Constitutional Contract
Companies Act
Effect of constitution
31. (1) Subject to the provisions of this Act, the constitution shall, when registered, bind the company and the members of it to the same extent as if it had been signed and sealed by each member, and contained covenants by the company and each member to observe all the provisions of the constitution and any provision of this Act as to the governance of the company.
(2) For the avoidance of doubt, in subsection (1) the reference to any provision of this Act as to the governance of the company includes a reference to any provision of this Act that commences with words to the effect that the provision applies save where the company’s constitution provides otherwise or otherwise contains a qualification on the provision’s application by reference to the company’s constitution.
(3) All money payable by any member to the company under the constitution shall be a debt due from him or her to the company.
(4) An action to recover a debt created by this section shall not be brought after the expiration of 12 years after the date on which the cause of action accrued.
Amendment of constitution by special resolution
32. (1) Subject to the provisions of this Act, a company may by special resolution amend its constitution.
(2) Any amendment so made of the constitution shall, subject to the provisions of this Act, be as valid as if originally contained therein, and be subject in like manner to amendment by special resolution.
(3) Where any amendment is made to a company’s constitution notice of which section 33 requires to be published as therein mentioned, the company shall deliver to the Registrar, in addition to the amendment, a copy of the text of the constitution as so amended.
(4) Subject to subsection (5), and notwithstanding anything in the constitution of a company, no member of the company shall be bound by an amendment made to the constitution after the date on which he or she became a member, if and so far as the amendment—
(a) requires him or her to take or subscribe for more shares than the number held by him or her at the date on which the amendment is made, or
(b) in any way increases his or her liability as at the date referred to in paragraph (a) to—
(i) contribute to the share capital of the company, or
(ii) otherwise pay money to the company.
(5) Subsection (4) shall not apply in any case where the member agrees in writing, either before or after the amendment is made, to be bound by the amendment.
Variation of rights attached to special classes of shares
88. (1) This section shall have effect with respect to the variation of the rights attached to any class of shares in a company whose share capital is divided into shares of different classes, whether or not the company is being wound up.
(2) Where the rights are attached to a class of shares in the company otherwise than by the constitution, and the constitution does not contain provisions with respect to the variation of the rights, those rights may be varied if, but only if—
(a) the holders of 75 per cent, in nominal value, of the issued shares of that class, consent in writing to the variation; or
(b) a special resolution, passed at a separate general meeting of the holders of that class, sanctions the variation,
and any requirement (however it is imposed) in relation to the variation of those rights is complied with, to the extent that it is not comprised in the requirements in paragraphs (a) and (b).
(3) Where—
(a) the rights are attached to a class of shares in the company by the constitution or otherwise;
(b) the constitution contains provision for the variation of those rights; and
(c) the variation of those rights is connected with the giving, variation, revocation or renewal of an authority for the purposes of section 69 (1) or with a reduction of the company’s company capital by either of the means referred to in section 84 ,
those rights shall not be varied unless—
(i) the requirement in subsection (2)(a) or (b) is satisfied; and
(ii) any requirement of the constitution in relation to the variation of rights of that class is complied with to the extent that it is not comprised in the requirement in subsection (2)(a) or (b).
(4) Where the rights are attached to a class of shares in the company by the constitution or otherwise and—
(a) where they are so attached by the constitution, it contains provision with respect to their variation which had been included in the constitution at the time of the company’s original incorporation; or
(b) where they are so attached otherwise, the constitution contains such provision (whenever first so included),
and in either case the variation is not connected as mentioned in subsection (3)(c), those rights may only be varied in accordance with that provision of the constitution.
(5) Where the rights are attached to a class of shares in the company by the constitution and it does not contain provisions with respect to the variation of the rights, those rights may be varied if all the members of the company agree to the variation.
(6) Where a resolution referred to in any of the preceding subsections is to be proposed at a meeting of members holding a particular class of shares—
(a) the necessary quorum at any such meeting, other than an adjourned meeting, shall be 2 persons holding or representing by proxy at least one-third in nominal value of the issued shares of the class in question and at an adjourned meeting one person holding shares of the class in question or his or her proxy;
(b) any holder of shares of the class in question present in person or by proxy may demand a poll.
(7) Any amendment of a provision contained in the constitution of a company for the variation of the rights attached to a class of shares or the insertion of any such provision into the company’s constitution shall itself be treated as a variation of those rights.
(8) References to the variation of the rights attached to a class of shares in—
(a) this section; and
(b) except where the context otherwise requires, in any provision for the variation of the rights attached to a class of shares contained in the company’s constitution,
shall include references to their abrogation.
(9) Nothing in subsections (2) to (5) shall be read as derogating from the powers of the court under sections 212 , 451 and 455 .
(10) Save where the company’s constitution provides otherwise, the rights conferred upon the holders of the shares of any class issued by a company with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.
