Heads Up for Everyone - Please read.

Bandara

Just a reminder thats the Companies Act Deadline is approaching and not to miss this deadline if it is relevant to you


Basically the Companies Act 2014 stated that all private limited companies have to change in 2016 to either a private company limited by shares (LTD) or a designated activity company (DAC).

Deadline to convert to a 'DAC' is 31 August 2016, whereas its 30th November 2016 if converting to a Model Private Limited Company aka 'LTD'.

Its most likely that you will covert to a LTD; there are three ways to do this;

A director driven conversion under S.60 of the act
A Member driven conversion under S.59 of the act
A deemed conversion under S.55 of the act

Most will no doubt be going via the Member driven conversion, which is fine to do up until Nov 30th.

But you do need to visit this subject with your account and discuss with him/her whats best for you, and why.

There has been talk that a company who does nothing will automatically statutorily default to a LTD, this is correct, however there are implications that need to be considered before you allow this to happen and do nothing.

S.60 of the act compels directors to convert if a members driven or other form of re-registeration isn't completed presto to 30th Nov.

Failure to convert in accordance with S.59 or S.60 of the act is a breach of the requirements of all directors and potentially can result in a breach of fiduciary duties

Under S.62 of the act, if members make an application under S.212 where directors have failed to comply with the requirements of S.60 it'll be presumed until proven otherwise that the directors have acted in a manner oppressive to the member who makes the application

When you are statutorily defaulted to a LTD, yes you will be issued with a new Cert of Incorporation by the CRO, you will not have a formally updated constitution which could potentially cause delays in legal and banking transactions

Sorry, I know thats pretty hard reading !

I'm no expert in this area but I'm just trying to make anyone who isn't aware that this is something that requires your attention, and there is a deadline looming in 7 days time that may or may not be your chosen option.

Maybe Dbran or someone suitably qualified could do a little piece on this that makes it easier to read and understand than I was able to.

Please don't ignore !

Trojan

I've been putting off dealing with this.

I've a 2 director Limited Company with 1 (me) active in the business. The other director is a family member.

So this wonderful new possibility comes along of a single director company making paperwork simpler. But hang on:

A company still needs to have a secretary and the secretary cannot be same person as the director, if the company has only one director.

That kind of misses the point entirely.

Gloomtastic!

Trojan wrote: »

I've been putting off dealing with this.

I've a 2 director Limited Company with 1 (me) active in the business. The other director is a family member.

So this wonderful new possibility comes along of a single director company making paperwork simpler. But hang on:



That kind of misses the point entirely.

Irish government legislation to a tee! :rolleyes:

dbran

Thanks for posting this Bandara and you have actually explained it quite well.:)

The thing I would add is that it will still be possible to change from one type of company to another after the deadline however it will be more difficult and onerous to do so.

In reality, most companies will want to be LTDs in order to simplify the way that their company is run.

However if you are regulated by the central bank you will must likely be obliged to become a DAC. Similarly if the shareholders of the company wish for it to remain restricted by an objects clause a DAC would be necessary.

Doing nothing is technically a breach of company law by the directors although there are no sanctions for it.

It will also mean that your company's constitution will essentially be out of date and be referring to defunct legislation. This in turn may affect the company's ability to obtain finance in the future.

dbran