Directors’ Shares
Companies Act
Interpretation generally (Chapter 5)
256. (1) In this Chapter—
(a) “body corporate of the same group” means, in relation to a company, a body corporate which belongs to the same group of companies as that company belongs to;
(b) “child” does not include a person who has attained the age of majority; and
(c) a reference to a child of a director or secretary shall be deemed to include a reference to a child of the director’s civil partner or (as the case may be) the secretary’s civil partner who is ordinarily resident with (as the case may be)—
(i) the director and the civil partner, or
(ii) the secretary and the civil partner.
(2) For the avoidance of doubt, the use of the words “aggregate interest” in any provision of this Chapter, with reference to the interest of a director or secretary and the spouse (or civil partner) and children of the director or secretary in shares or debentures, does not operate to limit the provision’s effect (and, accordingly, does not prevent the director or secretary having the benefit of the provision) in either the situation where—
(a) the director or secretary alone has an interest in shares or debentures reckonable for the purposes of the provision, or
(b) one or more, but not all, of any foregoing class of persons has or have alone such a reckonable interest.
“Disclosable interest” — meaning of that term
257. (1) Subject to section 260 , in this Chapter “disclosable interest” means, in relation to shares or debentures, any interest of any kind whatsoever in shares in, or debentures of, a body corporate.
(2) For that purpose there shall be disregarded any restraints or restrictions to which the exercise of any right attached to the interest is or may be subject.
(3) It is also immaterial—
(a) whether or not the interest is held alone, jointly or in common with any other person, or
(b) whether the shares or debentures are identifiable or not.
Circumstances in which person is to be regarded as having disclosable interest in shares or debentures
258. (1) Without prejudice to the other circumstances in which a person may have such an interest, a person shall, for the purposes of this Chapter, be regarded as having a disclosable interest in shares or debentures if—
(a) the person enters into a contract for the purchase by him or her of them (whether for cash or other consideration),
(b) the person is the registered holder or joint holder of them,
(c) not being the registered holder, the person is entitled to exercise any right conferred by the holding of those shares or debentures or is entitled to control the exercise of any such right,
(d) a body corporate is interested in them and—
(i) that body corporate or its directors are accustomed to act in accordance with the person’s directions or instructions, or
(ii) the person is entitled to exercise or control the exercise of one third or more of the voting power at general meetings of that body corporate,
(e) otherwise than by virtue of having an interest under a trust—
(i) the person has a right to call for delivery of the shares or debentures to himself or herself or to his or her order, or
(ii) the person has a right to acquire an interest in shares or debentures, or is under an obligation to take an interest in shares or debentures,
whether in any case the right or obligation is conditional or absolute,
(f) the person is a beneficiary of a trust and—
(i) the property held on trust for that beneficiary includes any interest in shares or debentures, and
(ii) that person, apart from this paragraph, does not have an interest in the shares or debentures.
(2) For the purpose of subsection (1)(c), a person shall be taken to be entitled to exercise or control the exercise of any right conferred by the holding of shares or debentures if he or she—
(a) has a right (whether subject to conditions or not), the exercise of which would make him or her so entitled, or
(b) is under an obligation (whether so subject or not), the fulfilment of which would make him or her so entitled.
(3) For the purpose of subsection (1)(d)—
(a) “voting power” does not include any power to vote which arises only in specified circumstances,
(b) where a person is entitled to exercise or control the exercise of one third or more of the voting power at general meetings of a body corporate and that body corporate is entitled to exercise or control the exercise of any of the voting power at general meetings of another body corporate (the “relevant voting power”), then, for the purposes of that provision, the relevant voting power shall be taken to be exercisable by that person.
