DACs I
Companies Act
Definitions (Part 16)
963. In this Part—
“constitution” shall be read in accordance with section 967 (1);
“DAC limited by guarantee” means a DAC falling within paragraph (b) of the definition of “designated activity company” in this section;
“DAC limited by shares” means a DAC falling within paragraph (a) of the definition of
“designated activity company” in this section;
“designated activity company” or “DAC” means a company that, as provided under section 965 (2), has either—
(a) the status of a private company limited by shares registered under this Part (as distinct from a private company limited by shares registered under Part 2 ); or
(b) the status of a private company limited by guarantee, and having a share capital.
Application of Parts 1 to 14 to DACs
964. (1) The provisions of Parts 1 to 14 apply to a DAC except to the extent that they are disapplied or modified by—
(a) this section; or
(b) any other provision of this Part.
(2) For the purposes of that application, section 10 (1) shall have effect as if it read:
“(1) Unless expressly provided otherwise, a reference in Parts 2 to 14 to a company is a reference to a DAC.”.
(3) Subject to subsection (4), the provisions of this Act specified in the Table to this section shall not apply to a DAC.
(4) In relation to a DAC limited by guarantee the non-application of section 32 (1) is provided for by section 976 and, accordingly, the entry of that provision in the Table to this section shall (so far as it relates to that type of DAC) be disregarded.
(5) The specification in the foregoing Table of a provision (a “specified provision”) of Parts 1 to 14 also operates to disapply to a DAC any other provision of those Parts (notwithstanding that it is not specified in that Table) that makes consequential, incidental or supplemental provision on, or in relation to, the specified provision.
Table
Provisions disapplied to DACs
Subject matter
Provision disapplied
Way of forming a private company limited by shares
Section 17
Company to carry on activity in the State and prohibition of certain activities
Section 18
Form of the constitution
Section 19
Certificate of incorporation to state that company is a private company limited by shares
Section 25 (3)
Provisions as to names of companies
Section 26 (1) to (4)
Trading under a misleading name
Section 27
Amendment of constitution by special resolution
Section 32 (1)
Capacity of private company limited by shares
Section 38
Variation of rights attached to special classes of shares
Section 88
Directors
Section 128
Share qualifications of directors
Section 136
Liability as contributories of past and present members
Section 655
CHAPTER 2
Incorporation and consequential matters
Way of forming a DAC and the 2 types of DAC
965. (1) A DAC may be formed for any lawful purpose by any person or persons subscribing to a constitution and complying with the relevant provisions of—
(a) Chapter 2 of Part 2 , as applied by this Part, and
(b) this Part,
in relation to registration of a DAC.
(2) If the memorandum of the DAC contains the statement referred to in—
(a) section 967 (2)(b)(i), the DAC shall have the status of a private company limited by shares registered under this Part (as distinct from a private company limited by shares registered under Part 2 ), or
(b) section 967 (2)(b)(ii), the DAC shall have the status of a private company limited by guarantee, and having a share capital.
(3) Without prejudice to the means by which a DAC may be formed under the relevant provisions referred to in subsection (1), a company may be registered as a DAC by means of—
(a) re-registration as a DAC (but only as one limited by shares) pursuant to Chapter 6 of Part 2 ,
(b) the re-registration, or registration, as a DAC of a body corporate pursuant to Part 20 or Part 22 ,
(c) the merger of 2 or more companies pursuant to Chapter 3 of Part 9 ,
(d) the division of a company pursuant to Chapter 4 of Part 9 , or
(e) the merger operation provided for by the European Communities (Cross-Border Mergers) Regulations 2008 ( S.I. No. 157 of 2008 ).
(4) The liability of a member of a DAC at any time shall be limited—
(a) in the case of a DAC limited by shares, to the amount, if any, unpaid on the shares registered in the member’s name at that time,
(b) in the case of a DAC limited by guarantee, to—
(i) the amount undertaken, as mentioned in section 967 (2)(f), to be contributed by him or her to the assets of the DAC in the event of its being wound up, and
(ii) the amount, if any, unpaid on the shares registered in the member’s name at that time.
(5) Subsection (4) is without prejudice to any other liability to which a member may be subject as provided by this Act.
(6) The number of members of a DAC shall not exceed 149 but, in reckoning that limit, there shall be disregarded any of the following persons.
(7) Those persons are—
(a) a person in the employment of the DAC who is a member of it,
(b) a person who, having been formerly in the employment of the DAC, was, while in that employment, and has continued after the termination of the employment to be, a member of it.
