Allotment
Companies Act
Interpretation (Part 3)
64. (1) In this Part—
“capital conversion reserve fund”, in relation to a company, means the amount equivalent to the aggregate diminution in share capital consequential upon renominalisation of share capital under section 26 of the Economic and Monetary Union Act 1998 ;
“cash” includes funds in any currency or currencies;
“company capital”, in relation to a company, means—
(a) the aggregate value, expressed as a currency amount, of the consideration received by the company in respect of the allotment of shares of the company; and
(b) that part of the company’s undenominated capital constituted by the transfer of sums referred to in sections 106 (4) and 108 (3),
and subsection (2) supplements this definition;
“employees’ share scheme” means any scheme, for the time being in force, in accordance with which a company encourages or facilitates the holding of shares in, or debentures of, the company or its holding company by or for the benefit of employees or former employees of the company or of any subsidiary of the company including any person who is or was a director holding a salaried employment or office in the company or any subsidiary of the company;
“nominal value”, in relation to a share, means a monetary amount, expressed as an amount, multiple, fraction or percentage of any currency or currencies or combination thereof;
“parent public company” means a public limited company which has one or more private limited subsidiaries;
“private limited subsidiary” means a subsidiary that is a private company limited by shares but, for the purposes of this definition, a company shall not be regarded as a subsidiary if it is such only by virtue of section 7 (2)(a)(ii) or (e);
“redeemable shares” includes shares which are liable at the option of the company or the shareholder to be redeemed;
“securities” means—
(a) shares in a company;
(b) debentures of a company, including debenture stock, bonds and any other debt instruments of a company whether constituting a charge on the assets of the company or not;
(c) those classes of securities which are negotiable on the capital market, such as:
(i) shares in bodies corporate and other securities equivalent to shares in bodies corporate, partnerships or other entities, and depositary receipts in respect of shares;
(ii) bonds or other forms of securitised debt, including depositary receipts in respect of such securities;
(iii) any other securities giving the right to acquire or sell any such transferable securities or giving rise to a cash settlement determined by reference to transferable securities, currencies, interest rates or yields, commodities or other indices or measures with the exception of instruments of payment;
“share capital”, in relation to a company, means the aggregate amount or value of the nominal value of shares of the company;
“undenominated capital”, in relation to a company, means the amount of the company capital from time to time which is in excess of the nominal value of its issued shares and shall be deemed to include any sum transferred as referred to in sections 106 (4) and 108 (3).
(2) There is included in the definition of “company capital” in subsection (1) any amounts standing, immediately before the commencement of this section, to the credit of—
(a) the company’s share premium account (within the meaning of the prior Companies Acts);
(b) its capital redemption reserve fund (within the meaning of those Acts); and
(c) its capital conversion reserve fund.
(3) For the purposes of this Part a share in a company shall be taken to have been paid up (as to its nominal value or any premium on it) in cash or allotted for cash if the consideration for the allotment or the payment up is
(a) cash received by the company; or
(b) a cheque received by the company in good faith which the directors have no reason for suspecting will not be paid; or
(c) the release of a liability of the company for a liquidated sum; or
(d) an undertaking to pay cash to the company on demand or at an identified or identifiable future date which the directors have no reason for suspecting will not be complied with.
(4) In relation to the allotment or payment up of any shares in a company, references in this Act, other than in section 69 (12)(c), to consideration other than cash and to the payment up of shares and premiums on shares otherwise than in cash include references to the payment of, or an undertaking to pay, cash to any person other than the company.
Limitation on offers of securities to the public
68. (1) Subject to the provisions of this section, a company shall not—
(a) make—
(i) any invitation to the public to subscribe for; or
(ii) any offer to the public of,
any shares, debentures or other securities of the company; or
(b) allot, or agree to allot, (whether for cash or otherwise) any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public or being the subject of an invitation to the public to subscribe for them.
(2) A company shall—
(a) neither apply to have securities (or interests in them) admitted to trading or to be listed on; nor
(b) have securities (or interests in them) admitted to trading or listed on,
any market, whether a regulated market or not, in the State or elsewhere.
