Companies Act 2014 – Time Running Out for Conversions
Time is running out for companies wishing to convert to a Company Limited by Shares under the Companies Act 2014 as the deadline of the 30 November 2016 approaches.
As we approach the end of the period in which companies can proactively convert (by 30 November 2016) the following consequences of not converting should be considered.
- LTDs will not have a physical Constitution (previously Memorandum & Articles of Association) unless they proactively convert.
- Under the Act directors have a duty to prepare a Constitution and deliver it to the Companies Registration Office (“CRO”) and its members within the Transition Period – to not do so will result in directors being in breach of a statutory duty.
- Lack of a Constitution could lead to missed opportunities (for example, inability to provide documents required for financing discussions, investor negotiations, submitting tenders).
- Confusion may arise as to what directors have the authority to do as they will have no clear regulations to work with.
The CRO has in their recent newsletter stated that any company whose N1 form has not been processed by the 30 November 2016 will automatically be converted to the new company type by the CRO on the 1 December 2016 and a digital Certificate will be e-mailed to the company’s e-mail address.
The CRO will complete the processing of the Constitutions and G1 forms filed with any unregistered N1 forms as soon as possible after 1 December but this could take some weeks to complete, given the volume of submissions to date.
FCS Services provides a full project managed conversion service if you have any further queries or if you would like assistance with your conversion please call Anna or Bernadette on 00353 (0) 91 704818.