This document is the plan for Conversion under the new Companies Act 2014 of “A Private Company Ltd. (Limited by Shares)” to the new Private Ltd. Company Type. In summary:

1. This is a practical workable plan to enable Companies to make the transition to the new company type in a structured way.

2. This plans is streamlined to deal only with the New Private Company. Designated Activity Companies and Companies Limited by Guarantee are dealt with separately.

3. Gives the objectives for converting and provides windows of opportunity to expand the scope to take advantage of the changes.

4. Examines some general risks associated with the conversion.

5. It outlines the criteria for choosing the appropriate structure to be adopted and the timing of the conversion.

6. Provides the process for gaining members agreement or otherwise.

7. Gives details of the actions necessary to complete the conversion process.

8. Provides a fully resourced, costed (in hours) and time-lined activity schedule.

9. Indicates the resource inputs to enable delegation of activities to named individuals.

10. Highlights the section numbers of the Act under which the actions are required.

11. Details the processes required to re-align the business with the new company type:

a. Strike offs

b. Electronic filing

c. Audit exemption

d. Compliance statements

e. In person meetings

12. Includes templates and samples for revised documents such as:

a. Constitution

b. Resignation letter

c. Written resolutions

d. Sample CRO forms for demonstration purposes

e. Directors and secretaries roles and responsibilities

1.1 Project Integration

Many months of work have gone into consolidating all the Companies Acts from 1963 to 2013 that would best the needs of Companies operating in Ireland. The 2014 Companies Act not only consolidates all the Companies Acts from 1963 to 2013, but also introduces the two new company models, one of which (the LTD company) is a much simplified company type. All companies currently registered as “Private Ltd.(Limited by Shares)” must choose to convert either one of these two new company types - LTD (Private company limited by shares), or DAC (Designated Activity Company). This “conversion” process affects approximately 85% of Irish registered companies which are currently Private Companies (Limited by Shares).The Company Secretary or a Director, will have to determine the type of company best suited to the organisation’s activities and lead out on the conversion process during the transition period of 18 months from 1 June 2015,

1.1.1 Project Initiation

The Companies Act 2014 creates new company types to replace the current types.

• LTD – Private Company Limited by Shares

• DAC – Designated Activity Company limited by shares or by guarantee with specified objects

• PLC – Public Limited Company

• PUC – Public Unlimited Company

• PULC – Public Unlimited Company with no share capital

• ULC – Private Unlimited Company

• CLG – Company Limited by Guarantee (these are public guarantee companies)

1.1.1.1 Register for CRO Updates

The Companies Registration Office (CRO) has drafted forms and information leaflets regarding some of the main points of interest including (a) the Need to Convert, (b) Requirement to Change Name, (c) Mortgages, (d) Liquidations, (e) Strike-off and (f) Re-Registration. The CRO will issue newsletters on a regular basis regarding the New Act, including the commencement date and the changeover to the new CRO forms.

1. Sign up to the CRO Newsletter to make sure you receive updates regarding the legislative changes.

1.1.1.2 Establish New Company Type

All existing private companies limited by shares will be required to change to a new company type. Company names must include the company type suffix at the end of its name, unless exempted. Private Companies registering as limited by shares will not have to make any changes to the suffix “Teoranta”, “Limited” or “Ltd.”.

The Companies Act 2014 is the most significant overhaul of company law in the history of the State. The Act helps to simplify the legislation and makes it easier to follow. When implemented the Act is expected to enhance competitiveness for Ireland internationally. In the current economic climate many companies are so busy with operations they may not think through the implementation process of this Act. More often than not the implementation process, more than the Act itself is what will make the benefits of transition to the new company type a worthwhile realisation. The new Act will bring changes in legislation which will affect every company. Existing private companies cannot avail of the features of the LTD Company without having been converted first.

A sample Company Ltd.

Private Company Ltd. X has an established history and is well recognised in its field of expertise. The announcement of the change is to be used as an opportunity to communicate the company’s direction and strategy, to employees, customers and other stakeholders. The project includes significant change and a considerable effort is required for presentations to stakeholders.

Private Company Ltd. X is converting to the new LTD type – Private Company Limited by Shares because it:

--------- can have just one director

--------- can engage in any allowed activity as it is not restricted by any stated objects

--------- can dispense with the need to hold an annual general meeting

--------- would not require an objects clause for the re-formation of the company

--------- does not perform a designated activity

--------- is not governed by a shareholders agreement

--------- does not have banking covenants restricting its activities

--------- is not in a joint venture arrangement

--------- does not offer securities to the public

--------- does not have listed debt

1.1.1.3 Project Charter

This Charter gives authority to commence project planning for converting Private Company Ltd. X to the new LTD company type.