Circumstances in which person shall be regarded as having ceased to have disclosable interest
259. A person shall, amongst other circumstances, be taken to have ceased to have a disclosable interest in shares or debentures for the purposes of this Chapter upon—
(a) delivery to another person’s order of the shares or debentures in fulfilment of a contract for the purchase of them by that other person or in satisfaction of a right of his or her to call for delivery of them, or
(b) failure by another person to deliver the shares or debentures in accordance with the terms of a contract or pursuant to a right to call for delivery of them, or
(c) the lapse of that person’s right to call for delivery of the shares or debentures.
Interests that are not disclosable interests for the purposes of this Chapter
260. The following interests shall not constitute disclosable interests for the purposes of this Chapter—
(a) where property is held on trust and an interest in shares or debentures is comprised in that property—
(i) an interest in reversion or remainder,
(ii) an interest of a bare trustee, or
(iii) any discretionary interest,
(b) an interest of a person subsisting by virtue of—
(i) his or her holding—
(I) units in an authorised unit trust scheme within the meaning of the Unit Trusts Act 1990 ,
(II) units in an undertaking for collective investment in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 ( S.I. No. 352 of 2011 ), or
(III) shares in an investment company within the meaning of Part 24 ,
or
(ii) a scheme made under section 46 of the Charities Act 1961 ,
(c) an interest for the life of himself or herself or of another person under a settlement in the case of which the property comprised in the settlement consists of or includes shares or debentures, and—
(i) the settlement is irrevocable, and
(ii) the settlor (within the meaning of section 10 of the Taxes Consolidation Act 1997 ) has no interest in any income arising under, or property comprised in, the settlement,
(d) an interest in shares or debentures held by a member of an authorised market operator carrying on business as a stock broker which is held by way of security only for the purposes of a transaction entered into by the person or other body concerned in the ordinary course of business of such person or other body,
(e) any power or discretion vested in a person by virtue only of such person having been duly appointed as or acting as—
(i) an attorney of a person with an interest in shares or debentures,
(ii) a proxy of a member of, or holder of debentures in, a company or a representative of a body corporate which is a member of the holder of debentures of a company,
(f) any interest in shares in, or debentures of, a body corporate where the aggregate interest of the director or secretary and spouse (or civil partner) and children of such director or secretary is in—
(i) shares representing 1 per cent or less, in nominal value, of the body corporate’s issued share capital of a class carrying rights to vote in all circumstances at general meetings of the body corporate (provided that the temporary suspension of voting rights in respect of shares comprised in issued share capital of a body corporate of any such class shall be disregarded), or
(ii) shares or debentures not carrying the right to vote at general meetings of the body corporate, save a right to vote which arises only in specified circumstances,
(g) as regards circumstances in which an offer is made in relation to shares in a body corporate, being an offer—
(i) to which the Irish Takeover Panel Act 1997 or the European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006 ( S.I. No. 255 of 2006 ) applies or apply, and
(ii) which is conditional on acceptance to a given extent,
an interest in those shares that would have arisen but for the offer not being accepted to the required extent,
(h) such interests, or interests of such a class, as may be prescribed for the purposes of this subsection.
Duty to notify disclosable interests — first of the 5 cases in which duty arises — interests held at commencement of Chapter
261. (1) Subject to subsection (3) and section 264 , a person who, at the commencement of this Chapter—
(a) is a director or secretary of a company, and
(b) is aware of—
(i) the person’s having, or
(ii) the person’s spouse or civil partner or a child of the person’s having,
a disclosable interest in shares in, or debentures of, that company (the “relevant company”) or a body corporate of the same group,
has the following duty.
(2) That duty is to notify the relevant company in writing of the particulars specified in section 265 of the disclosable interest and the fact of its being so held.
(3) That duty does not arise if—
(a) the nature of the disclosable interest concerned is such as to constitute an interest of the kind specified in section 54 of the Act of 1990, and
(b) the relevant company has—
(i) before the commencement of this section, been notified, in accordance with Part IV of the Act of 1990, of the particulars required by that Part in relation to that interest, or
(ii) received, not later than 5 days after the commencement of this section, such particulars in relation to that interest by way of such a notification (being a notification sent not later than that commencement).
