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COMPANIES ACT 1990

COMPANIES ACT 1990 - LONG TITLE
AN ACT TO AMEND THE LAW RELATING TO COMPANIES AND TO PROVIDE FOR RELATED MATTERS.
[22nd December, 1990]
BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:
COMPANIES ACT 1990 - SECT 25
Interpretation of Part III.
25.—(1) In this Part, unless the context otherwise requires—
"credit transactions" has the meaning assigned to it by subsection
(3);
"guarantee" includes indemnity;
"quasi-loan" has the meaning assigned to it by subsection (2);
"licensed bank" means the holder of a licence under section 9 of
the Central Bank Act, 1971.
(2) For the purposes of this Part—
(a) a quasi-loan is a transaction under which one party ("the
creditor") agrees to pay, or pays otherwise than in pursuance of an
agreement, a sum for another ("the borrower") or agrees to
reimburse, or reimburses otherwise than in pursuance of an agreement,
expenditure incurred by another party for another ("the borrower")—
(i) on terms that the borrower (or a person on his behalf) will
reimburse the creditor; or
(ii) in circumstances giving rise to a liability on the borrower to
reimburse the creditor;
(b) any reference to the person to whom a quasi-loan is made
is a reference to the borrower; and
(c) the liabilities of a borrower under a quasi-loan include the
liabilities of any person who has agreed to reimburse the creditor
on behalf of the borrower.
(3) For the purposes of this Part a credit transaction is a
transaction under which one party ("the creditor")—
(a) supplies any goods or sells any land under a hire-purchase
agreement or conditional sale agreement;
(b) leases or licenses the use of land or hires goods in
return for periodical payments;
(c) otherwise disposes of land or supplies goods or services on
the understanding that payment (whether in a lump-sum or instalments
or by way of periodical payments or otherwise) is to be deferred.
(4) For the purposes of this Part the value of a transaction or
arrangement is—
(a) in the case of a loan, the principal of the loan;
(b) in the case of a quasi-loan, the amount, or maximum amount,
which the person to whom the quasi-loan is made is liable to
reimburse the creditor;
(c) in the case of a transaction or arrangement, other than a
loan or quasi-loan or a transaction or arrangement within paragraph
(d) or (e), the price which it is reasonable to expect could
be obtained for the goods, land or services to which the
transaction or arrangement relates if they had been supplied at the
time the transaction or arrangement is entered into in the ordinary
course of business and on the same terms (apart from price) as
they have been supplied or are to be supplied under the transaction
or arrangement in question;
(d) in the case of a guarantee or security, the amount
guaranteed or secured;
(e) in the case of an arrangement to which section 31 (2) or
31 (3) applies the value of the transaction to which the
arrangement relates less any amount by which the liabilities under
the arrangement or transaction of the person for whom the
transaction was made have been reduced.
(5) For the purposes of subsection (4), the value of a transaction
or arrangement which is not capable of being expressed as a
specific sum of money (because the amount of any liability arising
under the transaction is unascertainable, or for any other reason)
shall, whether or not any liability under the transaction has been
reduced, be deemed to exceed £50,000.
(6) For the purposes of this Part, a transaction or arrangement is
made for a person if—
(a) in the case of a loan or quasi-loan, it is made to him;
(b) in the case of a credit transaction, he is the person to
whom goods or services are supplied, or land is sold or otherwise
disposed of, under the transaction;
(c) in the case of a guarantee or security, it is entered into
or provided in connection with a loan or quasi-loan made to him or
a credit transaction made for him;
(d) in the case of an arrangement to which section 31 (2) or
31 (3) applies, the transaction to which the arrangement relates was
made for him; and
(e) in the case of any other transaction or arrangement for the
supply or transfer of goods, land or services (or any interest
therein), he is the person to whom the goods, land or services (or
the interest) are supplied or transferred.
(7) This Part, except sections 41, 43 and 44, does not apply to
arrangements or transactions entered into before the commencement of
this section but, for the purposes of determining whether an
arrangement is one to which section 31 (2) or 31 (3) applies the
transaction to which the arrangement relates shall, if it was
entered into before the said commencement, be deemed to have been
entered into thereafter.
