CLG Constitution Ireland (Company Limited by Guarantee, Charity-Ready)

A company limited by guarantee, or CLG, has no share capital. Its members do not buy shares; each one undertakes to contribute a nominal fixed sum, stated in the memorandum, towards the company's debts if it is wound up while he or she is a member or within one year after leaving. That promise is the guarantee, and it is the whole of a member's liability. This template, like most CLG constitutions, forbids any distribution to members, so surpluses stay in the company and fund its objects, which is why the CLG is the default not-for-profit vehicle in Ireland.

Under section 1176 of the Companies Act 2014, the constitution is the company's rulebook: a memorandum of association and articles of association contained in one document. The memorandum states the name, the company's status as a CLG registered under Part 18, its objects, the limited liability of members and the amount of the guarantee. The articles govern everything else. A private company limited by shares (an LTD) suits trading businesses better, and its formation documents sit with our Irish company and business templates. An unincorporated club has no legal personality at all, which leaves its committee personally exposed.

The governing statute is the Companies Act 2014, and Part 18 (sections 1172 to 1226) adapts the general company rules to guarantee companies. The name comes first: section 1178 requires the registered name to end with "company limited by guarantee" or its Irish equivalent, with "CLG" allowed as an abbreviation after registration. Companies promoting commerce, art, science, education, religion or charity can drop that ending under section 1180, provided the constitution applies all income to the objects, prohibits distributions to members and transfers any surplus on winding up to another company meeting the same conditions. A director or the secretary must also deliver the prescribed statement to the Registrar. On governance, section 1194 imposes at least two directors, and section 1199(3) requires the articles to state the number of members with which the company proposes to be registered.

Meetings follow the general rules with CLG adjustments. An annual general meeting is held every year, no more than 15 months apart, and section 1202 prevents a CLG with more than one member from dispensing with it. Notice is 21 days for the AGM and for any meeting passing a special resolution, and 7 days for other extraordinary general meetings under section 181. Each subscriber signs in front of a witness who attests the signature, or authenticates electronically under section 888, and the CLG constitution is filed with the CRO alongside Form A1.

Charities add a second layer. The Charities Act 2009 defines charitable purpose in section 3 and requires it to be for the public benefit, and section 39 obliges a charity operating in the State to register with the Charities Regulator. For tax exemption, Revenue expects the constitution to contain its own standard clauses on income and property, payments to directors, amendments, winding up and accounts, as set out in the Revenue guidance on applying for charitable tax exemption. The charitable version of this template carries those clauses, adapted only where section 1180 requires it.

The classic case is a new charity that has outgrown a committee and a bank account. Once it wants to sign a lease, hire a first co-ordinator or apply for public funding, incorporation becomes the practical answer, and many funders insist on it. Community centres, youth projects and food banks reach this point sooner than their founders expect, and the board documents that follow sit among our Irish non-profit and charity templates.

Not every CLG is a charity. Residents' groups, sports clubs, professional networks and festivals often want limited liability and a not-for-profit lock without charity regulation, because their members benefit directly or their objects are not charitable in law. An unincorporated association converting to a company also needs a fresh constitution, since its old rules cannot simply be registered with the CRO. If the organisation will employ staff from day one, line up contracts with the Irish employment contract templates at the same time.

One edge case recurs: a single founder. A CLG may be formed by one subscriber, but the company still needs two directors, and the AGM can be dispensed with only while there is a single member.

The memorandum opens with the name in the form your choice requires, either with "Company Limited by Guarantee" or under the section 1180 exemption, followed by the status statement, the main object and the guarantee. For a charity, the objects clause names the head of charitable purpose under section 3 of the Charities Act 2009, identifies the section of the public that benefits and confirms that any private benefit is reasonable, ancillary to and necessary for the public benefit, the test in section 3(3) in the Act's own words.

Most of the work sits in the articles, which cover the ground a solicitor would expect:

• Membership rules come first, because most disputes in small CLGs start there; the board can remove a member only after 14 days' notice and a hearing, which displaces the bare statutory power in section 1199(8).
• A non-distribution lock applies in both versions. In the charitable one, Revenue's wording bars any salary or fee to a director, with a short list of exceptions such as reasonable out-of-pocket expenses, capped loan interest and proper rent.
• Board provisions set your minimum and maximum number of directors, rotation of one third at each AGM under section 1196, and removal by ordinary resolution on 28 days' extended notice.
• Conflicts are declared at the board meeting where the matter is first considered, and the interested director neither votes nor counts in the quorum.
• What happens to the assets if the company closes? Any surplus goes to another not-for-profit body, normally one with similar objects, that is itself barred from distributing to its members.

In the charitable version, an article on registration states plainly that adopting the constitution does not by itself make the company a registered charity or tax exempt; those decisions belong to the Regulator and Revenue.

You start by typing the company name without any ending, then answering whether the company will be a charity and whether the name keeps "Company Limited by Guarantee". Those two answers drive the objects clause, the director payment rules, the amendment clause and one of four winding-up clauses, and the preview on the right updates as you click. Next comes the main object, written as a sentence beginning with "to". A charity then picks the head of charitable purpose and the people who benefit, while a non-charitable company using the section 1180 exemption picks the statutory object it promotes.

The next screens cover the guarantee, the number of subscribers, any annual subscription, the board's size and quorums, and each subscriber's name and address. When you click Finish, the CLG constitution is ready to download, print and sign in front of a witness, then file with Form A1, which names the first directors and the secretary. A company renting premises can draw up its lease from the Irish property and tenancy templates, and every other form starts from the Captain.Legal Ireland document library.

The most frequent problem at the CRO stage is the name. Founders type "CLG" into the name field and the registered name ends up doubled, or they omit the ending without filing the section 1180 statement. A close second is an objects clause so broad ("to support good causes in Ireland") that the Charities Regulator cannot identify a charitable purpose; registration then stalls while the company passes a special resolution to amend its objects. Write the main object of your CLG constitution as precisely as you would explain it to a funder.

Quorums cause quieter trouble. A board quorum above the minimum number of directors, or a members' quorum above the number of subscribers, can leave the company unable to decide anything the first time someone resigns. Charities also get caught by director pay: a founder who plans to become the paid manager while staying on the board breaches the Revenue clause, because none of its exceptions covers a director's salary; the usual fix is to step down from the board before taking the job. Finally, many groups start fundraising as soon as the CRO number arrives. Until the Charities Regulator registers the company, it must not ask the public for money or accept donations, because section 41 of the Charities Act 2009 makes that an offence.