Charity Law Update - February 2015 - The Companies Act 2014

The Companies Act 2014 (the “Act”) is the most significant change in Irish corporate law in two generations.  Given the large number of Irish charities that are companies limited by guarantee without a share capital, the boards of those charities will need to become conversant with the main issues arising.

Set out below is a summary of the main changes and the issues that charity trustees will need to be aware of:

  • The Act is confined to company law and does not address matters in relation to the taxation or residence of companies or their directors, or the administration and regulation of charities.
  • The indicative date of commencement of the Act is 1 June 2015, which will be followed by an 18 month transition period to allow directors to ensure compliance with the new legislation.
  • Companies limited by guarantee without a share capital (“CLGs”) are likely to continue to be the legal form of choice for charities.
  • All CLGs will now be governed by a ‘constitution’, although this will comprise of a memorandum of association and articles of association, similar to the existing position.
  • To all intents and purposes a CLG’s constitution will look like a memorandum and articles of association save that it will be one document and the word “constitution” will appear before the start of the memorandum of association.
  • The memorandum of association of a CLG will contain much of the same information as that an existing CLG.  In particular, it must contain an objects clause.
  • Under the Act, CLGs can now have one single member (in contrast to the previous requirement to have seven members) although the Revenue Commissioners are unlikely to grant charitable tax exemption to charitable companies having one single member.
  • CLGs must, under the Act, have at least two directors.  However, the Revenue Commissioners are likely to continue to apply their condition, for charitable tax exemption to be granted, that a charity have at least three independent directors.
  • Unless the constitutional documentation provides otherwise, the directors shall retire by rotation.
  • CLGs can now avail of audit exemption.  However, this will not change the condition imposed by the Revenue Commissioners, in the context of granting charitable tax exemption, that the accounts of charities must be audited where the annual income exceeds €100,000.  This is a lacuna in the legislation governing charitable companies, given that the new audit requirements of charities under the Charities Act 2009 do not apply to companies.
  • While the Act sets out a series of statutory default provisions for the constitutions of all companies, many CLGs are likely to disapply the standard provisions and write their bespoke articles long form, as is the current practice for many charities.
  • The corporate name of a CLG must end in “Company Limited by Guarantee” or “CLG”, although many charities will have liberty to dispense with having “Limited” in their name, and that this dispensation may be carried forward.
  • Similarly to the other types of company under the Act, CLGs now have a duty to ensure that the person appointed company secretary “has the skills or resources necessary to discharge his or her statutory or other duties”. 
  • There are no changes to the obligations of multi-member CLGs to hold an AGM.
  • It would appear that external companies granted charitable tax exemption (DCHY numbers) whose presence constitutes a ‘place of business’ in Ireland, but not a branch, will no longer be required to file accounts in the Companies Registration Office.  It remains to be seen how the Companies Registration Office will deal with this aspect.

The Companies Act 2014 is a state of the art of the law applicable to companies, from their formation, administration and management to their winding up and dissolution, incorporating the rights and duties of their officers, members and creditors.  From the perspective of directors of charitable companies limited by guarantee, the actions that will need to be taken during the transition period of 18 months from the commencement date should be quite minimal, and it is expected that existing charitable companies limited by guarantee will continue their existence within that statutory form.




Charity Law Update - February 2015 - Registration of Charities

Since the establishment of the Charities Regulatory Authority (CRA) in October 2014, its initial priority has been the registration of charitable organisations.  The initial Register will comprise of approximately 8,500 charitable organisations that already have a charitable tax exemption (a CHY number) from the Revenue Commissioners, and are therefore automatically deemed to be registered under Section 40 of the Charities Act 2009. 

The Register of Charities is already in place and can be viewed on the website of the Charities Regulatory Authority (  Entries on the Register are not yet complete, and the CRA will be adding to the information available on the Register in the months ahead. The CRA are writing to all charitable organisations that are deemed registered in order to obtain certain information to complete the registration process.  Charities operating in Ireland that do not have a CHY number, including those foreign charities having a DCHY number, are required to register within six months of the establishment of the CRA, therefore by mid-April 2015. 

