The Companies Act 2014 brought about some major changes in the types of companies that can be registered in Ireland. Previously, all companies were registered as Private Limited Companies (PLCs), which had certain requirements and restrictions. Under the new Act, PLCs have been divided into two categories – the Private Company Limited by Shares (LTD) and the Designated Activity Company (DAC).
If your company was registered before June 1, 2015, as a PLC, you have a responsibility to convert it to one of the new company types within 18 months of the Act coming into effect. This conversion is necessary in order to avail of the new features of the new LTD, such as the option for a single-director company.
It is important to note that if you do not take action to convert your company, it will default to the new LTD automatically at the end of the 18-month transitional period. While this may seem like an easy solution, it could potentially cause legal problems for the company, its directors, and shareholders. This is because the company will be forced to adopt a default constitution that may not be suitable for its type of business.
One potential legal issue that could arise is if certain members and creditors prefer to see the company re-registered as a DAC, they may challenge the company’s LTD status in the courts claiming prejudice on the basis of the directors’ failure to act appropriately. Additionally, companies may also be refused financial funding from banks if they are not compliant with the current company law.
At Abbey Blue Formations, we strongly advise directors to take a proactive approach to the new Act and convert to a suitable new company type as early as possible. We understand that this process can be overwhelming, and that’s why we offer our assistance in converting your company to a new company type. Our team of experts can guide you through the entire process, ensuring that all the necessary steps are taken in compliance with the statutory requirements.
Our fee for this service is €300+VAT, which includes comprehensive support throughout the conversion process. Don’t wait until it’s too late, take action today and secure the future of your company.
