We are forming a not-for-profit Company Limited By Guarantee and have 4 directors. Are we required to have any members when we just have directors?
Every company is required to have at least one member. The members have different roles and responsibilities than the directors. However, the members may often also be the directors as there may not be enough people involved to have members who are not directors.
It is very important to clarify in the constitution: –
- How are members appointed?
- Are there any special qualifications to be a member?
- How a member ceases to be a member?
- What rights a member has and is there any membership fee or annual subscription?
- If the members are the directors, they are aware of the different roles they perform
For more information on the key features of a CLG click here
What is a member?
A member is one of the company’s owners whose name appears on the register of members. The subscribers to the constitution on incorporation are the first members of the company. Once a CLG is formed the names of the members do not appear on the annual return which may often lead to CLG’s neglecting the role of the members.
Particular types of CLG’s have very identifiable members such as Owner Management Companies (the unit owners are the members) or a representative body. However smaller CLG’s may not have separate members and directors.
Members have certain rights and powers and give certain powers to the company’s directors to run the company on their behalf. However certain decisions are required to be approved by the members not the directors.
A CLG may have as few as one member and no maximum number of members but the constitution of the CLG must specify the number of member(s) with which it is to be registered.
A person may become a member by applying to the company requesting to be approved as a member and their name entered on the register of members. A membership certificate may be issued if provided for in the constitution.
A person ceases to be a member of a CLG on death or bankruptcy or by writing to the company notifying them they are ceasing their membership. Each member usually has only one vote.
Member Liability
The constitution sets out the liability of its members limited to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up. This liability is typically €1.
What rights do members have?
The constitution of the Company should set out the rights of members and it is important to clarify these rights when setting up the company. The typical rights are:-
- Right to receive notice, attend and vote at an Annual General Meeting or Extraordinary General Meeting
- Right to information from the company
- Right to participate in the winding up of the Company
What duties do members have?
The members have the following duties
- Pay any membership or subscription fees
- Attend and vote on ordinary and special resolutions put to the members at general meetings
- Notify the company of any change in their details
- Notify the company if they wish to cease being a member
Forming a Charity CLG
The Charities Regulator has some excellent guidance on the registration and governance requirements for new charities. There must be a minimum of three charity trustees (directors), who are not related and who are independent of each other Click here for more information
Note: The content of this article is provided for information purposes only and does not constitute legal or other advice.
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