Compliance Update for Irish Charities

Compliance Update for Irish Charities

Caitlyn Buchanan, 17th February 2020

Enhanced obligations for Irish charities have been introduced over the past few years. Most recently, the Charities Governance Code was introduced at the start of 2020. There are also obligations on Irish Companies to file a register of beneficial ownership with the Central Register of Beneficial Ownership and ensure the company’s constitution is in line with the Companies Act 2014. It is vital that Irish charities are compliant and up to date with the regulations as they are introduced.

Charities Governance Code

The Charities Governance Code sets out minimum standards of how charities operate, govern themselves, and show they are compliant with the requirements of the Charities Regulatory Authority (CRA). Irish Charities must arrange to put in place the required policies and procedures in place during the 2020 period. In 2021 all Irish charities will be required to certify with the CRA to show they have been compliant with the Charities Governance Code during 2020. 

The code has been developed to address a large range of Irish charities, from high-level organisations with hundreds of employees to small volunteer-led organisations. Volunteer-led charities and those with only a few paid employees are facilitated in the Charity Governance Code which lays out 32 core standards for all charities to adhere to. There are 17 additional best practice standards which apply specifically to charities with high levels of income and many employees. It is the responsibility of everyone on the board of a registered charity to ensure the Charity Governance Code standards are met. This new code is expected to play a key role in building public trust and confidence in Irish charities. 

Governing Documents of Companies with Charitable Status

When companies with charitable status are incorporated, they typically use a CLG (Company Limited by Guarantee) company type. If a CLG company intends to apply for charitable status the CRA require certain additional clauses to be included in their governing document (Constitution or Memorandum & Articles of Association).

All existing Irish companies must ensure their governing document (Memorandum & Articles of Association) now refer to the Companies Act 2014 (in place of the old Companies Act 1963-2013 that has been obsolete since June 2015). Credit institutions, Revenue and regulatory bodies such as the Charities Regulator expect companies to be compliant with the Companies Act 2014 at this stage and will petition same during the course of a review of the company or during the course of an application for credit, or charitable status etc.

Central Register of Beneficial Ownership (RBO)

In 2019, the Beneficial Ownership regulations come into effect in Ireland as part of the 4th and 5th Anti-Money Laundering directives. These included a requirement for all companies to maintain an internal register of beneficial owners as well as a requirement that details of the company’s beneficial owners be submitted to the Central Register of Beneficial Ownership. This caused some confusion, as charitable companies do not have shareholders. Charitable companies must interpret the beneficial owner definition as it relates to their organisation, to identify the relevant individuals as the beneficial owners. Existing companies were required to file with the Central Register, by 22nd November 2019. 

All Companies incorporated after 22nd June 2019 must file their Beneficial Ownership information with the Central Register of Beneficial Ownership within 5 months of incorporation. If your company has not yet met this obligation, please act quickly or click here to avail of our Register of Beneficial Ownership (RBO) Filing Service

Conclusion

If your company has still not taken steps to update its governing document to bring it in line with the Companies Act 2014, or filed its Beneficial Ownership information, please contact us now to get started. Company Bureau has assisted thousands of companies with these requirements and has years of expertise in this area. Please contact us today on +353 (0)1 6461625 or e-mail formations@companybureau.ie.

 

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