Company Secretarial Library

Welcome to Incorpro's Company Secretarial Library where we provide jargon-free, easy to understand answers to the most frequently asked questions we receive from our clients.

Shareholders

Limited Liability
  • A limited company is a separate and distinct legal entity to any individual who owns shares in that company.
  • As a distinct legal entity, the company is capable of entering contracts, taking on debt, owning property, suing and being sued.
  • As a result, it is the company, and not the members of the company, who are liable to creditors.
  • The liability of the shareholders is limited to the amount that remains unpaid on shares taken in the company. E.g. if a shareholder has taken 100 shares at €1 each, the liability of this shareholder is capped at this amount.
Share Capital
  • Share Capital is the aggregate amount or value of the nominal value of shares of the company.
  • All limited companies in Ireland must state, on its constitution, how the share capital of the company is divided. E.g. The Share Capital of the company is divided into shares of €1 each.
  • Limited companies in Ireland are not required however to state an Authorised Share Capital value on the Constitution. If the company chooses to state an Authorised Share Capital then the number of shares that can be issued by the company wll be capped at this amount. The share capital of the Company is €1,000 divided into 1,000 shares of €1.00 each.
  • The Nominal Value of shares is set by members of the company at incorporation. Common nominal values used are €1, €0.01, €100. While the market value of shares can fluctuate the Nominal Value of the shares will remain the same, unless the company submits an application to the Companies Registration Office to change it.
  • Authorised Share Capital – is the aggregate amount or value of the nominal value of the authorised shares of the company. E.g. A company with a stated Authorised Share Capital of 1000 shares divided into shares with a nominal value of €1 has an Authorised Share Capital of 1000 shares or €1000.
  • Issued Share Capital - is the aggregate amount or value of the nominal value of the issued shares of the company. E.g. A company that has allocated/issued 100 shares and the nominal value of the shares of the company are €1, has an Issued Share Capital of 100 shares or €100.
The Rights of Company Members
  • A company's constitution, as well as any shareholders agreements, will outline any specific rights and obligations the shareholders of the company have.
  • In addition to specific rights and obligations contained in a company's constitution members have statutory rights and obligations imposed by the Companies Act 2014.

  • The right to receive a copy of the Company Constitution.
    • Shares
      • The right to receive a share certificate.
      • To exercise pre-emption rights - save to the extent the company's constitution has dis-applied the right.
      • To transfer shares - subject to the approval of directors - save to the extent the Constitution provides otherwise.
    • Meetings
      • To receive notice of meetings consistent with timeframes specified by the Companies Act 2014.
      • The right to appoint a proxy to attend and vote at meetings on their behalf.
      • The right to request a copy of the minutes of general meetings of members.
    • Financial Statements and Company Documents
      • The right to receive a copy of the company's financial statements, as well as any associated Directors Reports and Auditors Reports.
      • The right to receive and inspect copies of the companies internal registers, e.g. Register of Members, Register of Directors, Register of Share Transfers, etc.
    • Request or Convene General Meetings
      • Members holding not less than 10% of the company's Issued Share Capital can request the Directors of the company to convene an Extraordinary General Meeting (EGM).
      • Members holding not less than 50% of the company's Issued Share Capital can themselves convene an Extraordinary General Meeting.

Beneficial Ownership

What is meant by Beneficial Ownership?
  • A beneficial owner is an individual who ultimately owns or controls a company, either through direct or indirect ownership of 25% of the shares or voting rights or ownership interest in the company.
  • Limited companies in Ireland are required to register details of Beneficial Ownership with the Central Register of Beneficial Ownership (RBO) within 5 months of incorporation. Limited companies are also required to maintain an internal beneficial ownership register.
Why do I have to register as a Beneficial Owner with the RBO?
  • The requirement to register details of Beneficial Ownership with the RBO stems European Union Anti Money Laundering directives.
  • “The aim of the Directives is to deter money laundering and terrorist financing and to help law enforcement and regulatory authorities to identify those ‘natural persons’ who hide their ownership or control of Irish companies/societies for the purpose of facilitating illegal activities”.
  • Limited companies in Ireland are required to register details of Beneficial Ownership with the Central Register of Beneficial Ownership within 5 months of incorporation. Limited companies are also required to maintain an internal beneficial ownership register.
What are the legal requirements of a limited company relating to Beneficial Ownership?
  • All limited companies incorporated in Ireland after 22 June 2019 have 5 months from the date of incorporation to register details of Beneficial Ownership with the RBO.
  • Limited companies in Ireland must also hold an internal register of beneficial ownership. The register must contain the beneficial owners’ particulars, including name, residential address, date of birth, PPS Number, date of entry into register and nature and extent of interest.

Shareholder Decision Making - General Meetings

General Meetings - AGMs & EGMs

The Companies Act 2014 distinguished between two types of General Meetings:

  • AGM - Annual General Meeting

    The Annual General Meeting is an important date in a company’s corporate calendar. Irish limited companies are required to hold an annual general meeting each year and there should be no more than 15 months between the date of one annual general meeting of and that of the next.

    The AGM is an opportunity for the shareholders to receive an update on the performance of the company, to ask questions of its directors and to vote on proposed resolutions.

  • EGM-Extraordinary General Meetings

    All general meetings, other than an AGM, are deemed to be Extraordinary General Meetings.