(8) This Part shall have effect in relation to an arrangement or
transaction whether governed by the law of the State or of another
country.
COMPANIES ACT 1990 - SECT 26
Connected persons.
26.—(1) For the purposes of this Part, a person is connected with
a director of a company if, but only if, he is—
(a) that director's spouse, parent, brother, sister or child;
(b) a person acting in his capacity as the trustee of any
trust, the principal beneficiaries of which are the director, his
spouse or any of his children or any body corporate which he
controls; or
(c) a partner of that director;
unless that person is also a director of the company.
(2) A body corporate shall also be deemed to be connected with a
director of a company if it is controlled by that director.
(3) For the purposes of this section, a director of a company
shall be deemed to control a body corporate if, but only if, he
is, alone or together with any of the persons referred to in
paragraph (a), (b) or (c) of subsection (1), interested in more
than one-half of the equity share capital of that body or entitled
to exercise or control the exercise of more than one-half of the
voting power at any general meeting of that body.
(4) In subsection (3)—
(a) "equity share capital" has the same meaning as in section
155 of the Principal Act; and
(b) references to voting power exercised by a director shall
include references to voting power exercised by another body
corporate which that director controls.
(5) The provisions of section 54 shall have effect for the purposes
of subsection (3) with the substitution of the words "more than
half" for the words "one-third or more" in subsections (5) and (6)
of that section.
COMPANIES ACT 1990 - SECT 27
Shadow directors.
27.—(1) Subject to subsection (2), a person in accordance with whose
directions or instructions the directors of a company are accustomed
to act (in this Act referred to as "a shadow director") shall be
treated for the purposes of this Part as a director of the company
unless the directors are accustomed so to act by reason only that
they do so on advice given by him in a professional capacity.
(2) A shadow director shall not be guilty of an offence under
section 44 (8) by virtue only of subsection (1).
(3) section 194 of the Principal Act shall apply in relation to a
shadow director of a company as it applies in relation to a
director of a company, except that the shadow director shall declare
his interest, not at a meeting of the directors, but by a notice
in writing to the directors which is either—
(a) a specific notice given before the date of the meeting at
which, if he had been a director, the declaration would be required
by subsection (2) of that section to be made; or
(b) a notice which under subsection (3) of that section falls
to be treated as a sufficient declaration of that interest or would
fall to be so treated apart from the proviso;
and section 145 of that Act shall have effect as if the
declaration had been made at the meeting in question and had
accordingly formed part of the proceedings at that meeting.
Particular transactions involving conflict of interest
COMPANIES ACT 1990 - SECT 28
Contracts of employment of director's.
28.—(1) Subject to subsection (6), a company shall not incorporate
employment of directors. in any agreement a term to which this
section applies unless the term is first approved by a resolution
of the company in general meeting and, in the case of a director
of a holding company, by a resolution of that company in general
meeting.
(2) This section applies to any term by which a director's
employment with the company of which he is the director or, where
he is the director of a holding company, his employment within the
group is to continue, or may be continued, otherwise than at the
instance of the company (whether under the original agreement or
under a new agreement entered into in pursuance of the original
agreement), for a period exceeding five years during which the
employment
(a) cannot be terminated by the company by notice; or
(b) can be so terminated only in specified circumstances.
(3) In any case where—
(a) a person is or is to be employed with a company under an
agreement which cannot be terminated by the company by notice or
can be so terminated only in specified circumstances; and
(b) more than six months before the expiration of the period
for which he is or is to be so employed, the company enters into
a further agreement (otherwise than in pursuance of a right
conferred by or by virtue of the original agreement on the other
party thereto) under which he is to be employed with the company
or, where he is a director of a holding company, within the group,
subsection (2) shall apply as if to the period for which he is to
be employed under that further agreement there were added a further
period equal to the unexpired period of the original agreement.
(4) A resolution of a company approving a term to which this
section applies shall not be passed at a general meeting of the
company unless a written memorandum setting out the proposed
agreement incorporating the term is available for inspection by
members of the company both—
(a) at the registered office of the company for not less than
the period of 15 days ending with the date of the meeting; and
(b) at the meeting itself.
