In this blog post, we’ll cover everything you need to know about forming a CLG, including its key features, advantages, and disadvantages, and the step-by-step registration process. Whether you’re starting a charity or a professional association, this guide will help you easily navigate the setup process.
A Company Limited by Guarantee (CLG) is a type of legal entity in Ireland that’s primarily used for non-profit, charitable, or social enterprises. Unlike a company limited by shares, a CLG does not have a share capital, and its members are not shareholders. Instead, they are “guarantors” who agree to contribute a nominal amount (often just €1) to the company’s assets if it is wound up.
This structure offers the benefit of limited liability, protecting the personal assets of its members from the company’s debts.
To successfully register a Company Limited by Guarantee in Ireland, follow these steps:
✔️ Step 1: Choose a Company Name: Ensure the name is unique by checking availability with the Companies Registration Office (CRO).
✔️ Step 2: Appoint Directors and a Company Secretary: A CLG requires at least two directors. A company secretary must also be appointed.
✔️ Step 3: Register an Irish Office Address: Every company must have a registered office in Ireland for official correspondence.
✔️ Step 4: Draft the Constitution: The CLG’s Memorandum and Articles of Association must outline its objectives and governance structure.
✔️ Step 5: File Incorporation Documents with the CRO: Submit the Form A1 and Constitution to the Companies Registration Office. Pay the required registration fee.
✔️ Step 6: Register with the Register of Beneficial Owners (RBO): All Irish companies must register their beneficial owners within 5 months of incorporation.
✔️ Step 7: Open a Business Bank Account: Once incorporated, open a bank account to manage company finances.
The first and most crucial step is to register the company with the Companies Registration Office (CRO). This requires the submission of several documents, including.
A Form A1, which provides details about the company’s name, registered office, directors, and subscribers
The Company Constitution, which includes the Memorandum and Articles of Association. This document outlines the company’s purpose and how it will be governed.
Once the company is officially registered with the CRO, it must also be registered for Corporate Tax with the Irish Revenue Commissioners. This is a separate, but equally important, step to ensure the company is compliant from the start.
To complete the registration, you’ll need to provide specific personal documents for all directors and subscribers, including:
A copy of their passport. A recent utility bill or other proof of address. A copy of their PPSN (Personal Public Service Number), front and back
The registration process with the CRO typically takes about 10 working days. There will be a set of fees for the CRO filing and the drafting of the Memorandum, in addition to a basic annual charge for ongoing services.
If you intend for your CLG to eventually become a registered charity, it is vital to be strategic during the initial registration. If you add a large number of people as subscribers to the board, you will be required to convert all of them to directors if you want to officially convert to a charity in the future. Planning for this possibility from the outset can save significant complications down the line.
Before registering a Company Limited by Guarantee in Ireland, you should be aware of its core features:
✔️ A CLG is usually formed for charitable, social, or professional purposes rather than profit distribution.
✔️ At least two directors are required. Directors must be at least 18 years old.
✔️ A company secretary must also be appointed (can be one of the directors or an external party).
✔️ A CLG must have a constitution that outlines the company’s purpose & the rules for company governance
✔️ Documents such as copies of passports, the latest address proofs/utility bills, and PPSN details of all members are required to start a CLG
✔️ Once the entity is registered with the CRO, we need to apply for a Tax Registration Number (TRN) via the Revenue Online Service (ROS)
✔️ If the company is a charity, apply for charitable tax exemption with the Revenue (depending on the nature of the entity formed)
✔️ After the registration with the CRO, a CLG must maintain documents such as Certificate of Incorporation, Company Constitution, Beneficiary Ownership Registration document & Tax Registration Number (TRN) for future engagements and official matters
✔️ Once the entity is formed, we have to maintain the documents for AML auditing
Ensuring compliance here helps maintain employee confidence and avoids payroll disruptions.
Advantages:
✔️ Limited Liability: Members are only liable for their guaranteed amount.
✔️ Separate Legal Entity: Can own property and enter into contracts independently.
✔️ No Share Capital: No requirement for investment from shareholders.
✔️ Ideal for Non-Profits: Used by charities, clubs, and associations
✔️ Audit Exemptions: Can avoid costly audits under certain conditions
Disadvantages:
✘ No Profit Distribution: Cannot distribute profits to members.
✘ Regulatory Compliance: Must adhere to CRO and RBO filing requirements.
✘ Governance Structure: Requires at least two directors
Ensuring compliance here helps maintain employee confidence and avoids payroll disruptions.
If you’re considering making this change, don’t navigate it alone. Our team at TASC Accountants, Ongar, Dublin 15, specializes in helping startups, freelancers, and small businesses, including CLGs.
📞Don’t wait until the last minute. Contact us today to discuss your invoicing setup, explore smart software options, and ensure your business is fully prepared for Ireland’s e-invoicing future.
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