Goal

The over-riding goal of “Converting Private Company Ltd. X to the new LTD type” is to Maintain Company Stability.

The purpose is to

(a) Avoid Legal Conflict – The alignment of the legal structure with the new company type will define company X’s legal responsibilities.

(b) Strengthen Controls - Corporate Governance is the system of rules, practices and processes by which a company is directed and controlled. It encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure. Under section 129 of the Act, a company may have just one director, if desired (but it must have a separate secretary if it has only one director). It should be noted that all directors must be over the age of eighteen. The company directors’ duties are set out in Part 5 of the new Companies Act (Appendix VI - Duty of Each Director).

(c) Simplify Procedures– A number of areas of the Act provides opportunities to reduce administrative practices and hence improve external perceptions, helping to win new and repeat work.

Stakeholders

The primary stakeholders are Shareholders, Directors, and Employees

The secondary project stakeholders are Customers, Suppliers, and Statutory Bodies

Budget

Costs of external resources for this project are zero. Staff costs and costs of internal plant and machinery, heat power and light and use of equipment are to be excluded from the budget. No fees will be charged by the Companies Registration Office (CRO) for companies filing documents while undergoing the conversion process during the transition period under the new Act.

Funding

The project is to be funded from current resources.

Timescale

The Companies Act 2014 was signed into law by the President on 23rd December 2014. It is expected that the new Act will be commenced in June 2015. A Period of 18 months will be allowed for an existing Private Company Limited by Shares to opt for conversion to either a LTD or a DAC.

Resources

All of the human resources for this project will be required on a part time basis over a 12 month period.

Project Roles

Briefly outline the roles of project human resources. (e.g. Project Team, Sponsor, Steering Group etc.)

Role	Name	Initials
Company Secretary
Project Team Manager
Sponsor
Project Administration

Signed

______________________ Date:___________

(Project sponsor)

1.1.2 Success Framework

Successful implementation of the Companies Act hinges on establishing the alignment of the company with the Act.

Project Management Success Framework

1.1.2.1 Select Project Resources

This project requires a mix of internal and external human resources. The project manager for this project will be a person from within the company appointed by the Secretary/Managing Director. Input will be required from the company secretary, directors and company legal, financial and HR personnel as appropriate. The external resources are from the CRO.

1.1.2.2 Project Objectives

The product objectives are:

Objectives of Comapanies Act 2014

The project management objectives are

● Meet stakeholder needs ● Deliver within Time-frame

● Operate within budget

1.1.2.3 Critical Success Factors

The Critical Success Factors are:

● Clear objectives ● Directors Agreement ● Members Participation

1.1.2.4 Success Criteria

The criteria as set out in the table below have been drawn up by the stakeholders to measure the success of the project based on the project outputs.

Project Outputs	Success Criteria Measurement Unit Specification	Time Base	Expected Result
Reduce or Retain at Zero Number of Fines and Penalties Received	Units	I Year	>or=0
Reduce or Retain at Zero Instances of Sanctions Imposed on Directors and Staff	Units	I Year	>or=0
Eliminate or Retain at Zero Instances of Non Conformity	Units	I Month	>or=0
Limit Number of Loans to Company Directors	Units	I Year	>or=0
Eliminate Redundant Directors	Units	I Month	>or=0
Eliminate Redundant Meetings	Units	I Month	>or=0

1.1.2.5 Establish Current “As Is” Criteria

By providing companies with an option to dispense with AGMs and to serve notice on members electronically, the new provisions introduced by the Act will help to reduce the cost and administrative burden currently placed on companies. One of the overarching intentions of the Bill is to make it easier and cheaper to operate a company in Ireland. Practical changes such as this are an example of that aim being put into practice. In order to comparisons to company operations resulting from the implementation of the Act it is worthwhile to document what the current practices are.

1.1.2.6 Risk

The risks, their likely impact and the necessary response are outlined in the table below:

Risk No.	Risk Identified	Likely Impact	Risk Response
1	Member dissatisfaction with conversion type.	Bad publicity for company. Adversely affect operational quality.	Make every effort to inform members of the facts and issues associated with passing the special resolution under G1 (2014)
2	Negative perception of conversion with customers.	Customers may be confused by the change, wondering if the business has been bought out or sold.	Communicate clear message of company improvements. Portray advantageous reasons for change.

