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Ireland Companies Act

COMPANIES ACT 2014 of Ireland

An Act to consolidate, with amendments, certain enactments relating to companies and to provide for related matters.

Be it enacted by the Oireachtas as follows:

PART 1 - PRELIMINARY AND GENERAL

Short title and commencement

1. (1) This Act may be cited as the Companies Act 2014.

(2) This Act shall come into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions.

(3) Without prejudice to the generality of subsection (2), an order or orders under that subsection may appoint different days for the coming into operation of section 4 or 1325 so as to effect the repeal or revocation provided by section 4 or 1325 of—

(a) an enactment specified in Part 1 or Part 2 of Schedule 2 or in Schedule 15, as the case may be, on different days for different purposes; or

(b) different provisions of an enactment specified in Part 1 or Part 2 of Schedule 2 or in Schedule 15, as the case may be, on different days.

Interpretation generally

2. (1) In this Act—

“Acting Director” means a person appointed under section 948 as the Acting Director of Corporate Enforcement;

“Act of 1963” means the Companies Act 1963;

“Act of 1990” means the Companies Act 1990;

“agent” does not include a person’s counsel acting as such;

“amendment”, in relation to a constitution, includes an alteration and a deletion;

“annual general meeting” means the meeting provided for in section 175;

“annual return” has the meaning given to it by section 342;

“annual return date” has the meaning given to it by section 343;

“appropriate rate”, in relation to interest, means—

(a) subject to paragraph (b), 5 per cent per annum; or

(b) such other rate as may be specified by order made by the Minister under subsection (7);

“articles” means articles of association;

“assignee in bankruptcy” means the Official Assignee (within the meaning of the Bankruptcy Act 1988) or a creditors’ assignee (within the meaning of that Act);

“authorized market operator” means a market operator (within the meaning of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004) who, for the time being, is authorized under—

(a) the European Communities (Markets in Financial Instruments) Regulations 2007 (S.I. No. 60 of 2007); or

(b) the measures adopted by another Member State to implement that Directive, to operate the business of a regulated market (within the meaning of that Directive);

“Bankruptcy Acts” means the Bankruptcy Act 1988 and any enactment amending or extending that Act;

“book and paper” and “book or paper” includes deeds, writings and documents and, where not separately mentioned in the provision concerned, accounting records;

“books and documents” and “books or documents” includes deeds, writings and records made in any other manner and, where not separately mentioned in the provision concerned, accounting records;

“called-up share capital”, in relation to a company, means so much of its share capital as equals the aggregate amount of the calls made on its shares, whether or not those calls have been paid, together with any share capital paid up without being called and any share capital to be paid on a specified future date under the company’s constitution, the terms of allotment of the relevant shares or any other arrangements for payment of those shares, and “uncalled share capital” shall be read accordingly;

“category 1 offence” means an offence the penalties for which are specified in section 871(1);

“category 2 offence” means an offence the penalties for which are specified in section 871(2);

“category 3 offence” means an offence the penalties for which are specified in section 871(3);

“category 4 offence” means an offence the penalties for which are specified in section 871(4);

“Central Bank” means the Central Bank of Ireland;

“child” includes a step-child and an adopted child and “son”, “daughter” and “parent” shall be read accordingly;

“civil partner” has the meaning given to it by the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010;

“Community act” means an act adopted by an institution of the European Union; “company”—

(a) in Parts 2 to 14, shall be read in accordance with section 10;

(b) subject to the foregoing, means a company formed and registered under this Act, or an existing company;

“company having a sole director” shall be read in accordance with subsection (8);

“constitution” means the constitution of a company as provided for in section 19 or, in the case of a company that is not a private company limited by shares, as provided for in Part 16, 17, 18, 19 or 24, as appropriate;

“contravention” includes a failure to comply;

“contributory” has the meaning given to it by section 559; “court”—

(a) without prejudice to paragraphs (b) and (c), where used in any provision of this Act in relation to a company, means—

(i) the High Court; or

(ii) where another court is specified for the purposes of that provision — that court;

(b) where used in relation to proceedings for an offence, means—

(i) in the case of an offence that is being prosecuted summarily — the District Court; or

(ii) in any other case — the court with jurisdiction in the matter concerned;

(c) where used in connection with proceedings for a debt or the recovery of a sum otherwise provided by this Act to be recoverable and a particular court or a court of competent jurisdiction is not specified for the purpose, means any court of competent jurisdiction;

“CRO Gazette” means the Companies Registration Office Gazette referred to in section 887(7);

“debenture” includes debenture stock, bonds and any other securities of a company whether constituting a charge on the assets of the company or not;

“de facto director” shall be read in accordance with section 222;

“deliver” includes send or forward and, in the case of a requirement to deliver a document, notice or thing to the Registrar, where the provision concerned itself does not indicate that that is the purpose of its delivery, means deliver the document, notice or thing to the Registrar for the purposes of its registration;

“director” includes any person occupying the position of director by whatever name called;

“Director” means the Director of Corporate Enforcement (but that title appears set out in full in any provision where it is desirable to avoid confusion or otherwise to provide clarity on the matter) and includes an Acting Director while so acting and, in relation to a particular power of the Director, a delegate to whom the power is delegated under section 954;

“document” includes summons, notice, order and other legal process, and register;

“EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

“EEA state” means a state, including the State, which is a contracting party to the EEA Agreement;

“electronic means” or “electronic communications” includes the use of electronic mail;

“enactment” means a statute or an instrument made under a power conferred by a statute;

“examiner” means an examiner appointed under section 509 or 517;

“existing company” means a company formed and registered in a register kept in the State under the Joint Stock Companies Acts, the Companies Act 1862, the Companies (Consolidation) Act 1908 or the Act of 1963;

“extended notice” has the meaning given to it by section 396;

“extraordinary general meeting” shall be read in accordance with section 177;

“financial year” shall be read in accordance with section 288;

“hire-purchase agreement” has the same meaning as it has in the Consumer Credit Act 1995;

“holding company” has the meaning given to it by section 8;

“insolvency proceedings”, other than in Chapter 15 of Part 11, means insolvency proceedings opened under Article 3 of the Insolvency Regulation in a Member State, other than the State and Denmark, where the proceedings relate to a body corporate;

“Insolvency Regulation” means Council Regulation (EC) No. 1346/2000 of 29 May 2000 on insolvency proceedings;

“Joint Stock Companies Acts” means the Joint Stock Companies Act 1856, the Joint Stock Companies Acts 1856, 1857, the Joint Stock Banking Companies Act 1857 and the Act to enable Joint Stock Banking Companies to be formed on the principle of limited liability, or any one or more of those Acts as the case may require, but does not include the Act 7 & 8 Victoria, Chapter 110;

“limited company” means a company the liability of whose members is limited;

“members’ voluntary winding up” has the meaning given to it by section 559(1);

“memorandum” means memorandum of association;

“Minister”, other than in Parts 23 and 24, means the Minister for Jobs, Enterprise and Innovation;

“officer”, in relation to a body corporate, includes a director or secretary;

“officer of the Director” means—

(a) an officer of the Minister assigned to the Director;

(b) a member of An Garda Síochána seconded to the Director; or

(c) a person employed by the Minister or the Director under a contract for service or otherwise, to assist the Director in performing functions of the Director under this Act or any other enactment;

“ordinary resolution” has the meaning given to it by section 191;

“prescribed”—

(a) subject to paragraphs (b), (c) and (d), means prescribed by regulations made by the Minister;

(b) in Part 11, unless a power of the Supervisory Authority to prescribe by regulations is provided or that Part otherwise makes express provision—

(i) means prescribed by rules of court; and

(ii) where a power of the Minister to prescribe is provided, means prescribed by the means referred to in paragraph (a);

(c) in Part 15, where a power of the Minister to prescribe is provided or the provision in which the expression appears does not indicate otherwise, means prescribed by the means referred to in paragraph (a); and

(d) in Parts 23 and 24, means prescribed by regulations made by the Minister for Finance;

“printed” includes reproduced in any legible and durable form approved by the Registrar;

“prior Companies Acts” means—

(a) the Companies Acts 1963 to 2005;

(b) Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006;

(c) the Companies (Amendment) Act 2009;

(d) the Companies (Miscellaneous Provisions) Act 2009;

(e) the Companies (Amendment) Act 2012;

(f) the Companies (Miscellaneous Provisions) Act 2013; and

(g) every other enactment passed or made before the commencement of this section which provides that it is to be read as one with the Companies Acts;

“private company limited by shares” means, unless otherwise indicated, a private company limited by shares registered under Part 2 as distinct from a designated activity company of the type referred to in section 965(2)(a);

“prospectus” means a document or documents in such form and containing such information as may be required by or under Irish prospectus law or EU prospectus law (within the meaning of Chapter 1 of Part 23), howsoever the document or documents are constituted, but does not include any advertisements in newspapers or journals derived from the foregoing;

“public holiday” means a day which is a public holiday under the Organisation of Working Time Act 1997;

“public limited company” includes (in Parts 2 to 15) an investment company within the meaning of Part 24;

“receiver of the property of a company” shall be read in accordance with subsection (9);

“register” shall be read in accordance with section 887(2);

“registered office”, in relation to a company, means the office provided for in section 50;

“Registrar” means—

(a) the registrar appointed under section 887(3); or

(b) the person referred to in subsection (6) (which relates to the existing Registrar of Companies) of section 887 for so long as the person holds office in accordance with subsection (5) of that section;

“related company” shall be read in accordance with subsections (10) and (11);

“resolution for voluntary winding up” means a resolution referred to in—

(a) section 202(1)(a)(i) as it relates to section 579; or

(b) section 580(1) or 586(2), to wind up a company voluntarily;

“sealed”, other than in provisions governing the use of a company’s common seal or of any official seal of it, means executed in the manner specified in section 64 of the Land and Conveyancing Law Reform Act 2009 (but only to the extent that that section 64 obviates the need for a seal);

“shadow director” shall be read in accordance with section 221;

“share” means share in the share capital of a company, and includes stock except where a distinction between stock and shares is express or implied;

“single-member company” has the meaning given to it by section 196;

“special resolution” has the meaning given to it by section 191;

“statutory auditor” means an individual or a firm (within the meaning of those Regulations) that stands approved as a statutory auditor or statutory audit firm, as the case may be, under the European Communities (Statutory Audits) (Directive 2006/43/ EC) Regulations 2010 (S.I. No. 220 of 2010);

“subscribe” includes, where the means of authentication referred to in section 888 are employed, subscribe in the prescribed non-legible form;

“subsidiary” has the meaning given to it by section 7;

“Summary Approval Procedure” has the meaning given to it by section 202;

“Supervisory Authority” has the meaning given to it by section 900(1);

“system of interconnection of registers” means the system of interconnection of central commercial and companies registers established in accordance with Article 4a(2) of Directive 2009/101/EC of the European Parliament and of the Council of 16 September 2009;

“undischarged bankrupt” means a person who is declared bankrupt by a court of competent jurisdiction, within the State or elsewhere, and who has not obtained a certificate of discharge or its equivalent in the relevant jurisdiction;

“written resolution” has the meaning given to it by section 191(8).

(2) A word or expression used in Part 6 and also used in another Part of this Act has, in that other Part, the same meaning as it has in Part 6.

(3) A reference in this Act to Table A in the First Schedule to the Act of 1963 shall, where appropriate, be read as a reference to Tábla A in that Schedule.

(4) References in this Act to a body corporate or to a corporation shall be read as not including a corporation sole, but as including a company or body corporate incorporated outside the State.

(5) Any provision of this Act overriding or interpreting a company’s constitution shall, except as provided by this Act, apply in relation to the constitution in force on the provision’s commencement as well as to regulations of the constitution coming into force thereafter.

(6) References in this Act to a person being in partnership with another are references to the person’s being in partnership, within the meaning of section 1(1) of the Partnership Act 1890, with that person and references to a partner of a person shall be read accordingly.

(7) The Minister may, by order, specify a rate of interest for the purposes of paragraph

(b) of the definition of “appropriate rate” in subsection (1).

(8) In this Act a reference to a company having a sole director is a reference to its having, for the time being and for whatever reason, a single director (and this applies notwithstanding a stipulation in the constitution that there be 2 directors, or a greater number).

(9) In this Act a reference to a receiver of the property of a company includes—

(a) a reference to—

(i) a receiver and manager of the property of a company; or

(ii) a manager of the property of a company;

(b) a reference to a receiver or to a receiver and manager or to a manager, of part only of that property; and

(c) a reference to a receiver only of the income arising from that property or from part of it.

(10) For the purposes of this Act, a company is related to another company if—

(a) that other company is its holding company or subsidiary; or

(b) more than half in nominal value of its equity share capital (within the meaning of section 7(11)) is held by the other company and companies related to that other company (whether directly or indirectly, but other than in a fiduciary capacity); or

(c) more than half in nominal value of the equity share capital (within the meaning of section 7(11)) of each of them is held by members of the other (whether directly or indirectly, but other than in a fiduciary capacity); or

(d) that other company or a company or companies related to that other company, or that other company together with a company or companies related to it, are entitled to exercise or control the exercise of more than one half of the voting power at any general meeting of the company; or

(e) the businesses of the companies have been so carried on that the separate business of each company, or a substantial part thereof, is not readily identifiable; or

(f) there is another body corporate to which both companies are related, and “related company” has a corresponding meaning; for the purpose of any preceding paragraph of this subsection that contains a reference to a company being related to another, the provisions of this subsection also apply to the construction of each such reference.

(11) For the purposes of subsection (10) “company” includes any body that is capable of being wound up under this Act. Periods of time

3. (1) Where the time limited by any provision of this Act for the doing of anything expires on a Saturday, a Sunday or a public holiday, the time so limited shall extend to and the thing may be done on the first following day that is not a Saturday, a Sunday or a public holiday.

(2) Where in this Act anything is required or allowed to be done within a number of days not exceeding 6, a day that is a Saturday, a Sunday or a public holiday shall not be reckoned in computing that number.

Repeals and revocations

4. (1) The Acts of the Oireachtas specified in Part 1 of Schedule 2 are repealed to the extent specified in the third column of that Part.

(2) The statutory instruments specified in Part 2 of Schedule 2 are revoked to the extent specified in the third column of that Part.

(3) This section is in addition to section 1325 and Schedule 15 (repeals related to an unregistered company becoming registered under this Act).

Savings and transitional provisions

5. (1) As provided under Part 17, 18, 19 or 24, as appropriate, the repeal by this Act of any enactment shall not affect the incorporation of any company registered under any enactment so repealed.

(2) The effect of this Act in relation to a private company limited by shares incorporated under any former enactment relating to companies is provided for in Chapter 6 of Part 2.

(3) Any document referring to any former enactment relating to companies shall be read as referring to the corresponding enactment of this Act.

(4) Any person, appointed to any office under or by virtue of any former enactment relating to companies, who is in office immediately before the commencement of the provision concerned of this Act, shall be deemed to have been appointed to that office under or by virtue of the provision concerned of this Act.

(5) Any register, kept under any former enactment relating to companies, shall be deemed part of the register to be kept under the corresponding provision of this Act.

(6) All funds and accounts constituted under this Act shall be deemed to be in continuation of the corresponding funds and accounts constituted under the former enactments relating to companies.

(7) Schedule 6 contains further savings and transitional provisions and shall have effect accordingly.

(8) This section is without prejudice to—

(a) the generality of the Interpretation Act 2005 and, in particular, section 27 of it; and

(b) the special provision made in certain provisions of this Act for transitional matters as they relate to those provisions.

(9) In this section “former enactment relating to companies” means any enactment repealed or revoked by this Act and any enactment repealed or revoked by the Act of 1963 or the Companies (Consolidation) Act 1908.

Construction of references in other Acts to companies registered under Companies (Consolidation) Act 1908 and Act of 1963

6. (1) References in any Act, other than this Act, to a company formed and registered, or registered, under the Companies (Consolidation) Act 1908 or the Act of 1963 shall, unless the contrary intention appears, be read as references to a company formed and registered, or registered, under whichever of those Acts is appropriate or this Act.

(2) Subsection (1) applies despite section 26(2)(f) of the Interpretation Act 2005 (which provides that where an Act repeals and re-enacts, with or without modification, any provisions of a former Act, references in any other Act to the provisions so repealed shall, unless the contrary intention appears, be read as references to the provisions of the new Act relating to the same subject-matter as that of the former Act).

Definition of “subsidiary”

7. (1) In this section the expressions “superior company” and “lower company” are used solely to assist the understanding of its terms and—

(a) are not indicative of the status (in any manner not relevant to this section) of the respective companies vis a vis one another; and

(b) do not constitute definitions to which regard must be had for any other purpose of this Act.

(2) For the purposes of this Act, a company (the “lower company”) is, subject to subsection (5), a subsidiary of another (the “superior company”) if, but only if—

(a) the superior company—

(i) is a shareholder or member of it and controls the composition of its board of directors; or

(ii) holds more than half in nominal value of its equity share capital; or

(iii) holds more than half in nominal value of its shares carrying voting rights (other than voting rights which arise only in specified circumstances); or

(iv) holds a majority of the shareholders’ or members’ voting rights in the lower company; or

(v) is a shareholder or member of it and controls alone, pursuant to an agreement with other shareholders or members, a majority of the shareholders’ or members’ voting rights; or

(b) the superior company has the right to exercise a dominant influence over it—

(i) by virtue of provisions contained in the lower company’s constitution; or

(ii) by virtue of a control contract; or

(c) the superior company has the power to exercise, or actually exercises, dominant influence or control over it; or

(d) the superior company and the lower company are managed by the superior company on a unified basis; or

(e) the lower company is a subsidiary (by virtue of the application of any of the provisions of this section) of any company which is the superior company’s subsidiary (by virtue of such application).

(3) For the purposes of subsection (2)(a)(i), the composition of the lower company’s board of directors shall be regarded as being controlled by the superior company if, but only if, the latter company, by the exercise of some power exercisable by it without the consent or concurrence of any other person, can appoint or remove the holders of all or a majority of the directorships.

(4) In applying subsection (3), the superior company shall be deemed to have power to appoint to a directorship in relation to which any of the following conditions is satisfied—

(a) that a person cannot be appointed to the directorship without the exercise in his or her favour by the superior company of such a power as is mentioned in that subsection; or

(b) that a person’s appointment to the directorship follows necessarily from his or her appointment as director of the superior company.

(5) In determining whether the lower company is a subsidiary of the superior company—

(a) any shares held or power exercisable by the superior company in a fiduciary capacity shall be treated as not held or exercisable by it;

(b) subject to paragraphs (c) and (d), any shares held or power exercisable—

(i) by any person as a nominee for the superior company (except where the latter company is concerned only in a fiduciary capacity), or

(ii) by, or by a nominee for, a subsidiary of the superior company, not being a subsidiary which is concerned only in a fiduciary capacity, shall be treated as held or exercisable by the superior company;

(c) any shares held or power exercisable by the superior company or a nominee for the superior company or a subsidiary of it shall be treated as not held or exercisable by the superior company where the shares are so held or the power is so exercisable by way of security but only if such power or the rights attaching to such shares are exercised in accordance with instructions received from the person providing the security;

(d) any shares held or power exercisable by the superior company or by a nominee for the superior company or a subsidiary of it shall be treated as not held or exercisable by the superior company if the ordinary business of the superior company or its subsidiary, as the case may be, includes the lending of money and the shares are so held or the power is so exercisable by way of security but only if such power or the rights attaching to such shares are exercised in the interests of the person providing the security.

(6) For the purposes of subsection (2)(a)(iv) and (v), the total of the voting rights of the shareholders or members in the lower company shall be reduced by the following—

(a) the voting rights attached to shares held by the lower company in itself; and

(b) the voting rights attached to shares held in the lower company by any of its subsidiaries; and

(c) the voting rights attached to shares held by a person acting in his or her own name but on behalf of the lower company or one of the lower company’s own subsidiaries.

(7) For the purposes of subsection (2)(b), a company shall not be regarded as having the right to exercise a dominant influence over another company unless it has a right to give directions with respect to the operating and financial policies of that other company which its directors are obliged to comply with.

(8) In subsection (2)(b) “control contract” means a contract in writing conferring such a right as is there referred to which—

(a) is of a kind authorised by the constitution of the company in relation to which the right is exercisable; and

(b) is permitted by the law under which that company is established.

(9) Subsection (7) shall not be read as affecting the construction of the expression “actually exercises dominant influence” in subsection (2)(c).

(10) If a document created before the commencement of this section defines the expression “subsidiary” by reference to section 155 of the Act of 1963, then, for the avoidance of doubt, the construction provided in respect of that expression by the document is not affected by this section in the absence of an agreement to the contrary by the parties to the document.

(11) In this section—

“company” includes any body corporate;

“equity share capital” means, in relation to a company, its issued share capital excluding any part of it which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution.

Definitions of “holding company”, “wholly owned subsidiary” and “group of companies”

8. (1) For the purposes of this Act, a company is another company’s holding company if, but only if, that other is its subsidiary.

(2) For the purposes of this Act, a company is another company’s wholly owned subsidiary if, but only if, the company has no members except—

(a) that other company; or

(b) companies that are wholly-owned subsidiaries (by virtue of the application of this subsection to them) of that other company; or

(c) nominees of any company referred to in paragraph (a) or (b); or

(d) a mixture of what is referred to in 2 or more of the foregoing paragraphs.

(3) For the purposes of this Act “group of companies” means a holding company and its one or more subsidiaries.

(4) If a document created before the commencement of this section defines the expression “holding company” by reference to section 155 of the Act of 1963, then, for the avoidance of doubt, the construction provided in respect of that expression by the document is not affected by this section in the absence of an agreement to the contrary by the parties to the document.

(5) In this section “company” has the same meaning as it has in section 7.

Act structured to facilitate its use in relation to most common type of company

9. (1) Subject to subsections (3) and (4), all of the law in this Act in relation to private companies limited by shares is to be found in Parts 1 to 14 (or instruments under them) and Schedules 1 to 6.

(2) Subject to subsection (3), all of the law in this Act in relation to other types of company is to be found amongst the provisions of—

(a) Parts 16 to 25 (or instruments under them) and Schedules 7 to 17; and

(b) Parts 1 to 14 (or instruments under them) and Schedules 1 to 6 as applied or adapted by Parts 16 to 25.

(3) Part 15 (Functions of Registrar and of regulatory and advisory bodies) applies to both—

(a) private companies limited by shares; and

(b) other types of company, as well as to certain undertakings to which the European Communities (Accounts) Regulations 1993 (S.I. No. 396 of 1993), as amended, apply.

(4) Exceptionally, provisions either—

(a) of a miscellaneous nature arising out of the relationship between a private company limited by shares and another company type (such as provisions for reregistration); or

(b) which it would not otherwise be practicable to include in Parts 1 to 14 (such as provisions for a merger between a public limited company and a private company limited by shares), will be found in Parts 16 to 25.

(5) References in Chapter 6 of Part 2, however expressed, to this Part and Parts 2 to 15 having application to a private company limited by shares shall not be read as excluding the application to such a company of provisions of the kind mentioned in subsection (4).

Reference in Parts 2 to 14 to company to mean private company limited by shares

10. (1) Unless expressly provided otherwise, a reference in Parts 2 to 14 to a company is a reference to a private company limited by shares.

(2) For the avoidance of doubt, subsection (1) does not apply to the construction of—

(a) the expression “holding company”, where that expression is used without qualification, in Parts 2 to 14; or

(b) any related expression, where used without qualification, in those Parts.

Construction of references to directors, board of directors and interpretation of certain other plural forms

11. (1) References in this Act to the directors of a company shall, where the company has a sole director, be read as references to the director of the company.

(2) References in this Act to the board of directors of a company shall, where the company has a sole director, be read as references to the director of the company.

(3) References in this Act to the members of a company, or the subscribers to a company’s constitution, shall, where the company has a sole member or where there is a single subscriber to its constitution, be read as references to the member of the company or the subscriber to its constitution, as the case may be.

(4) This section is in addition to, and does not derogate from, any special provision in this Act as to the construction of the expression “director” or “member” in a particular case.

(5) This section is without prejudice to the generality of section 18(a) of the Interpretation Act 2005.

Regulations and orders

12. (1) Subject to subsection (2), the Minister may make regulations prescribing anything referred to in this Act as prescribed or to be prescribed.

(2) Subsection (1) does not apply to anything that Part 11 or 15 provides is to be prescribed by another authority.

(3) Every regulation made by the Minister under this Act (other than a regulation referred to in section 946, 1313 or 1321) or order made by the Minister under this Act (other than an order under section 1(2) or 16(1)) shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation or order is passed by either such House within the next 21 days on which that House has sat after the regulation or order is laid before it, the regulation or order shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.

Authentication of certain official documents

13. Any approval, sanction, direction or licence or revocation of licence which, under this Act, may be given or made by the Minister may be signed by any person authorised in that behalf by the Minister.

Expenses

14. The expenses incurred by the Minister in the administration of this Act shall, to such extent as may be sanctioned by the Minister for Public Expenditure and Reform, be paid out of moneys provided by the Oireachtas.

PART 2

INCORPORATION AND REGISTRATION

CHAPTER 1

Preliminary

Definitions (Part 2)

15. In this Part—

“activity” means any activity that a company may be lawfully formed to carry on and includes the holding, acquisition or disposal of property of whatsoever kind;

“existing private company” means a private company limited by shares which—

(a) was incorporated under any former enactment relating to companies (within the meaning of section 5); and

(b) is in existence at the commencement of this section, but does not include such a company where, subsequent to that commencement, it reregisters as another type of company;

“registered person” shall be read in accordance with section 39(2);

“relevant classification system” means NACE Rev. 2, that is to say, the common basis for statistical classifications of economic activities within the European Community set out in the Annex to Council Regulation (EEC) No. 3037/90 of 9 October 1990 on the statistical classification of economic activities in the European Community, as amended for the time being;

“transition period” means the period expiring 18 months after the commencement of this section.

Extension of transition period in the event of difficulties

16. (1) If, in any respect, any difficulties arise in the operation of the provisions of the Act which, in the opinion of the Minister, necessitate the giving of more time for affected or interested parties to undertake any necessary actions or procedures in the period provided for in the definition of “transition period” in section 15, the Minister may by order substitute a longer period (but not a period of longer than 30 months) for the period mentioned in that definition.

(2) Where it is proposed to make an order under this section, a draft of the order shall be laid before each House of the Oireachtas and the order shall not be made unless a resolution approving of the draft has been passed by each such House.

CHAPTER 2

Incorporation and consequential matters

Way of forming private company limited by shares

17. (1) A company may be formed for any lawful purpose by any person or persons subscribing to a constitution and complying with the requirements of this Part as to registration of a company.

(2) The liability of a member of a company at any time shall be limited to the amount, if any, unpaid on the shares registered in the member’s name at that time.

(3) Subsection (2) is without prejudice to any other liability to which a member may be subject as provided by this Act.

(4) The number of members of a company shall not exceed 149 but, in reckoning that limit, there shall be disregarded any of the following persons.

(5) Those persons are—

(a) a person in the employment of the company who is a member of it;

(b) a person who, having been formerly in the employment of the company, was, while in that employment, and has continued after the termination of the employment to be, a member of it.

(6) Where 2 or more persons hold one or more shares in a company jointly, they shall, for the purposes of this section, be treated as a single member.

(7) Any registration of a person as a member of a company in excess of the limit provided by subsection (4) shall be void.

Company to carry on activity in the State and prohibition of certain activities

18. (1) A company shall not be formed or registered unless it appears to the Registrar that the company, when registered, will carry on an activity in the State.

(2) A company shall not carry on the activity of a credit institution or an insurance undertaking.

Form of the constitution

19. (1) The constitution of a company shall state—

(a) the company’s name;

(b) that it is a private company limited by shares registered under this Part;

(c) that the liability of its members is limited;

(d) as respects its share capital, either—

(i) the amount of share capital with which it proposes to be registered (“its authorised share capital”), and the division of that capital into shares of a fixed amount specified in the constitution, or

(ii) without stating such amount, that the share capital of the company shall, at the time of its registration, stand divided into shares of a fixed amount specified in the constitution;

(e) the number of shares (which shall not be less than one) taken by each subscriber to the constitution; and

(f) if the company adopts supplemental regulations, those regulations.

(2) The constitution shall—

(a) be in a form in accordance with the form set out in Schedule 1 or as near to it as circumstances permit;

(b) be divided into paragraphs numbered consecutively; and

(c) either—

(i) be signed by each subscriber in the presence of at least one witness who shall attest the signature; or

(ii) be authenticated in the manner referred to in section 888.

(3) Where, subsequent to its registration, an amendment of the constitution is made affecting the matter of share capital, or another matter, referred to in subsection (1), that subsection shall be read as requiring the constitution to state the matter as it stands in consequence of that amendment.

Restriction on amendment of constitution

20. A company may not amend the provisions contained in its constitution except in the cases, in the manner and to the extent for which express provision is made in this Act.

Registration of constitution

21. (1) The constitution of a company shall be delivered for registration to the Registrar together with—

(a) the statement and consent referred to in section 22; and

(b) the declaration referred to in section 24, and, where appropriate—

(i) the bond referred to in section 22(6);

(ii) the statement referred to in section 23.

(2) The Registrar shall not register a constitution delivered for registration under this section unless he or she is satisfied that all the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with.

Statement to be delivered with constitution

22. (1) In this section—

(a) a reference to a statement is to the statement required to be delivered by section 21(1)(a); and

(b) a reference to a company is to the company to which such statement relates.

(2) The statement shall be in the prescribed form and shall state:

(a) the name of each of the persons who are to be the first directors of the company;

(b) the name of the person who is, or of each of the persons who are, to be the first secretary or joint secretaries of the company;

(c) the name of the person (if any) who is, or of each of the persons (if any) who are, to be the first assistant or deputy secretary or secretaries of the company;

(d) the address of the company’s registered office; and

(e) the place (whether in the State or not) where the central administration of the company will normally be carried on, and the particulars (in relation to any foregoing person) specified in subsection (3) and any other particulars that may be prescribed in relation to such a person or in relation to any other foregoing matter.

(3) The particulars referred to in subsection (2) are—

(a) in relation to a person named as director of the company concerned, all particulars which are, in relation to a director, required pursuant to subsection (2) of section 149 to be contained in the register kept under that section;

(b) in relation to a person named as secretary, or as one of the joint secretaries, all particulars which are, in relation to the secretary or to each joint secretary, required pursuant to subsection (5) of section 149 to be contained in the register kept under that section; and

(c) in relation to a person named as assistant or deputy secretary, all particulars which are, in relation to an assistant or deputy secretary, required pursuant to subsection (7) of section 149 to be contained in the register kept under that section.

(4) Where the constitution is delivered, pursuant to section 21, to the Registrar by a person (the “agent”) as agent for the person or persons who have subscribed to the constitution, the statement shall so specify and shall specify the name and address of the agent.

(5) Subsections (2) and (3) are without prejudice to subsection (7).

(6) Where no person referred to in subsection (2)(a) is resident in an EEA state, there shall be delivered for registration a bond as provided by section 137(2).

(7) In respect of the activity, or one of the activities, to be carried on by the company in the State, the statement shall contain the following particulars:

(a) if it appears to the person making the statement that the activity belongs to a division, group and class appearing in the relevant classification system—

(i) the general nature of the activity; and

(ii) the division, group and class in that system to which the activity belongs;

(b) if it appears to that person that the activity does not belong to any such division, group and class, a precise description of the activity;

(c) the place or places in the State where it is proposed to carry on the activity.

(8) For the purposes of subsection (7), if the purpose or one of the purposes for which the company is being formed is the carrying on of 2 or more activities in the State, the particulars in respect of the matters referred to in paragraphs (a) to (c) of that subsection to be given in the statement shall be the particulars that relate to whichever of those activities the person making the statement considers to be the principal activity for which the company is being formed to carry on in the State.

(9) The statement shall—

(a) be signed by or on behalf of each subscriber to the constitution of the company or be authenticated in the manner referred to in section 888; and

(b) be accompanied by a consent that is either—

(i) signed by each of the persons named in the statement as a director, secretary or joint secretary or assistant or deputy secretary to act in that capacity, or

(ii) authenticated in the manner referred to in section 888.

(10) Section 223(3), in the case of a director, and section 226(5), in the case of a secretary, requires the inclusion of a particular statement in a foregoing consent by him or her.

Additional statement to be furnished in certain circumstances

23. (1) If any person named in the statement to be delivered under section 21(1)(a) as a director of the company concerned is a person who is disqualified under the law of another state (whether pursuant to an order of a judge or a tribunal or otherwise) from being appointed or acting as a director or secretary of a body corporate or an undertaking, that person has the following obligation.

(2) That obligation is to ensure that the foregoing statement is accompanied by (but as a separate document from that statement) a statement in the prescribed form signed by him or her, or authenticated in the manner referred to in section 888, specifying—

(a) the jurisdiction in which he or she is so disqualified;

(b) the date on which he or she became so disqualified; and

(c) the period for which he or she is so disqualified.

Declaration to be made to Registrar

24. (1) In this section—

(a) a reference to a declaration is to the declaration required to be delivered by section 21(1)(b); and

(b) a reference to a company is to the company to which such declaration relates.

(2) The declaration shall state that—

(a) all the requirements in respect of registration of the company and of matters precedent and incidental thereto have been complied with;

(b) the purpose, or one of the purposes, for which the company is being formed is the carrying on by it of an activity in the State; and

(c) the particulars contained in the statement delivered under section 21(1)(a) are correct.

(3) The declaration shall be made by—

(a) one of the persons named in the statement delivered under section 21(1)(a) as directors of the company;

(b) the person or, as the case may be, one of the persons named in that statement as secretary or joint secretaries of the company; or

(c) the solicitor, if any, engaged in the formation of the company.

(4) The Registrar may accept the declaration as sufficient evidence that all the requirements in respect of registration of the company and of matters precedent and incidental thereto have been complied with and, in particular, that there have been complied with—

(a) the requirements mentioned in section 22 and, where appropriate, section 23; and

(b) the requirement mentioned in section 18.

Effect of registration

25. (1) On the registration of the constitution of a company, the Registrar shall certify in writing that the company is incorporated and shall issue to the company a certificate of incorporation in respect of it.

(2) From the date of incorporation mentioned in the certificate of incorporation, the subscriber or subscribers to the constitution, together with such other persons as may from time to time become members of the company, shall be a body corporate with the name contained in the constitution, having perpetual succession and a common seal.

(3) The certificate of incorporation issued under subsection (1) shall state that the company is a private company limited by shares.

(4) A certificate of incorporation issued under subsection (1) shall be conclusive evidence that the requirements of section 21 have been complied with, and that the company is duly registered under this Act.

(5) The persons who are specified in the statement required to be delivered to the Registrar by section 21(1)(a) as the director or directors, secretary or joint secretaries or assistant or deputy secretary or secretaries of the company to which the statement refers shall, on the incorporation of the company, be deemed to have been appointed as the first director or directors, secretary or joint secretaries or assistant or deputy secretary or secretaries, as the case may be, of the company.

(6) Any indication in the constitution, as delivered under section 21 for registration, specifying a person as a director or secretary (including any assistant or deputy secretary) of a company shall be void unless such person is specified as a director or as secretary (or, as the case may be, assistant or deputy secretary) in the foregoing statement.

(7) Subsection (5) does not operate to deem a person appointed as a director or secretary (including any assistant or deputy secretary) of a company where—

(a) he or she is disqualified under this Act from being appointed a director, secretary, assistant or deputy secretary, as the case may be, of a company; or

(b) in the case of a director or secretary, a provision of this Act provides that the person’s appointment as such in the circumstances is void.

Provisions as to names of companies

26. (1) The name of a company shall end with one of the following:

— limited;

— teoranta.

(2) The word “limited” may be abbreviated to “ltd.” (including that abbreviation in capitalised form) in any usage after the company’s registration by any person including the company.

(3) The word “teoranta” may be abbreviated to “teo.” (including that abbreviation in capitalised form) in any usage after the company’s registration by any person including the company.

(4) A company carrying on business under a name other than its corporate name shall register in the manner directed by law for the registration of business names but the use of the abbreviation set out in subsection (2) or (3) shall not of itself render such registration necessary.

(5) No company shall be registered on—

(a) its incorporation; or

(b) should such occur, its re-registration, merger or division, by a name which, in the opinion of the Registrar, is undesirable.

(6) An appeal shall lie to the court against a refusal by the Registrar to register a company (in any of the circumstances referred to in paragraph (a) or (b) of subsection (5)) on the ground there referred to.

Trading under a misleading name

27. (1) Neither a body that is not a company nor an individual shall carry on any trade, profession or business under a name which includes, as its last part, the word “limited” or the words “company limited by shares” or any abbreviations of any of the foregoing words.

(2) If a body or individual contravenes subsection (1), the body or individual and, in the case of a body, any officer of it who is in default, shall be guilty of a category 3 offence.

(3) Subsection (1) as it relates to the use of the word “limited”, or any abbreviation of that word, shall not apply to a society registered under the Industrial and Provident Societies Acts 1893 to 2014.

(4) A company shall not, in the following circumstances, use a name which may reasonably be expected to give the impression that it is any type of company other than a private company limited by shares or that it is any other form of body corporate.

(5) Those circumstances are circumstances in which the fact that it is a private company limited by shares is likely to be material to any person.

(6) If a company contravenes subsection (4), the company and any officer of it who is in default shall be guilty of a category 3 offence.

(7) Subsection (1) shall not apply to any company—

(a) to which Part 21 applies, and

(b) which has provisions in its constitution that would entitle it to rank as a private company limited by shares (whether under this Part or Part 16) if it had been registered in the State.

Reservation of a company name

28. (1) In this section—

“reserved” means reserved under subsection (4) for the particular purpose mentioned in subsection (2);

“specified period” means the period specified in the relevant notification made by the Registrar under subsection (5).

(2) A person may apply to the Registrar to reserve a specified name for either of the following purposes, namely—

(a) the purpose of a company that is proposed to be formed by that person being incorporated with that name;

(b) the purpose of a company changing its name to that name, and, in either such case, such an application shall be accompanied by the prescribed fee.

(3) In subsection (2), “person” means, for the purposes of paragraph (b) of it, the company referred to in that paragraph.

(4) On the making of such an application, the Registrar may, subject to subsection (7), determine that the name specified in the application shall be reserved for the particular purpose mentioned in subsection (2).

(5) That determination shall be notified to the applicant by the Registrar and that notification shall specify the period for which the name is reserved.

(6) The specified period shall not be greater than 28 days and shall be expressed to begin on the making of the notification.

(7) A name shall not be reserved that, in the opinion of the Registrar, is undesirable.

(8) A person in whose favour a name has been reserved may, before the expiry of the specified period, apply to the Registrar for an extension of the specified period; such an application shall be accompanied by the prescribed fee.

(9) On the making of such an application, the Registrar may, if he or she considers it appropriate to do so, extend the specified period for such number of days (not exceeding 28 days) as the Registrar determines and specifies in a notification of the determination to the applicant.

Effect of reservation of name

29. (1) During the specified period and any extension under section 28(9) of that period, a company shall neither—

(a) be incorporated with a particular reserved name save on application of the person in whose favour that name has been reserved; nor

(b) be incorporated with a name that, in the opinion of the Registrar, is too like a particular reserved name.

(2) During the specified period and any extension under section 28(9) of that period, a company shall neither—

(a) change its name to a particular reserved name (unless it is the company in whose favour the name has been reserved); nor

(b) change its name to a name that, in the opinion of the Registrar, is too like a particular reserved name (3) If an application for the incorporation of a company with a name that has been reserved under section 28 is received by the Registrar during the specified period (or any extension of it granted under section 28(9)) from the person in whose favour the name has been so reserved, the fee payable to the Registrar in respect of that incorporation shall be reduced by an amount equal to the amount of the fee paid under section 28(2) in respect of the reservation of that name.

(4) In this section “reserved” and “specified period” have the same meaning as they have in section 28.

Change of name

30. (1) A company may, by special resolution and with the approval of the Registrar, signified in writing, change its name.

(2) Subsection (3) applies if, through inadvertence or otherwise, a company is registered by a name (whether on its first registration, or on its registration by a new name) which, in the opinion of the Registrar, is too like the name by which a company in existence is already registered.

(3) Where this subsection applies the first-mentioned company in subsection (2)—

(a) with the approval of the Registrar — may change its name; or

(b) if, within 6 months after the date of its being registered by the first-mentioned name in subsection (2), the Registrar directs it to do so — shall change its name.

(4) A direction under subsection (3)(b) shall be complied with within a period of 6 weeks after the date of its being given or such longer period as the Registrar may think fit to allow.

(5) Where a company changes its name under this section, the Registrar shall enter the new name in the register in place of the former name, and shall issue a certificate of incorporation altered to meet the circumstances of the case.

(6) A change of name by a company under this section shall not affect any rights or obligations of the company, or render defective any legal proceedings by or against the company, and any legal proceedings which might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.

(7) A company which was registered by a name specified by statute, may, notwithstanding anything contained in that statute, change its name in accordance with subsection (1), but, if the Registrar is of the opinion that any Minister of the Government is concerned in the administration of the statute which specified the name of the company, the Registrar shall not approve of the change of name save after consultation with that Minister of the Government.

(8) If a company fails to comply with a direction under subsection (3)(b) within the period provided under subsection (4), the company and any officer of it who is in default shall be guilty of a category 4 offence.

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.

Publication of notices

33. (1) The Registrar shall publish in the CRO Gazette notice of the delivery to or the issue by the Registrar of the following documents and particulars—

(a) any certificate of incorporation of the company;

(b) the constitution of the company;

(c) any document making or evidencing an amendment of its constitution;

(d) every amended text of its constitution;

(e) any return relating to its register of directors or notification of a change among its directors;

(f) any return relating to the persons, other than the board of directors, authorised to enter into transactions binding the company, or notification of a change among such persons;

(g) its annual return and the financial statements that are required to be published in accordance with Part 6;

(h) any notice of the situation of its registered office, or of any change therein;

(i) any copy of a winding up order in respect of the company;

(j) any copy of an order for the dissolution of the company on a winding up;

(k) any return by the liquidator of the final meeting of the company on a winding up;

(l) any notice of the appointment of a liquidator in a voluntary winding up of the company.

(2) The publication referred to in subsection (1) shall occur within 10 days after the date of the relevant delivery or issue.

Language of documents filed with Registrar

34. (1) Without prejudice to any other provisions on the language of documents, anydocument delivered to the Registrar shall be in the Irish or English language.

(2) A translation of any such document may be delivered to the Registrar in any official language of the European Union.

