Nature of Shares I Shares are assets and are the subject of property rights. They enjoy the constitutional protection of property and the guarantee against the abolition of private property. Although they are founded on a deemed contract between the members in the constitution (formerly the memorandum and articles of association) they are proprietary in nature. They are the instruments […]
Allotment of Shares Shares may be allotted on the initial formation of the company or at a later date. The first subscribers are usually the parties to the constitution/ memorandum and articles of association. They may subscribe for shares of nominal value, in the case of a private company. A public company must have at least the minimum issued share capital required by law. […]
Share Certificates Share certificates are evidence of the shareholder’s title to his shares. They are issued under the common seal of the company. They are generally required to be delivered on the transfer of the shares. In the case of most public limited companies, shares have been dematerialised and are held through agents and trustees/nominees. The shares may be transferred […]
Transfer of Shares I The Companies Act 2014 Act re-enacted the earlier provisions on the transfer and transmission of shares and debentures. An instrument of transfer must be executed, by or on behalf of the transferor. Where the consideration is not fully paid, it is to be executed by or on behalf of both transferor and transferee. Under the Companies […]
Company Capital Private limited companies commonly have a very small issued share capital. However, this does not necessarily bear any relationship to the value of the company.It reflects the nominal amount paid for the share on its issue, which is commonly as low as €1.00 or less. A company’s issues share capital is the total value expressed as a currency amount […]
Entitlement to Dividend There is no automatic entitlement to a dividend. It is usually a matter for the directors to decide whether to propose a dividend and if so how much should be paid.The default position provides that the right to a dividend arises only when declared by the directors and confirmed by the members at the annual general meeting. The directors […]
Capital Protection Rules In one sense, the capital of the company is a fund available for creditors. It is not available to shareholders, other than on winding up after all creditors/ debt holders have been paid in full. There are capital protection rules in company law which seek to protect the company’s capital. The capital protection rules prohibit certain transactions which would otherwise […]
Redeemable Shares A company may issue redeemable shares. This means that the company may repurchase and cancel them. Unlike other ordinary shares, they need not be locked into the company until liquidation. This facilitates investment in private limited companies. The abolition of capital duty further facilitates investment in shares. Formerly, only preference shares could be redeemable. Since 1990, redeemable ordinary shares […]
2014 Act Reforms Because a reduction of the issued share capital may (theoretically in many cases) jeopardise the creditors, it is tightly controlled. The conditions and restrictions are designed to preserve capital and protect creditors. The 2014 Act simplified the procedures for the reduction of share capital. The reduction formerly required court confirmation. Under the Companies Act, 2014, private companies […]
Prohibition on Financial Assistance The policy of capital maintenance and protection is supported by the prohibition on companies assisting in financing the acquisition of their own shares. The prohibition on financial assistance is wide-ranging and may apply to a wider range of transactions than might first appear. It is unlawful for a company to give, either directly or indirectly, whether by […]
Corporate Reorganisation The 2014 Act made new provision in relation to the reorganisation of a company’s capital and undertaking. A limited company may enter a transaction by which its assets, undertakings or liabilities are transferred to another company or body corporate, in return for shares or securities of that body corporate being issued to the shareholders of the company or […]
Private Company Mergers I There are separate provisions applicable to mergers involving PLCs and to mergers where none of the companies is a PLC, or at least one of the merging companies is a private company limited by shares. A merger may be by acquisition, absorption or by the formation of a new company. The method for merger provided under […]
Arrangements in Winding Up Where a company is proposed to be wound up or is in the course of being wound up in a members’ voluntary liquidation, the whole or any part of its business or property may be transferred or sold to another company or undertaking and the liquidator may in compensation or part compensation for the transfer or […]
Obligation to Compile Register There is an obligation to compile and maintain a register of beneficial ownership in shares. It applies to “company”, which means any corporate or other legal entity incorporated in the State and includes a company. The obligation does not apply to companies listed on a regulated market that is subject to disclosure requirements consistent with the […]
Obligation to File in Central Register An obligation imposed on a company to deliver information to the Registrar may be discharged by a person who is not an officer or employee of it, acting on the company’s behalf. A company that is in existence before the commencement of the regulations shall deliver the information specified to the Registrar within 5 […]
Unrestricted Access The following shall have the right to inspect the central register – a member of the Garda Siochana, not below the rank of inspector, who is engaged in the prevention, detection or investigation of possible money laundering or terrorist financing, a member of FIU Ireland within the meaning of Part 4 of the Act of 2010, an officer […]