Question

Hello, writing to you in the hope of some advice. We are involved in a Yoga centre and looking to get set up as an incorporated company. We run on a non-profit basis. The teachers do not get paid, they teach voluntarily in order to share the experience. Any surplus is channeled back into the activities of the school. We were also thinking to apply for charitable status at some point.

We are wondering what is the best type of company to set up as. Is a non profit organisation bound to set up/incorporate as a public company or can it be private company?

Reading from the CRO literature, it seems that private companies can avail from audit exemption but public companies can not. We are not in a position to be paying 1,500 euro for a annual tax audit so we thought to become a private company (not sure about whether to have shaes or not - does this matter?) and hopefully avail of this exemption. 

Also, to become a charity is it necessary to be a certain type of company? (ie. public or private)

Are there any other avenues for a non profit organisation to act other than by setting up/getting incorporated as a company?

Any help/advice would be very appreciated. Thank you sincerely, 

Comments

Anthony Lindsay's picture

The most common type of legal

The most common type of legal vehicle for non profit organisations is that of the "company limited by guarantee not having share capital".

The advantages of being a limited company include limiting the liability of members and allowing the organisation to enter into contracts in its own name. It is therefore suitable for larger organisations and also any wishing to employ staff, lease property, etc. Disadvantages include the costs associated with forming and maintaining the company and compliance with company legislation, which can be onerous in terms of administration.

There are other avenues you can explore though:

http://www.wheel.ie/content/choosing-right-structure

 

As for charitable status, at the moment the CHY scheme is operated solely by Revenue.  A CHY number simply means that an organisation is recognised as charitable by the Revenue Commissioners for tax purposes. There is currently no official "Register of Charities" in Ireland. However, you should note that the Charities Act 2009, when fully implemented, will introduce such a register for the first time.

You do not have to have a particular legal structure to get a CHY number: the two are largely unrelated.  Charitable status does not give legal status to an organisation, nor confer incorporation. A group can have charitable status without being incorporated and vice versa.

See "applying for charitable status" here.