By Andrew Lambe, 8th January 2013 (Updated 16th October 2014)
On 21st December 2012, Minister for Enterprise and Jobs Richard Bruton announced the publishing of the long-awaited Consolidated Companies Bill, which will radically reform company law in Ireland. The bill, which comprises of 1429 sections, will consolidate the existing Companies Acts 1963-2013 into one brand new single piece of legislation. The bill will ultimately make it easy to register and operate a limited company in Ireland and will simplify and improve many aspects of Irish company law.
The bill has just passed through the final stages of the Seanad (30th September 2014) and is expected to be signed into law shortly by President Michael D. Higgins. There were 164 amendments by the Seanad, all of which had been proposed by the Government, were accepted and eight opposition amendments were not proceeded with.
The Companies Registration Office will have a substantial workload to prepare for the legislation, and there will be a period between the signing of the bill and the commencement date, which we now expect to be June 2015.
The main features of the Bill are as follows:
- – A Private Limited Company will become known as ‘Company Limited by Shares’ (LTD for short)
- – Single Director Companies will be permitted once a separate Company Secretary is appointed. The duties of Company Directors will be simplified
- – The need for a ‘physical’ Annual General Meeting (AGM) will be dispensed with, once the shareholders agree
- – The abolishment of the objectives clause. Companies will be able to trade in whatever legally permitted business they see fit without the need pass a special resolution (i.e. the doctrine of ‘ultra vires’ will no longer apply)
- – The Memorandum & Articles of Association will be replaced by one document ‘Constitution’ Companies which will be provided by default (Unless the company elects to have a specific Constitution or decides to become a Designated Activity Company (DAC)
- – The law relating to the strike off of companies will be consolidated and radically overhauled, and a legal distinction between voluntary strike-off and involuntary strike-off will be created.
- – Offences created by the Bill have been categorised on a scale of 1 to 4 (1 being the most serious) and the punishment for those Directors and Companies found guilty of offences clearly specified – this will result in far greater transparency
- – A new “summary approval procedure” no longer require companies to obtain High Court approval for certain transactions, including capital reductions, and solvent windings up
- – Reform of legislation which governs Guarantee Companies, PLC’s and Unlimited companies and the provision to change from a limited company to Guarantee company and vice versa
- Audit exemption will now be possible for holding/subsidiary companies once certain conditions are met, and thresholds for audit exemption will change so more companies can avail of same
For more information on the new companies act please contact us at Company Bureau.
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