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The ROI Companies Act 2014 came into force on 1 June 2015 and will apply to all Republic of Ireland registered companies.

It’s been 14 years in the making and has been described as the biggest reform to Irish Company Law in a generation. The purpose of the Act is to consolidate existing Irish Company Law and to make the Law clear and accessible in respect of the provisions that apply to all companies.

So what’s new?

The biggest single change brought in by the Act is to establish the different classifications of companies. The Board of directors of every company will have a decision to make as to which entity type the company will become. The main types of companies* are:

Private Company Limited by Shares	Designated Activity Company (DAC)	Company Limited by Guarantee without share capital
Seen as the model private company Can have between 1 and 149 shareholders Can have a minimum of 1 director If only 1 director they must have a separate company secretary AGMs are optional No memorandum of association No objects stated in its constitution – can undertake any business or activity. Applicable to: Simple trading companies with no complex shareholding.	Private company Can have between 1 and 149 shareholders Must have at least 2 directors Has a memorandum of association Must specify its objects in its constitution - must undertake a specific business or activity Must hold an AGM where there is more than 1 shareholder Can list debt securities on stock exchange. Applicable to: Companies with external shareholders (e.g. joint ventures) where there is a need to have a specific objective of the company.	Members’ liability is limited to amount they have undertaken to contribute to assets of company if it is wound up - this is usually an amount of €1 Must have minimum of 2 directors Has a memorandum of association Must specify its objects in its constitution - must undertake a specific business or activity Must hold an AGM where there is more than 1 shareholder. Applicable to: Charitable organisations, professional bodies and sports and social clubs.

* Other entity types include Public companies listed on the Stock Exchange and unlimited companies. Specialist accounting and legal advice should be taken if considering setting up these types of companies.

What else is included?

Other provisions of the Act include:

• The company’s registered office must be a physical location in the Republic of Ireland
• The director must be resident in European Economic Area
• Companies are still required to file an Annual Return and financial statements within 28 days of the Annual Return date. A company's annual return date can be checked online at the Companies Registration Office (CRO)
• Where accounts are filed after the above deadline, the company accounts must be audited
• Expansion of the audit thresholds to include group companies and companies limited by guarantee
• The Act establishes 8 fiduciary duties of directors including to act in good faith, act honestly and responsibly and to exercise care, skill and diligence
• New two stage registration of charges and debentures against the company. Companies can now notify CRO of the intention to create a charge and subsequently register the charge. The priority of charges created by a company will be determined by reference to date of receipt by CRO
• Updated legislation in respect of the winding up, striking off and appointment of receivers and examinerships. Specialist advice should be sought in respect of these areas
• Updated forms which are available online should be sent to CRO.

What do I need to do next?

• Every company must decide which type of company it wishes to become
• Directors should review the company’s existing memorandum, existing shareholding and the objective of the company and decide on the company type which best suits them
• Companies have 18 months from the date of commencement (1 June 2015) to register as company type. If not registered by this time, the company will automatically be registered as a Private Company Limited by Shares with its existing Memorandum amended to remove the objects clause
• Companies wishing to register as a DAC must have this filed with CRO 15 months from commencement date
• Directors can elect to register as a Private Company Limited by Shares before the end of the 18 month period – this may be advisable as the Act provides a model constitution for such companies.

Key dates:

• 1 June 2015 – commencement date
• 31 August 2016 – final date to register as DAC
• 30 November 2016 – end of transition period, all companies who have not elected will be registered as Private Company Limited by shares

Contact us:

It is important you fully understand your options and responsibilities under the Act. Please feel free to contact us and we will be more than happy to help and provide advice.

Whilst every effort has been made to ensure the accuracy if the information in this update, readers should not act on it without first seeking professional advice.