Company Limited By Guarantee (CLG) Also known as a Not for Profit

Also known as a Not for Profit
Company Limited by Guarantee: Pioneering a Purpose-Driven Approach

In the ever-evolving landscape of corporate structures, the Company Limited by Guarantee (CLG) emerges as a compelling option for those driven by purpose rather than profit. Under the framework of the Companies Act 2014, the CLG presents a flexible and purpose-oriented model that caters to various entities seeking to make a difference. Here, we delve into the intricacies and benefits of a CLG, shedding light on its applications and advantages.

Key Features of a CLG:
1. Membership Flexibility: The Companies Act 2014 revolutionized CLGs by permitting incorporation with as few as a single member, without imposing a maximum limit. However, the constitution must specify the number of members with which it is registered, providing adaptability to different group sizes.

2. Directorship Requirement: A CLG must appoint a minimum of two directors, ensuring a responsible governance structure.

3. Purpose-Driven Approach: Unlike profit-focused entities, a CLG is not established to generate profits for its members. Instead, it is committed to fulfilling a specific purpose or mission, making it an ideal choice for organizations with altruistic goals.

4. Limited Liability: Members of a CLG enjoy limited liability, safeguarding their personal assets. In the event of winding up, their liability is limited to the predetermined contribution, which is typically not less than €1.

5. No Share Capital: CLGs do not possess a share capital, freeing them from the obligation to raise funds from members. This unique feature allows them to retain the benefits of limited liability and a distinct legal identity.

6. Common Applications: CLGs are a preferred choice for various groups, including charitable and professional bodies, residents’ associations, property management entities, educational institutions, sports clubs, trade associations, and more.

Advantages of CLGs:

1. Separate Legal Identity: CLGs exist as legal entities separate from their members, facilitating property transactions and legal proceedings in the organization’s name.

2. Liability Protection: Individual members benefit from extensive liability protection, shielding their personal assets from potential risks.

3. Democratic Structure: CLGs often adopt a democratic structure with a membership base, promoting inclusivity and collaborative decision-making.

Unlocking the Potential of Purpose:

A Company Limited by Guarantee (CLG) is more than just a corporate structure; it’s a vehicle for driving meaningful change and impact. Whether your organization is dedicated to charitable causes, education, sports, or any purpose-driven endeavour, the CLG framework offers the flexibility and protection needed to pursue your mission with confidence. At every stage of incorporating your CLG in Ireland, we provide comprehensive guidance and support, ensuring that your purpose finds a steadfast foundation in this innovative corporate model.