(3) Every translation referred to in subsection (2) shall be certified, in a manner approved by the Registrar, to be a correct translation.

(4) In any case of a discrepancy between a document delivered as mentioned in subsection (1) and a translation of it delivered pursuant to subsection (2), the latter may not be relied upon by the company against a third party. A third party may, nevertheless, rely on that translation against the company, unless the company proves that the third party had knowledge of the document delivered as mentioned in subsection (1).

(5) In subsection (4), “third party” means a person other than the company or a member officer or employee of it.

Authorisation of an electronic filing agent

35. (1) A company may authorise a person (who shall be known and is in this Act referred to as an “electronic filing agent”) to do the following acts on its behalf.

(2) Those acts are—

(a) the electronic signing of documents that are required or authorised, by or under this Act or any other enactment, to be delivered by the company to the Registrar; and

(b) the delivery to the Registrar, by electronic means, of those documents so signed.

(3) The authorisation of a firm (not being a body corporate) by its firm name to do the foregoing acts on behalf of a company shall operate to authorise the following persons to do those acts on the company’s behalf, namely those persons who are from time to time during the currency of the authorisation the partners in that firm as from time to time constituted.

(4) Subject to the following conditions being satisfied, an act of the foregoing kind done by such an agent on behalf of a company pursuant to an authorisation by the company under this section that is in force shall be as valid in law as if it had been done by the company (and the requirements of this Act or the other enactment concerned with respect to the doing of the act have otherwise been complied with (such as with regard to the period within which the act is to be done)).

(5) The conditions mentioned in subsection (4) are—

(a) that prior to the first instance of the electronic filing agent’s doing of an act of the kind referred to in subsection (2), pursuant to an authorisation by the company concerned under this section, the authorisation of the agent has been notified by the company to the Registrar in the prescribed form; and

(b) the doing of the act complies with any requirements of the Registrar of the kind referred to in sections 12(2)(b) and 13(2)(a) of the Electronic Commerce Act 2000.

(6) It shall be the joint responsibility of a company and the electronic filing agent authorised by it under this section to manage the control of the documents referred to in subsection (2).

(7) An electronic filing agent shall not, by virtue of his or her authorisation under this section to act as such, be regarded as an officer or servant of the company concerned for the purposes of Regulation 71(4) or (5) of the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 (S.I. No. 220 of 2010).

Revocation of the authorisation of an electronic filing agent

36. (1) A company may revoke an authorisation by it under section 35 of an electronic filing agent (2) Such a revocation by a company shall be notified by it, in the prescribed form, to the Registrar.

(3) Unless and until the revocation is so notified to the Registrar, the authorisation concerned shall be deemed to subsist and, accordingly, to be still in force for the purposes of section 35(4).

(4) If a revocation, in accordance with this section, of an authorisation under section 35 constitutes a breach of contract or otherwise gives rise to a liability being incurred—

(a) the fact that it constitutes such a breach or otherwise gives rise to a liability being incurred does not affect the validity of the revocation for the purposes of section 35; and

(b) the fact of the revocation being so valid does not remove or otherwise affect any cause of action in respect of that breach or the incurring of that liability.

Copies of constitution to be given to members

37. (1) A company shall, on being so requested by any member, send to him or her a copy of its constitution—

(a) free of charge, and

(b) in the event of a second or subsequent such request by the member (the first request by him or her having been complied with) on payment to it of €5.00.

(2) Where an amendment is made of the constitution of a company, every copy of the constitution issued after the date of the amendment shall be in accordance with the amendment.

(3) If a company contravenes this section, the com****pany and any officer of it who is in default shall be guilty of a category 4 offence.

CHAPTER 3

Corporate capacity and authority

Capacity of private company limited by shares

38. (1) Subject to subsection (2), notwithstanding anything contained in its constitution a company shall have, whether acting inside or outside of the State—

(a) full and unlimited capacity to carry on and undertake any business or activity, do any act or enter into any transaction; and

(b) for the purposes of paragraph (a), full rights, powers and privileges.

(2) Nothing in subsection (1) shall relieve a company from any duty or obligation under any enactment or the general law.

Registered person

39. (1) Where the board of directors of a company authorises any person as being a person entitled to bind the company (not being an entitlement to bind that is, expressly or impliedly, restricted to a particular transaction or class of transactions), the company may notify the Registrar in the prescribed form of the authorisation and the Registrar shall register the authorisation.

(2) A person so authorised, where his or her authorisation is registered in the foregoing manner, is referred to in this Act as a “registered person”; where, in a provision of this Act, that expression appears without qualification, it shall be taken as a reference to a registered person authorised by the board of the directors of the company to which the provision falls to be applied.

(3) Where the board of directors of a company revokes an authorisation of a person as a person entitled to bind the company (being an authorisation notified to the Registrar in the prescribed form), the person shall, notwithstanding that revocation, continue to be regarded for the purposes of this Act as a registered person unless and until the company notifies the Registrar in the prescribed form of that revocation.

(4) References in this section to a person’s entitlement to bind the company are references to his or her authority to exercise any power of the company and to authorise others to do so.

(5) In subsection (4) “power of the company” does not include—

(a) any power of management of the company exercisable by its board of directors (as distinct from any power of the board to enter into transactions with third parties), or

(b) a power of the company which this Act requires to be exercised otherwise than by its board of directors.

(6) For the avoidance of doubt, for the purposes of this section the provisions of a company’s constitution with regard to a person’s office or powers shall not, in themselves, be taken as an authorisation by the board of the directors of the company of the person as a person entitled to bind the company.

Persons authorised to bind company

40. (1) For the purposes of any question whether a transaction fails to bind a company because of an alleged lack of authority on the part of the person who exercised (or purported to exercise) the company’s powers, the following, namely—

(a) the board of directors of the company; and

(b) any registered person, shall each be deemed to have authority to exercise any power of the company and to authorise others to do so.

(2) Subsection (1) applies regardless of any limitations in the company’s constitution on the board’s authority or a registered person’s authority, but subject to subsections (5) and (8).

(3) Subsection (1) is not to be read as preventing the exercise of a company’s powers otherwise than by the board, a registered person or a person authorised by the board or by a registered person, where authority for that exercise exists.

(4) Subsection (1) does not affect—

(a) a director’s duties (including a director’s duty to observe any limitations in the company’s constitution on the board’s authority), or his or her liability in respect of any breach of those duties; or

(b) any duty arising on the part of any other person concerned in the transaction (including the registered person) or his or her liability in respect of any breach of that duty.

(5) Where a company is purportedly a party to a transaction—

(a) in connection with which the board of directors exceeded limitations in the company’s constitution on their authority; and

(b) to which a person referred to in subsection (6) is also a party, subsection (1) does not apply in favour of the person so referred to.

(6) Each of the following is a person mentioned in subsection (5)(b):

(a) a director or shadow director of the company or of its holding company;

(b) a person connected with such a director;

(c) a registered person;

(d) a person connected with a registered person, and in this subsection references to a person’s being connected with—

(i) a director or shadow director are to be read in accordance with section 220; or

(ii) a registered person are to be read in accordance with section 220 as that section is applied by subsection (7).

(7) For the purpose of subsection (6)(ii), section 220 applies as if—

(a) for each reference in subsections (1), (2), (3) and (8) to a director of a company there were substituted a reference to the registered person;

(b) for the first reference and the third reference in subsection (5) to a director of a company there were substituted a reference to the registered person;

(c) the references in subsection (5) to another director or directors included references to one or more other registered persons; and

(d) the reference in subsection (6)(b) to a director included a reference to a registered person.

(8) In subsection (1) “power of the company” does not include—

(a) with reference to any registered person, the power of management referred to in section 39(5)(a), and

(b) with reference to the board of directors or any registered person, the power referred to in section 39(5)(b).

(9) Without prejudice to subsection (1), in determining any question whether a person had ostensible authority to exercise any of a company’s powers in a given case, no reference may be made to the company’s constitution.

(10) In this section a reference—

(a) to limitations in a company’s constitution includes a reference to limitations deriving from—

(i) a resolution of the company or of any class of its members; or

(ii) any agreement between the members of the company or of any class of its members;

(b) to a transaction includes a reference to any act or omission.

(11) This section is in addition to, and not in substitution for, the Rule in Royal British Bank v. Turquand.

Powers of attorney

41. (1) Notwithstanding anything in its constitution, a company may empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds or do any other matter on its behalf in any place whether inside or outside the State.

(2) A deed signed by such attorney on behalf of the company shall bind the company and have the same effect as if it were under its common seal.

CHAPTER 4

Contracts and other transactions

Form of contracts

42. (1) Contracts on behalf of a company may be made as follows—

(a) a contract which, if made between natural persons, would be by law required to be in writing and to be under seal, may be made on behalf of the company in writing under the common seal of the company;

(b) a contract which, if made between natural persons, would be by law required to be in writing, signed by the parties to be charged therewith, may be made on behalf of the company in writing, signed by any person acting under its authority, express or implied;

(c) a contract which, if made between natural persons, would by law be valid although made by parol only, and not reduced into writing may be made by parol on behalf of the company by any person acting under its authority, express or implied.

(2) A contract made according to this section shall bind the company and its successors and all other parties to it.

(3) A contract made according to this section may be varied or discharged in the same manner in which it is authorised by this section to be made.

The common seal

43. (1) A company shall have a common seal or seals that shall state the company’s name, engraved in legible characters.

(2) Save as otherwise provided by this Act or by the constitution of the company—

(a) a company’s seal shall be used only by the authority of its directors, or of a committee of its directors authorised by its directors in that behalf; and

(b) any instrument to which a company’s seal shall be affixed shall be—

(i) signed by a director of it or by some other person appointed for the purpose by its directors or by a foregoing committee of them; and

(ii) be countersigned by the secretary or by a second (if any) director of it or by some other person appointed for the purpose by its directors or by a foregoing committee of them.

(3) Save as otherwise provided by the constitution of the company, if there be a registered person in relation to a company, the company’s seal may be used by such person and any instrument to which the company’s seal shall be affixed when it is used by the registered person shall be signed by that person and countersigned—

(a) by the secretary or a director of the company; or

(b) by some other person appointed for the purpose by its directors or a committee of its directors authorised by its directors in that behalf.

Power for company to have official seal for use abroad

44. (1) In this section—

“official seal”, in relation to a company, means the official seal referred to in subsection (2);

“place abroad” means any territory, district or place not situate in the State.

(2) A company may, if authorised by its constitution, have for use in any place abroad an official seal which shall resemble the common seal of the company with the addition on its face of the name of every place abroad where it is to be used.

(3) A deed or other document to which an official seal is duly affixed shall bind the company as if it had been sealed with the common seal of the company.

(4) A company having an official seal for use in any place abroad may, by writing under its common seal, authorise any person appointed for the purpose in that place (the “agent”) to affix the official seal to any deed or other document to which the company is party in that place.

(5) The authority of the agent shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or, if no period is there mentioned, then until the notice of revocation or determination of the agent’s authority has been given to the person dealing with him or her.

(6) The person affixing an official seal shall, by writing under his or her hand, certify on the deed or other instrument to which the seal is affixed, the date on which and the place at which it is affixed.

Pre-incorporation contracts

45. (1) Any contract or other transaction (including any application to any lawful authority) purporting to be entered into by a company prior to its formation, or by any person on behalf of the company prior to its formation, may be ratified by the company after its formation.

(2) Upon such contract or other transaction being so ratified, the company shall become bound by it and entitled to the benefit of it as if the company had been in existence at the date of such contract or other transaction and had been a party to it.

(3) Prior to such ratification (if any) by the company, the person or persons whopurported to act in the name or on behalf of the company shall, in the absence of express agreement to the contrary, be personally bound by the contract or other transaction and entitled to the benefit of it.

Bills of exchange and promissory notes

46. A bill of exchange or promissory note shall be deemed to have been made, accepted or endorsed on behalf of a company, if made, accepted or endorsed in the name of or by or on behalf or on account of, the company by a person acting under its authority.

Liability for use of incorrect company name

47. (1) If an officer of a company or any person on its behalf does any of the following things, the officer or person shall be guilty of a category 4 offence.

(2) Those things are:

(a) uses or authorises the use of any seal purporting to be a seal of the company on which its name is not engraved in legible characters;

(b) issues or authorises the issue of any business letter of the company or any notice or other official publication of the company, or signs or authorises to be signed on behalf of the company any bill of exchange, promissory note, endorsement, cheque or order for money or goods, in which its name is not mentioned in the manner described in section 49;

(c) issues or authorises the issue of any invoice, receipt or letter of credit of the company in which its name is not mentioned in the manner described in section 49.

(3) In the circumstances of his or her doing a relevant thing mentioned in subsection (2)

(b), the officer or other person shall be personally liable to the holder of the bill of exchange, promissory note, cheque or order for money or goods for the amount thereof unless—

(a) it is duly paid by the company; or

(b) it appears to the court that no injustice will be done by imposing liability for the amount on the company.

Authentication by company of documents

48. A document or proceeding requiring authentication by a company may be signed by a director, secretary, registered person or other authorised officer of the company, and need not be under its common seal.

CHAPTER 5

Company name, registered office and service of documents

Publication of name by company

49. (1) A company—

(a) shall display its name in a conspicuous position, in letters easily legible, outside every office or place in which its business is carried on and at its registered office; and

(b) shall have its name mentioned in legible characters in each of the following:

(i) all notices and other official publications of the company;

(ii) all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company;

(iii) all invoices, receipts and letters of credit of the company.

(2) If a company contravenes subsection (1)(a) or (b), the company and any officer of it who is in default shall be guilty of a category 4 offence.

(3) The use of the abbreviation “ltd” instead of “limited” or “teo” instead of “teoranta” shall not be regarded as constituting a contravention of this section.

(4) This section is without prejudice to section 151.

Registered office of company

50. (1) A company shall, at all times, have a registered office in the State to which all communications and notices may be addressed.

(2) Particulars of the situation of the company’s registered office shall be specified in the statement delivered pursuant to section 21(1)(a) prior to the incorporation of the company.

(3) Notice of any change in the situation of the registered office of a company shall be given in the prescribed form, within 14 days after the date of the change, to the Registrar who shall record that change.

(4) A company’s registered office may be constituted by a statement (contained in the statement or notice referred to in subsection (2) or (3)) to the effect that the office is care of a specified agent, being a company formed and registered under this Act, or an existing company, and which is approved for this purpose by the Registrar; where a registered office is constituted by those means, references in this Act to the situation of the company’s registered office shall be read accordingly.

(5) The notification to the Registrar by the agent approved for that purpose of any change in the situation of the agent’s registered office shall, if made in the form prescribed for the purpose of subsection (3) and within the period there mentioned, be regarded as constituting compliance by the company concerned with subsection (3).

(6) If default is made in complying with this section, the company concerned and any officer of it who is in default shall be guilty of a category 4 offence.

Service of documents

51. (1) A document may be served on a company—

(a) by leaving it at or sending it by post to the registered office of the company; or

(b) if the company has not given notice to the Registrar of the situation of its registered office, by delivering it to the Registrar.

(2) For the purposes of this section, any document left at or sent by post to the place for the time being recorded by the Registrar as the situation of the registered office of a company shall be deemed to have been left at or sent by post to the registered office of the company notwithstanding that the situation of its registered office may have changed.

(3) It shall be the duty of the Registrar to enter on the register a document that has, by the means referred to in subsection (1)(b), been served on a company.

Security for costs

52. Where a company is plaintiff in any action or other legal proceeding, any judge having jurisdiction in the matter, may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his or her defence, require security to be given for those costs and may stay all proceedings until the security is given.

Enforcement of orders and judgments against companies and their officers

53. (1) Any judgment or order against a company wilfully disobeyed may, by leave of the court, be enforced by—

(a) sequestration against the property of the company,

(b) attachment against the directors or other officers of the company, or

(c) sequestration against the property of such directors or other officers.

(2) An application may not be made, in the foregoing circumstances, for attachment against directors or other officers or for sequestration against their property unless the judgment or order of the court to which the application relates has contained a statement indicating the liability of such persons or of their property to attachment or sequestration, as the case may be, should the judgment or order be disobeyed by the company.

(3) In this section “attachment” and “sequestration” have the same meaning as they have in rules of court concerning the jurisdiction of the High Court and the Supreme Court.

CHAPTER 6

Conversion of existing private company to private company limited by shares to which Parts 1 to 15 apply

Interpretation (Chapter 6)

54. (1) In this Chapter—

“mandatory provision” means a provision of any of Part 1, this Part or Parts 3 to 14 that is not an optional provision;

“optional provision” means a provision of any of Part 1, this Part or Parts 3 to 14 that—

(a) contains a statement to the effect, or is governed by provision elsewhere to the effect, that the provision applies save to the extent that the constitution provides otherwise or unless the constitution states otherwise; or

(b) is otherwise of such import;

“Table A” means Table A in the First Schedule to the Act of 1963.

(2) A reference in this Chapter to a designated activity company is a reference to a designated activity company limited by shares.

(3) A reference in this Chapter to Table A includes, where appropriate, a reference to any Table referred to in section 3(9)(b), (c) or (d) of the Act of 1963.

Status of existing private companies at end of transition period: general principle

55. As provided for in section 61, on the expiry of the transition period, unless it has reregistered as a designated activity company or one of the other circumstances specified in that section prevent the following happening—

(a) an existing private company shall be deemed to have a constitution that comprises the provisions of its existing memorandum (other than the provisions excepted by subsection (1)(a) of that section) and of its existing articles and subject to subsection (3) of that section;

(b) the company’s constitution, as so constituted of those provisions, shall be deemed to satisfy the requirements of section 19 as to the form of a company’s constitution, and the company shall be deemed to have become a private company limited by shares to which this Part and Parts 1 and 3 to 15 apply.

Conversion of existing private companies to designated activity companies: duties and powers in that regard

56. (1) An existing private company may re-register as a designated activity company by passing an ordinary resolution, not later than 3 months before the expiry of the transition period, resolving that the company be so registered; if it so re-registers, pursuant to such a resolution, before the expiry of the transition period, Part 16 shall, as provided in section 63(9), apply to it.

(2) An existing private company shall re-register as a designated activity company before the expiry of the transition period if, not later than 3 months before the expiry of that period, a notice in writing requiring it to do so is served on it by a member or members holding shares in the company that confer, in aggregate, more than 25 per cent of the total voting rights in the company; on its so re-registering, in compliance with that notice, Part 16 shall, as provided in section 63(9), apply to it.

(3) Without prejudice to subsections (1) and (2) but subject to subsection (4), where anything is done by an existing private company, being a thing which (if the company were a private company limited by shares to which this Part and Parts 1 and 3 to 15 apply) would not be in compliance with section 68, then the company shall re-register as a designated activity company before the expiry of the transition period and upon its so doing Part 16 shall, as provided in section 63(9), apply to it.

(4) Instead of re-registering as a designated activity company as mentioned in subsection (3), an existing private company referred to in that subsection may, by passing a special resolution and otherwise complying with the requirements of Part 20, reregister as a type of company that is not a designated activity company before the expiry of the transition period.

(5) The reference in subsection (2) to a voting right in a company shall be read as a reference to a right exercisable for the time being to cast a vote at general meetings of members of the company, not being such a right that is exercisable only in special circumstances.

Relief where company does not re-register as a designated activity company

57. (1) Where an existing private company does not, before the expiry of the transition period, re-register as a designated activity company under section 56 (whether it is obliged under that section to do so or not), the person or persons referred to in subsection (2) may apply to the court for an order directing that it shall re-register as such a company and the court shall, unless cause is shown to the contrary, make the order sought or make such other order as seems just.

(2) The persons mentioned in subsection (1) are—

(a) one or more members of the company who hold, or together hold, not less than 15 per cent in nominal value of the company’s issued share capital or any class thereof; or

(b) one or more creditors of the company who hold, or together hold, not less than 15 per cent of the company’s debentures entitling the holders to object to alterations of its objects.

Applicable laws during transition period

58. (1) During the period beginning on the commencement of this Part and ending on the expiry of the transition period, Part 16 shall, subject to subsection (3) and without prejudice to subsection (7), apply to an existing private company as if it were a designated activity company, unless and until there is delivered to the Registrar, in accordance with this Chapter, a constitution in respect of it in the form provided under section 19.

(2) If there is so delivered to the Registrar such a constitution in respect of that company then, on and from such delivery, this Part and Parts 1 and 3 to 15 shall apply to that company.

(3) The provisions of the prior Companies Acts relating to the use of limited or teoranta (or their abbreviations) shall apply as respects the name of an existing private company referred to in subsection (1) during the period referred to in that subsection and not the provisions of section 969 and the other relevant provisions of Part 16.

(4) The reference in subsection (3) to provisions relating to the use of any words includes a reference to provisions conferring an exemption from the use of those words.

(5) An existing private company that has adopted, or is deemed to have adopted, in whole or in part, the regulations of Table A as its articles, shall, despite the repeal of the Act of 1963, continue to be governed by those regulations (or the parts of them concerned) after the repeal of that Act and, without prejudice to subsection (8), before the expiry of the transition period unless and until—

(a) there is delivered to the Registrar, in accordance with this Chapter, a constitution in respect of it in the form provided under section 19; or

(b) it re-registers as another type of company, but, as regards the company continuing to be governed by the foregoing regulations—

(i) this is save to the extent that those regulations are inconsistent with a mandatory provision;

(ii) those regulations may be altered or added to under and in accordance with the conditions under which articles, whenever registered, are permitted by Part 16 to be altered or added to; and

(iii) references in those regulations to any provision of the prior Companies Acts shall be read as references to the corresponding provision of this Act.

(6) Subject to paragraphs (ii) and (iii) of that subsection, the regulations referred to in subsection (5) shall be interpreted according to the form in which they existed on the date of repeal of the Act of 1963.

(7) To take account of any interregnum between—

(a) the delivery (in accordance with this Chapter and in the form provided under section 19) of a constitution in respect of an existing private company to the Registrar for registration; and

(b) its registration by the Registrar, it is declared that subsections (1) and (2) operate, and are to be read as operating, so as also to provide that Part 16 applies, subject to subsection (3), to that company as if it were a designated activity company during any such interregnum (and accordingly that the application of this Part, and Parts 1 and 3 to 15, to it is postponed until that registration is effected).

(8) Likewise, to take account of any similar interregnum in the case of subsection (5), it is declared that that subsection operates, and is to be read as operating, so as also to provide that the whole or part (as the case may be) of the regulations of Table A continue to govern the company concerned during any such interregnum.

(9) For the avoidance of doubt, the application of Part 16, in the circumstances under this section where that Part is stated to apply and notwithstanding that the course of action of delivering a constitution of the kind referred to in subsection (1) will not be adopted by such a company, extends to an existing private company falling within subsection (10) but—

(a) the application of Part 16 to such a company does not affect the application of the provisions of the statute referred to in subsection (10) (or any other relevant statute) to the company; and

(b) if, by virtue of the foregoing statute, the company was not required to include the word “limited” or “teoranta” in its name, that exemption is not affected by anything in this section or Part 16.

(10) The existing private company referred to in subsection (9) is one that has been incorporated under a former enactment relating to companies (within the meaning of section 5) pursuant to, or in compliance with a requirement of, any statute.

Adoption of new constitution by members

59. (1) An existing private company—

(a) by special resolution passed in accordance with its existing memorandum and articles; and

(b) subject to compliance with the provisions of Part 16 as to the variation of rights and obligations of members, may, after the commencement of this Part, adopt a new constitution in the form provided under section 19; where it does so and delivers, in the prescribed form, before the expiry of the transition period, the constitution to the Registrar for registration, it shall, on the constitution’s registration, become a private company limited by shares to which this Part and Parts 1 and 3 to 15 apply.

(2) The constitution need not contain any supplemental regulations, to the extent that the provisions of this Part and Parts 1 and 3 to 15 regulate the matters which would be governed by those regulations; for the avoidance of doubt, the requirements of sections 19 and 26(1) relating to a company’s name shall apply despite any exemption of the kind referred to in section 61(3) that had been enjoyed by the company under the prior Companies Acts.

(3) On registration of its constitution under this section, the Registrar shall issue to the company a certificate of incorporation in respect of it stating that the company is a private company limited by shares registered under this Part.

Preparation, registration, etc. of new constitution by directors

60. (1) The directors of an existing private company shall do each of the things specified in subsection (2) before the expiry of the transition period, unless the company—

(a) has already adopted a constitution in accordance with section 59(1); or

(b) is required, under section 56(2) or (3), to re-register as a designated activity company; or

(c) is proceeding, in accordance with a resolution passed pursuant to section 56(1), to re-register as such a company or is proceeding, in accordance with section 56(4) and Part 20, to re-register as another type of company; or

(d) is required by an order made under section 57 to re-register as a designated activity company or proceedings under that section are pending in relation to it.

(2) The things referred to in subsection (1) are—

(a) prepare a constitution for the company in the form provided under section 19;

(b) deliver a copy of such constitution to each member; and

(c) deliver, in the prescribed form, the constitution to the Registrar for registration, and, where the things in the foregoing paragraphs are done (including the delivery of the constitution to the Registrar for registration), the company shall, on the constitution’s registration, become a private company limited by shares to which this Part and Parts 1 and 3 to 15 apply, and the Registrar shall issue to it a certificate of incorporation in respect of it stating that it is a private company limited by shares registered under this Part.

(3) The provisions of that constitution of the company, to be prepared by the directors as mentioned in subsection (2)(a), shall consist solely of—

(a) the provisions of its existing memorandum, other than provisions that—

(i) contain its objects; or (ii) provide for, or prohibit, the alteration of all or any of the provisions of its memorandum or articles; and

(b) the provisions of its existing articles, but, despite any exemption of the kind referred to in section 61(3) that had been enjoyed by the company under the prior Companies Acts, nothing in this subsection shall be read as overriding the requirements of sections 19 and 26(1) relating to a company’s name.

(4) If, by reason of the company not having registered articles, the regulations in Table A are deemed to be the articles of the company, the constitution prepared under subsection (2)(a) shall state that the articles of the company comprise those regulations.

(5) If the existing articles do not exclude or modify the regulations contained in the Table A, those regulations shall, so far as applicable, be the regulations of the existing private company in the same manner and to the same extent as if they were contained in the constitution prepared under subsection (2)(a).

(6) For the purposes of subsections (4) and (5) and without prejudice to their application otherwise by a provision of this Chapter, the regulations contained in Table A shall, despite the repeal of the Act of 1963, continue in force but, as regards the company continuing, by virtue of subsection (4) or (5), to be governed (in whole or in part) by the foregoing regulations—

(a) this is save to the extent that those regulations are inconsistent with a mandatory provision;

(b) those regulations may be altered or added to under and in accordance with the conditions under which the company’s constitution is permitted by section 32 to be altered or added to; and

(c) references in those regulations to any provision of the prior Companies Acts shall be read as references to the corresponding provision of this Act.

(7) Subject to paragraphs (b) and (c) of that subsection, the regulations referred to in subsection (6) shall be interpreted according to the form in which they existed on the date of repeal of the Act of 1963.

Deemed constitution

61. (1) Where there has not been delivered to the Registrar a constitution (in the form provided under section 19) in respect of an existing private company for registration within the transition period then, subject to subsection (4), from the expiry of that period—

(a) the existing private company shall be deemed to have, in place of its existing memorandum and articles, a constitution that comprises—

(i) the provisions of its existing memorandum, other than provisions that—

(I) contain its objects; or

(II) provide for, or prohibit, the alteration of all or any of the provisions of its memorandum or articles; and

(ii) the provisions of its existing articles; and

(b) its constitution, as so constituted of those provisions, shall be deemed to satisfy the requirements of section 19 as to the form of a company’s constitution, and the company shall be deemed to have become a private company limited by shares to which this Part and Parts 1 and 3 to 15 apply.

(2) In those circumstances the Registrar shall issue to the company a certificate of incorporation in respect of it stating that the company is a private company limited by shares registered under this Part.

(3) Notwithstanding—

(a) section 24, as originally enacted, of the Act of 1963; or

(b) section 24, inserted in the Act of 1963 by section 88(1) of the Company Law Enforcement Act 2001, in place of the first-mentioned section, and the continuing effect, for certain other types of company, provided elsewhere by this Act of an exemption conferred by or under either such section, any such exemption (whatever its basis) enjoyed, immediately before the expiry of the transition period, by an existing private company to which subsection (1) applies shall cease on that expiry; accordingly subsection (1)(a) shall be read as requiring such a company’s name to end with “limited” or “teoranta”, as appropriate, and subsection (2)** shall have effect subject to this subsection.

(4) Subsection (1) shall not apply if—

(a) the existing company has re-registered before the expiry of the transition period as a designated activity company in accordance with section 56(1) or as another type of company in accordance with section 56(4) and Part 20;

(b) the existing company is required under section 56(2) or (3) to re-register as such a company and has so re-registered; or

(c) its operation would be inconsistent with an order of the court made under section 57 or otherwise.

(5) If, by reason of section 58, an existing private company was, immediately before the expiry of the transition period or, if later, the end of the interregnum referred to in section 58(8), governed (in whole or in part) by the regulations contained in Table A, then for the purposes of this section and without prejudice to their application otherwise by a provision of this Chapter, those regulations shall, despite the repeal of the Act of 1963, continue in force and the existing articles of the company shall be deemed to comprise the whole of those regulations or, as the case may be, to include the parts concerned of those regulations, but—

(a) this is save to the extent that those regulations are inconsistent with a mandatory provision;

(b) those regulations may be altered or added to under and in accordance with the conditions under which the company’s constitution is permitted by section 32 to be altered or added to; and

(c) references in those regulations to any provision of the prior Companies Acts shall be read as references to the corresponding provision of this Act.

(6) Subject to paragraphs (b) and (c) of that subsection, the regulations referred to in subsection (5) shall be interpreted according to the form in which they existed on the date of repeal of the Act of 1963.

Relief for members and creditors

62. (1) Without limiting the generality of section 212, if any member of a company considers that his or her rights or obligations have been prejudiced by—

(a) the exercise of any power under this Chapter;

(b) the non-exercise of any such power; or

(c) the exercise of any such power in a particular manner, by the company or the directors of it, the member may apply to the court for an order under section 212.

(2) In any such application where it is proved that the directors of the company have failed to comply with section 60 then, unless the members of the company have adopted a new constitution in accordance with section 59(1), it shall be presumed, until the contrary is proved, that the directors have exercised their powers in a manner oppressive to the applicant or in disregard of his or her interests as a member.

(3) Where in relation to an existing private company a constitution in the form provided under section 19 comes into being, the person or persons referred to in subsection (5) may apply under this subsection to the court for relief if the constitution prejudices any interest of the person or persons (but only if the person or persons has or have a legal or equitable right to that interest).

(4) On the hearing of an application under subsection (3), the court may grant such relief to the applicant or applicants as the court thinks just.

(5) The persons mentioned in subsection (3) are one or more creditors of the company who hold, or together hold, not less than 15 per cent of the company’s debentures entitling the holders to object to alterations of its objects.

(6) The jurisdiction of the court under section 212 as provided for under subsection (1) and the jurisdiction of the court under subsection (3) shall each be exercised having regard to, and, where appropriate subject to, any exercise by the court of its jurisdiction under section 57 in relation to the company concerned.

(7) In this section a reference to a constitution in the form provided under section 19 coming into being is a reference to such a constitution coming into being by reason of—

(a) its being adopted and registered under section 59; or

(b) its being prepared by the directors and registered under section 60; or

(c) the operation of section 61.

Procedure for re-registration as designated activity company under this Chapter

63. (1) This section contains the procedure for re-registration by an existing private company as a designated activity company under section 56(1), (2) or (3) or pursuant to an order of the court under section 57(1).

(2) Either—

(a) in the case of re-registration under section 56(1), the ordinary resolution referred to in that provision; or

(b) in the case of re-registration under subsection (2) or (3) of section 56 or pursuant to an order of the court under section 57(1), a resolution of the directors of the company passed for the purpose in consequence of that subsection’s operation or that order, shall alter the company’s memorandum so that it states that the company is to be a designated activity company and shall, unless this Act provides that on re-registration the company shall continue to enjoy an exemption conferred by or under either of the sections referred to in section 61(3), alter that document and the articles so that there is substituted “designated activity company” or “cuideachta ghníomhaíochta ainmnithe” for “limited” or “teoranta”, as the case may be, in the company’s name.

(3) An application for the purpose of re-registration, in the prescribed form and signed by a director or secretary of the company, shall be delivered by the company to the Registrar together with the documents specified in subsection (4).

(4) Those documents are—

(a) a copy of the ordinary resolution or the resolution of the directors referred to in subsection (2)(a) or (b);

(b) a copy of the memorandum and articles of the company as altered by the resolution; and

(c) a statement in the prescribed form (in this section referred to as a “statement of compliance”) by a director or secretary of the company that the requirements of this Chapter as to re-registration as a designated activity company have been complied with by the company, including the passing of the resolution referred to in paragraph (a).

(5) The Registrar may accept the statement of compliance as sufficient evidence that the resolution referred to in subsection (4)(a) has been duly passed and the other conditions of this Chapter for re-registration as a designated activity company have been satisfied and that the company is entitled to be re-registered as that type of company.

(6) If, on an application under subsection (3) for re-registration of an existing private company as a designated activity company, the Registrar is satisfied that a company is entitled to be so re-registered, the Registrar shall—

(a) retain the application and the other documents delivered to him or her under this section; and

(b) issue to the company a certificate of incorporation in respect of it, being a certificate of incorporation that—

(i) is altered to meet the circumstances of the case; and

(ii) states that it is issued on re-registration of the company and the date on which it is issued.

(7) If the existing private company had not registered articles and, by reason of section 58, the regulations in Table A are, immediately before the making by the company of an application under subsection (3), deemed to be its articles, then each of the references in the preceding subsections of this section to articles shall be disregarded, but in such a case the application under subsection (3) shall be accompanied by a statement in the prescribed form that the articles of the company comprise those regulations.

(8) Upon the issue to a company of a certificate of incorporation on re-registration under subsection (6)—

(a) the company shall, by virtue of the issue of that certificate, become a designated activity company; and

(b) any alterations in the memorandum and articles set out in the resolution concerned shall take effect accordingly.

(9) A certificate of incorporation issued on re-registration to a company under subsection (6) shall be conclusive evidence—

(a) that the requirements of this Chapter as to re-registration and of matters precedent and incidental thereto have been complied with; and

(b) that the company is the type of company which is set out in the certificate, and, accordingly, without prejudice to section 58, Part 16, on and from the issue of the certificate, shall apply to the company as a designated activity company.

(10) If, by reason of section 58, an existing private company was, immediately before the making by the company of an application under subsection (3), governed (in whole or in part) by the regulations contained in Table A, then for the purposes of this section and in addition to the other cases where their continuance in force for a particular purpose is provided for by this Chapter, those regulations shall, despite the repeal of the Act of 1963, continue in force and upon the issue of the aforementioned certificate of incorporation the articles of the designated activity company shall be deemed to comprise the whole of those regulations or, as the case may be, to include the parts concerned of those regulations, but—

(a) this is save to the extent that those regulations are inconsistent with a mandatory provision;

(b) those regulations may be altered or added to under and in accordance with the conditions under which the designated activity company’s articles are permitted by Part 16 to be altered or added to; and

(c) references in those regulations to any provision of the prior Companies Acts shall be read as references to the corresponding provision of this Act.

(11) Subject to paragraphs (b) and (c) of that subsection, the regulations referred to in subsection (10) shall be interpreted according to the form in which they existed on the date of repeal of the Act of 1963.

(12) The re-registration of an existing private company as a designated activity company pursuant to this Chapter shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and 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.

(13) The procedures under this section may be followed, after consultation by the company with the relevant Minister, by an existing private company that has been incorporated under a former enactment relating to companies (within the meaning of section 5) pursuant to, or in compliance with a requirement of, any statute (in subsection (11) referred to as the “relevant statute”) and may be so followed notwithstanding that statute but—

(a) the provisions otherwise of that statute (and any other relevant statute) shall apply to the designated activity company that the foregoing company re-registers as under this section as they apply to the foregoing company before such reregistration; and

(b) if the foregoing company is a company to which section 1446 applies, the provision made by subsection (1) requiring the substitution of certain words in its name shall be taken to be omitted from that subsection.

(14) In subsection (13) “relevant Minister” means the Minister of the Government concerned in the administration of the relevant statute.

(15) For the avoidance of doubt, references in Part 6, and in particular section 349 (which exempts a company from having to annex financial statements to its first annual return), to the incorporation of a company are references to its original incorporation.

PART 3

SHARE CAPITAL, SHARES AND CERTAIN OTHER INSTRUMENTS

CHAPTER 1

Preliminary and interpretation

Interpretation (Part 3)

64. (1) In this Part—

“capital conversion reserve fund”, in relation to a company, means the amount equivalent to the aggregate diminution in share capital consequential upon renominalisation of share capital under section 26 of the Economic and Monetary Union Act 1998;

“cash” includes funds in any currency or currencies;

“company capital”, in relation to a company, means—

(a) the aggregate value, expressed as a currency amount, of the consideration received by the company in respect of the allotment of shares of the company; and

(b) that part of the company’s undenominated capital constituted by the transfer of sums referred to in sections 106(4) and 108(3), and subsection (2) supplements this definition;

“employees’ share scheme” means any scheme, for the time being in force, in accordance with which a company encourages or facilitates the holding of shares in, or debentures of, the company or its holding company by or for the benefit of employees or former employees of the company or of any subsidiary of the company including any person who is or was a director holding a salaried employment or office in the company or any subsidiary of the company;

“nominal value”, in relation to a share, means a monetary amount, expressed as an amount, multiple, fraction or percentage of any currency or currencies or combination thereof;

“parent public company” means a public limited company which has one or more private limited subsidiaries;

“private limited subsidiary” means a subsidiary that is a private company limited by shares but, for the purposes of this definition, a company shall not be regarded as a subsidiary if it is such only by virtue of section 7(2)(a)(ii) or (e);

“redeemable shares” includes shares which are liable at the option of the company or the shareholder to be redeemed;

“securities” means—

(a) shares in a company;

(b) debentures of a company, including debenture stock, bonds and any other debt instruments of a company whether constituting a charge on the assets of the company or not;

(c) those classes of securities which are negotiable on the capital market, such as:

(i) shares in bodies corporate and other securities equivalent to shares in bodies corporate, partnerships or other entities, and depositary receipts in respect of shares;

(ii) bonds or other forms of securitised debt, including depositary receipts in respect of such securities;

(iii) any other securities giving the right to acquire or sell any such transferable securities or giving rise to a cash settlement determined by reference to transferable securities, currencies, interest rates or yields, commodities or other indices or measures with the exception of instruments of payment;

“share capital”, in relation to a company, means the aggregate amount or value of the nominal value of shares of the company;

“undenominated capital”, in relation to a company, means the amount of the company capital from time to time which is in excess of the nominal value of its issued shares and shall be deemed to include any sum transferred as referred to in sections 106(4) and 108(3).

(2) There is included in the definition of “company capital” in subsection (1) any amounts standing, immediately before the commencement of this section, to the credit of—

(a) the company’s share premium account (within the meaning of the prior Companies Acts);

(b) its capital redemption reserve fund (within the meaning of those Acts); and

(c) its capital conversion reserve fund.

(3) For the purposes of this Part a share in a company shall be taken to have been paid up (as to its nominal value or any premium on it) in cash or allotted for cash if the consideration for the allotment or the payment up is—

(a) cash received by the company; or

(b) a cheque received by the company in good faith which the directors have no reason for suspecting will not be paid; or

(c) the release of a liability of the company for a liquidated sum; or

(d) an undertaking to pay cash to the company on demand or at an identified or identifiable future date which the directors have no reason for suspecting will not be complied with.

(4) In relation to the allotment or payment up of any shares in a company, references in this Act, other than in section 69(12)(c), to consideration other than cash and to the payment up of shares and premiums on shares otherwise than in cash include references to the payment of, or an undertaking to pay, cash to any person other than the company.

Powers to convert shares into stock, etc.

65. (1) Each provision of this section applies save to the extent that the company’s constitution provides otherwise.

(2) A company may, by ordinary resolution—

(a) convert any of its paid up shares into stock; and

(b) reconvert any stock into paid up shares of any denomination.

(3) Subject to subsection (4), the holders of stock may transfer the stock, or any part of it, in the same manner and subject to the same regulations as, and subject to which the shares from which the stock arose might, previously to conversion, have been transferred, or as near thereto as circumstances admit.

(4) The directors of a company may from time to time fix the minimum amount of stock that is capable of being transferred but any such minimum so fixed shall not exceed the nominal amount of each share from which the stock arose.

(5) Subject to subsection (6), the holders of stock shall, according to the amount of stock held by them, have the same rights, privileges and advantages in relation to dividends, voting at meetings of the company and other matters as if they held the shares from which the stock arose.

(6) No such right, privilege or advantage (except participation in the dividends and profits of the company and in the assets on winding up) shall be conferred by an amount of stock which would not, if existing in shares, have conferred that right, privilege or advantage.

(7) Such of the regulations of a company as are applicable to paid up shares shall apply to stock of the company, and the words “share” and “shareholder” in those regulations shall be read as including “stock” and “stockholder”, respectively.

Shares

66. (1) Shares in the capital of a company shall have a nominal value.

(2) A company may allot shares—

(a) of different nominal values;

(b) of different currencies;

(c) with different amounts payable on them; or

(d) with a combination of 2 or more of the foregoing characteristics.

(3) Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, any share in a company may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the company may from time to time by ordinary resolution determine.

(4) Save to the extent that its constitution provides otherwise, a company may allot shares that are redeemable (which shall be known, and are referred to in this Act, as “redeemable shares”).

(5) The shares or other interest of any member in a company shall be personal estate and shall not be of the nature of real estate.

(6) Except as required by law, no person shall be recognised by a company as holding any share upon any trust and the company shall not be bound by or be compelled in any way to recognise (even when having notice of it)—

(a) any equitable, contingent, future or partial interest in any share or any interest in any fractional part of a share; or

(b) save only as this Act or other law otherwise provides, any other rights in respect of any share, except an absolute right to the entirety of it in the registered holder.

(7) Subsection (6) shall not preclude the company from requiring a member or a transferee of shares to furnish the company with information as to the beneficial ownership of any share when such information is reasonably required by the company.

(8) In subsections (9) and (10) “bearer instrument” means an instrument, in relation to shares of a company, which entitles or purports to entitle the bearer thereof to transfer the shares that are specified in the instrument by delivery of the instrument.

(9) A company shall not have power to issue any bearer instrument.