(8) Where 2 or more persons hold one or more shares in a DAC jointly, they shall, for the purposes of this section, be treated as a single member.
(9) Any registration of a person as a member of a DAC in excess of the limit provided by subsection (6) shall be void.
(10) The certificate of incorporation issued under section 25 (1) shall state that the company is a designated activity company limited by shares or, as the case may be, a designated activity company limited by guarantee.
DAC to carry on activity in the State
966. A DAC shall not be formed and registered unless it appears to the Registrar that the DAC, when registered, will carry on an activity in the State, being an activity that is mentioned in its memorandum.
The form of a DAC’s constitution
967. (1) Subject to subsection (3), the constitution of a DAC shall be in the form of a memorandum of association and articles of association which together are referred to in this Part as a “constitution”.
(2) The memorandum of association of a DAC shall state—
(a) its name,
(b) that it is a designated activity company having the status, as the case may be, of—
(i) a private company limited by shares, or
(ii) a private company limited by guarantee, and having a share capital,
registered under this Part,
(c) its objects,
(d) that the liability of its members is limited,
(e) in the case of a DAC limited by shares, the amount of share capital with which the DAC proposes to be registered and the division thereof into shares of a fixed amount,
(f) in the case of a DAC limited by guarantee — in addition to the matter set out in the preceding paragraph — that each member undertakes that, if the company is wound up while he or she is a member, or within one year after the date on which he or she ceases to be a member, he or she will contribute to the assets of the company such amount as may be required for—
(i) payment of the debts and liabilities of the company contracted before he or she ceases to be a member,
(ii) payment of the costs, charges and expenses of winding up, and
(iii) adjustment of the rights of contributories among themselves,
not exceeding an amount specified in the memorandum.
(3) The constitution of a DAC shall—
(a) in addition to the matters specified in subsection (2), state the number of shares (which shall not be less than one) taken by each subscriber to the constitution, (b) be in accordance with the form set out in—
(i) Schedule 7 — in the case of a DAC limited by shares, or
(ii) Schedule 8 — in the case of a DAC limited by guarantee,
or, in either case, as near thereto as circumstances permit,
(c) be printed in an entire format, that is to say the memorandum and articles shall be contained in the one document, being a document either in legible form or (as long as it is capable of being reproduced in legible form) in non-legible form, and
(d) either—
(i) be signed by each subscriber in the presence of at least one witness who shall attest the signature, or
(ii) be authenticated in the manner referred to in section 888 .
(4) Where, subsequent to the registration of the constitution, an amendment of the memorandum of association is made affecting the matter of share capital, or another matter, referred to in subsection (2), that subsection shall be read as requiring the memorandum to state the matter as it stands in consequence of that amendment.
Supplemental provisions in relation to constitution
968. (1) This section—
(a) contains provisions as to the articles of a DAC, and
(b) provides that, in certain circumstances, a default position shall obtain in relation to the articles of a DAC.
(2) In this section—
“mandatory provision” means a provision of any of Parts 1 to 14 (as applied by this Part) or of this Part that is not an optional provision;
“optional provision” means a provision of any of Parts 1 to 14 (as applied by this Part) or of this Part that—
(a) contains a statement to the effect, or is governed by provision elsewhere to the effect, that the provision applies save to the extent that the constitution provides otherwise or unless the constitution states otherwise; or
(b) is otherwise of such import.
(3) The articles of a DAC may contain regulations in relation to the DAC.
(4) So far as the articles of a DAC do not exclude or modify an optional provision, that optional provision shall apply in relation to the DAC.
(5) Articles, instead of containing any regulations in relation to the DAC, may consist solely of a statement to the effect that the provisions of the Companies Act 2014 are adopted and, if the articles consist solely of such a statement, subsection (4) shall apply.
Provisions as to names of DACs
969. (1) The name of a DAC shall end with one of the following:
— designated activity company;
— cuideachta ghníomhaíochta ainmnithe.
(2) The words “designated activity company” may be abbreviated to “d.a.c.” or “dac” (including either such abbreviation in capitalised form) in any usage after the company’s registration by any person including the DAC.
(3) The words “cuideachta ghníomhaíochta ainmnithe” may be abbreviated to “c.g.a.” or “cga” (including either such abbreviation in capitalised form) in any usage after the company’s registration by any person including the DAC.
(4) A DAC carrying on business under a name other than its corporate name shall register in the manner directed by law for the registration of business names but the use of the abbreviations set out in subsection (2) or (3) shall not of itself render such registration necessary.
