The Conversion Deadline Passed…. So what now?

Everyone woke up on the morning of 1^st December 2016 and the sun shone (I think) and life continued as normal. One of the biggest deadlines in the history of Company Law in Ireland had passed and like Y2K nothing happened and life moved on.

Approximately 26% of private limited companies choose to either convert to an LTD or DAC and the rest took a wait and see approach (or didn’t really care!).

The Register of Companies now looks like this:

Digital Certificates

All companies that were automatically converted to LTD have been issued with a new digital certificate of incorporation to any email addresses held for the company by the CRO.

Digital certificates of incorporation on the change of name for CLG’s and Unlimited companies have also been issued to the email addresses held by the CRO.

If you have not received these digital certificates check your junk mail or contact CRO.

So what is the Impact for Companies that did nothing?

There is no more conversions as all companies have either converted by choice or been automatically converted.  No more filing N1, N2 or N3 forms!

Companies that automatically converted or had the company name automatically changed did not get issued a new constitution their existing Memorandum and Articles of Association continue to exist.

LTD Companies

• Continue with the old Memorandum and Articles of Association
• The company may pass a special resolution to adopt a new constitution in accordance with the Companies Act 2014

Designated Activity Company

• Companies may re-register as a Designated Activity Company by passing a special resolution in accordance with Part 20 of the Act

Companies Limited By Guarantee

• The suffix of the company is now “Company Limited By Guarantee”. This can be shortened to “CLG” but the official name is the full spelling
• Companies that were exempt from the use of a suffix will continue to be exempt and any companies wishing to be exempt must apply to the CRO on a G5 form.
• All headed paper and company seal should be updated to reflect this new name
• The company may pass a special resolution to adopt a new constitution in accordance with the Companies Act 2014
• Charity companies, companies with the sporting body exemption, property management companies applying the MUD Act should adopt a new constitution to comply with the various provisions that are required

Unlimited Companies

• The suffix of the company is now “Unlimited Company”. This can be shortened to “UC” but the official name is the full spelling
• All headed paper and company seal should be updated to reflect this new name
• The company may pass a special resolution to adopt a new constitution in accordance with the Companies Act 2014

Do we have to Adopt a new Constitution?

No! however if the existing Memo & Arts conflicts with a mandatory provision in the Companies Act 2014 then the Act will overrule your Memo & Arts.

If you are considering adopting the sample 1 page constitution in the Act or on CRO website, please be aware that it might not give you all the required provisions that a standard company might require such as the authority to allot shares is not granted to the directors. In some cases it may be better to retain the existing Memo & Arts!

Banks, due diligence being performed, shareholders wanting the company to be brought up to date or the company requiring the power of a new provision in the Companies Act 2014 that is not in your constitution are some of the reasons for choosing to adopt a new constitution now.

Add this to your To Do List !!

Most companies are reactive so they will wait until they are required to do so but the correct advice is to adopt a new constitution now and to not continue with a Memo & Arts that applies the old Companies Acts 1963 – 2013 and may not be fit for purpose.

For more information from the CRO click here

How Can CLS Help

If you require assistance in drafting a new constitution, please feel free to contact one of our Co Sec Team on 059 9186776 or cosec@clscs.ie we would be delighted to help.

Please Note:

Our CLS Insights aims to bring you practical information and news on Company Law and Company Secretarial. We cover the topics that matter to your business and give practical tips and also the benefit our experiences. Please remember this article is a guide and legal advice should always be obtained. If you have any queries please contact one of the team and we would be happy to help.

Related posts:

Alteration of Constitution Q&A – Member Resolutions Charity Governance – How to Advise