2 April 2015

The New Companies Act 2014 and what you need to know as a director.

Company law in Ireland is changing. A New act being brought in a transition period from June 2015 – November 2016, will replace the last 52 years of company law in Ireland. For company owners and directors  It will be required to "convert" the company to a new format, and replace the original memorandum and articles of association with a constitution. The "new" limited company model allows for one director companies among other changes discussed below.
Companies Act 2014
Companies Act 2014

Companies Act 2014

‘New’ Limited Company Model being introduced
  • It may have just one director, but it must have a separate secretary if it has only one director
  • It does not have stated objects. It has a one-document constitution which replaces the need for a memorandum and articles of association.  It will not have an objects clause because it has full unlimited capacity to carry on any legal business, subject to any restrictions in other legislation
  • Its name must end in ‘Limited’ or ‘Teoranta’ (this can be abbreviated to Ltd. or Teo.)
  • It is a private company, it has limited liability and has a share capital. It does not need to have an authorised share capital
  • It does not need to hold an AGM
  • Existing limited companies (EPC) will automatically transition to this model at the end of the transition period, 31st November 2016.

Designated Activity Company (DAC)

  • It must have at least two directors
  • It has stated objects for which the company was incorporated. It has a constitution document which includes a memorandum and articles of association
  • Its name must end in ‘Designated Activity Company’ or ‘Cuideachta Ghníomhaíochta Ainmnithe’ unless qualified for an exemption (can be abbreviated to DAC/D.A.C. or CGA/C.G.A.)
  • It is a private company and has limited liability. It has a share capital, or is limited by guarantee with a share capital. It must have an authorised share capital
  • It is required to hold an AGM
  • Existing limited companies will be treated as this model during the transition period, but will need to apply by 31st August 2016 if they wish to transition to this model permanently. Otherwise they will automatically be converted to the new Limited model at the end of the transition period (31st November 2016).

Details of the New Act:
Timeline of new act and transition period:
  • Act Commences, EPC treated as DAC: 1st June 2015
  • Deadline to apply to convert to DAC: 31st August 2016
  • End of transition period, remaining EPC automatically converted to new Ltd model: 31st November 2016
Key decision between two new standard company types:
  • Do you wish to retain objects clause (designated purpose of business)? – Convert to DAC
  • Do you wish to reduce to one director, before 2017? – Convert to Ltd
How to convert:
  • Form N1 for Ltd, form N2 for DAC (no fees for N2, no information yet for N1)
  • New Constitution to replace existing Memorandum and Articles
  • Special resolution
Other details:
  • New Certificate of Incorporation will be issued upon conversion (voluntary or otherwise)
  • All directors must be over 18, existing underage directors will be removed.
How we can assist you?
  • Provide Advice on new company models
  • Processing conversions, including drafting new Constitution

New types of companies:
  • LTD – Private Company Limited by shares
  • DAC – Designated Activity Company limited by shares or by guarantee (These are private limited companies but with specified objects)
  • PLC – Public Limited Company
  • PUC – Public Unlimited Company
  • PULC – Public Unlimited Company with no share capital
  • ULC – Private Unlimited Company
  • CLG – Company Limited by Guarantee (these are public guarantee companies)

Should you require further information on conversion and advice on how the new act will affect your business, please don’t hesitate to contact us on office@nolanassociates.ie or on 01 8786011.

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