Trading under a misleading name
970. (1) Subject to subsection (6), neither a body that is not a DAC nor an individual shall carry on any trade, profession or business under a name which includes, as its last part, the words “designated activity company”, or “cuideachta ghníomhaíochta ainmnithe” or abbreviations of those words.
(2) If a body or individual contravenes subsection (1), the body or individual and, in the case of a body, any officer of it who is in default, shall be guilty of a category 3 offence.
(3) A DAC shall not, in the following circumstances, use a name which may reasonably be expected to give the impression that it is any type of a company other than a DAC or that it is any other form of body corporate.
(4) Those circumstances are circumstances in which the fact that it is a DAC is likely to be material to any person.
(5) If a DAC contravenes subsection (3), the DAC and any officer of it who is in default shall be guilty of a category 3 offence.
(6) Subsection (1) shall not apply to any company—
(a) to which Part 21 applies, and
(b) which has provisions in its constitution that would entitle it to rank as a DAC if it had been registered in the State.
Power to dispense with “designated activity company” in name of charitable and other companies
971. (1) A DAC shall, notwithstanding its registration as a company with limited liability, be exempt from the provisions of this Act relating to the use of the words “designated activity company” or “cuideachta ghníomhaíochta ainmnithe” as part of its name and the publishing of its name, but shall enjoy all the privileges and shall (subject to this section) be subject to all the obligations of a DAC, where—
(a) its objects are the promotion of commerce, art, science, education, religion, charity or any other prescribed object, and
(b) its constitution—
(i) requires its profits (if any) or other income to be applied to the promotion of its objects,
(ii) prohibits the making of distributions to its members, and
(iii) requires all the assets which would otherwise be available to its members to be transferred on its winding up to another company whose objects comply with paragraph (a) and which meets the requirements of this paragraph,
and
(c) a director or secretary of the company (or, in the case of an association about to be formed as a limited company, one of the persons who are to be the first directors or the person who is to be the first secretary of the company) has delivered to the Registrar a statement in the prescribed form that the company complies or, where applicable, will comply with the requirements of paragraphs (a) and (b).
(2) The Registrar shall refuse to register as a DAC any association about to be formed as a DAC by a name which does not include the words “designated activity company” or “cuideachta ghníomhaíochta ainmnithe” unless a statement, as provided for under subsection (1)(c), has been delivered to the Registrar.
(3) An application by a company registered as a DAC for a change of name, being a change that includes or consists of the omission of the words “designated activity company” or “cuideachta ghníomhaíochta ainmnithe”, shall be made in accordance with section 30 and the Registrar shall refuse to accede to the application unless a statement, as provided for under subsection (1)(c), has been delivered to the Registrar.
(4) A DAC which is exempt under subsection (1) and which is permitted to omit the words “designated activity company” or “cuideachta ghníomhaíochta ainmnithe” from its name shall not alter its constitution so that it ceases to comply with the requirements of that subsection.
(5) If it appears to the Registrar that a DAC which is registered under a name not including the words “designated activity company” or “cuideachta ghníomhaíochta ainmnithe”—
(a) has carried on any business other than the promotion of any of the objects mentioned in subsection (1)(a),
(b) has applied any of its profits or other income otherwise than in promoting such objects, or
(c) has made a distribution to any of its members,
the Registrar may, in writing, direct the DAC to change its name within such period as may be specified in the direction so that its name ends with the words “designated activity company” or “cuideachta ghníomhaíochta ainmnithe”, and the change of name shall be made in accordance with section 30 .
(6) A DAC which has received a direction under subsection (5) shall not thereafter be registered by a name which does not include the words “designated activity company” or “cuideachta ghníomhaíochta ainmnithe” without the approval of the Registrar.
(7) A person who—
(a) alters the constitution of a DAC in contravention of subsection (4), or
(b) fails to comply with a direction from the Registrar under subsection (5),
shall be guilty of a category 3 offence.
(8) Subsections (9) to (12) have effect notwithstanding—
(a) the repeal by the Act of 2001 of section 24, as originally enacted, of the Act of 1963 (the “original section 24”), or
(b) the repeal by this Act of section 24, inserted by section 88(1) of the Act of 2001, of the Act of 1963 (the “substituted section 24”) or of the Act of 2001.
