Forming Your Organisation
When you are thinking of setting up an organisation for a particular purpose there is an important question to ask first: Is there already an organisation out there with the same purpose and would it be more effective to work with them rather than establishing an organisation on our own?
Establishing a new organisation is a lot of work for the volunteers who end up sitting on the committee. These volunteers will have legal responsibilities for the work of the organisation - including perhaps charity regulation and reporting, health and safety requirements, child protection etc. This carries a cost as well as involving a lot of time and responsibility. Even if another organisation does not exist that does precisely what you believe is needed, perhaps you could partner with a similar group to run your service under the legal and governance authority of their pre-existing structure?
If you need more information about setting up an organisation in general, this Carmichael guide provides more detail. If you judge the most effective way to achieve your purpose is to establish a new organisation, you will then need to consider charity registration and what legal structure to adopt.
Do We Need to Think About Charity Regulation?
It is no longer a question of deciding whether or not your organisation chooses to become a charity or not. Instead all organisations that meet the legal definition of a charity must register with the Charities Regulator.
If you operate in the Republic of Ireland there are two aspects of your organisation that determine your charity status: your organisation’s purpose and whether or not you provide public benefit. The definition of a charity in Irish law is now quite broad and includes many organisations that would not necessarily use the term “charity” to define what they do. As a result, it's important that you consider carefully at this stage whether or not your planned organisation falls under the legal definition of a charity. If it does then you will need to begin the process of registering with the Charities Regulator early on.
The Charities Regulator gives some helpful guidance on what types of organisation meet the definition of a charity in this guide.
You can find out more about the Regulator on www.charitiesregulator.ie or contact them at:
Charities Regulator, 3 Georges Dock, IFSC, Dublin 1, D01 X5X0
Telephone: 01 633 1500
Email: info@charitiesregulator.ie
While in the process of registering with the Charities Regulator, organisations cannot carry out any fundraising or charitable activities. They can continue, however, to put in place their organisational structures.
If you would like more information about registering as a charity, Carmichael have produced a guide to the application process which you can find here.
Which Legal Structure Should We Choose?
An organisation must decide what form of legal structure would best suit and facilitate its activities. The form best suited to the organisation depends very much on its purposes, the planned activities and how it is going to fund these activities.
Charitable organisations now mainly take one of three types of legal structure:
- Unincorporated Association
- Company Limited By Guarantee
- Charitable Trust.
There are other organisation types which could be suitable, including Industrial and Provident Societies, most commonly known as Cooperatives. If you are considering a cooperative structure for your organisation, bear in mind that there is a new Co-operative Societies Bill moving through the legislative process in 2023.
Many organisations start off as an unincorporated association of individuals. As they grow and their activities become more complex, organisations often decide to incorporate as a company limited by guarantee. This limits the personal liability of the members of the board or committee. It also allows the organisation to enter into contracts, employ staff and lease or own property in its own name.
If you would like to know more about the advantages and disadvantages of these legal structures read Thomson Reuters Foundation and Mason Hayes & Curran LLP here.
Whichever legal structure you choose, you will need a constitution.