Last year a new Companies Act came into effect in Ireland. Along with consolidating all historical company law, the Act was designed to reduce business complexity in the country in 2016 and beyond.
Let’s look at the most notable changes for corporate businesses in Ireland following the adoption of the new Act:
- A single constitutional document replaces the Memorandum and Articles of Association.
- No main objects clause is required for most entities – where one is required for commercial purposes, a new company type – the “designated activity company (DAC)” has been introduced.
- The minimum number of directors of a private company limited by shares was reduced to one from two. A DAC must have at least two directors. (Directors in Ireland must be natural persons, and they can be a resident anywhere in the world).
- The small companies audit exemption has been extended to small groups.
- The concept of authorised share capital is abolished for the private company limited by shares.
- Some companies may opt to dispense with the requirement to hold an AGM.
- Existing companies may need to change their name if they are an Unlimited or a Designated Activity Company.
The aim of the new Act is to enhance corporate governance, increase commerce by reducing complexity and modernise Irish legislation.
A general election will be held in the first half of 2016, however as most political parties in Ireland share a similar philosophy, any change of government is not expected to have a significant impact on companies/see alterations to the Act.
How we can help
Our Corporate Secretarial experts in Ireland can help to make sure your Irish companies convert to the new Companies Act requirements during what remains of the 18-month transition period, while maintaining the highest standards of corporate governance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.