This note relates how companies limited by guarantee will be dealt with under the new Companies Act 2014 (the “Act” or the “2014 Act”). The provisions relating to companies limited by guarantee are set out in Part 18 of the 2014 Act. Part 18 operates by providing that much of the provisions that relate to private companies apply to guarantee companies subject to certain amendments. Those amendments principally relate to the fact that guaranteed companies do not have a share capital and much of the references to private companies and share capital must be modified to take into account guarantee companies. It is expected that the 2014 Act will commence in June. There is a transition period under the act of 18-months. After the transition period a company limited by guarantee will deem to end with the term “company limited by guarantee” instead of the word “limited”. Therefore for example in the case of a management company known as Holly Village Management Company Limited this will now be known as Holly Village Management Company Limited by Guarantee.
The Act provides that existing Memorandum and Articles of a company limited by guarantee continue after the passing of the Act (1177 (6)). A company limited by guarantee must have at least two directors (1194(1)). It is possible under the 2014 Act to have a company limited by guarantee with only one member and dispense with the holding of an AGM. However where a company limited by guarantee has two or more members it may not dispense with the holding of an AGM (1202). Under the previous regime the audit exemption was not available for companies limited by guarantee. However the 2014 Act now extends the availability of the audit exemption to a company limited by guarantee. However the 2014 Act does provide that if any one member of the company limited by guarantee serves notice in writing on the company to the effect that that member does not wish the audit exemption to be available to the company in that financial year the guarantee company will not be entitled to avail of the audit exemption in that financial year.
For more information on company law matters, contact Colm Kelly or Geraldine Conroy solicitors