Companies Act 2014 – Private Companies Limited By Shares – One Director or Two?
Following changes introduced by the Companies Act 2014, private companies limited by shares may now have a single director. While many companies may be considering this change, particularly if once of the Directors is not active in the company, there are a few items that should first be considered.
Does your company’s constitution allow for a sole director?
The company’s constitution previously called the company’s memorandum and articles, may set out a minimum number of directors, this will need to be checked.
Is your company a private company limited by shares?
Until converted under the Companies Act 2014, existing private companies require two directors, and any company that converts to a DAC will require two directors.
Do you have a separate person or entity to act as company secretary?
Companies can’t have the same person holding the position of sole Director and Company Secretary.
What happens if the sole Director is unavailable or incapacitated?
Consideration should be given to who could make/authorise urgent payments, for example wages, or payments to suppliers where the sole Director is unavailable or incapacitated.
What happens if your sole Director is also your sole shareholder?
If your Director is also your sole shareholder, in the case of sudden serious incapacitation or death of this individual, unless a continuity structure has been arranged, the company may find itself unable to operate without legal/court intervention.
If we can assist with any queries you may have on this matter, please call Anna or Bernadette on 00 353 (0) 91 704818.