CLGs

Existing companies limited by guarantee were carried forward under the Companies Act, 2014, with a transitional period for name changes. The Act applies the provisions for private limited companies to companies limited by guarantee, except for certain dis-applied or modified sections.

Formation requires a constitution and compliance with registration rules. CLGs don’t have share capital and must state their objects in their constitution. Alterations to objects require special resolution and court approval if challenged.

Directors must number at least two and may serve on a limited number of boards. Members are subscribers to the memorandum and others admitted according to the constitution.

CLGs must maintain a register of members and may hold AGMs. Financial reporting requirements vary depending on the activities of the CLG. In winding up, members are liable up to the amount of their guarantee.

CLGs are subject to certain financial and regulatory provisions applicable to companies other than public limited companies.

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