We are a voluntary run organisation, registered with the CRO as company limited by guarantee and having no share capital. We are experiencing difficulties in appointing Directors, as in these difficult times, potential candidates for the director position are afraid that if the organisation becomes financially unviable, they would be personally liable and their properties could be at risk. We have been trying to undertake some research on this, but without success and we can not afford to seek legal advice on this matter. Could any one advice me on whether Directors are personally and financially liable for the organisation, and if that is the case, are is there any insurance policies that we could take out, that would cover any personal liabilities to the directors?

Many thanks


Anthony Lindsay's picture

Directors, whilst ultimately

Directors, whilst ultimately responsible for a company, are not personally financially liable. 

From the CRO: "The members' liability is limited to the amount they have undertaken to contribute to the assets of the company, in the event it is wound up, not exceeding the amount specified in the memorandum."

Regardless of any personal liabilities, though, poor director's decisions can have negative financial impacts on an organisation.  For this reason it is often wise to invest in "Directors and Officers Liability" insurance.

Find out more about such policies specific to our sector at

(There may be other people who do it, but Arachas is the one I know!)

csweeney's picture

Unfortunately Directors can

Unfortunately Directors can be found personally liable for some or all of the debts of the company in the event of failure. However, not to scare you completely this rarely occurs and in particular with not for profit companies. If the Directors run the company into the ground, take assets or funds out of the company or are guilty of fraud then personal liability can be an issue.

It can be quite difficult to get volunteers to act as directors due to the legal position that they will be in, however if the company has a policy document and the directors are trained on their duties and responsibilities, it should go some way to encouraging people to act as Directors. We provide a Directors Duties Seminar for new and existing Directors of Companies Limited by Guarantee or Not For Profit companies. the training highlight in a practical way the legal duties and responsibilities of the directors. If you are interested the course please let me know.

Directors Liability insurance is also a benefit to any director and will cover them in nearly all breaches of company law. We have done some work with Arachas and find them very useful.


Wexford Insurances Ltd's picture

There are a variety of

There are a variety of polices which provide additional covers including Directors and Officers Liability and Professional indemnity if required. These can be purchased ordinarily as add on stand alone policies or as part of an overall package with your property and public liability insurances.

If you wish, I can send through a small wording  ' why businesses require directors and officers cover' which is a bullet point article.


Alternatively ring Wexford Insurances, 053 91 22466 and ask for the charity section.



Máire McSherry

Wexford Insurances Ltd