The Companies Bill 2012 was published on 21 December 2012 by the Minister for Jobs, Enterprise and Innovation. The Bill which runs to over 1,100 pages represents over a decade's work and seeks to consolidate the existing 16 Companies Acts and reform existing Irish company law. The Bill aims to make the incorporation and operation of Irish companies more straightforward and cost effective.
It is estimated that 12,500 private companies limited by shares are incorporated every year and this type of company makes up 90% of all companies registered at the Companies Registration Office. The Bill focuses on this type of company with the first 15 Parts of the Bill addressing the life cycle of the private company limited by shares ('CLS') from incorporation to winding up. Provisions relating to other types of company such as the public limited company, unlimited company and company limited by guarantee are set out in subsequent separate Parts of the Bill.
Company Limited by Shares -v- Existing Private Company Limited by Shares
The CLS has a number of features which differ from the existing private company limited by shares, some of these differences mentioned below should make the operation of these companies simpler and more efficient:
Single director companies: there will no longer be a minimum requirement of two directors. The CLS will be able to operate with one director however a company secretary is still required and where there is only one director that person may not also hold the office of company secretary. The company must still have at least one director who is resident in an EEA state.
Objects clause: there will be no requirement on a CLS to have an objects clause. This removes the concern around a company's capacity under its constitutional documents to take certain actions and gives the CLS "full and unlimited capacity to carry on and undertake any business or activity, do any act or enter into any transaction". In doing so the Bill removes the concept of 'ultra vires' and effectively gives the CLS legal capacity equivalent to that of a natural person.
Annual General Meetings: the CLS is not required to hold a physical AGM and the business required to be carried out at an...