Share Capital Change
Each company with a share capital has an authorised share capital amount which is stated in the memorandum and articles of the company. Therefore any increase or reduction in this figure involves a change to the memorandum and articles of the company which the members must resolve to do. A reduction of issued share capital generally requires a High Court Order under s72 of the 1963 Companies Act.
Bearer Shares
A Public Company, if so authorised by its articles, may issue bearer shares under section 88 of the Companies Act 1963. Table A of a memorandum and articles does not contain such authorisation, so a public company would have to include an express authorisation in its articles of association before any issue of bearer shares can occur. A private company, however, cannot issue bearer shares. Section 33 of the Companies Act 1963 requires a private company to restrict the right to transfer its shares in its articles of association. Bearer shares, which are transferred by simple delivery of the share warrant, would be in conflict with such restrictions. Regulation 2 of Table A part 2 states that (d) "the company shall not have power to issue share warrants to bearer".
Share/Stock Transfer Form
With regards to a share/stock form, this form is not a CRO form but should be filed with the Revenue Commissioners. Share transfers will be noted on a company's annual return form. The form can be purchased from a law/legal stationers.
Increase in issued capital of a limited company
(a) Allotment of shares for cash
Every allotment of shares by a company limited by shares, or by a company limited by guarantee and having a share capital must be notified to the CRO on Form B5 within one month of the date of allotment.
Since the abolition of companies capital duty with effect from 7 December 2005, Form B5 with an effective date on or after that date should be filed directly with the CRO (fee €15).
Only a Form B5 that has an effective date prior to 7 December 2005 should now be filed to the Revenue Commissioners, Companies Capital Duty Section, Dublin Region, Stamping District, Stamping Building, Dublin Castle Dublin 2 together with the registration fee (€15 plus appropriate capital duty). Capital duty is a matter for Revenue.
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Warning regarding Form B5Subsequent amendments to the particulars supplied on the form B5 cannot be accepted by CRO pursuant to section 122(5) where the effect would be to reduce the amount of the company's issued share capital and a High Court order will be needed if a company requires to have such an amendment made to the content of the form. Therefore great care should therefore be taken when completing the form B5 to ensure that the information supplied as to the details of shares allotted is fully accurate.
(b) Allotment of shares for a consideration other than cash (Form B5 and contract/Form 52(B6))
Notwithstanding the above, Form 52(B6), or contract relating to non-cash allotments of shares must be filed with Revenue. The Revenue
has an online e-stamping facility. One original copy should then be filed with the CRO along with the filing fee (€15) and the Revenue Certificate receipt.
The following documents are required:
- Form B5 must be filed within one month of the date of the allotment together with either a contract in writing, constituting the title of allottees to the allotment, together with any contract of sale, duly stamped adjudicated as to stamp duty; or
- If there are no such contracts in writing, Form 52(B6).
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The contract/Form 52(B6) cannot be accepted for filing unless it has been adjudicated and stamped by Revenue. The contract/Form 52(B6) (in duplicate) should, therefore, be sent in the first instance to Revenue Commissioners, Companies Capital Duty Section, Dublin Region, Stamping District, Stamping Building, Dublin Castle Dublin 2. The Revenue also has an online e-stamping facility.
Form 52(B6) is required to be filed only where there is no written contract pertaining to the allotment of shares which have been fully or partly paid up otherwise than in cash - section 58(2).
Where there is a written contract within the meaning of section 58(1)(b), however, the contract must be filed. Form 52(B6) may not be filed in lieu of filing the written contract.
Increase in nominal share capital
The following documents must be filed within 15 days after the passing of the resolution increasing the share capital:
- A signed copy of the resolution passed in favour of the increase.
- Form B4
- An up-to-date text of the company's memorandum and articles of association.
Unlimited companies are not required to file the amended memorandum and articles of association.
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Reduction in nominal capital
(a) Companies limited by shares, companies limited by guarantee and having a share capital.
(i) If a company reduces its nominal capital by way of cancelling un-issued shares the company must file:
- A signed copy of the resolution;
- An amended memorandum and articles of association;
- Form 28(B7)
(ii) If a company reduces its nominal capital by:
- extinguishing or reducing the liability on any of its shares in respect of share capital not paid-up; or
- either with or without extinguishing or reducing liability on any of its shares, cancel any paid-up share capital which is lost or unrepresented by available assets; or
- either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital which is in excess of the wants of the company;
the company must file:
- Court order and minute approved by the Court outlining the capital of the company, number of shares into which the capital is to be divided and the amount of each share;
- A signed copy of the special resolution;
- An amended copy of the memorandum and articles of association;
(b) Unlimited companies
Unlimited companies do not require a court order and minute. They only need file
- A signed copy of the special resolution;
- Form 28 (B7)
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Reduction in share premium account
Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the value of the premia on those shares must be transferred to an account to be called the share premium account. Any reduction in the share premium account is regarded as a reduction in the capital of the company.
If a company reduces its share premium account the company must file:
- A signed copy of the special resolution;
- Court order confirming the reduction and minute approved by the Court setting out the amount of the share premium account.
Link to Forms Page G1 Link to Fees Page
Reduction in the capital redemption reserve fund
Where shares are redeemed by a company (pursuant to section 208 Companies Act 1990) out of the profits available for distribution or redeemed, wholly or partly out of the proceeds of a fresh issue then a certain sum (the amount to be as per section 208(b)), must be transferred to a reserve fund to be called the capital redemption reserve fund.
Any reduction in this fund is regarded as a reduction in the capital of the company as if the capital redemption reserve fund were paid-up share capital of the company.
If a company reduces its capital redemption reserve fund the company must file:
- A signed copy of the special resolution;
- Court order confirming the reduction and court minute setting out the amount of the capital redemption reserve fund.
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Reduction in capital conversion reserve fund (euro related)
When a company adjusted its euro share value to convenient amounts prior to 30 June 2002, by decreasing the nominal value of its shares, an amount equal to the decrease was required to be paid into a fund known as the capital conversion reserve fund.
Any reduction in this fund is regarded as a reduction in the capital of the company and section 72 Companies Act 1963 then applies.
Alterations in share capital
A company having a share capital, is required to notify the CRO when it consolidates shares, divides shares, converts shares into stock or reconverts stock into shares, subdivides, redeems or cancels shares otherwise than in connection with a reduction in share capital under section 72 Companies Act 1963. This notice must be filed on Form 28(B7) within one month of this happening.
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Disclosure order
Disclosure order means an order of the Court to any person to give information on share ownership. Anyone who has a financial interest in a company may apply to the Court for a disclosure order. The applicant shall cause notice on Form H2 together with a copy of the order to be sent by registered post within seven days of the making of the order to the CRO, to the company, etc. (plcs, industrial and provident societies, building societies and charities are excluded from these provisions.)
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Return by a company purchasing its own shares and/or shares in a holding company
Every company which has purchased its own shares (section 211 Companies Act 1990) shall deliver to the CRO for registration Form H5 within 28 days after delivery to the company of the shares.
The form must be accompanied by the company's resolution approving the purchase contract.
A company may not purchase any of its shares under this section if as a result of such purchase the nominal value of the issued share capital which is not redeemable would be less than one tenth of the nominal value of the total issued share capital of the company.
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