Re-registration

Pre-2014 Re-Registration

1983 legislation derived from an EU Directive, effectively required the re-registration of existing public companies as public limited companies (plcs) with a minimum capital. The minimum issued share capital, which a public company was required to have was set at €38,092.14 (£30,000 pounds) at that time.

When a private company or an old public company re-registered as a public limited company, it was required to meet certain requirements. It was required to have the minimum issued share capital.  The allotted share capital must be paid up as to at least 25%. The net assets must at least equal the total called up share capital and non-distributable reserves.

The procedure for re-registration commenced with a special resolution by the members of the company requiring re-registration and the consequent alteration of its Memorandum and Articles of Association. The application for registration was broadly similar to that in respect of the initial formation of the company.


Pre-2014 Re-Registration

An audited statement was required to the effect that the net assets were not less than the aggregate of the share capital and reserves.  Copies of the balance sheet and an unqualified Auditor’s Report were required.  A special statutory declaration was required by a director or the secretary confirming compliance with the above and certain other requirements.  Valuations were required in respect of any non-cash consideration for shares.

The procedure for conversion of a public company to a private company was simpler.  The relevant restrictions were required to be added to the company’s Articles. A resolution was required to alter the Memorandum so that it was no longer a public company.

An application could be made by the holders of at least 5% of the capital to annul the resolution.  It could be made within 28 days, by persons who had voted against the resolution.  The court could confirm or annul the resolution.  It could adjourn proceedings to allow the interest of the dissenting shareholders to be purchased out.

An unlimited company could be converted to a limited company, and vice versa. A special resolution was required, together with an application for re-registration. In the case of re-registration as an unlimited company, the consent of all members was required.  The application also required a statutory declaration and a new Memorandum and Articles of Association.


General Requirements I

It is possible in principle to re-register one type of company under the 2014 Act as another type of company under the Act.  A new constitution must be registered. The requirements applicable to the new type of company must be complied with. This may require significant alterations, which makes re-registration impractical in some cases.

There are general requirements applicable to conversions. There are particular provisions applicable to some types of conversions, that follow from the respective nature of the type of company involved.

A company may be re-registered as another type of company under the 2014 Act if a special resolution of the company,  that it should be so re-registered is passed and  an application for that purpose in the prescribed form which is signed by a director or secretary of the company, is delivered to the Registrar together with the required documents.

The special resolution shall

  • alter the company’s constitution so that it states that the company is to be a company of the type that the company wishes to be re-registered as;
  • make such other alterations in the company’s constitution as are necessary to bring it in substance and in form into conformity with the requirements of the Act with respect to the constitution of the resultant company type, and
  • make such other alterations to the company’s constitution as are requisite in the circumstances.

Where the resultant company type is a private company limited by shares, the alteration must include the replacement of the memorandum and articles of the re-registering company by a constitution in conformity with Schedule 1 to the Act.


General Requirements II

Re-registration does not authorise the alteration of the rights and obligations of members of the re-registering company or of other persons as set out in its memorandum and articles of association. Accordingly, where necessary, the replacement constitution shall include such supplemental regulations as will secure those rights and obligations.

The documents required to be filed with the CRO are

  •  a copy of the special resolution that the company should re-register as another type of company;
  •  a copy of the constitution of the company as altered by the resolution;
  •  a statement in the prescribed form by a director or the secretary of the company that the requirements of the Act as to re-registration as another type of company have been complied with by the company.

If on the application for re-registration of a company as another type of company, the CRO  is satisfied that the company is entitled to be so re-registered, it issues to the company a certificate of incorporation that is altered to meet the circumstances of the case. It states that it is issued on the re-registration of the company and the date on which it is issued.

Upon the issue to a company of a certificate of incorporation on re-registration, the company becomes a company of the type described in the certificate. Any alterations in the constitution set out in the special resolution take effect.

