Deadline for Company Conversions is fast Approaching
1 November 2016
The 30th November 2016 deadline for company conversions is fast approaching. Private companies limited by shares which have not converted under the Companies Act 2014 must do so and have filed all relevant papers in the Companies Registration Office before 30 November 2016.This means that companies should be attending to all paperwork now.
The Companies Act 2014 introduced a conversion process for all private companies limited by shares and affects the majority of Irish companies. The Act provides for a transition period from 1 June 2015 to 30 November 2016 in which companies limited by shares can opt to convert to a new style private company limited by shares (LTD).
Converting to an LTD
The company must pass a special resolution to adopt a new Constitution. The Company then submits the new form constitution (which is a single document which replaces the existing memorandum and articles) with statutory forms N1, G1 and a copy of the resolution to the Companies Registration Office.
Companies should be cognisant of their current memorandum and articles and particularly any security provisions they contain, for example, a company may be required to seek the consent of a lender or investor prior to resolving to adopt a new Constitution.
Failure to convert
If, by the deadline, no action is taken by a company limited by shares, it will automatically become a new model LTD company on 1 December 2016. However, in those circumstances a Company’s existing Memorandum and Articles (other than its objects clause) will become its Constitution but any provisions of such Constitution which are be inconsistent with the Act cannot be relied on.
The conversion process only applies to private companies limited by shares. Unlimited Companies, Companies Limited by Guarantee and PLCs do not need to convert.
For further information on this topic please contact:
Partner and Head of Corporate,