(5) A term incorporated in an agreement in contravention of this
section shall to the extent that it contravenes this section be
void; and that agreement and, in a case where subsection (3)
applies, the original agreement shall be deemed to contain a term
entitling the company to terminate it at any time by the giving of
reasonable notice.
(6) No approval is required to be given under this section by any
body corporate unless it is a company within the meaning of The
Principal Act or registered under Part IX of that Act or if it
is, for the purposes of section 150 of that Act, a wholly owned
subsidiary of any body corporate, wherever incorporated.
(7) In this section—
(a) "employment" includes employment under a contract for
services; and
(b) "group", in relation to a director of a holding company,
means the group which consists of that company and its subsidiaries.
COMPANIES ACT 1990 - SECT 29
Substantial property transactions involving directors, etc.
29.—(1) Subject to subsections (6), (7) and (8), a company shall
not enter into an arrangement—
(a) whereby a director of the company or its holding company or
a person connected with such a director acquires or is to acquire
one or more non-cash assets of the requisite value from the
company; or
(b) whereby the company acquires or is to acquire one or more
non-cash assets of the requisite value from such a director or a
person so connected;
unless the arrangement is first approved by a resolution of the
company in general meeting and, if the director or connected person
is a director of its holding company or a person connected with
such a director, by a resolution in general meeting of the holding
company.
(2) For the purposes of this section a non-cash asset is of the
requisite value if at the time the arrangement in question is
entered into its value is not less than £1,000 but, subject to
that, exceeds £50,000 or ten per cent of the amount of the
company's relevant assets, and for those purposes the amount of a
company's relevant assets is—
(a) except in a case falling within paragraph (b), the value of
its net assets determined by reference to the accounts prepared and
laid in accordance with the requirements of section 148 of the
Principal Act in respect of the last preceding financial year in
respect of which such accounts were so laid;
(b) where no accounts have been prepared and laid under that
section before that time, the amount of its called-up share capital.
(3) An arrangement entered into by a company in contravention of
this section and any transaction entered into in pursuance of the
arrangement (whether by the company or any other person) shall be
voidable at the instance of the company unless—
(a) restitution of any money or any other asset which is the
subject-matter of the arrangement or transaction is no longer
possible or the company has been indemnified in pursuance of
subsection (4) ( b ) by any other person for the loss or damage
suffered by it; or
(b) any rights acquired bona fide for value and without actual
notice of the contravention by any person who is not a party to
the arrangement or transaction would be affected by its avoidance;
or
(c) the arrangement is, within a reasonable period, affirmed by
the company in general meeting and, if it is an arrangement for
the transfer of an asset to or by a director of its holding
company or a person who is connected with such a director, is so
affirmed with the approval of the holding company given by a
resolution in general meeting.
(4) Without prejudice to any liability imposed otherwise than by
this subsection, but subject to subsection (5), where an arrangement
is entered into with a company by a director of the company or
its holding company or a person connected with him in contravention
of this section, that director and the person so connected, and any
other director of the company who authorised the arrangement or any
transaction entered into in pursuance of such an arrangement, shall
(whether or not it has been avoided in pursuance of subsection (3))
be liable—
(a) to account to the company for any gain which he had made
directly or indirectly by the arrangement or transaction; and
(b) (jointly and severally with any other person liable under
this subsection) to indemnify the company for any loss or damage
resulting from the arrangement or transaction.
(5) Where an arrangement is entered into by a company and a person
connected with a director of the company or its holding company in
contravention of this section, that director shall not be liable
under subsection (4) if he shows that he took all reasonable steps
to secure the company's compliance with this section and, in any
case, a person so connected and any such other director as is
mentioned in that subsection shall not be so liable if he shows
that, at the time the arrangement was entered into, he did not
know the relevant circumstances constituting the contravention.
(6) No approval is required to be given under this section by any
body corporate unless it is a company within the meaning of The
Principal Act or registered under Part IX of that Act or, if it
is, for the purposes of section 150 of that Act, a wholly owned
subsidiary of any body corporate, wherever incorporated.
