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The Companies Act 2014 – what you need to do

THE COMPANIES ACT 2014  – WHAT YOU NEED TO KNOW – WHAT YOU NEED TO DO

BOYCE KELLY SOLICITORS

 COMPANY LAW HAS BEEN OVERHAULED WITH THE INTRODUCTION OF THE COMPANIES ACT 2014 WHICH COMES INTO FORCE ON 1ST JUNE 2015. THE NEW ACT SERVES TO CONSOLIDATE EXISTING COMPANY LAW BUT IT ALSO CONTAINS IMPORTANT CHANGES WHICH EACH COMPANY DIRECTOR AND SECRETARY NEEDS TO BE AWARE OF AND ADVISED ON.

AS EACH COMPANY HAS TO MAKE IMPORTANT DECISIONS ABOUT ITS STRUCTURE OVER THE NEXT 18 MONTHS IT IS IMPORTANT THAT PROPER LEGAL, TAX AND ACCOUNTING ADVICE IS TAKEN ON THE IMPLICATIONS OF THE COMPANIES ACT 2014 AND WHICH STRUCTURE SUITS YOUR COMPANY BEST. BELOW ARE SOME OF THE KEY CHANGES FOR PRIVATE LIMITED COMPANIES. WE HAVE LIMITED THE SCOPE OF THIS ARTICLE TO DEALING WITH THAT PARTICULAR TYPE OF COMPANY.

 WHAT IS CHANGING?

1.       THE CLASSIFICATION OF YOUR COMPANY IS CHANGING.

IF YOU ARE A COMPANY LIMITED BY SHARES (MOST COMPANIES IN IRELAND ARE), ONCE THECOMPANIES ACT 2014 COMES INTO FORCE (1ST JUNE 2015) YOU WILL HAVE 18 MONTHS FROM THAT DATE TO CHOOSE BETWEEN BECOMING EITHER

A.      A COMPANY LIMITED BY SHARES (AN ‘LTD’)

B.      A DESIGNATED ACTIVITY COMPANY (A ‘DAC’)

WHAT YOU NEED TO DO:

AS THIS IS A FUNDAMENTAL CHANGE AS TO HOW YOUR COMPANY IS STRUCTURED, YOU WILL FIRST NEED TO TAKE ADVICE FROM YOUR LEGAL ADVISER AS TO WHICH STRUCTURE SUITS YOUR NEEDS BEST. YOUR ADVISER SHOULD CARRY OUT A FULL REVIEW OF HOW YOUR COMPANY OPERATES TO DETERMINE WHICH TYPE OF COMPANY SUITS YOU BEST.

IF YOU DO NOTHING IN THE TRANSITION PERIOD, YOUR COMPANY WILL AUTOMATICALLY BECOME A COMPANY LIMITED BY SHARES. THE NEW COMPANY WILL BE DEEMED TO HAVE ADOPTED A CONSTITUTION WHICH WILL CONSIST OF ITS EXISTING MEMORANDUM AND ARTICLES OF ASSOCIATION BUT EXCLUDING PROVISIONS CONTAINING ITS OBJECTS AND ANY PROVISIONS PROVIDING FOR OR PROHIBITING THE ROTATION OF ANY OF THE PROVISIONS OF ITS MEMORANDUM AND ARTICLES OF ASSOCIATION. A COMPANY CAN OPT OUT OF BECOMING AN ‘LTD’ IN FAVOUR OF BECOMING A ‘DAC’, BY SIMPLY PASSING A SHAREHOLDERS RESOLUTION

YOUR COMPANY’S SHAREHOLDERS WILL BE ENTITLED TO REQUIRE RE-REGISTRATION OR APPLY TO COURT IF THE SHAREHOLDER(S) IS/ARE OF THE VIEW THAT THEIR RIGHTS ARE BEING PREJUDICED.

WHAT IS CHANGING?

2.       ALL OF THE DUTIES OF DIRECTORS AND SECRETARIES ARE NOW SET OUT IN THE ACT.

PREVIOUSLY CERTAIN DUTIES WERE SET DOWN IN VARIOUS ACTS AND REGULATIONS AND IN CASE LAW AS ESTABLISHED DOWN THROUGH THE YEARS BY THE COURTS. NOW ALL OFF THESE RULES ARE CLEARLY SET OUT IN THE NEW ACT.

WHAT YOU NEED TO DO:

YOU NEED TO FAMILIARISE YOURSELF WITH THE DUTIES IMPOSED UPON YOU AS A DIECTOR/SECRETARY. YOU SHOULD GET LEGAL ADVICE ON THE IMPLICATIONS OF THESE DUTIES TO ENSURE THAT YOU ARE COMPLIANT. IF YOU DO NOT COMPLY, YOU ARE EXPOSED TO POSSIBLE PERSONAL LIABILITY AND POSSIBLE CRIMINAL SANCTIONS

WHAT IS CHANGING?

3.       STRICTER ENFORCEMENT

AS THE DUTIES HAVE NOW BEEN SET OUT CLEARLY IN THE NEW ACT, STRICTER ENFORCEMENT TO ENSURE COMPLIANCE WITH YOUR DUTIES IS EXPECTED.

WHAT YOU NEED TO DO:

ENSURE YOU ARE COMPLIANT WITH YOUR OBLIGATIONS AS A DIRECTOR/SECRETARY. TAKE YOUR LEGAL ADVISERS ADVICE ABOUT HOW BEST TO BECOME AND REMAIN COMPLIANT. BE AWARE THAT THE MORE SERIOUS OFFENCES ARE PUNISHABLE WITH VERY LARGE FINES AND A MAXIMUM OF 10 YEARS IN PRISON ON INDICTMENT. THERE IS AN EVEN HIGHER LEVEL OF OFFENCE, WHICH INCLUDES MARKET ABUSE, TRANSPARENCY WHICH WILL ATTRACT FINES OF UP TO €10 MILLON AND PRISON TERMS OF 5-10 YEARS.

AT BOYCE KELLY SOLICITORS WE ADVISE MANY SME’S ON THE LEGAL ISSUES WHICH THEY FACE ON A DAY TO DAY BASIS. WE CAN ASSIST YOU WITH THE TRANSITION TO THE NEW REGIME IN A PRACTICAL AND COST-EFFECTIVE WAY.

 TO COINCIDE WITH THE OPENING OF OUR NEW OFFICE AT CARRIGART, WE OFFER TO NEW AND EXISTING BUSINESS CLIENTS OUR ‘LEGAL HEALTH CHECK FOR SME’S’ FOR FREE* UNTIL THE END OF JUNE. THIS SERVICE INVOLVES OUR BUSINESS TEAM TAKING AN IN DEPTH LOOK AT YOUR BUSINESS AND REVIEWING YOUR EXISTING OR PROPOSED STUCTURE TO ENSURE THAT THE CORRECT STRUCTURE IS CHOSEN. THE REVIEW TAKES APPROXIMATELY 2 HOURS AND IS WITHOUT OBLIGATION.

CONTACT US TODAY ON info@boycekelly.ie OR TELEPHONE US 0749890190.

*THE ABOVE IS FOR GENERAL INFORMATION ONLY. THIS IS NOT LEGAL ADVICE AND IS NOT TO BE RELIED ON AS SUCH. EACH COMPANY SHOULD SEEK THE ADVICES OF A BUSINESS LAWYER IN RELATION TO THE NEW ACT. WE CAN PROVIDE BESPOKE BUSINESS LAW ADVICE TO ANY COMPANY BASED ON THEIR OWN INDIVIDUAL CIRCUMSTANCES.

Business Advice For SME's, Uncategorized The Companies Act 2014 – what you need to do