originally written in March 2013

For various reasons, certain companies that are limited by shares or by guarantee find it in their interests to carry on business without the inclusion of "Limited" or "Teoranta" in their name. Whilst members of a company can decide by special resolution to change the corporate name, they are not allowed to pass a resolution in favour of a change of name that deletes either of the above-mentioned words.

Such a change can only be carried out in a specified manner under the Companies Acts and, as under the Company Law Enforcement Act, 2001, the procedure for removing either "Limited" or "Teoranta" has now been updated.

The old section 24 of the Companies Act, 1963 has been repealed and substituted by a new similarly numbered section.

There are two main impacts that the new section brings about. Firstly, under the old section 24 the application process culminated in a licence from the Minister to omit the relevant word from the company name and all amendments, changes, refusals etc. were in the power of the Minister. The Registrar of Companies was not formally involved in the process.

The new section 24 has changed this and now, rather than obtaining a licence, a company will apply for an exemption. All exemption applications, changes etc. are to be handled and decided upon by the Registrar of Companies and the Minister no longer has a frontline involvement.

A new application process has also been implemented with the introduction of a Statutory Declaration of Compliance (Form G5). This form, when filed, must be accompanied by a good quality text of the revised memorandum and articles of association and a form G1 (Special Resolution) approving the changes. The text of the memorandum and articles must include a number of mandatory clauses in order to obtain the exemption.

The parameters for obtaining the exemption remain the same as those that applied to the ministerial licence in that the company seeking it must have objects that are for the promotion of commerce, art, science, education , religion, charity or any other prescribed object and its memorandum and articles require:-

* Its profits or other income to be applied to the promotion of its objects;

* prohibit the payment of a dividend to its members and;

* require that, on winding up, all assets that would otherwise be available to its members be transferred to another company that meets with all of the foregoing requirements.

The second impact is mainly for continuity and procedural purposes in that the 2001 amendment specifically mentions that a licence granted to a company under the old section 24 will continue to have effect as if the section had not been repealed.

 

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