Conversion - Types of Companies under the Act

The majority of private Irish companies will have to decide whether they want to change to the new model of private company limited by shares (LTD) or convert to being a designated activity company (DAC ) under the Companies Act 2014.   

LTD

A company limited by shares is the new model private limited company

Designated Activity Company (DAC)

The DAC is the alternative to the LTD and is close to the corporate structure we are familiar with in Ireland.  Certain companies may wish to convert to DAC as they have been set up for a specific purpose eg management companies. 

Features of LTD and DAC

New LTD Company Model

Designated Activity Company Model

It may have just one director but it must have a separate secretary if it has only one director. It must have at least two directors.
It can have between 1 and 149 members. It can have between 1 and 149 members.
It does not need to hold an AGM. It is required to hold an AGM where there are 2 or more members.
It has a one-document constitution which replaces the need for a memorandum and articles of association.  It will not have an objects clause because it has full unlimited capacity to carry on any legal business, subject to any restrictions in other legislation. It has a constitution document which includes a memorandum and articles of association. It has stated objects for which the company was incorporated.
It can claim eligibility for audit exemption and dormant company audit exemption. It can claim eligibility for audit exemption and dormant company audit exemption.
It has limited liability and has a share capital. It is a private company. It is a private company and has limited liability. It has a share capital or is a private company limited by guarantee with a share capital.
It can pass majority written resolutions. It can pass majority written resolutions.
Name must end in “Limited” or “Teoranta Name must end in “Designated Activity Company” or “Cuideachta Ghníomhaíochta Ainmnithe” unless qualified for an exemption.

There are a number of other company types

  • PLC - Public limited company

  • CLG - Company limited by guarantee

  • ULC - Private unlimited company having a share capital

  • PUC - Public unlimited company having a share capital

  • PULC - Public unlimited company not having a share capital


Useful links

Readers may find the following links useful.

Chartered Accountants Ireland member firms

 

Legal Firms

 

Government Agencies

 

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