In order to complete entries on the Register, or to register a charity, it is necessary first to create an online account with the CRA, which will provide access to the relevant section of the website.  The entries on the Register will be populated from the responses given to the requests for information that the CRA has sent out to charitable organisations. 

The information and documentation requested includes:

  • Copies of governing instruments and details of all officers.
  • Financial information including balance sheet date, gross income and sources, total expenditure and expenditure on salaries.
  • Copies of financial accounts for the twelve months immediately preceding the application. 
  • Details of the charity’s purpose/objects.
  • Details of activities, and how activities directly support the objectives of the charity, and how the public benefit test is satisfied.
  • Details of how the charity intends to raise money.
  • Details of risk assessment procedures, safety checks and safeguards employed by the charitable organisation where its activities include working with vulnerable people (including the aged, children and young people, the sick and disabled).

The charity trustees will need to sign a declaration form which is available for downloading on the website of the CRA.

Ongoing Registration Obligations

All information set out on the Register of Charities will be accessible by the public, and there is an ongoing obligation to ensure all particulars are correctly entered and updated.  All charities are obliged to state on all public literature, including on telephone or the internet, that they are registered charitable organisations, and charities may be required to provide further information as may be prescribed by Regulations in due course.

Accounting and Audit

All charities are required to keep proper books of account, and there are detailed provisions in the Act setting out the obligations under this head.  However, those provisions do not apply to charitable organisations that are incorporated under the Companies Acts.

Similarly, there are detailed provisions in the Charities Act setting out the obligations of charities to prepare statements of accounts and to have their accounts audited, but those provisions do not apply to corporate charitable organisations.

The obligations of corporate charitable organisations in relation to accounting, annual returns and audit will continue to be governed by the Companies Acts solely, and the Registrar of Companies will provide a copy of the annual returns of incorporated charities to the CRA together with all documents annexed to the annual return.  The intention here is to avoid dual reporting for corporate charities.

Annual Reports

All charitable organisations, including those established as companies, will have an obligation to prepare and submit to the CRA an annual report in respect of their activities in that financial year.  The Charities Act provides that charity trustees must submit the report no later than 10 months, or such longer period as the CRA may specify, after the end of each financial year.  The content of the annual reports will be determined by Regulations in due course, and it is likely that the requirements will include an activities report element and a finance reporting element.

There may be distinctions made in the Regulations in terms of the obligations of different classes of charitable organisations, which may depend on the level of annual turnover.  The content of the annual report would be made available to the public, and all charities will be required to provide the CRA with any other information that it may reasonably require to enable it to perform its functions.


Establishment of Charities Regulatory Authority

The Charities Regulatory Authority (CRA) was established on 16 October 2014 under the Charities Act 2009. This new Authority is an independent agency of the Department of Justice and Equality and is charged with increasing public trust and confidence in charitable organisations. 

The CRA has a range of statutory functions. These will be introduced incrementally, starting with the compilation and registration of all charities operating in Ireland. All charities operating in Ireland must now be registered on the Register of Charities. Those charities with a valid tax exemption (CHY number) will be automatically registered with the CRA. However, if a charity does not have a CHY number they must apply to the CRA to be registered. Charities will be required to provide information on their activities and how they are funded. This information will be available to the public in line with increasing transparency and confidence in the sector. 

The Establishment Order of the Charities Regulatory Authority can be found here$File/SI4562014.pdf



Shatter announces plans to establish Independent Charities Regulator and publishes outcome of consultation on charities regulation

The Government has approved plans by Minister for Justice, Equality and Defence, Alan Shatter, TD, to proceed with the establishment of an independent Charities Regulatory Authority under the terms of the 2009 Charities Act. The new Authority will come into operation in 2014.

Press release:

Summary report of submissions received:


Submissions from organisations (including the STEP submission):


Submissions from individuals:


Awards and Nominations 

Shortlisted as a finalist for the STEP Awards 2013 - Boutique Firm of the Year (UK and Ireland). Winner to be announced in September 2013.

Boutique Winner of the 2013 Corporate INTL Legal Award for Tax Law – Irish Law Firm of the Year.