Ireland · Schemes of arrangement, mergers and divisions
Schemes of arrangement, information to members and creditors, and the buy-out of dissenting shareholders
the Companies Act 2014 · sections 452, 454, 455, 457 and 459
A scheme depends on the information given to members and creditors before they vote
A scheme lives or dies on the information given before the vote. Sections 452 and 455 set what must be put before members and creditors, and the accuracy of that material is the company's responsibility, not the court's. Where provision of the kind set out in section 455(2) is made by a scheme order, every company in relation to which the order is made, other than the company whose compromise it is, carries the duty section 455(4) imposes.
The squeeze-out mechanism is time limited. The conditions for acquiring the shares of a dissenting shareholder include that the offeror act at a time before the expiry of the period of 6 months after the date section 457(4)(a) identifies. Where the scheme, contract or offer allows an assenting shareholder to elect between two or more sets of terms, section 457(5)(a) governs how that election affects the dissenting shareholder. Save where a call notice has already been given, the offeror must act within 30 days after the date on which the scheme, contract or offer becomes binding (section 457(6)).
Sections 452, 454 and 455 require the company to deliver a scheme order to the Registrar within 21 days
Sections 452, 454 and 455 govern the scheme of arrangement: the explanatory material, the court's order and the consequences of the order for other companies caught by it. Where a scheme order is made, the company must deliver a copy to the Registrar within 21 days after the date on which the order is made, and the order takes effect as section 454(1) provides.
Sections 457 and 459 govern the acquisition of the shares of a dissenting shareholder following an approved scheme, contract or offer, the call notice, the dissenting shareholder's right to apply to court and the price payable. The mechanism transfers shares compulsorily, so the section's conditions are read strictly.
The system generates your ComplianceSME company passport and then walks you through the working files
Working files 69 and 70 of the IE-COMPANY agent toolkit cover this situation. Working file 69 works through the information given to members and creditors and the delivery of the scheme order to the Registrar. Working file 70 works through the buy-out of dissenting shareholders: the terms of the offer, the level of acceptances, the call notices given, the dates on which each step happened and the treatment of any election between sets of terms.
- Working file 69 · Schemes of arrangement: information to members and creditors
- Working file 70 · Acquisitions: the buy-out of dissenting shareholders
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The working files above open from your ComplianceSME account at no charge, and so does the rest of the Companies Act 2014 toolkit: 215 working files across the 75 situations a company registered in Ireland can be in. Working file 1 runs first and builds the company passport; after that you open each working file as its situation arises.
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