The re-registration of a company as another type of company does not affect any rights or obligations of the company or render defective any legal proceedings by or against the company. Any legal proceedings which might have been continued or commenced against it in its former status may be continued or commenced against it in its new status.


Changes to Share Capital

In addition to the above requirements, in the case of a company that does not have a share capital, which proposes to re-register as a company which does have share capital, the following must be delivered to the CRO in the application;
  • a “statement of initial shareholdings”, and
  • a “statement of share capital”.
The statement of initial shareholdings shall state with respect to each member of the company,  the number and nominal value of the shares to be taken by him or her on re-registration, and the amount (if any) payable in respect of each share on re-registration, whether on account of the nominal value or by way of a premium.
if the resultant company will be other than a private company limited by shares, tThe statement of share capital shall state particulars of the company’s share capital which is to be allotted on re-registration.

PLC Shareholder Objection

Where a special resolution by a PLC to be re-registered as a private company limited by shares or a designated activity company has been passed, an application may be made to the court for the cancellation of the resolution by the holders of  not less (in aggregate) than 5 per cent in nominal value of its issued share capital or any class of its issued share capital (disregarding treasury shares), or by not less than 50 of the company’s members.

The application may not be made by any person who has consented to or voted in favour of the resolution. It shall be made within 28 days after the date on which the resolution was passed. On the hearing of the application, the court may make an order either cancelling or confirming the resolution. The order of the court may if the court thinks fit—

  •  provide for the purchase by the PLC or the resultant company of the shares of any of its members and for the reduction of the PLC’s or resultant company’s capital, and
  •  make such alteration in the PLC’s or the resultant company’s constitution as may be required in consequence.

If the court makes an order confirming a reduction of the company capital of a PLC, and  that reduction has the effect of bringing the nominal value of the company’s allotted share capital below the authorised minimum, the court may authorise the PLC to be re-registered as another type of company without having to pass a special resolution for that purpose.


Re-Registration as LTD

A company may be re-registered as a private company limited by shares provided that, in addition to compliance by the company with the general requirements, the below requirements are also complied with.

Where the company is a PLC,  the period during which an application for the cancellation of the special resolution must have expired or no order must have been made on foot of such application.

Where the company is an unlimited company, the special resolution required must include a statement that the liability of the members of the resultant company is to be limited by shares. If the resultant company is to have an authorised share capital,  it must specify the authorised share capital and the fixed amount of the shares into which it is to be divided. If the resultant company is not to have an authorised share capital, it must specify the fixed amount of shares into which the company’s share capital is to be divided.

An unlimited company having a share capital may, by its special resolution for re-registration as a limited company  do either or both of the following things:

  • increase the nominal amount of its share capital by increasing the nominal amount of each of its shares, but on condition that no part of the increased capital is capable of being called up, except in the event and for the purposes of the company being wound up;
  • provide that a specified portion of its uncalled share capital shall not be capable of being called up, except in the event and for the purposes of the company being wound up.

Re-Registration as a PLC I

A company may be re-registered as a PLC if, in addition to compliance by the  company with the relevant general requirements, the company delivers the following documents to theCRO:

  • a copy of its balance sheet as at a date not more than 7 months before the date of the application for re-registration;
  • an unqualified report by the company’s statutory auditors on that balance sheet;
  • a copy of a written statement by the statutory auditors of the company that, in their opinion, that, at the balance sheet date, the amount of the company’s net assets was not less than the aggregate of its called-up share capital  and undistributable reserves; and
  • a copy of a statutory report.

The statement of compliance for re-registration as a PLC must include a statement by a director or secretary of the company confirming that between the balance sheet date and the date of the application for re-registration, there has been no change in the financial position of the company that has resulted in  the company’s net assets becoming less than the aggregate of its called-up share capital and undistributable reserves.


Re-Registration as a PLC II

Where the company is an unlimited company, the special resolution required must include a statement that the liability of the members of the resultant company is to be limited by shares. It must specify the authorised share capital of the resultant company and the fixed amount of shares into which that share capital is to be divided.