(10) If a company purports to issue a bearer instrument, the shares that are specified in the instrument shall be deemed not to have been allotted or issued, and the amount subscribed therefor (and in the case of a non-cash asset subscribed therefor, the cash value of that asset) shall be due as a debt of the company to the purported subscriber thereof.

Numbering of shares

67. (1) Subject to subsections (2) and (3), each share in a company shall be distinguished by its appropriate number.

(2) If at any time, all the issued shares in a company or all the issued shares in it of a particular class are fully paid up and rank pari passu for all purposes, none of those shares need thereafter have a distinguishing number, so long as it—

(a) remains fully paid up; and

(b) ranks pari passu for all purposes with all shares of the same class for the time being issued and fully paid up.

(3) Where new shares are issued by a company on the terms that, within a period not exceeding 12 months, they will rank pari passu for all purposes with all the existing shares, or with all the existing shares of a particular class in the company, neither the new shares nor the corresponding existing shares need have distinguishing numbers so long as all of them are fully paid up and rank pari passu.

(4) However, in the circumstances mentioned in subsection (3), the share certificates of the new shares shall, if not numbered, be appropriately worded or enfaced.

CHAPTER 2

Offers of securities to the public

Limitation on offers of securities to the public

68. (1) Subject to the provisions of this section, a company shall not—

(a) make—

(i) any invitation to the public to subscribe for; or

(ii) any offer to the public of, any shares, debentures or other securities of the company; or

(b) allot, or agree to allot, (whether for cash or otherwise) any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public or being the subject of an invitation to the public to subscribe for them.

(2) A company shall—

(a) neither apply to have securities (or interests in them) admitted to trading or to be listed on; nor

(b) have securities (or interests in them) admitted to trading or listed on, any market, whether a regulated market or not, in the State or elsewhere.

(3) Subsection (1) shall not apply to any of the following offers or allotments of debentures by a company (wherever they may be made)—

(a) an offer of debentures addressed solely to qualified investors;

(b) an offer of debentures addressed to fewer than 150 persons, other than qualified investors;

(c) an offer of debentures addressed to investors who acquire securities for a total consideration of at least €100,000 per investor, for each separate offer;

(d) an offer of debentures whose denomination per unit amounts to at least €100,000;

(e) an offer of debentures with a total consideration in the European Union less than €100,000, which shall be calculated over a period of 12 months;

(f) an allotment of debentures, or an agreement to make such an allotment, with a view to those debentures being the subject of any one or more of the offers referred to in paragraphs (a) to (e), and the reference in this subsection to an offer of debentures includes an invitation to subscribe for them.

(4) Subsection (1) shall not apply to—

(a) an offer of shares by a company (of any amount or wherever it may be made), being an offer addressed to—

(i) qualified investors; or

(ii) 149 or fewer persons; or

(iii) both qualified investors and 149 or fewer other persons; or

(b) an allotment of shares, or an agreement to make such an allotment, with a view to those shares being the subject of an offer referred to in paragraph (a), and the reference in this subsection to an offer of shares includes an invitation to subscribe for them.

(5) Subsection (1) shall not apply to an offer by a company of those classes of instruments which are normally dealt in on the money market (such as treasury bills, certificates of deposit and commercial papers) having a maturity of less than 12 months, and the reference in this subsection to an offer of instruments includes an invitation to subscribe for them.

(6) A word or expression that is used in this section and is also used in the Prospectus (Directive 2003/71/EC) Regulations 2005 (S.I. No. 324 of 2005) shall have in this section the same meaning as it has in those Regulations.

(7) For the purposes of subsection (6), the Regulations referred to in that subsection shall have effect as if Regulation 8 were omitted therefrom.

(8) Nothing in this section shall affect the validity of any allotment or sale of securities or of any agreement to allot or sell securities.

(9) If a company contravenes subsection (1) or (2), the company and any officer of it who is in default shall be guilty of a category 2 offence.

CHAPTER 3

Allotment of shares

69. (1) No shares may be allotted by a company unless the allotment is authorised, either specifically or pursuant to a general authority, by ordinary resolution or by the constitution of the company.

(2) Without prejudice to subsection (1), in the case of a company whose constitution states an authorised share capital, no shares may be allotted by the company unless those shares are comprised in the authorised but unissued share capital of the company.

(3) An authorisation for the purposes of subsection (1) (whether conferred by an ordinary resolution or the constitution) may stipulate a period during which the allotment may occur; if it so stipulates, then allotments occurring outside that period are not authorised by it.

(4) Save to the extent that the constitution of the company provides otherwise—

(a) shares of a company may only be allotted by the directors of the company;

(b) the directors of a company may allot, grant options over or otherwise dispose of shares to such persons, on such terms and conditions and at such times as they may consider to be in the best interests of the company and its shareholders.

(5) Any director of a company who knowingly contravenes, or knowingly permits or authorises a contravention of, a preceding provision of this section shall be guilty of a category 3 offence.

(6) Subject to subsections (8) and (12) and section 70, a company proposing to allot any shares—

(a) shall not allot any of those shares, on any terms—

(i) to any non-member, unless it has made an offer to each person who holds relevant shares, of the class concerned, in the company to allot to him or her, on the same or more favourable terms, a proportion of those relevant shares which is, as nearly as practicable, equal to the proportion in nominal value held by him or her of the aggregate of the shares of that class; or

(ii) to any person who holds shares in the company, unless it has made an offer to each person who holds relevant shares, of the class concerned, in the company to allot to him or her, on the same terms, a proportion of those shares which is, as nearly as practicable, equal to the proportion in nominal value held by him or her of the aggregate of the relevant shares of that class; and

(b) shall not allot any of those shares to any person unless the period during which any such offer may be accepted (not being less than 14 days) has expired or the company has received notice of the acceptance or refusal of every offer so made.

(7) In—

(a) subsection (6) “relevant shares”, in relation to a company, means shares in the company other than shares which as respects dividends and capital carry a right to participate only to a specified amount in a distribution;

(b) subsection (6)(a)(ii) “non-member” means a person who is not a holder of shares (as that expression is to be read by virtue of section 70(4)) in the company.

(8) Where a company’s constitution contains provisions which—

(a) require that the company, when proposing to allot shares of a particular class, shall not allot those shares unless it makes an offer of those shares to existing holders of shares of that class; and

(b) specify that the minimum period during which that offer may be accepted is not less than 14 days, then subsection (6) shall not apply to any allotments made in compliance with such provisions.

(9) An offer which is required by—

(a) subsection (6); or

(b) the provisions of the company’s constitution referred to in subsection (8), to be made to any person shall be made by serving it on him or her in the same manner in which notices are authorised to be given by sections 180, 181 and 218.

(10) Any such offer as is mentioned in subsection (6) or (8) shall not be withdrawn before the end of the period that the offer referred to in subsection (6) or, as the case may be, the provisions of the company’s constitution referred to in subsection (8) specify as the period within which it may be accepted.

(11) Nothing in subsection (6)(b), (9) or (10) shall invalidate provisions of the company’s constitution referred to in subsection (8) by reason that those provisions require or authorise an offer thereunder to be made in contravention of one or more of those subsections, but, to the extent that those provisions require or authorise such an offer to be so made, they shall be of no effect.

(12) Subsection (6) shall not apply—

(a) to the extent that—

(i) the constitution of the company,

(ii) a special resolution, or

(iii) the terms of issue of already allotted shares, provides or provide (either generally or in respect of a particular allotment or class of allotments), to the extent so provided;

(b) to allotments of shares for a consideration wholly or partly paid for, otherwise than in cash;

(c) to allotments of shares to the subscriber or subscribers to the company’s constitution upon the company’s incorporation, being the shares taken by that subscriber or those subscribers before such incorporation;

(d) to allotments of shares to persons in pursuance of the terms of an employees’ share scheme established by the company;

(e) to allotments of bonus shares.

Supplemental and additional provisions as regards allotments

70. (1) Shares which a company has offered to allot to a holder of shares in the company may be allotted to that holder or anyone in whose favour that holder has renounced his or her right to their allotment without contravening section 69(6)(b).

(2) Notwithstanding that any authorisation conferred by a resolution or the constitution such as is mentioned in section 69(1) has expired, the directors of a company may allot shares in pursuance of an offer or agreement previously made by the company, if that authorisation enabled the company to make an offer or agreement which would or might require shares to be allotted after the authorisation’s expiry.

(3) For the purposes of section 69 and this section—

(a) “allot” includes “agreement to allot” (other than an agreement made subject to the passing of an ordinary or special resolution);

(b) “shares” includes a right to subscribe for shares or to convert securities into shares, and with the effect that—

(i) in the case of paragraph (a), if an agreement to allot shares is entered into in compliance with section 69, subsections (3), (4) and (6) of that section shall not apply to an allotment of shares pursuant to that agreement; and

(ii) in the case of paragraph (b), if a right to subscribe for shares, or to convert securities into shares, is granted in compliance with section 69, subsections (3), (4) and (6) of that section shall not apply to an allotment of shares pursuant to the exercise of that right.

(4) References in section 69 and this section (however expressed) to the holder of shares or the holder of shares of any class shall be read as including references to any person who held shares or, as the case may be, shares of that class on any day within the period of 28 days ending with the day immediately preceding the date of the offer which is specified by the directors of the company concerned as being the record date for the purposes of the offer.

(5) A resolution of a company to give, vary, revoke or renew an authority for the purposes of section 69(1) may, notwithstanding that it alters the company’s constitution, be an ordinary resolution.

(6) Where a company allots shares, the shares shall be taken, for the purposes of this Act, to be allotted when a person acquires the unconditional right to be included in the company’s register of members in respect of those shares.

(7) Where a company allots shares, it shall, within 30 days after the date of allotment, deliver particulars of the allotment in the prescribed form to the Registrar.

(8) If a company fails to comply with subsection (7), the company and any officer of it who is in default shall be guilty of a category 4 offence.

(9) Nothing in section 69 or this section shall affect the validity of any allotment of shares.

(10) Where there is a contravention of section 69(6), the company and every officer of the company who knowingly authorised or permitted the contravention, shall be jointly and severally liable to compensate any person to whom an offer should have been made under section 69(6) for any loss, damage, costs or expenses which that person has sustained or incurred by reason of the contravention.

(11) No proceedings to recover any such loss, damage, costs or expenses shall be commenced after the expiration of 2 years after the date of the delivery to the Registrar of the return of allotments in question or, where shares are agreed to be allotted, the agreement.

(12) If, before the commencement of section 69, the directors of a company have been granted authority, pursuant to section 20 of the Act of 1983, to allot relevant securities (within the meaning of that section 20) and that authority is in force immediately before that commencement—

(a) neither section 69 nor this section shall apply to the allotment, after that commencement, of relevant securities by the directors pursuant to that authority (which authority shall, in accordance with its terms, be taken to remain in force); and

(b) section 20 (other than subsections (4) and (9) thereof), and sections 23 and 24, of the Act of 1983 shall apply to that authority and any allotment of relevant securities on foot thereof, but, on the expiry of that authority, section 69 and this section shall apply to any allotment thereafter of shares in the company (or the grant of any right to subscribe for shares in the company or to convert securities into such shares).

(13) For the purposes of subsection (12)—

(a) “Act of 1983” means the Companies (Amendment) Act 1983;

(b) the reference to the grant of an authority includes a reference to the conferral, by the articles of the company, of an authority; and

(c) the exclusion of the application of section 20(4) of the Act of 1983 by paragraph

(b) of subsection (12) shall not be taken as preventing the renewal of the authority concerned under section 69 and this section, but if that authority is so renewed, section 69 and this section shall apply to any allotment, or the grant of any right, as mentioned in subsection (12), that occurs after that renewal of authority on foot thereof.

Payment of shares

71. (1) Shares may be paid up in money or money’s worth (including goodwill and expertise).

(2) Shares of a company shall not be allotted at a discount to their nominal value.

(3) Where shares are allotted in contravention of subsection (2), the allottee shall be liable to pay the company concerned an amount equal to the amount of the discount and interest thereon at the appropriate rate.

(4) Subsections (1) and (2) shall not prevent a company from allotting bonus shares as provided by this Part.

(5) Subject to sections 72, 73 and 75, any value received in respect of the allotment of a share in excess of its nominal value shall be credited to and form part of undenominated capital of the company and, for that purpose, shall be transferred to an account which shall be known, and in this Act is referred to, as the “share premium account”.

(6) Where any person becomes a holder of any shares in respect of which—

(a) there has been a contravention of this section; and

(b) by virtue of that contravention, another is liable to pay any amount under this section, the first-mentioned person in this subsection also shall be liable to pay that amount (jointly and severally with any other person so liable) unless either that firstmentioned person is a purchaser for value and, at the time of the purchase, he or she did not have actual notice of the contravention or he or she derived title to the shares (directly or indirectly) from a person who became a holder of them after the contravention and was not so liable.

(7) Where a company contravenes any of the provisions of this section, the company and any officer of it who is in default shall be guilty of a category 3 offence.

Restriction of section 71(5) in the case of mergers

72. (1) This section applies where the issuing company has secured at least a 90 per cent equity share capital holding in another company in pursuance of an arrangement providing for the allotment of equity share capital in the issuing company, on terms that the consideration for the shares allotted is to be provided—

(a) by the issue or transfer to the issuing company of equity shares in the other company; or

(b) by the cancellation of any such shares not held by the issuing company.

(2) If the equity shares in the issuing company, allotted in pursuance of the arrangement in consideration for the acquisition or cancellation of equity shares in the other company, are issued at a premium section 71(5) does not apply to the premiums on those shares.

(3) Where the arrangement also provides for the allotment of any shares in the issuing company on terms that the consideration for those shares is to be provided by the issue or transfer to the issuing company of non-equity shares in the other company or by the cancellation of any such shares in that company not held by the issuing company, the restriction on the application of section 71(5) provided by subsection (2) extends to any shares in the issuing company allotted on those terms in pursuance of the arrangement.

(4) Subject to subsection (5), the issuing company (“company X”) is to be regarded for purposes of this section as having secured at least a 90 per cent equity share capital holding in another company (“company Y”) in pursuance of such an arrangement as is mentioned in subsection (1) if in consequence of an acquisition or cancellation of equity shares in company Y (in pursuance of that arrangement)—

(a) company X holds equity shares in company Y (whether all or any of those shares were acquired in pursuance of that arrangement, or not); and

(b) the aggregate nominal value of the equity shares so held by company X equals 90 per cent or more of the nominal value of company Y’s equity share capital (excluding any shares in company Y held as treasury shares).

(5) Where the equity share capital of the other company is divided into different classes of shares, this section does not apply unless the requirements of subsection (1) are satisfied in relation to each of those classes of shares taken separately.

(6) Shares held by a company which is the issuing company’s holding company or subsidiary, or a subsidiary of the issuing company’s holding company, or by its or their nominees, are to be regarded for purposes of this section as held by the issuing company.

(7) In relation to a company and its shares and capital, the following definitions apply for purposes of this section—

(a) “equity share capital” means the company’s issued share capital excluding any part of it which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;

(b) “equity shares” means shares comprised in the company’s equity share capital; and

(c) “non-equity shares” means shares (of any class) not so comprised, and “arrangement” means any agreement, scheme or arrangement (including an arrangement sanctioned under section 453 or 601).

(8) This section does not apply if the issue of shares took place before the commencement of this section.

Restriction of section 71(5) in the case of group reconstructions

73. (1) This section applies where the issuing company—

(a) is a wholly-owned subsidiary of a body corporate (the “holding company”); and

(b) allots shares to the holding company or to another wholly-owned subsidiary of the holding company in consideration for the transfer to the issuing company of assets other than cash, being assets of any body corporate (the “transferor”) which is a member of the group which comprises the holding company and all its wholly-owned subsidiaries.

(2) Where the shares in the issuing company, allotted in consideration for the transfer, are issued at a premium, the issuing company is not required by section 71(5) to credit to undenominated capital any amount in excess of the minimum premium value.

(3) In subsection (2) the “minimum premium value” means the amount (if any) by which the base value of the consideration for the shares allotted exceeds the aggregate nominal value of those shares.

(4) For the purposes of subsection (3), the base value of the consideration for the shares allotted is the amount by which the base value of the assets transferred exceeds the base value of any liabilities of the transferor assumed by the issuing company as part of the consideration for the assets transferred.

(5) For the purposes of subsection (4)—

(a) the base value of assets transferred is to be taken as—

(i) the cost of those assets to the transferor; or

(ii) the amount at which those assets are stated in the transferor’s accounting records immediately before the transfer, whichever is the less, and

(b) the base value of the liabilities assumed is to be taken as the amount at which they are stated in the transferor’s accounting records immediately before the transfer.

(6) Section 72 shall not apply to a case falling within this section.

Supplementary provisions in relation to sections 72 and 73

74. (1) An amount corresponding to one representing the premiums or part of the premiums on shares issued by an issuing company which, by virtue of section 72 or 73, is not included in the issuing company’s undenominated capital may also be disregarded in determining the amount at which any shares or other consideration provided for the shares issued is to be included in the company’s balance sheet.

(2) References in sections 72 and 73 (however expressed) to—

(a) the acquisition by a company of shares in a body corporate; and

(b) the issue or allotment of shares to, or the transfer of shares to or by, a company or other body corporate, include (respectively) the acquisition of any of those shares by, and the issue or allotment or (as the case may be) the transfer of any of those shares to or by, nominees of that company or body corporate; and the reference in section 72 to the company transferring the shares is to be read accordingly.

(3) References in sections 72 and 73 to the transfer of shares in a body corporate include the transfer of a right to be included in the body corporate’s register of members in respect of those shares.

Restriction of section 71(5) in the case of shares allotted in return for acquisition of issued shares of body corporate

75. (1) This section applies where—

(a) a company (the “issuer”) allots and issues shares to the shareholders of a body corporate in consideration for the acquisition by the issuer of all of the issued shares in the body corporate (the “acquired shares”) such that the body corporate becomes the wholly-owned subsidiary of the issuer;

(b) the consolidated assets and liabilities of the issuer immediately after those shares are issued are exactly, except for any permitted cash payments, the same as—

(i) if the body corporate was itself a holding company, the consolidated assets and liabilities of the body corporate immediately before those shares were issued, or

(ii) if the body corporate was not a holding company, the assets and liabilities of the body corporate immediately before those shares were issued;

(c) the absolute and relative interests that the shareholders in the body corporate have in the consolidated assets and liabilities of the issuer are in proportion to (or as nearly as may be in proportion to) the interest they had in—

(i) if the body corporate was itself a holding company, the consolidated assets and liabilities of the body corporate immediately before the shares were issued;

(ii) if the body corporate was not a holding company, the assets and liabilities of the body corporate immediately before the shares were issued; and

(d) the issuer does not account for its investment in the body corporate at fair value in the issuer’s entity financial statements.

(2) Where the shares in the issuer allotted in consideration for the acquisition of the acquired shares are issued at a premium, the issuer—

(a) is not required by section 71(5) to credit to undenominated capital any amount in excess of the minimum premium value; and

(b) may disregard any such amount in determining the amount at which the shares or other consideration provided for the acquired shares is to be included in the issuer’s entity financial statements and, if such are prepared, group financial statements.

(3) Nothing in this section shall permit any share in the issuer to be issued at a discount to the share’s nominal value.

(4) In this section—

“base value of the consideration”, in relation to shares allotted by an issuer, means the carrying value of the assets and liabilities that would be shown in the balance sheet of the body corporate if that body corporate were to prepare entity financial statements in accordance with Part 6 immediately before the issue of the shares;

“consolidated assets and liabilities”, in relation to a holding company, means the assets and liabilities included in the group financial statements of the holding company prepared under section 293;

“minimum premium value”, in relation to shares allotted, means the amount (if any) by which the base value of the consideration for the acquisition of the acquired shares exceeds the aggregate nominal value of the shares issued;

“permitted cash payments” means—

(a) cash payments to shareholders of the body corporate in relation to fractional share entitlements in the body corporate that are not being replicated in the issuer, whether on account of different nominal values of shares or otherwise;

(b) such cash payments as may be ordered or permitted by the court, including by reason of the imposition on the issuer of disproportionate expense arising from compliance with requirements with respect to a prospectus or similar requirements.

Treatment of premiums paid on shares issued before a certain date

76. (1) Where before 1 April 1964 a company had issued any shares at a premium, section 71(5) (and the exceptions to that provision in sections 72 to 75) shall apply as if the shares had been issued after that date, but this is subject to subsection (2).

(2) Where any part of a premium referred to in subsection (1) had been applied as mentioned in section 62(2) of the Act of 1963 such that it did not, on 1 April 1964, form an identifiable part of the company’s reserves (within the meaning of the Sixth Schedule to the Act of 1963) then that part shall continue to be disregarded in determining the sum to be included in the share premium account.

Calls on shares

77. (1) Each provision of this section and of section 78 applies save to the extent that the company’s constitution provides otherwise.

(2) Subject to subsection (3), the directors of a company may from time to time make calls upon the members in respect of any moneys unpaid on their shares (whether on account of the nominal value of the shares or by way of premium).

(3) Subsection (2) does not apply to shares where the conditions of allotment of them provide for the payment of moneys in respect of them at fixed times.

(4) Each member shall (subject to receiving at least 30 days’ notice specifying the time or times and place of payment) pay to the company, at the time or times and place so specified, the amount called on the shares.

(5) A call may be revoked or postponed, as the directors of the company may determine.

(6) A call shall be deemed to have been made at the time when the resolution of the directors authorising the call was passed and may be required to be paid by instalments.

(7) The joint holders of a share shall be jointly and severally liable to pay all calls in respect of it.

(8) If a sum called in respect of a share is not paid before or on the day appointed for payment of it, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment of it to the time of actual payment of such rate, not exceeding the appropriate rate, as the directors of the company may determine, but the directors may waive payment of such interest wholly or in part.

Supplemental provisions in relation to calls

78. (1) Any sum which, by the terms of issue of a share, becomes payable on allotment or at any fixed date (whether on account of the nominal value of the share or by way of premium) shall, for the purposes of this Act, be deemed to be a call duly made and payable on the date on which, by the terms of issue, that sum becomes payable.

(2) In case of non payment of such a sum, all the relevant provisions of this Act as to payment of interest and expenses, forfeiture or otherwise, shall apply as if such sum had become payable by virtue of a call duly made and notified.

(3) The directors of a company may, on the issue of shares, differentiate between the holders of different classes as to the amount of calls to be paid and the times of payment.

(4) The directors of a company may, if they think fit—

(a) receive from any member willing to advance such moneys, all or any part of the moneys uncalled and unpaid upon any shares held by him or her; and

(b) pay, upon all or any of the money so advanced (until the amount concerned would, but for such advance, become payable) interest at such rate (not exceeding, unless the company in a general meeting otherwise directs, the appropriate rate) as may be agreed upon between the directors and the member paying such moneys in advance.

Further provisions about calls (different times and amounts of calls)

79. Save to the extent that the company’s constitution provides otherwise, a company may—

(a) make arrangements on the issue of shares for a difference between the shareholders in the amounts and times of payment of calls on their shares;

(b) accept from any member the whole or a part of the amount remaining unpaid on any shares held by him or her, although no part of that amount has been called up;

(c) pay a dividend in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others; and

(d) by special resolution determine that any portion of its share capital which has not been already called up shall not be capable of being called up except in the event and for the purposes of the company being wound up; upon the company doing so, that portion of its share capital shall not be capable of being called up except in that event and for those purposes.

Lien

80. (1) Each provision of this section applies save to the extent that the company’s constitution provides otherwise.

(2) A company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys (whether immediately payable or not) called, or payable at a fixed time, in respect of that share.

(3) The directors of a company may at any time declare any share in the company to be wholly or in part exempt from subsection (2).

(4) A company’s lien on a share shall extend to all dividends payable on it.

(5) A company may sell, in such manner as the directors of the company think fit, any shares on which the company has a lien, but no sale shall be made unless—

(a) a sum in respect of which the lien exists is immediately payable; and

(b) the following conditions are satisfied.

(6) Those conditions are—

(a) a notice in writing, stating and demanding payment of such part of the amount in respect of which the lien exists as is immediately payable, has been given to the registered holder for the time being of the share, or the person entitled thereto by reason of his or her death or bankruptcy; and

(b) a period of 14 days after the date of giving of that notice has expired.

(7) The following provisions apply in relation to a sale referred to in subsection (5)—

(a) to give effect to any such sale, the directors may authorise some person to transfer the shares sold to the purchaser of them;

(b) the purchaser shall be registered as the holder of the shares comprised in any such transfer;

(c) the purchaser shall not be bound to see to the application of the purchase money, nor shall his or her title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale; and

(d) the proceeds of the sale shall be received by the company and applied in payment of such part of the amount in respect of which the lien exists as is immediately payable, and the residue, if any, shall (subject to a like lien for sums not immediately payable as existed upon the shares before the sale) be paid to the person entitled to the shares at the date of the sale.

Forfeiture of shares

81. (1) Each provision of this section applies save to the extent that the company’s constitution provides otherwise.

(2) If a member of a company fails to pay any call or instalment of a call on the day appointed for payment of it, the directors of the company may, at any time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on the member requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued.

(3) That notice shall—

(a) specify a further day (not earlier than the expiration of 14 days after the date of service of the notice) on or before which the payment required by the notice is to be made; and

(b) state that, if the amount concerned is not paid by the day so specified, the shares in respect of which the call was made will be liable to be forfeited.

(4) If the requirements of that notice are not complied with, any share in respect of which the notice has been served may at any time after the day so specified (but before, should it occur, the payment required by the notice has been made) be forfeited by a resolution of the directors of the company to that effect.

(5) A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the directors of the company think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the directors think fit.

(6) A person whose shares have been forfeited shall cease to be a member of the company in respect of the forfeited shares, but shall, notwithstanding, remain liable to pay to the company all moneys which, at the date of forfeiture, were payable by him or her to the company in respect of the shares, but his or her liability shall cease if and when the company shall have received payment in full of all such moneys in respect of the shares.

(7) A statement in writing that the maker of the statement is a director or the secretary of the company, and that a share in the company has been duly forfeited on a date stated in the statement, shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the share.

(8) The following provisions apply in relation to a sale or other disposition of a share referred to in subsection (5):

(a) the company may receive the consideration, if any, given for the share on the sale or other disposition of it and may execute a transfer of the share in favour of the person to whom the share is sold or otherwise disposed of (the “disponee”);

(b) upon such execution, the disponee shall be registered as the holder of the share;

(c) the disponee shall not be bound to see to the application of the purchase money, if any, nor shall his or her title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share.

Financial assistance for acquisition of shares

82. (1) In subsection (2) “acquisition”, in relation to shares, means acquisition by subscription, purchase, exchange or otherwise.

(2) It shall not be lawful for a company to give any financial assistance for the purpose of an acquisition made or to be made by any person of any shares in the company, or, where the company is a subsidiary, in its holding company.

(3) Subsection (2) is subject to subsections (5) and (6).

(4) The prohibition in subsection (2) applies whether the financial assistance is given—

(a) directly or indirectly; or

(b) by means of a loan or guarantee, the provision of security or otherwise.

(5) Subsection (2) does not prohibit the giving of financial assistance in relation to the acquisition of shares in a company or its holding company if—

(a) the company’s principal purpose in giving the assistance is not to give it for the purpose of any such acquisition; or

(b) the giving of the assistance for that purpose is only an incidental part of some larger purpose of the company, and the assistance is given in good faith in the interests of the company.

(6) Without prejudice to the generality of subsection (5), subsection (2) does not prohibit—

(a) the giving of financial assistance in accordance with the Summary Approval Procedure;

(b) the payment by a company of a dividend or making by it of any distribution out of profits of the company available for distribution;

(c) the discharge by a company of a liability lawfully incurred by it;

(d) the—

(i) purchase under section 105; or

(ii) redemption under section 105 or 108, of own shares or the giving of financial assistance, by means of a loan or guarantee, the provision of security or otherwise, for the purpose of such purchase or redemption;

(e) where the lending of money is part of the ordinary business of the company, the lending of money by a company in the ordinary course of its business;

(f) the provision by a company, in accordance with any scheme for the time being in force, of money for the purchase of, or subscription for, fully paid shares in the company or its holding company, being a purchase or subscription of or for shares to be held by or for the benefit of employees or former employees of the company or of any subsidiary of the company including any person who is or was a director holding a salaried employment or office in the company or any subsidiary of the company;

(g) the making by a company of loans to persons, other than directors, bona fide in the employment of the company or any subsidiary of the company with a view to enabling those persons to purchase or subscribe for fully paid shares in the company or its holding company to be held by themselves as beneficial owners thereof;

(h) the giving of financial assistance—

(i) by means of a loan or guarantee, the provision of security or otherwise to discharge the liability under, or effect that which is commonly known as a refinancing of, any arrangement or transaction that gave rise to the provision of financial assistance, being financial assistance referred to in subsection (2) that has already been given by the company in accordance with the Summary Approval Procedure or section 60(2) of the Act of 1963; or

(ii) by means of any subsequent loan or guarantee, provision of security or otherwise to effect a refinancing of—

(I) refinancing referred to subparagraph (i); or

(II) refinancing referred to in this subparagraph that has been previously effected (and this subparagraph shall be read as permitting the giving of financial assistance to effect such subsequent refinancing any number of times);

(i) the making or giving by a company of one or more representations, warranties or indemnities to a person (or any affiliate of, or person otherwise connected with, the first-mentioned person or a director of such an affiliate or connected person that is a body corporate) who has purchased or subscribed for, or proposes to purchase or subscribe for, shares in the company or its holding company for the purpose of or in connection with that purchase or subscription;

(j) the payment by a company of fees and expenses of—

(i) the advisers to any subscriber for, or purchaser of, shares in the company that are incurred in connection with his or her subscription for, or purchase of, such shares; or

(ii) the advisers to the company or its holding company that are incurred in connection with that subscription or purchase;

(k) the incurring of any expense by a company in order to facilitate the admission to, or the continuance of, a trading facility of securities of its holding company on a stock exchange or securities market, including the expenses associated with the preparation and filing of documents required under the laws of any jurisdiction in which the securities in question are admitted to trading or are afforded a trading facility;

(l) the incurring of any expenses by a company in order to ensure compliance by the company or its holding company with the Irish Takeover Panel Act 1997 or an instrument thereunder or any measures for the time being adopted by the State to implement Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids;

(m) the reimbursement by a private limited subsidiary of an offeree (within the meaning of the Irish Takeover Panel Act 1997) of expenses of an offeror (within the meaning of that Act) pursuant to an agreement approved by, or on terms approved by, the Irish Takeover Panel;

(n) in connection with an allotment of shares by a parent public company, the payment by a private limited subsidiary of that company of commissions, not exceeding 10 per cent of the money received in respect of such allotment, to intermediaries, and the payment by that subsidiary of professional fees;

(o) to the extent that provision of this kind is not authorised by paragraph (f) or (g), the provision of financial assistance by a holding company or a subsidiary of it in connection with the holding company or subsidiary purchasing or subscribing for shares in the holding company on behalf of—

(i) the present or former employees of the holding company or any subsidiary of it;

(ii) an employees’ share scheme; or

(iii) an employee share ownership trust referred to in section 519 of the Taxes Consolidation Act 1997.

(7) Subject to subsection (8), a private limited subsidiary shall not provide financial assistance in accordance with the Summary Approval Procedure for the purpose of the acquisition of shares in its parent public company.

(8) The Minister may, by regulations, specify circumstances in which a private limited subsidiary, in cases falling within subsection (7), may avail itself of the Summary Approval Procedure.

(9) 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 notice of the facts which constitute such contravention.

(10) Nothing in this section shall affect the operation of sections 84 to 87.

(11) If a company contravenes this section, the company and any officer of it who is in default shall be guilty of a category 2 offence.

CHAPTER 4

Variation in capital

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 thecompany—

(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. 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 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.

CHAPTER 5

Transfer of shares

Transfer of shares and debentures

94. (1) Subject to any restrictions in the company’s constitution and this section, a member may transfer all or any of his or her shares in the company by instrument in writing in any usual or common form or any other form which the directors of the company may approve.

(2) The instrument of transfer of any share shall be executed by or on behalf of the transferor, save that if the share concerned (or one or more of the shares concerned) is not fully paid, the instrument shall be executed by or on behalf of the transferor and the transferee.

(3) The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register in respect thereof.

(4) A company shall not register a transfer of shares in or debentures of the company unless a proper instrument of transfer has been delivered to the company.

(5) Nothing in subsection (4) shall prejudice any power of the company to register as shareholder or debenture holder, any person to whom the right to any shares in, or debentures of the company, has been transmitted by operation of law.

(6) A transfer of the share or other interest of a deceased member of a company made by his or her personal representative shall, although the personal representative is not himself or herself a member of the company, be as valid as if the personal representative had been such a member at the time of the execution of the instrument of transfer.

(7) On application of the transferor of any share or interest in a company, the company shall enter in its register of members, the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee.

(8) Save to the extent that a company’s constitution regulates the execution of instruments by any particular company or other body corporate, this section is without prejudice to the Stock Transfer Act 1963.

Restrictions on transfer

95. (1) Save where the constitution of the company provides otherwise—

(a) the directors of a company may in their absolute discretion and without assigning any reason for doing so, decline to register the transfer of any share;

(b) the directors’ power to decline to register a transfer of shares (other than on account of a matter specified in subsection (2)) shall cease to be exercisable on the expiry of 2 months after the date of delivery to the company of the instrument of transfer of the share.

(2) The directors of a company may decline to register any instrument of transfer unless—

(a) a fee of €10.00 or such lesser sum as the directors may from time to time require, is paid to the company in respect of it;

(b) the instrument of transfer is accompanied by the certificate of the shares to which it relates and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer; and

(c) the instrument of transfer is in respect of one class of share only.

(3) If the directors refuse to register a transfer they shall, within 2 months after the date on which the transfer was lodged with the company, send to the transferee notice of the refusal.

(4) The registration of transfers of shares in a company may be suspended at such times and for such periods, not exceeding in the whole 30 days in each year, as the directors of the company may from time to time determine.

Transmission of shares

96. (1) Subsections (2) to (11) apply save to the extent that the company’s constitution provides otherwise.

(2) In the case of the death of a member, the survivor or survivors where the deceased was a joint holder, and the personal representatives of the deceased where he or she was a sole holder, shall be the only persons recognised by the company as having any title to his or her interest in the shares.

(3) Nothing in subsection (2) shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him or her with other persons.

(4) Any person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such evidence being produced as may from time to time properly be required by the directors of the company and subject to subsection (5), elect either—

(a) to be registered himself or herself as holder of the share; or

(b) to have some person nominated by him or her (being a person who consents to being so registered) registered as the transferee thereof.

(5) The directors of the company shall, in either of those cases, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by that member before his or her death or bankruptcy, as the case may be.

(6) If the person becoming entitled as mentioned in subsection (4)—

(a) elects to be registered himself or herself, the person shall furnish to the company a notice in writing signed by him or her stating that he or she so elects; or

(b) elects to have another person registered, the person shall testify his or her election by executing to that other person a transfer of the share.

(7) All the limitations, restrictions and provisions of this Chapter relating to the right to transfer and the registration of a transfer of a share shall be applicable to a notice or transfer referred to in subsection (6) as if the death or bankruptcy of the member concerned had not occurred and the notice or transfer were a transfer signed by that member.

(8) Subject to subsections (9) and (10), a person becoming entitled to a share by reason of the death or bankruptcy of the holder shall be entitled to the same dividends and other advantages to which he or she would be entitled if he or she were the registered holder of the share.

(9) Such a person shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the company.

(10) The directors of the company may at any time serve a notice on any such person requiring the person to make the election provided for by subsection (4) and, if the person does not make that election (and proceed to do, consequent on that election, whichever of the things mentioned in subsection (6) is appropriate) within 90 days after the date of service of the notice, the directors may thereupon withhold payment of all dividends, bonuses or other moneys payable in respect of the share until the requirements of the notice have been complied with.

(11) The company may charge a fee not exceeding €10.00 on the registration of every probate, letters of administration, certificate of death, power of attorney, notice as to stock or other instrument or order.

(12) The production to a company of any document which is by law sufficient evidence of probate of the will or letters of administration of the estate of a deceased person having been granted to some person shall be accepted by the company, notwithstanding anything in its constitution, as sufficient evidence of the grant.

Transmission of shares in special circumstances (including cases of mergers)

97. (1) The Minister may prescribe procedures whereby the registration of shares in a company may be validly effected in the following cases:

(a) cases of a death of the sole member of a single-member company where that member had been the only director of the company;

(b) other cases of difficulty in effecting such registration.

(2) Without prejudice to this matter being provided for by the exercise of the Minister’s powers under subsection (1) (and subject, in that eventuality, to any regulations made in pursuance thereof), nothing in section 96 prejudices the adoption of alternative procedures to those specified in that section with respect to the registering of a transfer of shares in a company held by another company that are transmitted by operation of law in consequence of a merger between those companies.

(3) Save to the extent that the constitution of the second-mentioned company in subsection (2) provides otherwise and subject—

(a) as mentioned in subsection (2); and

(b) in every case (that is to say, irrespective of what that constitution or those regulations provide), to any order made by the court in respect of the matter concerned under Part 9, those alternative procedures shall be such as the directors of that second-mentioned company determine.

Certification of shares

98. (1) The certification by a company of any instrument of transfer of shares in, or debentures of, the company shall be taken as a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on the face of them show a prima facie title to the shares or debentures in the transferor named in the instrument of transfer, but not as a representation that the transferor has any title to the shares or debentures.

(2) Where any person acts on the faith of a false certification by a company made negligently, the company shall be under the same liability to him or her as if the certification had been made fraudulently.

(3) For the purposes of this section—

(a) an instrument of transfer shall be deemed to be certificated if it bears the words

“certificate lodged” or words to the like effect;

(b) the certification of an instrument of transfer shall be deemed to be made by a company if—

(i) the person issuing the instrument is a person authorised to issue certificated instruments of transfer on the company’s behalf; and

(ii) the certification is signed by a person authorised to certificate transfers on the company’s behalf or by any officer or employee either of the company or of a body corporate so authorised;

(c) a certification shall be deemed to be signed by any person if—

(i) it purports to be authenticated by his or her signature or initials (whether handwritten or not); and

(ii) it is not shown that the signature or initials was or were placed there neither by himself or herself nor by any person authorised to use the signature or initials for the purpose of certificating transfers on the company’s behalf.

Share certificates

99. (1) A certificate under the common seal of the company specifying any shares held by any member shall be prima facie evidence of the title of the member to the shares.

(2) A company shall, within 2 months after the date—

(a) of allotment of any of its shares or debentures; or

(b) on which a transfer of any such shares or debentures is lodged with the company, complete and have ready for delivery the certificates of all shares and debentures allotted or, as the case may be, transferred, unless the conditions of issue of the shares or debentures otherwise provide.

(3) In subsection (2) “transfer” means a transfer that is (where appropriate) duly stamped and is otherwise valid and does not include such a transfer as the company is, for any reason, entitled to refuse to register and does not register.

(4) If any company on which a notice has been served requiring the company to make good any default in complying with the provisions of subsection (2), fails to make good the default within 10 days after the date of service of the notice, the person entitled to have the certificates or the debentures delivered to him or her may apply to the court for, and the court on such an application may grant, the following order.

(5) That order is one directing the company and any officer of the company specified in the order to make good the default within such time as may be specified in the order, and any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officer of it responsible for the default.

(6) If a share certificate is defaced, lost or destroyed, it may be renewed on payment of €10.00 or such lesser sum and on such terms (if any) as to evidence and indemnity and the payment of out-of-pocket expenses of the company of investigating evidence as the directors of the company think fit.

(7) If a member of a company so requests, the member shall be entitled to receive from the company one or more certificates for one or more shares held by the member upon payment, in respect of each certificate, of €10.00 or such lesser sum as the directors of the company think fit.

(8) In respect of a share or shares in a company held jointly by several persons—

(a) the company shall not be bound to issue more than one certificate; and

(b) delivery by the company of a certificate for a share to one of several joint holders shall be sufficient delivery to all such holders.

(9) If a company contravenes subsection (2), the company and any officer of it who is in default shall be guilty of a category 4 offence.

Rectification of dealings in shares

100. (1) If—

(a) a company has created, allotted, acquired or cancelled any of its shares; and

(b) there is reason to apprehend that such shares were invalidly created, allotted, acquired or cancelled, the court may, on the application of any of the following persons, declare that such creation, allotment, acquisition or cancellation shall be valid for all purposes if the court is satisfied that it would be just and equitable to do so.

(2) The persons who may make such an application are—

(a) the company;

(b) any holder or former holder of such shares;

(c) any member or former member or creditor of the company;

(d) the liquidator of the company.

(3) Where such a declaration is made, the shares shall from the creation, allotment, acquisition or cancellation thereof, as the case may be, be deemed to have been validly created, allotted, acquired or cancelled.

(4) The grant of relief by the court under this section shall, if the court so directs, not have the effect of relieving the company or its officers of any liability incurred under this Act.

(5) In this section “acquired”, in relation to shares, means acquired by redemption, purchase, surrender, forfeiture or other means.

Personation of shareholder: offence

101. If any person falsely and deceitfully personates any owner of any share or interest in a company and thereby—

(a) obtains or endeavours to obtain any such share or interest;

(b) receives or endeavours to receive any money due to any such owner; or

(c) votes at any meeting as if the person were the true and lawful owner, he or she shall be guilty of a category 2 offence.

CHAPTER 6

Acquisition of own shares

Company acquiring its own shares, etc. — permissible circumstances and prohibitions

102. (1) Subject to the provisions of this Chapter, a company may acquire its own fully paid shares—

(a) by transfer or surrender to the company otherwise than for valuable consideration;

(b) by cancellation pursuant to a reduction of company capital by either of the means referred to in section 84;

(c) pursuant to an order of the court under section 212;

(d) where those shares are redeemable shares, by redemption or purchase under section 105;

(e) by purchase under section 105;

(f) where those shares are preference shares referred to in section 108, by redemption under that section; or

(g) pursuant to a merger or division under Chapter 3 or 4 of Part 9.

(2) Without prejudice to the powers of a company with respect to forfeiture of its own shares as provided by this Part or to accept any of its own shares surrendered in lieu for failure to pay any sum payable in respect of those shares, a company may not acquire any of its own shares otherwise than as described in the preceding subsection, but nothing in that subsection or any other provision of this section affects the lawfulness of a merger effected in accordance with Chapter 3 of Part 9 or a scheme of arrangement sanctioned under that Part.

