Ireland · Shares, company capital and dividends

Issuing shares, calls on shares, lien, forfeiture and financial assistance

the Companies Act 2014 · sections 66 to 71, 75, 77 and 80 to 82

Most allotment failures are procedural rather than commercial. No shares may be allotted unless the allotment is authorised, either specifically or under a general authority, by ordinary resolution or by the constitution (section 69(1)), and where the constitution states an authorised share capital, that ceiling binds as well (section 69(2)). Shares may not be allotted at a discount to their nominal value (section 71(2)), and any value received above nominal value goes to the share premium account (section 71(5)).

The pre-emption rule catches companies that issue to a new investor in a hurry. A company proposing to allot shares may not allot them to a non-member unless it has first offered them to each holder of relevant shares of the class concerned (section 69(6)). The offer has to be served in the same manner as a notice (section 69(9)), and it may not be withdrawn before the end of the period the offer specifies (section 69(10)). The filing then follows: particulars in the prescribed form within 30 days after the date of allotment (section 70(7)).

Shares in the capital of a company must have a nominal value (section 66(1)), and a company has no power to issue a bearer instrument (section 66(9)). Section 68 controls the extent to which a private company may offer its securities to the public. Section 75 permits certain arrangements but does not permit any share to be issued at a discount to its nominal value (section 75(3)).

Calls, lien and forfeiture run on their own notice periods. A member must receive at least 30 days' notice specifying the time or times and place of payment before the called amount falls due (section 77(4)). A lien may only be enforced once a written notice stating and demanding payment of the part immediately payable has been given to the registered holder or the person entitled by transmission (section 80(6)). A forfeiture notice must specify a further day not earlier than 14 days after service, and must state what happens if payment is not made by that day (section 81(3)). Section 82 governs financial assistance by a company for the acquisition of its own shares.

Working files 6, 7 and 8 of the IE-COMPANY agent toolkit cover this situation. Working file 6 asks about nominal value, numbering and the limit on offers of securities. Working file 7 works through the authority for each allotment, the pre-emption offer, the consideration and the 30-day filing. Working file 8 works through calls, lien, forfeiture and any financial assistance given, and asks for the notice and resolution evidence behind each one.

• Working file 6 · Shares, nominal value, numbering and the limit on offers of securities to the public
• Working file 7 · Allotment of shares and payment for them
• Working file 8 · Calls on shares, lien, forfeiture and financial assistance

ComplianceSME tracks the Companies Act 2014 and updates the toolkit on your account through the Compliance Complete account, so that you are never working from a superseded version. Compliance Complete

• Altering company capital and varying class rights
• Transferring shares, transmission on death and share certificates
• Buying back own shares, treasury shares and cross-holdings
• Paying a dividend and making a bonus issue

The Irish library holds all 75 situations →