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Republic of Ireland – New legislation comes into force

On the 1 June 2015 the Irish Companies Act 2014 ("the Act") came into force heralding significant modernisation of Irish Company Law, codifying, consolidating and reforming more than 40 years of existing legislation.

This article aims to provide a brief overview of the main aspects of the new legislation and how this affects the most prevalent type of Irish company, the private limited company.

Companies incorporated after the 1 June 2015 are subject to the new regime. However, the Act also imposes a burden, in some areas, on pre-existing limited companies to actively transition to the new system.

The new Act introduces some radical changes to numerous areas of company law including the law relating to mergers and divisions of companies, liquidation and Directors' loans. Notably, the legislation relating to Directors' duties has also been overhauled, having been simplified and consolidated by categorizing offences on a scale of 1-4 dependent upon severity.

Arguably..., the most significant reforms imposed by the new Act are those aimed at reducing the administrative burden on limited companies


Arguably, however, the most significant reforms imposed by the new Act are those aimed at reducing the administrative burden on limited companies. To this end, the new Act establishes two new company forms: the Private Company Limited by Shares (LTD) and the Designated Activity Company (DAC). The LTD is comparable to the existing private limited company, whilst the DAC is an entirely new creation. All existing companies currently registered, as ‘private company limited by shares' should take steps to convert and re-register as one of the two new forms. The Act allows for an 18 month transitional period for this purpose.

Single Document Constitution

In the case of both LTDs and DACs, the existing style Articles and Memorandum of Association have been removed and replaced by a single-document Constitution.

Importantly, private limited companies which are converted to LTDs will no longer be required to state their objects as part of their Constitution. As a result, LTDs will have unlimited capacity to trade in any legal business its Directors' decide.

On the other hand, as the name suggests, DACs will have to designate their trading activities. Therefore, if a company wishes to restrict its objects it must re-register as a DAC. A company wishing to re-register as a DAC must adopt a new-style Constitution containing an objects clause which restricts the permissible activities of the company.

As under previous legislation, carrying out activities outside of those designated in the Constitution will be subject to the doctrine of Ultra Vires.

A DAC will be distinguishable by its name as the company name must end in "Designated Activity Company" or ‘Cuideachta Ghniomhaichta Ainmnithe'. In comparison, an LTD must end with ‘Limited' or ‘Teoranta'. As under previous legislation, restrictions concerning offensive or similar names continue to apply to both LTDs and DACs.


Under the new regime, companies which are converted to LTD status will now have the option of appointing a single Director, however, this is only applicable in circumstances where there is also a separate company secretary appointed. In comparison, a DAC will continue to require a minimum of 2 Directors, though one of these Directors may also be appointed as the company secretary. It remains the Director's responsibility to ensure that the secretary appointed has the skills and resources required to discharge their duties.

As under the previous legislation, corporate Directors are not permitted under the new Act regardless of whether the company is a LTD or DAC, and at least one Director must be resident in the EEA.

Shareholders and Annual General Meetings

Under the new legislation, both LTDs and DACs continue to be permitted to have between 1 and 149 shareholders. However, with the aim of reducing the administrative burden on limited companies, the new Act removes the requirement for companies re-registered as an LTD to hold physical Annual General Meetings (AGMs). In addition, DACs are now only required to hold an AGM where there are two or more members.

Significantly, if a pre-existing private limited company is not actively re-registered within the 18 month transitional period it will automatically be deemed to be converted to an LTD. By default, the company's Constitution will be deemed to consist of its existing Memorandum and Articles of Association, with the exclusion of any objects. It is important to be aware that automatically defaulting to an LTD may not be suitable for all companies and it is therefore important for company Directors to consider the company's requirements and then adopt a new style Constitution and re-register as appropriate.

If you would like to discuss incorporating a new company in the Republic of Ireland, or if you have a pre-existing company and require assistance with re-registering under the new regime, please contact any member of the Corporate and Trust Planning Unit at Jordans Trust Company on +44 (0)117 918 1408 or email

Private Company Limited by Shares (LTD)  Designate Activity Company (DAC) 

Single document constitution 

Single (two-part) constitution

No longer required to state company objects 

Must state the company's objects 

May have a single Director in circumstances where a separate company secretary is also appointed

Must have at least 2 Directors. One Director may also act as the company secretary 

Not required to hold an AGM

Only required to hold an AGM if 2 or more members 
Name must end with ‘Limited' or ‘Teoranta'  Name must end with ‘Designated Activity Company' or ‘Cuideachta Ghniomhaichta Ainmnithe' (unless the company qualifies for an exemption) 


Jenny Powell

Jenny Powell

Consultant - Corporate and Trust Planning Unit
T: +44 (0)117 918 1382

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