(3) If a company purports to act in contravention of subsection (2), the company and any officer of it who is in default shall be guilty of a category 2 offence and the purported acquisition is void.

(4) Subject to section 103, a private limited subsidiary shall not—

(a) subscribe for the shares of its parent public company; or

(b) purchase shares in its parent public company which are not fully paid.

(5) If a private limited subsidiary purports to act in contravention of subsection (4)(a), that subsidiary and any officer of it who is in default shall be guilty of a category 2 offence and the purported subscription is void.

(6) Where shares in a parent public company are subscribed for by a nominee of a private limited subsidiary, then for all purposes the shares shall be treated as held by the nominee on his or her own account and the private limited subsidiary shall be regarded as having no beneficial interest in them, and the provisions of section 104 shall, with any necessary modifications, apply.

(7) Without prejudice to any other requirements contained in or penalties imposed by this Act, where a private limited subsidiary purchases, subscribes for or holds shares in its parent public company, and—

(a) in the case of a purchase, the shares were not fully paid when they were purchased; or

(b) the authorisation required by section 114(3) has not been obtained; or

(c) by virtue of their being treated (under subsection (2) of section 109) as shares held as treasury shares by the parent public company for the purposes of the limit provided by subsection (1) of that section, that limit is exceeded by the parent public company; or

(d) the purchase or subscription was in contravention of section 82(7), then, unless the shares or any interest of the private limited subsidiary in them are previously disposed of, the provisions of sections 1040 and 1041 shall apply to the private limited subsidiary in respect of such shares, with the modification that the “relevant period” (as that expression is used in those sections) in relation to any shares shall be 12 months and with any other necessary modifications.

Supplemental provisions in relation to section 102

103. (1) Section 102 shall not affect or prohibit—

(a) subject to subsection (2), the subscription for, acquisition or holding of shares in its parent public company by a private limited subsidiary where the private limited subsidiary is concerned as personal representative or where it is concerned as trustee;

(b) without prejudice to subsection (3), the allotment to, or holding by, a private limited subsidiary of shares in its parent public company in the circumstances set out in section 113(6);

(c) the subscription, acquisition or holding of shares in its parent public company by a private limited subsidiary where the subscription, acquisition or holding is effected on behalf of a person other than the person subscribing, acquiring or holding the shares, who is neither the parent public company itself nor a subsidiary of that parent public company; or

(d) the subscription, acquisition or holding of shares in its parent public company by a private limited subsidiary which is a member of an authorised market operator acting in its capacity as a professional dealer in securities in the normal course of its business.

(2) The restriction on the application of section 102 by subsection (1)(a) does not have effect (in the case of a trust) if the parent public company or a subsidiary of it is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.

(3) Where shares in a parent public company—

(a) are allotted to, or held by, a private limited subsidiary as mentioned in subsection (1)(b); and

(b) by virtue of their being treated (under subsection (2) of section 109) as shares held as treasury shares by the parent public company for the purposes of the limit provided by subsection (1) of that section, that limit is exceeded by the parent public company, then, unless the shares or any interest of the private limited subsidiary in them are previously disposed of, the provisions of sections 1040 and 1041 shall apply to the private limited subsidiary in respect of such shares, with the modification that the “relevant period” (as that expression is used in those sections) in relation to any shares shall be 3 years and with any other necessary modifications.

Shares of a company held by a nominee of a company

104. (1) Subject to subsection (5), where shares in a company are issued to a nominee of the company or are acquired by a nominee of the company from a third party as partly paid up, then for all purposes the shares shall be treated as held by the nominee on his or her own account and the company shall be regarded as having no beneficial interest in them.

(2) If a person is called on to pay any amount for the purpose of paying up, or paying any premium on, any shares in a company which were issued to him or her, or which he or she otherwise acquired, as the nominee of the company and he or she fails to pay that amount within 21 days after the date on which he or she is called on to do so, then—

(a) if the shares were issued to him or her as a subscriber to the constitution by virtue of an undertaking of his or hers in the constitution, the other subscribers, if any, to the constitution; or

(b) if the shares were otherwise issued to or acquired by him or her, the directors of the company at the time of the issue or acquisition, shall be jointly and severally liable with him or her to pay that amount.

(3) If in proceedings for the recovery of any such amount from any such subscriber or director under this section, it appears to the court that he or she is or may be liable to pay that amount, but that he or she has acted honestly and reasonably and that, having regard to all the circumstances of the case, he or she ought fairly to be excused from liability, the court may relieve him or her, either wholly or partly, from his or her liability on such terms as the court thinks fit.

(4) Where any such subscriber or director has reason to apprehend that a claim will or might be made for the recovery of any such amount from him or her, he or she may apply to the court for relief and on the application the court shall have the same power to relieve him or her as it would have had in proceedings for the recovery of that amount.

(5) Subsections (1) and (2) shall not apply—

(a) to shares acquired by a nominee of a company where the company has no beneficial interest in those shares (disregarding any right which the company itself may have as trustee, whether as personal representative or otherwise, to recover its expenses or be remunerated out of the trust property); or

(b) to shares issued in consequence of an application made for them before 13 October 1983 or transferred in pursuance of an agreement to acquire them made before that date.

Acquisition of own shares

105. (1) A company may acquire its own shares by purchase, or in the case of redeemable shares, by redemption or purchase.

(2) Any such acquisition is subject to payment in respect of the shares’ acquisition being made out of—

(a) profits available for distribution; or

(b) where the company proposes to cancel, pursuant to section 106, shares on their acquisition, the proceeds of a fresh issue of shares made for the purposes of the acquisition, but subject to the restriction contained in subsection (3) as respects such proceeds being used to pay a premium there referred to.

(3) Where the shares being acquired were issued at a premium, some or all of the premium payable on their acquisition (being an acquisition to which subsection (2)(b) applies) may be paid out of the proceeds of a fresh issue of shares made for the purposes of the acquisition, up to an amount equal to—

(a) the aggregate of the premiums received by the company on the issue of the shares acquired; or

(b) the current amount of the company’s undenominated capital (including any sum transferred to its share premium account in respect of premiums on the new shares), whichever is less, and in any such case the amount of the company’s share premium account or other undenominated capital shall be reduced by a sum corresponding (or by sums in the aggregate corresponding) to the amount of any payment made by virtue of this subsection out of the proceeds of the issue of the new shares.

(4) Subject to this Part, the acquisition by a company of its own shares shall be authorised by—

(a) the constitution of the company;

(b) the rights attaching to the shares in question; or

(c) a special resolution.

(5) A special resolution under subsection (4) shall not be effective for the purposes of this section if any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares in voting on the resolution and the resolution would not have been passed if he or she had not done so.

(6) With respect to subsection (4) and the matter of passing a special resolution for the purpose thereof by the written means provided for under this Act—

(a) the procedure under section 193 (unanimous written resolutions) is not available for that purpose;

(b) if a resolution referred to in section 194 (majority written resolutions) for the purpose of subsection (4) is signed by a member of the company who holds shares to which the resolution relates, then, in determining whether the requirement under section 194(4)(a)(ii) — that the resolution be signed by the requisite majority — has been fulfilled, no account shall be taken of the percentage of voting rights conferred by the foregoing shares of that member.

(7) Notwithstanding anything contained in section 189 or in the company’s constitution, any member holding one or more shares in the company conferring the right to vote at the meeting concerned may demand a poll on a special resolution under subsection(4).

(8) Where a purchase of shares is proposed to be authorised by special resolution—

(a) the proposed contract of purchase or, if the contract is not in writing, a written memorandum of its terms shall be furnished to the members of the company on request or made available for inspection by the members at the registered office of the company from the date of the notice of the meeting at which the resolution is to be proposed and at the meeting itself;

(b) any memorandum of the terms of the contract of purchase made available for the purposes of paragraph (a) shall include the names of any members holding shares to which the contract relates, and any copy of the contract made available for those purposes shall have annexed to it a written memorandum specifying any such names which do not appear in the contract itself.

(9) With respect to the proposed authorisation of a purchase of shares by a resolution referred to in section 194, the requirements of subsection (8) shall also apply but with the modification that in paragraph (a) of that subsection “during the period of 21 days before the date of the signing of the resolution by the last member to sign” shall be substituted for “from the date of the notice of the meeting at which the resolution is to be proposed and at the meeting itself”.

(10) A company may agree to a variation of an existing contract of purchase authorised pursuant to a special resolution under this section only if the variation is authorised by special resolution of the company before it is agreed to, and subsections (5) to (9) shall apply in relation to that authority, save that a copy or memorandum (as the case may require) of the existing contract shall also be available for inspection in accordance with subsection (8).

(11) A company shall only make a purchase of its own shares in pursuance of an option if the terms of the option have been authorised by a special resolution of the company in accordance with subsections (5) to (9) and, for the purposes of this subsection, subsection (8) shall have effect as if the references in it to the contract of purchase were references to the contract under which the option arises.

(12) In subsection (11) “option” means an entitlement of the company, or an obligation on the part of the company, to purchase any of its shares that may arise under a contract entered into, being a contract that does not amount to a contract to purchase those shares.

Supplemental provisions in relation to section 105

106. (1) Shares acquired by a company under section 105, or otherwise acquired by it under section 102(1)(a), shall be cancelled or held by it (as “treasury shares”).

(2) Where a company—

(a) has acquired, under section 105, shares and cancelled them; or

(b) is about to so acquire shares and cancel them upon their acquisition, it shall have power to issue shares up to the nominal amount of the shares so acquired, or to be so acquired, as if those shares had never been issued.

(3) No cancellation of shares under subsection (1) shall be taken as reducing the amount of the company’s authorised share capital (if any).

(4) Where the shares are—

(a) under section 105, acquired wholly out of the profits available for distribution; or

(b) under section 105, acquired wholly or partly out of the proceeds of a fresh issue and the aggregate amount of those proceeds (disregarding any part of those proceeds used to pay any premium on the acquisition) is less than the aggregate nominal value of the shares acquired (the “aggregable difference”), then a sum equal to, in the case of paragraph (a), the nominal value of the shares acquired and, in the case of paragraph (b), the aggregable difference shall be transferred to undenominated capital of the company, other than its share premium account.

(5) The amount by which the consideration paid for the acquisition of redeemable preference shares allotted before 1 February 1990 exceeds the consideration received by the company on the issue of those shares may be paid from undenominated capital.

(6) Section 105 shall not apply to the redemption of preference shares referred to in section 108 and no such shares may be the subject of purchase under section 105.

Assignment or release of company’s right to purchase own shares

107. (1) Any purported assignment of the rights of a company under any contract authorised under section 105 shall be void.

(2) Nothing in subsection (1) shall prevent a company from releasing its right under any contract authorised under section 105 provided that the release has been authorised by special resolution of the company before the release is entered into, and any such purported release by a company which has not been authorised in that manner shall be void.

(3) Subsections (5) to (9) of section 105 shall apply to a resolution under subsection (2) and, for the purposes of this subsection, subsection (8) of section 105 shall have effect as if the references in it to the contract of purchase were references to the release concerned.

Power to redeem preference shares issued before 5 May 1959

108. (1) Subject to the provisions of this section, a company may, if so authorised by its constitution, redeem any preference shares issued by it before 5 May 1959 provided that—

(a) no such shares shall be redeemed except out of profits of the company which would otherwise be available for distribution or out of the proceeds of a fresh issue of shares made for the purposes of the redemption;

(b) no such shares shall be redeemed at a sum greater than the issue price of such shares;

(c) the redemption of such shares and the terms and the manner of the redemption shall have been authorised by a special resolution of the company;

(d) notice of the meeting at which the special resolution referred to in paragraph (c) is to be proposed and a copy of that resolution shall be published in Iris Oifigiúil and in at least one daily newspaper circulating in the district in which the registered office of the company is situated not less than 14 days and not more than 30 days before the date of the meeting;

(e) no holder of such shares shall be obliged to accept redemption of them;

(f) the redemption shall have been sanctioned by the court.

(2) The powers conferred by this section may be availed of only by means of an offer made to all the holders of the preference shares concerned.

(3) Where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall, out of profits which would otherwise have been available for distribution be transferred to undenominated capital, other than the share premium account a sum equal to the nominal amount of the shares redeemed.

(4) Subject to the provisions of this section, the redemption of preference shares under this section may be effected on such terms and in such manner as may be provided by the special resolution referred to in subsection (1)(c).

(5) The redemption of preference shares under this section by a company shall not be taken as reducing the amount of the company’s authorised share capital (if any).

(6) Where in pursuance of this section a company has redeemed or is about to redeem any preference shares, it shall have power to issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued.

Treasury shares

109. (1) The nominal value of treasury shares held by a company may not, at any one time, exceed 10 per cent of its company capital.

(2) For the purposes of subsection (1), the following shall also be deemed to be treasury shares held by the company—

(a) shares held in the company by any subsidiary in pursuance of section 114;

(b) shares held in the company by any person acting in his or her own name but on the company’s behalf.

(3) For the purposes of subsection (1), shares of the company acquired by it otherwise than for valuable consideration shall not be deemed to be treasury shares.

(4) For so long as the company holds shares as treasury shares—

(a) the company shall not exercise any voting rights in respect of those shares and any purported exercise of those rights shall be void; and

(b) no dividend or other payment (including any payment in a winding up of the company) shall be payable to the company in respect of those shares.

(5) The manner in which shares held by a company as treasury shares are to be treated in the company’s entity financial statements is provided for in section 320(1) (which also contains provision restricting the profits available for distribution by reference to the accounting treatment of such shares there provided).

(6) Treasury shares may either be—

(a) cancelled by the company in which case section 106 shall apply as if the shares had been cancelled on their acquisition; or

(b) subject to subsections (7) to (9), re-issued as shares of any class or classes.

(7) A re-issue of shares under this section shall be deemed for all the purposes of this Act to be an issue of shares but the issued share capital of the company shall not be regarded for any purpose as having been increased by the re-issue of the shares.

(8) Unless the case falls within subsection (9), the maximum and minimum prices at which treasury shares may be re-allotted (the “re-allotment price range”) shall be determined by special resolution of the company passed before any contract for the re-allotment of the shares is entered into.

(9) In a case where the whole or a part of the treasury shares to be re-allotted are derived from shares acquired by the company under this Part on foot of the authority of a special resolution of the company, the re-allotment price range of the whole or such part (as the case may be) of those shares shall be determined by special resolution of the company passed at the meeting at which the first-mentioned resolution in this subsection has been passed.

(10) Any determination referred to in subsection (8) or (9)—

(a) may fix different maximum and minimum prices for different shares; and

(b) shall, for the purposes of subsection (8) or (9), as the case may be, remain effective with respect to those shares for the requisite period.

(11) The company may from time to time, by special resolution, vary or renew a determination of re-allotment price range under subsection (8) or (9) with respect to particular treasury shares before any contract for re-allotment of those shares is entered into and any such variation or renewal shall, for the purposes of this subsection, remain effective as a determination of the re-allotment price range of those shares for the requisite period.

(12) A re-allotment by a company of treasury shares in contravention of subsection (8), (9), (10) or (11) shall be unlawful.

(13) In this section “requisite period” means the period of 18 months after the date of the passing of the resolution determining the re-allotment price range or varying or renewing (as the case may be) such determination or such lesser period as the resolution may specify.

Incidental payments with respect to acquisition of own shares

110. (1) Any payment made by a company in consideration of—

(a) acquiring any right with respect to the purchase of its own shares in pursuance of a contract authorised under section 105;

(b) the variation of a contract authorised under section 105; or

(c) the release of any of the company’s obligations with respect to the purchase of any of its own shares under a contract authorised under section 105, shall be unlawful if any such payment is made otherwise than out of distributable profits of the company or, in the circumstances in which the proceeds of such an issue are permitted to be used by this Part for the purpose of the purchase of the shares, the proceeds of a new issue of shares.

(2) If the requirements of subsection (1) are not satisfied in relation to a contract—

(a) in a case to which paragraph (a) of that subsection applies, no purchase by the company of its own shares in pursuance of that contract shall be lawful under this Part;

(b) in a case to which paragraph (b) of that subsection applies, no such purchase following the variation shall be lawful under this Part; and

(c) in a case to which paragraph (c) of that subsection applies, the purported release shall be void.

Effect of company’s failure to redeem or purchase

111. (1) This section applies to—

(a) redeemable shares issued after 1 February 1991;

(b) shares which have been converted into redeemable shares; and

(c) shares which a company has agreed to purchase pursuant to section 105.

(2) Without prejudice to any other right of the holder of any shares to which this section applies, a company shall not be liable in damages in respect of any failure on its part to redeem or purchase any such shares.

(3) Neither the High Court nor the Circuit Court shall grant an order for specific performance of the terms of redemption or purchase of the shares to which this section applies if the company shows that it is unable to meet the cost of redeeming or purchasing the shares out of profits available for distribution.

(4) Where, at the commencement of the winding up of a company, any shares to which this section applies have not been redeemed or purchased then, subject to subsections (5), (6) and (7), the terms of redemption or purchase may be enforced against the company and the shares when so redeemed or purchased under this subsection shall be treated as cancelled.

(5) Subsection (4) shall not apply if—

(a) the terms of redemption or purchase provided for the redemption or purchase to take place at a date later than that of the commencement of the winding up; or

(b) during the period beginning with the date on which the redemption or purchase was to have taken place and ending with the commencement of the winding up, the company could not at any time have lawfully made a distribution equal in value to the price at which the shares were to have been redeemed or purchased.

(6) There shall be paid in priority to any amount for which the company is liable by virtue of subsection (4) to pay in respect of any shares—

(a) all other debts and liabilities of the company other than any due to members in their capacity as such; and

(b) if other shares carry rights, whether as to capital or to income, which are preferred to the rights as to capital attaching to the first-mentioned shares, any amount due in satisfaction of those preferred rights, but subject to that, any such amount shall be paid in priority to any amounts due to members in satisfaction of their rights (whether as to capital or income) as members.

(7) Where, by virtue of the application by section 619 of the rules of bankruptcy in the winding up of insolvent companies, a creditor of a company is entitled to payment of any interest only after payment of all other debts of the company, the company’s debts and liabilities shall for the purposes of subsection (6) include the liability to pay that interest.

Retention and inspection of documents

112. (1) A company which enters into a contract under section 105 shall, until the expiration of 10 years after the date on which the contract has been fully performed, keep at its registered office a copy of that contract or, if it is not in writing, a memorandum of its terms.

(2) Every document required to be kept under subsection (1) shall during business hours be open to the inspection of any member.

(3) In the case of a refusal of an inspection of a document required under subsection (2), the court may, on the application of a person who has requested an inspection and has been refused, by order require the company to allow the inspection of that document.

(4) Section 127(1) (access to documents during business hours) shall apply in relation to subsection (2) as it applies in relation to the relevant provisions of Part 4.

(5) 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.

Membership of holding company

113. (1) Subject to section 114 and the other provisions of this Act, a company cannot be a member of a company which is its holding company, and any allotment or transfer of shares in a company to its subsidiary shall be void.

(2) Nothing in this section shall apply where the subsidiary is concerned as personal representative, or where it is concerned as trustee, unless the holding company or a subsidiary of it is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.

(3) This section shall not prevent a subsidiary which on 5 May 1959 was a member of its holding company from continuing to be a member.

(4) This section shall not prevent a company which, at the date on which it becomes a subsidiary of another company is a member of that other company, from continuing to be a member.

(5) This section shall not prevent the subscription, acquisition or holding of shares in its parent public company by a company which is a member of an authorised market operator acting in its capacity as a professional dealer in securities in the normal course of its business.

(6) This section shall not prevent a subsidiary which is a member of its holding company from accepting and holding further shares in the capital of its holding company if—

(a) such further shares are allotted to it in consequence of a capitalisation by such holding company; and

(b) the terms of such capitalisation are such that the subsidiary is not thereby involved in any obligation to make any payment or to give other consideration for such further shares.

(7) Subject to subsection (2), a subsidiary which is a member of its holding company shall have no right to vote at meetings of the holding company or any class of members of it.

(8) The manner in which shares held (in the circumstances permitted by this section) in a holding company by the subsidiary are to be treated in—

(a) the subsidiary’s entity financial statements is provided for in section 320(2) (which also contains provision restricting the profits available for distribution by reference to the accounting treatment of such shares there provided); and

(b) the group financial statements, if any, of the holding company is provided for in section 320(3).

(9) Subject to subsection (2), this section shall apply in relation to a nominee for the company firstly referred to in subsection (1), as if references in this section to such a company included references to a nominee for it.

(10) Where a holding company makes an offer of shares to its members, it may sell, on behalf of a subsidiary, any such shares which the subsidiary could, but for this section, have taken by virtue of shares already held by it in the holding company and pay the proceeds of sale to the subsidiary.

Holding by subsidiary of shares in its holding company

114. (1) Notwithstanding section 82 or 113, a company may, subject to the provisions of this section, acquire and hold shares in a company which is its holding company.

(2) The acquisition and holding by a subsidiary under subsection (1) of shares in its holding company shall be subject to the following conditions—

(a) the consideration for the acquisition of such shares shall be provided for out of the profits of the subsidiary available for distribution;

(b) upon the acquisition of such shares and for so long as the shares are held by the subsidiary—

(i) the subsidiary shall not exercise any voting rights in respect of the shares and any purported exercise of those rights shall be void;

(ii) the manner in which shares so held by the subsidiary are to be treated in—

(I) the subsidiary’s entity financial statements is provided for in section 320(2) (which also contains provision restricting the profits available for distribution by reference to the accounting treatment of such shares there provided); and

(II) the group financial statements, if any, of the holding company is provided for in section 320(3).

(3) A contract for the acquisition (whether by allotment or transfer) by a subsidiary of shares in its holding company shall not be entered into without being authorised in advance both by the subsidiary and its holding company and the provisions of sections 105 and 107 shall apply, with the necessary modifications, to the granting, variation, revocation and release of such authority.

(4) For the purposes of this section and section 320, a subsidiary’s profits available for distribution shall not include the profits attributable to any shares in the subsidiary for the time being held by the subsidiary’s holding company, so far as they are profits for the period before the date on or from which the shares were acquired by the holding company.

(5) This section shall not apply to shares held by a subsidiary in its holding company in the circumstances permitted by section 113.

(6) No authorisation is required to be given under subsection (3) by any body corporate unless it is a company formed and registered under this Act or an existing company.

(7) Nothing in this section limits the operation of section 102(4).

Civil liability for improper purchase in holding company

115. (1) This section applies where—

(a) the winding up of a company which has acquired shares in its holding company in accordance with section 114 commences within 6 months after the date of such acquisition; and

(b) the company is, at the time of the commencement of the winding up, unable to pay its debts (taking into account the contingent and prospective liabilities).

(2) Where this section applies the court, on the application of a liquidator, creditor, employee or contributory of the company, may, subject to subsection (3), declare that the directors of the company shall be jointly and severally liable to repay to the company the total amount paid by the company for the shares.

(3) Where it appears to the court that any person in respect of whom a declaration has been sought under subsection (2) believed on reasonable grounds that the acquisition referred to in subsection (1) was in the best interests of the company, the court may relieve him or her, either wholly or in part, from personal liability on such terms as it may think fit.

Return to be made to Registrar

116. (1) A company which has acquired shares pursuant to this Part shall, within 30 days after the date of delivery to the company of those shares, deliver to the Registrar a return in the prescribed form stating, with respect to shares of each class acquired, the number and nominal value of those shares and the date on which they were delivered to the company.

(2) Particulars of shares delivered to the company on different dates and under different contracts may be included in a single return to the Registrar.

(3) 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.

CHAPTER 7

Distributions

Profits available for distribution

117. (1) A company shall not make a distribution except out of profits available for the purpose.

(2) For the purposes of this Part, a company’s profits available for distribution are its accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less its accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made.

(3) A company shall not apply an unrealised profit in paying up debentures or any amounts unpaid on any of its issued shares.

(4) For the purposes of subsections (2) and (3)—

(a) where the company prepares Companies Act entity financial statements, any provision (within the meaning of Schedule 3) shall be treated as a realised loss other than such a provision in respect of any diminution in value of a fixed asset appearing on a revaluation of all the fixed assets or of all the fixed assets other than goodwill (and this qualification is referred to in subsections (5) and (6) as “the exception to subsection (4)(a)”); and

(b) where the company prepares IFRS entity financial statements, a provision of any kind shall be treated as a realised loss.

(5) Subject to section 121(6) and the next subsection, any consideration by the directors of a company of the value at any particular time of any fixed asset of the company shall be treated as a revaluation of that asset for the purposes of determining whether any such revaluation of the company’s fixed assets, as is required for the purposes of the exception to subsection (4)(a), has taken place at that time.

(6) However where any such assets which have not actually been revalued are treated as revalued for those purposes by virtue of the preceding subsection, the exception to subsection (4)(a) shall only apply if the directors are satisfied that the aggregate value of those assets at the time in question is not less than the aggregate amount at which they are for the time being stated in the company’s Companies Act entity financial statements.

(7) If, on the revaluation of a fixed asset, an unrealised profit is shown to have been made and, on or after the revaluation, a sum is written off or retained for depreciation of that asset over a period, then an amount equal to the amount by which that sum exceeds the sum which would have been so written off or retained for depreciation of that asset over that period if that profit had not been made, shall be treated for the purposes of subsections (2) and (3) as a realised profit made over that period.

(8) Where there is no record of the original cost of an asset of a company or any such record cannot be obtained without unreasonable expense or delay, then, for the purposes of determining whether the company has made a profit or loss in respect of that asset, the cost of the asset shall be taken to be the value ascribed to it in the earliest available record of its value made on or after its acquisition by the company.

(9) Notwithstanding anything in the preceding subsections of this section, but without prejudice to any contrary provision of—

(a) an order of, or undertaking given to, the court;(b) the resolution for, or any other resolution relevant to, the reduction of company capital; or

(c) the company’s constitution, a reserve arising from the reduction of a company’s company capital is to be treated, both for the purposes of this section and for purposes otherwise, as a realised profit.

(10) In this section “fixed asset” includes any other asset which is not a current asset.

Prohibition on pre-acquisition profits or losses being treated in holding company’s financial statements as profits available for distribution

118. (1) Subject to subsections (3) and (4), any amount of the accumulated profits or losses attributable to any shares in a subsidiary for the time being held by a holding company or any other of its subsidiaries shall not, for any purpose, be treated in the holding company’s financial statements as profits available for distribution so far as that amount relates to accumulated profits or losses for the period before the date on or as from which the shares were acquired by the company or any of its subsidiaries (which period is referred to in subsection (2) as the “pre-acquisition period”).

(2) For the purpose of determining whether any profits or losses are to be treated as profits or losses for the pre-acquisition period, the profit or loss for any financial year of the subsidiary may, if it is not practicable to apportion it with reasonable accuracy by reference to the facts, be treated as accruing from day to day during that year and be apportioned accordingly.

(3) If the Summary Approval Procedure is followed in respect of such treatment, subsection (1) does not prohibit—

(a) the whole of the amount referred to in that subsection; or

(b) such proportion of that amount as is specified in the declaration referred to in section 205, being treated as profits available for distribution by the holding company for the period, and the period only, referred to in section 202(1)(a) (as that provision applies by virtue of section 202(2) and (3)).

(4) Subsection (1) does not apply to the profits or losses attributable to shares in a subsidiary held by a holding company where those shares were acquired in a transaction to which section 72, 73 or 75 applies.

Distributions in kind: determination of amount

119. (1) This section applies for determining the amount of a distribution consisting of or including, or treated as arising in consequence of, the sale, transfer or other disposition by a company of a non-cash asset where—

(a) at the time of the distribution the company has profits available for distribution; and

(b) if the amount of the distribution were to be determined in accordance with this section, the company could make the distribution without contravening this Part.

(2) The amount of the distribution (or the relevant part of it) is taken to be—

(a) in a case where the amount or value of the consideration for the disposition is not less than the book value of the asset, zero;

(b) in any other case, the amount by which the book value of the asset exceeds the amount or value of any consideration for the disposition.

(3) For the purposes of subsection (1)(a), the company’s profits available for distribution are treated as increased by the amount (if any) by which the amount or value of any consideration for the disposition exceeds the book value of the asset.

(4) In this section “book value”, in relation to an asset, means—

(a) the amount at which the asset is stated in the relevant financial statements referred to in section 121; or

(b) where the asset is not stated in those financial statements at any amount, zero.

(5) The provisions of section 121 shall have effect subject to this section.

Development costs shown as asset of company to be set off against company’s distribution profits

120. (1) Subject to the following provisions of this section, where development costs are shown as an asset in a company’s financial statements, any amount shown in respect of those costs shall be treated for the purposes of section 117 as a realised loss.

(2) Subsection (1) shall not apply to any part of the amount referred to in that subsection representing an unrealised profit made on revaluation of the costs so referred to.

(3) Subsection (1) shall not apply if—

(a) there are special circumstances justifying the directors of the company concerned in deciding that the amount mentioned in respect of development costs in the company’s financial statements shall not be treated as required by that subsection; and

(b) it is stated—

(i) where the company prepares Companies Act entity financial statements, in the note to the statements required by paragraph 23(2) of Schedule 3; or

(ii) where the company prepares IFRS entity financial statements, in any note to those statements, that that amount is not to be so treated, and the note explains the circumstances relied upon to justify the decision of the directors to that effect.

The relevant financial statements

121. (1) Subject to the following provisions of this section, the question whether a distribution may be made by a company without contravening section 117 and the amount of any distribution which may be so made shall be determined by reference to the relevant items as stated in the relevant entity financial statements, and section 117 shall be treated as contravened in the case of a distribution unless the requirements of this section in relation to those statements are complied with in the case of that distribution.

(2) The relevant entity financial statements for any company in the case of any particular distribution are—

(a) except in a case falling within paragraph (b) or (c), the last entity financial statements, that is to say, the statutory financial statements, respecting the company alone, prepared in accordance with the requirements of Part 6 (and, where applicable, in accordance with the requirements of Article 4 of the IAS Regulation (within the meaning of that Part)) which were laid in respect of the last preceding financial year in respect of which statutory financial statements so prepared were laid;

(b) if that distribution would be found to contravene section 117 if reference were made only to the last statutory financial statements, such financial statements (“interim financial statements”), respecting the company alone, as are necessary to enable a reasonable judgement to be made as to the amounts of any of the relevant items;

(c) if that distribution is proposed to be declared during the company’s first financial year or before any statutory financial statements are laid in respect of that financial year, such financial statements (“initial financial statements”), respecting the company alone, as are necessary as mentioned in paragraph (b).

(3) The following requirements apply where the last financial statements of a company constitute the only relevant entity financial statements in the case of any distribution, that is to say—

(a) those financial statements shall have been properly prepared or have been so prepared subject only to matters which are not material for the purpose of determining, by reference to the relevant items as stated in those statements, whether that distribution would be in contravention of section 117;

(b) unless the company is entitled to and has availed itself of the audit exemption under section 360 or 365, the statutory auditors of the company shall have made a report under section 391 in respect of those financial statements;

(c) if, by virtue of anything referred to in that report, the report is not an unqualified report, the statutory auditors shall also have stated in writing (either at the time the report was made or subsequently) whether, in their opinion, that thing is material for the purpose of determining, by reference to the relevant items as stated in those financial statements, whether that distribution would be in contravention of section 117; and

(d) a copy of any such statement shall have been laid before the company in general meeting.

(4) A statement under subsection (3)(c) suffices for the purposes of a particular distribution, not only if it relates to a distribution which has been proposed, but also if it relates to distributions of any description which include that particular distribution, notwithstanding that at the time of the statement it has not been proposed.

(5) For the purpose of determining by reference to particular financial statements whether a proposed distribution may be made by a company, this section shall have effect, in any case where one or more distributions have already been made in pursuance of determinations made by reference to those same financial statements, as if the amount of the proposed distribution was increased by the amount of the distributions so made.

(6) Where subsection (3)(a) applies to the relevant entity financial statements, section 117(5) shall not apply for the purposes of determining whether any revaluation of the company’s fixed assets affecting the amount of the relevant items as stated in those statements has taken place, unless it is stated in a note to those statements—

(a) that the directors have considered the value at any time of any fixed assets of the company without actually revaluing those assets;

(b) that they are satisfied that the aggregate value of those assets at the time in question is or was not less than the aggregate amount at which they are or were for the time being stated in the company’s statutory financial statements; and

(c) that the relevant items affected are accordingly stated in the relevant financial statements on the basis that a revaluation of the company’s fixed assets that, by virtue of section 117(5), is deemed to have included a revaluation of the assets in question, took place at that time.

(7) In this section—

“properly prepared” means, in relation to any financial statements of a company, that they have been properly prepared in accordance with the provisions of Part 6;

“relevant item” means any of the following, that is to say profits, losses, assets, liabilities, provisions (within the meaning of Schedule 3), share capital and reserves;

“reserves” includes undistributable reserves, that is to say—

(a) the company’s undenominated capital;

(b) the amount by which the company’s accumulated, unrealised profits, so far as not previously utilised by any capitalisation, exceed its accumulated, unrealised losses, so far as not previously written off in a reduction or reorganisation of capital duly made; and

(c) any other reserve which the company is prohibited from distributing by any enactment, other than one contained in this Part, or by its constitution.

“unqualified report”, in relation to any financial statements of a company, means a report without qualification, to the effect that, in the opinion of the person making the report, the financial statements have been properly prepared, and for the purposes of this section, financial statements are laid if section 290 has been complied with in relation to those statements.

Consequences of making unlawful distribution

122. (1) Where a distribution or part of one, made by a company to one of its members, is made in contravention of any provision of this Part and, at the time of the distribution, he or she knows or has reasonable grounds for believing that it is so made, he or she shall be liable to repay it or that part, as the case may be, to the company or (in the case of a distribution made otherwise than in cash) to pay the company a sum equal to the value of the distribution or part at that time.

(2) This section is without prejudice to any obligation imposed apart from this section on a member of a company to repay a distribution unlawfully made to him or her.

Meaning of “distribution”, “capitalisation”, etc., and supplemental provisions

123. (1) In this Part “distribution” means every description of distribution of a company’s assets to members of the company, whether in cash or otherwise, except distributions made by way of—

(a) an issue of shares as fully or partly paid bonus shares;

(b) the redemption of preference shares pursuant to section 108 out of the proceeds of a fresh issue of shares made for the purposes of redemption;

(c) the redemption or purchase of shares pursuant to section 105 and the other relevant provisions of this Part out of the proceeds of a fresh issue of shares made for the purposes of the redemption or purchase;

(d) the payment pursuant to section 106(5) of any premium out of the company’s undenominated capital on a redemption referred to in that provision; and

(e) a distribution of assets to members of the company on its winding up.

(2) In this Part “capitalisation”, in relation to any profits of a company, means any of the following operations, that is to say, applying the profits in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid bonus shares or transferring the profits to undenominated capital.

(3) In this Part references to profits and losses of any description are references respectively to profits and losses of that description made at any time and, except where the context otherwise requires, are references respectively to revenue and capital profits and revenue and capital losses.

(4) The provisions of this Part are without prejudice to any enactment or rule of law or any provision of a company’s constitution restricting the sums out of which, or the cases in which, a distribution may be made.

(5) Where a company makes a distribution of or including a non-cash asset and any part of the amount at which that asset is stated in the financial statements relevant for the purposes of the distribution in accordance with this Chapter represents an unrealised profit, that profit is to be treated as a realised profit—

(a) for the purpose of determining the lawfulness of the distribution in accordance with this Chapter (whether before or after the distribution takes place); and

(b) for the purpose of the application of paragraphs 14(a) and 37(3) of Schedule 3 (only realised profits to be included in or transferred to the profit and loss account) in relation to anything done with a view to or in connection with the making of that distribution.

Procedures for declarations, payments, etc., of dividends and other things

124. (1) Each provision of this section and section 125 applies save to the extent that the company’s constitution provides otherwise.

(2) A company may, by ordinary resolution, declare dividends but no dividend shall exceed the amount recommended by the directors of the company.

(3) The directors of a company may from time to time—

(a) pay to the members such interim dividends as appear to the directors to be justified by the profits of the company, subject to section 117;

(b) before recommending any dividend, set aside out of the profits of the company such sums as they think proper as a reserve or reserves which shall, at the discretion of the directors, be applicable for any purpose to which the profits of the company may be properly applied, and pending such application may, at the like discretion either be employed in the business of the company or be invested in such investments as the directors may lawfully determine;

(c) without placing the profits of the company to reserve, carry forward any profits which they may think prudent not to distribute.

(4) Subject to the rights of persons, if any, entitled to shares with special rights as to dividend, all dividends shall be declared and paid according to the amounts paid or credited as paid on the shares in respect of which the dividend is paid.

(5) However no amount paid or credited as paid on a share in advance of calls shall be treated for the purposes of this section as paid on the share.

(6) All dividends shall be apportioned and paid proportionally to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid, but if any share is issued on terms providing that it shall rank for a dividend as from a particular date, such share shall rank for dividend accordingly.

(7) The directors may deduct from any dividend payable to any member, all sums of money (if any) immediately payable by him or her to the company on account of calls or otherwise in relation to the shares of the company.

Supplemental provisions in relation to section 124

125. (1) A general meeting of a company declaring a dividend or bonus may direct payment of such dividend or bonus wholly or partly by the distribution of specific assets and, in particular, paid up shares, debentures or debenture stock of any other company or in any one or more of such ways.

(2) The directors of the company shall give effect to such resolution, and where any difficulty arises in regard to such distribution, the directors may settle the matter as they think expedient and, in particular, may—

(a) issue fractional certificates and fix the value for distribution of such specific assets or any part of them;

(b) determine that cash payments shall be made to any members upon the footing of the value so fixed, in order to adjust the rights of all the parties; and

(c) vest any such specific assets in trustees as may seem expedient to the directors.

(3) Any dividend, interest or other moneys payable in cash in respect of any shares may be paid—

(a) by cheque or negotiable instrument sent by post directed to or otherwise delivered to the registered address of the holder, or where there are joint holders, to the registered address of that one of the joint holders who is first named on the register or to such person and to such address as the holder or the joint holders may in writing direct; or

(b) by agreement with the payee (which may either be a general agreement or one confined to specific payments), by direct transfer to a bank account nominated by the payee.

(4) Any such cheque or negotiable instrument shall be made payable to the order of the person to whom it is sent.

(5) Any one of two or more joint holders may give valid receipts for any dividends, bonuses or other moneys payable in respect of the shares held by them as joint holders, whether paid by cheque or negotiable instrument or direct transfer.

(6) No dividend shall bear interest against the company.

Bonus issues

126. (1) Each provision of this section applies save where the company’s constitution provides otherwise.

(2) In subsections (3) and (4) “relevant sum” means—

(a) any sum for the time being standing to the credit of the company’s undenominated capital;

(b) any of the company’s profits available for distribution; or

(c) any sum representing unrealised revaluation reserves.

(3) The company in general meeting may, on the recommendation of the directors, resolve that any relevant sum be capitalised and applied on behalf of the members who would have been entitled to receive that sum if it had been distributed by way of dividend and in the same proportions in or towards paying up in full unissued shares of the company of a nominal value equal to the relevant sum capitalised (such shares to be allotted and distributed credited as fully paid up to and amongst such holders and in the proportions as aforementioned).

(4) The company in general meeting may, on the recommendation of the directors, resolve that it is desirable to capitalise any part of a relevant sum which is not available for distribution, by applying such sum in paying up in full unissued shares to be allotted as fully paid bonus shares, to those members of the company who would have been entitled to that sum if it were distributed by way of dividend (and in the same proportions).

(5) The directors of the company shall give effect to any resolution under subsection (3) or (4).

(6) For that purpose the directors shall make—

(a) all appropriations and applications of the undivided profits resolved to be capitalised by the resolution; and

(b) all allotments and issues of fully paid shares, if any, and generally shall do all acts and things required to give effect to the resolution.

(7) Without limiting the foregoing, the directors may—

(a) make such provision as they think fit for the case of shares becoming distributable in fractions (and, again, without limiting the foregoing, may sell the shares represented by such fractions and distribute the net proceeds of such sale amongst the members otherwise entitled to such fractions in due proportions); and

(b) authorise any person to enter, on behalf of all the members concerned, into an agreement with the company providing for the allotment to them, respectively credited as fully paid up, of any further shares to which they may become entitled on the capitalisation concerned or, as the case may require, for the payment by the application thereto of their respective proportions of the profits resolved to be capitalised of the amounts remaining unpaid on their existing shares.

(8) Any agreement made under such authority shall be effective and binding on all the members concerned.

(9) Where the directors of a company have resolved to approve a bona fide revaluation of all the fixed assets of the company, the net capital surplus in excess of the previous book value of the assets arising from such revaluation may be—

(a) credited by the directors to undenominated capital, other than the share premium account; or

(b) used in paying up unissued shares of the company to be issued to members as fully paid bonus shares.

PART 4

CORPORATE GOVERNANCE

CHAPTER 1

Preliminary

Access to documents during business hours

127. (1) A reference in this Part to a document kept by a company being open to the inspection of a person, or a specified class of person, during business hours shall be read as a requirement that the document be open to such inspection subject to such reasonable restrictions as the company may in general meeting impose, but so that not less than 2 hours in each day be allowed for such inspection.

(2) Subsection (1) applies to the provisions of other Parts of this Act that are referred to in Chapter 10 (which deals with, amongst other things, inspection of registers) as it applies to the provisions of this Part so referred to.

CHAPTER 2

Directors and secretaries

Directors

128. (1) A company shall have at least one director.

(2) If default is made by a company in complying with subsection (1) for 28 consecutive days, the company and any officer of it who is in default shall be guilty of a category 3 offence.

Secretaries

129. (1) A company shall have a secretary, who may be one of the directors.

(2) Anything required or authorised to be done by or to the secretary may, if the office is vacant or there is for any other reason no secretary capable of acting, be done by or to any assistant or deputy secretary or, if there is no assistant or deputy secretary capable of acting, by or to any officer of the company authorised generally or specially in that behalf by the directors.

(3) Subject to section 25(5), the secretary shall be appointed by the directors of the company for such term, at such remuneration and upon such conditions as they may think fit; and any secretary so appointed may be removed by them.

(4) The directors of a company shall have a duty to ensure that the person appointed as secretary has the skills or resources necessary to discharge his or her statutory and other duties.

(5) The cases to which subsection (4) applies includes the case of an appointment of one of the directors of the company as secretary.

(6) Where a company has only one director, that person may not also hold the office of secretary of the company.

(7) In subsections (2) to (6) references to a secretary include references to joint secretaries.

