Corporate Matters Update

New Requirements for Corporates to Maintain a Register of their Beneficial Ownership

Initially, all Irish incorporated companies are required to create and maintain a Register of Beneficial Ownership listing any individuals who have a 25%+ beneficial interest in an Irish Company either directly or indirectly via a shareholding company or a nominee. Where no individual beneficial owner can be identified after a company has carried out exhaustive enquiries, then one or more of the Directors who manage the company should be listed.   
 
The government will introduce a Central Register of Beneficial Ownership later this year, whereby all Irish Companies will be required to submit their Registers of Beneficial Ownership.
   
Upon summary conviction, a company and/or an individual with a beneficial interest of 25%+ can be fined €5,000 for non-compliance with these Regulations.
 
Automatic conversions under Companies Act 2014

A vast number of companies were automatically converted on 1st December 2016 to an “LTD” one of the new company types under the CA 2014, or if the company was a Company Limited by Guarantee or Unlimited Company these companies had an automatic change of name. If your company is included in the categories above your company has not received a new constitution which has been drafted in accordance with new CA 2014, unless proactively addressed since the automatic conversion date of 1st December 2016.

As a matter of good corporate governance your company should adopt a new constitution in accordance with the CA 2014. 

The constitution is the governing document of every company and banks, external investors etc. may look for the updated constitution as part of any future dealings with the company. 

It is also now a requirement for companies to have a section in their constitution permitting use of company property by directors for their personal use, such as company cars.   

Shareholders agreements
As part of updating your company constitution it is worth revisiting existing shareholder agreements to see that they are consistent with CA 2014 or indeed if there is no shareholders agreement putting one in place. A shareholders agreement is essentially a contract between shareholders in a company and frequently the company itself. 

The basic purpose for a having a shareholders agreement is to provide for how the company will be managed and in advance to address issues that may become divisive in the future if not agreed up front.

The shareholders agreement should be read and reviewed in conjunction with the company’s constitution and expert legal advice taken when drafting these documents.

The predominant reason for using a shareholders agreement is that it is a private document only seen by the shareholders themselves; by contrast the constitution of a company is a public document which can be accessed through the Companies Registration Office.       

Headed paper and company seals

These will need to be updated for Designated Activity Companies (DACs), Companies Limited by Guarantee (CLGs) and Unlimited Companies (UCs) as the names of these companies have now changed.  

Should you have any queries please contact your Moore Stephens representative.