The Companies Act 2014 divided the Private Limited Company into the Private Company Limited by Shares and the Designated Activity Company (DAC). Under the new act, Directors of companies registered before June 1, 2015, have the responsibility to convert their company to one of the new company types within the 18-month transitional period. A Company cannot avail of the new features of the new LTD (for example, a single-director company) until the company has been converted.
At the end of the 18-month transitional period, all Private Limited Companies will default to the new LTD automatically. Whilst this default position is catered for, it is important to understand that this lack of action could potentially cause legal problems for the company, its directors and also its shareholders. The company will be forced to adopt a default constitution that may not be suitable for its type of business. One potential legal issue is if certain members and creditors who would prefer to see the company re-registered as a DAC may challenge the company’s LTD status in the courts claiming prejudice on the basis of the directors’ failure to act appropriately. Companies may also be refused financial funding from banks if they are not compliant with current company law.
We strongly advise Directors to take a pro-active approach to the new Act and convert to the suitable company type as early as possible.
Company Bureau can assist you with converting your company to a new company type. Our fee for this service is €195+VAT to convert to the new Private Company Limited by Shares (LTD) or €295+VAT to convert to the new Designated Activity Company (DAC). We can offer a discount on multiple orders.
For more information or to avail of our conversion service, please do not hesitate to contact us today.