Rights of holders of special classes of shares
89. (1) If in the case of a company, the share capital of which is divided into different classes of shares, the rights attached to any such class of shares are at any time varied pursuant to section 88 , one or more members who hold, or together hold, not less than 10 per cent of the issued shares of that class, being members who did not consent to or vote in favour of the resolution for the variation, may apply to the court to have the variation cancelled.
(2) Where any such application is made, the variation shall not have effect unless and until it is confirmed by the court.
(3) An application under this section shall be made within 28 days (or such longer period as the court, on application made to it by any member before the expiry of the first mentioned 28 days, may allow) after the date on which the consent was given or the resolution was passed, as the case may be, and may be made on behalf of the members entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.
(4) On any such application the court, after hearing the applicant and any other persons who apply to the court to be heard and appear to the court to be interested in the application, may, if it is satisfied having regard to all the circumstances of the case that the variation would unfairly prejudice the shareholders of the class represented by the applicant, disallow the variation and shall, if not so satisfied, confirm the variation.
(5) The decision of the court on any such application shall be final but an appeal shall lie to the Supreme Court from the determination of the court on a question of law.
(6) The company shall, within 21 days after the date on which an order is made by the court on any such application, deliver a certified copy of the order to the Registrar.
(7) If a company contravenes subsection (6), the company and any officer of it who is in default shall be guilty of a category 4 offence.
(8) In this section “variation” includes abrogation, and “varied” shall be read accordingly.
Registration of particulars of special rights
90. (1) Where a company allots shares with rights which are not stated in its constitution or in any resolution or agreement to which section 198 applies, the company shall, unless the shares are in all respects uniform with shares previously allotted, deliver to the Registrar, within 30 days after the date of allotting the shares, a statement in the prescribed form containing particulars of those rights.
(2) Shares allotted with such rights shall not be treated for the purposes of subsection (1) as different from shares previously allotted by reason only of the fact that the former do not carry the same rights to dividends as the latter during the 12 months after the date of the former’s allotment.
(3) Where the rights attached to any shares of a company are varied otherwise than by an amendment of the company’s constitution or by resolution or agreement to which section 198 applies, the company shall within 30 days after the date on which the variation is made, deliver to the Registrar a statement in the prescribed form containing particulars of the variation.
(4) Where a company (otherwise than by any such amendment, resolution or agreement as is mentioned in subsection (3)) assigns a name or other designation, or a new name or other designation, to any class of its shares it shall, within 30 days after the date of doing so, deliver to the Registrar a notice in the prescribed form giving particulars thereof.
(5) If a company contravenes this section, the company and any officer of it who is in default shall be guilty of a category 4 offence.
Variation of company capital on reorganisation
91. (1) Subject to subsection (3), a company (the “relevant company”) may for any purpose (with the result that its company capital is thereby re-organised) transfer or dispose of—
(a) one or more assets;
(b) an undertaking or part of an undertaking; or
(c) a combination of assets and liabilities,
to a body corporate, on the terms that the consideration (or part of the consideration) therefor is as follows.
(2) That consideration (or part of consideration) is one comprising shares or other securities of that body corporate paid (by the allotment of them) to the members of the relevant company or of its holding company rather than to the relevant company.
(3) Subsection (2) applies whether or not the terms of the transfer or disposal referred to in subsection (1) also involve the payment of cash to the members of the relevant company or of its holding company or the relevant company.
(4) A transaction to which subsection (1) applies shall not be undertaken unless it is—
(a) approved by the relevant company by employing the Summary Approval Procedure; or
(b) approved by special resolution passed by the relevant company that is confirmed by the court under section 85 as if that resolution were providing for a reduction of the company’s company capital (and the provisions of sections 84 to 87 shall apply accordingly with the necessary modifications).
(5) Where such a transaction is so approved or confirmed by order of the court under section 85 , there shall be deducted from such of the relevant company’s reserves and company capital as the relevant company shall, by ordinary resolution, resolve an amount equivalent to the value (as stated in, or ascertainable from, the accounting records of the company immediately before the transfer or disposal) of the transferred or disposed asset or assets, undertaking or part of an undertaking mentioned in subsection (1).
(6) Any transaction in contravention of this section shall be voidable at the instance of the relevant company against any person (whether a party to the transaction or not) who had notice of the facts which constitute such contravention.
Notice to Registrar of certain alternations of share capital
92. (1) If a company has—
(a) consolidated and divided its share capital into shares of larger amount than its existing shares; or
(b) converted any shares into stock; or
(c) reconverted stock into shares; or
(d) subdivided its shares or any of them; or
(e) redeemed any redeemable shares; or
(f) redeemed any preference shares; or
(g) cancelled any shares, otherwise than in connection with a reduction of company capital referred to in section 84 ,
it shall, within 30 days after the date of so doing, give notice thereof to the Registrar specifying, as the case may be, the shares consolidated, divided, converted, subdivided, redeemed or cancelled, or the stock reconverted.
(2) If a company contravenes this section, the company and any officer of it who is in default shall be guilty of a category 3 offence.
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.