Hey All,
Anyone have any experience of becoming a director on a limited by guarantee company?
Our management company is supposedly limited by guarantee and I heard that meant you are not liable personally for any finacial issues with the company - all members of the company are (residents),
Any advise?
Cheers
The directors manage the company. If they act negligently or without due care then directors can be held personally liabile for company debts. Also if the company fails in its filing obligations - tax and CRO - directors can be held liabile for indictable offences. They can also be removed as directors and be restricted from holding future directorships. This can have severe consequenses for individuals. Thread carefully and ensure all matters are properly attended to - insurance, filing, tax, etc
Surely there are different provisions for these management companies?
why would anyone want to be involved if it was going to jeopardise their own career/business?
Very good point. People should refuse point blank to remain, or accept appointment, as director of any guarantee company until and unless the law in this area is reformed.
I guess we're lucky in that ours seems to be well run or does anybody else have any relative positive experiences? I would still be reluctant to actually get involved in directorship matters for the reasons mentioned earlier...The few management companies I'm involved with are all a shambles, generally insolvent and flouting regulations left right and centre.
I'd worry about people diving in to get involved with them.
Very good point. People should refuse point blank to remain, or accept appointment, as director of any guarantee company until and unless the law in this area is reformed.
Why should the law be reformed? The law is there to protect the interests of parties dealing with companies, whether limited by shares or by guarantee. If one is to become a director one must be aware of and accept the responsibilities which go with such appointments. The Office of the Director of Corporate Enforcement www.odce.ie has some good booklets on directors responsibilities , well worth reading by anyone considering directorships.
Why should the law be reformed?
The law is there to protect the interests of parties dealing with companies, whether limited by shares or by guarantee.
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3. Because guarantee companies rely so heavily on volunteers, it is unrealistic to expect their directors to have the required levels of knowledge of company law etc.
4. It is an absolute scandal that small voluntary organisation have had to publicly fundraise in order to pay large CRO & auditors fees.
5. Something like 96% of Irish private companies are exempt from statutory audits as their turnover is less than €7.5m. Yet a guarantee company such as a sports club has to undergo such an audit even if their turnover in the year as as low as €100. This doesn't make sense.
Large CRO fees ? €40 per annual return if filed on time. Its only if companies run late that the CRO fees start to stack up.
And...? I think its rather obvious that many guarantee companies have been forced to pay large amounts to the CRO in late filing fees. As such I don't really understand your point.Large CRO fees ? €40 per annual return if filed on time. Its only if companies run late that the CRO fees start to stack up.
The separate issue is WHY are they late filing? Is it back to the directors not understanding their responsibilities?
Because guarantee companies rely so heavily on volunteers, it is unrealistic to expect their directors to have the required levels of knowledge of company law etc.
It's a massive problem...we are approaching the handover stage in our complex and the company is literally a mess.
I guess we're lucky in that ours seems to be well run or does anybody else have any relative positive experiences?
Why is it "obvious" that many guarantee companies have been forced to pay late fees ? One is only forced to pay late fees if one is late in filing. If the company is compliant then annual compliance cost is €40 to the CRO, no more. My point is that a company is only forced to pay late fees if they are late in filing. The separate issue is WHY are they late filing? Is it back to the directors not understanding their responsibilities?
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