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The Companies Act 2014 & Your Company

With the introduction of the Companies Act 2014, which commenced on 1st June 2015, Company Law has changed in its entirety with ramifications for all Companies in Ireland.  These ramifications will impact the Ordinary Limited Company the most.

 

The new Act sets out that all existing Private Companies must convert to one of the new Company types.

 

  • Company Limited by Shares (LTD)         -             (Option 1)

 

OR

 

  • Designated Activity Company (DAC)    -             (Option 2)

 

and should complete this process during the transition period of 18-months, which expires on 30th November 2016.  In the interim, all Limited Companies in Ireland will operate as a DAC.  At the end of this transition period, any Company which has not opted to convert itself to a LTD or a DAC will be automatically converted to a LTD Company Model on the Companies Register (Option 3).

 

Waiting for automatic conversion may not be the best option for your Company, as the current Memorandum & Articles of Association will be adopted as the new constitution of the Company.

 

We set out hereunder the key points of the two new Company types.

 

LTD (OPTION 1 DAC (OPTION 2)
  • One document constitution replaces need for a Memorandum & Articles of Association.
  • Constitution document includes a Memorandum & Articles of Association.
  • No objects clause in its constitution and will have unlimited capacity to carry on any legal business, subject to any restrictions in other legislation.
  • Objects clause in its constitution will limited capacity to carry on business to that activity.
  • Can have just one Director (but must have a separate Secretary if it has only one Director).
  • Must have at least two Directors.
  • Holding an Annual General Meeting is optional.
  • Must hold an Annual General Meeting where the Company has two or more Members.
  • Can claim eligibility for Audit Exemption.
  • Can claim eligibility for Audit Exemption.
  • Has Limited Liability and has a Share Capital.
  • Has Limited Liability and has a Share Capital or is a Private Company Limited by Guarantee with a Share Capital.
  • Can have between 1 and 149 Members.
  • Can have between 1 and 149 Members.
  • Can pass majority written Resolutions (Special & Ordinary).
  • Can pass majority written Resolutions unless constitution states otherwise.
  • Name must end in “Limited” or “Teoranta”.
  • Name must end in “Designated Activity Company” or “Cuideachta Ghniomhaiochta Ainmnithe” unless qualified for an Exemption.

For more information on this area and how it may impact you, please contact Mike Frazier at info@murphyoconnor.ie or (061) 314266