Second and third cases in which duty to notify arises — interests acquired or ceasing to be held
262. (1) Subject to section 264 , a person who—
(a) is a director or secretary of a company, and
(b) becomes aware of—
(i) the person’s having acquired or having ceased to have, or
(ii) the person’s spouse or civil partner, or a child of the person’s, having acquired or having ceased to have,
a disclosable interest in shares in, or debentures of, that company (the “relevant company”) or any body corporate of the same group,
has the following duty.
(2) That duty is to notify the relevant company in writing of the particulars specified in section 265 of the disclosable interest and the fact of its being so acquired or, as the case may be, of its so ceasing to be held.
(3) Subject to section 264 , a person who—
(a) becomes aware of—
(i) the person’s having, or
(ii) the person’s spouse or civil partner or a child of the person’s having,
a disclosable interest in shares in, or debentures of, a company (the “relevant company”) or a body corporate of the same group, and
(b) becomes a director or secretary of the relevant company (not being the secretary of the relevant company at the time of so becoming a director or not being a director at the time of so becoming the secretary of the relevant company),
has the following duty.
(4) That duty is to notify the relevant company in writing of the particulars specified in section 265 of the disclosable interest and the fact of its being so held.
Fourth and fifth cases in which duty to notify arises — grant or assignment of subscription rights, etc.
263. (1) Subject to section 264 , a director or secretary of a company (the “relevant company”) who—
(a) (i) is granted by another body corporate of the same group a right to subscribe for shares in, or debentures of, that other body corporate, or
(ii) exercises such a right so granted,
or
(b) becomes aware of a spouse or civil partner of the director’s or secretary’s or a child of the director’s or secretary’s—
(i) having been granted by such a body corporate such a right of subscription, or
(ii) having exercised such a right so granted,
has, subject to subsection (3) and (5), the following duty.
(2) That duty is to notify the relevant company in writing of—
(a) the grant of the right of subscription, or the exercise of it, referred to in paragraph (a) or (b) of the preceding subsection (or, as the case may be, both the things referred to in those paragraphs),
(b) the number or amount, and class, of shares or debentures involved and the consideration payable, and
(c) if section 265 (6) applies, the address there mentioned.
(3) If a director or secretary, at the time of the thing referred to in subsection (1)(a) being done, is not aware of the fact of the thing being done (the “relevant fact”) by reason of—
(a) in the case of the thing referred to in subsection (1)(a)(i), the grantor of the right not informing the director or secretary immediately of the grant,
(b) in the case of the thing referred to in subsection (1)(a)(ii), the thing being done on behalf of the director or secretary by another person pursuant to an authority conferred on the person by the director or secretary, or
(c) in either such case, other exceptional circumstances,
then the duty under subsection (2), with respect to that thing, only arises on the director or secretary becoming aware of the relevant fact.
(4) However, in any proceedings (civil or criminal) it shall be presumed, unless the contrary is shown, that none of the circumstances referred to in subsection (3) applies.
(5) If the aggregate interest of the director or secretary and spouse (or civil partner) and children of such director or secretary in shares in the body corporate concerned (both before and after the occurrence of the event or events referred to in subsection (2)(a)) is such as to fall within section 260 (f)(i), then the duty of notification under subsection (2) does not arise.
(6) Subject to section 264 , a director or secretary of a company (the “relevant company”) who—
(a) enters into a contract to sell shares in, or debentures of, the relevant company or any body corporate of the same group,
(b) assigns a right granted to him or her by the relevant company or a body corporate of the same group to subscribe for shares in, or debentures of, the relevant company or such body corporate, or
(c) becomes aware of a spouse or civil partner of the director’s or secretary’s or a child of the director’s or secretary’s—
(i) having entered into a contract to sell such shares or debentures, or
(ii) having assigned a right that has been granted to the spouse, civil partner or child by the relevant company or such body corporate to subscribe for shares in, or debentures of, the relevant company or such body corporate,
has, subject to subsection (8) and (10), the following duty.
