SECTION: GOVERNANCE

A free resource for Companies Limited by Guarantee to review and update their Memo & Arts A free resource for Companies Limited by Guarantee to review and update their Memo & Arts

Published: 16.05.2016 |
Last Updated: 07.06.2017
Diarmaid
Diarmaid
Diarmaid Ó Corrbuí

Diarmaid is Chief Executive Officer of Carmichael Centre for Voluntary Groups.

A free resource for Companies Limited by Guarantee to review and update their Memo & Arts

The Irish Companies Act 2014 (the “Companies Act”) has brought in a comprehensive overhaul and consolidation of company law in Ireland. The Act will impact on the form of the Constitution (which is made up of the memorandum and articles of association) of all CLGs (the most common company model used by non-profit organisations) and other types of companies.  The Companies Act sets out detailed structural and governance requirements and, through consolidation of requirements previously contained in memoranda and articles of association into the Companies Act itself, has removed the need for a “full set” of articles. 

The Companies Act has also introduced the concept of “mandatory” and “optional” provisions, which allows companies the ability to tailor certain portions of their constitution to their relevant needs.  The mandatory provisions will apply to the company whether or not they are stated in the company’s constitution. The optional provisions will apply “save to the extent that the constitution provides otherwise”.  In other words, unless the company’s constitution excludes the statutory default provisions, they will be deemed to apply. 

For companies in existence prior to the implementation of the Companies Act, the Companies Act should be considered as an impetus to review, revise and possibly replace your existing memorandum and articles of association to ensure it is up to date and compliant with the requirements of the Companies Act.   If you do not update your documents and they are in conflict with the Companies Act after 30 November 2016, the laws of the Companies Act will take precedence over your documents to the extent they are mandatory provisions.  As such, it is better to ensure that your documents are up to date rather than find out after the fact that you were working off incorrect information. 

Carmichael Centre for Voluntary Groups is a leading provider of governance training and support to non-profit organisations of Ireland.  We have received a lot of queries from non-profit organisations who are concerned and confused about implications of the Companies Act for their organisation and for their constitution.  We know from experience that reviewing and updating your company documents is a time consuming and often a costly exercise for non-profit organisations.
  
The Carmichael Centre is therefore, delighted that as a result of the support we have received from Dechert and TrustLaw, we are making a Template Constitution available to the sector. The Template Constitution will provide a valuable aid to organisations in forming new CLGs and assisting existing organisations in reviewing and updating their existing memorandum and articles of association.

If you would like to get more information or to receive training on this issue we will be running an open training course on the 16th June entitled 'Develop a Constitution for a Company Limited by Guarantee (CLG)'. More information can be found at:

http://www.carmichaelcentre.ie/content/develop-constitution-company-limited-guarantee-clg

The approach adopted in developing the Template Constitution is to utilise the benefits of being able to adopt the Companies Act without further detail of the provisions so that the need to update the constitution each time a new amendment to the Companies Act is brought in will be reduced.  Additionally, where appropriate, the Template Constitution recommends keeping detailed, organisation-specific matters such as terms of membership or election and rotation of directors out of the constitution and instead described in a separate document (such as a Company Governance Handbook).  Having such provisions in a separate document will help to remove the burden of requiring a member’s meeting and vote to make amendments to such provisions and the requirement to submit any revisions to the Companies Registration Office or in the case of charities with the Revenue Commissioners and the Charities Regulatory Authority.    

The template constitution can be downloaded free from the Carmichael Centre website using the following link: http://www.carmichaelcentre.ie/content/governance-and-development
If you would like more information on the range of supports that the Carmichael Centre provides to not-for-profit organisations in Ireland, please send an email to info@carmichaelcentre.ie with your contact details and we will get in touch with you.

SECTION 7: GOVERNANCE

A free resource for Companies Limited by Guarantee to review and update their Memo & Arts A free resource for Companies Limited by Guarantee to review and update their Memo & Arts

Published: 16.05.2016 |
Last Updated: 07.06.2017
Diarmaid
Diarmaid
Diarmaid Ó Corrbuí

Diarmaid is Chief Executive Officer of Carmichael Centre for Voluntary Groups.

A free resource for Companies Limited by Guarantee to review and update their Memo & Arts

The Irish Companies Act 2014 (the “Companies Act”) has brought in a comprehensive overhaul and consolidation of company law in Ireland. The Act will impact on the form of the Constitution (which is made up of the memorandum and articles of association) of all CLGs (the most common company model used by non-profit organisations) and other types of companies.  The Companies Act sets out detailed structural and governance requirements and, through consolidation of requirements previously contained in memoranda and articles of association into the Companies Act itself, has removed the need for a “full set” of articles. 

The Companies Act has also introduced the concept of “mandatory” and “optional” provisions, which allows companies the ability to tailor certain portions of their constitution to their relevant needs.  The mandatory provisions will apply to the company whether or not they are stated in the company’s constitution. The optional provisions will apply “save to the extent that the constitution provides otherwise”.  In other words, unless the company’s constitution excludes the statutory default provisions, they will be deemed to apply. 

For companies in existence prior to the implementation of the Companies Act, the Companies Act should be considered as an impetus to review, revise and possibly replace your existing memorandum and articles of association to ensure it is up to date and compliant with the requirements of the Companies Act.   If you do not update your documents and they are in conflict with the Companies Act after 30 November 2016, the laws of the Companies Act will take precedence over your documents to the extent they are mandatory provisions.  As such, it is better to ensure that your documents are up to date rather than find out after the fact that you were working off incorrect information. 

Carmichael Centre for Voluntary Groups is a leading provider of governance training and support to non-profit organisations of Ireland.  We have received a lot of queries from non-profit organisations who are concerned and confused about implications of the Companies Act for their organisation and for their constitution.  We know from experience that reviewing and updating your company documents is a time consuming and often a costly exercise for non-profit organisations.
  
The Carmichael Centre is therefore, delighted that as a result of the support we have received from Dechert and TrustLaw, we are making a Template Constitution available to the sector. The Template Constitution will provide a valuable aid to organisations in forming new CLGs and assisting existing organisations in reviewing and updating their existing memorandum and articles of association.

If you would like to get more information or to receive training on this issue we will be running an open training course on the 16th June entitled 'Develop a Constitution for a Company Limited by Guarantee (CLG)'. More information can be found at:

http://www.carmichaelcentre.ie/content/develop-constitution-company-limited-guarantee-clg

The approach adopted in developing the Template Constitution is to utilise the benefits of being able to adopt the Companies Act without further detail of the provisions so that the need to update the constitution each time a new amendment to the Companies Act is brought in will be reduced.  Additionally, where appropriate, the Template Constitution recommends keeping detailed, organisation-specific matters such as terms of membership or election and rotation of directors out of the constitution and instead described in a separate document (such as a Company Governance Handbook).  Having such provisions in a separate document will help to remove the burden of requiring a member’s meeting and vote to make amendments to such provisions and the requirement to submit any revisions to the Companies Registration Office or in the case of charities with the Revenue Commissioners and the Charities Regulatory Authority.    

The template constitution can be downloaded free from the Carmichael Centre website using the following link: http://www.carmichaelcentre.ie/content/governance-and-development
If you would like more information on the range of supports that the Carmichael Centre provides to not-for-profit organisations in Ireland, please send an email to info@carmichaelcentre.ie with your contact details and we will get in touch with you.