Ireland Company Constitution
An LTD company has a Constitution instead of a Memorandum & Articles of Association
A company private limited by shares (LTD) must have a Constitution in order to be incorporated. Under the Companies Act 2014, companies do not have stated objects if they are registered as a Private Limited Company, instead they have a simple one document constitution. All other company types must have a two part constitution made up of Memorandum & Articles of Association.
The Constitution of an Irish Limited Company
The constitution states the name of the company, the fact that the company is a private company limited by shares, any additional regulations the company may wish to specify and takes the form set out in Schedule 1 to the Companies Act 2014.
The Constitution under the Companies Act 2014 replaces the term Memorandum and Articles of Association. Under the 2014 Act, a company model, Private company limited by shares under Part 2 of the Act, does not have a memorandum (i.e. no set objects stated).
Companies used to be incorporated using a principal objects clause in line with the principal activity of the company and the subsidiary objectives allows the company diversity to trade in any business.
All companies apart from LTDs in Ireland must have a written constitution, which is comprised of following two documents:
- Memorandum of Association
- Articles of Association
The Memorandum of Association
The Memorandum of Association is apart of the constitution for all companies apart from LTDs.
A company’s memorandum and articles of association are of fundamental importance in that they set out the constitution and internal rules of your company. Where the content of the two documents conflicts, the memorandum of association takes precedence over the articles of association.
The memorandum of association of a company states your company name and aims to set out the main and subsidiary objectives of your company. A corresponding NACE Code is recorded on the form A1. It also establishes the share structure of the company.
The Articles of Association
The Articles of Association govern the internal management of the company, it literally lays down how a company is to be governed normally by choosing a standard set of Articles provided within the Companies Acts’ with appropriate amendments.
The objects are clauses stated in your company’s memorandum of association stating the principal activity of the business and the subsidiary activities.
Articles of Association requirements
- The memorandum and articles must comply with the Companies Act 2014, and must be printed in clear black print on durable paper
- The correct statutes, e.g. ‘Companies Act 2014’, must be cited
- If the company is a limited company and has not claimed the exemption under The Companies Act, the full name of the company followed by Limited, Public Limited Company or Teoranta, Cuideachta Phoibli Teoranta as applicable, must be given; Abbreviations to Ltd, PLC or Teo. are not acceptable.
- The company name must exactly match that on Form A1
- The main objects of the company must be stated and must correspond with the principal activity identified in Form A1.
- In the case of a public limited company, the memorandum must state that the company is to be a public limited company, as well as the amount of share capital (minimum €40,000) with which the company proposes to be registered and its division into shares of a fixed amount
- The memorandum and articles must be signed by the subscribers, their addresses and descriptions must be stated and their signatures witnessed and dated.
The law prohibits the following matters:
- Banking objects are not permitted unless a licence has been obtained from the Central Bank of Ireland
- A company is excluded from holding a bookmaker’s licence under the Betting Acts 1926-1931
- A company cannot act as director, auditor, receiver or liquidator for another company
- It is not permitted to carry on the business of insurance or re-insurance unless the Insurance Acts have been complied with. Where the business of insurance or re-insurance is mentioned in the objects of a company, the applicant must submit confirmation to the CRO that the Department of Jobs, Enterprise and Innovation (Insurance Financial Supervision Section) has acknowledged notice under section 22(1)(b) Insurance Act 1989
- A credit union, trade union or building society cannot be incorporated as a limited company
- Broadcasting is prohibited unless the permission of the Minister for Department of Jobs, Enterprise and Innovation has been obtained