(7) That duty is to notify the relevant company in writing of—
(a) the entering into of the contract or the assigning of the right referred to in paragraph (a), (b) or (c) of the preceding subsection (or, as the case may be, the doing of 2 or more of the things referred to in those paragraphs),
(b) the number or amount, and class, of shares or debentures involved and the consideration payable, and
(c) if section 265 (6) applies, the address there mentioned.
(8) If a director or secretary, at the time of the thing referred to in subsection (6)(a) or (b) being done, is not aware of the fact of the thing being done (the “relevant fact”) by reason of—
(a) the thing being done on behalf of the director or secretary by another person pursuant to an authority conferred on the person by the director or secretary, or
(b) other exceptional circumstances,
then the duty under subsection (7), with respect to that thing, only arises on the director or secretary becoming aware of the relevant fact.
(9) However, in any proceedings (civil or criminal) it shall be presumed, unless the contrary is shown, that none of the circumstances referred to in subsection (8) applies.
(10) If the aggregate interest of the director or secretary and spouse (or civil partner) and children of such director or secretary in shares in the body corporate concerned (before the occurrence of the event or events referred to in subsection (7)(a)) is such as to fall within section 260 (f)(i), then the duty of notification under subsection (7) does not arise.
Application of sections 261 to 263 and exceptions to them
264. (1) With respect to the application of sections 261 to 263 (by virtue of sections 221 and 222 ) to shadow directors and de facto directors, the making of a notification by a person under section 261 , 262 or 263 shall not, in itself, be proof that the person making the notification is a shadow director or de facto director.
(2) Nothing in sections 261 to 263 shall operate so as to impose an obligation with respect to shares in a body corporate which is the wholly owned subsidiary of another body corporate.
(3) Nothing in sections 261 to 263 shall operate to impose an obligation on a director or secretary of a company who is granted an option to subscribe for shares in, or debentures of, that company to make any notification to that company in respect of such grant.
Mode of notification by directors and secretaries under this Chapter
265. (1) In relation to the acquisition or disposal by a director or secretary of a company of shares or debentures the means specified in subsection (2) shall, if the director or secretary opts to use them, constitute a sufficient notification in writing to the company, for the purposes of this Chapter, of the fact of their acquisition or disposal and the particulars of the disclosable interest.
(2) Those means are the delivery, within 30 days after the date of the instrument, to the company of an instrument of transfer in respect of the shares or debentures, being an instrument that identifies—
(a) the director or secretary by name,
(b) the shares or debentures in question,
(c) the purchase or sale price therefor, and
(d) if subsection (6) applies, the address there mentioned.
(3) In any case not falling within subsection (1) or where the director or secretary opts not to use the foregoing means in a case falling within subsection (1), the following means shall be used to notify in writing, for the purpose of section 261 or 262 , the fact of a disclosable interest being held or of its being acquired or being ceased to be held (as the case may be) and the particulars thereof.
(4) Those means are the delivery to the company concerned (within 8 days after the date of the event giving rise to the duty to make the notification) of a statement in writing by or on behalf of the director or secretary containing the following particulars:
(a) a statement that the director or secretary, or his or her spouse or civil partner or a child of the director or secretary (as the case may be) has, has acquired or has ceased to have (as the case may be) a disclosable interest in shares in, or debentures of, the company or a body corporate of the same group,
(b) the number of shares or debentures and their class, and a statement of the names of the registered holders of the shares or debentures,
(c) in the case of an acquisition or disposal of shares or debentures, the consideration payable therefor, and
(d) if subsection (6) applies, the address there mentioned.
