Companies Act 2014

The genesis of this new Act, which is the largest in the history of the State, can be traced back to the establishment of the Company Law Review Group (CLRG) in 2000. The CLRG was mandated to make recommendations on the updating, consolidation and simplification of company law in Ireland to bring it to world class standards.

This was achieved by shifting the emphasis of company law away from Public Limited Companies and on to the workhorse of Irish commercial life, the Private Company Limited By Shares. It was further achieved by a re-ordering of existing law into a more logical and user friendly format, along with the introduction of a number of common sense innovations.

The most frequent comment made is that this Act is ‘old wine in a new bottle’. Accordingly, existing company law knowledge is not entirely lost, but rather re-packaged and made easier to access.
The company types under CA 2014 are as follows;

LTD – New model private company
DAC – Designated Activity Company
PLC – Public Limited Company
CLG – Company Limited By Guarantee
PUC – Public Unlimited Company
PULC – Public Unlimited Company w/out share cap.
ULC – Private Unlimited Company
SE – Societas Europaea
External Companies
Unregistered Companies
Investment Companies
Joint Stock Companies

As such the 1,448 Sections of CA2014 has been constructed so that the legislation relating to each company type can be found in one location in the Act. Parts 1-15 relate to ‘Ltd’ companies


This simplified company type is expected to be the corporate form which the vast majority of Irish companies will take either on incorporation or by way of conversion. The key features are as follows:
1 to 149 Shareholders (up from a maximum of 99)
May have just one Director (but must have a separate Company Secretary)
Must have a Company Secretary (may not be sole director)
Shareholder(s) only liable for unpaid portion of share capital
Name must end in ‘Limited’ or ‘Teoranta’
No main objects clause (rule of Ultra Vires is gone)
May register any person who can ‘bind’ the company, in the CRO
Must have company seal
Cannot list any securities(inc. debt securities)
May become Audit Exempt/Dormant
Can dispense with the holding of physical AGM
‘Majority’ written resolutions permitted (but with 7/21 day cooling off period)

May dispense with having a specified Authorised Share Capital


Despite being a ‘new’ company type, the DAC will closely resemble a Private Company Limited by Shares as registered under the Companies Acts 1963 to 2013.

  • 1 – 149 members/shareholders
  • Can be limited by shares or by guarantee
  • It will have a two document constitution very similar to a Memorandum & Articles of Association
  • Must have TWO Directors
  • May become Audit Exempt/Dormant
  • Can dispense with holding of physical AGM ONLY where there is a sole member/shareholder
  • May list debt securities

Existing companies which are envisaged as becoming DACs would include trustee companies, Joint Venture companies, charities, companies limited by guarantee having a share capital and companies which are incorporated for a specific purpose for which the shareholders want the capacity of the company to be clearly stated. Also, companies which have heavily negotiated Articles of Association are unlikely to want to go through the process again.


Once the Act has been commenced on 1st June 2015 , there will be an 18 Month ‘Transition Period’ during which existing companies will have to decide on which form they wish to take i.e. either LTD or DAC.

Where Shareholders do NOT engage with this process and actively convert, there is then an obligation on the Directors to take action. They must prepare a minimal new form constitution, circulate it to the shareholders for consideration and then file in CRO with the relevant Form N1. CRO will then issue a new Certificate of Incorporation. Failure to do this will leave the Directors in default of their general obligations to keep their company compliant with company law.


Where Directors/Shareholders are not pro-active in completing the conversion process to either LTD or DAC their company will automatically ‘convert’ to the new form LTD at the end of the transition period.

However, it is strongly recommended that companies do not allow this to happen for the following reasons. Because of the deeming provisions of CA 2014 their governing instrument as filed at the CRO (their previous Memorandum & Articles of Association)will become practically unintelligible as a stand-alone document.

Apart from being poor corporate governance this may impact the subject company’s dealings with its own shareholders, with banks, potential investors, Enterprise Boards and any other third parties. Directors may be exposed where shareholders have been prejudiced by inaction. Companies wishing to become ‘single Director’ must convert to being a LTD. Accordingly, companies would be well advised to address this issue as quickly as possible. We will continue with part 2 of this article in the next issue.

We Are Here!

25 Herbert Place,
Dublin 2,
DO2 AY86,
Republic of Ireland.