Companies Act 2014 section 55

Status of existing private companies at end of transition period: general principle

Section 55 sets out the default position for existing private companies that take no action during the transition period, explaining how they will automatically convert to the new-style private company limited by shares.

• Unless an existing private company re-registers as a designated activity company (DAC) or another company type, it automatically becomes a new-style private company limited by shares (CLS) at the end of the eighteen-month transition period.
• The company is deemed to have a constitution comprising its existing memorandum and articles of association, but excluding its objects clause and any provisions inconsistent with mandatory provisions of the Act.
• The resulting constitution is treated as satisfying the requirements of section 19 regarding the form of a company's constitution, so no further action is needed to comply.
• A designated activity company (DAC) under Part 16 is essentially the same as the old-style private company, retaining a memorandum of association with an objects clause that limits the company's capacity.