On the 10th December 2014 the long-awaited Consolidated Companies Bill passed through the final parliamentary stages and is expected to come into effect on Monday 1st June 2015. The Act essentially consolidates the existing Companies Acts 1963-2013 into a single piece of legislation.
Amongst some of the changes that that Act brings into Corporate Law is that Single Director Companies will be permitted once a separate Company Secretary is appointed. Where a company only has one director, it is confirmed that this person cannot also act as Company Secretary. Director duties are clearly outlined, and offences created by the Act have been categorized with the punishment for those Directors and Entities found guilty of such offences clearly outlined within the Act itself, bringing much needed transparency required by our corporate clients.
Clients will find of particular interest that the need for a ‘physical’ Annual General Meeting (AGM) will be dispensed with, providing this is agreed with the shareholders. Companies will now also be able to trade in whatever legally permitted business they see fit without the need pass a special resolution, as has previously been normal procedure.
Another major change which the Companies Act 2014 brings into law is that the Memorandum of Association and the Articles of Association will now be replaced by one single document, a Company Constitution. A standard Constitution will be made available to all companies, however the company also has the option to have a specific Constitution.
There will be an 18 month transition period where clients will need to re-register an existing private company as either a private Company Limited by Shares (CLS) or a Designated Activity Company (DAC). If no action is taken then the company will automatically be deed to be a CLS, and the new Constitution will comprise of the current Memorandum of Association and the Articles of Association.
The new Companies Act will ultimately make it easier for Limited Liability Companies to register and operate in Ireland.