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New Companies Regime – 1st June 2015 –



The Companies Act 2014 commenced on the 1st June 2015.  This Act will affect all companies incorporated under Irish law, in particular private limited companies


Companies Act 2014

Companies Acts 1963-2013

New model private company limited by shares (referred to as a “LTD” or “CLS”)

Private company limited by shares

Designated Activity Company (“DAC”) limited by shares

Private company limited by shares

Designated Activity Company limited by guarantee

Private company limited by guarantee and having a share capital

Public limited company (“PLC”)

Public limited company (i.e. limited by shares)

Company limited by guarantee (“CLG)

Public company limited by guarantee and not having a share capital

Unlimited company (“UC”)

Unlimited company


As 86% of companies registered as at 31st December 2013 were private companies limited by shares, the new law focuses on the private limited company with shares and simplifies the law.



There is a transition period from 1st June 2015 to 30th November 2016, within which all existing private limited companies may choose to convert to:


a) the new model private limited company (“LTD” also known as “CLS”),

b) a Designated Activity Company (“DAC”)

c) or another type of company eg PLC, CLG or UC as described in the table above.


*The form most likely to be chosen is a LTD/CLS type company.


What you need to know:

Companies limited by shares (LTD/CLS)

The LTD/ CLS company type will have a number of advantages:-

  • full and unlimited capacity  ie the existing requirement of an objects clause and companies cannot act outside of their objects clause will no longer apply;
  • needs only one director and shareholder (but it must also have a secretary if it has only one director); Further, the directors of the company hav a duty to ensure that the person appointed as company secretary has the necessary skills to discharge the role.
  • a simplified single document constitution, replacing the current Memorandum of Association and separate Articles of Association
  • need not have an authorised share capital;
  • no need to change the company name or stationery (it will continue to include “Limited” or “Ltd” or the Irish equivalent).

Designated Activity Company (DAC)

This will be necessary for companies which need to be incorporated for a very specific and stated purpose e.g a joint venture or charitable objects.
It requires a minimum of two directors and one director can also act as a secetary.. 
Must have an object clause ie same as private limited company as we currently know it.
Will have a two part document constitution.
The name must end in “designated activity company”, “DAC” or the Irish equivalent.
Must have an authorised share capital


Re-registration as a new private limited company (LTD/CLS)

If an existing private company wishes to become a LTD/CLS immediately; it must pass a special resolution and may then adopt its new constitution in the form specified in section 19 of the Act.

All incorporation paperwork including the new Constitution, Form A1 and the appropriate fees must be delivered to the CRO

The CRO will issue a new certificate of incorporation.

Unless a company re-registers as a DAC or another company type it will automatically be “deemed” to be a company limited by shares (“LTD” or “CLS”) once the transition period expires i.e should they take no action. They will simply lose their objects clause and the remaining part of the memorandum and the articles will be deemed to be the company’s constitution. They will have a “deemed constitution”.  However, it may be useful to convert prior to the end of the transition period (as the more restrictive law on DAC’s apply to existing companies until they convert).

Re-registration as a Designated Activity Company (DAC)

A DAC is essentially the same as the private limited company as we have known it. It must have a memorandum of association with an objects clause, and the limitations on capacity – the ultra vires rule, etc – will remain for DACs.

If a company wishes to convert to a DAC, it should pass an ordinary resolution not later than 3 months before the expiry of the transition period.

If a member of an existing private company, who holds more than 25% of the total voting rights in the company, serves notice on the company that he wants it to re-register as a DAC, it must do so.

Members who hold more than 15% of the company’s issued share capital and/or creditors who hold 15% of the company’s debentures may apply to court for an order requiring the company to re-register as a DAC.

Until the end of the transition period, the law applying to DACs shall apply to all existing private companies as if they were DACs, unless the company delivers a constitution to the Registrar, which takes the form set out in the new Act.


•Decide whether or not you are happy to convert to a LTD/CLS or a DAC, and remember some companies may be obliged to convert to DACs - we can advise further if required.

Patrick Donaghy & Co. can assist you in converting your company to a LTD or a DAC or some other type of company and we can advise you on the options for, and your obligations, concerning conversion.

If you have a query in relation to this area of law please contact Teresa Love on 01-6794165 or by email: