Last updated: Jun 16, 2022
For Limited companies registered under the Companies Act 2014, the governing instrument consists of a one document constitution, with an example set out in Schedule 1 of the Act. All other company types have a constitution that includes a Memorandum and Articles of Association. There being no Memorandum, a Limited company has no stated objects and it can engage in any allowed business.
The constitution states the name of the company, the fact that the company is a private company limited by shares and any additional regulations the company may wish to specify. The name, address and shareholding of each original shareholder are listed on the constitution. They must sign beside their name and the constitution must be witnessed. The constitution is submitted to the Companies Registration Office (CRO) with the application to register the company.
The rules on the rights of members and shareholders are set out in the company’s constitution.
The Authorised Share Capital is the maximum amount of share capital directors are authorised to issue to a company's shareholders under the Constitution of the company.
The Companies Act 2014 gives private companies limited by shares the flexibility to specify an Authorised Share Capital on it's constitution or to leave it blank.
If a company chooses to not specify an Authorised Share Capital it can issue and unlimited amount of shares over the life of the company without having to take into consideration the threshold that a specified Authorised Share Capital would ordinarily place on it.
On the other hand, in the situation that the directors choose to specify an Authorised Share Capital, shares in the company can only be issued up to the amount of Authorised Share Capital. The situation may arise whereby the company wishes to issue new shares in the company but the amount of unissued shares available (shares that are authorised but not yet issued) is less than the amount of shares it wishes to issue.
Changes to Authorised Share Capital after your company has been incorporated requires updating the Constitution and notifying the CRO, so it can reduce the future workload and give greater flexibility by opting to not specify an Authorised Share Capital on the company's constitution.
When registering a company through Incorpro, we will automatically not specify an Authorised Shares Capital on the Consitution.
This is the number of shares that have been allotted to the shareholders of the company. Many companies issue 100 shares and divide them between the shareholders as desired. One person or company can hold all the shares.
Given an Authorised Share Capital of 100,000 shares and an Issued Share Capital of 100 shares, the directors can at any time in the future issue another 99,900 shares to any person. It is important that the directors adhere to the company's Constitution and Company Law when issuing shares.
The shareholders are the owners of the company and they hold the Issued shares. The company is a separate legal entity from the shareholders and it is the company, not the shareholders, that get sued in the case of unpaid debts. The members' liability, if the company is wound up, is limited to the amount, if any, unpaid on the shares they hold (i.e. limited liability).
There needs to be a minimum of one shareholder with a maximum of 149 for private limited companies. Shareholders can be from anywhere in the world with corporate bodies allowed to act as shareholders. When setting up a company, the shareholders will sign the Constitution of the company and the signing of Constitution needs to be witnessed.
For a single member company, i.e., a private limited company with only one shareholder, the shareholder and director can be the same person.
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. The shareholder of the Limited company is often the beneficial owner.
It is the legal responsibility of a company’s officers (director(s) and company secretary) to obtain and confirm beneficial ownership information, to keep the company’s own beneficial ownership register current and accurate and to deliver the required beneficial ownership information to the Register of Beneficial Ownership (RBO) within the prescribed time frames. You can find more details on the RBO filing requirements in our guidance note here.
A shareholders' right to transfer shares may be limited by the constitution. The shareholder would likely have to offer the shares to existing shareholders first and get approval from the directors to transfer the shares.
Companies are required to maintain certain registers, including the Register of Members. The name, address, shareholding, date they became a member and date they ceased to be a member must be maintained on the Register of Members. The subscribers to the company upon its registration will be the first name on the register.
Other registers and records that must also be kept include the following:
Shareholders have the right to attend the Annual General Meeting (AGM) held each year. It is the board of directors who call the AGM and the shareholders must receive notice at least 21 days in advance. AGMs are normally held every calendar year with not more than 15 months between them.
The purpose of the AGM is to give shareholders the right to obtain information on the company from the directors and to discuss and vote on financial statements, director appointments, dividends and any other matters.
For single member companies, the sole member, if he/she so decides, can dispense with the holding of General Meetings, including AGMs. The financial statements and reports that would normally be laid before the AGM of a company still need to be prepared and forwarded to the member.
If you need further help or you would like to speak to us about any of your accounting and tax needs, please contact us on +353 1 442 9409 or email email@example.com. For updates, follow us on twitter.
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