A company shall not be re-registered as a PLC unless at the time the special resolution for re-registration is passed

  • the nominal value of the company’s allotted share capital is not less than the authorised minimum;
  • each of its allotted shares is paid up at least as to one-quarter of the nominal value of that share and the whole of any premium on it;
  • where any share in the company or any premium payable on it has been fully or partly paid up by an undertaking given by any person that that person or another should do work or perform services for the company or another, the undertaking has been performed or otherwise discharged, and
  • where shares have been allotted as fully or partly paid up as to their nominal value or any premium payable on them otherwise than in cash and the consideration for the allotment consists of or includes an undertaking to the company, either  that undertaking has been performed or otherwise discharged or  there is a contract between the company and any person pursuant to which that undertaking must be performed within 5 years after that time.

Re-registration as Unlimited Company

A limited company may be re-registered as an unlimited company if, in addition to compliance by the company with the relevant general requirements, all of its members have assented to its being so re-registered and the following requirements are complied with;

  • the company delivers to the CRO,  the prescribed form of assent to the company being re-registered as an unlimited company  by, or on behalf of, all members of the company;
  • the below financial statements and report;
  • the statement of compliance includes confirmation by a director or the secretary that the persons by whom, or on whose behalf, the form of assent is subscribed constitute the whole membership of the company, and
  • if any of the members have not, themselves, subscribed that form, that the directors have taken all reasonable steps to satisfy themselves that each person who subscribed it on behalf of a member was lawfully empowered to do so.

There is an exception to the requirements for further financial statements where, within the period of 3 months prior to the date of the application to re-register, the company has delivered to the CRO, an annual return with the financial statements required or the company was incorporated in that period.

The financial statements required above are financial statements of the company covering a period that ends on a date that is not more than 3 months prior to the date of the application to re-register and cover at least a 12 months’ duration (or less by reason of the company’s recent incorporation)

Where a company is re-registered as an unlimited company, a person who at the time when the application to be re-registered was delivered to the Registrar was a past member of the company and did not thereafter again become a member, shall not in the event of the company being wound up, be liable to contribute to the assets of the company more than he or she would have been liable to contribute, had it not been so re-registered.


To Guarantee Company

A company may be re-registered as a company limited by guarantee if, in addition to compliance by the company with the relevant general requirements, the following requirements are complied with.

  • where the company is a company with a share capital, all of its members have assented to its being re-registered as a company limited by guarantee;
  • the company delivers to the CRO  the prescribed form of assent to the company’s being re-registered as a company limited by guarantee subscribed to by, or on behalf of, all members of the company;and
  • where the company is an unlimited company, the requisite special resolution includes a statement that the liability of the members of the resultant company is to be limited as provided for in the relevant alterations of its constitution made by that resolution.

The statement of compliance must include confirmation by a director or the secretary of the company that the persons by whom, or on whose behalf, the form of assent is subscribed constitute the whole membership of the company, and if any of the members have not, themselves, subscribed that form, that the directors have taken all reasonable steps to satisfy themselves that each person who subscribed it on behalf of a member was lawfully empowered to do so.

Unless the position concerning the allotted share capital of the company at the date of the application for re-registration is as set out below, the court on application to it made by the company, must sanction its re-registration as a company limited by guarantee and give directions as to how its company capital is to be treated in the framework of the resultant company.

The conditions which must apply regarding the allotted share capital, in order to avoid the requirement for court sanction are

  • no amount is paid up on it, and
  • its nominal value does not exceed the aggregate maximum amount that the company’s shareholders, who become members of the resultant company on the issue of the certificate of incorporation, would be liable to pay by virtue of the latter company’s memorandum were the latter immediately then to be wound up.

