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Directors of Charitable CLG: how do they get paid?

  • 08-01-2019 4:07pm
    #1
    weertex
    Registered Users, Registered Users 2 Posts: 1 ✭


    I'm doing some reading into Charitable Companies Limited by Guarantee, and I'm stuck on how directors of such entities get paid. The Model Constitution for Charitable CLG which I found on the Charities Regulator website [1] clearly states that directors do not get salaries (apologies for copy and pasting, I can't post links as a new user):


    6. Income and Property
    6.1 The income and property of the Company shall be applied solely towards the promotion of Main Object(s) as set forth in this Constitution. No portion of the Company’s income and property shall be paid or transferred directly or indirectly by way of dividend, bonus or otherwise howsoever by way of profit to members of the Company.
    6.2 No Director shall be appointed to any office of the Company paid by salary or fees, or receive any remuneration or other benefit in money or money’s worth from the Company. However, nothing shall prevent any payment in good faith by the Company of:
    (a) reasonable and proper remuneration to any member or servant of the Company (not being a Director) for any services rendered to the Company;
    (b) interest at a rate not exceeding 1% above the Euro Interbank Offered Rate (Euribor) per annum on money lent by Directors or other members of the Company to the Company;
    (c) reasonable and proper rent for premises demised and let by any member of the Company (including any Director) to the Company;
    (d) reasonable and proper out-of-pocket expenses incurred by any Director in connection with their attendance to any matter affecting the Company;
    (e) fees, remuneration or other benefit in money or money’s worth to any company of which a Director may be a member holding not more than one hundredth part of the issued capital of such company.
    (f) Nothing shall prevent any payment by the Company to a person pursuant to an agreement entered into in compliance with section 89 of the Charities Act, 2009 (as for the time being amended, extended or replaced).


    I'm referring specifically to the article 6.2a. Reading elsewhere online confirms that directors of said entities can't have a salaries. I understand paying the expenses (travel and such) but how does get committed time and effort gets compensated - organising and attending meetings, fund rising and such?


Comments

  • #2
    jimmii
    Registered Users, Registered Users 2 Posts: 14,810 ✭✭✭✭jimmii


    I work with a charity in the UK and its split into two. One is the charity element that has it's own board and oversees all the charitable interests etc and then there is the trading arm which is a separate company with a separate board and all profit generated by the trading company goes to the charity. I would imagine you could use this sort of structure where people volunteer for the charity board and are paid to be on the trading board.

    If you are considering setting up a charity then, I don't know what its like there, but in the UK it's a massive pain in the ass admin wise! I can see why, as you obviously don't want people abusing the system, but when you are a legit charity it adds a lot of expense.


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