Prohibition of body corporate or unincorporated body of persons being director

130. (1) A company shall not have as director of the company a body corporate or an unincorporated body of persons.

(2) Any purported appointment of a body corporate or an unincorporated body of persons as a director of a company shall be void.

Prohibition of minor being director or secretary

131. (1) No person shall be appointed a director or, in the case of an individual, secretary of a company unless he or she has attained the age of 18 years.

(2) Any purported appointment of a minor as a director of a company shall be void.

(3) Where—

(a) a person appointed a director of a company before the commencement of subsection (1) has not attained the age of 18 years when that subsection is commenced; or

(b) the office of director of a company is held otherwise by virtue of another office, and the person appointed to that other office has not attained the age of 18 years when subsection (1) is commenced, that person ceases to be a director of the company on the commencement of subsection (1) and the company shall make the necessary consequential alteration in its register of directors and shall notify the Registrar of the change.

Prohibition of undischarged bankrupt being director or secretary or otherwise involved in company

132. (1) If any person being an undischarged bankrupt—

(a) acts as a director or secretary of a company; or

(b) directly or indirectly takes part or is concerned in the promotion, formation or management of a company, the person shall (unless he or she does so with the leave of the court) be guilty of a category 2 offence.

(2) Where a person is convicted of an offence under subsection (1) the person shall be deemed to be subject to a disqualification order from the date of such conviction for such period as the court specifies if he or she was not, or was not deemed to be, subject to such an order on that date.

(3) In this section “disqualification order” has the same meaning as it has in Chapter 4 of Part 14.

Examination as to solvency status

133. (1) Where the Director of Corporate Enforcement has reason to believe that a director or secretary of a company is an undischarged bankrupt, the Director of Corporate

Enforcement may exercise the following power.

(2) That power is to require the director or secretary of the company to produce to the Director, by a specified date, a sworn statement by him or her of all relevant facts pertaining to the director’s or secretary’s financial position, both within the State and elsewhere, and, in particular, to any matter relating to bankruptcy as at a particular date.

(3) The court may, on the application of the Director of Corporate Enforcement, require a director or secretary of a company who has made a statement under subsection (2) to appear before it and answer on oath any question pertaining to the content of the statement.

(4) The court may, on the application of the Director of Corporate Enforcement, make a disqualification order against a director or secretary of a company, to be for such period as the court specifies, on the grounds that he or she is an undischarged bankrupt.

(5) A director or secretary of a company who fails to comply with a requirement under subsection (2) shall be guilty of a category 3 offence.

(6) In this section “disqualification order” has the same meaning as it has in Chapter 4 of Part 14.

Performance of acts by person in dual capacity as director and secretary not permitted

134. A provision of—

(a) this Act;

(b) an instrument under it; or

(c) a company’s constitution, requiring or authorising a thing to be done by or to a director and the secretary shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of, the secretary.

Validity of acts of director or secretary

135. The acts of a director or of a secretary shall be valid notwithstanding any defect which may afterwards be discovered in his or her appointment or qualification.

Share qualifications of directors

136. (1) This section applies where the constitution of a company requires a director of the company to hold a specified share qualification (the “specified qualification”).

(2) Where this section applies—

(a) the office of director of a company shall be vacated if the director—

(i) does not within 2 months after the date of his or her appointment or within such shorter time as may be fixed by the constitution, obtain the specified qualification; or

(ii) ceases at any time, after the expiration of that period or shorter time so fixed, as the case may be, to hold the specified qualification; and

(b) a person vacating office under this section shall be incapable of being reappointed director of the company until he or she has obtained the specified qualification.

Company to have director resident in an EEA state

137. (1) Subject to subsection (2) and section 140, one, at least, of the directors for the time being of a company shall be a person who is resident in an EEA state.

(2) Subsection (1) shall not apply in relation to a company if the company for the time being holds a bond, in the prescribed form, in force to the value of €25,000 and which provides that, in the event of a failure by the company to pay the whole or part of each (if any) fine and penalty specified in the Table to this section, there shall become payable under the bond to a person who is, under subsection (4), nominated for the purpose (the “nominated person’’) a sum of money for the following purpose.

(3) That purpose is the purpose of the sum being applied by the nominated person in discharging the whole or part, as the case may be, of the company’s liability in respect of any such fine or penalty (and any sum that becomes so payable shall be applied by the nominated person accordingly).

(4) The nomination referred to in subsection (2) shall be made—

(a) by the Registrar or the Revenue Commissioners, as appropriate; or

(b) in the case of failure to pay both a fine referred to in paragraph 1 of the Table to this section and a fine or penalty, or a fine and penalty, referred to in paragraph 2 of that Table, jointly by the Registrar and the Revenue Commissioners.

(5) The bond referred to in subsection (2) may be entered into and shall have effect according to its terms notwithstanding any rule of law whereby any agreement to insure or indemnify a person in respect of any punishment or liability imposed on him or her in relation to any offence or unlawful act committed by him or her is void or unenforceable.

(6) If subsection (1) is not complied with, the company concerned and any officer of it who is in default shall be guilty of a category 4 offence.

(7) In this section “director” does not include an alternate director Supplemental provisions concerning bond referred to in section 137(2)

138. (1) In this section—

“bond” means the bond referred to in section 137(2);

“nominated person” means the person nominated under section 137(4) in relation to the bond concerned.

(2) The bond shall also provide that, in addition to the sum referred to in section 137(2), there shall become payable under the bond to the nominated person, on demand being made, with the consent of the Revenue Commissioners, by him or her in that behalf, a sum of money (not exceeding such sum as the Revenue Commissioners and the Minister may sanction) for the purpose of defraying such expenses as may have been reasonably incurred by that person in carrying out his or her duties under section 137(3).

(3) The nominated person shall keep all proper and usual accounts, including an income and expenditure account and a balance sheet, of all moneys received by him or her on foot of the bond and of all disbursements made by him or her from any such moneys.

(4) The Minister, after consultation with the Minister for Public Expenditure and Reform, the Revenue Commissioners and any other person who, in the opinion of the Minister, might be concerned with or interested in the matter, may prescribe—

(a) that arrangements in relation to the bond shall only be entered into with persons of a prescribed class or classes;

(b) the form of that bond and the minimum period to be specified in the bond as being the period for which it shall be valid.

(5) A copy of the bond held by a company shall be appended—

(a) in case none of the directors (within the meaning of section 137) of the company is resident in an EEA state on its incorporation, to the statement required by section 21(1)(a) to be delivered to the Registrar in relation to the company;

(b) in case a notification is made under section 139 to the Registrar in relation to the company, to that notification;

(c) in case during the period to which an annual return concerning the company relates none of the directors (within the meaning of section 137) of the company is resident in an EEA state, to that annual return (unless such a copy has been appended to a notification under section 139 made to the Registrar in that period).

Notification requirement as regards non-residency of director

139. (1) Without prejudice to anything in section 149, if a person ceases to be a director of a company and, at the time of that cessation—

(a) he or she is resident in an EEA state; and

(b) either—

(i) he or she was the sole director, or

(ii) to his or her knowledge, no other director of the company is resident in an EEA state, that person shall, within 14 days after the date of that cessation, notify, in writing, the Registrar of that cessation and the matter referred to in paragraph (b)(i) or (ii), as the case may be.

(2) A notification in writing to the Registrar of the matter referred to in subsection (1)(b)

(i) or (ii) shall not, of itself, be regarded as constituting defamatory matter.

(3) If a person fails to comply with subsection (1), he or she shall be jointly and severally liable with the company of which he or she has ceased to be director for any fine or penalty referred to in section 137(2) imposed on the company, or which it is held liable to pay, after that cessation.

(4) Any such fine or penalty for which that person is so liable may be recovered by the Registrar or the Revenue Commissioners, as appropriate, from him or her as a simple contract debt in any court of competent jurisdiction.

(5) In this section “director” does not include an alternate director.

Exception to section 137 — companies having real and continuous link with economic activity in State

140. (1) Section 137(1) shall not apply in relation to a company in respect of which there is in force a certificate under this section.

(2) The Registrar may grant to a company, on application in the prescribed form being made by it in that behalf, a certificate stating that the company has a real and continuous link with one or more economic activities that are being carried on in the State.

(3) The Registrar shall not grant such a certificate unless the company concerned tenders proof to him or her that it has such a link.

(4) A statement referred to in subsection (5) that is tendered by the applicant shall be deemed to be proof, for the purposes of subsection (3), that the applicant has such a link.

(5) That statement is a statement in writing that has been given to the company concerned by the Revenue Commissioners within the period of 2 months ending before the date on which an application is made under subsection (2) by the company and which states that the Revenue Commissioners have reasonable grounds to believe that the company has a real and continuous link with one or more economic activities being carried on in the State.

(6) If, in consequence of information that has come into the possession of the Registrar, the Registrar is of opinion that a company in respect of which a certificate under subsection (2) has been granted has ceased to have a real and continuous link with any economic activity being carried on in the State, he or she shall revoke that certificate.

(7) If, in consequence of information that has come into their possession, the Revenue Commissioners are of opinion that a company in respect of which a certificate under subsection (2) has been granted has ceased to have a real and continuous link with any economic activity being carried on in the State, the following applies—

(a) the Commissioners may give a notice in writing to the Registrar stating that they are of that opinion; and

(b) such a notice that is received by the Registrar shall constitute information in his or her possession for the purposes of subsection (6).

(8) Subsection (7)(a) has effect notwithstanding any obligations as to secrecy or other restrictions upon disclosure of information imposed by or under statute or otherwise.

(9) For the purposes of this section a company has a real and continuous link with an economic activity that is being carried on in the State if one or more of the following conditions are satisfied by it—

(a) the affairs of the company are managed by one or more persons from a place of business established in the State and that person or those persons is or are authorised by the company to act on its behalf;

(b) the company carries on a trade in the State;

(c) the company is a subsidiary or a holding company of a company or other body corporate that satisfies either or both of the conditions specified in paragraphs (a) and (b);

(d) the company is a subsidiary of a company, another subsidiary of which satisfies either or both of the conditions specified in paragraphs (a) and (b).

Provisions for determining whether director resident in State

141. (1) So far as it is the person’s residence in the State that falls to be determined for the purposes of those sections, for the purposes of sections 137 and 139 a person is resident in the State at a particular time (the “relevant time”) if—

(a) he or she is present in the State at—

(i) any one time or several times in the period of 12 months preceding the relevant time (the “immediate 12 month period”) for a period in the aggregate amounting to 183 days or more; or

(ii) any one time or several times—

(I) in the immediate 12 month period; and

(II) in the period of 12 months preceding the immediate 12 month period (the “previous 12 month period”), for a period (being a period comprising in the aggregate the number of days on which the person is present in the State in the immediate 12 month period and the number of days on which the person was present in the State in the previous 12 month period) in the aggregate amounting to 280 days or more; or

(b) that time is in a year of assessment (within the meaning of the Taxes Consolidation Act 1997) in respect of which the person has made an election under section 819(3) of that Act.

(2) Notwithstanding subsection (1)(a)(ii), where in the immediate 12 month period concerned a person is present in the State at any one time or several times for a period in the aggregate amounting to not more than 30 days—

(a) the person shall not be resident in the State, for the purposes of section 137 or 139, at the relevant time concerned; and

(b) no account shall be taken of the period for the purposes of the aggregate mentioned in subsection (1)(a)(ii).

(3) For the purposes of subsections (1) and (2)—

(a) references in this section to a person’s being present in the State are references to the person’s being personally present in the State; and

(b) a person shall be deemed to be present in the State for a day if the person is present in the State at any time during that day.

Limitation on number of directorships

142. (1) A person shall not, at a particular time, be a director of more than—

(a) 25 private companies limited by shares; or

(b) 25 companies, one, or more than one, of which is a private company limited by shares and one, or more than one, of which is any other type of company capable of being wound up under this Act.

(2) Subsections (3) to (7) apply in reckoning, for the purposes of subsection (1) (the “relevant purposes”), the number of companies of which the person concerned is a director at a particular time (the “relevant time”) and a reference in them to a company, without qualification, includes a reference to any type of company capable of being wound up under this Act.

(3) Without prejudice to the following subsections, there shall not be included for the relevant purposes any of the following companies of which the person is a director at the relevant time, namely—

(a) a public limited company;

(b) a company in respect of which a certificate under section 140 is in force.

(4) There shall not be included, for the relevant purposes, any company of which the person is a director at the relevant time (not being a time that is before the date of the giving of the certificate or direction referred to subsequently in this subsection) if—

(a) the person, or the company, delivers to the Registrar a notice, in the prescribed form, stating that the company is a company falling within one or more of the categories of company specified in the Table to this section; and

(b) either—

(i) the Registrar, having considered that notice and having made such enquiries as he or she thinks fit, certifies in writing, or as the case may be the Minister under subsection (7) so certifies, that the company is a company falling within one or more of the foregoing categories; or

(ii) the Minister directs, under subsection (7), that the company is not to be included amongst the companies for the relevant purposes.

(5) There shall, for the relevant purposes, be counted as the one company of which the person is a director at the relevant time, 2 or more companies of which he or she is a director at that time if one of those companies is the holding company of the other or others.

(6) For the purposes of subsection (4)(b)(i), the Registrar may accept as sufficient evidence that the company concerned falls within a category of company specified in the Table to this section a declaration, in the prescribed form, to that effect made by an officer of the company or the other person referred to in subsection (4)(a).

(7) If the Registrar refuses to certify that the company to which a notice under subsection (4)(a) relates is a company falling within a category of company specified in the Table to this section, the company or the person referred to in subsection (4)(a) may appeal to the Minister against such a refusal and the Minister may, having considered the matter and made such enquiries as he or she thinks fit, do one of the following:

(a) confirm the decision of the Registrar;

(b) certify in writing that the company is a company falling within a foregoing category; or

(c) notwithstanding that he or she confirms the decision of the Registrar, direct that the company is not to be included amongst the companies that shall be reckoned for the purposes of subsection (1) in so far as that subsection applies to the person concerned but shall only give such a direction if—

(i) the person concerned was a director of the company before 18 April 2000; and

(ii) in the opinion of the Minister the inclusion of the company amongst the companies that shall be reckoned for the purposes of subsection (1), in so far as that subsection applies to the person concerned, would result in serious injustice or hardship to that person; and

(iii) the giving of the direction would not operate against the common good.

(8) A notice referred to in subsection (4)(a) may, for the purposes of that provision, be delivered to the Registrar before the person concerned becomes a director of the company to which the notice relates.

Sanctions for contravention of section 142 and supplemental provisions

143. (1) If a person, in contravention of section 142(1), purports to become, or purports to remain, a director of one or more companies he or she shall be guilty of a category 4 offence.

(2) An appointment of a person as a director of a company shall, if it contravenes section 142(1), be void.

(3) For the avoidance of doubt—

(a) each purported appointment, in excess of the limit (reckoned in accordance with section 142(3) to (7)) that is provided for by section 142(1), of a person as a director of a company shall constitute a separate contravention of section 142(1);

(b) an appointment, not in excess of the foregoing limit, of a person as a director of a company shall not, by virtue of this section, become unlawful, be rendered void or cease to have effect by reason of a subsequent appointment, in excess of that limit, of the person as a director of a company.

(4) If—

(a) the appointments of a person as a director of 2 or more companies are made at the same time; or

(b) the times at which the appointments of a person as a director of 2 or more companies were made are not capable of being distinguished from one another, then those appointments shall, for the purposes of section 142, be deemed to have been made at different times on the day concerned and in the same order as the order in which the companies to which the appointments relate were registered under this Act, the prior Companies Acts or any other former enactment relating to companies (within the meaning of section 5), as the case may be.

(5) A reference in this section to a company includes a reference to any type of company capable of being wound up under this Act.

Appointment of director

144. (1) Any purported appointment of a director without that director’s consent shall be void.

(2) Subject to subsection (1), the first directors of a company shall be those persons determined in writing by the subscribers of the constitution or a majority of them.

(3) Save to the extent that the company’s constitution provides otherwise and subject to subsection (5) in the case of a single-member company—

(a) subsequent directors of a company may be appointed by the members in general meeting, provided that no person other than a director retiring at the meeting shall, save where recommended by the directors, be eligible for election to the office of director at any general meeting unless the requirements of subsection (4) as to his or her eligibility for that purpose have been complied with;

(b) the directors of the company may from time to time appoint any person to be a director of the company, either to fill a casual vacancy or as an addition to the existing directors, but so that the total number of directors of the company shall not at any time exceed the number, if any, provided for in its constitution;

(c) any director appointed as mentioned in paragraph (b) shall hold office only until the next following annual general meeting, and shall then be eligible for reelection;

(d) the company may from time to time, by ordinary resolution, increase or reduce the number of directors;

(e) the company may, by ordinary resolution, appoint another person in place of a director removed from office under section 146 and, without prejudice to the powers of the directors under subsection (3)(b), the company in general meeting may appoint any person to be a director either to fill a casual vacancy or as an additional director.

(4) The following are the requirements mentioned in subsection (3)(a) for the eligibility of a person (the “person concerned”) for election as a director at a general meeting, namely, not less than 3 nor more than 21 days before the day appointed for the meeting there shall have been left at the company’s registered office—

(a) notice in writing signed by a member of the company duly qualified to attend and vote at the meeting for which such notice is given, of his or her intention to propose the person concerned for such election; and

(b) notice in writing signed by the person concerned of his or her willingness to be so elected.

(5) Subject to subsection (1), in the case of a single-member company, the sole member may appoint a person to be a director of the company by serving a notice in writing on the company which states that the named person is appointed director and this applies notwithstanding anything in subsection (3) (save for the requirement of it that any limit for the time being on the number of the directors is to be observed) or subsection (4).

Appointment of directors to be voted on individually

145. (1) At a general meeting of a company, a motion for the appointment of 2 or more persons as directors of the company by a single resolution shall not be made, unless a resolution that it shall be so made has first been agreed to by the meeting without any vote being given against it.

(2) Subject to subsections (3) and (4), a resolution moved in contravention of this section shall be void, whether or not its being so moved was objected to at the time.

(3) Subsection (2) shall not be taken as excluding the operation of section 135.

(4) Where a resolution moved in contravention of this section is passed, no provision for the automatic re-appointment of retiring directors in default of another appointment shall apply.

(5) For the purposes of this section, a motion for approving a person’s appointment or for nominating a person for appointment shall be treated as a motion for his or her appointment.

(6) Nothing in this section shall apply to a resolution amending the company’s constitution.

Removal of directors

146. (1) A company may by ordinary resolution remove a director before the expiration of his or her period of office notwithstanding anything in its constitution or in any agreement between it and him or her.

(2) Subsection (1) shall not authorise the removal of a director holding office for life.

(3) In the case of a resolution to remove a director under this section or to appoint somebody instead of the director so removed at the meeting at which he or she is removed the following provisions shall apply—

(a) the company shall be given not less than 28 days’ notice of the intention to move any such resolution except when the directors of the company have resolved to submit it;

(b) on receipt of notice of such an intended resolution, the company shall forthwith send a copy of it to the director concerned, and the director (whether or not he or she is a member of the company) shall be entitled to be heard on the resolution at the meeting; and

(c) the company shall give its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting or, if that is not practicable, shall give them notice of it, either by advertisement in a daily newspaper circulating in the district in which the registered office of the company is situated or in any other manner allowed by this Act or by the constitution, not less than 21 days before the date of the meeting.

(4) Any such resolution that is passed that does not comply with the foregoing provisions shall, subject to subsection (5), not be effective.

(5) If, after notice of the intention to move such a resolution has been given to the company, a meeting is called for a date 28 days or less after the notice has been given, the notice, though not given within the time required by subsection (3)(a), shall be deemed to have been properly given for the purposes of that provision.

(6) Subject to subsection (8), where notice is given of an intended resolution to remove a director under this section and the director concerned makes in relation to that resolution representations in writing to the company (not exceeding a reasonable length) and requests their notification to the members of the company, the company shall, unless the representations are received by it too late for it to do so—

(a) in any notice of the resolution given to members of the company, state the fact of the representations having been made; and

(b) send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company).

(7) If a copy of the representations is not sent as mentioned in subsection (6) (either because they were received too late or because of the company’s default) the director concerned may, without prejudice to his or her right to be heard orally, require that the representations shall be read out at the meeting concerned.

(8) Copies of the representations need not be sent out, and the representations need not be read out at the meeting concerned, as mentioned in subsection (6) or (7), if, on the application either of the company or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter and orders that those things need not be done.

(9) The court may order the company’s costs on such an application to be paid in whole or in part by the director concerned, notwithstanding that he or she is not a party to the application.

(10) A vacancy created by the removal of a director under this section may be filled at the meeting at which he or she is removed and, if not so filled, may be filled as a casual vacancy.

(11) A person appointed director in place of a person removed under this section shall be treated, for the purpose of determining the time at which he or she or any other director is to retire, as if he or she had become director on the day on which the person in whose place he or she is appointed was last appointed director.

Compensation for wrongful termination, other powers of removal not affected by section 146

147. Nothing in section 146 shall be taken—

(a) as depriving a person removed under it of compensation or damages payable to him or her, or any other remedy available to the person, in respect of the termination of his or her appointment as director or of any appointment terminating with that as director; or

(b) as derogating from any power to remove a director that may exist apart from that section.

Vacation of office

148. (1) In addition to the case provided by section 136 (share qualification of directors), the office of director shall be vacated if the director—

(a) is adjudicated bankrupt or being a bankrupt has not obtained a certificate of discharge in the relevant jurisdiction; or

(b) becomes or is deemed to be subject to a disqualification order within the meaning of Chapter 4 of Part 14.

(2) Save to the extent that the company’s constitution provides otherwise, the office of director shall be vacated if—

(a) the director resigns his or her office by notice in writing to the company; or

(b) the health of the director is such that he or she can no longer be reasonably regarded as possessing an adequate decision making capacity; or

(c) a declaration of restriction is made in relation to the director and the directors, at any time during the currency of the declaration, resolve that his or her office be vacated; or

(d) the director is sentenced to a term of imprisonment following conviction of an indictable offence; or

(e) the director is for more than 6 months absent, without the permission of the directors, from meetings of the directors held during that period.

(3) In subsection (2)(d) the reference to a term of imprisonment includes a reference to such a term that is suspended.

Register of directors and secretaries

149. (1) A company shall keep a register (the “register”) of its directors and secretaries and, if any, its assistant and deputy secretaries.

(2) Subject to subsection (4) and section 150(11), the register shall contain the following particulars relating to each director:

(a) his or her present forename and surname and any former forename and surname;

(b) his or her date of birth;

(c) his or her usual residential address;

(d) his or her nationality;

(e) his or her business occupation, if any; and

(f) particulars of any other directorships of bodies corporate, whether incorporated in the State or elsewhere, held by him or her or which have been held by him or her.

(3) Sections 215 to 217 (rights of inspection, requests for copies, etc.) apply to the register.

(4) It shall not be necessary for the register to contain on any day particulars of any directorship—

(a) which has not been held by a director at any time during the 5 years preceding that day;

(b) which is held or was held by a director in bodies corporate of which the company is or was the wholly owned subsidiary or which are or were the wholly owned subsidiaries either of the company or of another body corporate of which the company is or was the wholly owned subsidiary.

(5) Subject to subsection (6) and section 150(11), the register shall contain the following particulars relating to the secretary or, where there are joint secretaries, in relation to each of them—

(a) in the case of an individual—

(i) his or her present forename and surname and any former forename and surname;

(ii) his or her usual residential address; and

(iii) his or her date of birth, and

(b) in the case of a body corporate, the corporate name and, if the body corporate is registered—

(i) its registered office;

(ii) the register in which it is registered; and

(iii) the number under which it is registered in that register.

(6) Where all the partners in a firm are joint secretaries of a company, the name and principal office of the firm may be stated instead of the particulars referred to in subsection (5).

(7) In relation to any assistant or deputy secretary the same particulars shall be contained in the register as respects the assistant or deputy secretary as are required by subsection (5) to be contained in the register as respects a secretary or joint secretary.

(8) The company shall, within the period of 14 days after the date of the happening of—

(a) any change among its directors or in its secretary or assistant or deputy secretary; or

(b) any change in any of the particulars contained in the register, send to the Registrar a notification in the prescribed form of the change and of the date on which it occurred.

(9) In the case of a person who is a director of more than one company (the “relevant companies”) the following provisions apply—

(a) the person may send a notification in the prescribed form to the Registrar of a change in his or her usual residential address or of a change in his or her name and (in each case) of the date on which the change occurred;

(b) if such a notification is sent to the Registrar and the relevant companies are listed in the notification as being companies of which the person is a director—

(i) each of the relevant companies shall be relieved, as respects, and only as respects, that particular change or, as the case may be, those particular changes, of the obligation under subsection (8) to send a notification of it or them to the Registrar; and

(ii) the Registrar may proceed to record the relevant change or changes concerning the person in relation to each of the relevant companies.

(10) A notification sent to the Registrar pursuant to subsection (8) of the appointment of a person as a director, secretary, joint secretary or assistant or deputy secretary of a company shall be accompanied by a consent signed by that person to act as director or secretary or assistant or deputy secretary or, where all the partners in a firm have been appointed joint secretaries of a company, by one partner on behalf of the firm, as the case may be.

(11) Section 223(3), in the case of a director, and section 226(5), in the case of a secretary, requires the inclusion of a particular statement in a foregoing consent by him or her.

(12) For the purposes of this section—

(a) in the case of a person usually known by a title different from his or her surname, the expression “surname” means that title;

(b) references to a “former forename” or “surname” do not include—

(i) in the case of a person usually known by a title different from his or her surname, the name by which he or she was known previous to the adoption of or succession to the title; or

(ii) in the case of any person, a former forename or surname where that name or surname was changed or disused before the person bearing the name attained the age of 18 years or has been changed or disused for a period of not less than 20 years, or

(iii) in the case of a married person or civil partner, the name or surname by which he or she was known previously to his or her marriage or civil partnership.

Supplemental provisions (including offences) in relation to section 149

150. (1) Without prejudice to the generality of section 149(8), a change among the directors for the purposes of that provision shall be deemed to include the case of a director’s becoming disqualified under the law of another state (whether pursuant to an order of a judge or a tribunal or otherwise) from being appointed or acting as a director or secretary of a body corporate or an undertaking; accordingly, in such a case, the notice under section 149(8) shall state, in relation to the director concerned—

(a) the jurisdiction in which he or she has become so disqualified;

(b) the date on which he or she has become so disqualified; and

(c) the period for which he or she has become so disqualified.

(2) Without prejudice to subsection (1) and to the requirement under section 149(10) that the notification be accompanied by the consent there referred to, if—

(a) the notification to be sent to the Registrar pursuant to section 149(8) is a notification of the appointment of a person as a director of a company; and

(b) that person is a person who is disqualified under the law of another state (whether pursuant to an order of a judge or a tribunal or otherwise) from being appointed or acting as a director or secretary of a body corporate or an undertaking, that person shall ensure that the notification is accompanied by (but as a separate document from that notification) a statement in the prescribed form signed by the person specifying—

(i) the jurisdiction in which he or she is so disqualified;

(ii) the date on which he or she became so disqualified; and

(iii) the period for which he or she is so disqualified.

(3) It shall be the duty of each director and secretary and assistant or deputy secretary, if any, of a company to give information in writing to the company as soon as may be of such matters as may be necessary to enable the company to comply with section 149 and the preceding subsections of this section.

(4) If default is made in complying with section 149(1), (2), (5), (7), (8) or (10), the company concerned and any officer of it who is in default shall be guilty of a category 3 offence.

(5) A person who fails to comply with subsection (1) shall be guilty of a category 3 offence.

(6) If the second mentioned person in subsection (2) fails to comply with that subsection, he or she shall be guilty of a category 3 offence.

(7) A person who fails to comply with subsection (3) shall be guilty of a category 3 offence.

(8) Without prejudice to subsection (3) or (6) and notwithstanding anything in subsection (2), it shall be the duty of a company to make reasonable enquiries of a person, on his or her appointment as director of the company, so as to ascertain whether the requirements of subsection (2) fall to be complied with by that person in relation to that appointment (but a failure of the company to do so does not relieve the person of his or her obligations under that subsection).

(9) If a person appointed a director of a company before the commencement of this section has, subsequent to his or her appointment but before that commencement, become disqualified under the law of another state (whether pursuant to an order of a judge or a tribunal or otherwise) from being appointed or acting as director or secretary of a body corporate or an undertaking, then subsection (1) shall apply to such a case as it applies to a case of a director becoming so disqualified after that commencement.

(10) For the purpose of the application of subsection (1) to the case first-mentioned in the preceding subsection, section 149 shall apply as if the following subsection were substituted for subsection (8):

“(8) The company shall, within the period of 3 months after the commencement of this section, send to the Registrar a notification in the prescribed form of the change and of the date on which it occurred.”.

(11) The Minister may make regulations providing that any requirement of this Act that the usual residential address of an officer of a company appear on the register referred to in section 149(1) or the register kept by the Registrar shall not apply in relation to a particular person who is such an officer if—

(a) in accordance with a procedure provided in the regulations for this purpose, it is determined that the circumstances concerning the personal safety or security of the person warrant the application of the foregoing exemption in respect of him or her; and

(b) such other conditions (if any) as are specified in the regulations for the application of the foregoing exemption are satisfied.

(12) Regulations under subsection (11) may contain such incidental, consequential and supplemental provisions as appear to the Minister to be necessary or expedient, including provision—

(a) so as to secure that there is not otherwise disclosed, by virtue of this Act’s operation, the usual residential address of a person in respect of whom the exemption referred to in that subsection applies; and

(b) limiting the regulations’ application to a usual residential address that, but for the regulations’ operation, would fall to be entered, on a register referred to in that subsection, on or after a date specified in the regulations.

Particulars to be shown on all business letters of company

151. (1) Subject to subsection (5), a company shall, in all business letters on or in which the company’s name appears and which are sent by the company to any person, state in legible characters in relation to every director of the company the following particulars:

(a) his or her present forename, or the initials thereof, and present surname;

(b) any former forename and surnames of him or her; and

(c) his or her nationality, if not Irish.

(2) A company shall further have the following particulars on all its business letters and order forms:

(a) the name and legal form of the company;

(b) the place of registration of the company and the number under which it is registered; and

(c) the address of its registered office.

(3) If on any business letters or order forms of a company there is reference to the share capital of the company, the company shall ensure that the reference is not stated otherwise than as a reference to the issued share capital of the company that is paid up.

(4) Where a company has a website, it shall display in a prominent and easily accessible place on that website the particulars referred to in subsection (2)(a) to (c) and if there is reference in such a website to the share capital of the company—

(a) the same requirement under subsection (3) applies to such a reference as it applies to such a reference on business letters and order forms; and

(b) the reference shall be displayed in a prominent and easily accessible place on the website.

(5) If special circumstances exist which render it, in the opinion of the Minister, expedient that such an exemption should be granted, the Minister may, subject to such conditions as he or she may think fit to impose and specifies in the exemption, grant, in writing, an exemption from the obligations imposed by subsection (1).

(6) If a company makes default in complying with this section, the company and any officer of it who is in default shall be guilty of a category 4 offence.

(7) For the purposes of this section—

(a) “director” includes any person in accordance with whose directions or instructions the directors of the company are accustomed to act, and “officer” shall be read accordingly;

(b) “initials” includes a recognised abbreviation of a forename; and

(c) section 149(12) shall apply as it applies for the purposes of section 149.

Entitlement to notify Registrar of changes in directors and secretaries if section 149(8) contravened

152. (1) In this section “former director or secretary” means the person referred to in subsection (2).

(2) This section applies where a company fails to send, in accordance with section 149(8), a notification, in the prescribed form, to the Registrar of the fact of a person’s having ceased, for whatever reason, to be a director or secretary of the company and of the date on which that event occurred.

(3) Where this section applies, the former director or secretary may serve on the company a notice—

(a) requesting it to send forthwith the notification of the matters mentioned in subsection (2), in the prescribed form, to the Registrar; and

(b) stating that if the company fails to comply with that request within 21 days after the date of service of the notice on it, he or she will forward to the Registrar and to every person who, to his or her knowledge, is an officer of the company a copy of any notice of resignation by him or her as a director or secretary of the company or any other documentary proof of his or her having ceased to be such a director or secretary, together with—

(i) in the case of the Registrar, such additional information as may be prescribed (which may include a declaration made by the person stating the names of the persons who, to the knowledge of the person, are officers of the company); and

(ii) in the case of every other person forwarded as mentioned above, a written request of the person that he or she take such steps as will ensure that the failure of the company to comply with the notice continues no further.

(4) If a company fails to comply with a request made of it under a notice referred to in subsection (3), the former director or secretary may forward to the Registrar and to every person who, to his or her knowledge, is an officer of the company a copy of the notice of resignation or other documentary proof referred to in subsection (3)(b) if, but only if, there is forwarded together with that notice or proof—

(a) in the case of the Registrar, the additional information referred to in subsection (3)(b)(i); and

(b) in the case of every other such person, the written request referred to in subsection(3)(b)(ii).

(5) No notice of resignation or other documentary proof of a person’s having ceased to be a director or secretary of a company which is forwarded to the Registrar by that person (other than such a notice or other proof which is forwarded by him or her under and in accordance with the preceding subsections or section 139) shall be considered by the Registrar.

(6) No additional information referred to in subsection (3)(b)(i) that is—

(a) included in a notice of resignation or other documentary proof referred to in this section; and

(b) forwarded, under and in accordance with the foregoing provisions of this section, to the Registrar, shall, of itself, be regarded as constituting defamatory matter.

Provisions as to assignment of office by directors

153. (1) This section applies to any provision of—

(a) the constitution of a company, or

(b) any agreement entered into between a company and any person, under which a director of the company is enabled to assign his or her office as such to another person.

(2) Any assignment of office made in pursuance of a provision to which this section applies shall, notwithstanding anything to the contrary contained in the provision, be of no effect unless and until it is approved by a special resolution of the company.

CHAPTER 3

Service contracts and remuneration

Copies of directors’ service contracts

154. (1) Subject to the provisions of this section, a company shall keep—

(a) in the case of each director whose contract of service with the company is in writing, a copy of that contract;

(b) in the case of each director whose contract of service with the company is not in writing, a written memorandum setting out the terms of that contract;

(c) in the case of each director who is employed under a contract of service with a subsidiary of the company, a copy of that contract or, if it is not in writing, a written memorandum setting out the terms of that contract;

(d) a copy or written memorandum, as the case may be, of any variation of any contract of service referred to in paragraph (a), (b) or (c), and all copies and memoranda kept by a company in pursuance of this subsection shall be kept at the same place.

(2) Sections 215 to 217 (rights of inspection, etc.) apply to those copies and memoranda.

(3) Where a contract of service is only partially in writing, paragraphs (a), (b), (c) and (d), as appropriate, of subsection (1), and subsection (4) shall also apply to such a contract.

(4) Subsection (1) shall not apply in relation to a director’s contract of service with the company or with a subsidiary of the company if that contract required him or her to work wholly or mainly outside the State, but the company shall keep a memorandum—

(a) in the case of a contract of service with the company, setting out the name of the director and the provisions of the contract relating to its duration;

(b) in the case of a contract of service with a subsidiary of the company, setting out the name of the director, the name and place of incorporation of the subsidiary and the provisions of the contract relating to its duration, at the same place as copies and the memoranda are kept by the company in pursuance of subsection (1).

(5) If default is made in complying with subsection (1) or (4), the company concerned and any officer of it who is in default shall be guilty of a category 3 offence.

(6) This section shall not require to be kept—

(a) a copy of, or memorandum setting out the terms of, a contract; or

(b) a copy of, or memorandum setting out the terms of a variation of, a contract, at a time at which the unexpired portion of the term for which the contract is to be in force is less than 3 years or at a time at which the contract can, within the next ensuing 3 years, be terminated by the company without payment of compensation.

Remuneration of directors

155. (1) Each provision of this section applies save to the extent that the company’s constitution provides otherwise.

(2) The remuneration of the directors of a company shall be such as is determined, from time to time, by the board of directors and such remuneration shall be deemed to accrue from day to day.

(3) The directors of a company may also be paid all travelling, hotel and other expenses properly incurred by them—

(a) in attending and returning from—

(i) meetings of the directors or any committee referred to in section 160(9); or

(ii) general meetings of the company, or

(b) otherwise in connection with the business of the company.

Prohibition of tax-free payments to directors

156. (1) It shall not be lawful for a company to pay a director of the company remuneration (whether as director or otherwise)—

(a) free of income tax or the universal social charge, or

(b) otherwise calculated by reference to or varying with the amount of his or her income tax or to or with the rate of income tax, except under a contract which was in force on 31 March 1962 and provides expressly and not by reference to the constitution for payment of remuneration in that manner.

(2) Any provision contained in—

(a) a company’s constitution;

(b) any contract other than such a contract as is mentioned in subsection (1); or

(c) any resolution of a company or a company’s directors, for payment to a director of remuneration in the manner referred to in subsection (1) shall have effect as if it provided for payment, as a gross sum subject to income tax and the universal social charge, of the net sum for which it actually provides.

CHAPTER 4

Proceedings of directors

Sections 158 to 165 to apply save where constitution provides otherwise

157. Each subsequent provision of this Chapter (other than sections 166 and 167) applies save to the extent that the company’s constitution provides otherwise.

General power of management and delegation

158. (1) The business of a company shall be managed by its directors, who may pay all expenses incurred in promoting and registering the company and may exercise all such powers of the company as are not, by this Act or by the constitution, required to be exercised by the company in general meeting, but subject to—

(a) any regulations contained in the constitution;

(b) the provisions of this Act; and (c) such directions, not being inconsistent with the foregoing regulations or provisions, as the company in general meeting may (by special resolution) give.

(2) However, no direction given by the company in general meeting under subsection (1)

(c) shall invalidate any prior act of the directors which would have been valid if that direction had not been given.

(3) Without prejudice to the generality of that subsection, subsection (1) operates to enable, subject to a limitation (if any) arising under any of paragraphs (a) to (c) of it, the directors of the company to exercise all powers of the company to borrow money and to mortgage or charge its undertaking, property and uncalled capital, or any part thereof.

(4) Without prejudice to section 40, the directors may delegate any of their powers to such person or persons as they think fit, including committees; any such committee shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on it by the directors.

(5) The reference in subsection (1) to a power of the company required to be exercised by the company in general meeting includes a reference to a power of the company that, but for the power of the members to pass a written resolution to effect the firstmentioned power’s exercise, would be required to be exercised by the company in general meeting.

Managing director

159. (1) The directors of a company may from time to time appoint one or more of themselves to the office of managing director (by whatever name called) for such period and on such terms as to remuneration and otherwise as they see fit, and, subject to the terms of any agreement entered into in any particular case, may revoke such appointment.

(2) Without prejudice to any claim the person so appointed may have for damages for breach of any contract of service between the person and the company, the person’s appointment shall cease upon his or her ceasing, from any cause, to be a director of the company.

(3) A managing director of a company shall receive such remuneration whether by way of salary, commission or participation in the profits, or partly in one way and partly in another, as the directors may determine.

(4) Without prejudice to section 40, the directors may confer upon a managing director any of the powers exercisable by them upon such terms and conditions and with such restrictions as they may think fit.

(5) In conferring any such powers, the directors may specify that the conferral is to operate either—

(a) so that the powers concerned may be exercised concurrently by them and the managing director; or

(b) to the exclusion of their own such powers.

(6) The directors may—

(a) revoke any conferral of powers under subsection (4); or

(b) amend any such conferral (whether as to the powers conferred or the terms, conditions or restrictions subject to which the conferral is made).

Meetings of directors and committees

160. (1) The directors of a company may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit.

(2) Questions arising at any such meeting shall be decided by a majority of votes and where there is an equality of votes, the chairperson shall have a second or casting vote.

(3) A director may, and the secretary on the requisition of a director shall, at any time summon a meeting of the directors.

(4) All directors shall be entitled to reasonable notice of any meeting of the directors but, if the directors so resolve, it shall not be necessary to give notice of a meeting of directors to any director who, being resident in the State, is for the time being absent from the State.

(5) Nothing in subsection (4) or any other provision of this Act enables a person, other than a director of the company concerned, to object to the notice given for any meeting of the directors.

(6) The quorum necessary for the transaction of the business of the directors may be fixed by the directors, and unless so fixed shall be 2 but, where the company has a sole director, the quorum shall be one.

(7) The continuing directors may act notwithstanding any vacancy in their number but, if and so long as their number is reduced below the number fixed by or pursuant to this Act as the necessary quorum of directors, the continuing directors or director may act for the purpose of increasing the number of directors to that number or of summoning a general meeting of the company but for no other purpose.

(8) The directors may elect a chairperson of their meetings and determine the period for which he or she is to hold office, but if no such chairperson is elected, or, if at any meeting the chairperson is not present within 15 minutes after the time appointed for holding it, the directors present may choose one of their number to be chairperson of the meeting.

(9) The directors may establish one or more committees consisting in whole or in part of members of the board of directors.

(10) A committee established under subsection (9) (a “committee”) may elect a chairperson of its meetings; if no such chairperson is elected, or if at any meeting the chairperson is not present within 15 minutes after the time appointed for holding it, the members of the committee present may choose one of their number to be chairperson of the meeting.

(11) A committee may meet and adjourn as it thinks proper.

(12) Questions arising at any meeting of a committee shall be determined by a majority of votes of the members of the committee present, and where there is an equality of votes, the chairperson shall have a second or casting vote.

Supplemental provisions about meetings (including provision for acting by means of written resolutions)

161. (1) A resolution in writing signed by all the directors of a company, or by all the members of a committee of them, and who are for the time being entitled to receive notice of a meeting of the directors or, as the case may be, of such a committee, shall be as valid as if it had been passed at a meeting of the directors or such a committee duly convened and held.

(2) Subject to subsection (3), where one or more of the directors (other than a majority of them) would not, by reason of—

(a) this Act or any other enactment;

(b) the company’s constitution; or

(c) a rule of law, be permitted to vote on a resolution such as is referred to in subsection (1), if it were sought to pass the resolution at a meeting of the directors duly convened and held, then such a resolution, notwithstanding anything in subsection (1), shall be valid for the purposes of that subsection if the resolution is signed by those of the directors who would have been permitted to vote on it had it been sought to pass it at such a meeting.

(3) In a case falling within subsection (2), the resolution shall state the name of each director who did not sign it and the basis on which he or she did not sign it.

