Companies Act 2014 - Modernising and consolidating company law in Ireland
The vast majority of the provisions of the Companies Act 2014 came into force on Monday 1 June 2015. The Act consolidates and restates a lot of existing company law but also brings in a significant number of changes which will affect the way business is done.
Eithne FitzGerald, Partner at A&L Goodbody said:
"This legislation is a welcome development as it modernises and consolidates company law and should simplify and facilitate certain transactions but it does also introduce more onerous responsibilities for directors, some extra obligations on companies and significantly increased penalties for non-compliance".
All existing private companies limited by shares will be required to convert to a new LTD or "Designated Activity Company" or "DAC" company type within a 15-18 month time frame. Certain companies such as insurers and companies with listed debt will not be able to convert to a LTD. It is recommended that all companies conduct a review of their constitutional documents to bring them in line with the new legislation.
It should be possible to effect certain transactions and reorganisations on a less costly basis due to certain simplified procedures. It is also to be welcomed that the legislation enables mergers, in the true sense of the word, of private domestic companies which could become a popular consolidating means of acquisition.
With effect from the financial year beginning after 1 June 2015 directors of certain larger companies and PLC's will be required to issue compliance statements and establish processes to secure compliance and audit committees, or explain why not. New more fulsome audit confirmations will also be required of all directors.
Priority of charges created over a company's assets will be established from the date of filing in the Companies Registration Office, not the date of its creation, as is currently the position.
For more information download our 'What's Changing? Your brief guide to the highlights' guide.