(5) The notification referred to in section 263 (2) or (7) shall be made to the company within 5 days after the date of the event giving rise to the duty to make the notification; in a case where the circumstances referred to in subsection (3) or (8) of section 263 apply, the date of the event giving rise to the duty to make the notification is the date on which the director or secretary becomes aware of the relevant fact referred to in that subsection (3) or (8).
(6) A shadow director or de facto director shall, in any notification made by him or her under this Chapter, specify his or her address and this applies whether the notification is in respect of himself or herself or a spouse or civil partner of such director or a child of such director.
Enforcement of notification obligation
266. (1) Where a person authorises any other person (the “agent”) to acquire or dispose of, on his or her behalf, interests in shares in, or debentures of, a company, the person shall secure that the agent notifies him or her immediately of acquisitions or disposals of interests in such shares or debentures effected by the agent which will or may give rise to any duty on the person’s part to make a notification under this Chapter with respect to his or her interest in those shares or debentures.
(2) Subject to the subsequent provisions of this section, where a person fails to fulfil, within the period specified by this Chapter in that behalf, a duty to which he or she is, by virtue of section 261 , 262 or 263 , subject, no right or interest of any kind whatsoever in respect of the shares or debentures concerned shall be enforceable by him or her, whether directly or indirectly, by action or legal proceeding.
(3) Where any right or interest is restricted under subsection (2)—
(a) any person in default as is mentioned in that subsection or any other person affected by such restriction may apply to the court for relief against a disability imposed by or arising out of that subsection,
(b) the court, on being satisfied that the default was accidental or due to inadvertence or some other sufficient cause or that on other grounds it is just and equitable to grant relief, may grant such relief either generally or as respects any particular right or interest, on such terms and conditions as it sees fit,
(c) where an applicant for relief under this subsection is a person referred to in subsection (2), the court may not grant such relief if it appears that the default has arisen as a result of any deliberate act or omission on the part of the applicant.
(4) Where a director or secretary is in default as mentioned in subsection (2), then, notwithstanding that default, that subsection shall not apply in respect of the shares or debentures concerned if the following condition is satisfied.
(5) That condition is that the identity of the director or secretary and his or her holding, acquisition and disposal (as the case may be) of the shares or debentures in question and the consideration paid or payable therefor has, from not later than 30 days after the date the duty arose, been apparent on the face of all or any of the following registers or documents of the company concerned (including some or all of them when consulted together), namely—
(a) the register of members,
(b) the register of directors and secretaries,
(c) the register of interests under section 267 ,
(d) documents made available by that company with those registers.
(6) If a company in general meeting passes a special resolution providing that the following protection shall apply in favour of a third party having the following dealing in relation to shares in, or debentures of, the company specified in the resolution then, upon production of a copy of such resolution by the secretary of the company to the third party, a third party having any dealing with the company or the registered holder of the shares or debentures in question shall be entitled to presume, without further enquiry, that—
(a) the provisions of this Chapter have been complied with in relation to the shares or debentures, and
(b) the registered holder is entitled to deal with the shares or debentures registered in his or her name.
(7) Subsection (2) shall not apply to a duty relating to a person ceasing to be interested in shares in, or debentures of, a company.
(8) A person who fails without reasonable excuse to comply with subsection (1) shall be guilty of a category 3 offence.
(9) A person who fails to fulfil, within the period specified in this Chapter in that behalf, a duty to which he or she is, by virtue of section 261 , 262 or 263 , subject shall be guilty of a category 3 offence.
(10) Where before the commencement of this section, default has been made in complying with section 53 of the Act of 1990 in relation to shares in, or debentures of, a company, the board of directors of the company, at any time before the expiry of 18 months after that commencement, may, if authorised by an ordinary resolution of the company in that behalf, resolve that any restrictions that continue to operate (by virtue of section 58(3) of the Act of 1990) in relation to the shares or debentures shall, on and from the time of their so resolving, cease to operate if—
(a) the person upon whom the duty to make the notification concerned under that section 53 fell presents evidence (by way of affidavit or such other satisfactory means as the board may specify) to the board that the default concerned was inadvertent, and
(b) the board is satisfied from that evidence that the default was inadvertent,
and, where the board so resolves, such restrictions shall cease to operate accordingly.