1.1.3 Project Constraints

From the Commencement Date, 1st June 2015 to end of the transition period 18 months later, existing private limited companies can convert to the LTD company type. For the duration of the transition period only, existing private limited companies are deemed to operate as Designated Activity Companies, unless conversion is made to LTD company status.

The project inputs explain how the product will be done and are defined, by the work breakdown structure, responsibility chart, schedule, and budget. These inputs are further decomposed into work package activities and tasks in the following sections.

1.1.3.1 Work Breakdown Structure

The product work inputs are the resource activities required to deliver each output objective. The product work inputs are:

● Register as New Private Ltd Company Type ●Update Corporate Governance

●Re-align Business Processes

The product work inputs can be further broken down into work packages as follows:

WorkBreakdown Structure for Implementing the Companies Act

1.1.3.2 Time & Resource Schedule

The project takes 6 months to complete based on the schedule below. The post project analysis is undertaken 6 months after the project completion date.

Project Schedule for Implementing the Companies Act

1.2 Product Work Inputs

These are the specifications for the product to satisfy stakeholder objectives.

1.2.1 Register as New Private Ltd Company Type

Under Section 59 of the new Companies Act, the members may, during the transition period, by special resolution passed in accordance with the company’s existing memorandum and articles of association, adopt a new constitution in the prescribed form and deliver that constitution to the CRO together with form N1 for registration.

Under Section 60 of the new Companies Act if the members do not adopt a constitution, and the company is neither proceeding nor required to re-register as another type of company, the directors are obliged to draft a new model one-document constitution during the transition period in the prescribed form based on the existing memorandum and articles of association, and to deliver a copy of it to each member and to the CRO together with form N1 for registration. If the company does not have articles but relies instead on the regulations of Table A from the 1963 Act, then the new constitution should state that the articles comprise those regulations.

The new constitution should consist of the provisions of its existing articles and also the provision of its existing memorandum other than provisions that contain its objects or which provide for, or prohibit the alteration of all or any of the provisions of its memorandum and articles.

1.2.1.1 Pass Resolution

Part 1 section 32 deals with amendment of constitution by special resolution. The constitution can be changed by special resolution. A resolution is a formal way in which a decision is proposed and passed at company meetings. Essentially, a resolution is written documentation describing an action that has been authorised by either the directors or members of a Company. Chapter 6 deals with General meetings and resolutions.

A special resolution is one which has been passed by a majority of not less than 75% of those present, in person or by proxy, and entitled to vote, at a meeting of which not less than 21 days’ notice, specifying the intention to propose the resolution as a special resolution, was duly given. Section 181 deals with notice of general meetings.

In the case of special resolutions, the notice convening the meeting will be invalid if it fails to specify either the entire text or entire substance of the proposed resolution.

All special resolutions must be registered with the Companies Registration Office within 15 days of the effective date on Form G1. A sample of the form is attached at Appendix III. Section 191 deals with the meaning of ordinary resolutions and special resolutions.

1.2.1.2 Revise Constitution

The constitution replaces the memorandum and articles of association. In a LTD company, the constitution states the name of the company, the fact that the company is a private company limited by shares, any additional regulations the company may wish to specify, the share capital information and takes the form set out in Schedule 1 of the Companies Act 2014 (see Appendix 1). Most of the regulations that would previously be stated in the memorandum and articles of association are included in the sections of the Companies Act, removing the need for the information to be supplied in a company’s constitution.

1.2.1.3 Submit Completed Form N1

Attached to this form the company delivers to the Registrar of Companies a copy of its new constitution for registration. A sample of the form is attached at Appendix I.

1.2.2 Update Corporate Governance

Many small private limited companies are currently owned and directed by two persons, often a husband and wife. By and large this situation is due to the fact that up to now private company limited by shares had to have two directors. If the company is a private company limited by shares (LTD company), it is allowed to have only one director, if desired under section 129 of the Companies Act 2014. A company still needs to have a secretary and the secretary cannot be same person as the director, if the company has only one director.

1.2.2.1 Re-Define Director Structure

Serious responsibilities attach to being a director of a company and for this reason this new Act affords Companies with structures that were put in place simply to comply with the two director rules under the old Acts an opportunity to re-define its director structure.

A company may have just one director. The most straightforward means of conversion to a one director company is for one director to resign by writing a letter of resignation to the company secretary or another director. A sample resignation letter is attached at Appendix IV. Changes to the director structure are notified to the CRO using Form B10 and signed by a company director or secretary. This form must be sent to the CRO within 14 days of the change occurring in order to update the Companies Register. A sample Form B10 is attached at Appendix V. The resignation may also be noted in the minutes of the next board meeting.