(3) Subsection (1) shall not apply to any of the following offers or allotments of debentures by a company (wherever they may be made)—
(a) an offer of debentures addressed solely to qualified investors;
(b) an offer of debentures addressed to fewer than 150 persons, other than qualified investors;
(c) an offer of debentures addressed to investors who acquire securities for a total consideration of at least €100,000 per investor, for each separate offer;
(d) an offer of debentures whose denomination per unit amounts to at least €100,000;
(e) an offer of debentures with a total consideration in the European Union less than €100,000, which shall be calculated over a period of 12 months;
(f) an allotment of debentures, or an agreement to make such an allotment, with a view to those debentures being the subject of any one or more of the offers referred to in paragraphs (a) to (e),
and the reference in this subsection to an offer of debentures includes an invitation to subscribe for them.
(4) Subsection (1) shall not apply to—
(a) an offer of shares by a company (of any amount or wherever it may be made), being an offer addressed to—
(i) qualified investors; or
(ii) 149 or fewer persons; or
(iii) both qualified investors and 149 or fewer other persons;
or
(b) an allotment of shares, or an agreement to make such an allotment, with a view to those shares being the subject of an offer referred to in paragraph (a),
and the reference in this subsection to an offer of shares includes an invitation to subscribe for them.
(5) Subsection (1) shall not apply to an offer by a company of those classes of instruments which are normally dealt in on the money market (such as treasury bills, certificates of deposit and commercial papers) having a maturity of less than 12 months, and the reference in this subsection to an offer of instruments includes an invitation to subscribe for them.
(6) A word or expression that is used in this section and is also used in the Prospectus (Directive 2003/71/EC) Regulations 2005 ( S.I. No. 324 of 2005 ) shall have in this section the same meaning as it has in those Regulations.
(7) For the purposes of subsection (6), the Regulations referred to in that subsection shall have effect as if Regulation 8 were omitted therefrom.
(8) Nothing in this section shall affect the validity of any allotment or sale of securities or of any agreement to allot or sell securities.
(9) If a company contravenes subsection (1) or (2), the company and any officer of it who is in default shall be guilty of a category 2 offence.
Allotment of shares
69. (1) No shares may be allotted by a company unless the allotment is authorised, either specifically or pursuant to a general authority, by ordinary resolution or by the constitution of the company.
(2) Without prejudice to subsection (1), in the case of a company whose constitution states an authorised share capital, no shares may be allotted by the company unless those shares are comprised in the authorised but unissued share capital of the company.
(3) An authorisation for the purposes of subsection (1) (whether conferred by an ordinary resolution or the constitution) may stipulate a period during which the allotment may occur; if it so stipulates, then allotments occurring outside that period are not authorised by it.
(4) Save to the extent that the constitution of the company provides otherwise—
(a) shares of a company may only be allotted by the directors of the company;
(b) the directors of a company may allot, grant options over or otherwise dispose of shares to such persons, on such terms and conditions and at such times as they may consider to be in the best interests of the company and its shareholders.
(5) Any director of a company who knowingly contravenes, or knowingly permits or authorises a contravention of, a preceding provision of this section shall be guilty of a category 3 offence.
(6) Subject to subsections (8) and (12) and section 70 , a company proposing to allot any shares—
(a) shall not allot any of those shares, on any terms—
(i) to any non-member, unless it has made an offer to each person who holds relevant shares, of the class concerned, in the company to allot to him or her, on the same or more favourable terms, a proportion of those relevant shares which is, as nearly as practicable, equal to the proportion in nominal value held by him or her of the aggregate of the shares of that class; or
(ii) to any person who holds shares in the company, unless it has made an offer to each person who holds relevant shares, of the class concerned, in the company to allot to him or her, on the same terms, a proportion of those shares which is, as nearly as practicable, equal to the proportion in nominal value held by him or her of the aggregate of the relevant shares of that class;
and
(b) shall not allot any of those shares to any person unless the period during which any such offer may be accepted (not being less than 14 days) has expired or the company has received notice of the acceptance or refusal of every offer so made.
(7) In—
(a) subsection (6) “relevant shares”, in relation to a company, means shares in the company other than shares which as respects dividends and capital carry a right to participate only to a specified amount in a distribution;
(b) subsection (6)(a)(ii) “non-member” means a person who is not a holder of shares (as that expression is to be read by virtue of section 70 (4)) in the company.