(9) A licence that—
(a) had been granted by the Minister pursuant to subsection (1) or (2) of the original section 24 to a private company limited by shares (being a company that has re-registered as a DAC pursuant to Chapter 6 of Part 2 ), and
(b) is in force immediately before the commencement of this section,
shall continue to have effect but with the modification that it shall operate to exempt the company from the use of the words “designated activity company” or “cuideachta ghníomhaíochta ainmnithe” as part of its name and the publishing of its name.
(10) Subsections (4) to (7) of the original section 24 shall continue in force in relation to the foregoing licence as if that section 24 had never been repealed, except that references in those subsections to the Minister, wherever occurring, shall be read as references to the Registrar.
(11) An exemption that immediately before the repeal of the Act of 2001 operated, by virtue of the substituted section 24, in favour of a private company limited by shares (being a company that has re-registered as a DAC pursuant to Chapter 6 of Part 2 ) shall continue to have effect but—
(a) with the modification that it shall operate to exempt the company from the use of the words “designated activity company” or “cuideachta ghníomhaíochta ainmnithe” as part of its name and the publishing of its name, and
(b) subject to subsection (12).
(12) Subsections (4) to (7) shall, with the necessary modifications, apply to a foregoing exemption as they apply to an exemption under subsection (1).
(13) In relation to a DAC that avails itself of the exemption under subsection (1), or continues to avail itself of a licence or exemption referred to in subsection (9) or (11), section 151 shall have effect as if, in addition to the particulars specified in subsection (2)(a) to (c) of that section to be included on all business letters and order forms of the DAC, there were specified in that subsection the fact of the DAC being a limited company.
(14) In this section “Act of 2001” means the Company Law Enforcement Act 2001 .
Capacity of a DAC
972. (1) A DAC shall have the capacity to do any act or thing stated in the objects set out in its memorandum.
(2) For the purposes of subsection (1)—
(a) the reference in it to an object includes a reference to anything stated in the memorandum to be a power to do any act or thing (whether the word “power” is used or not),
(b) if an object is stated in the DAC’s memorandum without the following also being stated in relation to it, the capacity of the DAC extends to doing any act or thing that appears to it to be requisite, advantageous or incidental to, or to facilitate, the attainment of that object and that is not inconsistent with any enactment,
and a subsequent reference in this Part to an object of a DAC shall be read accordingly.
Capacity not limited by a DAC’s constitution
973. (1) The validity of an act done by a DAC shall not be called into question on the ground of lack of capacity by reason of anything contained in the DAC’s objects.
(2) A member of a DAC may bring proceedings to restrain the doing of an act which, but for subsection (1), would be beyond the DAC’s capacity but no such proceedings shall lie in respect of any act to be done in fulfilment of a legal obligation arising from a previous act of the DAC.
(3) Notwithstanding the enactment of subsection (1), it remains the duty of the directors to observe any limitations on their powers flowing from the DAC’s objects and action by the directors which, but for subsection (1), would be beyond the DAC’s capacity may only be ratified by the DAC by special resolution.
(4) A resolution ratifying such action shall not affect any liability incurred by the directors or any other person; if relief from any such liability is to be conferred by the DAC it must be agreed to separately by a special resolution of it.
(5) A party to a transaction with a DAC is not bound to enquire as to whether it is permitted by the DAC’s objects.
Alteration of objects clause by special resolution
974. (1) Subject to subsection (2), a DAC may, by special resolution, alter the provisions of its memorandum of association by abandoning, restricting or amending any existing object or by adopting a new object and any alteration so made shall be as valid as if originally contained therein, and be subject to alteration in like manner.
(2) If an application is made to the court in accordance with this section for the alteration to be cancelled, it shall not have effect except in so far as it is confirmed by the court.
(3) Subject to subsection (4), an application under this section may be made—
(a) by the holders of not less, in the aggregate, than 15 per cent in nominal value of the DAC’s issued share capital or any class thereof, or
(b) by the holders of not less than 15 per cent of the DAC’s debentures, entitling the holders to object to alterations of its objects.
(4) An application shall not be made under this section by any person who has consented to or voted in favour of the alteration.
(5) An application under this section shall be made within 21 days after the date on which the resolution altering the DAC’s objects was passed and may be made on behalf of the persons entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.
(6) On an application under this section, the court may—
(a) make an order cancelling the alteration or confirming the alteration, either wholly or in part, and on such terms and conditions as it thinks fit, and
(b) if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the court for the purchase of the interests of dissenting members and may give such directions and make such orders as it may think expedient for facilitating or carrying into effect any such arrangement.