1.2.2.2 Re-Define Director Roles

Directors’ duties are codified in the Companies Act. This provides a central reference point for making directors aware of their new, varied and continuing obligations duties under relevant corporate governance, fiduciary and compliance codes. A sample roles and responsibilities document is included in Appendix VI. Use this as a template or revise existing documents to produce an updated role document and advise directors accordingly.

1.2.2.3 Re-Define Secretary Role

Section 226 deals with the duties of the secretary.

1. Outline duties of the secretary. In general the duties of the secretary of a company shall, without derogating from the secretary’s statutory and other legal duties, be such duties as are delegated to the secretary, from time to time, by the board of directors of the company. A company secretary’s main functions are to oversee the company’s day to day administration and to ensure specifically that the company complies with the law and observes its own regulations. Revise existing documents to produce an updated role document and advise the secretary accordingly.

2. The secretary and the director cannot be the same person.

1.2.3 Re-align Business Processes

In terms of corporate governance, the holding of an AGM in person will no longer be required in certain circumstances as long as the company’s members give their prior consent. Instead it will be possible for directors to achieve the same result by completion of a written procedure. This will be a great convenience to companies and in particular single-member companies.

1.2.3.1 Update approval processes

1. Decide on maintaining or dispensing with annual general meeting. Chapter 6 deals with General meetings and resolutions and section 175 deals with annual general meeting.

a. When a private limited company proposes not to hold an annual general meeting, issue a written resolution (under section 193) for all members who are entitled to vote to sign and return. A sample written resolution is outlined at appendix VII. Once a decision is made to dispense with the annual general meeting, all matters which are to be dealt with at the AGM can be settled through the passing of written resolutions.

161. (1) A resolution in writing signed by all the directors of a company, or by all the members of a committee of them, and who are for the time being entitled to receive notice of a meeting of the directors or, as the case may be, of such a committee, shall be as valid as if it had been passed at a meeting of the directors or such a committee duly convened and held.

2. The Act (section 218) contains provisions which will allow private companies to send notices to members by electronic means,

a. Update the company’s constitution to permit the use of electronic means for notice to be served on or given to a member of the company.

b. Seek members consent to be notified by electronic means.

3. Section 194 of the Act deals with majority written resolutions where the requisite majority, being either 50% for an ordinary resolution or 75% for special resolution, is required. The effective date is seven days for ordinary resolution or 21 days for special resolution subject to compliance with provisions of the Act.

a. Revise current processes for passing a written resolution or a resolution at a general meeting by all members to take account of this new procedure.

4. Chapter 3 section 236 and 237 deals with evidential provisions with respect to loans, other transactions, etc. between company and directors. If a loan does not specify any terms, the presumptions under the Act would normally be to assume it is repayable on demand. Chapter 3 deals with substantive prohibitions or restrictions on loans to directors and other particular transactions involving conflict of interest.

a. Clearly document in writing details of new loans to the company by directors or by the company to directors

b. Document existing loans to groups and company directors that rely on informal arrangements and verbal agreements. Clearly document these to ensure their intentions are reflected in the accounting and contractual terms and to avoid any unintended negative consequences of these loan arrangements.

5. The Act has formalised the procedure for Voluntary Strike-off.

a. Pass a resolution to request voluntary strike-off within the 3 months prior to the application submitted to the CRO.

b. Place an advertisement in a daily national newspaper within 30 days prior to the application submitted to the CRO.

c. Apply for a letter of no objection from the Revenue Commissioners dated within 3 months prior to the application submitted to the CRO.

d. Submit form H15 signed by all of the directors of the company requesting strike-off. Accompany form H15 with letter from Revenue. Have all annual CRO returns up-to-date prior to application.

1.2.3.2 Update HR processes

1. Liaise with Human Resources Department to update job descriptions for Director and Secretary.

2. Liaise with Finance to:

a. update accounting processes in line with the definition of Adequate Accounting Records

b. comply with legislative requirements in line with FRS 102 and audit exemption

3. Include a statement in the annual Director’s Report confirming

a. there is no relevant audit information of which the company’s auditors are unaware

b. the directors have made themselves aware of all relevant audit information

4. Update the process as appropriate for the registration of charges and notifying the CRO as the new Act is introducing a change to the priority of charges from June 1st 2015.

1.2.3.3 Provide business process training for staff

1. Give Staff supporting the directors and the secretary with the implementation access to the Act.

2. Provide training on revised processes to appropriate staff.

1.3 Closeout

Project closeout heralds the formal end of the project. The closeout shall verify that the objectives have been accomplished.

