Company conversions are commonly needed since The Companies Act 2014 has changed the corporate landscape in Ireland, introducing reforms for all company types and creating a new company type known as a Designated Activity Company. Following a transition period, allowing companies to ‘convert’ to a new company type, on 1 December 2016, all companies were automatically converted by the CRO. In doing so, however, only the company type and name (Companies Limited by Guarantee) was updated; the CRO did not update the companies’ constitutions. This has given rise to an anomaly whereby there are now thousands of companies on the register with a constitution that is not fit for purpose.

The result has been uncertainty and confusion, since a company’s constitution is akin to its rule book or internal governing framework. In interpreting an unconverted constitution, the reader must convert the old legislative references to new references and discard anything that is no longer part of the legislation. Clearly, this is an unsatisfactory situation, and, in practice, it has led to many frantic enquiries to get constitutions updated in advance of securing bank finance or closing a major property deal. There are also thousands of companies on the register now claiming audit exemption, while their constitution forbids this.

The Company Conversions Process – In Detail

• The existing constitution should be reviewed and advice given on the requirement of the new constitution
• Various minutes of meetings are drafted
• A special resolution is drafted and forms completed
• Documents are signed and returned for submission
• The documents are submitted to the CRO for processing