The Irish Companies Act 2014 (the "Act") will, once it comes into force in mid-2015, introduce significant enhancements to Irish company law. The Act is designed to give Ireland a modern company law regime and is further clear evidence of the Irish government's continued commitment to making Ireland a leading location to do business.
The Act, the largest substantive piece of legislation in the history of the State, brings together the existing 33 company law enactments into a single statute. Anyone involved in running Irish companies, large or small, needs to be aware of what the new legislation will mean for them in practical terms.
Some of the key questions currently being asked in relation to the Act are as follows:
With commencement of the Act imminent, what steps should we take now?
You should at this stage be reviewing your organisational structure to identify any Irish companies, branches or places of business to assess how these will be impacted by the Act. You should identify which of your companies are limited and which are unlimited and which are public or private, as different rules will apply in each case. You should also consider which of the new company types under the Act will best suit the needs of your business.
What will happen to existing Irish companies?
The Act creates new forms of Irish company and recognises the continued existence of other company types. The principal reforms being introduced focus on private limited companies.
The Act provides for two new forms of private limited liability company:
the model private company limited by shares ("LTD") the designated activity company ("DAC"). During an 18-month period following the Act's commencement, existing private limited companies may opt to become either an LTD or a DAC. If, after this transition period expires, an existing private limited company has not opted to convert, it will automatically become an LTD.
Until the end of the transition period the law applicable to DACs will apply to all existing private limited companies.
Will companies still need a memorandum and articles of association?
Under the new rules, an LTD will have a simplified single-document constitution, replacing the current memorandum and articles of association. Significantly, an LTD's constitution will not have an objects clause and it will therefore have unlimited corporate capacity. A DAC will need a memorandum and articles of association and may be a suitable vehicle where an objects...