New Companies Act

The Companies Act 2014 is the single biggest piece of legislation enacted in the history of the state. The commencement of the Act on the 1st of June brings over 15 years of consultation, preparation and work to a conclusion. This significant change impacts directly on SME companies and their directors.

How does the Act affect your Limited Company?
The Directors of all existing Limited Companies incorporated before the 1st of June will have a decision to make once the act is introduced. The directors will have to choose which type of NEW company structure they want to continue as.

The main options available are:

  • Decide to remain as a Private Company Limited by Shares (“LTD”) and change the Memorandum and articles to a new constitution.
  • Change to the new Designated Activity Company (“DAC”).
  • Wait until for 18 month transition period is up and convert then.

Upon the commencement of the act PLC’s, Companies Limited by Guarantee and Unlimited Companies should change their name to include there new suffix, change their Memorandum and articles to a new constitution and get a new company seal

All Companies which are incorporate after the 1st of June 2015 will have to choose what type of Company they are going to be before incorporation, should you have any questions about which type of company is right for you, Please don’t hesitate to contact us.

Below are the main characteristics of each type of company

Private Company Limited by shares

  • Will have to end with the suffix of ‘Limited’
  • Will be allowed to have a minimum of One Director but must have a separate company Secretary who must have the skills necessary to discharge his/hers statutory and other duties. (We could provide an experienced secretary, if required)
  • Will have a single company constitution instead of a Memorandum and articles of Association but the constitution will have no object clause (The company will be allowed to conduct any lawful business)
  • Will be able to dispense with holding an AGM
  • Will still be required to have a Company Seal
  • No requirement for Audited Accounts

Designated Activity Company

  • Will have to end with the suffix of ‘Designated Activity Company’
  • Will have to have a minimum of Two Directors but one of the directors may be the Company Secretary as well, however, the secretary must have the skills necessary to discharge his/her statutory and other legal duties, (we could provide one, if required)
  • Will have a company constitution instead of a Memorandum and articles of Association and the company will be limited to conducting business that is stated in the constitutions main object clause.
  • Will be not able to dispense with holding an AGM
  • Will still be required to have a Company Seal
  • No requirement for Audited Accounts

Unlimited Companies.

  • Will have to end with the suffix of ‘Unlimited Company’
  • The Members of the company will be liable for any unpaid debts upon liquidation or windup.
  • Will have to have a minimum of two Directors but one of the director may be the Company Secretary as well, however, The secretary must have the skills necessary to discharge his/her statutory and other legal duties, (we could provide one, if required)
  • Will have a company constitution instead of a Memorandum and articles of Association and the company will be limited to conducting business that is stated in the constitutions main object clause
  • Minimum of One shareholder
  • Will be able to dispense with holding an AGM
  • Will still be required to have a Company Seal
  • No requirement for Audited Accounts

Guarantee Companies with a Share Capital

  • Guarantee Companies can no longer have a share capital, such companies will have to re-register as a Designated Activity Company or a Public Limited Company. It is likely that most of these types of Company will re-register to a Designated Activity Company.
  • Guarantee Companies, Sports & Social Co’s
  • Will have to end with the suffix of ‘Company Limited by Guarantee’
  • Will have to have a minimum of Two Directors but one of the director may be the Company Secretary as well, however, The secretary must be experienced, (we will be able to provide one, if required)
  • Will have a company constitution instead of a Memorandum and articles of Association and the company will be limited to conducting business that is stated in the constitutions main object clause.
  • Minimum of One Member.
  • If more than one member, will be not able to dispense with holding an AGM
  • Will still be required to have a Company Seal
  • Can dispense with the suffix ‘Company Limited by Guarantee’ upon application to the CRO
  • Cannot have a share capital
  • No requirement for Audited Accounts as long as all members agree
  • No requirement for the company to file accounts with the with CRO, if the company is not trading for gain

Guarantee Companies Owners Management, for common areas

  • Will have to end with the suffix of ‘Owners Management Company Limited by Guarantee’
  • Will have to have a minimum of Two Directors but one of the director may be the Company Secretary as well, however, The secretary must be experienced, (we will be able to provide one, if required)
  • Will have a company constitution instead of a Memorandum and articles of Association and the company will be limited to managing the common areas of a multiunit development (The Constitution must include the provisions as stated in the Multi unit Development Act 2011.)
  • Minimum of One Member.
  • If more than one member, will be not able to dispense with holding an AGM
  • Will still be required to have a Company Seal
  • No requirement for audited accounts if agreed to by the members
  • No requirement for the company to file accounts with the with CRO

Guarantee Companies, for charitable status

  • Will have to end with the suffix of ‘Company Limited by Guarantee’
  • Will have to have a minimum of Three Directors who cannot be related by blood or Marriage (Revenue Requirement) but one of the director may be the Company Secretary as well, however, The secretary must be experienced, (we will be able to provide one, if required)
  • Will have a company constitution instead of a Memorandum and articles of Association and the company will be limited to conducting business that is stated in the constitutions main object clause.
  • Minimum of One Member.
  • If more than one member, will be not able to dispense with holding an AGM
  • Will still be required to have a Company Seal
  • While the companies act 2014 states that the no audit will be required, Revenue will insist that Charitable Companies continue to have their accounts audited.
  • Can dispense with the suffix ‘Company Limited by Guarantee’ upon application to the CRO
  • Cannot Have a share capital

Conclusion
We expect that smaller Companies will want to continue as Private Company Limited by shares which will allow them to have one director and the capacity to carry on any lawful business.

We expect that bigger companies and companies that were incorporated for a particular purpose will choose to become a Designated Activity Company and Companies with non-related Directors/Shareholders will choose to become a Private Limited Company by Shares.

For Further information do not hesitate to contact Kilcoyne Accountants.

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