Companies Act 2014 section 56

Conversion of existing private companies to designated activity companies: duties and powers in that regard

Section 56 sets out the circumstances under which an existing private company may or must re-register as a designated activity company (DAC) before the end of the transition period.

• An existing private company may voluntarily convert to a DAC by passing an ordinary resolution no later than three months before the transition period expires.
• Members holding more than 25 per cent of total voting rights can compel the company to re-register as a DAC by serving a written notice no later than three months before the transition period ends.
• A company that carries out activities that would breach the rules on public offers of securities (section 68) must re-register as a DAC before the transition period expires, or alternatively re-register as another company type by special resolution under Part 20.
• Voting rights for these purposes mean the right to vote at general meetings of members, excluding rights that are only exercisable in special circumstances.

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