Conversion

Under the Companies Act 2014, pre-existing private companies could re-register as Designated Activity Companies (DACs) during the transitional period (1 June 2015 to 30 November 2016). This process required compliance with specific procedures, ensuring the company met DAC requirements.

Re-Registration Process

1. Voluntary Re-Registration:
   • A company could re-register as a DAC by passing a special resolution or, in some cases, an ordinary resolution during the transitional period.
   • Directors were obligated to file a revised memorandum and articles of association reflecting the DAC’s structure.
   • The CRO issued a new certificate of incorporation upon successful re-registration.
2. Member-Initiated Re-Registration:
   • Members holding at least 25% of voting rights could demand re-registration as a DAC through written notice.
   • If the company did not comply, members holding at least 15% of shares could petition the court to order re-registration.
3. Default Conversion:
   • Companies not actively converting were deemed LTDs on 1 December 2016. However, these companies temporarily operated as DACs during the transitional period without needing “DAC” in their names.

Legal Implications of Re-Registration

• Continuity of Legal Status:
  • Re-registration did not affect existing rights, obligations, or legal proceedings.
  • DACs retained governance under their altered constitution, subject to mandatory provisions of the 2014 Act.
• Constitution Changes:
  • DAC constitutions included a memorandum and articles of association, specifying limited objects and shareholder liability.
  • References to earlier legislation in existing articles were interpreted under the 2014 Act.

Challenges and Protections

• Court Applications:
  • Members or creditors prejudiced by re-registration decisions could seek court orders to address perceived oppression or unfair treatment.
• Mandatory Compliance:
  • Directors failing to adopt a constitution during the transitional period faced civil obligations enforceable by the ODCE.

Post-Transitional Period Re-Registration

• Companies could still convert to DACs or other forms after the transitional period by passing a resolution and filing required documents with the CRO.
• The CRO issued new certificates of incorporation confirming the company’s type.

Status on Conversion

• Upon re-registration as a DAC, the company’s name included the suffix “DAC” or its Irish equivalent.
• A certificate of incorporation served as conclusive evidence of compliance with the Act.

The structured re-registration ensured companies aligned with the 2014 Act’s updated corporate frameworks while providing pathways for future conversions.