Companies Act 2014 Conversion Deadline Fast ApproachingMonday, 07 November 2016
Under the Companies Act 2014 (CA14), the directors of all private limited companies registered in Ireland are obliged to effect conversion of such companies to one of two new private company types –a private company limited by shares (LTD) or a designated activity company (DAC)* – on or before 30 November 2016 (Conversion Deadline). The Conversion Deadline is now fast approaching.
*Only companies which passed a members’ resolution approving conversion to DAC by 31 August 2016 are permitted to convert to DAC between 1 Sept and 30 Nov 2016. This doesn’t apply to LTD conversions.
For directors to ensure compliance with their statutory obligation to convert such companies before the Conversion Deadline, retain control of the decision and avoid the legal uncertainty of not having an up-to-date written CA14-compliant constitution and the other potential knock-on effects of missing the conversion deadline, conversion applications would need to be submitted to CRO as soon as possible.
A company which hasn’t pro-actively converted to LTD or DAC by the Conversion Deadline will be automatically converted to LTD on 1 Dec 2016. Such companies won't have an up-to-date written Constitution reflecting current company law until they amend their pre-conversion memorandum and articles of association (known as Constitution under CA14) and, until then, will have the uncertainty of a partially unwritten deemed constitution. If the company is of a type required under CA14 to be a DAC, it will be in breach of CA14 once converted to LTD. CA14 contains remedies for members/creditors affected by failure by a company's directors to convert (or convert to a specific company type) in certain circumstances.
Our dedicated Corporate and Corporate Secretarial teams can advise on the most appropriate company type for your company and assist you in navigating the conversion process and updating your Constitution prior to the Conversion Deadline. We can also advise on the implications of missing the Conversion Deadline and actions which should be taken in that scenario. We can also advise on the implications of missing the Conversion Deadline and actions which should be taken in that scenario including the available options for re-registering companies following the Conversion Date.
For information or advice, please contact Gillian O'Shaughnessy, Partner, Corporate on +353 1 691 5286, William Kingston, Head of Corporate Secretarial on +353 1 691 5449, any of our Corporate Partners or your usual ByrneWallace contact.
For further information on CA14 conversion requirements, please click these links to read more about LTDs and DACs or our CA14 FAQs.