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This practice note deals with the preparation and registration of a new constitution (memorandum and articles of association) for conversion of an existing private company to a designated activity company (DAC).  

What is the procedure for re-registration as a DAC?

The procedure for re-registration of an existing private company as a DAC pursuant to the Companies Act 2014 under s56(1), (2) or (3) or pursuant to an order of the court under s57(1) is set out in s63 of the act.

Application for re-registration of the company as a DAC in the prescribed form must be delivered to the Companies Registration Office together with the following documents:

1. A copy of the ordinary resolution or the resolution of the directors,
2. A copy of the memorandum and articles of the company as altered by the resolution, and
3. A statement in the prescribed form by a director or secretary of the company that the requirements of the act as to re-registration as a DAC have been complied with.

What alterations are to be made to the memorandum and articles of association?

Section 63 provides that the company’s memorandum must be altered so that it states that the company is to be a designated activity company and substitutes the words “designated activity company” or “cuideachta ghníomnaíochta ainmnithe” for the word “limited” or “teoranta”.

The alteration in the memorandum is effected by means of the ordinary resolution of the members referred to in s56(1) if that subsection applies or, if any of ss56(2) or 56(3) or 57 apply, by means of a resolution of the directors of the company passed pursuant to the relevant subsection or court order, as the case may be.

Can any further alterations be made to the memorandum and articles of association?

The objects clauses of a DAC may only be altered by special resolution of the company (s974(1)) and therefore may not be amended by way of the resolutions passed to convert the existing private company into a DAC. Certain members and creditors of the company have the ability to make an application to the courts to have such alteration cancelled within 21 days of the passing of the special resolution (ss974(3) and 974(5).

The other provisions of the memorandum and the articles of association may also be altered by special resolution (ss977 and 978). If, however, the memorandum prohibits any such alteration, ss977 and 978 do not apply.

Is a draft of the resolutions to convert to a DAC available?

The Business Law Committee has prepared suggested form resolutions, which are available on its Forms and Precedents section (see Document 5.1). This includes suggested wording for resolutions for conversion of the company to DAC.

The ordinary resolution to be passed by the members pursuant to s56(1) may be passed by the members in general meeting or, if the company’s existing articles permit, by means of a written resolution signed by all the members under s141(8) of the Companies Act 1963.

Resolutions to be passed by the directors under ss56(2) or 56(3) or pursuant to an order of the court made under s57 may be passed by way of the company’s normal method for passing a directors’ resolution.