(7) Subsection (1) shall not apply in relation to any arrangement
for the acquisition of a non-cash asset—
(a) if the non-cash asset in question is or is to be acquired
by a holding company from any of its wholly owned subsidiaries or
from a holding company by any of its wholly owned subsidiaries or
by one wholly owned subsidiary of a holding company from another
wholly owned subsidiary of that same holding company; or
(b) if the arrangement is entered into by a company which is
being wound up unless the winding up is a members' voluntary
winding up.
(8) Subsection (1) (a) shall not apply in relation to any
arrangement whereby a person acquires or is to acquire an asset
from a company of which he is a member if the arrangement is made
with that person in his character as such member.
(9) In this section—
(a) "non-cash asset" means any property or interest in property
other than cash, and for this purpose "cash" includes foreign
currency;
(b) any reference to the acquisition of a non-cash asset
includes a reference to the creation or extinction of an estate or
interest in, or a right over, any property and also a reference to
the discharge of any person's liability other than a liability for
a liquidated sum; and
(c) "net assets", in relation to a company, means the aggregate
of the company's assets less the aggregate of its liabilities, and
for this purpose "liabilities" includes any provision for liabilities
or charges within paragraph 70 of the Schedule to the Companies
(Amendment) Act, 1986.
COMPANIES ACT 1990 - SECT 30
Penalisation of dealing by director of a company in options to buy
or sell certain shares in, or debentures of, the company or
associated companies.
30.—(1) A director of a company who buys—
(a) a right to call for delivery at a specified price and
within a specified time of a specified number of relevant shares or
a specified amount of relevant debentures; or
(b) a right to make delivery at a specified price and within a
specified time of a specified number of relevant shares or a
specified amount of relevant debentures; or
(c) a right (as he may elect) to call for delivery at a
specified price and within a specified time or to make delivery at
a specified price and within a specified time of a specified number
of relevant shares or a specified amount of relevant debentures;
shall be guilty of an offence.
(2) In subsection (1)—
(a) "relevant shares", in relation to a director of a company,
means shares in the company or in any other body corporate, being
the company's subsidiary or holding company or a subsidiary of the
company's holding company, being shares for which dealing facilities
are provided by a stock exchange (whether within the State or
elsewhere); and
(b) "relevant debentures", in relation to a director of a
company, means debentures of the company or of any other body
corporate, being the company's subsidiary or holding company or a
subsidiary of the company's holding company, being debentures as
respects which there has been granted such dealing facilities as
aforesaid.
(3) Nothing in this section shall be taken to penalise a person
who buys a right to subscribe for shares in, or debentures of, a
body corporate or buys debentures of a body corporate that confer
upon the holder thereof a right to subscribe for, or to convert
the debentures (in whole or in part) into, shares of the body.
(4) For the purposes of this section any reference, however
expressed, to any price paid, given or received in respect of any
interest in shares or debentures shall be construed as including a
reference to any consideration other than money given or received in
respect of any such interest, and any reference to a specified
price includes a reference to a specified price range.
(5) This section shall also apply to any person (not being a
director of the company) who—
(a) buys a right referred to in subsection (1), and
(b) does so on behalf or at the instigation of a director of
the company.
COMPANIES ACT 1990 - SECT 31
Prohibition of loans, etc. to director's and connected persons.
31.—(1) Except as provided by sections 32 to 3737, a company shall
not—
(a) make a loan or a quasi-loan to a director of the company
or of its holding company or to a person connected with such a
director;
(b) enter into a credit transaction as creditor for such a
director or a person so connected;
(c) enter into a guarantee or provide any security in connection
with a loan, quasi-loan or credit transaction made by any other
person for such a director or a person so connected.
(2) A company shall not arrange for the assignment to it or the
assumption by it of any rights, obligations or liabilities under a
transaction which, if it had been entered into by the company,
would have contravened subsection (1); but for the purposes of this
Part the transaction shall be treated as having been entered into
on the date of the arrangement.
(3) A company shall not take part in any arrangement whereby—
(a) another person enters into a transaction which, if it had
been entered into by the company, would have contravened subsection
(1) or (2); and
(b) that other person, in pursuance of the arrangement, has
obtained or is to obtain any benefit from the company or its
holding company or a subsidiary of the company or its holding
company.
