The mammoth Companies Act 2014 is expected to come into force on 1 June 2015. It is a significant update to company law and directors should familiarise themselves with the changes it introduces.
The vast majority of Irish companies are private companies limited by shares and they will have the option for a number of months to convert into either the new form of private company limited (LT) by shares or a designated activity company (DAC). If a conversion is not made the Companies Registration Office will issue a new certificate of incorporation by default after 30 November 2016, so it is important for directors to check what type of company they should be after commencement and take advice as to whether it is necessary to convert.
The difference between these main two types of companies reflects the changes the Act have brought about to the constitutional documents of companies. Previously the memorandum and articles of association governed how companies must be run and, in particular, the objects clauses of a company set out what activities it could engage in. Under the new Act companies will instead have a constitution and there is no longer any need for an objects clause. This will allow far greater freedom to companies to carry on their activities, which may naturally change over time, without having to amend an objects clause. However, a company which is set up for a specific and limited purpose can register as a DAC.
As ever, specific advice should be taken but the Companies Registration Office has published a range of comprehensive guides(https://www.cro.ie/New-Act-2014/-Forms-and-Leaflets/Leaflets) which are an excellent starting point.