Register of interests: contents and entries
267. (1) A company shall keep a register of interests (the “register of interests”) for the purposes of this Chapter.
(2) Sections 215 to 217 (rights of inspection, requests for copies, etc.) apply to the register of interests.
(3) Whenever the company receives information from a director or secretary of the company in consequence of the fulfilment of a duty to which he or she is, by virtue of section 261 , 262 or 263 , subject, the company shall within 3 days after the date of such receipt enter in the register of interests that information and the date of the entry.
(4) A company shall, whenever it grants to a director or secretary of the company a right to subscribe for shares in, or debentures of, the company, enter in the register of interests against his or her name—
(a) the date on which the right is granted,
(b) the period during which or time at which it is exercisable,
(c) the consideration for the grant (or, if it be the case that there is no consideration, that fact), and
(d) the description of shares or debentures involved and the number or amount thereof, and the price to be paid therefor.
(5) Whenever such a right as is mentioned in subsection (4) is exercised by a director or secretary, the company shall enter in the register of interests against his or her name—
(a) that fact (identifying the right),
(b) the number or amount of shares or debentures in respect of which it is exercised, and
(c) if it be the case that they were registered in his or her name, that fact, and if not, the name or names of the person or persons in whose name or names they were registered, together (if they were registered in the names of 2 persons or more) with the number or amount thereof registered in the name of each of them.
(6) The register of interests shall be so made up that the entries in it against the several names inscribed in it appear in chronological order.
(7) The nature and extent of an interest recorded in the register of interests of a director or secretary in any shares or debentures shall, if he or she so requires, be recorded in that register.
(8) A company shall not, by virtue of anything done for the purposes of this section, be affected with notice of, or put upon inquiry as to, the rights of any person in relation to any shares or debentures.
(9) If default is made by a company in complying with subsection (1) or any of subsections (3) to (7), the company and any officer of it who is in default shall be guilty of a category 3 offence.
Supplemental provisions in relation to section 267
268. (1) Unless the register under section 267 is in such a form as to constitute in itself an index, the company shall keep an index of the names entered in it which shall—
(a) in respect of each name, contain a sufficient indication to enable the information inscribed against it to be readily found, and
(b) be kept at the same place as the register,
and the company shall, within 14 days after the date on which a name is entered in the register, make any necessary alteration in the index.
(2) In addition to the requirements of section 216 , the register shall be, and remain, open and accessible to any person attending an annual general meeting of the company concerned at least one quarter hour before the appointed time for the commencement of the meeting and during the continuance of the meeting.
(3) If default is made by a company in complying with subsection (1) or (2), the company and any officer of it who is in default shall be guilty of a category 3 offence.
Register of interests: removal of entries from it
269. (1) A company may remove an entry against a person’s name from the register required to be kept by it under section 267 (the “register”) if more than 6 years have elapsed after the date of the entry being made, and either—
(a) that entry recorded the fact that the person in question has ceased to have an interest notifiable under this Chapter in shares in, or debentures of, the company, or
(b) it has been superseded by a later entry made under section 267 against the same person’s name,
and, in a case falling within paragraph (a), the company may also remove that person’s name from the register.
(2) Where a company removes a name from the register pursuant to subsection (1), the company shall, within 14 days after the date of that removal, make any necessary alterations in any associated index.
(3) Entries in the register shall not be deleted except in accordance with subsections (1) and (2).
(4) If an entry is deleted from the register in contravention of subsection (1), the company concerned shall restore that entry to the register as soon as is reasonable and practicable.
(5) If default is made by a company in complying with subsection (2), (3) or (4), 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.