Last updated: Jun 16, 2022
As a company prepares for growth it may be necessary to issue shares to obtain funds. Before issuing shares, you should establish that the directors have the authority to issue shares and that there is no impediment to share allotment.
Offering shares in a private company must be done in such a way that it is not regarded as a public offering. The subscribers wishing to apply for the shares should complete an appropriate application for new shares. They should return this to the company along with the payment required for the shares
Subject to certain exceptions, a company proposing to allot shares to any non-member cannot do so unless it has already offered the shares to current members at least 14 days prior. A board meeting should be convened at which the directors consider the applications and resolve to issue the shares.
A company shall within 2 months after the date of allotment complete and have ready for delivery the certificates of all shares allotted under Section 99 Companies Act 2014. Share certificates must be signed and dated by two directors or one director and the Company Secretary. Certificates must also be stamped with the Company Seal.
Within 30 days of the date of the share allotment, Form B5 must be delivered to the CRO along with the €15 filing fee. The B5 requests the names and addresses of the new shareholders and the amount paid per share, either in cash or consideration.
Under the Companies Act 2014, someone effectively becomes a shareholder when they acquire the unconditional right to be included in the Register of Members. Under section 169 of the Act, the Register must be updated within 28 days of the Board Meeting.
The company may need to update the internal Register of Beneficial Owners and notify the Central Register of Beneficial Ownership.
Do not forget to include the new shareholders in the next B1 Annual Return filing.
You should liaise with an accountant to ensure the newly issued shares are correctly in the company’s accounts. Any value received in respect of the allotment of a share IN EXCESS of its nominal value shall be credited to the Share Premium Account.
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 info@incorpro.ie. For updates, follow us on twitter.
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