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Companies Act 2014 - Impact on Corporate Pension Trustees

  • Ireland
  • General


The Companies Act 2014 (the “Act”) came into effect on 1 June 2015 and brought about a major restructuring of Ireland’s existing company law framework. The Act aims to consolidate, simplify and modernise company law in Ireland and introduces a number of significant reforms to the current regime. Ian Devlin examines the Act’s impactions for corporate pension trustees.

New company structures

Perhaps the most significant feature of the Act from a corporate pension trustee perspective is the introduction of two separate forms of private company limited by shares which replace the current single form.  Corporate trustees will have to consider whether to convert to a new simplified form of private company limited by share (“LTD”) or to a Designated Activity Company (“DAC”), which closely resembles the existing form of private limited company.

The major difference between the LTD and the DAC under the Act relates to their respective legal capacity. A DAC will have an objects clause setting out the activities for which the company  has been formed and in which it may engage. In contrast, a LTD will have the same unlimited legal capacity as an individual with no objects clause and no restrictions on the lawful activities it is permitted to carry out.


The Act provides for an 18 month transition period running to 30 November 2016 during which company directors will have to decide whether to convert to a LTD or a DAC. During the 18 month transition period, all existing private limited companies will be dealt with as though they are a DAC. If a company takes no action, it will automatically be deemed to have converted to a LTD at the expiry of the transition period.

The Act also differentiates between 'mandatory provisions’ and ‘optionalprovisions’. Any terms of a company’s existing Memorandum and Articles of Association that are inconsistent with a ‘mandatory provision’ will be invalid and ‘optional provisions’ will now automatically apply unless they are dis-applied or unless the company’s constitution provides otherwise.

The decision as to which structure to adopt will ultimately be one for the directors of each corporate trustee to make based on an analysis of which company type will best suit its functions.

A professional corporate trustee may prefer the freedom offered by a LTD. If an employer has incorporated a corporate trustee to act solely as the trustee of its pension schemes, it may want to ensure that the scope of its activity is clearly defined in an objects clause and therefore might find the DAC structure more appropriate.

Next steps for corporate trustees The directors of corporate trustees should immediately consider the following steps:

  • Review the new forms of private company and consider which structure would best suit the needs of their company
  • Review the company’s current Memorandum and Articles of Association to identify any inconsistencies with mandatory or
    optional provisions of the Act
  • Determine the changes that will need to be made in preparing the company’s new constitution 
  • Present the new company constitution to the shareholders and pass the necessary resolution required for conversion to the
    preferred company type 
  • Register the new constitution with the Companies Registration Office.


This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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