Reorganisations
Companies Act
Variation of company capital
83. (1) Save to the extent that its constitution otherwise provides, a company may, by ordinary resolution, do any one or more of the following, from time to time—
(a) consolidate and divide all or any of its shares into shares of a larger nominal value than its existing shares;
(b) subdivide its shares, or any of them, into shares of a smaller nominal value, so however, that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived;
(c) increase the nominal value of any of its shares by the addition to them of any undenominated capital;
(d) reduce the nominal value of any of its shares by the deduction from them of any part of that value, subject to the crediting of the amount of the deduction to undenominated capital, other than the share premium account;
(e) convert any undenominated capital into shares for allotment as bonus shares to holders of existing shares;
(f) in the case of a company whose constitution states an authorised share capital (in addition to its power to do any of the foregoing things)—
(i) increase its share capital by new shares of such amount as it thinks expedient; or
(ii) cancel shares of its share capital which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled.
(2) A cancellation of share capital under subsection (1)(f)(ii) shall be deemed not to be a reduction of company capital within the meaning of this Act.
(3) Save to the extent that its constitution otherwise provides, a company may, by special resolution, and subject to the provisions of this Act governing the variation of rights attached to classes of shares and the amendment of a company’s constitution, convert any of its shares into redeemable shares.
(4) Such a conversion shall not have effect with respect to any shares, the holder of which notifies the company, before the date of conversion, of his or her unwillingness to have his or her shares converted but, subject to that and the other provisions of this section, the conversion shall have effect according to its terms.
(5) Subsection (4) shall not, where a shareholder objects to a conversion, prejudice any right he or she may have under this Act or otherwise to invoke the jurisdiction of the court to set aside the conversion or otherwise provide relief in respect of it.
(6) A company shall deliver particulars, in the prescribed form, of any resolution referred to in subsection (1) to the Registrar within 30 days after the date of its being passed by the company.
(7) If a company contravenes subsection (6), the company and any officer of it who is in default shall be guilty of a category 3 offence.
Reduction in company capital
84. (1) Save to the extent that its constitution otherwise provides, a company may, subject to the provisions of this section and sections 85 to 87 , reduce its company capital in any way it thinks expedient and, without prejudice to the generality of the foregoing, may thereby—
(a) extinguish or reduce the liability on any of its shares in respect of share capital not paid up;
(b) either with or without extinguishing or reducing liability on any of its shares, cancel any paid up company capital which is lost or unrepresented by available assets; or
(c) either with or without extinguishing or reducing liability on any of its shares, pay off any paid up company capital which is in excess of the wants of the company.
(2) A reduction of company capital under this section shall be effected either by the company—
(a) employing the Summary Approval Procedure; or
(b) passing a special resolution that is confirmed by the court.
(3) Where the reduction has been approved by the Summary Approval Procedure, the reduction shall take effect—
(a) if no date is specified in that behalf in the special resolution referred to in section 202 (1)(a)(i), on the expiry of 12 months after the date of the passing of the special resolution; or
(b) if such a date is so specified, on that date.
(4) A company shall not purport to reduce its company capital otherwise than as provided for by this section.
(5) Any transaction in contravention of this section shall be voidable at the instance of the company against any person (whether a party to the transaction or not) who had actual notice of the facts which constitute such contravention.
(6) 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.
Application to court for confirming order, objections by creditors and settlement of list of such creditors
85. (1) Where a company has passed a special resolution under section 84 (2)(b) for reducing its company capital it may apply to the court for an order confirming the resolution.
(2) A company which proposes to apply to the court for such an order shall cause notice of the passing of the resolution—
(a) to be advertised once at least in one daily newspaper circulating in the district where the registered office or principal place of business of the company is situated; and
(b) to be notified by ordinary post to all creditors of the company who are resident, or have their principal place of business, outside the State,
and no further advertisement of the passing of the resolution shall be required.
(3) In determining any preliminary application for directions as to the hearing of an application under this section, the court shall have regard to compliance by the company with the requirements of subsection (2).
(4) Where the proposed reduction of the company’s company capital involves either diminution of liability in respect of unpaid company capital, or the payment to any shareholder of any paid up company capital, and in any other case if the court so directs, the following provisions shall have effect (but subject to subsection (5))—
(a) every creditor of the company who—
(i) at the date fixed by the court, is entitled to a debt or claim that, if that date were the commencement of the winding up of the company, would be admissible in proof against the company; and
(ii) can credibly demonstrate that the proposed reduction in company capital would be likely to put the satisfaction of that debt or claim at risk, and that no adequate safeguards have been obtained from the company,
is entitled to object to the reduction,
(b) the court shall settle a list of creditors entitled to object, and for that purpose may publish notices fixing a day or days within which creditors are to claim to be entered on the list or are to be excluded from the right of objecting to the reduction of company capital, and
(c) where a creditor entered on the list whose debt or claim is not discharged or has not terminated does not consent to the confirmation, the court may, if it thinks fit, dispense with the consent of that creditor, on the company securing payment of his or her debt or claim by appropriating, as the court may direct, the following amount—
(i) if the company admits the full amount of the debt or claim, or, though not admitting it, is willing to provide for it, then the full amount of the debt or claim;
(ii) if the company does not admit and is not willing to provide for the full amount of the debt or claim, or, if the amount is contingent or not ascertained, then an amount fixed by the court after the like inquiry and adjudication as if the company were being wound up by the court.
