We intend to provide more guidance on this new Act over the coming months, but for now take note that :-
The Main Changes under the act are
- Introduction of five main types of companies, i.e. Private Company Limited by shares(LTD); Designated activity company (DAC); company limited by guarantee (CLG); Public Limited Company (PLC); and an Unlimited Company (UC). Every company must include it’s type after its corporate name
- New limited companies only require one director and can dispense with an AGM in certain circumstances
- Directors duties have been codified
- Increased notes required for abridged accounts filed in the CRO
- Charitable companies, group companies and property management companies can now avail of audit exemption provided they meet small company definitions
- Companies filing late still require an audit
- The Office of the Director of Corporate Enforcement now has the right of access to books and documents of the company to ensure compliance with the audit exemption requirements
- Single member companies, still require separate company secretary, who acts under the direction of the directors
- A company can now act as a company secretary to another company
- Liquidators will be regulated
- New type Limited companies will now have a single document Constitution instead of the Memo and Articles of Association. In short the company will be able to do whatever the directors decide – thus, removing the doctrine of “ultra vires”. Companies that want to retain an objects clause will have to opt to become a Designated Activity Company. Any third party cannot fall foul of the “ultra vires” doctrine>
- Existing guarantee and unlimited companies will have to change their name and amend their Memo and Articles of Association. Table A is now found within the body of the Act
This Act should be seen as an opportunity to tidy up their company regulations and address in a serious way good corporate governance. For instance, many private companies have a 2nd director, who really has no part to play in the business. now, is the time to remove that director, which also removes the possibility of personal liability and disqualification orders against them, if business goes wrong.
At the moment, directors of private limited companies should consider whether they wish to become DACs or LTDs. If they do nothing, then by 1st December 2016, the company will automatically convert to LTD. They should also note that if they have not reduced to writing any loans given by them to the company, then those loans shall be deemed a gift !
Creditors who are owed less than €10,000 and over €1,300, have until 1st June 2015 to avail of the old statutory demand notice in debt collection matters (1st step in winding-ups).