Part 20 Re-registration
3 Chapters – Sections 1283 to 1299
Chapter Overview
Chapter 1 – Interpretation
Chapter 2 – General provisions as to re-registration
Chapter 3 – Special requirements for re-registration
Part 20 Summary
This part outlines the law as it relates to the re-registration of a company from one type to another. Currently the only types of re-registrations allowed are those which have been specifically legislated for. This is a major innovation of the Act and should enhance Ireland’s attractiveness as a place to do business.
What is new?
The new Act establishes a process for the re-registration off all company types to any other company type. So there will be, for example, a mechanism through which re-registration of a company without a share capital as one with a share capital and vice versa will be achievable.
It should be pointed out that the effect of re-registration from one company type to anther will not affect any rights or obligations which the company has and any legal proceedings against the company in its former type can continue against it in its new type.
Companies Limited by shares re-registering as Companies Limited by Guarantee may be required to make a court application as part of the re-registration subject to the requirements of Section 1297 (2) (c).
What is different?
While the new procedure is broadly equivalent it is considered to be a more efficient version of the current process. The Act removes the prohibition on a company which has re-registered as unlimited from re-registering back to limited. A company wishing to avail of this option must file financial statements before applying for re-registration to combat abuse of this facility. The general procedure for re-registration is as follows:
- Pass a special resolution of the members to alter the constitution to that of the desired company type
- Obtaining a court order subject to the requirements of Section 1297 (2) (c) (CLG only)
- Deliver the resolution, constitution and the relevant CRO form to the Registrar along with a compliance statement confirming the conditions for re-registration have been met
- If satisfied the Registrar will issue new certificate of incorporation on re-registration
Specific additional requirements will apply depending on the company types in question, for example, a company without a share capital re-registering as a company with a share capital must deliver a statement of share capital and initial shareholdings.
In the case of a PLC, a court order can be obtained to cancel the re-registration by shareholders holding 5% of the nominal value of the issued share capital, or any class of the issued share capital; or by not less than 50 of the PLC’s members, assuming they haven’t already voted in favour of the resolution to re-register.
For a CLG, unless the position concerning the allotted share capital of the company, is at the date of the application for re-registration as set out in Section 1297 (3), the court, on application to it by the company in that behalf, may sanction its re-registration as a company limited by guarantee and give directions as to how its company capital is to be treated in the framework of the resultant company.
What are the Key Points?
- Streamlined process
- Unlimited company can re-register as limited
What do accountants need to do?
Accountants should be aware of the various company types and the appropriate type of company for specific business models. They should familiarise themselves with the re-registration process so as to advise clients on the requirements should they undertake a re-registration.
What do companies need to do?
Companies should review their corporate structure to determine whether the current type of company is the best fit for their business needs. They must consider the impact of any potential re-registration having regard for the viability of the action, resources available, possible impacts on reputation etc.