Companies Act 2014 section 965

Way of forming a DAC and the 2 types of DAC

Section 965 sets out how a Designated Activity Company (DAC) may be formed, describes the two types of DAC that can exist, and defines the limits on member liability and membership numbers.

• A DAC may be formed for any lawful purpose and can be either a private company limited by shares or a private company limited by guarantee with a share capital
• A DAC can be created as a new entity, by re-registration or conversion of an existing company, or through a merger, division, or cross-border operation under EU regulations
• Members' liability is limited to any unpaid amount on their shares and, in the case of a guarantee company, also to the amount they undertook to contribute on a winding up
• A DAC may not have more than 149 members, excluding current and former employees who are members, and joint holders of shares count as a single member