(5) Where a proposed reduction of company capital involves either the diminution of any liability in respect of unpaid company capital or the payment to any shareholder of any paid up company capital, the court may, if, having regard to any special circumstances of the case, it thinks proper so to do, direct that subsection (4) shall not apply as regards any class or any classes of creditors.
(6) If satisfied that the following requirement is satisfied, the court may make an order confirming the resolution on such terms and conditions as it thinks fit.
(7) That requirement is that, in relation to every creditor of the company who, under this section is entitled to object to the confirmation, either—
(a) the creditor’s consent to the confirmation has been obtained, or
(b) the creditor’s debt or claim has been discharged or has terminated, or has been secured.
(8) Where the court makes an order confirming the resolution, it may make an order requiring the company to publish, as the court directs, the reasons for reduction of its company capital or such other information in regard thereto as the court may think expedient, with a view to giving proper information to the public, and if the court thinks fit, the causes which led to that reduction.
(9) References in this section to a debt or claim having terminated are references to the debt or claim ceasing to be enforceable or to its otherwise determining.
Registration of order and minute of reduction
86. (1) On the doing of both of the following—
(a) the production to the Registrar of an order of the court under section 85 confirming the resolution of the company with respect to reduction of its company capital; and
(b) the delivery to the Registrar of a copy of the order and of a minute approved by the court showing, with respect to the company capital of the company as altered by the order—
(i) the amount of the share capital;
(ii) the number of shares into which it is to be divided and the amount of each share; and
(iii) the amount, if any, at the date of the registration deemed to be paid up on each share,
the Registrar shall register the order and minute.
(2) On the registration of the order and minute and not before, the resolution for reducing company capital as confirmed by the order so registered shall take effect.
(3) Notice of the registration of the order and minute shall be published in such manner as the court may direct.
(4) The Registrar shall issue a certificate with respect to the registration of the order and minute, and that certificate shall be conclusive evidence that all the requirements of this Act relating to reduction of company capital have been complied with, and that the share capital of the company is such as is stated in the minute.
(5) The minute, when registered, shall be deemed to be substituted for the corresponding part of the constitution of the company and shall be valid and capable of amendment as if it had been originally contained in it.
(6) The substitution of any such minute for part of the constitution of the company shall be deemed to be an amendment of the constitution within the meaning of section 37 (2).
Liability of members in respect of reduced calls
87. (1) In this section—
“confirmation” means confirmation by the court under section 85 of a resolution for reduction of company capital;
“minute” means the minute referred to in section 86 (1)(b).
(2) Subject to subsection (3), in the case of a reduction of company capital where future calls have been reduced, a member of the company, past or present, shall not be liable in respect of any share to any call or contribution exceeding in amount the difference, if any, between the amount of the share, as fixed by the minute and the amount paid, or the reduced amount, if any, which is to be deemed to have been paid, on the share, as the case may be.
(3) If any creditor entitled, in respect of any debt or claim, to object to the confirmation, is, by reason of his or her not being aware of the proceedings for the confirmation or of their nature and effect with respect to his or her debt or claim, not entered on the list of creditors, and, after the reduction, the company is unable, within the meaning of the provisions of this Act relating to winding up by the court, to pay the amount of his or her debt or claim, then—
(a) every person who was a member of the company at the date of the delivery for registration of the order in respect of the confirmation and the minute, shall be liable to contribute for the payment of that debt or claim an amount not exceeding the amount which he or she would have been liable to contribute if the company had commenced to be wound up on the day before that date; and
(b) if the company is wound up, the court, on the application of any such creditor and proof of his or her not being aware as mentioned in this subsection may, if it thinks fit, settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list, as if they were ordinary contributories in a winding up.
(4) Nothing in this section shall affect the rights of the contributories among themselves.
(5) If any officer of the company—
(a) intentionally conceals the name of any creditor entitled to object to the confirmation; or
(b) intentionally misrepresents the nature or amount of the debt or claim of any creditor,
he or she shall be guilty of a category 2 offence.
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).
“(4) A transaction to which subsection (1) applies shall not be undertaken unless—
(a) it is approved by the relevant company by employing the Summary Approval Procedure,
(b) it is 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), or
(c) the relevant company has distributable reserves at least equivalent to the value (as stated in, or ascertainable from, the accounting records of the relevant company immediately before the transfer or disposal concerned) of the transferred or disposed assets and deducts an amount, equivalent to the value of the transferred or disposed assets, from those reserves.”,
(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 alterations 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.
Notice of increase of share capital
93. (1) This section applies to a company whose constitution states an authorised share capital.
(2) If a company, whether its shares have or have not been converted into stock, has increased its share capital above the registered capital, it shall, within 30 days after the date on which it passes the resolution increasing its share capital, give to the Registrar notice of the increase and the Registrar shall record the increase.
(3) That notice shall include such particulars as may be prescribed with respect to the classes of shares affected, and the conditions subject to which the new shares have been or are to be issued.
(4) 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.