COMPANIES ACT 1990 - SECT 32
Arrangements of certain value.
32.—(1) Section 31 shall not prohibit a company from entering into
an arrangement with a director or a person connected with a
director if—
(a) the value of the arrangement, and
(b) the total amount outstanding under any other arrangements
entered into by the company with any director of the company, or
any person connected with a director, together, is less than ten
per cent of the company's relevant assets.
(2) For the purposes of this section—
(a) a company enters an arrangement with a person if it makes
a loan or quasi-loan to, or enters into a credit transaction as
creditor for, that person, and
(b) the amount of a company's relevant assets shall be
determined in accordance with section 29 (2).
COMPANIES ACT 1990 - SECT 33
Reduction in amount of company's relevant assets.
33.—(1) This section applies to a company in respect of which the
total amount outstanding under any arrangements referred to in
section 32 comes to exceed 10 per cent of the company's relevant
assets for any reason, but in particular because the value of those
assets has fallen.
(2) Where the directors of a company become aware, or ought
reasonably to become aware, that there exists a situation referred
to in subsection (1), it shall be the duty of the company, its
directors and any persons for whom the arrangements referred to in
that subsection were made, to amend, within two months, the terms
of the arrangements concerned so that the total amount outstanding
under the arrangements again falls within the percentage limit
referred to in that subsection.
COMPANIES ACT 1990 - SECT 34
Inter-company loans in same group.
34.—Where a company is a member of a group of companies, consisting
of a holding, company and its subsidiaries, section 31 shall not
prohibit that company from—
(a) making a loan or quasi-loan to another member of that
group; or
(b) entering into a guarantee or providing any security in
connection with a loan or quasi-loan made by any person to another
member of the group;
by reason only that a director of one member of the group is
connected with another.
COMPANIES ACT 1990 - SECT 35
Transactions with holding company.
35.—Section 31 shall not prohibit a company from—
(a) making a loan or quasi-loan to its holding company or
entering into a guarantee or providing any security in connection
with a loan or quasi-loan made by any person to its holding
company;
(b) entering into a credit transaction as creditor for its
holding company or entering into a guarantee or providing any
security in connection with any credit transaction made by any other
person for its holding company.
COMPANIES ACT 1990 - SECT 36
Directors' expenses.
36.—(1) Section 31 shall not prohibit a company from doing anything
to provide any of its directors with funds to meet vouched
expenditure properly incurred or to be incurred by him for the
purposes of the company or the purpose of enabling him properly to
perform his duties as an officer of the company or doing anything
to enable any of its directors to avoid incurring such expenditure.
(2) Where a company enters into any transaction pursuant to
subsection (1), any liability falling on any person arising from any
such transaction shall be discharged by him within six months from
the date on which it was incurred.
(3) A person who contravenes subsection (2) shall be guilty of an
offence.
COMPANIES ACT 1990 - SECT 37
Business transactions.
37.—Section 31 shall not prohibit a company from making any loan or
quasi-loan or entering into any credit transaction as creditor for
any person if—
(a) the company enters into the transaction concerned in the
ordinary course of its business; and
(b) the value of the transaction is not greater, and the terms
on which it is entered into are no more favourable, in respect of
the person for whom the transaction is made, than that or those
which—
(i) the company ordinarily offers, or
(ii) it is reasonable to expect the company to have offered,
to or in respect of a person of the same financial standing as
that person but unconnected with the company.
COMPANIES ACT 1990 - SECT 38
Civil remedies for breach of section 31.
38.—(1) Where a company enters into a transaction or arrangement in
contravention of section 31 the transaction or arrangement shall be
voidable at the instance of the company unless—
(a) restitution of any money or any other asset which is the
subject matter of the arrangement or transaction is no longer
possible, or the company has been indemnified in pursuance of
subsection (2) ( b ) for the loss or damage suffered by it; or
( b ) any rights acquired bona fide for value and without actual
notice of the contravention by any person other than the person for
whom the transaction or arrangement was made would be affected by
its avoidance.
