Key Reforms of the Act
The Companies Act 2014 consolidates the existing 1963-2013 into a logical legal code with the most common company type (private limited by shares) placed at the centre. It also introduces some significant reforms.
All Private Limited (by shares) companies, which account for 85% of all companies on the register (approximately 160,000), must convert into one of two new company types:
- Limited (LTD): simplified company structure which will operate under a one document constitution (no objects) and it may have only one company director and convene through written AGMs;
- Designated Activity Company (DAC): will operate under a two document constitution (with objects).
The Act specifies an 18 month transition period (beginning upon commencement) within which these companies must ‘convert’ into one of the new company types. They must notify the CRO through filing the relevant documents, a process which will be free of charge. Upon conversion, the CRO will electronically issue a new certificate of incorporation. During the transition period and before conversion – all private limited by shares companies will operate under the rules applying to a DAC.
Name Change Requirement:
During the transition period some companies will need to change their name to fulfil the requirement under the Act to specify their company type at the end of their name.
Directors’ duties have now been codified and set out in Part 5 of the new Act. Every director and secretary must be aged 18 or over.
The priority of a charge registered with CRO will be established by date and time of receipt of a fully completed submission to the CRO – the date of creation of the deed of charge will no longer determine the priority. See draft information leaflet 27.
Voluntary Strike Off:
The current administrative regime has been set out in statute. See draft information leaflet 28.
New Summary Approval Procedure:
This will allow companies to carry out certain activities by means of a director’s declaration and a shareholder’s resolution for activities which under the current law would require High Court approval.
CRO Communication Campaign:
The CRO’s main source of information on the Companies Act 2014 is www.cro.ie. CRO is updating all content, including forms and information leaflets. The ODCE is also updating all of its key publications and expects to have a range of new information books available soon.