Latest news and blog » The Companies Act 2014 - an overview of changes 2016-11-13
This new Act is the largest piece of legislation ever to come into effect in Ireland and changes substantially the law in relation to how businesses operate.
All existing private companies with shares must become either:
a company limited by shares (CLS or LTD company);
a 'designated activity company' (DAC) or
another type of company such as a PLC.
There is an 18 month transition period after the law comes into effect allowing companies to make these changes.
Small private companies who convert to a limited (LTD) type will benefit from some changes including:
- A simplified constitution comprising a single document instead of a Memorandum of Association and Articles of Association;
- There will be only one director required;
- May avoid holding AGMs;
- Removal of the ultra vires rule where companies cannot operate outside of the activities laid out in the objects clause;
- Codification of directors' duties into 8 rules.
Some further new rules are:
- The Company Secretary must have the skills and resources for the role;
- Directors' loans will be treated adversely; proper loan agreements and board resolutions must be in place;
- Directors will be required to confirm that all relevant audit information has been conveyed to the auditors;
- Directors will need to consider what basic steps they should take to demonstrate compliance;
- Directors will be required to secure compliance with tax law and company law provisions and whether to appoint an audit committee.