(8) Where a company’s constitution contains provisions which—
(a) require that the company, when proposing to allot shares of a particular class, shall not allot those shares unless it makes an offer of those shares to existing holders of shares of that class; and
(b) specify that the minimum period during which that offer may be accepted is not less than 14 days,
then subsection (6) shall not apply to any allotments made in compliance with such provisions.
(9) An offer which is required by—
(a) subsection (6); or
(b) the provisions of the company’s constitution referred to in subsection (8),
to be made to any person shall be made by serving it on him or her in the same manner in which notices are authorised to be given by sections 180 , 181 and 218 .
(10) Any such offer as is mentioned in subsection (6) or (8) shall not be withdrawn before the end of the period that the offer referred to in subsection (6) or, as the case may be, the provisions of the company’s constitution referred to in subsection (8) specify as the period within which it may be accepted.
(11) Nothing in subsection (6)(b), (9) or (10) shall invalidate provisions of the company’s constitution referred to in subsection (8) by reason that those provisions require or authorise an offer thereunder to be made in contravention of one or more of those subsections, but, to the extent that those provisions require or authorise such an offer to be so made, they shall be of no effect.
(12) Subsection (6) shall not apply—
(a) to the extent that—
(i) the constitution of the company,
(ii) a special resolution, or
(iii) the terms of issue of already allotted shares,
provides or provide (either generally or in respect of a particular allotment or class of allotments), to the extent so provided;
(b) to allotments of shares for a consideration wholly or partly paid for, otherwise than in cash;
(c) to allotments of shares to the subscriber or subscribers to the company’s constitution upon the company’s incorporation, being the shares taken by that subscriber or those subscribers before such incorporation;
(d) to allotments of shares to persons in pursuance of the terms of an employees’ share scheme established by the company;
(e) to allotments of bonus shares.
Supplemental and additional provisions as regards allotments
70. (1) Shares which a company has offered to allot to a holder of shares in the company may be allotted to that holder or anyone in whose favour that holder has renounced his or her right to their allotment without contravening section 69 (6)(b).
(2) Notwithstanding that any authorisation conferred by a resolution or the constitution such as is mentioned in section 69 (1) has expired, the directors of a company may allot shares in pursuance of an offer or agreement previously made by the company, if that authorisation enabled the company to make an offer or agreement which would or might require shares to be allotted after the authorisation’s expiry.
(3) For the purposes of section 69 and this section—
(a) “allot” includes “agreement to allot” (other than an agreement made subject to the passing of an ordinary or special resolution);
(b) “shares” includes a right to subscribe for shares or to convert securities into shares,
and with the effect that—
(i) in the case of paragraph (a), if an agreement to allot shares is entered into in compliance with section 69 , subsections (3), (4) and (6) of that section shall not apply to an allotment of shares pursuant to that agreement; and
(ii) in the case of paragraph (b), if a right to subscribe for shares, or to convert securities into shares, is granted in compliance with section 69 , subsections (3), (4) and (6) of that section shall not apply to an allotment of shares pursuant to the exercise of that right.
(4) References in section 69 and this section (however expressed) to the holder of shares or the holder of shares of any class shall be read as including references to any person who held shares or, as the case may be, shares of that class on any day within the period of 28 days ending with the day immediately preceding the date of the offer which is specified by the directors of the company concerned as being the record date for the purposes of the offer.
(5) A resolution of a company to give, vary, revoke or renew an authority for the purposes of section 69 (1) may, notwithstanding that it alters the company’s constitution, be an ordinary resolution.
(6) Where a company allots shares, the shares shall be taken, for the purposes of this Act, to be allotted when a person acquires the unconditional right to be included in the company’s register of members in respect of those shares.
(7) Where a company allots shares, it shall, within 30 days after the date of allotment, deliver particulars of the allotment in the prescribed form to the Registrar.
(8) If a company fails to comply with subsection (7), the company and any officer of it who is in default shall be guilty of a category 4 offence.
(9) Nothing in section 69 or this section shall affect the validity of any allotment of shares.
(10) Where there is a contravention of section 69 (6), the company and every officer of the company who knowingly authorised or permitted the contravention, shall be jointly and severally liable to
compensate any person to whom an offer should have been made under section 69 (6) for any loss, damage, costs or expenses which that person has sustained or incurred by reason of the contravention.