(4) For the avoidance of doubt, nothing in the preceding subsections dealing with a resolution that is signed by other than all of the directors shall be read as making available, in the case of an equality of votes, a second or casting vote to the one of their number who would, or might have been, if a meeting had been held to transact the business concerned, chairperson of that meeting.

(5) The resolution referred to in subsection (1) may consist of several documents in like form each signed by one or more directors and for all purposes shall take effect from the time that it is signed by the last director.

(6) A meeting of the directors or of a committee referred to in section 160(9) may consist of a conference between some or all of the directors or, as the case may be, members of the committee who are not all in one place, but each of whom is able (directly or by means of telephonic, video or other electronic communication) to speak to each of the others and to be heard by each of the others and—

(a) a director or member of the committee taking part in such a conference shall be deemed to be present in person at the meeting and shall be entitled to vote and be counted in a quorum accordingly; and

(b) such a meeting shall be deemed to take place—

(i) where the largest group of those participating in the conference is assembled;

(ii) if there is no such group, where the chairperson of the meeting then is;

(iii) if neither subparagraph (i) or (ii) applies, in such location as the meeting itself decides.

(7) Subject to the other provisions of this Act, a director may vote in respect of any contract, appointment or arrangement in which he or she is interested and he or she shall be counted in the quorum present at the meeting.

(8) The directors of a company may exercise the voting powers conferred by the shares of any other company held or owned by the company in such manner in all respects as they think fit and, in particular, they may exercise the voting powers in favour of any resolution—

(a) appointing the directors or any of them as directors or officers of such other company; or

(b) providing for the payment of remuneration or pensions to the directors or officers of such other company.

(9) Any director of the company may vote in favour of the exercise of such voting rights notwithstanding that he or she may be or may be about to become a director or officer of the other company referred to in subsection (8) and as such or in any other way is or may be interested in the exercise of such voting rights in the foregoing manner.

Holding of any other office or place of profit under the company by director

162. (1) A director of a company may hold any other office or place of profit under the company (other than the office of statutory auditor) in conjunction with his or her office of director for such period and on such terms as to remuneration and otherwise as the directors of the company may determine.

(2) No director of a company or intending such director shall be disqualified by his or her office from contracting with the company either with regard to his or her tenure of any such other office or place of profit or as vendor, purchaser or otherwise.

(3) In particular, neither shall—

(a) any contract with respect to any of the matters referred to in subsection (2), nor any contract or arrangement entered into by or on behalf of the company in which a director is in any way interested, be liable to be avoided, nor

(b) a director so contracting or being so interested be liable to account to the company for any profit realised by any such contract or arrangement, by reason of such director holding that office or of the fiduciary relation thereby established.

Counting of director in quorum and voting at meeting at which director is appointed

163. A director of a company, notwithstanding his or her interest, may be counted in the quorum present at any meeting at which—

(a) that director or any other director is appointed to hold any such office or place of profit under the company as is mentioned in section 162(1), or

(b) the terms of any such appointment are arranged, and he or she may vote on any such appointment or arrangement other than his or her own appointment or the arrangement of the terms of it.

Signing, drawing, etc., of negotiable instruments and receipts

164. Each—

(a) cheque, promissory note, draft, bill of exchange or other negotiable instrument, and

(b) receipt for moneys paid to the company, shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, by such person or persons and in such manner as the directors of the company shall from time to time by resolution determine.

Alternate directors

165. (1) Any director (the “appointer”) of a company may from time to time appoint any other director of it or, with the approval of a majority of its directors, any other person to be an alternate director (the “appointee”) as respects him or her.

(2) Only one person may stand appointed at a particular time to be an alternate director as respects a particular director.

(3) The appointee, while he or she holds office as an alternate director, shall be entitled—

(a) to notice of meetings of the directors of the company,

(b) to attend at such meetings as a director, and

(c) in place of the appointer, to vote at such meetings as a director, but shall not be entitled to be remunerated otherwise than out of the remuneration of the appointer.

(4) Any appointment under this section shall be effected by notice in writing given by the appointer to the company.

(5) Any appointment so made may be revoked at any time by the appointer or by a majority of the other directors or by the company in general meeting.

(6) Revocation of such an appointment by the appointer shall be effected by notice in writing given by the appointer to the company.

Minutes of proceedings of directors

166. (1) A company shall cause minutes to be entered in books kept for that purpose of—

(a) all appointments of officers made by its directors;

(b) the names of the directors present at each meeting of its directors and of any committee of the directors;

(c) all resolutions and proceedings at all meetings of its directors and of committees of directors.

(2) Such minutes shall be entered in the foregoing books as soon as may be after the appointment concerned is made, the meeting concerned has been held or the resolution concerned has been passed.

(3) Any such minute, if purporting to be signed by the chairperson of the meeting at which the proceedings were had, or by the chairperson of the next succeeding meeting, shall be evidence of the proceedings.

(4) Where minutes have been made in accordance with this section of the proceedings at any meeting of directors or committee of directors, then, until the contrary is proved—

(a) the meeting shall be deemed to have been duly held and convened;

(b) all proceedings had at the meeting shall be deemed to have been duly had; and

(c) all appointments of officers made by its directors at the meeting shall be deemed to be valid.

(5) A company shall, if required by the Director of Corporate Enforcement, produce to the Director for inspection the book or books kept in accordance with subsection (1) by it and shall give to the Director of Corporate Enforcement such facilities for inspecting and taking copies of the contents of the book or books as the Director may require.

(6) If a company fails to comply with subsection (1) or with a requirement made of it under subsection (5), the company and any officer of it who is in default shall be guilty of a category 4 offence.

Audit committees

167. (1) In this section—

“amount of turnover” and “balance sheet total” have the same meanings as they have in section 350;

“large company” means either of the following—

(a) a company that, in both the most recent financial year of the company and the immediately preceding financial year, meets the following criteria—

(i) the balance sheet total of that company exceeds for the year—

(I) subject to clause (II), €25,000,000; or

(II) if an amount is prescribed under section 945(1)(k), the prescribed amount; and

(ii) the amount of turnover of that company exceeds for the year—

(I) subject to clause (II), €50,000,000; or

(II) if an amount is prescribed under section 945(1)(k), the prescribed amount; or

(b) a company which has one or more subsidiary undertakings, if the company and all those subsidiary undertakings together, in both the most recent financial year of that company and the immediately preceding financial year, meet the criteria set out in paragraph (a).

(2) The board of directors of a large company shall either—

(a) establish a committee (an “audit committee”) that—

(i) has at least the responsibilities specified in subsection (7); and

(ii) otherwise meets the requirements of this section; or

(b) decide not to establish such a committee.

(3) The board of directors of a large company shall state in their report under section 325—

(a) whether the company has established an audit committee or decided not to do so;

(b) if the company has decided not to establish an audit committee, the reasons for that decision.

(4) The members of the audit committee shall include at least one independent director of the large company, that is to say, a person who—

(a) is a non-executive director of it; and

(b) otherwise possesses the requisite degree of independence (particularly with regard to his or her satisfying the condition in subsection (5)) so as to be able to contribute effectively to the committee’s functions.

(5) The condition referred to in subsection (4)(b) is that the director there referred to does not have, and at no time during the period of 3 years preceding his or her appointment to the committee did have—

(a) a material business relationship with the large company, either directly, or as a partner, shareholder, director (other than as a non-executive director) or senior employee of a body that has such a relationship with the company; or

(b) a position of employment in the large company.

(6) The director referred to in subsection (4) (or, where there is more than one director of the kind referred to in that subsection, one of them) shall be a person who has competence in accounting or auditing.

(7) Without prejudice to the responsibility of the board of directors, the responsibilities of the audit committee shall include:

(a) the monitoring of the financial reporting process;

(b) the monitoring of the effectiveness of the large company’s systems of internal control, internal audit and risk management;

(c) the monitoring of the statutory audit of the large company’s statutory financial statements; and

(d) the review and monitoring of the independence of the statutory auditors and in particular the provision of additional services to the large company.

(8) If an audit committee is established, any proposal of the board of directors of the large company with respect to the appointment of statutory auditors to the company shall be based on a recommendation made to the board by the audit committee.

(9) The statutory auditors shall report to the audit committee of the large company on key matters arising from the statutory audit of the company, and, in particular, on material weaknesses in internal control in relation to the financial reporting process.

(10) For the purposes of subsections (4) and (5)(a), a non-executive director is a director who is not engaged in the daily management of the large company or body concerned, as the case may be.

(11) Where a director of a large company fails to take all reasonable steps to comply withthe requirements of subsection (3), the director shall be guilty of a category 3 offence.

CHAPTER 5

Members

Definition of member

168. (1) The subscribers to the constitution of a company shall be deemed to have agreed to become members of the company, and, on its registration, shall be entered as members in its register of members.

(2) Every other person who agrees to become a member of a company, and whose name is entered in its register of members, shall be a member of the company.

Register of members

169. (1) Subject to subsection (5), a company shall keep a register of its members and enter in it the following particulars:

(a) the names, addresses of the members and a statement of the shares held by each member, distinguishing each share by its number so long as the share has a number, and of the amount paid or agreed to be considered as paid on the shares of each member;

(b) the date at which each person was entered in the register as a member; and

(c) the date at which any person ceased to be a member.

(2) Sections 215 to 217 (rights of inspection, requests for copies, etc.) apply to the register of members.

(3) The entries required under paragraphs (a) and (b) of subsection (1) shall be made within 28 days after the date of conclusion of the agreement with the company to become a member or, in the case of a subscriber of the constitution, within 28 days after the date of registration of the company.

(4) The entry required under subsection (1)(c) shall be made—

(a) within 28 days after the date when the person concerned ceased to be a member; or

(b) if the person ceased to be a member otherwise than as a result of action by the company, within 28 days after the date of production to the company of evidence satisfactory to the company of the occurrence of the event whereby the person ceased to be a member.

(5) Where the company has converted any of its shares into stock and given notice of the conversion to the Registrar, the register shall show the amount of stock held by each member instead of the amount of shares and the particulars relating to shares specified in subsection (1)(a).

(6) Where a company makes default in complying with any of the requirements of subsection (1) or subsections (3) to (5), the company and any officer of it who is in default shall be guilty of a category 3 offence.

Trusts not to be entered on register of members

170. No notice of any trust, express, implied or constructive, shall be entered—

(a) on the register of members or be receivable by the keeper of the register; or

(b) on any register kept by the Registrar.

Register to be evidence

171. The register of members shall be prima facie evidence of any matters by this Act directed or authorised to be inserted in it.

Consequences of failure to comply with requirements as to register owing to agent’s default

172. (1) Where—

(a) by virtue of section 216(2) the register of members is kept by some person other than the company concerned; and

(b) by reason of any default of that other person a failure on the part of the company to comply with section 169 or 216, or with any requirements of this Act as to the production of the register, occurs amounting to the commission of an offence under this Act by the company, that other person shall also be guilty of an offence and may be charged with and convicted of it whether or not proceedings for an offence are brought against the company.

(2) A person guilty of an offence under subsection (1) shall be liable on conviction to the same range of fines and other penalties provided in this Act that the company referred to in subsection (1) is or would be liable in respect of that offence.

(3) The power of the court under this Act to require compliance with the provision concerned shall extend to the making of orders against the person referred to in subsection (1) and his or her officers and servants.

Rectification of register

173. (1) If—

(a) the name of any person is, without sufficient cause, entered in the register of members or omitted from it, in contravention of subsections (1) and (3) of section 169, or

(b) default is made in entering on the register, within the period fixed by subsection

(4) of section 169, the fact of any person’s having ceased to be a member, the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register.

(2) Where an application is made under this section, the court may either refuse the application or may order rectification of the register and payment by the company of compensation for any loss sustained by any party aggrieved.

(3) On an application under this section the court may decide any question relating to the title of any person who is a party to the application to have his or her name entered in or omitted from the register (whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company on the other hand) and generally may decide any question necessary or expedient to be decided for rectification of the register.

(4) The court when making an order for rectification of the register shall by its order direct, if appropriate, notice of the rectification to be given to the Registrar.

(5) A company may, without application to the court, at any time rectify any error or omission in the register but such a rectification shall not adversely affect any person unless he or she agrees to the rectification made.

(6) The company shall, within 21 days after the date on which the rectification under subsection (5) has been made, give notice, in the prescribed form, of the rectification to the Registrar if the error or omission referred to in subsection (5) also occurs in any document forwarded by the company to the Registrar.

(7) Without prejudice to the generality of subsection (5), a rectification may be effected by the company under that subsection of an error or omission that relates to the amount of the company’s issued share capital (whether it consists of an overstatement or understatement of it) and subsection (6) shall apply, in the circumstances there set out, in the event of such a rectification.

Power to close register

174. A company may, on giving notice by advertisement in some newspaper circulating in the district in which the registered office of the company is situate, close the register of members for any time or times not exceeding in the whole 30 days in each year.

CHAPTER 6

General meetings and resolutions

Annual general meeting

175. (1) Subject to subsections (2) and (3), a company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year and shall specify the meeting as such in the notices calling it and not more than 15 months shall elapse between the date of one annual general meeting of a company and that of the next.

(2) So long as a company holds its first annual general meeting within 18 months after the date of its incorporation, it need not hold it in the year of its incorporation or in the following year.

(3) A company need not hold an annual general meeting in any year where all the members entitled (at the date of the written resolution referred to in this subsection) to attend and vote at such general meeting sign, before the latest date for the holding of that meeting, a written resolution under section 193—

(a) acknowledging receipt of the financial statements that would have been laid before that meeting;

(b) resolving all such matters as would have been resolved at that meeting; and

(c) confirming no change is proposed in the appointment of the person (if any) who, at the date of the resolution, stands appointed as statutory auditor of the company.

(4) Without prejudice to any specific provision of this Act providing for the contingency of an annual general meeting being so dispensed with, where a provision of this Act requires that a thing is to be done at an annual general meeting, then, if the thing is dealt with in the foregoing resolution (whether by virtue of the matter being resolved in the resolution, the members’ acknowledging receipt of a notice, report or other documentation or, as the case may require, howsoever otherwise), that requirement shall be regarded as having been complied with.

(5) If default is made in holding a meeting of the company in accordance with subsection (1), the Director of Corporate Enforcement may, on the application of any member of the company, call or direct the calling of a general meeting of the company and give such ancillary or consequential directions as the Director of Corporate Enforcement thinks expedient, including directions modifying or supplementing the operation of the company’s constitution in relation to the calling, holding and conducting of the meeting.

(6) The directions which may be given under subsection (5) may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

(7) A general meeting held in pursuance of subsection (5) shall, subject to any directions of the Director of Corporate Enforcement and subsection (8), be deemed to be an annual general meeting of the company.

(8) Where a meeting so held is not held in the year in which the default in holding the company’s annual general meeting occurred, the meeting so held shall not be treated as the annual general meeting for the year in which it is held unless, at that meeting, the company resolves that it shall be so treated.

(9) Where a company resolves that a meeting shall be so treated, a copy of the resolution shall, within 21 days after the date of passing of it, be delivered by it to the Registrar.

(10) If default is made in holding a meeting of the company in accordance with subsection (1), or in complying with any direction of the Director of Corporate Enforcement under subsection (5), the company and any officer of it who is in default shall be guilty of a category 3 offence.

(11) If default is made by a company in complying with subsection (9), the company and any officer of it who is in default shall be guilty of a category 4 offence.

The location and means for holding general meetings

176. (1) Subject to the provisions of this section, an annual general meeting of a company or an extraordinary general meeting of it may be held inside or outside of the State.

(2) If a company holds its annual general meeting or any extraordinary general meeting outside of the State then, unless all of the members entitled to attend and vote at such meeting consent in writing to its being held outside of the State, the company has the following duty.

(3) That duty is to make, at the company’s expense, all necessary arrangements to ensure that members can by technological means participate in any such meeting without leaving the State.

(4) A meeting referred to in subsection (1) may be held in 2 or more venues (whether inside or outside of the State) at the same time using any technology that provides members, as a whole, with a reasonable opportunity to participate.

Extraordinary general meetings

177. (1) All general meetings of a company, other than annual general meetings, shall be known, and in this Act are referred to, as “extraordinary general meetings”.

(2) The directors of a company may, whenever they think fit, convene an extraordinary general meeting.

(3) If, at any time, there are not sufficient directors capable of acting to form a quorum, any director of the company or any member of it may convene an extraordinary general meeting in the same manner as nearly as possible as that in which meetings may be convened by the directors.

Convening of extraordinary general meetings by members

178. (1) The rights conferred—

(a) by subsection (2) on a member or members have effect save where the constitution of the company provides otherwise; and

(b) by subsections (3) to (7) on a member or members (and the corresponding duties on the part of the directors) have effect notwithstanding anything in the constitution of the company.

(2) One or more members of a company holding, or together holding, at any time not less than 50 per cent (or such other percentage as may be specified in the constitution) of the paid up share capital of the company as, at that time, carries the right of voting at general meetings of the company may convene an extraordinary general meeting of the company.

(3) The directors of a company shall, on the requisition of one or more members holding, or together holding, at the date of the deposit of the requisition, not less than 10 percent of the paid up share capital of the company, as at the date of the deposit carries the right of voting at general meetings of the company, forthwith proceed duly to convene an extraordinary general meeting of the company.

(4) The requisition shall state the objects of the meeting and shall be signed by the requisitionists and deposited at the registered office of the company and may consist of several documents in like form each signed by one or more requisitionists.

(5) If the directors do not within 21 days after the date of the deposit of the requisition proceed duly to convene a meeting to be held within 2 months after that date (the “requisition date”), the requisitionists, or any of them representing more than 50 per cent of the total voting rights of all of them, may themselves convene a meeting, but any meeting so convened shall not be held after the expiration of 3 months after the requisition date.

(6) Any reasonable expenses incurred by the requisitionists by reason of the failure of the directors duly to convene a meeting shall be repaid to the requisitionists by the company and any sum so repaid shall be retained by the company out of any sums due or to become due from the company by way of fees or other remuneration in respect of their services to such of the directors as were in default.

(7) For the purposes of subsections (3) to (6), the directors shall, in the case of a meeting at which a resolution is to be proposed as a special resolution, be deemed not to have duly convened the meeting if they do not give such notice of it as is required by section 181.

(8) A meeting convened under subsection (2) or (5) shall be convened in the same manner as nearly as possible as that in which meetings are to be convened by directors.

Power of court to convene meeting

179. (1) Subject to subsection (2), the court may on application being made to it by any of the persons specified in subsection (3), or of its own motion, make an order requiring a general meeting of a company to be called, held and conducted in any manner that the court thinks fit.

(2) An order shall not be made under subsection (1) unless the court is satisfied that for any reason it is impracticable or otherwise undesirable—

(a) for any person to call a general meeting of the company in any manner in which meetings of that company may be called; or

(b) to conduct a general meeting of the company in any manner provided by this Act or the company’s constitution.

(3) The persons referred to in subsection (1) are—

(a) a director of the company referred to in that subsection (the “company”);

(b) a member of the company who would be entitled to vote at a general meeting of it;

(c) the personal representative of a deceased member of the company, which member would, but for his or her death, be entitled to vote at such a meeting; and

(d) the assignee in bankruptcy of a bankrupt member of the company, which member would be entitled to vote at such a meeting.

(4) Where an order under subsection (1) is made, the court may give such ancillary or consequential directions as it thinks expedient.

(5) Such directions may include a direction that one member of the company, or the personal representative of a deceased member of the company or the assignee in bankruptcy of a bankrupt member of it, present in person or by proxy, is a quorum.

(6) A meeting called, held and conducted in accordance with an order under subsection (1) is for all purposes to be taken as a meeting of the company duly called, held and conducted.

Persons entitled to notice of general meetings

180. (1) Notice of every general meeting of a company (“relevant notice”) shall be given to—

(a) every member;

(b) the personal representative of a deceased member of the company, which member would, but for his or her death, be entitled to vote at the meeting;

(c) the assignee in bankruptcy of a bankrupt member of the company (being a bankrupt member who is entitled to vote at the meeting); and

(d) the directors and secretary of the company.

(2) Relevant notice may, in the case of joint holders of a share, be given by giving the notice to the joint holder first named in the register in respect of the share.

(3) Relevant notice may be given by the company to the persons entitled to a share in consequence of the death or bankruptcy of a member by sending it through the post in a prepaid letter addressed to them by name or by the title of representatives of the deceased or assignee in bankruptcy or by any like description at the address supplied for the purpose by the persons claiming to be so entitled.

(4) Until such an address has been so supplied, relevant notice may be given to those persons by giving the notice in any manner in which it might have been given if the death or bankruptcy concerned had not occurred.

(5) Unless its constitution provides otherwise, no person, other than any person specified in the preceding subsections, shall be entitled to receive notices of general meetings of a company but this is without prejudice to subsection (6).

(6) Unless the company is entitled to and has availed itself of the audit exemption under section 360 or 365 (and, where relevant, section 399 has been complied with in that regard), the statutory auditors of a company shall be entitled to—

(a) attend any general meeting of a company;

(b) receive all notices of, and other communications relating to, any general meeting which any member of the company is entitled to receive; and

(c) be heard at any general meeting which they attend on any part of the business of the meeting which concerns them as statutory auditors.

Notice of general meetings

181. (1) Save where the constitution of the company makes provision for the giving of greater notice, a meeting of a company, other than an adjourned meeting, shall be called—

(a) in the case of the annual general meeting or an extraordinary general meeting for the passing of a special resolution, by not less than 21 days’ notice;

(b) in the case of any other extraordinary general meeting, by not less than 7 days’ notice.

(2) A meeting of a company shall, notwithstanding that it is called by shorter notice than that specified in subsection (1), be deemed to have been duly called if it is so agreed by—

(a) all the members entitled to attend and vote at the meeting; and

(b) unless no statutory auditors of the company stand appointed in consequence of the company availing itself of the audit exemption under section 360 or 365 (and, where relevant, section 399 has been complied with in that regard), the statutory auditors of the company.

(3) Where notice of a meeting is given by posting it by ordinary prepaid post to the registered address of a member, then, for the purposes of any issue as to whether the correct period of notice for that meeting has been given, the giving of the notice shall be deemed to have been effected on the expiration of 24 hours following posting.

(4) In determining whether the correct period of notice has been given by a notice of a meeting, neither the day on which the notice is served nor the day of the meeting for which it is given shall be counted.

(5) The notice of a meeting shall specify—

(a) the place, the date and the time of the meeting;

(b) the general nature of the business to be transacted at the meeting;

(c) in the case of a proposed special resolution, the text or substance of that proposed special resolution; and

(d) with reasonable prominence a statement that—

(i) a member entitled to attend and vote is entitled to appoint a proxy using the form set out in section 184 or, where that is allowed, one or more proxies, to attend, speak and vote instead of him or her;

(ii) a proxy need not be a member; and

(iii) the time by which the proxy must be received at the company’s registered office or some other place within the State as is specified in the statement for that purpose.

(6) Save to the extent that the company’s constitution provides otherwise, the accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at the meeting.

Quorum

182. (1) No business shall be transacted at any general meeting of a company unless a quorum of members is present at the time when the meeting proceeds to business.

(2) Save to the extent that its constitution provides otherwise or in a case falling within subsection (3), 2 members of a company present in person or by proxy at a general meeting of it shall be a quorum.

(3) In the case of a single-member company, one member of the company present in person or by proxy at a general meeting of it shall be a quorum.

(4) Subsection (5) shall apply unless the company’s constitution provides otherwise.

(5) Save to the extent that the company’s constitution provides otherwise, if within 15 minutes after the time appointed for a general meeting a quorum is not present, then—

(a) where the meeting has been convened upon the requisition of members, the meeting shall be dissolved;

(b) in any other case—

(i) the meeting shall stand adjourned to the same day in the next week, at the same time and place or to such other day and at such other time and place as the directors may determine; and

(ii) if at the adjourned meeting a quorum is not present within half an hour after the time appointed for the meeting, the members present shall be a quorum.

Proxies

183. (1) Subject to subsection (3), any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person (whether a member or not) as his or her proxy to attend and vote instead of him or her.

(2) A proxy so appointed shall have the same right as the member to speak at the meeting and to vote on a show of hands and on a poll.

(3) Unless the company’s constitution otherwise provides, a member of a company shall not be entitled to appoint more than one proxy to attend on the same occasion.

(4) The instrument appointing a proxy (the “instrument of proxy”) shall be in writing—

(a) under the hand of the appointer or of his or her attorney duly authorised in writing; or

(b) if the appointer is a body corporate, either under seal of the body corporate or under the hand of an officer or attorney of it duly authorised in writing.

(5) The instrument of proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of that power or authority, shall be deposited at the registered office of the company concerned or at such other place within the State as is specified for that purpose in the notice convening the meeting, and shall be so deposited not later than the following time.

(6) That time is—

(a) 48 hours (or such lesser period as the company’s constitution may provide) before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or

(b) in the case of a poll, 48 hours (or such lesser period as the company’s constitution may provide) before the time appointed for the taking of the poll.

(7) The depositing of the instrument of proxy referred to in subsection (5) may, rather than its being effected by sending or delivering the instrument, be effected by communicating the instrument to the company by electronic means, and this subsection likewise applies to the depositing of anything else referred to in subsection (5).

(8) If subsection (5) or (6) is not complied with, the instrument of proxy shall not be treated as valid.

(9) Subject to subsection (10), a vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the appointer or revocation of the proxy or of the authority under which the proxy was executed or the transfer of the share in respect of which the proxy is given.

(10) Subsection (9) does not apply if notice in writing of such death, insanity, revocation or transfer as is mentioned in that subsection is received by the company concerned at its registered office before the commencement of the meeting or adjourned meeting at which the proxy is used.

(11) Subject to subsection (12), if, for the purpose of any meeting of a company, invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the company’s expense to some only of the members entitled to be sent a notice of the meeting and to vote at it by proxy, any officer of the company who knowingly and intentionally authorises or permits their issue in that manner shall be guilty of a category 3 offence.

(12) An officer shall not be guilty of an offence under subsection (11) by reason only of the issue to a member, at his or her request in writing, of a form of appointment naming the proxy or of a list of persons willing to act as proxy if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.

Form of proxy

184. An instrument appointing a proxy shall be in the following form or a form as near to it as circumstances permit—

[name of company] (“the Company”)

[name of member] (“the Member”) of [address of member] being a member of the Company hereby appoint/s [name and address of proxy] or failing him or her [name and address of alternative proxy] as the proxy of the Member to attend, speak and vote for the Member on behalf of the Member at the (annual or extraordinary, as the case may be) general meeting of the Company to be held on the [date of meeting] and at any adjournment of the meeting.

Representation of bodies corporate at meetings of companies

185. (1) A body corporate may, if it is a member of a company, by resolution of its directors or other governing body authorise such person (in this section referred to as an “authorised person”) as it thinks fit to act as its representative at any meeting of the company or at any meeting of any class of members of the company.

(2) A body corporate may, if it is a creditor (including a holder of debentures) of a company, by resolution of its directors or other governing body authorise such person (in this section also referred to as an “authorised person”) as it thinks fit to act as its representative at any meeting of any creditors of the company held in pursuance of this Act or the provisions contained in any debenture or trust deed, as the case may be.

(3) An authorised person shall be entitled to exercise the same powers on behalf of the body corporate which he or she represents as that body corporate could exercise if it were an individual member of the company, creditor or holder of debentures of the company.

(4) The chairperson of a meeting may require a person claiming to be an authorised person within the meaning of this section to produce such evidence of the person’s authority as such as the chairperson may reasonably specify and, if such evidence is not produced, the chairperson may exclude such person from the meeting.

The business of the annual general meeting

186. The business of the annual general meeting shall include—

(a) the consideration of the company’s statutory financial statements and the report of the directors and, unless the company is entitled to and has availed itself of the audit exemption under section 360 or 365, the report of the statutory auditors on those statements and that report;

(b) the review by the members of the company’s affairs;

(c) save where the company’s constitution provides otherwise—

(i) the declaration of a dividend (if any) of an amount not exceeding the amount recommended by the directors; and

(ii) the authorisation of the directors to approve the remuneration of the statutory auditors (if any);

(d) where the company’s constitution so provides, the election and re-election of directors;

(e) save where the company is entitled to and has availed itself of the exemption referred to in paragraph (a), the appointment or re-appointment of statutory auditors; and

(f) where the company’s constitution so provides, the remuneration of the directors.

Proceedings at meetings

187. (1) Each provision of this section applies save to the extent that the company’s constitution provides otherwise.

(2) The chairperson, if any, of the board of directors shall preside as chairperson at every general meeting of the company, or if there is no such chairperson, or if he or she is not present within 15 minutes after the time appointed for the holding of the meeting or is unwilling to act, the directors present shall elect one of their number to be chairperson of the meeting.

(3) If at any meeting no director is willing to act as chairperson or if no director is present within 15 minutes after the time appointed for holding the meeting, the members present shall choose one of their number to be chairperson of the meeting.

(4) The chairperson may, with the consent of any meeting at which a quorum is present, and shall if so directed by the meeting, adjourn the meeting from time to time and from place to place.

(5) However no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

(6) When a meeting is adjourned for 30 days or more, notice of the adjourned meeting shall be given as in the case of an original meeting but, subject to that, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

(7) Unless a poll is demanded in accordance with section 189, at any general meeting—

(a) a resolution put to the vote of the meeting shall be decided on a show of hands; and

(b) a declaration by the chairperson that a resolution has, on a show of hands, been carried or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book containing the minutes of the proceedings of the company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.

(8) Where there is an equality of votes, whether on a show of hands or on a poll, the chairperson of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote.

Votes of members

188. (1) Each provision of this section applies save to the extent that the company’s constitution provides otherwise.

(2) Subject to any rights or restrictions for the time being attached to any class or classes of shares, where a matter is being decided—

(a) on a show of hands, every member present in person and every proxy shall have one vote, but so that no individual member shall have more than one vote; and

(b) on a poll, every member shall, whether present in person or by proxy, have one vote for each share of which he or she is the holder or for each €15 of stock held by him or her, as the case may be.

(3) Where there are joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders; and for this purpose, seniority shall be determined by the order in which the names of the joint holders stand in the register of members.

(4) Each of the following:

(a) a member of unsound mind;

(b) a member who has made an enduring power of attorney;

(c) a member in respect of whom an order has been made by any court having jurisdiction in cases of unsound mind; may vote, whether on a show of hands or on a poll, by his or her committee, donee of an enduring power of attorney, receiver, guardian or other person appointed by the foregoing court.

(5) Any such committee, donee of an enduring power of attorney, receiver, guardian, or other person may speak and vote by proxy, whether on a show of hands or on a poll.

(6) No member shall be entitled to vote at any general meeting of a company unless all calls or other sums immediately payable by him or her in respect of shares in the company have been paid.

(7) No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes.

(8) Any such objection made in due time shall be referred to the chairperson of the meeting, whose decision shall be final and conclusive.

Right to demand a poll

189. (1) At a meeting, a poll may be demanded in relation to a matter (whether before or on the declaration of the result of the show of hands in relation to it).

(2) A demand for such a poll may be made by—

(a) the chairperson of the meeting;

(b) at least 3 members present in person or by proxy;

(c) any member or members present in person or by proxy and representing not less than 10 per cent of the total voting rights of all the members of the company concerned having the right to vote at the meeting; or

(d) a member or members holding shares in the company concerned conferring the right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than 10 per cent of the total sum paid up on all the shares conferring that right.

(3) A demand for such a poll may be withdrawn by the person or persons who have made the demand.

(4) Subject to subsection (5), if a poll is duly demanded it shall be taken in such manner as the chairperson of the meeting directs, and the result of the poll shall be deemed to be the resolution, in relation to the matter concerned, of the meeting at which the poll was demanded.

(5) A poll demanded with regard to the election of a chairperson or on a question of adjournment shall be taken forthwith.

(6) A poll demanded on any other question shall be taken at such time as the chairperson of the meeting directs, and any business other than that on which a poll is demanded may be proceeded with pending the taking of the poll.

(7) The instrument appointing a proxy to vote at a meeting of a company shall be deemed also to confer authority to demand or join in demanding a poll, and for the purposes of subsections (2) and (3), a demand by a person as proxy for a member shall be the same as a demand by the member.

Voting on a poll

190. On a poll taken at a meeting of a company or a meeting of any class of members of a company, a member, whether present in person or by proxy, entitled to more than one vote need not, if he or she votes—

(a) use all his or her votes; or

(b) cast all the votes he or she uses in the same way.

Resolutions — ordinary resolutions, special resolutions, etc., — meaning

191. (1) In this Act “ordinary resolution” means a resolution passed by a simple majority of the votes cast by members of a company as, being entitled to do so, vote in person or by proxy at a general meeting of the company.

(2) In this Act “special resolution” means a resolution—

(a) that is referred to as such in this Act, or is required (whether by this Act or by a company’s constitution or otherwise) to be passed as a special resolution; and

(b) that satisfies the condition specified in subsection (3); and

(c) without prejudice to subsections (4) and (5), as respects which notice of the meeting at which the resolution is proposed to be passed has been given in accordance with section 181(1)(a) and (5).

(3) The condition referred to in subsection (2)(b) is that the resolution is passed by not less than 75 per cent of the votes cast by such members of the company concerned as, being entitled to do so, vote in person or by proxy at a general meeting of it.

(4) Notwithstanding section 181(1)(a), for the purposes of subsection (2)(c) a resolution may be proposed and passed as a special resolution at a meeting of which less than 21 days’ notice has been given if it is so agreed by a majority in number of the members having the right to attend and vote at any such meeting, being a majority either—

(a) together holding not less than 90 per cent in nominal value of the shares giving that right; or

(b) together representing not less than 90 per cent of the total voting rights at that meeting of all the members.

(5) Nothing in either subsection (2)(c) (as it relates to section 181(1)(a)) or (4) prevents a special resolution from being regarded as having been passed (in a case where less than 21 days’ notice of the meeting has been given) in the following circumstances:

(a) the agreement referred to in section 181(2) exists as regards the meeting; and

(b) the condition specified in subsection (3) is satisfied in relation to the resolution.

(6) The terms of any resolution (whether special or otherwise) before a general meeting may be amended by ordinary resolution moved at the meeting provided that the terms of the resolution as amended will still be such that adequate notice of the intention to pass the same can be deemed to have been given.

(7) Any reference to an extraordinary resolution contained in any statute which was passed or document which existed before 1 April 1964 shall, in relation to a resolution passed on or after that date, be deemed to be a reference to a special resolution.

(8) In this Act “written resolution” means either an ordinary resolution or a special resolution passed in accordance with section 193 or 194.

Resolutions passed at adjourned meetings

192. Where a resolution is passed at an adjourned general meeting, the resolution shall for all purposes be treated as having been passed on the date on which it was in fact passed and shall not be deemed to have been passed on any earlier date.

Unanimous written resolutions

193. (1) Notwithstanding any provision to the contrary in this Act—

(a) a resolution in writing signed by all the members of a company for the time being entitled to attend and vote on such resolution at a general meeting (or being bodies corporate by their duly appointed representatives) shall be as valid and effective for all purposes as if the resolution had been passed at a general meeting of the company duly convened and held; and

(b) if described as a special resolution shall be deemed to be a special resolution within the meaning of this Act.

(2) For the avoidance of doubt, the reference in subsection (1) to a provision to the contrary includes a reference to a provision that stipulates that the company in general meeting, or the members of the company in general meeting, must have passed the resolution concerned.

(3) A resolution passed in accordance with subsection (1) may consist of several documents in like form each signed by one or more members.

(4) A resolution passed in accordance with subsection (1) shall be deemed to have been passed at a meeting held on the date on which it was signed by the last member to sign, and, where the resolution states a date as being the date of his or her signature thereof by any member, the statement shall be prima facie evidence that it was signed by him or her on that date.

(5) If a resolution passed in accordance with subsection (1) is not contemporaneously signed, the company shall notify the members, within 21 days after the date of delivery to it of the documents referred to in subsection (6), of the fact that the resolution has been passed.

(6) The signatories of a resolution passed in accordance with subsection (1) shall, within 14 days after the date of its passing, procure delivery to the company of the documents constituting the written resolution; without prejudice to the use of the other means of delivery generally permitted by this Act, such delivery may be effected by electronic mail or the use of a facsimile machine.

(7) The company shall retain those documents as if they constituted the minutes of the proceedings of a general meeting of the company; without prejudice to the requirement (by virtue of section 199(1)) that the terms of the resolution concerned be entered in books kept for the purpose, the requirement under this subsection that the foregoing documents be retained shall be read as requiring those documents to be kept with the foregoing books.

(8) It is immaterial, as regards the resolution’s validity, whether subsection (5), (6) or (7) is complied with.

(9) If a company fails to comply with subsection (5), the company and any officer of it who is in default shall be guilty of a category 4 offence.

(10) If a signatory fails to take all reasonable steps to procure the delivery to the company, in accordance with subsection (6), of the documents referred to in that subsection, the signatory shall be guilty of a category 4 offence.

(11) This section does not apply to—

(a) a resolution to remove a director;

(b) a resolution to effect the removal of a statutory auditor from office, or so as not to continue him or her in office, as mentioned in section 382(2), 383(2)(b) or 394.

(12) Nothing in this section affects any rule of law as to—

(a) things done otherwise than by passing a resolution;

(b) circumstances in which a resolution is or is not treated as having been passed; or

(c) cases in which a person is precluded from alleging that a resolution has not been duly passed.

Majority written resolutions

194. (1) Notwithstanding any provision to the contrary in this Act, a resolution in writing—

(a) that is—

(i) described as being an ordinary resolution, and

(ii) signed by the requisite majority of members of the company concerned, and

(b) in respect of which the condition specified in subsection (7) is satisfied, shall be as valid and effective for all purposes as if the resolution had been passed at a general meeting of the company duly convened and held.

(2) For the avoidance of doubt, the reference in subsection (1) to a provision to the contrary includes a reference to a provision that stipulates that the company in general meeting, or the members of the company in general meeting, must have passed the resolution concerned.

(3) In subsection (1) “requisite majority of members” means a member or members who alone or together, at the time of the signing of the resolution concerned, represent more than 50 per cent of the total voting rights of all the members who, at that time, would have the right to attend and vote at a general meeting of the company (or being bodies corporate by their duly appointed representatives).

(4) Notwithstanding any provision to the contrary in this Act, a resolution in writing—

(a) that is—

(i) described as being a special resolution, and

(ii) signed by the requisite majority of members, and

(b) in respect of which the condition specified in subsection (7) is satisfied, shall be as valid and effective for all purposes as if the resolution had been passed at a general meeting of the company duly convened and held.

(5) For the avoidance of doubt, the reference in subsection (4) to a provision to the contrary includes a reference to a provision that stipulates that the company in general meeting, or the members of the company in general meeting, must have passed the resolution concerned.

(6) In subsection (4) “requisite majority of members” means a member or members who alone or together, at the time of the signing of the resolution concerned, represent at least 75 per cent of the total voting rights of all the members who, at that time, would have the right to attend and vote at a general meeting of the company (or being bodies corporate by their duly appointed representatives).

(7) The condition referred to in subsections (1)(b) and (4)(b) is that all members of the company concerned entitled to attend and vote on the resolution referred to in subsection (1) or (4), as the case may be, have been circulated, by the directors or the other person proposing it, with the proposed text of the resolution and an explanation of its main purpose.

(8) A resolution passed in accordance with subsection (1) or (4) may consist of several documents in like form each signed by one or more members.

(9) Without prejudice to section 195(5), a resolution passed—

(a) in accordance with subsection (1), shall be deemed to have been passed, subject to subsection (10), at a meeting held 7 days after the date on which it was signed by the last member to sign, or

(b) in accordance with subsection (4), shall be deemed to have been passed, subject to subsection (10), at a meeting held 21 days after the date on which it was signed by the last member to sign, and where the resolution states a date as being the date of his or her signature thereof by any member the statement shall be prima facie evidence that it was signed by him or her on that date.

(10) Without prejudice to section 195(5), if—

(a) a date earlier than that referred to in subsection (9)(a) or (b) (not being earlier than the date on which the resolution was signed by the last member to sign) is specified in the resolution referred to in subsection (1) or (4) as the date on which it shall have been deemed to have been passed,

(b) all members of the company concerned entitled to attend and vote on that resolution state, in a written waiver signed by each of them, that the application of subsection (9) is waived, and

(c) there accompanies the delivery to the company under subsection (3) of section 195 of the documents referred to in that subsection that written waiver (which may be so delivered to the company by any of the means referred to in that subsection), then the resolution shall be deemed to have been passed on the date specified in it.

(11) A written waiver under subsection (10) may consist of several documents in like form each signed by one or more members.

Supplemental provisions in relation to section 194

195. (1) Section 194 does not apply to—

(a) a resolution to remove a director;

(b) a resolution to effect the removal of a statutory auditor from office, or so as not to continue him or her in office, as mentioned in section 382(2), 383(2)(b) or 394.

(2) Within 3 days after the date of the delivery to it of the documents referred to in subsection (3), the company shall notify every member of—

(a) the fact of the resolution concerned having been signed by the requisite majority of members (within the meaning of section 194(3) or (6), as the case may be); and

(b) the date that the resolution will, by virtue of section 194, be deemed to have been passed.

(3) The signatories of a resolution passed in accordance with section 194(1) or (4) shall procure delivery to the company of the documents constituting the written resolution;

without prejudice to the use of the other means of delivery generally permitted by this Act, such delivery may be effected by electronic mail or the use of a facsimile machine.

(4) The company shall retain those documents as if they constituted the minutes of the proceedings of a general meeting of the company; without prejudice to the requirement (by virtue of section 199(1)) that the terms of the resolution concerned be entered in books kept for the purpose, the requirement under this subsection that the foregoing documents be retained shall be read as requiring those documents to be kept with the foregoing books.

(5) Unless and until subsection (3) is complied with, a resolution passed in accordance with section 194(1) or (4) shall not have effect; however it is immaterial, as regards the resolution’s validity, whether subsection (2) or (4) is complied with.

(6) Where subsection (10) of section 194 applies, the reference in subsection (5) to subsection (3) shall be read as including a reference to paragraph (c) of that subsection (10).

(7) If a company fails to comply with subsection (2), the company and any officer of it who is in default shall be guilty of a category 4 offence.

Single-member companies — absence of need to hold general meetings, etc.

196. (1) In this Act “single-member company” means a company which, for whatever reason has, for the time being, a sole member (and this applies notwithstanding a stipulation in the constitution that there be 2 members, or a greater number).