(2) Without prejudice to any liability imposed otherwise than by
this subsection but subject to subsection (3), where an arrangement
or transaction is made by a company for a director of the company
or its holding company or person connected with such a director in
contravention of section 31, that director and the person so
connected and any other director of the company who authorised the
transaction or arrangement shall (whether or not it has been avoided
in pursuance of subsection (1)) be liable—
(a) to account to the company for any gain which he has made
directly or indirectly by the arrangement or transaction; and
(b) (jointly and severally with any other person liable under
this subsection) to indemnify the company for any loss or damage
resulting from the arrangement or transaction.
(3) Where an arrangement or transaction is entered into by a
company and a person connected with a director of the company or
its holding company in contravention of section 31 that director
shall not be liable under subsection (2) if he shows that he took
all reasonable steps to secure the company's compliance with that
section and, in any case, a person so connected and any such other
director as is mentioned in the said subsection (2) shall not be
so liable if he shows that, at the time the arrangement or
transaction was entered into, he did not know the relevant
circumstances constituting the contravention.
COMPANIES ACT 1990 - SECT 39
Personal liability for company debts in certain cases.
39.—(1) If a company is being wound up and is unable to pay its
debts, and the court considers that any arrangement of a kind
described in section 32 has contributed materially to the company's
inability to pay its debts or has substantially impeded the orderly
winding up thereof, the court, on the application of the liquidator
or any creditor or contributory of the company, may, if it thinks
it proper to do so, declare that any person for whose benefit the
arrangement was made shall be personally liable, without any
limitation of liability, for all, or such part as may be specified
by the court, of the debts and other liabilities of the company.
(2) In deciding whether to make a declaration under subsection (1),
the court shall have particular regard to whether, and to what
extent, any outstanding liabilities arising under any arrangement
referred to in that subsection were discharged before the
commencement of the winding up.
(3) In deciding the extent of any personal liability under this
section, the court shall have particular regard to the extent to
which the arrangement in question contributed materially to the
company's inability to pay its debts or substantially impeded the
orderly winding up of the company.
COMPANIES ACT 1990 - SECT 40
Criminal penalties for breach of section 31.
40.—(1) An officer of a company who authorises or permits the
Criminal penalties company to enter into a transaction or arrangement
knowing or having reasonable cause to believe that the company was
thereby contravening section 31 shall be guilty of an offence.
(2) A person who procures a company to enter into a transaction or
arrangement knowing or having reasonable cause to believe that the
company was thereby contravening section 31 shall be guilty of an
offence.
Disclosure of transactions involving directors and others
COMPANIES ACT 1990 - SECT 41
Substantial contracts, etc., with directors and others to be
disclosed in accounts.
41.—(1) Subject to subsections (5) and (6) and to section 45, group
accounts prepared by a holding company in accordance with the
contracts, etc., with the requirements of section 150 of the
Principal Act in respect of the relevant period shall contain the
particulars specified in section 42 of—
(a) any transaction or arrangement of a kind described in
section 31 entered into by the company or by a subsidiary of the
company for a person who at any time during the relevant period
was a director of the company or its holding company or was
connected with such a director;
(b) any agreement by the company or by a subsidiary of the
company to enter into any such transaction or arrangement for a
person who at any time during the relevant period was a director
of the company or its holding company or was connected with such a
director;
(c) any other transaction or arrangement with the company or
with a subsidiary of the company in which a person who at any
time during the relevant period was a director of the company or
its holding company had, directly or indirectly, a material interest.
(2) Subject as aforesaid, accounts prepared by any company other
than a holding company in respect of the relevant period shall
contain the particulars specified in section 42 of—
(a) any transaction or arrangement of a kind described in
section 31 entered into by the company for a person who at any
time during the relevant period was a director of the company or
of its holding company or was connected with such a director;
(b) any agreement by the company to enter into any such
transaction or arrangement for a person who at any time during the
relevant period was a director of the company or of its holding
company or was connected with such a director;
(c) any other transaction or arrangement with the company in
which a person who at any time during the relevant period was a
director of the company or of its holding company had, directly or
indirectly, a material interest.
(3) Particulars which are required by subsection (1) or (2) to be
contained in any accounts shall be given by way of notes to those
accounts.
(4) Where by virtue of sections 150 (2) and 154 of The Principal
Act a company does not produce group accounts in relation to any
financial year, subsection (1) shall have effect in relation to the
company and that financial year as if the word "group" were
omitted.
