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COVID-19 - OPTIONS FOR YOUR IRISH CHARITY'S AGM

Posted in Category(ies):  Charities

 

Coronavirus has no race - Photo by visuals on Unsplash

 

COVID-19 - OPTIONS FOR YOUR IRISH CHARITY'S AGM

 

The Covid-19 pandemic is having a huge impact on charities in Ireland most of whom will have to reconsider their AGM arrangements this year. All companies in Ireland must hold an AGM every calendar year. The following are suggestions to take into account for planning the AGM this year:

DELAY

Consider delaying the AGM, taking the following into account:

 ·       The length of time between one AGM and the next can be no more than 15 months.

·        No more than 9 months between the year end and the AGM date.

The good news is that the Companies Registration Office announced this week that Annual Returns due between now and the 30th June will deemed to have been filed on time if all elements of the return are completed and filed by that date.  They are reviewing the situation and this date may be extended again. 

 The Charity Regulatory Authority do not currently propose to formally extend filing deadlines. This may be reviewed.

WRITTEN RESOLUTION

Check your constitution to see if holding an AGM via Written Resolution is an option. The Written Resolution would need to be signed by all of the Members entitled to attend and vote at the AGM.  This is may not be practical for charities with a large membership. In that instance, consider attendance by proxy.  

USE OF PROXIES

Arrange the AGM attendance by use of proxies, subject to the constitution. Ensure the proxy form offers alternate proxy holders and permits appointing a substitute, doing so will avoid the risk of a of an absent proxy holder and the member’s voting preferences not being counted.

VIRTUAL MEETINGS

Irish Company Law does not allow virtual meetings. However, subject to the constitution, a hybrid general meeting may be possible. This is where a physical meeting is held and facilitates electronic participation.

  •        The Chair must be able to identify Members present which could tricky in a virtual AGM if the member is not visible.
  •        Attendees must be able to both speak and vote at the meeting.


The use of any proposed technology needs to be tested in advance to include the above requirements and also ensure electronic votes can be counted. The AGM notice should also include a helpline number for any member having difficulty joining the meeting.

Consider the possibility that the technology may not work due to Covid-19 and certainly should not be trusted for a quorum.

You could arrange the AGM by proxy and still hold a virtual meeting to facilitate participation.

WHAT IF FINANCIAL STATEMENTS ARE NOT READY?

If the Financial Statements are not ready, the charity can hold the AGM and then immediately adjourn it.

Alternatively, hold the AGM, deal with all items that should be dealt with i.e. reappoint the Statutory Auditors, change of Drectors, Special Resolutions (if any).  Adjourn the meeting when the Financial Statements are to be dealt with. The meeting is then reconvened at a time and place determined by the Directors when the Financial Statements are ready.  The reconvened AGM only deals with unfinished business from the adjourned AGM i.e. present the Financial Statements to the members.  

Canvassing members on this option is recommended best practice.

COMMUNICATION

Finally, communicate clearly with your members and stakeholders. Explain that in light of the current global health emergency, the charity must comply with legal restrictions imposed by the Government and the HSE. Being open and transparent with your members should migate any risk of the charity being accused of unreasonable behaviour.

As always if you have any questions on this article or are struggling with any governance issue for your charity, please do not hesitate to contact me or one of my colleauges in KomSec. 

Keep well and safe.

 

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Posted on Wednesday, 25 March 2020  |  By Van Geraghty   |  0 comments
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Charities - you just can't win

Posted in Category(ies):  Charities

We have become so used to hearing about Charity Trustees who have gone bad and lost the run of themselves but, in this case, depending on one’s viewpoint the only ones losing the run of themselves is either the Charities Regulator or the Revenue Commissioners or both.

 

Paul Murphy of RTÉ Investigates issued a fascinating update on 21.02.2020 entitled “Charities Regulator excoriated after its Trustee Nominees sued by Revenue”.  When reading this article you must suspend any thoughts about “sense” “logic” “appreciation” with “weird” “illogical” and “what on earth”.

 

In brief, the Kerry based Animal Heaven Animal Rescue (AHAR) incurred substantial tax liabilities which ultimately led to the closure of the Charity.  

o   January 2017 – RTÉ Investigates exposed misleading fundraising practices, unreceipted cash expenditure and a lack of financial controls.

o   March 2019 – the Charity was wound up following an audit which had commenced over 18 months before the Charities Regulator nominated four Trustees.

o   April 2019 – the Revenue initiated High Court proceedings against the Trustees nominated by the Charities Regulator. 

