The Companies Act , 2014, which is the largest piece of legislation in the history of the State, comes into effect on the 1st June 2015 (with the exception of some sections of the Act which will come into effect at later dates to be announced). The Companies Act, 2014 updates, consolidates and simplifies our companies legislation starting with the Companies Act, 1963 and the various amendments to that Act introduced over the years culminating with the last amendment in 2013. The 2014 Act takes away the emphasis from a public limited company and puts the emphasis on the what has been described as the workhorse of Irish commercial life i.e. the Private Company Limited by shares. This new Act relies on an individual’s existing company law knowledge but makes it easier to access in a new package.
The company types under the 2014 Act are as follows:
LTD – new model private company
DAC – Designated Activity Company
PLC – Public Limited Company
CLG – Company Limited by Guarantee
PUC – Public Unlimited Company
PULC – Public Unlimited Company without share capital
ULC – Private Unlimited Company
SE- Societas Europaea
Joint Stock Companies
Key features of the new model Private Company Limited by Shares (LTD) – this simplified form is the type of company that the vast majority of Irish companies will take either on incorporation or by way of conversion. Some of the key features are as follows:
- 1 to 149 shareholders
- May have just one director but must also have a separate company secretary
- Name must end in limited or teoranta
- Must have company seal
Some of the key features of Designated Activity Company (DAC) are:
- 1 to 149 shareholders
- Must have two directors
- Two document constitution similar to Memorandum and Articles of Association
Once the Act has commenced on 1st June 2015 there will be a Transition Period during which existing companies will have to decide on which form they wish to take i.e. either LTD or DAC. If a company does not elect which company form to take in this 18 month period ending on the 30th November 2016 then the company will automatically convert to the new form LTD at the end of the transition period.
If you are a company director/secretary then you will need to consider the changes introduced by this legislation as soon as possible. It is a topic we will discuss again.