    They are convened for the consideration of matters that fall outside the scope of “ordinary” business decisions. Such business falls outside the powers of directors of the company to make on their own and requires shareholder involvement. These matters are typically resolved by votes cast by members at physically attended general meetings.

Who Can Convene a General Meeting of the Company's Members?
  • Directors
    • The directors of a company may, whenever they think fit, convene an extraordinary general meeting of the company's members.
    • The directors of a company are obliged to convene an EGM of its members, if members holding not less than 10 per cent of the share capital of the company request them to do so.
  • Shareholders/Members
    • Members of a company holding not less than 50 per cent of the capital of the company may convene an extraordinary general meeting of the company.
Notice of General Meetings

The statutory minimum notice of general meetings is:

  • 21 days for both AGMs and for general meetings at which a special resolution is to be considered.
  • 7 days for general meetings not falling into the above categories.
What Details Should the Notice of a General Meeting Contain?

The notice of the meeting should specify:

  • The place, the date and the time of the meeting.
  • The general nature of the business to be transacted at the meeting.
  • In the case of a proposed special resolution, the text or substance of that proposed special resolution.
  • A statement, given reasonable prominence: that a member entitled to attend and vote is entitled to appoint a proxy.
Who must be notified of the holding of a General Meeting?

Under irish company law there is a statutory obligation to notify:

  • Every shareholder (whether entitled to vote or not).
  • The personal representative of a deceased member who has the right to vote.
  • The assignee in bankruptcy of a bankrupt member (who has the right to vote.
  • The directors and secretary of the company.
  • The company’s auditors (if one has been appointed).
Voting at General Meetings

No business shall be transacted at any general meeting of the company unless a quorum of members is present at the time when the meeting starts. Unless the company’s constitution provides otherwise, Irish company law considers two members of the Company present in person or by proxy at a general meeting to be a quorum. 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.

  • Voting - By Show of hands
    • Unless a poll is demanded, voting is to be by a show of hands.
    • On a show of hands, every member present in person and every proxy shall have one vote. No individual member shall have more than one vote;
  • Voting-By Poll
    • 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).
    • Every member, whether present in person or by proxy, has one vote for each share of which he or she is the holder.
  • 7 days for general meetings not falling into the above categories.

Shareholder Decision Making - Written Resolutions

What is a Written Resolution?

Signed written resolutions are a practical alternative mechanism to the physical holding of general meetings.

These resolutions are “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”.

The Companies Act 2014 makes reference to two types of written resolutions:

  • Unanimous Written Resolution:
    • Is a resolution in writing signed by all the members of a company entitled to attend and vote on such a resolution at a general meeting.
  • Majority Written Resolutions
    • Special Written Resolution
      • Is a written resolution described as such and signed by members who 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.
    • Ordinary Written Resolution
      • A written resolution described as such and signed by members who 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.
Administrative Procedure of Written Resolutions:

It is important that the officers and members of a company understand the procedures of valid written resolutions. Failure to follow administrative procedures, required by the Companies Act, may invalidate the written resolution.

  • Unanimous Written Resolution:
    • Obligations of the members signing the written resolution:
      • The signatories of a written resolution are required to deliver the documents constituting the written resolution to the company within 14 days of its passing.
    • Obligations of the company's directors:
      • If the written resolution is not contemporaneously signed by all members, the company shall notify the members, within 21 days after the date of delivery to it of the documents of the fact that the resolution has been passed.
      • The company should retain the documents constituting the written resolution documents as if they constituted the minutes of the proceedings of a general meeting of the company.
  • A unanimous written resolution is deemed to have been passed at a meeting held on the date on which it was signed by the last member to sign.

  • Majority Written Resolutions:

    All members who would be entitled to attend and vote on the resolution must have been circulated the proposed text of the resolution and an explanation of its main purpose.

    • Obligations of Members:
      • The signatories of a written resolution are required to deliver the documents constituting the written resolution to the company. Unless this procedural requirement is complied with, majority written resolutions will not have effect.
    • Obligations of Directors:
      • The company shall retain the documents constituting the written resolution documents as if they constituted the minutes of the proceedings of a general meeting of the company.
      • Within 3 days after the date of the delivery to it of the documents the company shall notify every member of the fact that a majority written resolution has been passed and the date on which it will be deemed to have been passed.
      • For all special resolutions and certain ordinary resolutions, the directors of a company are required to notify and register the details of that resolution with the Companies Registrar. This must be done within 15 days of the resolution passing (G1/G2).
  • Delayed Effect
    • Unlike Unanimous Written Resolutions, Majority Written Resolutions have a mandatory delayed effect.
    • an ordinary resolution passed as a majority written resolution is deemed to have been passed at a meeting held 7 days after the date on which it was signed by the last member to sign;
    • and a special resolution passed as a majority written resolution is deemed to have been passed at a meeting held 21 days after the date on which it was signed by the last member to sign.
  • Limitations of Written Resolutions

    Written Resolutions, whether unanimous or majority, cannot be used for resolutions that:

    • Remove a director.
    • Remove a statutory auditor.
    • Acquire its own shares.

Further Guidance and Assistance

If you would like to speak to us about any of your accounting and tax needs you can call us on 01-4429409 or email us at info@incorpro.ie. You can also keep up-to-date with all of our latest news, resources, and the deals that we offer by following us on our social media channels.