 

AHAR is now wound up but, had tax liabilities of €203,000 of which €140,000 has been paid with a commitment to repay the balance of €60,000 in October 2020.  Given the tax liabilities are being repaid, and (based on RTÉ Investigates reports) the Revenue have stated its intention to drop these proceedings if the outstanding tax liability is discharged in full why is the Revenue taking proceedings against the current Trustees?

 

Concerns over the level of “poor governance” at the Charity prompted the Charities Regulator to start nominating Trustees in order to “Implement proper governance and controls of the charity”

The Trustees (nominated by the Charities Regulator) did not receive any remuneration or expenses for their work.  They are however receiving legal bills as they have to defend themselves against prosecution by the Revenue which must be costing each of them somewhere between €12k to €15k each.

The Charities Regulator expressed “sympathy” for the Trustees nominated by his office to help sort out CRA issues with the Charity. 

 

One thing for sure the very people who were put in to help rescue the situation were the ones who are being been hammered.  Why would anyone want to be involved with a Charity at any level based on this type of scenario where people were doing the right thing for the right reasons and still lose!

 

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Posted on Tuesday, 25 February 2020  |  By Kathryn Maybury  |  0 comments
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Who is a 'Beneficial Owner' of a Charity & must register on the Register of Beneficial Ownership?

Posted in Category(ies):  Charities

If you cast your mind back to before we all dug into Mince Pies and Christmas pudding, you might recall the hullabaloo  concerning registering beneficial owner details of practically every company  in Ireland on the Register of Beneficial Ownership before an end of November deadline.

While companies were by and large aware of their obligations it has been my experience that Charities are not as aware that they too must Register and even if they are aware the first question I hear is …. “but who are the ‘Beneficial Owners’ of our Charity?”.  This blog will try and answer that question……….

‘Control’ is the key as under Beneficial Ownership rules this determines who must register. In your standard limited liability company, it is generally the case that whoever holds over 25% of the shares in the company is considered to ‘control’ it and must register their details. Most charities however are companies limited by guarantees (CLG’s) and don’t have shares. As such you have to look at its members as in general they are entitled to exercise, through their right to vote at general meetings, some ‘control’ over the company. Then it is simply a question of numbers!

  • ≤ 3 members

If there are 3 or fewer members in a Charity CLG, those members are likely to meet the definition of “control” (because each member has greater than 25% of the voting rights) and their details must be placed on the Register of Beneficial Ownership.

  • ≥ 4 members

If there are 4 or more members in a Charity CLG (which is typically the case in most charities), no one member has over 25% of the voting rights and so they do not qualify as a beneficial owner. In this case, the details of the “senior managing officials” (i.e. its Directors and any Chief Executive Officer) must be placed on the Register of Beneficial Ownership.

  • Exceptions

As you would expect, my easy numbers rule is not the case for every single charity and there can be exceptions (e.g. the constitution of the Charity prescribes ‘control’ in a particular way) but by and an large the members ‘rule’ applies to the vast majority of charities and is an easy way of identifying who must register.

As always, if you have any questions on this blog please contact myself or one of my colleagues.

 

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Posted on Wednesday, 12 February 2020  |  By Kathryn Maybury  |  0 comments
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New Charity Governance Code

Posted in Category(ies):  Charities

Nathan Lemon (unsplash)

New Charity Governance Code

The Charity Regulator launched a new governance code for charities last week. It sets out a basic standard made up of 6 governance principles i.e. Advancing Charitable Purpose, Behaving with Integrity, Leading People, Exercising Control, Working Effectively and being Accountable and Transparent.  There are 32 core standards outlined in putting the six principles in place with additional standards for more complex charities

On reviewing the standard it might appear detailed, however, it won’t be daunting for most well-run charities who will already have processes in place to deal most of the core standards e.g. managing conflicts of interest, financial controls and hold regular board meetings etc.

Charities will be expected to be compliant with the code from 2020 and begin reporting on their compliance in 2021 which gives organisations ample time to review and implement the code.  The Charities Regulator has wisely identified that the key to implementation is to ensure board engagement. Directors must review and approve the charities implementation, therefore by supporting its implementation, challenges can be addressed more readily. 

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Posted on Tuesday, 13 November 2018  |  By Van Geraghty   |  0 comments
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