What is the main regulation related to the the Irish designated activity company?
The main rule of law concerning the designated activity company (DAC) in Ireland is the Companies Act, which provides the legal framework for all types of companies that can be set up in this country. The Companies Act in Ireland was modified in 2014 and it entered into force in June 2015, providing new types of limited companies.
The Companies Act 2014 created a new type of legal form, the designated activity company (DAC) and foreign businessmen interested in company formation may set up two types of DACs in Ireland: the DAC limited by shares and the DAC limited by guarantee. Our team of company formation representatives in Ireland can offer assistance on the main characteristics of the DAC companies and can help businessmen register the legal entity following the legal incorporation requirements.
What are the characteristics of the Irish DAC?
The DAC in Ireland is regulated by the Part 16 of the new Companies Act. The procedure of company formation in Ireland for a DAC legal entity is performed following the same procedures for both types of companies. This type of company has the capacity to act only into the limits of the regulations prescribed in the company’s constitution and thus, the investors setting up an Irish DAC, regardless of its liability (limited by shares, limited by guarantee), will need to mention the specific business activities and objects during the incorporation of the business form. Both types of DAC legal entities have a set of similar characteristics, as follows:
- • the company set up in Ireland may have a maximum of 149 members;
- • it is necessary to draw up the company’s articles of association and memorandum;
- • the memorandum represents the document in which the investor will specify the company’s objects of activities;
- • an Irish DAC can be registered in Ireland as long as the investors appoint two directors.
Investors are invited to watch the video below created by our Ireland company formation team, which provides details on the registration of a designated activity company in Ireland:
What is the liability of the DAC’s shareholders in Ireland?
It is important to know that the liability of the company’s shareholders is prescribed in a different manner for each type of legal form the DAC can take. In the case of a DAC limited shares, the shareholders are liable in the amount of the shares they own in the company. Shareholders of a DAC limited by guarantee will be liable following the legal provisions applicable to a DAC limited by shares, but they will also be liable in the amount they have contributed to the company’s assets. Our team of company formation agents in Ireland can provide further details on this aspect.
What are the requirements for the DAC’s trading name in Ireland?
Any company operating in Ireland is required to register a trading name with the Companies Registration Office (CRO). The procedure of company registration in Ireland in the case of an Irish DAC requires to state at the end of the company’s name the words “Designated Activity Company” or “Cuideachta Ghníomhaíochta Ainmnithe”. The legal entity can be exempted from this regulation, but only if an exemption was obtained for this procedure.
What are the most suitable business activities for setting up an Irish DAC?
The Irish DAC can be set up for a wide range of business activities, but in most cases, this business form is suitable for businesses operating as charities or management companies. At the same time, this business form can be registered by the investors who want to set up a company created for a specific purpose.
Businessmen can find out further information on other characteristics of the Irish DAC from our team of Ireland company formation consultants. Please address to our representatives for more details concerning the taxation of the Irish DAC, as well as on the audit requirements. It is important to know that the DAC can qualify for audit exemptions.