The new Companies Act 2014 (the Act) was signed into law in late 2014 and it condensed the previous 17 Companies Acts and related company law provisions into a single comprehensive code of company legislation. It was the culmination of more than 10 years’ work on the part of the Company Law Review Group and the Department of Jobs, Enterprise and Innovation.
Whilst many of the provisions of the Act are merely a restatement of the previous law, there are also a number of changes and some new provisions. The design of the new Act focuses on simplification and modernisation, with clear and accessible drafting language.
A significant portion of the legislation is dedicated entirely to the company limited by shares or “LTD”. It is intended that the LTD will become the company model of choice for the vast majority of private companies in Ireland. The remainder of the legislation sets out the law applying to other company types, namely public limited companies, guarantee companies, unlimited companies, investment companies and Designated Activity Companies (or DACs).
The bulk of the Act entered into force on Monday 1 June 2015, with the commencement of a small number of provisions being deferred.
The following six provisions will only apply in respect of financial years beginning on or after 1 June 2015:
- Section 167 - audit committees;
- Section 225 - directors' compliance statement;
- Section 305(1)(b) and Section 306(1) – disclosure of directors' remuneration and gains on exercise of share options;
- Section 326(1)(a) – list of directors of company during financial year in director's report; and
- Section 330 - directors' audit confirmation.
The transition period for conversion of existing private limited companies to either a company limited by shares or a designated activity company also commenced on 1 June and will run for 15 months for conversion to a DAC and 18 months for conversion to a LTD.