(7) An order under this section may, if the court thinks fit, provide for the purchase by the DAC of the shares of any members of the DAC and for the reduction accordingly of the DAC’s company capital and may make such alterations in the constitution of the DAC as may be required in consequence of that provision; and such a purchase may be so ordered notwithstanding anything in section 102 .
Supplemental provisions in relation to section 974
975. (1) Where an order under section 974 requires the DAC not to make any, or any specified, alteration in its constitution, then, notwithstanding anything in this Act, but subject to the provisions of the order, the DAC shall not have power, without the leave of the court, to make any such alteration in contravention of that requirement.
(2) Any alteration in the constitution of a DAC made by virtue of an order under section 974 , other than one made by resolution of the DAC, shall be of the same effect as if duly made by resolution of the DAC and the provisions of this Act shall apply to the constitution as so altered accordingly.
(3) Notice of the meeting at which the special resolution altering a DAC’s objects is intended to be proposed shall be given to any holders of the DAC’s debentures that entitle the holders to object to alterations of its objects; that notice shall be the same as that given to members of the DAC, so however that not less than 10 days’ notice shall be given to the holders of any such debentures.
(4) If the written resolution procedure is used in the matter, notice, which shall not be less than 10 days, of the proposed use of that procedure shall, together with a copy of the proposed text of the resolution, be given to the debenture holders referred to in subsection (3).
(5) In default of any provisions in the DAC’s constitution regulating the giving to the foregoing debenture holders of notice referred to in subsection (3) or (4), the provisions of Part 4 or, as the case may be, of the DAC’s constitution regulating the giving of notice to members shall apply.
(6) Without prejudice to subsections (3) and (4), in the case of a DAC which is, by virtue of section 971 , permitted to omit the words “designated activity company” or “cuideachta ghníomhaíochta ainmnithe” from its name, notice of—
(a) the meeting at which the special resolution altering a DAC’s objects is intended to be proposed, or
(b) if the written resolution procedure is used in the matter, notice of the proposed use of that procedure, together with a copy of the proposed text of the resolution,
shall be given to the Registrar and subsections (3) to (5) shall apply as respects such notice as they apply as respects notice of the meeting or resolution to debenture holders.
(7) Where a DAC passes a resolution altering its objects—
(a) if no application is made under section 974 with respect to the alteration, it shall, within 15 days after the end of the period for making such an application, deliver to the Registrar a copy of its memorandum of association as altered, and
(b) if such an application is made, it shall—
(i) forthwith give notice of that fact to the Registrar, and
(ii) within 15 days after the date of any order cancelling or confirming the alteration, deliver to the Registrar a certified copy of the order and, in the case of an order confirming the alteration, a copy of the memorandum as altered.
(8) The court may by order at any time extend the time for delivery of documents to the Registrar under subsection (7)(b) for such period as the court may think proper.
(9) If a DAC makes default in giving notice or delivering any document to the Registrar as required by subsection (7), the DAC and any officer of it who is in default shall be guilty of a category 4 offence.
Restriction of section 32 (1) in relation to a DAC limited by guarantee
976. (1) Other than in respect of making an amendment of the type specified in subsection (2), section 32 (1) shall not apply in relation to a DAC limited by guarantee.
(2) The amendment referred to in subsection (1) is an amendment of the amount referred to in section 967 (2)(f) that is specified in the memorandum of the DAC limited by guarantee.
Alteration of articles by special resolution
977. (1) Subject to the provisions of this Act and to the conditions contained in its memorandum, a DAC may, by special resolution, alter or add to its articles.
(2) Any alteration or addition so made in the articles shall, subject to the provisions of this Act, be as valid as if originally contained therein and be subject in like manner to alteration by special resolution.
Power to alter provisions in memorandum which could have been contained in articles
978. (1) Subject to subsection (2), sections 32 (4) and (5) and 212 , any provision contained in a DAC’s memorandum which could lawfully have been contained in articles instead of in the memorandum may, subject to the provisions of this section, be altered by the DAC by special resolution.
(2) If an application is made to the court for the alteration to be cancelled, it shall not have effect except in so far as it is confirmed by the court.
(3) This section shall not apply where the memorandum itself provides for or prohibits the alteration of all or any of the foregoing provisions, and shall not authorise any variation or abrogation of the special rights of any class of members.
(4) section 974 (3) to (7) (other than subsection (3)(b)) and section 975 (other than subsections (3) to (6)) shall apply in relation to any alteration and to any application made under this section as they apply in relation to alterations and to applications made under those sections.
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.