(11) No proceedings to recover any such loss, damage, costs or expenses shall be commenced after the expiration of 2 years after the date of the delivery to the Registrar of the return of allotments in question or, where shares are agreed to be allotted, the agreement.
(12) If, before the commencement of section 69 , the directors of a company have been granted authority, pursuant to section 20 of the Act of 1983, to allot relevant securities (within the meaning of that section 20) and that authority is in force immediately before that commencement—
(a) neither section 69 nor this section shall apply to the allotment, after that commencement, of relevant securities by the directors pursuant to that authority (which authority shall, in accordance with its terms, be taken to remain in force); and
(b) section 20 (other than subsections (4) and (9) thereof), and sections 23 and 24, of the Act of 1983 shall apply to that authority and any allotment of relevant securities on foot thereof,
but, on the expiry of that authority, section 69 and this section shall apply to any allotment thereafter of shares in the company (or the grant of any right to subscribe for shares in the company or to convert securities into such shares).
(13) For the purposes of subsection (12)—
(a) “Act of 1983” means the Companies (Amendment) Act 1983 ;
(b) the reference to the grant of an authority includes a reference to the conferral, by the articles of the company, of an authority; and
(c) the exclusion of the application of section 20(4) of the Act of 1983 by paragraph (b) of subsection (12) shall not be taken as preventing the renewal of the authority concerned under section 69 and this section, but if that authority is so renewed, section 69 and this section shall apply to any allotment, or the grant of any right, as mentioned in subsection (12), that occurs after that renewal of authority on foot thereof.
Payment of shares
71. (1) Shares may be paid up in money or money’s worth (including goodwill and expertise).
(2) Shares of a company shall not be allotted at a discount to their nominal value.
(3) Where shares are allotted in contravention of subsection (2), the allottee shall be liable to pay the company concerned an amount equal to the amount of the discount and interest thereon at the appropriate rate.
(4) Subsections (1) and (2) shall not prevent a company from allotting bonus shares as provided by this Part.
(5) Subject to sections 72 , 73 and 75 , any value received in respect of the allotment of a share in excess of its nominal value shall be credited to and form part of undenominated capital of the company and, for that purpose, shall be transferred to an account which shall be known, and in this Act is referred to, as the “share premium account”.
(6) Where any person becomes a holder of any shares in respect of which—
(a) there has been a contravention of this section; and
(b) by virtue of that contravention, another is liable to pay any amount under this section,
the first-mentioned person in this subsection also shall be liable to pay that amount (jointly and severally with any other person so liable) unless either that first-mentioned person is a purchaser for value and, at the time of the purchase, he or she did not have actual notice of the contravention or he or she derived title to the shares (directly or indirectly) from a person who became a holder of them after the contravention and was not so liable.
(7) Where a company contravenes any of the provisions of this section, the company and any officer of it who is in default shall be guilty of a category 3 offence.
(5A) The share premium account may be applied by the company—
(a) in writing off—
(i) the preliminary expenses of the company, or
(ii) the expenses of, or the commission paid on, any issue of shares or debentures of the company,
or
(b) in providing for the premium payable on redemption of any redeemable preference shares issued by the company before 1 July 1991 or of any debentures of the company issued by a company before 1 June 2015.”.
Rectification of dealings in shares
100. (1) If—
(a) a company has created, allotted, acquired or cancelled any of its shares; and
(b) there is reason to apprehend that such shares were invalidly created, allotted, acquired or cancelled,
the court may, on the application of any of the following persons, declare that such creation, allotment, acquisition or cancellation shall be valid for all purposes if the court is satisfied that it would be just and equitable to do so.
(2) The persons who may make such an application are—
(a) the company;
(b) any holder or former holder of such shares;
(c) any member or former member or creditor of the company;
(d) the liquidator of the company.
(3) Where such a declaration is made, the shares shall from the creation, allotment, acquisition or cancellation thereof, as the case may be, be deemed to have been validly created, allotted, acquired or cancelled.
(4) The grant of relief by the court under this section shall, if the court so directs, not have the effect of relieving the company or its officers of any liability incurred under this Act.
(5) In this section “acquired”, in relation to shares, means acquired by redemption, purchase, surrender, forfeiture or other means.
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.