By Annette McCarthy, 7th April 2022
Important update: all Limited Companies incorporated prior to 1st June 2015 were required to convert to a new company type and replace the memorandum and articles of association with a constitution. If this action was not taken, the constitution will reference an obsolete Companies Act and may contradict current company law.
When the Companies Act 2014 came into effect on the 1st June 2015 it replaced the Companies Acts 1963 – 2013. The new 2014 Act introduced a conversion process which required all limited companies to convert into a new company type, either the new LTD company or a DAC (designated activity company). The deadline for the conversion was 30th November 2016. Please be advised that the CRO did not automatically issue new constitutions. For those companies that have not replaced their memorandum and articles of association with a constitution, their existing Memorandum and Articles of Association have since been deemed its constitution except for its objects clause, their constitution will reference an obsolete Companies Act and may contradict current company law.
Consequences of not having replaced Memorandum and Articles of Association with a Constitution
Both Director(s) and the company secretary have a duty to ensure that the company’s legal documents are compliant and kept fully up to date. Directors who have not acted before 30th November 2016 may be in breach of Section 60 of the Companies Act 2014. Some financial institutions and state bodies will require sight of a company’s constitution for transactions such as opening a bank account, arranging, and agreeing to a loan and will expect to receive a compliant version of the company’s constitution. A company will not be in a position to change its name until a constitution is in place.
In February 2021, Ulster Bank announced its withdrawal from the Irish banking sector. As a result, some companies may need to open new bank accounts with other providers and in order to do so, their company’s constitution will need to be compliant with the Companies Act 2014.
Benefits of having a constitution
There are many benefits available to companies such as having uncapped authorised share capital and having a sole director.
How to rectify the situation
Company Bureau offers a professional, quick and efficient constitution service for a fee of €150 plus VAT for Limited Companies (please contact Company Bureau to receive a quote for all other company types) which includes adapting our standard constitution which is preapproved and compliant with the Companies Act 2014, generating and lodging of required documents with the Companies Registration Office (CRO) and the drafting of minutes.
If you would like to order our Constitution Update Service or if you have any queries, please do not hesitate to contact us or call +353(0)1 6461625. The experts at Company Bureau would be happy to assist you with your specific company needs.
Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.