The New Companies Bill 2012 has been described as the largest substantive piece of legislation in the history of the state.
It was published on the 12th of December 2012 but it is expected to come into law in 2014 although parts may be implemented later. The bill will consolidate the existing companies act into one piece of legislation.

There will be four different types of companies once the bill is enacted:

  • CLS-Companies Limited by Shares
  • DAC- designated activity companies
  • PLC -Public limited companies
  • SE- Societas Europaea

CLS- Company Limited by Shares are similar to the existing private limited company. The majority of Irish companies are currently formed under this bracket.

Main changes caused by New Companies Bill 2012:

  • The memorandum and articles of association will be replaced by a single document called a constitution. Will no longer have specific objects clause and the concept of “Ultra Vitres”, therefore, is no longer applicable.
  • CLS companies will be allowed to have only one Director as long as a separate company secretary is appointed. The duties of Directors will be simplified and become more transparent. Directors common law and equitable duties will be codified. DACs will still need to have two Directors.
  • CLS companies will be allowed to have up to 99 members.
  • CLS companies will not be permitted to list any securities whether they be shares, debts or any other type of listed asset.
  • The need for a physical AGM will be dispensed, where the members consent. DACs cannot dispense with the requirement to have an AGM.
  • Offences created by the bill have been categorised on a scale from 1 to 4(1 being the most serious). The bill clearly outlines the offences and the punishment for each category. Category 1 can result in term of imprisonment of up to 10 years or a fine of up to €500,000 or both. Category 4 offences will be punishable by the imposition of class A fine not exceeding €5,000
  • The Law relating to the strike off of companies will be radically overhauled, there will also be a legal distinction between voluntary and involuntary strike off’s
  • Audit exemption will come into force for dormant companies and small groups where certain conditions are met(see below)
  • Small and Medium companies will be refined. If a company and its subsidiaries together satisfy at least two of the requirements below relating to medium company the company will be exempt from preparing Companies Act group financial statements
  • A small Company will be based on the following; Turnover not greater than  €5m/Balance sheet not greater than €2.5m and average employees not greater than 50
  • A Medium Company will be based on; Turnover not greater than  €20m/Balance sheet not greater than €10m and average employees not greater than 250

DAC,PLC and SE, these will have specific objects and will retain (in general) the same type of constitution as under the current companies act. Directors will need to make sure that under the new regime whether a specific objects clause may be required.

What’s going to happen?

When the bill is enacted, all private limited companies will be treated as DAC for a transition period of 18 months. If an existing private limited company elects to be a new company type as listed above it will become this company type at the end of the transition period. The CRO will not update the register to amend the existing memorandum and article of association, the client needs to arrange as best practice to have the new one page constitution filed. This is only applicable if becoming a company limited by shares rather than a DAC.

If an existing private limited company wants to become a DAC it needs to pass an ordinary resolution and make all relevant filings with the CRO three months prior to the end of the transition period. If the private limited company should be a DAC but doesn’t do so before three month before the end of the transition period the members may apply to the court for an order to convert.

If you want more information on how this could affect your business, contact us on 01-2804731.
Or contact any of our audit partners;,,


by Evelyn Rooney, Audit Manager