1.3.1 Lessons Learned report

Identify and record issues arising on the project to help reduce or eliminate the chances of re-occurrence on similar projects in the future.

1.3.2 Project closure event

(supply details)

1.3.3 Post Project Analysis

The timeframe for measuring product success can be immediately or several years after project completion. Describe here to what extent the criteria for measuring success have been met compared to expectations. Outline your recommendations for future projects of a similar nature.

Project Outputs	Success Criteria Measurement Unit Specification	Time Base	Expected Result	Actual Result

2 Appendix

2.1 Appendix I – Sample Constitution

Template Constitution for the new LTD company model as per Schedule 1 to the draft Companies Bill - Form of Constitution of Private Company Limited by Shares

CONSTITUTION OF [name of company LIMITED]

1. The name of the company is: [name of company LIMITED].

2. The company is a private company limited by shares, registered under Part 2 of the Companies Act 2014.

3. The liability of the members is limited.

4. The share capital of the company is (€amount) divided into (number) shares of (€amount) each. The share capital of the company is divided into shares of (€amount) each.

5. Supplemental Regulations (if any) - vary any of the optional provisions of the Act - regulate other matters with respect to the company.

We, the several persons whose names and addresses are subscribed, wish to be formed into a company in pursuance of this constitution, and we agree to take the number of shares in the capital of the company set opposite our respective names.

Names, Addresses and Descriptions of Subscriber Number of Shares taken by each Subscriber

1. 1st Name Surname (number)

Address:

Description:

2. 1st Name Surname (number)

Address:

Description:

Total shares taken: (number)

As appropriate:

(signatures in writing of the above subscribers, attested by witness as provided for below; or

authentication in the manner referred to in section 888).

Dated the --- day of ----- 20--

Witness to the above Signatures:

Name:--------------------------

Address: ----------------------

2.2 Appendix 11 - Conversion Form

2.3 Appendix III – Special Resolution

2.4 Appendix IV - Sample Director Resignation Letter

Personal address <Line 1>

Date of letter

To: <company Name> Ltd.

Address <Line 1 >

Re: Letter of resignation

Dear Sir/Madam,

I, <your own name>, of <personal address> hereby resign as a <director/secretary or both> of <company name> Ltd with immediate effect. I confirm that I have no claim whatsoever of any kind relating to my position of director/secretary or both or its termination. I should be grateful if you would submit notice of my resignation as <director/secretary or both> on a statutory form B10 (Notice of change in director or secretary) to the Registrar of Companies, Companies Registration Office, O’Brien Road, Carlow.

Yours faithfully,

____________

Print name:

Dated :________

2.5 Appendix V – Change of Director or Secretary

2.6 Appendix VI - Directors Responsibilities

Role and Responsibilities of Each Company Director

• ensure compliance by the company with the Companies Act

• take into account the interests of the members and shareholders of the company

• exercise their powers in good faith and in the interests of the company as a whole

• regard the interests of the employees in the performance of their functions

• include a directors’ compliance statement as required in accordance with financial thresholds

• ensure that the company secretary is suitably qualified for the role

• ensure proper books of account and records are maintained and audited as required under the Companies Act

• disclose to directors the nature of any interest in a contract made by the company

• file form B74a with the CRO if subject to a foreign disqualification subsequent to appointment underSection 150(1) and 150(10) of the Companies Act 2014

• account for any gain derive from their position

• indemnify the company against any loss made by it as a result of any breach of duty

• not make undisclosed profits from their position

• avoid any conflict between the duties to the company and other business and personal interests

• act in accordance with the law and the company’s constitution

• file appropriate documents with the companies registration office

• disclose personal information as outline in the Companies Act

• convene meetings of the company

• carry out their functions with due care, skill and diligence

• be over the age of eighteen

2.7 Appendix VII - Written Resolutions In Lieu Of Annual Meeting

In this Act “written resolution” means either an ordinary resolution or a special resolution passed in accordance with section [193] or [194].

WRITTEN RESOLUTIONS IN LIEU OF ANNUAL MEETING FOR THE MEMBERS OF

[Company Name Limited] Company Number__

The undersigned, being all the members of the Company, hereby consent to and adopt in writing the following resolutions passed on the ____ day of ______, 20___ in lieu of the annual meeting of the Members:

(a) acknowledge receipt of the financial statements that would have been laid before that meeting;

(b) resolve that ----------

(c) confirm that no change is proposed in the appointment of the person (if any) who,at the date of the resolution, stands appointed as statutory auditor of the company.

_______________

[Name]

______________

[Name]

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