Re-registration as a DAC I

A company may be re-registered as a DAC limited by shares if, in addition to compliance by the company with the relevant general requirements, the following requirements are complied with.

Where the company is a PLC the period during which an application for the cancellation of the special resolution must have expired without any such application having been made or if made, it has been withdrawn or the court does not cancel the resolution.

Where the company is an unlimited company, the special resolution must include a statement that the liability of the members of the resultant company is to be limited by shares. It must specify what is to be the authorised share capital of the resultant company and the fixed amount of the shares into which it is to be divided. It must include a statement that the liability of the members of the resultant company is to be limited as provided for in the relevant alterations of its constitution made by that resolution.

Where the company is a company with a share capital, reregistering as a DAC limited by guarantee, all its members must have assented to its being re-registered as a DAC limited by guarantee. It must also deliver to the CRO,  the prescribed form of assent to the company’s being re-registered as a DAC limited by guarantee subscribed to by, or on behalf of, all members of the company.


Re-Registration as a DAC II

The Company must deliver a statement of compliance which includes confirmation by a director or secretary of the company that

  • the persons by whom, or on whose behalf, the form of assent is subscribed constitute the whole membership of the company and that
  • if any of the members have not themselves, subscribed that form, that the directors have taken all reasonable steps to satisfy themselves that each person who subscribed it on behalf of a member was lawfully empowered to do.

Unless the position concerning the allotted share capital of the company, at the date of the application for re-registration, complies with the below condition,  the court, on application to it by the company in that behalf, must sanction its re-registration as a DAC limited by guarantee and give directions as to how its company capital is to be treated in the framework of the resultant company.

The above-mentioned conditions concerning the company’s allotted share capital are

  • no amount is paid up on it, and
  • its nominal value does not exceed the aggregate maximum amount that the company’s shareholders, who become members of the resultant company on the issue of the certificate of incorporation under, would be liable to pay by virtue of the latter company’s memorandum were the latter immediately then to be wound up.

References and Sources

Primary References

 

Companies Act 2014 S.1283-1299 (Part 20) (Irish Statute Book)

Companies Act 2014: An Annotation (2015) Conroy

Law of Companies 4th Ed.  (2016) Ch.34   Courtney

Keane on Company Law 5th Ed. (2016) Ch.4 Hutchinson

Other Irish Sources

Tables of Origins & Destinations Companies Act 2014 (2016) Bloomsbury

Introduction to Irish Company Law    4th Ed. (2015) Callanan

Bloomsbury’s Guide to the Companies Act 2015      Courtney & Ors

Company Law in Ireland 2nd Ed. (2015) Thuillier

Pre-2014 Legislation Editions

Modern Irish Company Law   2nd Ed. (2001) Ellis

Cases & Materials Company Law 2nd Ed. (1998) Forde

Company Law 4th Ed. (2008)  Forde & Kennedy

Corporations & Partnerships in Ireland (2010) Lynch-Fannon & Cuddihy

Companies Acts 1963-2012   (2012)  MacCann & Courtney

Constitutional Rights of Companies   (2007)  O’Neill

Court Applications Under the Companies Act (2013) Samad

Shorter Guides

Company Law – Nutshell 3rd Ed. (2013) McConville

Questions & Answers on Company Law (2008)        McGrath, N & Murphy

Make That Grade Irish Company Law 5th Ed. (2015) Murphy

Company Law BELR Series (2015)   O’Mahony

UK Sources

Companies Act 2006 (UK) (Legilsation.gov.uk)

Statute books Blackstone’s statutes on company law (OUP)

Gower Principles of Modern Company Law 10th Ed. (2016) P. and S. Worthington

Company Law in Context 2nd Ed. (2012) Kershaw

Company Law (9th Ed.) OUP (2016) J Lowry and A Dignam

Cases and Materials in Company law 11th Ed (2016) Sealy and Worthington

 

UK Practitioners Services

Tolley’s Company Law Handbook

Palmer’s Company Law