Conversion of New Companies
The Companies Act 2014 introduced two new company types that companies currently registered as “Private Limited by Shares” companies may convert to during an 18 month transition period:
- the LTD (Private Company Limited by Shares), and
- the DAC (Designated Activity Company)
- Existing companies cannot avail of the features of the simplified LTD company model without first having their company converted to a LTD.
- A company may convert to a LTD by submitting Form N1 together with a special resolution and a copy of their new constitution to the CRO, or, if converting under Section 60 of the Act, only an N1 & new constitution is required.
- During the transition period, all existing “Private Limited by Shares” companies operate under the rules applying to DACs until they convert. Such companies do not have to change their name during the transition period (Part 16 of the Act).
- A company can convert to a DAC by submitting Form N2, with copies of the ordinary resolution and new constitution.
Companies should exercise their conversion option as early as possible. At the end of the 18 month transition period, companies which have not chosen to convert themselves to either DAC or LTD will, by law, be converted to a LTD by the CRO.
When converting to one of the new company types, a list of subscribers must be attached to the new Constitution. This list must be the original subscribers list as submitted to the CRO on incorporation, not the current list of subscribers/shareholders.
In addition, it is the latest Authorised Share Capital and Share Value, as submitted to the CRO which must be stated on the new Constitution.
Companies converting to the new LTD type do not need to state the Authorised Share Capital, but the current Share Value must be the most up to date value, as filed with the CRO.