Third parties should be able to readily identify the type of company with which they are dealing. To achieve this, the Companies Act 2014 (the “Act”) introduced stricter requirements on companies to include their company type in their name. This requires some companies to take action before the transition period in the Act expires on 30 November 2016 (the “transition period”).
It is anticipated that most private limited companies in existence on 1 June 2015 (“EPCs”) will, by the end of the transition period, convert to one of the two new types of private limited company - either the private company limited by shares (the “LTD”) or the designated activity company (the “DAC”). As part of the conversion process the Companies Registration Office (the “CRO”) will formally change some companies’ registered company names to include their company type ie to include either the words “Limited” (if not already in the name of the EPC by previous exemption) or “Designated Activity Company”, as appropriate.
All other company types in existence on 1 June 2015 (“pre-Act” companies) automatically became their equivalent company type under the Act but enjoyed a temporary suspension during the transition period of the requirement to change their registered company name with the CRO. The Act does not require public limited companies to change their name.
Apart from EPCs, certain pre-Act companies must also change their registered corporate names with the CRO by the end of the transition period, unless an exemption has been secured by the company.
Unlimited Companies (“UCs”)
The Act requires that every pre-Act UC (whether public or private) must have the words “unlimited company” (or the Irish equivalent) at the end of its registered corporate name and that UCs must attend to this change at the CRO before the end of the transition period. If special circumstances exist which render it, in the opinion of the Minister for Jobs, Innovation and Enterprise, expedient to grant an exemption from such use, then the Minister may grant the UC a written exemption from this requirement. It is not yet clear how widely available that exemption will prove to be. If the UC does secure an exemption, it must so notify the CRO before the end of the transition period so that its name is not inadvertently altered by the CRO.
After registration, the words “unlimited company” may be used by a UC in abbreviated forms such as u.c. or uc (or such abbreviations in their capitalised forms or Irish equivalents).
Companies Limited by Guarantee (“CLGs”)
The Act requires that every pre-Act CLG must include the words “company limited by guarantee” (or the Irish equivalent) at the end of its registered corporate name. CLGs must attend to this change at the CRO before the end of the transition period unless the company was previously exempt from the requirement to include the word “Limited” in its name under section 24 of the Companies Act 1963 (in which case the CLG may continue to avail of the exemption so that “company limited by guarantee” may be omitted).
Every CLG incorporated under the Act must include the words “company limited by guarantee” unless an exemption has been secured from the CRO under the Act (see below).
Designated Activity Companies
If an EPC re-registers as a DAC, as part of the re-registration process, its registered corporate name is changed to incorporate the words “Designated Activity Company” (or the Irish language equivalent) at the end of its name. After registration, the words “designated activity company” may be used by the DAC in the abbreviated forms such as d.a.c. or dac (or such abbreviations in their capitalised forms or Irish equivalents).
Some DAC’s may be entitled to an exemption granted by the CRO under the Act from having to use the prescribed words or abbreviations (see below).
Private Companies Limited by Shares
If an EPC converts to an LTD its name must continue to end with either “Limited” or “Teoranta”. After conversion, these words can be used in their abbreviated forms. However, exemptions from the obligation to use these words can no longer be obtained under the Act for a new LTD and existing exemptions will be lost.
Exemptions granted by the CRO
Some DACs and CLGs may be entitled to an exemption from having to use the prescribed words or abbreviations if they are charities or their objects are the promotion of (for example) religion or education, where the profits are applied solely for the promotion of those objects. To apply for such an exemption under the Act (which corresponds with the exemption from naming requirements under section 24 of the Companies Act 1963) the DAC or CLG must file a Form G5 with the application for incorporation. Even if such an exemption is granted, the DAC or CLG must still identify its company type on business letters and order forms.
Requirements for Change
UCs and CLGs must file a Form N3 (with a special resolution) at the CRO together with an amended form of memorandum and articles of association. If the company does not do so by the end of the transition period, the Registrar of Companies will change the name of the company and issue the amended certificate of incorporation (unless an exemption has been granted to the company).
The CRO has advised that once the transition period has expired, it will not accept any documentation with the incorrect form of company name.
A change of company name will also involve both administrative and legal considerations. These include changes in stationery, company seal, registers and share certificates. Contractual counterparties and third parties may need to be notified of the new company name (such as the registrars of Irish or overseas registers in which the company name is recorded). Depending on the type of company and the industry in which it operates, the name change may also trigger changes in authorisations or registrations. Companies should factor in such issues when considering the application of the transition period to them.