07 April 2016 by John Burns
One of the main innovations of the Companies Act 2014 (“the Act”) was the introduction of changes to a number of existing company types. Chief amongst these changes was the introduction of two new Company types the “Limited” (LTD) and the “Designated Activity Company” (DAC).
All existing companies currently registered as a private company limited by shares were required to change to either a LTD or a DAC. This conversion was to be completed within an 18 month transition period between 1st June 2015 and 30th November 2016. As we have now just passed the half way mark in this 18 month window, it is interesting to note that the response to these conversion obligations has been very weak. As of mid-March there were just under 8,000 conversions to the LTD and just under 200 conversions to the DAC. While these figures do not include conversions received by the Companies Registration Office and not yet registered, the figures for converting are extremely low when one considers the large number of private companies limited by shares in Ireland. Company directors that do not convert run a number of risks among them having an out of date constitution or even leaving themselves exposed to an action by their shareholders.
A further aspect of the Act related to the requirement that each company type be included as part of the company name. For some types of company this will require an alteration to be made such as a Company Limited by Guarantee (CLG), Unlimited Company (UC) or a company converting to a DAC. Certain company types require their type as a suffix to be included as part of the company name. To date there have been approximately 500 such filings.
The Companies Registration Office website has further information. Find out more about the conversion process and company types So this is just a timely reminder to Company Secretaries to discuss this with their Boards of Directors and get going on those conversions and filings before the deadline.