(5) For the purposes of subsections (1) (c) and (2) (c)—
(a) a transaction or arrangement between a company and a
director of the company or of its holding company or a person
connected with such a director shall (if it would not otherwise be
so treated) be treated as a transaction, arrangement or agreement in
which that director is interested; and
(b) an interest in such a transaction or arrangement is not
material if in the opinion of the majority of the directors (other
than that director) of the company which is preparing the accounts
in question it is not material (but without prejudice to the
question whether or not such an interest is material in any case
where those directors have not considered the matter).
(6) Subsections (1) and (2) do not apply, for the purposes of any
accounts prepared by any company which is, or is the holding
company of, a licensed bank, in relation to a transaction or
arrangement of a kind described in section 31, or an agreement to
enter into such a transaction or arrangement, to which that licensed
bank is a party.
(7) Subsections (1) and (2) do not apply in relation to the
following transactions, arrangements and agreements—
(a) a transaction, arrangement or agreement between one company
and another in which a director of the first company or of its
subsidiary or holding company is interested only by virtue of his
being a director of the other;
(b) a contract of service between a company and one of its
directors or a director of its holding company or between a
director of a company and any of that company's subsidiaries;
(c) a transaction, arrangement or agreement which was not entered
into during the relevant period for the accounts in question and
which did not subsist at any time during that period; and
(d) a transaction, arrangement or agreement which was made before
the commencement of this section and which does not subsist
thereafter.
(8) Subsections (1) and (2) apply whether or not—
(a) the transaction or arrangement was prohibited by section 31;
(b) the person for whom it was made was a director of the
company or was connected with a director of the company at the
time it was made;
(c) in the case of a transaction or arrangement made by a
company which at any time during a relevant period is a subsidiary
of another company, it was a subsidiary of that other company at
the time the transaction or arrangement was made.
(9) In this section and in sections 43 and 45, "relevant period",
in relation to a company, means a financial year of the company
ending not earlier than 6 months after the commencement of the
section concerned.
COMPANIES ACT 1990 - SECT 42
Particulars required to be included in accounts by section 41.
42.—The particulars of a transaction, arrangement or agreement which
are required by section 41 to be included in the annual accounts
prepared by a company are particulars of the principal terms of the
transaction, arrangement or agreement and (without prejudice to the
generality of the foregoing provision)—
(a) a statement of the fact either that the transaction,
arrangement or agreement was made or subsisted, as the case may be,
during the financial year in respect of which those accounts are
made up;
(b) the name of the person for whom it was made, and, where
that person is or was connected with a director of the company or
of its holding company, the name of that director;
(c) in any case where subsection (1) (c) or (2) (c) of section
41 applies, the name of the director with the material interest and
the nature of that interest;
(d) in the case of a loan or an agreement for a loan or an
arrangement within section 31 (2) or 31 (3) relating to a loan—
(i) the amount of the liability of the person to whom the loan
was or was agreed to be made, in respect of principal and
interest, at the beginning and at the end of that period;
(ii) the maximum amount of that liability during that period;
(iii) the amount of any interest which, having fallen due, has not
been paid; and
(iv) the amount of any provision (within the meaning of the Sixth
Schedule to The Principal Act or the Companies (Amendment) Act,
1986) made in respect of any failure or anticipated failure by the
borrower to repay the whole or part of the loan or to pay the
whole or part of any interest thereon;
(e) in the case of a guarantee or security or an arrangement
within section 31 (2) relating to a guarantee or security—
(i) the amount for which the company (or its subsidiary) was liable
under the guarantee or in respect of the security both at the
beginning and at the end of the financial year in question;
(ii) the maximum amount for which the company (or its subsidiary)
may become so liable; and
(iii) any amount paid and any liability incurred by the company (or
its subsidiary) for the purpose of fulfilling the guarantee or
discharging the security (including any loss incurred by reason of
the enforcement of the guarantee or security); and
(f) in the case of any transaction, arrangement or agreement,
other than those mentioned in paragraphs (d) and (e) the value of
the transaction or arrangement or, as the case may be, the value
of the transaction or arrangement to which the agreement relates;
and
(g) in the case of arrangements to which section 32 relates,
the aggregate value of such arrangements at the end of the
financial year concerned, in relation to any persons specified in
that section, expressed as a percentage of the company's relevant
assets at that time; and
(h) any amendment of the terms of any such arrangement in
accordance with section 33.
