Companies Act 2014 section 963

Definitions (Part 16)

Section 963 defines the key terms used throughout Part 16 of the Companies Act 2014, which deals with designated activity companies (DACs).

• A designated activity company (DAC) is a private company that, unlike an ordinary private company limited by shares under Part 2, has an objects clause restricting its activities to those stated in its constitution.
• There are two types of DAC: one limited by shares and one limited by guarantee (but which also has a share capital).
• The term "constitution" for a DAC has a specific meaning set out in section 967(1), reflecting the fact that a DAC's constitution differs from that of an ordinary private company.
• The concept of the DAC originated from the Company Law Review Group's First Report, recognising the need for a company type that retains an objects clause alongside the new simplified private company model.