(2) Subject to subsection (3), all the powers exercisable by a company in general meeting under this Act or otherwise shall be exercisable, in the case of a single-member company, by the sole member without the need to hold a general meeting for that purpose; for the avoidance of doubt this subsection extends to the exercise of the power under section 146 to remove a director and, accordingly, any of the procedures under that section concerning notice to the director or the making of representations by the director shall not apply in the case of a single-member company but this is without prejudice to the application of the requirements of procedural fairness to the exercise of that power of removal by the sole member and section 147.

(3) Subsection (2) shall not empower the sole member of a single-member company to exercise the powers under section 382(2), 383(2)(b) or 394 to remove a statutory auditor from, or not continue a statutory auditor in, office without holding the requisite meeting provided for in the section concerned.

(4) Subject to subsection (3), any provision of this Act which—

(a) enables or requires any matter to be done or to be decided by a company in general meeting, or

(b) requires any matter to be decided by a resolution of the company, shall be deemed to be satisfied, in the case of a single-member company, by a decision of the member which is drawn up in writing and notified to the company in accordance with this section.

**(5) Where the sole member of a single-member company takes any decision which has effect, pursuant to subsections (2) and (4), as if agreed by the company in general meeting, the member shall provide the company with a written record of that decision, unless the decision is taken by way of written resolution which the member has already forwarded to the company.

(6) Where the sole member notifies to the company of which he or she is such member a decision taken by way of written resolution, or, pursuant to subsection (5), a written record of a decision taken by him or her, the notification shall be recorded and retained by the company in a book or by some other suitable means maintained for the purpose, and the one or more records so retained shall—

(a) be deemed to be the books kept by the company pursuant to section 199, or

(b) where (at any subsequent or prior time when the company is, or was, not a singlemember company) that section has or had application to proceedings of its members, be kept with the books kept by the company pursuant to section 199, and, either case, subsection (5) of that section applies to those records as it applies to books generally of a company under that section.

(7) Where—

(a) the sole member of a single-member company exercises or discharges, by virtue of this section, any power, right or obligation, and

(b) such exercise or discharge involves or consists of the passing of a resolution, or the sole member’s agreeing to a thing, to which section 198 applies, such exercise or discharge shall, within 15 days after the date of the exercise or discharge, be notified by the company in writing to the Registrar and be recorded by the Registrar.

(8) If—

(a) the sole member fails to comply with subsection (5), or

(b) a company fails to comply with subsection (6) or (7), then (irrespective of whether the case falls within paragraph (a) or (b)) the sole member, the company and any officer of it who is in default shall be guilty of a category 4 offence.

(9) Failure by the sole member to comply with subsection (5) shall not affect the validity of any decision referred to in that subsection.

Application of this Part to class meetings

197. (1) The provisions of this Part, and the provisions of the constitution of a company relating to general meetings, shall, as far as applicable, apply in relation to any meeting of any class of member of the company.

(2) Subsection (1) operates so that all of section 198, in so far as it relates to subsection (4)(c) of that section, applies in relation to any meeting of any class of member of the company but does not operate to apply (if those provisions would otherwise be so applicable) the provisions of that section apart from the foregoing to any such meeting.

Registration of, and obligation of company to supply copies of, certain resolutions and agreements

198. (1) A copy of every resolution or agreement to which this section applies shall, within 15 days after the date of passing or making of it, be forwarded by the company concerned to the Registrar and recorded by the Registrar.

(2) A copy of every such resolution or agreement for the time being in force shall be embodied in, or annexed to, every copy of the constitution of the company concerned issued by it after the passing of the resolution or the making of the agreement.

(3) A copy of every such resolution or agreement shall be forwarded by the company concerned to any member of it, at his or her request, on payment of €10.00 or such lesser sum as the company may direct.

(4) This section applies to—

(a) resolutions that are required by this Act or a company’s constitution to be special resolutions;

(b) resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions;

(c) resolutions or agreements which have been agreed to by all the members of some class of shareholders but which if not so agreed to, would not have been effective for their purpose unless they had been passed by some particular majority or otherwise in some particular manner, and all resolutions or agreements which effectively bind all the members of any class of shareholders though not agreed to by all those members;

(d) resolutions increasing or decreasing the authorised share capital (if any) of a company;

(e) resolutions conferring authority for the allotment of shares;

(f) resolutions that a company be wound up voluntarily passed under section 580;

(g) resolutions attaching rights or restrictions to any share;

(h) resolutions varying any such right or restriction;

(i) resolutions classifying any unclassified share;

(j) resolutions converting shares of one class into shares of another class;

(k) resolutions converting share capital into stock and resolutions converting stock into share capital.

(5) If a company fails to comply with subsection (1), (2) or (3), the company and any officer of it who is in default shall be guilty of a category 4 offence.

(6) For the purposes of subsection (5), a liquidator of a company shall be deemed to be an officer of the company.

Minutes of proceedings of meetings of a company

199. (1) A company shall, as soon as may be after their holding or passing, cause—

(a) minutes of all proceedings of general meetings of it, and

(b) the terms of all resolutions of it, to be entered in books kept for that purpose; all such books kept by a company in pursuance of this subsection shall be kept at the same place.

(2) Sections 215 to 217 (rights of inspection, requests for copies, etc.) apply to those books.

(3) Any such minute, if purporting to be signed by the chairperson of the meeting at which the proceedings were had, or by the chairperson of the next succeeding meeting, shall be evidence of the proceedings.

(4) Where minutes have been made in accordance with this section of the proceedings at any general meeting of a company then, until the contrary is proved—

(a) the meeting shall be deemed to have been duly held and convened;

(b) all proceedings had at the meeting shall be deemed to have been duly had; and

(c) all appointments of directors or liquidators shall be deemed to be valid.

(5) A company shall, if required by the Director of Corporate Enforcement, produce to the Director for inspection the book or books kept in accordance with subsection (1) by it and shall give the Director of Corporate Enforcement such facilities for inspecting and taking copies of the contents of the book or books as the Director may require.

(6) If a company fails to comply with subsection (1) or with a requirement made of it under subsection (5), the company and any officer of it who is in default shall be guilty of a category 4 offence.

CHAPTER 7

Summary Approval Procedure

Interpretation (Chapter 7)

200. (1) In this Chapter—

“common draft terms of merger” means the common draft terms of merger referred to in section 466(1);

“declaration” means a declaration referred to in section 202(1)(b);

“merger” means a merger under Chapter 3 of Part 9;

“merging companies” has the same meaning as it has in Chapter 3 of Part 9;

“restricted activity” means an activity that is specified in—

(a) section 82 (financial assistance for acquisition of shares);

(b) section 84 (reduction in company capital);

(c) section 91 (variation of company capital on reorganisations);

(d) section 118 (prohibition on pre-acquisition profits or losses being treated in holding company’s financial statements as profits available for distribution);

(e) section 239 (prohibition of loans, etc., to directors and connected persons);

(f) section 464 (merger may not be put into effect save in accordance with the relevant provisions of this Act); or

(g) section 579 (procedure for and commencement of members’ voluntary winding up);

the carrying on of which is expressed by a provision of this Act to be either—

(i) prohibited unless carried on in accordance with the Summary Approval Procedure; or

(ii) authorised subject to a specified requirement that the Summary Approval Procedure be employed or, in the case of section 84, 91 or 464, that the Summary Approval Procedure be employed if the alternative procedure specified in section 84(2)(b), 91(4)(b) or, as the case may be, 464(1)(b) is not employed;

“Summary Approval Procedure” shall be read in accordance with section 202;

“written means for passing the resolution” means—

(a) other than in the case of a merger, the means under section 193 or 194(4) for passing a special resolution;

(b) in the case of a merger, the means under section 193 for passing a unanimous resolution.

(2) A reference in the definition of “restricted activity” in subsection (1) to an activity—

(a) subject to paragraph (b), includes a reference to a procedure, transaction or arrangement;

(b) in the case of the activity falling within paragraph (g) of that definition, is a reference to the commencement of a members’ voluntary winding up.

Chapter 7 — what it does

201. (1) This Chapter sets out the way in which a company can, by—

(a) its members passing a special resolution, and

(b) its directors making a certain declaration, either—

(i) permit the carrying on of a restricted activity (not being a merger) that is otherwise prohibited, or

(ii) fulfil the requirement specified in the provision concerned for the restricted activity (not being a merger) to be authorised, as the case may be.

(2) In a case where the restricted activity is a merger, this Chapter sets out the way in which each of the merging companies can, by—

(a) every member of it entitled to vote at a general meeting of the company voting in favour of a resolution at such a meeting, and

(b) its directors making a certain declaration, authorise, as provided in section 464(1), the merger to be put in effect without certain procedures under Chapter 3 of Part 9 having to be employed.

(3) The provisions of this Chapter shall be read and shall operate so that a restricted activity may be carried on at a time falling before compliance with the requirement (arising under section 203, 204, 205, 206 or 207 as the case may be) that a copy of the appropriate declaration be delivered to the Registrar; however

— should a failure to comply with that requirement occur

— that failure then invalidates the carrying on of the activity, but this is without prejudice to the power of validation conferred subsequently by this Chapter on the court.

Summary Approval Procedure

202. (1) In this Act “Summary Approval Procedure” means the procedure whereby the following conditions are satisfied:

(a) authority for the carrying on of the restricted activity has been conferred by—

(i) other than in the case of a merger, a special resolution of the company; or

(ii) in the case of a merger, a resolution of each of the merging companies which every member of the company entitled to vote at a general meeting of it has voted in favour of (a “unanimous resolution”);

being a special resolution or unanimous resolution passed not more than, subject to subsections (2) and (3), 12 months prior to the commencement of the carrying on by the company, or as the case may be, by each of the merging companies of the activity; and

(b) either—

(i) the company or, as the case may be, each of the merging companies has forwarded with each notice of the meeting at which the special resolution or other foregoing resolution is to be considered, or

(ii) if the written means for passing the resolution is used, the company or, as the case may be, each of the merging companies has appended to the proposed text of the resolution, a copy of a declaration which complies with subsection (6) and the other relevant provisions of this Chapter as regards its contents or the documents to be attached to it.

(2) In computing the period of 12 months referred to in subsection (1)(a) there shall be disregarded, where an application is made in accordance with section 211 to cancel the special resolution, the period beginning on the date of the making of that application and ending on—

(a) the date of confirmation of the special resolution by the court on that application; or

(b) if such an application so made is withdrawn, the date of that withdrawal.

(3) If the restricted activity is that referred to in paragraph (d) of the definition of that expression in section 200(1), the reference in subsection (1)(a) to 12 months shall be read as a reference to—

(a) subject to paragraph (b), 60 days; or

(b) if—

(i) one or more members who hold, or together hold, more than 90 per cent in nominal value of each class of issued shares of the company and entitled to vote at general meetings of the company have voted in favour of the special resolution referred to in subsection (1)(a), or

(ii) that resolution has been passed by the means provided under section 193, 30 days, but subsection (2) applies as regards computing that period of 60 or 30 days as it applies as regards computing the period of 12 months referred to in subsection (2).

(4) Subsection (1) is, in the case of a merger, without prejudice to the procedures set out in Chapter 3 of Part 9 that must be followed before the resolution referred to in paragraph (a)(ii) of that subsection may be passed.

(5) In the case of a merger, on the delivery, in accordance with section 206, to the Registrar of each declaration referred to in that section, the Registrar shall register the dissolution of the transferor company or companies concerned.

(6) The declaration referred to in subsection (1)(b) is a declaration in writing that is made at a meeting of the directors held—

(a) not earlier than 30 days before the date of the meeting referred to in subsection (1)(b), or

(b) if the written means for passing the resolution is used, not earlier than 30 days before the date of the signing of the resolution by the last member to sign, and that is made by the directors or, in the case of a company having more than 2 directors, by a majority of the directors.

(7) The terms of the resolution referred to in subsection (1)(a)(ii) (which deals with a case of a merger) shall be that the common draft terms of merger are approved.

Declaration to be made in the case of financial assistance for acquisition of shares or transaction with directors

203. (1) Where the restricted activity is a transaction or arrangement that would otherwise be prohibited by section 82(2) or 239, the declaration shall state—

(a) the circumstances in which the transaction or arrangement is to be entered into;

(b) the nature of the transaction or arrangement;

(c) the person or persons to or for whom the transaction or arrangement is to be made;

(d) the purpose for which the company is entering into the transaction or arrangement;

(e) the nature of the benefit which will accrue to the company directly or indirectly from entering into the transaction or arrangement; and

(f) that the declarants have made a full inquiry into the affairs of the company and that, having done so, they have formed the opinion that the company, having entered into the transaction or arrangement (the “relevant act”), will be able to pay or discharge its debts and other liabilities in full as they fall due during the period of 12 months after the date of the relevant act.

(2) For the purposes of a declaration under this section, in determining whether or not a company will be able to pay or discharge its debts and other liabilities in full, the declarants shall not be required to assume (in circumstances where the following are relevant) either that the company will be called upon to pay moneys on foot of a guarantee given or, as the case may be, that security given will be realised.

(3) A copy of the declaration under this section shall be delivered to the Registrar not later than 21 days after the date on which the carrying on of the restricted activity concerned is commenced.

(4) On application to it by any interested party, the court may, in any case where there has been a failure to comply with subsection (3), declare that the carrying on of the restricted activity concerned shall be valid for all purposes if the court is satisfied that it would be just and equitable to do so.

Declaration to be made in the case of a reduction in company capital or variation of company capital on reorganisation

204. (1) Where the restricted activity is a reduction in company capital referred to in section 84(1) or a transfer or disposal referred to in section 91(1), the declaration shall state—

(a) the circumstances in which the transaction or arrangement is to be entered into;

(b) the nature of the transaction or arrangement;

(c) the person or persons to or for whom the transaction or arrangement is to be made;

(d) the total amount of the company’s assets and liabilities as at the latest practicable date before the date of making of the declaration and in any event at a date not more than 3 months before the date of that making;

(e) the anticipated total amount of the company’s assets and liabilities immediately after the restricted activity having taken place;

(f) that the declarants have made a full inquiry into the affairs of the company and that, having done so, they have formed the opinion that the company, after the restricted activity has taken place, will be able to pay or discharge its debts and other liabilities (being the debts and liabilities identified for the purposes of paragraph (d) and so far as not already paid or discharged) in full as they fall due during the period of 12 months after the date of that event; and

(g) that the declarants do not have actual or constructive notice that the company will incur any material, extraordinary, future liability within the period of 12 months after the date of the making of the declaration.

(2) A copy of the declaration under this section shall be delivered to the Registrar not later than 21 days after the date on which the carrying on of the restricted activity concerned is commenced; if a failure to comply with this subsection occurs, a like power to that under section 203(4) is available to the court to declare valid for all purposes the carrying on of the activity.

Declaration to be made in the case of treatment of pre-acquisition profits or losses in a manner otherwise prohibited by section 118(1)

205. (1) Where the restricted activity is to provide in a company’s financial statements a treatment that is otherwise prohibited by section 118(1) of the profits or losses attributable to shares of a subsidiary of the company for the period referred to in section 118(2) as the “pre-acquisition period”, the declaration shall state—

(a) the amount of the profits or losses that will be subject to the alternative treatment and the amount so stated is referred to in this section as the “proposed distribution”;

(b) the total amount of the company’s assets and liabilities as stated in its last statutory financial statements or interim financial statements properly prepared as of a date specified in the declaration, and the date so specified shall be the date which is the latest practicable date before the date of making of the declaration and in any event shall not be a date more than 3 months before the date of such making;

(c) that the declarants have made a full inquiry into the affairs of the company and that, having done so, they have formed the opinion that, if the company were to make the proposed distribution within 2 months after the date of the making of the declaration, the company would be able to pay or discharge its debts and other liabilities included in the financial statements referred to in paragraph (b) as they fall due during the period of 12 months after the date of that distribution.

(2) In determining whether or not a company will be able to pay or discharge its debts and other liabilities as they fall due, the declarants shall be required to consider the likelihood (in circumstances where the following are relevant) either that the company will be called upon to pay moneys on foot of a guarantee given or, as the case may be, that security given will be realised.

(3) The reference in subsection (1)(b) to a company’s last statutory financial statements or interim financial statements or to their being properly prepared shall be read in accordance with section 121.

(4) A copy of the declaration under this section shall be delivered to the Registrar not later than 21 days after the date on which the carrying on of the restricted activity concerned is commenced; if a failure to comply with this subsection occurs, a like power to that under section 203(4) is available to the court to declare valid for all purposes the carrying on of the activity.

Declaration to be made in the case of merger of company

206. (1) Where the restricted activity is to effect a merger, each declaration (that is to say, each declaration by the directors (or a majority of them) of each merging company) shall state—

(a) the total amount of the assets and liabilities of the merging company in question as at the latest practicable date before the date of making of the declaration and in any event at a date not more than 3 months before the date of that making; and

(b) that the declarants have made a full inquiry into the affairs of the company and the other merging companies and that, having done so, they have formed the opinion that the successor company (within the meaning of Chapter 3 of Part 9) will be able to pay or discharge the debts and other liabilities of it and the transferor company or companies in full as they fall due during the period of 12 months after the date on which the merger takes effect.

(2) A copy of each declaration under this section shall be delivered to the Registrar not later than 21 days after the date on which the carrying on of the restricted activity concerned is commenced; if a failure to comply with this subsection occurs, a like power to that under section 203(4) is available to the court to declare valid for all purposes the carrying on of the activity.

Declaration to be made in the case of members’ winding up of solvent company

207. (1) Where the restricted activity is to wind up a company in a members’ voluntary winding up under section 579, the declaration shall state—

(a) the total amount of the company’s assets and liabilities as at the latest practicable date before the date of making of the declaration and in any event at a date not more than 3 months before the date of that making; and

(b) that the declarants have made a full inquiry into the affairs of the company and that, having done so, they have formed the opinion that the company will be able to pay or discharge its debts and other liabilities in full within such period not exceeding 12 months after the commencement of the winding up as may be specified in the declaration.

(2) A copy of the declaration under this section shall be delivered to the Registrar not later than 21 days after the date on which the carrying on of the restricted activity concerned is commenced; if a failure to comply with this subsection occurs, a like power to that under section 203(4) is available to the court to declare valid for all purposes the carrying on of the activity.

Condition to be satisfied common to declarations referred to in section 204, 205 or 207

208. A declaration referred to in section 204, 205 or 207 shall have no effect for the purposes of this Act unless it is accompanied by a report—

(a) drawn up in the prescribed form, by a person who is qualified at the time of the report to be appointed, or to continue to be, the statutory auditor of the company; and

(b) which shall state whether, in the opinion of that person, the declaration is not unreasonable.

Condition to be satisfied in relation to declaration referred to in section 206

209. (1) A declaration referred to in section 206 shall have no effect for the purposes of this Act unless it is accompanied by a document prepared by the declarants either—

(a) confirming that the common draft terms of merger provide for such particulars of each relevant matter as will enable each of the prescribed effects provisions to operate without difficulty in relation to the merger; or

(b) specifying such particulars of each relevant matter as will enable each of those effects provisions to operate without difficulty in relation to the merger.

(2) In subsection (1) “prescribed effects provisions” means subsection (3)(a) to (i) of section 480 as that subsection has effect by virtue of section 472(2).

Civil sanctions where opinion as to solvency stated in declaration without reasonable grounds

210. (1) Where a director of a company makes a declaration without having reasonable grounds for the opinion referred to in section 203(1)(f), 204(1)(f), 205(1)(c), 206(1)(b) or 207(1)(b), as the case may be, the court, on the application of—

(a) a liquidator, creditor, member or contributory of the company or, in the case of the opinion referred to in section 206(1)(b), of the successor company (within the meaning of Chapter 3 of Part 9), or

(b) the Director of Corporate Enforcement, may declare that the director shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company or successor company, as the case may be.

(2) If a company or, as the case may be, a successor company (within the foregoing meaning) is wound up within 12 months after the date of the making of a declaration and its debts are not paid or provided for in full within 12 months after the commencement of the winding up, it shall be presumed, until the contrary is shown, that each director of, as appropriate—

(a) the company, or

(b) the merging companies, who made the declaration did not have reasonable grounds for the opinion referred to in section 203(1)(f), 204(1)(f), 205(1)(c), 206(1)(b) or 207(1)(b), as the case may be.

(3) If the court makes a declaration under subsection (1), it may give such further directions as it thinks proper for the purpose of giving effect to the declaration.

Moratorium on certain restricted activities being carried on and applications to court to cancel special resolution

211. (1) This section shall apply unless the restricted activity—

(a) is to effect a merger; or

(b) has the authority of a special resolution referred to in section 202(1)(a)(i) passed by the means provided under section 193.

(2) Unless one or more members who hold, or together hold, more than 90 per cent in nominal value of each class of issued shares of the company and entitled to vote at general meetings of the company have voted in favour of the special resolution referred to in section 202(1)(a), the company shall not proceed to carry on the restricted activity—

(a) subject to paragraph (b), until the expiry of 30 days after the date on which the special resolution has been passed; or

(b) if an application under subsection (3) is made, until the application has been disposed of by the court (and then only (unless the application is withdrawn) to the extent, if any, that authority for its being proceeded with is provided by confirmation of the special resolution by the court on that application).

(3) An application may be made to the court in accordance with this section for the cancellation of the special resolution.

(4) Subject to subsection (5), an application under subsection (3) may be made by one or more members who held, or together held, not less than 10 per cent in nominal value of the company’s issued share capital, or any class thereof, at the date of the passing of the special resolution and hold, or together hold, not less than that percentage in nominal value of the foregoing on the date of the making of the application.

(5) An application shall not be made under subsection (3) by a person who has consented to, or voted in favour of, the special resolution.

(6) An application under subsection (3) shall be made within 30 days after the date on which the special resolution was passed and may be made on behalf of the persons entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.

(7) On the hearing of an application under subsection (3), the court may, as it thinks fit—

(a) confirm the special resolution;

(b) confirm the special resolution as respects only specified parts or aspects of the restricted activity to which it relates; or

(c) cancel the special resolution.

CHAPTER 8

Protection for minorities

Remedy in case of oppression

212. (1) Any member of a company who complains that the affairs of the company are being conducted or that the powers of the directors of the company are being exercised—

(a) in a manner oppressive to him or her or any of the members (including himself or herself), or

(b) in disregard of his or her or their interests as members, may apply to the court for an order under this section.

(2) If, on an application under subsection (1), the court is of opinion that the company’s affairs are being conducted or the directors’ powers are being exercised in a manner that is mentioned in subsection (1)(a) or (b), the court may, with a view to bringing to an end the matters complained of, make such order or orders as it thinks fit.

(3) The orders which a court may so make include an order—

(a) directing or prohibiting any act or cancelling or varying any transaction;

(b) for regulating the conduct of the company’s affairs in future;

(c) for the purchase of the shares of any members of the company by other members of the company or by the company and, in the case of a purchase by the company, for the reduction accordingly of the company’s capital; and

(d) for the payment of compensation.

(4) Where an order under this section makes any amendment of any company’s constitution, then, notwithstanding anything in any other provision of this Act, but subject to the provisions of the order, the company concerned shall not have power, without the leave of the court, to make any further amendment of the constitution, inconsistent with the provisions of the order.

(5) However, subject to the foregoing subsection, the amendment made by the order shall be of the same effect as if duly made by resolution of the company, and the provisions of this Act shall apply to the constitution as so amended accordingly.

(6) A certified copy of any order under this section amending or giving leave to amend a company’s constitution shall, within 21 days after the date of the making of the order, be delivered by the company to the Registrar.

(7) If a company fails to comply with subsection (6), the company and any officer of it who is in default shall be guilty of a category 4 offence.

(8) Each of the following—

(a) the personal representative of a person who, at the date of his or her death, was a member of a company, or

(b) any trustee of, or person beneficially interested in, the shares of a company by virtue of the will or intestacy of any such person, may apply to the court under subsection (1) for an order under this section and, accordingly, any reference in that subsection to a member of a company shall be read as including a reference to any such personal representative, trustee or person beneficially interested as mentioned in paragraph (a) or (b) or to all of them.

(9) If, in the opinion of the court, the hearing of proceedings under this section would involve the disclosure of information the publication of which would be seriously prejudicial to the legitimate interests of the company, the court may order that the hearing of the proceedings or any part of them shall be in camera.

CHAPTER 9

Form of registers, indices and minute books

Form of registers, minutes, etc.

213. (1) Any register, index or minute book required by this Act to be kept by a company or by the Registrar may be kept either by making entries in bound books or by recording the matters in question in any other manner.

(2) Where any register, index or minute book to be kept by a company is not kept by making entries in a bound book but by some other means, adequate precautions shall be taken for guarding against falsification and facilitating discovery of such falsification, should it occur.

(3) If default is made in complying with subsection (2), the company concerned and any officer of it who is in default shall be guilty of a category 3 offence.

Use of computers, etc., for certain company records

214. (1) Subject to subsections (2) and (6), the power conferred on a company by section 213(1) to keep a register or other record by recording the matters in question otherwise than by making entries in bound books includes power to keep the register or other record by recording the matters in question otherwise than in a legible form so long as the recording is capable of being reproduced in a legible form.

(2) Subsection (1) does not apply to the books required to be kept by section 199 for the purpose mentioned in subsection (1) of that section.

(3) Any provision of an instrument made by a company before 3 April 1978 which requires a register of holders of debentures of the company to be kept in a legible form shall be read as requiring the register to be kept in a legible or non-legible form (but so that, if it is kept in non-legible form, it shall be capable of being reproduced in legible form).

(4) If the power under subsection (1) is availed of by a company, any duty imposed on the company by or under this Act to allow inspection of, or to furnish a copy of, the register or other record concerned kept by the company otherwise than in legible form, or any part of it, shall be treated as a duty to allow inspection of, or to furnish, a reproduction of the recording or of the relevant part of it in a legible form.

(5) Subsection (6) does not apply—

(a) if the services to the other computer there mentioned are provided by means of the technology commonly known as cloud computing or by any other distance hosting solution; or

(b) to the extent that regulations under subsection (7) provide that it shall not apply.

(6) Any computer (the “server computer”) that provides services to another computer, being services the provision of which to the latter is necessary so that the information of the kind referred in subsection (1) stored in the latter can be accessed at all times, shall be kept in a place in the State.

(7) The Minister may, by regulations, make such provision, being provision in addition to subsection (4), as he or she considers appropriate in connection with such registers or other records as are mentioned in that subsection and are kept as there mentioned and may also, by regulations, provide for such exceptions to subsection (6) as he or she considers appropriate.

CHAPTER 10

Inspection of registers, provision of copies of information in them and service of notices

Definitions for purposes of section 216 concerning registers, etc. and construction of reference to company keeping registers, etc.

215. In—

(a) section 216—

“copies of directors’ service contracts and memoranda” means the copies of directors’ service contracts and memoranda kept by the company pursuant to section 154;

“copies of instruments creating charges” means the copies of instruments creating charges kept by the company pursuant to section 418 (including copies of any relevant judgment mortgage documentation referred to in that section);

“directors’ and secretaries’ register” means the register of directors and secretaries kept by the company pursuant to section 149;

“disclosable interests register” means the register of interests kept by the company pursuant to section 267;

“members’ register” means the register of members kept by the company pursuant to section 169;

“minutes of meetings” means the books kept by the company pursuant to section 199 (including any records referred to in section 196(6)) and—

(i) the documents, if any, required by section 193(7) (documents relating to unanimous written resolutions), and

(ii) the documents, if any, required by section 195(4) (documents relating to majority written resolutions), to be kept with those books;

(b) this section a reference to any foregoing register or document being kept by the company includes a reference to the register or document being kept by another on the company’s behalf pursuant to section 216(2);

(c) this section and section 216 a reference to keeping includes a reference to maintaining; and

(d) section 216(3) the requirement thereunder to keep a register or other document at a place shall be deemed to be complied with if, by means of any computer, the register or document is (at that place) capable of being reproduced in legible form and inspected in that form, and references elsewhere in section 216 and this Chapter to the keeping of a register or other document, and the inspection of it, shall be read accordingly.

Where registers and other documents to be kept, right to inspect them, etc.

216. (1) This section applies to—

(a) the copies of directors’ service contracts and memoranda;

(b) the copies of instruments creating charges;

(c) the directors’ and secretaries’ register;

(d) the disclosable interests register;

(e) the members’ register; and

(f) the minutes of meetings.

(2) An obligation imposed on a company under this Act to keep a register or document to which this section applies may be discharged by another person keeping, on its behalf, the register or document.

(3) Subject to subsections (4) and (5), a register or document to which this section applies shall be kept at—

(a) the registered office of the company;

(b) its principal place of business within the State; or

(c) another place within the State.

(4) Where the register or document is kept by another person on behalf of the company pursuant to subsection (2), the place at which that register or document is kept by that person shall be a place within the State.

(5) In a case where a company keeps several of the registers or documents (or both) to which this section applies at a place other than that referred to in subsection (3)(a) or (b), those registers or documents (or both) shall be kept by it at a single place.

(6) Where a register or document to which this section applies is kept at a place referred to in subsection (3)(b) or (c) or subsection (4), the company shall send a notice to the Registrar in the prescribed form of that place and of any change in that place.

(7) A register or document to which this section applies shall, during business hours (except, in the case of the members’ register, when it is closed under section 174), be open to inspection in accordance with subsections (8) to (10).

(8) Every such register or document shall be open to the inspection of any member of the company without charge.

(9) The following shall be open to the inspection of any other person, on payment of the relevant fee:

(a) the directors’ and secretaries’ register;

(b) the disclosable interests register;

(c) the members’ register.

(10) The copies of instruments creating charges shall be open to the inspection of any creditor of the company without charge.

(11) A member of the company may request a copy, or a copy of any part, of—

(a) the directors’ and secretaries’ register;

(b) the disclosable interests register;

(c) the members’ register; or

(d) the minutes of meetings.

(12) Any other person may request a copy, or a copy of any part, of—

(a) the directors’ and secretaries’ register;

(b) the disclosable interests register; or

(c) the members’ register.

(13) A company shall, within 10 days after the date of receipt of a request under subsection (11) or (12) and on payment to it of the relevant fee by the requester, cause to be sent to the requester the copy, or part of it, concerned.

Supplemental provisions in relation to section 216 — “relevant fee”, power to alter the amount of it, offences, etc.

217. (1) In section 216 “relevant fee” means—

(a) in a case falling within subsection (9) of that section—

(i) where one register is inspected, €10.00 or such less sum as the company may determine; or

(ii) subject to subsection (2), where more than one register is inspected on the same day or in any period of 24 consecutive hours, €15.00 or such less sum as the company may determine;

(b) in a case falling within subsection (13) of that section, €10.00 per copy or such less sum as the company may determine.

(2) Subsection (1)(a)(ii) only applies if—

(a) the inspections concerned are made by, or on behalf of, the same person; and

(b) at the time the first request for inspection is made (by, or on behalf of, the same person) during the period concerned it is indicated to the company that more than one register will be inspected (by, or on behalf of, that person) during that period.

(3) If a company fails to comply with any of subsections (3) to (10), or subsection (13), of section 216, the company and any officer of it who is in default shall be guilty of a category 3 offence.

(4) The court may, on application being made to it, make the following orders:

(a) in the case of a failure to comply with any of subsections (7) to (10) of section 216, an order compelling an immediate inspection of the register or document concerned;

(b) in the case of a failure to comply with section 216(13), an order directing that the copy requested be sent to the person requesting it.

(5) Subject to subsections (6) to (8), the Minister may, by order, alter a sum specified in paragraph (a) or (b) of the definition of “relevant fee” in this section.

(6) An order under subsection (5) may only be made, at a particular time (the “relevant time”), if it appears to the Minister the changes in the value of money generally in the State that have occurred during the period beginning—

(a) on this Act’s passing, or

(b) if the powers under that subsection have previously been exercised, immediately after their last previous exercise, and ending at the relevant time warrant the exercise of powers under that subsection for the following purpose.

(7) That purpose is to relieve companies of an additional financial expense that they would otherwise incur (by reason of the foregoing changes) in complying with the provisions specified in the definition of “relevant fee” in this section if the powers under subsection (5) were not exercised at the relevant time.

(8) Without prejudice to subsections (6) and (7), in making any order under subsection (5), the Minister shall take into account the general costs incurred by a company in facilitating the inspection, or providing copies, of the registers or other documents referred to in the provisions specified in the definition of “relevant fee” in this section.

Service of notices on members

218. (1) Subsections (3) and (4) shall apply to any case in which a provision of this Act, or of the company’s constitution, requires or authorises a notice to be served on or given to a member of the company by the company, or an officer of it, but save to the extent that the constitution provides otherwise.

(2) Subsection (5) shall only apply if there is contained in the company’s constitution a provision to the effect that it shall apply (but nothing in this subsection shall prevent alternative and reasonable provision being made in the constitution with regard to one or more of the matters set out in that subsection and, to the extent that such alternative and reasonable provision is made, that provision shall apply instead of that subsection).

(3) A notice referred to in subsection (1) shall, save where the means of serving or giving it specified in paragraph (d) is used, be in writing and may be served on or given to the member in one of the following ways:

(a) by delivering it to the member;

(b) by leaving it at the registered address of the member;

(c) by sending it by post in a prepaid letter to the registered address of the member; or

(d) if the company’s constitution permits the use of electronic means to serve or give the notice or the conditions specified in subsection (4) are satisfied, by electronic means.

(4) The conditions referred to in subsection (3)(d) are—

(a) the member has consented in writing to the company, or the officer of it, using electronic means to serve or give notices in relation to him or her;

(b) at the time the electronic means are used to serve or give the notice in relation to the member, no notice in writing has been received by the company or the officer concerned from the member stating he or she has withdrawn the consent referred to in paragraph (a); and

(c) the particular means used to serve or give the notice electronically are those that the member has consented to.

(5) Any notice served or given in accordance with subsection (3) shall be deemed, in the absence of any agreement to the contrary between the company (or, as the case may be, the officer of it) and the member, to have been served or given—

(a) in the case of its being delivered, at the time of delivery (or, if delivery is refused, when tendered);

(b) in the case of its being left, at the time that it is left;

(c) in the case of its being posted (to an address in the State) on any day other than a Friday, Saturday or Sunday, 24 hours after despatch and in the case of its being posted (to such an address)—

(i) on a Friday – 72 hours after despatch; or

(ii) on a Saturday or Sunday – 48 hours after despatch;

(d) in the case of electronic means being used in relation to it, 12 hours after despatch, but this subsection is without prejudice to section 181(3).

(6) In this section “registered address”, in relation to a member, means the address of the member as entered in the register of members.

PART 5

DUTIES OF DIRECTORS AND OTHER OFFICERS

CHAPTER 1

Preliminary and definitions

Interpretation and application (Part 5)

219. (1) In this Part—

“credit transaction” has the meaning given to it by subsection (3);

“guarantee” includes an indemnity;

“quasi-loan” has the meaning given to it by subsection (2).

(2) For the purposes of this Part—

(a) a quasi-loan is a transaction under which one party (the “creditor”) agrees to pay, or pays otherwise than in pursuance of an agreement, a sum for another (the “borrower”) or agrees to reimburse or reimburses otherwise than in pursuance of an agreement, expenditure incurred by another party for another (the “borrower”)—

(i) on terms that the borrower (or a person on his behalf) will reimburse the creditor; or

(ii) in circumstances giving rise to a liability on the borrower to reimburse the creditor;

(b) any reference to the person to whom a quasi-loan is made is a reference to the borrower; and

(c) the liabilities of a borrower under a quasi-loan include the liabilities of any person who has agreed to reimburse the creditor on behalf of the borrower.

(3) For the purposes of this Part a credit transaction is, subject to subsection (4), a transaction under which one party (the “creditor”)—

(a) supplies any goods or sells any land under, as the case may be, a hire-purchase agreement or conditional sale agreement;

(b) leases or licenses the use of land or hires goods in return for periodical payments;

(c) otherwise disposes of land or supplies goods or services, on the understanding that payment (whether in a lump sum or instalments or by way of periodical payments or otherwise) is to be deferred.

(4) For the purposes of this Part a lease of land which reserves a nominal annual rent of not more than €100 is not a credit transaction where a company grants the lease in return for a premium or capital payment which represents the open market value of the land thereby disposed of by the company.

(5) For the purposes of this Part the value of a transaction or arrangement is—

(a) in the case of a loan, the principal of the loan;

(b) in the case of a quasi-loan, the amount or maximum amount which the person to whom the quasi-loan is made is liable to reimburse the creditor;

(c) in the case of a transaction or arrangement other than a loan or quasi-loan or a transaction or arrangement falling within paragraph (d) or (e), the price which it is reasonable to expect could be obtained for the goods, land or services to which the transaction or arrangement relates if they had been supplied at the time the transaction or arrangement is entered into in the ordinary course of business and on the same terms (apart from price) as they have been supplied or are to be supplied under the transaction or arrangement in question;

(d) in the case of a guarantee or security, the amount guaranteed or secured;

(e) in the case of an arrangement to which section 239(2) or (3) applies, the value of the transaction to which the arrangement relates less any amount by which the liabilities under the arrangement or transaction of the person for whom the transaction was made have been reduced.

(6) For the purposes of subsection (5), the value of a transaction or arrangement (or, as the case may be, of a transaction to which an arrangement relates) which is not capable of being expressed as a specific sum of money, whether because the amount of any liability arising under the transaction or arrangement is unascertainable or for any other reason, shall be deemed to exceed €65,000, and this subsection applies irrespective of whether any liability under the transaction or arrangement has been reduced.

(7) For the purposes of this Part, a transaction or arrangement is made for a person if—

(a) in the case of a loan or quasi-loan, it is made to him or her;

(b) in the case of a credit transaction, he or she is the person to whom goods or services are supplied, or land is sold or otherwise disposed of, under the transaction;

(c) in the case of a guarantee or security, it is entered into or provided in connection with a loan or quasi-loan made to him or her or a credit transaction made for him or her;

(d) in the case of an arrangement to which section 239(2) or (3) applies, the transaction to which the arrangement relates was made for him or her; and

(e) in the case of any other transaction or arrangement for the supply or transfer of goods, land or services (or any interest therein), he or she is the person to whom the goods, land or services (or the interest) are supplied or transferred.

(8) This Part does not apply to arrangements or transactions entered into before 1 February 1991 but, for the purposes of determining whether an arrangement is one to which section 239(2) or (3) applies, the transaction to which the arrangement relates shall, if it was entered into before 1 February 1991, be deemed to have been entered into after that date.

(9) This Part shall have effect in relation to an arrangement or transaction whether governed by the law of the State or of another country.

Connected persons

220. (1) For the purposes of this Part (and without prejudice to subsection (3)), a person is connected with a director of a company if, but only if, the person (not being himself or herself a director of the company) is—

(a) that director’s spouse, civil partner, parent, brother, sister or child;

(b) a person acting in his or her capacity as the trustee of any trust, the principal beneficiaries of which are that director, the spouse (or civil partner) or any children of that director or any body corporate which that director controls; or

(c) in partnership with that director.

(2) In subsection (1)(a) and (b) “child”, in relation to a director, shall be deemed to include a child of the director’s civil partner who is ordinarily resident with the director and the civil partner.

(3) A body corporate shall also be, for the purposes of this Part, connected with a director of a company if it is controlled by that director or by another body corporate that is controlled by that director.

(4) For the avoidance of doubt, subsection (3) is without prejudice to the application of section 18(c) of the Interpretation Act 2005 (“person” to include body corporate, etc.) to subsection (1)(b).

(5) For the purposes of this section, a director of a company controls a body corporate if, but only if, he or she is, alone or together with any other director or directors of the company or any person connected with the director or such other director or directors—

(a) interested in one-half or more of the equity share capital of that body; or

(b) entitled to exercise or control the exercise of one-half or more of the voting power at any general meeting of that body.

(6) In subsection (5)—

(a) “equity share capital” has the same meaning as it has in section 7; and

(b) references to voting power exercised by a director shall be read as including references to voting power exercised by another body corporate which that director controls.

(7) For the purpose of subsections (5)(b) and (6)(b) “voting power” does not include any power to vote which arises only in specified circumstances.

(8) It shall be presumed, for the purposes of this Part, until the contrary is shown, that the sole member of a single-member company is a person connected with a director of that company.

Shadow directors

221. (1) Subject to subsection (2), a person in accordance with whose directions or instructions the directors of a company are accustomed to act (in this Act referred to as a “shadow director”) shall be treated for the purposes of this Part as a director of the company unless the directors are accustomed so to act by reason only that they do so on advice given by him or her in a professional capacity.

(2) A body corporate is not to be regarded as a shadow director of any of its subsidiaries.

(3) Section 231 shall apply in relation to a shadow director of a company as it applies in relation to a director of a company, except that the shadow director shall declare his or her interest, not at a meeting of the directors, but by a notice in writing to the directors which is either—

(a) a specific notice given before the date of the meeting at which, if he or she had been a director, the declaration would be required by subsection (3) of that section to be made; or

(b) a notice which under subsection (4) of that section falls to be treated as a sufficient declaration of that interest or would fall to be so treated apart from the qualification of that subsection (4) contained in subsection (5) of that section.

(4) As respects a declaration made by either of the means referred to in subsection (3), section 166 shall have effect as if the declaration had been made at the meeting in question and had accordingly formed part of the proceedings at that meeting.

De facto director

222. (1) Without limiting the manner in which the expression “director” is to be read by virtue of section 2(1), a person who occupies the position of director of a company but who has not been formally appointed as such director shall, subject to subsection (4), be treated, for the purposes of this Part, as a director of the company.

(2) In particular, section 231 shall apply in relation to such a director as it applies in relation to directors generally.

(3) A person who is, by virtue of subsection (1), treated, for the purposes of this Part, as a director of a company is in this Act referred to as a de facto director.

(4) A person shall not be a de facto director of a company by reason only of the fact that he or she gives advice in a professional capacity to the company or any of the directors of it.

CHAPTER 2

General duties of directors and secretaries and liabilities of them and other officers

Duty of each director

223. (1) It is the duty of each director of a company to ensure that this Act is complied with by the company (2) The breach by a director of the duty under subsection (1) shall not of itself affect—

(a) the validity of any contract or other transaction, or

(b) the enforceability, other than by the director in breach of that duty, of any contract or other transaction by any person, but nothing in this subsection affects the principles of liability of a third party where he or she has been an accessory to a breach of duty or has knowingly received a benefit therefrom.

(3) The consent in respect of a director to accompany—

(a) a statement under section 21(1)(a), and

(b) a notification under section 149(8), shall include a statement by the director (immediately above his or her signature on the consent) in the following terms:

“I acknowledge that, as a director, I have legal duties and obligations imposed by the Companies Act, other statutes and at common law.”.

