On 1st June 2015 the New Companies act will commence, and with it there will be many changes to the processes of new incorporation’s and changes to Companies. These changes are many as the new companies act is one of the biggest amendments in the history of the state. The companies act 2014 will replace the companies acts 1963-2013. So what does it mean for company Directors:
- It will ensure good corporate governance.
- It will reduce the administrative burden on business
- and it will modernize and simplify company law.
- Changes in legislation will affect every company.
- All existing Private companies limited by shares will have to change to a new company type. They are as follows:
1. Simplified private limited company:
- One Director is allowed but there must be a separate Secretary.
- The name of the company must end with the word “Limited”
- There is a simplified constitution Memorandum & Articles of Association.
- In most circumstances there is no requirement to hold an AGM.
- The company can pass majority written resolutions.
2. Designated Activity Company (DAC)
- The name of the company must include “Designated Activity Company”
- It has a two page constitution (Memorandum & Articles of Association.)
- It is a private company limited by shares or by shares and Guarantee.
- This type can pass majority written resolutions where the constitution allows.
Existing Private Limited by Shares (EPC) company type must choose to convert to one of these two new company types:-
- Designated Activity Company (DAC)
- Private Company Limited by Shares
|1. Designated Activity Company
|2. Private Company Limited By Shares (Limited)|
|Minimum of 2 Directors||Minimum of 1 Director|
|Secretary must be separate, cannot be sole Director||Secretary can be one of the Directors|
|1-149 Shareholders||1-149 Shareholders|
|Objects clause within Memorandum limits Capacity of the Company.||Has a one page constitution document.|
|Must have Authorised Share Capital||No Authorised share capital requirement|
|Must hold an AGM||Need not hold an AGM|
|Can be an Insurance Undertaking or Credit Institution||Cannot be an Insurance Undertaking or Credit Institution|
Conversion Process (18 month transition period.
This “conversion” procedure affects approximately 85% of Irish registered companies which are currently Private Companies (Limited by Shares). All companies currently registered as the “Private Limited by Shares” company type must choose to convert to one of these two new company types – LTD (Private company limited by shares), or DAC (Designated Activity Company). Existing private companies (limited by shares) (EPCs) on the register do not automatically become LTD companies on 1st June 2015.
Converting during the transition period:
Companies should convert as early as possible. Contact us or visit our Services page to choose conversion.
The End of the transition period.
*It should be remembered that all Private Limited by Shares companies can convert to the Designated Activity Company type, by re-registering, during the Transition Period. Where Private limited by shares companies do not convert to either the LTD/DAC model, then the Registrar of Companies will give effect to the conversion requirements and the companies will become LTD companies.
To start your company formation, visit our Packages page.