Shareholders Information

Limited Liability

A limited company in Ireland is considered a separate and distinct legal entity from any individual who owns shares in the company. This status means that the company, not its shareholders, is directly responsible for its own liabilities and debts. The liability of shareholders is limited to the amount that remains unpaid on the shares they have taken in the company. For example, if a shareholder holds 100 shares at €1 each, their maximum liability is capped at €100.

Share Capital

Share capital refers to the total value of shares that a company has issued to its shareholders. In Ireland, all limited companies must outline how the share capital is divided in their constitution. For instance, a company might state that its share capital is divided into shares of €1 each.

• Nominal Value of Shares: This is the face value of a share, set by the company members at the time of incorporation. Common nominal values are €1, €0.01, or €100. The nominal value remains unchanged unless an application to alter it is submitted to the Companies Registration Office.
• Authorised Share Capital: This is the maximum amount of share capital that the company is authorized to issue, as stated in its constitution. A company with 1,000 shares at a nominal value of €1 each has an authorised share capital of €1,000.
• Issued Share Capital: The portion of authorised share capital that has been allocated and issued to shareholders. For example, if a company has issued 100 shares at a nominal value of €1, its issued share capital is €100.

The Rights of Company Members

Company members or shareholders enjoy various rights under the Companies Act 2014 and the company’s constitution, including:

1. Shares:
   • The right to receive a share certificate.
   • Pre-emption rights (the right of first refusal on new shares, unless otherwise stated in the constitution).
   • The right to transfer shares (subject to the approval of directors, if stipulated in the constitution).
2. Meetings:
   • The right to receive notice of general meetings.
   • 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.
3. Financial Statements and Company Documents:
   • The right to receive copies of the company’s financial statements, Directors Reports, and Auditors Reports.
   • The right to inspect internal company registers, such as the Register of Members, Register of Directors, and Register of Share Transfers.
4. Request or Convene General Meetings:
   • Members holding at least 10% of the issued share capital can request that the directors convene an Extraordinary General Meeting (EGM).
   • Members holding 50% or more of the issued share capital can convene an EGM themselves.

Beneficial Ownership

What is Beneficial Ownership?

A beneficial owner is an individual who ultimately controls or owns a company, either through direct or indirect ownership of at least 25% of the shares, voting rights, or ownership interest in the company.

Registration Requirements

Irish limited companies must register details of their beneficial owners with the Central Register of Beneficial Ownership (RBO) within five months of incorporation. They must also maintain an internal register of beneficial ownership.

Why Register as a Beneficial Owner?

This requirement stems from the EU Anti-Money Laundering Directives, which aim to deter money laundering and terrorist financing by identifying individuals who hide their ownership of companies for illegal purposes.

Legal Requirements

Companies incorporated in Ireland after June 22, 2019, must register the details of beneficial owners within five months of incorporation. The register should include:

• Beneficial owner’s name and residential address
• Date of birth
• PPS Number
• Date of entry into the register
• Nature and extent of the ownership interest

Shareholder Decision Making - General Meetings

General Meetings - AGMs & EGMs

The Companies Act 2014 distinguishes between two types of general meetings:

1. Annual General Meeting (AGM): An AGM is held annually to update shareholders on company performance, discuss key matters, and vote on resolutions.
2. Extraordinary General Meeting (EGM): EGMs are convened for urgent or special matters outside of the regular scope of business.

Who Can Convene a General Meeting?

• Directors: The company directors can convene an EGM whenever necessary. They must also convene an EGM if requested by shareholders holding at least 10% of the issued share capital.
• Shareholders: Shareholders holding 50% or more of the issued share capital can convene an EGM themselves.

Notice of General Meetings

• 21 days for AGMs and special resolutions.
• 7 days for other general meetings.

Contents of a General Meeting Notice

The notice should include:

• The place, date, and time of the meeting.
• The general nature of the business to be transacted.
• In the case of special resolutions, the text or substance of the resolution.
• A statement indicating that a member entitled to attend and vote can appoint a proxy.

Voting at General Meetings

1. Quorum Requirements: No business can be transacted without a quorum of members. Unless the constitution states otherwise, two members present in person or by proxy constitute a quorum.
2. Voting by Show of Hands: Each member or proxy present has one vote.
3. Voting by Poll: Each share carries one vote in a poll.

Shareholder Decision Making - Written Resolutions

What is a Written Resolution?

Written resolutions allow members to pass resolutions without holding a physical meeting. They are just as valid as those passed at a general meeting.

Types of Written Resolutions:

1. Unanimous Written Resolution: Requires signatures from all members entitled to vote.
2. Majority Written Resolution:
   • Special Written Resolution: Requires at least 75% approval.
   • Ordinary Written Resolution: Requires more than 50% approval.

Administrative Procedures for Written Resolutions

• Unanimous Resolutions: Must be signed by all members and delivered to the company within 14 days.
• Majority Resolutions: All members must receive the proposed resolution and its explanation. Within 3 days of receipt, the company must notify all members that the resolution has been passed.

Limitations of Written Resolutions

Written resolutions cannot be used for decisions to:

• Remove a director.
• Remove a statutory auditor.
• Acquire the company’s own shares.

 

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