The Institute of Directors in Ireland (IOD) have conducted a survey on awareness by directors of the potential impact on them of the Companies Act 2014. Nine in ten (89%) of the directors surveyed signalled some awareness of how the Companies Act 2014 might impact them or their company. However, three in five (60%) of those surveyed indicated that they are unprepared for the commencement of the legislation in June 2015.
According to the IOD, the survey showed that public limited companies (PLCs) were most prepared. 62% of directors of PLCs said they are either prepared or very prepared for the commencement of the legislation, compared to just one-third (35%) of directors of companies with less than 100 employees.
Directors rated the following measures from the Companies Act as having the most potentially positive impact on their companies:
- 70% said codifying directors’ duties into law will have a positive impact on operating a company in Ireland;
- 51% said the introduction of a one document constitution for certain companies, replacing the separate Memorandum and Articles of Association will make it easier to operate a company;
- 50% said that new rules allowing for online filing of accounts would have a positive impact; and
- 44% believed that allowing certain companies to have only one director would contribute to making it easier to operate a company in Ireland.
According to the IOD, 41% of directors surveyed say their company intends to dedicate specific resources to manage compliance and implementation of the Act and unsurprisingly, this is higher among large companies (250 or more employees) and PLCs, with 60% of those intending to put specific resources in place to deal with the changes.
When asked about conversion, 48% of directors of existing private companies limited by shares indicated that they intend to opt into the new regime for a private limited company by shares (known as a CLS or LTD), allowing companies to avail of a range of reforms, including the option to have just one company director. However, one in three (36%) directors of existing private companies limited by shares stated that they were undecided as to which company structure they will opt for.