1 | ARTHUR COX
Group Briefing
CHARITY LAW
Charities Update
Summer 2015
KEY CONTACTS
THE COMPANIES ACT 2014 AND THE REGISTER OF
For further information please speak to
your usual Arthur Cox contact or:
LOBBYING
PHILIP SMITH
PARTNER
+353 1 618 0557
philip.smith@arthurcox.com
SARAH MCCAGUE
ASSOCIATE
+353 1 618 1145
sarah.mccague@arthurcox.com
1. INTRODUCTION
The Companies Act 2014 (the “Act”)
was generally commenced with effect
from 1 June 2015. The Act involves an
overhaul of the existing company law
regime in place since the 1960’s. The Act
segregates companies by corporate type
and applies different law to each type
of Company. The Act does not apply to
charities established as charitable trusts
or unincorporated associations. Where
charities are incorporated entities, they
are generally established as companies
limited by guarantee not having share
capital (“Guarantee Companies”).
This update sets out on overview of
the impact of the Act on Guarantee
Companies.
There is an 18 month transition period
(commencing on 15 June 2015) for the
introduction of the Act. At the end the
transitional period, all of the existing
Guarantee Companies will be deemed
to be “CLGs” (companies limited by
guarantee without a share capital).
2. MAIN CHANGES INTRODUCED BY THE ACT AS
THEY APPLY TO CLGS
This document contains a general
summary of developments and is not a
complate or definitive statement of the
law. Specific legal advice should be
obtained where appropriate.
capitalised or lower case and with or
without punctuation marks) or the Irish
equivalent.
However, if an existing Guarantee
Company has been granted a license
authorising it to dispense with the use
of the word ‘Limited’ in its name, that
exemption continues to apply and it
will not be necessary to end the name of
the company or charity with ‘company
limited by guarantee’ or ‘CLG’.
2.2 Members
The minimum number of members
for a CLG has been reduced from
seven to one. However, the Revenue
Commissioners are unlikely to grant
charitable tax exemption to charitable
companies having one single member.
If there is only one member of a CLG
the obligation to hold an annual general
meeting (“AGM”) can be waived.
2.3 Directors
CLGs must have at least two directors.
However, the Revenue Commissioners
are likely to continue to require that a
charity have at least three independent
directors for it to be granted charitable
tax exemption.
2.1 Company Name
2.4 Applicable law
From the end of the transition period,
the company name must end with the
words ‘company limited by guarantee’
or the abbreviation ‘CLG’ (whether
Table C which currently sets out model
articles of association for CLGs will
no longer exist. The law that is now
2 | ARTHUR COX
CHARITY LAW
CHARITIES UPDATE - SUMMER 2015
applicable to CLGs is set out in Parts 1
to 14 of the Act as modified by Part 18 of
the Act.
Reform, Brendan Howlin T.D., launched
the Register of Lobbying website on
Thursday 30 April 2015.
The first steps organisations must take in
order to comply with the requirements
of the Lobbying Act are:
If charities do not update their
Memorandum and Articles of
Association (“M&A”) in accordance with
the Act existing M&A will continue
to apply but certain provisions will be
deemed ‘struck-out’ and certain default
provisions of the Act will apply instead.
The aim of the Lobbying Act is not to
restrict the flow of information or views
on policy or legislation. The intention
is to bring about significantly greater
openness and transparency about
lobbying activities.
1. Review your organisation’s
arrangements for recording relevant
communications which might fall
within the scope of the Lobbying Act
and identify the key personnel involved.
3. WHAT HAS NOT CHANGED
3.1 The CLG will continue to have a
two-document constitution (comprising
the Memorandum and Articles of
Association);
3.2 The M&A of a CLG must contain an
objects clause.
4. WHAT STEPS SHOULD THE DIRECTORS OF A
GUARANTEE COMPANY TAKE?
Existing Guarantee Companies will be
required to amend their name by the end
of the 18 month transition period (which
began on 1 June 2015). Although not
strictly necessary to amend their M&A,
a review and restatement of the M&A
will for many companies be the prudent
course of action. We would suggest that
you discuss any proposed changes with
your legal advisers.
5. REGISTER OF LOBBYING
From 1 September 2015, the Regulation
of Lobbying Act 2015 (the “Lobbying
Act”) provides that organisations that
employ more than ten staff (or if their
primary activity is lobbying/advocacy,
organisations that employ one or more
staff) will be required to record all
lobbying activity/communications that
they engage in with Designated Public
Officials in the Register of Lobbying.
The Minister for Public Expenditure and
arthurcox.com
The Lobbying Act is designed to provide
information to the public about:
•
Who is lobbying and on whose
behalf is lobbying being carried out;
•
What are the issues involved in the
lobbying and what is the intended
result of the lobbying; and;
•
Who is being lobbied.
In general, the Act applies to:
•
Advocacy groups, non-governmental
organisations and charities which
have at least one full time employee
and which promote particular
interests or causes;
•
Professional lobbyists;
•
Commercial organisations which
have more than 10 full time
employees; and
•
Representative bodies with at least
one full time employee.
The first formal return of the Register of
Lobbying will be required by 21 January
2016 at the latest to cover the period
from September to December 2015.
Thereafter, a return will need to be made
every four months.
2. Where necessary, put in place
arrangements to record such
information from 1 September 2015.
3. Create an account on www.lobbying.
ie and submit a trial registration and
return of any lobbying activity which
takes place during the period 1 May – 31
August 2015. None of the information
submitted during this period will be
available for public scrutiny.
4. Identify individual(s) responsible for
registration and compilation of returns
from 21 January 2016 onwards.
Arthur Cox has a long history of involvement
in the community and voluntary sector in
general, and with charities in particular.
Our core Charity Law Group comprises four
lawyers from a variety of disciplines. They are
assisted by other relevant specialists from our
Property, Employment & Industrial Relations,
Pensions, Technology, Intellectual Property, Tax,
Litigation and Corporate and M&A Groups.
The fact that we have an office in Belfast means
that clients have the benefit of a full one firm
service where charity law issues involve both
jurisdictions in Ireland.
Dublin
+353 1 618 0000
dublin@arthurcox.com
London
+44 207 823 0200
london@arthurcox.com
Belfast
+44 28 9023 0007
belfast@arthurcox.com
New York
+1 212 782 3294
newyork@arthurcox.com
Silicon Valley
+1 650 943 2330
siliconvalley@arthurcox.com