Board directors must be mindful of their legal requirements to adhere to the requirements of the Companies Act 2014 and their reporting obligations to the Companies Registration Office (CRO). However, companies limited by guarantee that have a charitable purpose, must also consider the requirements of a larger group of stakeholders, especially when amending articles in the company Constitution (incorporating the Memorandum and Articles of Association.)

As of June 2016, the Charities Regulatory Authority (CRA) is providing potential charity registrants with a model constitution template, which not alone adheres to the legal requirements of the Companies Act 2014 but also incorporates the requirements of the Charities Regulator.

Thus, if your company is also a charity (or intending to register as one) and you plan to amend articles and update the company constitution, remember to check with the Charities Regulatory Authority to confirm that the intended changes are acceptable to the Regulator. If your company holds a CHY number from the Revenue Commissioners, you should also check that intended changes are acceptable to the Revenue Commissioners. Finally, if your company is in receipt of funding, read the terms and conditions of the funding agreement to ascertain if it is necessary for the company to obtain permission from the funding body to make changes to the company constitution. When all stakeholders have been consulted and amendments agreed, then the members can be called upon to pass the necessary resolutions and accept the changes! Remember that at least 75% of the company members will need to approve the changes.

Before, proceeding to amend your existing company constitution, please read the Model Constitution for CLG proposed by the Charities Regulator. You can download a copy of the document here.

Word document version: Model Constitution for CLG

PDF version: Model Constitution for CLG

It is helpful to compare the contents of the model constitution with your existing Memorandum and Articles of Association. In this way, you can better identify what changes are required and which of the articles must remain the same to satisfy the requirements of stakeholders.

It is important to note that in order to avail of any of the new provisions in the Companies Act 2014, such as the audit exemption, a company must first have amended its constitution to reflect the new Act (as opposed to using a constitution that refers to the Companies Acts 1963 – 2013.)

In the next section of the course, we look at board processes and procedures and the importance of having an up-to-date Board Governance Handbook to guide board member behaviour. Remember to click the ‘Mark Complete’ button to move to the next section of the course.