Directors to have regard to interests of employees

224. (1) The matters to which the directors of a company are to have regard in the performance of their functions shall include the interests of the company’s employees in general, as well as the interests of its members.

(2) Accordingly, the duty imposed by this section on the directors shall be owed by them to the company (and the company alone) and shall be enforceable in the same way as any other fiduciary duty owed to a company by its directors.

Directors’ compliance statement and related statement

225. (1) In this section—

“amount of turnover” and “balance sheet total” have the same meanings as they have in section 350;

“relevant obligations”, in relation to a company, means the company’s obligations under—

(a) this Act, where a failure to comply with any such obligation would (were it to occur) be—

(i) a category 1 offence or a category 2 offence; or

(ii) a serious Market Abuse offence or a serious Prospectus offence; and

(b) tax law;

“serious Market Abuse offence” means an offence referred to in section 1368;

“serious Prospectus offence” means an offence referred to in section 1356;

“tax law” means—

(a) the Customs Acts;

(b) the statutes relating to the duties of excise and to the management of those duties;

(c) the Tax Acts;

(d) the Capital Gains Tax Acts;

(e) the Value-Added Tax Acts;

(f) the Capital Acquisitions Tax Consolidation Act 2003 and the enactments amending or extending that Act;

(g) the Stamp Duties Consolidation Act 1999 and the enactments amending or extending that Act; and

(h) any instruments made under an enactment referred to in any of paragraphs (a) to (g) or made under any other enactment and relating to tax.

(2) The directors of a company to which this section applies shall also include in their report under section 325 a statement—

(a) acknowledging that they are responsible for securing the company’s compliance with its relevant obligations; and

(b) with respect to each of the things specified in subsection (3), confirming that the thing has been done or, if it has not been done, specifying the reasons why it has not been done.

(3) The things mentioned in subsection (2)(b) are—

(a) the drawing up of a statement (to be known, and in this Act referred to as, a “compliance policy statement”) setting out the company’s policies (that, in the directors’ opinion, are appropriate to the company) respecting compliance by the company with its relevant obligations;

(b) the putting in place of appropriate arrangements or structures that are, in the directors’ opinion, designed to secure material compliance with the company’s relevant obligations; and

(c) the conducting of a review, during the financial year to which the report referred to in subsection (2) relates, of any arrangements or structures referred to in paragraph (b) that have been put in place.

(4) The arrangements or structures referred to in subsection (3)(b) may, if the directors of the company in their discretion so decide, include reliance on the advice of one or more than one person employed by the company or retained by it under a contract for services, being a person who appears to the directors to have the requisite knowledge and experience to advise the company on compliance with its relevant obligations.

(5) For the purposes of this section, the arrangements or structures referred to in subsection (3)(b) shall be regarded as being designed to secure material compliance by the company concerned with its relevant obligations if they provide a reasonable assurance of compliance in all material respects with those obligations.

(6) If default is made in complying with subsection (2), each director to whom the default is attributable shall be guilty of a category 3 offence.

(7) Subject to subsection (8), this section shall apply to a company if, in respect of the financial year of the company to which the report referred to in subsection (2) relates—

(a) its balance sheet total for the year exceeds—

(i) subject to subparagraph (ii), €12,500,000; or

(ii) if an amount is prescribed under section 943(1)(i), the prescribed amount; and

(b) the amount of its turnover for the year exceeds—

(i) subject to subparagraph (ii), €25,000,000; or

(ii) if an amount is prescribed under section 943(1)(i), the prescribed amount.

(8) This section does not apply to any company that is of a class exempted under section 943(1)(g) from this section. Duties of secretary 226.

(1) The duties of the secretary of a company shall, without derogating from the secretary’s statutory and other legal duties, be such duties as are delegated to the secretary, from time to time, by the board of directors of the company.

(2) Without prejudice to the generality of section 129(4), the directors of a company shall, in their appointment of a secretary, have a duty to ensure that the person appointed has the skills necessary so as to enable him or her maintain (or procure the maintenance of) the records (other than accounting records) required to be kept under this Act in relation to the company.

(3) The cases to which subsection (2) applies includes the case of an appointment of one of the directors of the company as secretary.

(4) In subsections (1) to (3) references to a secretary include references to joint secretaries.

(5) The consent in respect of a secretary or joint secretaries to accompany—

(a) a statement under section 21(1)(a), and

(b) a notification under section 149(8), shall include a statement by the secretary or secretaries (immediately above the signature or signatures of the secretary or secretaries on the consent) in the following terms:

“I/We acknowledge that, as a secretary, I/we have legal duties and obligations imposed by the Companies Act, other statutes and at common law.”.

Fiduciary duties of directors — provisions introductory to section 228

227. (1) Without prejudice to the provisions of any enactment (including this Act), a director of a company shall owe the duties set out in section 228 (the “relevant duties”) to the company (and the company alone).

(2) The breach by a director of the relevant duties shall not of itself affect—

(a) the validity of any contract or other transaction, or

(b) the enforceability, other than by the director in breach of that duty, of any contract or other transaction by any person, but nothing in this subsection affects the principles of liability of a third party where he or she has been an accessory to a breach of duty or has knowingly received a benefit therefrom.

(3) The relevant duties shall be enforced in the same way as any other fiduciary duty owed to a company by its directors.

(4) The relevant duties (other than those set out in section 228(1)(b) and (h)) are based on certain common law rules and equitable principles as they apply in relation to the directors of companies and shall have effect in place of those rules and principles as regards the duties owed to a company by a director.

(5) The relevant duties (other than those set out in section 228(1)(b) and (h)) shall be interpreted, and the provisions concerned of section 228 shall be applied, in the same way as common law rules or equitable principles; regard shall be had to the corresponding common law rules and equitable principles in interpreting those duties and applying those provisions.

Statement of principal fiduciary duties of directors

228. (1) A director of a company shall—

(a) act in good faith in what the director considers to be the interests of the company;

(b) act honestly and responsibly in relation to the conduct of the affairs of the company;

(c) act in accordance with the company’s constitution and exercise his or her powers only for the purposes allowed by law;

(d) not use the company’s property, information or opportunities for his or her own or anyone else’s benefit unless—

(i) this is expressly permitted by the company’s constitution; or

(ii) the use has been approved by a resolution of the company in general meeting;

(e) not agree to restrict the director’s power to exercise an independent judgment unless—

(i) this is expressly permitted by the company’s constitution;

(ii) the case concerned falls within subsection (2); or

(iii) the director’s agreeing to such has been approved by a resolution of the company in general meeting;

(f) avoid any conflict between the director’s duties to the company and the director’s other (including personal) interests unless the director is released from his or her duty to the company in relation to the matter concerned, whether in accordance with provisions of the company’s constitution in that behalf or by a resolution of it in general meeting;

(g) exercise the care, skill and diligence which would be exercised in the same circumstances by a reasonable person having both—

(i) the knowledge and experience that may reasonably be expected of a person in the same position as the director; and

(ii) the knowledge and experience which the director has; and

(h) in addition to the duty under section 224 (duty to have regard to the interests of its employees in general), have regard to the interests of its members.

(2) If a director of a company considers in good faith that it is in the interests of the company for a transaction or engagement to be entered into and carried into effect, a director may restrict the director’s power to exercise an independent judgment in the future by agreeing to act in a particular way to achieve this.

(3) Without prejudice to the director’s duty under subsection (1)(a) to act in good faith in what the director considers to be the interests of the company, a director of a company may have regard to the interests of a particular member of the company in the following circumstances.

(4) Those circumstances are where the director has been appointed or nominated for appointment by that member, being a member who has an entitlement to so appoint or nominate under the company’s constitution or a shareholders’ agreement.

Other interests of directors

229. (1) Save to the extent that the company’s constitution provides otherwise, a director of a company may be or become a director or other officer of, or otherwise interested in, any company promoted by the company or in which the company may be interested as shareholder or otherwise; but neither this subsection nor anything in the company’s constitution governing the foregoing matter overrides section 228.

(2) No such director shall be accountable to the company for any remuneration or other benefits received by him or her as a director or officer of, or from his or her interest in, such other company unless the company otherwise directs.

Power of director to act in a professional capacity for company

230. Save to the extent that the company’s constitution provides otherwise—

(a) any director may act by himself or herself, or his or her firm, in a professional capacity for the company of which he or she is a director, and

(b) any director, in such a case, or his or her firm, shall be entitled to remuneration for professional services as if he or she were not a director, but nothing in this section authorises a director, or his or her firm, to act as statutory auditor of a company of which he or she is director.

Duty of director to disclose his or her interest in contracts made by company

231. (1) It shall be the duty of a director of a company who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the company, to declare the nature of his or her interest at a meeting of the directors of the company.

(2) Subsection (1) does not apply in relation to an interest that cannot reasonably be regarded as likely to give rise to a conflict of interest.

(3) The declaration required by this section to be made by a director shall—

(a) in the case of a proposed contract, be made at the meeting of the directors at which the question of entering into the contract is first taken into consideration or, if the director was not at the date of that meeting interested in the proposed contract, at the next meeting of the directors held after he or she became so interested; and

(b) in the case of his or her becoming interested in a contract after it is made, be made at the first meeting of the directors held after the director becomes so interested.

(4) Subject to subsection (5), for the purposes of this section a general notice given to the directors of a company by a director to the effect that—

(a) he or she is a member of a specified company or firm and is to be regarded as interested in any contract which may, after the date of the notice, be made with that company or firm, or

(b) he or she is to be regarded as interested in any contract which may, after the date of the notice, be made with a specified person who is connected with him or her, shall be deemed to be a sufficient declaration of interest in relation to any such contract.

(5) No such notice as is mentioned in subsection (4) shall be of effect unless it is given at the meeting of directors or the director takes reasonable steps to secure that it is brought up and read at the next meeting of the directors after it is given.

(6) A copy of every declaration made and notice given in pursuance of this section shall, within 3 days after the date of making or giving of it, be entered into a book kept by the company for this purpose.

(7) That book shall be open for inspection, without any charge, by any director, secretary, statutory auditor or member of the company at the registered office of the company and shall be produced at—

(a) every general meeting of the company; and

(b) any meeting of its directors if any of its directors so requests in sufficient time to enable the book to be available at the meeting.

(8) A company shall, if required by the Director of Corporate Enforcement, produce to the Director for inspection the book kept by it in accordance with subsection (6) and shall give the Director such facilities for inspecting and taking copies of the contents of the book as the Director may require.

(9) Nothing in this section shall be taken to prejudice the operation of any enactment or rule of law restricting directors of a company from having interests in contracts with the company.

(10) Any reference in this section to a contract—

(a) shall be read as excluding a reference to a contract the decision as to whether to enter into it is taken, or falls to be taken, other than by the board of directors or a committee of which the first-mentioned director in subsection (1) is a member;

(b) shall be read as including a reference to any transaction or arrangement, whether or not constituting a contract, but, in a case where the transaction or arrangement does not constitute a contract, a like limitation to that which applies under paragraph (a) applies to the construction of reference provided by this paragraph.

(11) For the purposes of this section, a transaction or arrangement of a kind described in section 239 made by a company for a director of the company or a person connected with such a director shall, if it would not otherwise be so treated (and whether or not prohibited by that section), be treated as a transaction or arrangement in which that director is interested.

Breaches of certain duties: liability to account and indemnify

232. (1) Subject to section 233, where a director of a company acts in breach of his or her duty under section 228(1)(a), (c), (d), (e), (f) or (g), he or she shall be liable to do either or both (as the corresponding common law rule or equitable principle with respect to the matter would have required) of the following things, namely—

(a) account to the company for any gain which he or she makes directly or indirectly from the breach of duty;

(b) indemnify the company for any loss or damage resulting from that breach.

(2) Subject to subsection (6), where a company enters into a transaction or arrangement contrary to section 238 or 239 with—

(a) a director of the company,

(b) a director of its holding company, or

(c) a person connected with a director of the company or its holding company, that director and the person so connected and any other director of the company who authorised the transaction or arrangement (or, as the case may be, any transaction entered into in pursuance of the arrangement) shall be liable—

(i) to account to the company for any gain which he or she makes directly or indirectly from the transaction or arrangement;

(ii) (jointly and severally with any other person liable under this subsection) to indemnify the company for any loss or damage resulting from the transaction or arrangement; or

(iii) to do both of those things as the circumstances may require.

(3) Subject to section 233, where a company makes a payment to a director contrary to section 251 or 252 that director shall be liable—

(a) to account to the company for any gain which he or she makes directly or indirectly from the payment,

(b) to indemnify the company for any loss or damage resulting from the payment, or

(c) to do both of those things as the circumstances may require, and, in the case of section 252, this is without prejudice to subsection (3) of that section.

(4) Subsection (2) applies irrespective of whether the transaction or arrangement concerned has been avoided.

(5) Subsections (1) to (3) are without prejudice to—

(a) the company’s right at common law to claim damages for breach of duty, or

(b) the company’s right to make an application seeking the grant of equitable relief, but the provisions of this section shall not be read as having the combined effect of enabling the company to be afforded more compensation for any damage or injury, or more protection of any proprietary right, than is just and equitable in the circumstances.

(6) Where a transaction or arrangement is entered into by a company and a person connected with a director of the company or of its holding company in contravention of section 238 or 239—

(a) that director shall not be liable under subsection (2) (or under any law referred to in subsection (5)) if he or she shows that he or she took all reasonable steps to secure the company’s compliance with section 238 or 239, as the case may be, and

(b) in any case, a person so connected and any such other director as is mentioned in subsection (2) shall not be so liable if he or she shows that, at the time the transaction or arrangement was entered into (or, as the case may be, at the time the particular transaction was entered into in pursuance of the arrangement), he or she did not know the relevant circumstances constituting the contravention.

Power of court to grant relief to officers of company

233. (1) This section applies to any proceedings for negligence, default, breach of duty or breach of trust against an officer of a company.

(2) In proceedings to which this section applies the court hearing the proceedings has the power of granting relief provided under subsection (3) if it appears to the court that the officer concerned is or may be liable in respect of the negligence, default, breach of duty or breach of trust (the “wrong concerned”) but that he or she has acted honestly and reasonably and that, having regard to all the circumstances of the case (including those connected with his or her appointment), he or she ought fairly to be excused for the wrong concerned.

(3) The power referred to in subsection (2) is to relieve the officer concerned, either wholly or partly, from his or her liability in respect of the wrong concerned on such terms as the court may think fit.

Anticipated claim: similar power of relief as under section 233

234. (1) If an officer of a company has reason to apprehend that any claim will or might be made against him or her in respect of any negligence, default, breach of duty or breach of trust (the “wrong concerned”) he or she may make the following application to the court.

(2) That application is an application to be relieved of liability in respect of the wrong concerned; on the making of such an application the court shall have the same power to relieve the applicant as it would have had (by virtue of section 233) if it had been a court before which proceedings against that person for the wrong concerned had been brought.

Any provision exempting officers of company from liability void (subject to exceptions)

235. (1) Subject to the provisions of this section, the following provision shall be void, namely, any provision:

(a) purporting to exempt any officer of a company from; or

(b) purporting to indemnify such an officer against; any liability which by virtue of any enactment or rule of law would otherwise attach to him or her in respect of any negligence, default, breach of duty or breach of trust of which he or she may be guilty in relation to the company.

(2) Subsection (1) applies whether the provision concerned is contained in the constitution of a company or a contract with a company or otherwise.

(3) Notwithstanding subsection (1), a company may, in pursuance of any such provision as is mentioned in that subsection, indemnify any officer of the company against any liability incurred by him or her—

(a) in defending proceedings, whether civil or criminal, in which judgment is given in his or her favour or in which he or she is acquitted; or

(b) in connection with any proceedings or application referred to in, or under, section 233 or 234 in which relief is granted to him or her by the court.

(4) Notwithstanding subsection (1), a company may purchase and maintain for any of its officers insurance in respect of any liability referred to in that subsection.

(5) Notwithstanding any provision contained in any enactment, the constitution of a company or otherwise, a director may be counted in the quorum and may vote on any resolution to purchase or maintain any insurance under which the director might benefit.

(6) For the avoidance of doubt, if—

(a) any business, trade or activity has been carried on by means of a company, or other body corporate, registered or formed under the laws of another country,

(b) the period for which that business, trade or activity was so carried on was not less than 12 months preceding the date on which this subsection falls to be applied,

(c) a provision of the kind referred to in subsection (1)(a) or (b) in relation to officers of the company or other body corporate was in being and valid under the laws of that country, and

(d) a private company limited by shares is formed and registered to carry on that business, trade or activity, then nothing in this section invalidates the operation of the provision referred to in paragraph (c) in respect of any negligence, default, breach of duty or breach of trust occurring before that private company limited by shares is formed and registered.

(7) Any directors’ and officers’ insurance purchased or maintained by a company before 6 April 2004 is as valid and effective as it would have been if this section had been in operation when that insurance was purchased or maintained.

(8) In this section—

(a) “officer” includes a statutory auditor,

(b) a reference to an officer includes a reference to any former or current officer of the company.

CHAPTER 3

Evidential provisions with respect to loans, other transactions, etc., between company and directors

Loans, etc., by company to directors: evidential provisions

236. (1) In this section “relevant proceedings” means civil proceedings in which it is claimed that a company has made a loan or quasi-loan to—

(a) a director of the company, or

(b) a director of its holding company, or

(c) a person connected with a director of any such company.

(2) In relevant proceedings if the terms of the loan or quasi-loan are not in writing then it shall be presumed, until the contrary is proved, that—

(a) the loan or quasi-loan is repayable on demand, and

(b) for any period before repayment of the amount of the loan or quasi-loan (or for any period before repayment of part of that amount) the amount or part has borne interest at the appropriate rate.

(3) In relevant proceedings if the terms of the loan or quasi-loan are in writing or partially in writing but—

(a) the case is one in which those terms are ambiguous with respect to the time at which, or the circumstances under which, the loan or quasi-loan is to be repaid, then it shall be presumed, until the contrary is proved, that the loan or quasi-loan is repayable on demand, or

(b) the case is one in which those terms are ambiguous with respect to whether, or the extent to which, the loan or quasi-loan bears interest, then it shall be presumed, until the contrary is proved, that for any period before repayment of the amount of the loan or quasi-loan (or for any period before repayment of part of that amount) the amount or part has borne interest at the appropriate rate.

(4) If the case referred to in paragraph (a) of subsection (3) and the case referred to in paragraph (b) of that subsection both apply then both of the presumptions provided by that subsection shall apply.

(5) References in subsection (3) to the terms of a loan or quasi-loan being ambiguous with respect to a matter shall, if the terms of the loan or quasi-loan are partially in writing, be deemed to include references to the following case.

(6) That case is one in which—

(a) the written terms of the loan or quasi-loan do not make provision in respect of the matter concerned, and

(b) provision in respect of that matter is alleged to be made by those of the terms of the loan or quasi-loan that are not in writing.

Loans, etc., by directors or connected persons to company or holding company: evidential provisions

237. (1) In this section “relevant proceedings” means civil proceedings in which it is claimed that a transaction or arrangement entered into, or alleged to have been entered into—

(a) by a director of a company with the company or its holding company, or

(b) by a person connected with such director with that company or its holding company (the “related person”), constitutes a loan or quasi-loan by the director or (as appropriate) the related person to that company or its holding company, as the case may be.

(2) In relevant proceedings, if the terms of the transaction or arrangement concerned either—

(a) are not in writing, or

(b) are in writing, or partially in writing, but are ambiguous as to whether the transaction or arrangement constitutes a loan or quasi-loan or not (or as to whether it constitutes a quasi-loan as distinct from a loan), then it shall be presumed, until the contrary is proved, that the transaction or arrangement constitutes neither a loan nor a quasi-loan to the company or its holding company, as the case may be.

(3) In relevant proceedings, where it is proved that a loan or a quasi-loan was made to the company or its holding company by the director of the first-mentioned company or the related person (whether the terms of the loan or quasi-loan are in writing, partially in writing or wholly oral) then, if—

(a) the case is one in which those terms are ambiguous with respect to whether, or the extent to which, the loan or quasi-loan bears interest, it shall be presumed, until the contrary is proved, that the loan or quasi-loan bears no interest,

(b) the case is one in which those terms are ambiguous with respect to whether, or the extent to which, the loan or quasi-loan is secured, it shall be presumed, until the contrary is proved, that the loan or quasi-loan is not secured, or

(c) in the event that the loan or quasi-loan is proved to be secured and the case is one in which those terms are ambiguous with respect to the priority that the security concerned is to have as against other indebtedness of the company, it shall be presumed, until the contrary is proved, that the loan or quasi-loan is subordinate to all other indebtedness of the company.

(4) If more than one of the cases referred to in paragraphs (a) to (c) of subsection (3) apply then each of the presumptions provided by the applicable paragraphs shall apply.

(5) The reference in subsection (2)(b) to the terms of a transaction or arrangement being ambiguous as to whether the transaction or arrangement constitutes a loan or quasiloan or not (or as to whether it constitutes a quasi-loan as distinct from a loan) shall, if the terms of the transaction or arrangement are partially in writing, be deemed to include a reference to the following case.

(6) That case is one in which—

(a) the written terms of the transaction or arrangement do not specify what the nature of the transaction or arrangement is, and

(b) the nature of the transaction or arrangement is alleged to be specified by those of its terms that are not in writing.

(7) References in subsection (3) to the terms of a loan or quasi-loan being ambiguous with respect to a matter shall, if the terms of the loan or quasi-loan are partially in writing, be deemed to include references to the following case.

(8) That case is one in which—

(a) the written terms of the loan or quasi-loan do not make provision in respect of the matter concerned, and

(b) provision in respect of that matter is alleged to be made by those of the terms of the loan or quasi-loan that are not in writing.

CHAPTER 4

Substantive prohibitions or restrictions on loans to directors and other particular transactions involving conflict of interest

Substantial transactions in respect of non-cash assets and involving directors, etc.

238. (1) Subject to subsections (4) and (5), a company (the “relevant company”) shall not enter into an arrangement under which—

(a) a director of the relevant company or of its holding company, or a person connected with such a director, acquires or is to acquire, one or more non-cash assets of the requisite value from the relevant company, or

(b) the relevant company acquires or is to acquire, one or more non-cash assets of the requisite value from such a director or a person so connected, unless the arrangement is first approved—

(i) by a resolution of the relevant company in general meeting, and

(ii) if the director or connected person is a director of its holding company or a person connected with such a director, by a resolution of the holding company in general meeting.

(2) For the purposes of this section a non-cash asset is of the requisite value if at the time the arrangement in question is entered into its value is not less than €5,000 but, subject to that, exceeds €65,000 or 10 per cent of the amount of the relevant company’s relevant assets, and for those purposes the amount of a company’s relevant assets is—

(a) except in a case falling within paragraph (b), the value of its net assets determined by reference to the entity financial statements prepared under section 290 and laid in accordance with section 341 in respect of the last preceding financial year in respect of which such entity financial statements were so laid, (b) where no entity financial statements have been prepared and laid under the foregoing sections before that time, the amount of its called-up share capital.

(3) An arrangement entered into by a company in contravention of this section and any transaction entered into in pursuance of the arrangement (whether by the company or any other person) shall be voidable at the instance of the company unless—

(a) restitution of any money or any other asset which is the subject-matter of the arrangement or transaction is no longer possible or the company has been indemnified in pursuance of section 232 by any other person for the loss or damage suffered by it, or

(b) any rights acquired bona fide for value and without actual notice of the contravention by any person who is not a party to the arrangement or transaction would be affected by its avoidance, or

(c) the arrangement is affirmed by a resolution of the company in general meeting passed within a reasonable period of time after the date on which the arrangement is entered into and, if it is an arrangement for the transfer of an asset to or by a director of its holding company or a person who is connected with such a director, is affirmed by a resolution of the holding company in general meeting passed within a reasonable period of time after that date.

(4) Subsection (1) shall not apply in relation to any arrangement for the acquisition of a non-cash asset—

(a) if the non-cash asset in question is or is to be acquired—

(i) by a holding company from any of its wholly owned subsidiaries, or

(ii) from a holding company by any of its wholly owned subsidiaries, or

(iii) by one wholly owned subsidiary of a holding company from another wholly owned subsidiary of that holding company, or

(b) if the arrangement is entered into by a company which is being wound up unless the winding up is a members’ voluntary winding up, or

(c) if the arrangement involves the disposal of a company’s assets by a receiver.

(5) Subsection (1)(a) shall not apply in relation to any arrangement under which a person acquires or is to acquire an asset from a company of which he or she is a member if the arrangement is made with that person in his or her character as such member.

(6) Without prejudice to subsection (7), no approval is required to be given under this section by any body corporate unless it is a company formed and registered under this Act or an existing company.

(7) No approval is required to be given under this section by a wholly owned subsidiary of any body corporate.

(8) In this section—

(a) “non-cash asset” means any property or interest in property other than cash, and for this purpose “cash” includes foreign currency,

(b) any reference to the acquisition of a non-cash asset includes a reference to the creation or extinction of an estate or interest in, or a right over, any property and also a reference to the discharge of any person’s liability other than a liability for a liquidated sum, and

(c) “net assets”, in relation to a company, means the aggregate of the company’s assets less the aggregate of its liabilities, and for this purpose “liabilities” includes—

(i) where the company prepares Companies Act entity financial statements, any provision for liabilities (within the meaning of paragraph 82 of Schedule 3) that is made in those financial statements,

(ii) where the company prepares IFRS entity financial statements, any provision that is made in those financial statements.

Prohibition of loans, etc., to directors and connected persons

239. (1) Except as provided by section 240 and sections 242 to 245, a company shall not—

(a) make a loan or a quasi-loan to a director of the company or of its holding company or to a person connected with such a director,

(b) enter into a credit transaction as creditor for such a director or a person so connected,

(c) enter into a guarantee or provide any security in connection with a loan, quasiloan or credit transaction made by any other person for such a director or a person so connected.

(2) A company shall not arrange for the assignment to it or the assumption by it of any rights, obligations or liabilities under a transaction which, if it had been entered into by the company, would have contravened subsection (1), but, for the purposes of this Part, the transaction shall be treated as having been entered into on the date of the arrangement.

(3) A company shall not take part in any arrangement under which—

(a) another person enters into a transaction which, if it had been entered into by the company, would have contravened subsection (1) or (2), and

(b) that other person, in pursuance of the arrangement, has obtained or is to obtain any benefit from the company or its holding company or a subsidiary of the company or its holding company.

Arrangements of certain value

240. (1) Section 239 does not prohibit a company from entering into an arrangement with a director or a person connected with a director (whether, in either case, a director of the company or of its holding company) if—

(a) the value of the arrangement, or

(b) in a case where there are other arrangements entered into by the company with any director of the company, or any person connected with a director, the value of the arrangement and the total amount outstanding under those other arrangements, is, or, as the case may be, is together, less than 10 per cent of the company’s relevant assets.

(2) For the purposes of this section—

(a) a company enters an arrangement with a person if it—

(i) makes a loan or quasi-loan to or enters into a credit transaction as creditor for that person, or

(ii) enters into a guarantee or provides any security in connection with a loan, quasi-loan or credit transaction made for that person by any other person,

(b) the amount of a company’s relevant assets shall be determined in accordance with section 238(2); and

(c) there shall not be reckoned any arrangement entered into in accordance with the Summary Approval Procedure.

Reduction in amount of company’s relevant assets

241. (1) This section applies to a company in respect of which the total amount outstanding under any arrangements referred to in section 240 comes to exceed 10 per cent of the company’s relevant assets for any reason but in particular because the value of those assets has fallen.

(2) The reference in subsection (1) to arrangements referred to in section 240 does not include a reference to any arrangement or arrangements entered into in accordance with the Summary Approval Procedure.

(3) Where the directors of a company to which this section applies become aware, or ought reasonably to become aware, that there exists the situation referred to in subsection (1), it shall be the duty of the company, its directors and any persons for whom the arrangements referred to in that subsection were made, to do the thing referred to in subsection (4) within the period specified in subsection (5).

(4) The thing mentioned in subsection (3) is to amend the terms of the arrangements concerned so that the total amount outstanding under the arrangements again falls within the percentage limit referred to in subsection (1).

(5) The period mentioned in subsection (3) is 2 months after the date that the directors become aware or ought reasonably to have become aware that the situation concerned referred to in subsection (1) exists.

(6) Where the terms of the arrangements referred to in subsection (4) are not amended within the period specified in subsection (5), the arrangements shall be voidable at the instance of the company; but the same restrictions apply to this right of the company to avoid as are contained in paragraphs (a) and (b) of section 246 on the right to avoid under that section.

Availability of Summary Approval Procedure to permit loans, etc.

242. Section 239 does not prohibit a company from—

(a) making a loan or quasi-loan,

(b) entering into a credit transaction, or

(c) entering into a guarantee or providing any security, of the kind described in subsection (1) of that section if the Summary Approval Procedure is followed in respect of the doing of the thing referred to in paragraph (a), (b) or (c), as the case may be.

Intra-group transactions

243. (1) Section 239 does not prohibit a company from—

(a) making a loan or quasi-loan to any body corporate which is its holding company, subsidiary or a subsidiary of its holding company, or

(b) entering into a guarantee or providing any security in connection with a loan or quasi-loan made by any person to any body corporate which is its holding company, subsidiary or a subsidiary of its holding company.

(2) Section 239 does not prohibit a company from—

(a) entering into a credit transaction as creditor for any body corporate which is its holding company, subsidiary or a subsidiary of its holding company, or

(b) entering into a guarantee or providing any security in connection with any credit transaction made by any other person for any body corporate which is its holding company, subsidiary or a subsidiary of its holding company.

Directors’ expenses

244. (1) Section 239 does not prohibit a company from doing anything—

(a) to provide any of its directors with funds to meet vouched expenditure properly incurred or to be incurred by him or her—

(i) for the purposes of the company, or

(ii) for the purpose of enabling him or her properly to perform his or her duties as an officer of the company, or

(b) to enable any of its directors to avoid incurring such expenditure.

(2) Where a company enters into any transaction that is permitted by subsection (1), any liability falling on any person arising from any such transaction shall be discharged by him or her within 6 months after the date on which it was incurred.

(3) A person who contravenes subsection (2) shall be guilty of a category 4 offence.

Business transactions

245. (1) Section 239 does not prohibit a company from—

(a) making a loan or quasi-loan,

(b) entering into a credit transaction, or

(c) entering into a guarantee or providing any security, of the kind described in that section if the following 2 conditions are satisfied.

(2) Those conditions are—

(a) the company enters into the transaction concerned in the ordinary course of its business, and

(b) the value of the transaction is not greater, and the terms on which it is entered into are no more favourable, in respect of the person for whom the transaction is made, than that or those which—

(i) the company ordinarily offers, or

(ii) it is not unreasonable to expect the company to have offered, to or in respect of a person of the same financial standing as that person but unconnected with the company.

Transaction or arrangement in breach of section 239 voidable at instance of company

246. If a company enters into a transaction or arrangement in contravention of section 239 the transaction or arrangement shall be voidable at the instance of the company unless—

(a) restitution of any money or any other asset which is the subject matter of the arrangement or transaction is no longer possible, or the company has been indemnified in pursuance of section 232 for the loss or damage suffered by it, or

(b) any rights acquired bona fide for value and without actual notice of the contravention by any person other than the person for whom the transaction or arrangement was made would be affected by its avoidance.

Personal liability for company debts in certain cases

247. (1) If—

(a) a company is being wound up and is unable to pay its debts, and

(b) the court considers that any arrangement of a kind described in section 240(2)(a) has contributed materially to the company’s inability to pay its debts or has substantially impeded the orderly winding up of it, the court, on the application of the liquidator or any creditor or contributory of the company, may, if it thinks it proper to do so, make the following declaration.

(2) That declaration is a declaration that any person for whose benefit the arrangement was made shall be personally liable, without any limitation of liability, for all or such part as may be specified by the court, of the debts and other liabilities of the company.

(3) In deciding whether to make a declaration under this section, the court shall have particular regard to whether and to what extent, any outstanding liabilities arising under any arrangement referred to in subsection (1) were discharged before the commencement of the winding up.

(4) In deciding the extent of any personal liability under this section, the court shall have particular regard to the extent to which the arrangement in question contributed materially to the company’s inability to pay its debts or substantially impeded the orderly winding up of the company.

Offence for contravention of section 239

248. If a company enters into a transaction or arrangement that contravenes section 239, any officer of it who is in default shall be guilty of a category 2 offence.

Contracts of employment of directors — control by members over guaranteed periods of employment

249. (1) In this section “relevant term” means a term by which a director’s employment with the company of which he or she is a director or, where he or she is the director of a holding company, his or her employment by any company comprised in the group, is to continue or may be continued, otherwise than at the instance of the company, for a period exceeding 5 years during which the employment—

(a) cannot be terminated by the company by the giving of notice, or

(b) can be so terminated only in specified circumstances.

(2) References in subsection (1) to employment being continued (or its potential to be continued) are references to its being continued (or its potential to be continued) whether under the original agreement concerned or under a new agreement entered into in pursuance of the original agreement concerned.

(3) A company shall not incorporate in any agreement a relevant term unless the term is first approved by a resolution of the company in general meeting and, in the case of a director of a holding company, by a resolution of that company in general meeting.

(4) A resolution of a company approving a relevant term shall not be passed at a general meeting of the company unless a written memorandum, setting out the proposed agreement incorporating the term, is available for inspection by members of the company both—

(a) at the registered office of the company for not less than the period of 15 days ending before the date of the meeting, and

(b) at the meeting itself.

(5) If it is proposed to use the means under section 193 or 194, in lieu of passing a resolution at a general meeting of the company, to approve a relevant term those means shall not be used unless a written memorandum setting out the proposed agreement incorporating the relevant term has been circulated to the members of the company (being those entitled to attend and vote at a general meeting of the company) with the proposal for the written resolution.

(6) A term incorporated in an agreement in contravention of this section shall, to the extent that it contravenes this section, be void and the agreement shall be deemed to contain a term entitling the company to terminate it at any time by the giving of reasonable notice.

(7) No approval is required to be given under this section by any body corporate unless it is a company formed and registered under this Act, an existing company or a wholly owned subsidiary of a body corporate.

(8) For the purposes of this section—

“employment” includes employment under a contract for services;

“group”, in relation to a director of a holding company, means the group which consists of that company and its subsidiaries.

Anti-avoidance provision — section 249

250. (1) In any case where—

(a) a person is or is to be employed with a company under an agreement which cannot be terminated by the company by the giving of notice or can be so terminated only in specified circumstances, and

(b) more than 6 months before the expiration of the period for which he or she is or is to be so employed, the company enters into a further agreement (otherwise than in pursuance of a right conferred by or by virtue of the original agreement on the other party to it) under which he or she is to be employed with the company, or where he or she is a director of a holding company, within the group, the definition of “relevant term” in section 249 shall apply as if to the period for which the person is to be employed under that further agreement there were added a further period equal to the unexpired period of the original agreement.

(2) Where subsection (1) has effect in relation to the definition of “relevant term” in section 249, subsection (6) of that section has effect as if there were substituted “the agreement and the original agreement referred to in section 250(1) shall each be deemed to contain a term entitling the company to terminate it at any time by the giving of reasonable notice” for “the agreement shall be deemed to contain a term entitling the company to terminate it at any time by the giving of reasonable notice”.

(3) For the purposes of this section “employment” and “group” have the same meaning as they have for the purposes of section 249.

Approval of company necessary for payment by it to director or directors’ dependants for loss of office

251. (1) It shall not be lawful for a company to make to any director of the company any payment by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office, unless the following conditions are first satisfied.

(2) Those conditions are—

(a) particulars relating to the proposed payment (including the amount of it) are disclosed to the members of the company, and

(b) the proposal is approved by resolution of the company in general meeting.

(3) Without prejudice to the exceptions provided for by section 254(5), a payment made bona fide in discharge of an existing legal obligation does not fall within this section.

Approval of company necessary for payment to director of compensation in connection with transfer of property

252. (1) It shall not be lawful in connection with the transfer of the whole or any part of the undertaking or property of a company for any payment to be made to any director of the company by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office, unless the following conditions are first satisfied.

(2) Those conditions are—

(a) particulars relating to the proposed payment (including the amount of it) are disclosed to the members of the company, and

(b) the proposal is approved by resolution of the company in general meeting.

(3) Where a payment which is not lawful under subsection (1) is made to a director of a company the amount received shall be deemed to have been received by him or her in trust for the company.

(4) Without prejudice to the exceptions provided for by section 254(5), a payment made bona fide in discharge of an existing legal obligation does not fall within this section.

Duty of director to disclose to company payments to be made to him or her in connection with transfer of shares in company

253. (1) The following duty arises on the part of a director where, in connection with the transfer to any persons of all or any of the shares in a company being a transfer resulting from:

(a) an offer made to the general body of shareholders, or

(b) an offer made by or on behalf of some other body corporate with a view to the company becoming its subsidiary or a subsidiary of its holding company, or

(c) an offer made by or on behalf of an individual with a view to his or her obtaining the right to exercise or control the exercise of not less than one-third of the voting power at any general meeting of the company, or

(d) any other offer which is conditional on acceptance to a given extent, a payment is to be made to that director of the company by way of compensation for loss of office or as a consideration for or in connection with his or her retirement from office.

(2) That duty on the part of that director is to take all reasonable steps to secure that particulars of the proposed payment (including the amount of it) are included in or sent with any notice of the offer made for their shares which is given to any shareholders.

(3) Without prejudice to the exceptions provided for by section 254(5), a payment to be made, or that is made, bona fide in discharge of an existing legal obligation does not fall within this section.

(4) If—

(a) any such director fails to take reasonable steps as mentioned in subsection (2), or

(b) any person who has been properly required by any such director to include the particulars specified in that subsection in, or send them with, any such notice so mentioned fails to do so, he or she shall be guilty of a category 3 offence.

(5) Unless—

(a) the requirements of subsections (1) and (2) are complied with in relation to any such payment as is mentioned in subsection (1), and

(b) the making of the proposed payment is, before the transfer of any shares in pursuance of the offer, approved by a meeting summoned for the purpose of the holders of the shares to which the offer relates and of other holders of shares of the same class as any of those shares, any sum received by the director on account of the payment shall be deemed to have been received by him or her in trust for any persons who have sold their shares as a result of the offer made and the expenses incurred by him or her in distributing that sum amongst those persons shall be borne by him or her and not retained out of that sum.

(6) Where the shareholders referred to in paragraph (b) of subsection (5) are not all the members of the company and no provision is made by the constitution for summoning or regulating such a meeting as is mentioned in that paragraph, the provisions of—

(a) this Part and the rest of Parts 1 to 14, and

(b) the company’s constitution, relating to general meetings of the company shall, for that purpose, apply to the meeting either without modification or with such modifications as the Director of Corporate Enforcement, on the application of any person concerned, may direct for the purpose of adapting them to the circumstances of the meeting.

(7) If at a meeting summoned for the purpose of approving any payment as required by paragraph (b) of subsection (5), a quorum is not present and after the meeting has been adjourned to a later date a quorum is again not present, the payment shall be deemed for the purposes of that subsection to have been approved.

“Existing legal obligation”— definition and other provisions in relation to sections 251 to 253

254. (1) “Existing legal obligation” for the purposes of—

(a) section 251(3), means an obligation of the company concerned, or any body corporate associated with it, that was not entered into in connection with, or in consequence of, the event giving rise to the payment for loss of office in question,

(b) sections 252(4) and 253(3), means an obligation of the person making, or proposing to make, the payment that was not entered into for the purposes of, in connection with or in consequence of, the transfer in question.

(2) In the case of a payment to which both sections 251 and 252 apply, or to which both sections 251 and 253 apply, paragraph (a) of subsection (1) and not paragraph (b) of it shall have effect.

(3) Where in proceedings for the recovery of any payment which it is alleged is recoverable as having, by virtue of—

(a) subsections (1) and (3) of section 252, or

(b) subsections (1), (2) and (5) of section 253, been received by any person in trust, it is shown that—

(i) the payment was made in pursuance of any arrangement entered into as part of the agreement for the transfer in question or within one year before or 2 years after the date of that agreement or the offer leading to it, and

(ii) the company or any person to whom the transfer was made was privy to that arrangement, the payment shall be deemed, except in so far as the contrary is shown, to be one to which the subsections concerned apply.

(4) If, in connection with any such transfer as is mentioned in section 252 or 253—

(a) the price to be paid to a director of the company for any shares in the company held by him or her is in excess of the price which could at the time have been obtained by other holders of the like shares, or

(b) any valuable consideration is given to any such director, the excess or the money value of the consideration, as the case may be, shall, for the purposes of that section, be deemed to have been a payment made to him or her by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office.

(5) References in sections 251 to 253 to payments to any director of a company by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office include references to payments to him or her by way of compensation for—

(a) loss of office as director of the company,

(b) the loss, while director of the company, or on or in connection with his or her ceasing to be a director of the company, of any other office in connection with the management of the company’s affairs or of any office as director or otherwise in connection with the management of the affairs of any subsidiary, but do not include references to any bona fide payment by way of—

(i) damages for breach of contract, or

(ii) pension in respect of past services, and, for the purposes of this subsection, “pension” includes any superannuation allowance, superannuation gratuity or similar payment.

(6) Nothing in section 251 or 252 shall be taken to prejudice—

(a) the operation of any rule of law requiring disclosure to be made with respect to any such payments as are mentioned in that section or with respect to any other like payments made or to be made to the directors of a company, or

(b) the operation of any rule of law or enactment in relation to the accountability (if any) of any director for any such payment received by him or her.

(7) References in sections 251 to 253 and this section to a director include references to a past director.

(8) For the purposes of subsection (1)(a) a body corporate is associated with a company if one is the subsidiary of the other or both are subsidiaries of the same body corporate.

Contracts with sole members

255. (1) Subject to subsection (2), where a single-member company enters into a contract with the sole member of the company and the sole member also represents the company in the transaction, whether as a director or otherwise, the single-member company shall, unless the contract is in writing, ensure that the terms of the contract are forthwith set out in a written memorandum or are recorded in the minutes of the first meeting of the directors of the company following the making of the contract.

*(2) Subsection (1) shall not apply to contracts entered into in the ordinary course of the company’s business.

(3) If a company fails to comply with subsection (1), the company and any officer of it who is in default shall be guilty of a category 3 offence.

(4) Subject to subsection (5), nothing in this section shall be taken to prejudice the operation of any other enactment (including a provision of this Act) or rule of law applying to contracts between a company and a director of that company.

(5) Failure to comply with subsection (1) with respect to a contract shall not affect the validity of that contract.

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