COMPANIES ACT 1990 - SECT 43
Particulars of amounts outstanding to be included in accounts.
43.—(1) This section applies in relation to the following classes
transactions, arrangements and agreements—
(a) loans, guarantees and securities relating to loans,
arrangements of a kind described in section 31 (2) or 31 (3)
relating to loans, and agreements to enter into any of the
foregoing transactions and arrangements;
(b) quasi-loans, guarantees and securities relating to quasi-loans,
arrangements of a kind described in those subsections relating to
quasi-loans and agreements to enter into any of the foregoing
transactions and arrangements;
(c) credit transactions, guarantees and securities relating to
credit transactions and arrangements of a kind described in those
subsections relating to credit transactions and agreements to enter
into any of the foregoing transactions and arrangements.
(2) The group accounts of a holding company prepared in accordance
with the requirements of section 150 of the Principal Act and the
accounts of any other company prepared in accordance with the
requirements of section 148 of the Principal Act in respect of the
relevant period shall contain a statement in relation to
transactions, arrangements and agreements made by the company and, in
the case of a holding company, by a subsidiary of the company for
persons who at any time during the relevant period were officers of
the company (but not directors) of the aggregate amounts outstanding
at the end of the relevant period under transactions, arrangements
and agreements within any paragraph of subsection (1) and the number
of officers for whom the transactions, arrangements and agreements
falling within each of those paragraphs were made.
(3) Subsection (2) shall not apply, in relation to the accounts
prepared by any company in respect of any relevant period, to
transactions, arrangements and agreements made by the company or any
of its subsidiaries for any officer of the company if the aggregate
amount outstanding at the end of that period under the transactions,
arrangements and agreements so made for that officer does not exceed
£2,500.
(4) Subsection (2) shall not apply in relation to any transaction,
arrangement or agreement made by a licensed bank for any of its
officers or for any of the officers of its holding company.
(5) The group accounts of a company which is, or is the holding
company of, a licensed bank prepared in accordance with the
requirements of section 150 of the Principal Act, and the accounts
of any other company which is a licensed bank, prepared in
accordance with the requirements of section 148 of the Principal Act
in respect of the relevant period shall contain a statement in
relation to transactions, arrangements or agreements made by the
company preparing the accounts, if it is a licensed bank, and (in
the case of a holding company) by any of its subsidiaries which is
a licensed bank, for persons who at any time during the relevant
period were directors of the company, of the aggregate amounts
outstanding at the end of the relevant period under transactions,
arrangements and agreements within any paragraph of subsection (1)
and the number of persons for whom the transactions, arrangements
and agreements falling within each of those paragraphs were made.
(6) (a) The statement referred to in subsection (5) shall
also separately contain the like information as is referred to in
that subsection in relation to transactions. arrangements or
agreements made for persons who at any time during the relevant
period were connected with a director of the company.
(b) A transaction, arrangement or agreement to which paragraph
(a) applies need not be included in the statement if—
(i) it is entered into by the company concerned in the ordinary
course of its business, and
(ii) its value is not greater, and its terms no more favourable,
in respect of the person for whom it is made, than that or those
which—
(I) the company ordinarily offers, or
(II) it is reasonable to expect the company to have offered,
to or in respect of a person of the same financial standing but
unconnected with the company.
(7) Particulars which are required by subsection (2), (5) or (6) to
be contained in any accounts shall be given by way of notes to
those accounts.
(8) Where by virtue of sections 150 (2) and 154 of The Principal
Act, a company does not produce group accounts in relation to any
financial year, subsections (2), (5) and (6) shall have effect in
relation to the company and that financial year as if the word
"group" were omitted.
(9) Subsections (2), (5) and (6) do not apply in relation to a
transaction, arrangement or agreement which was made before the
commencement of this section and which does not subsist thereafter.
(10) For the purposes of this section, "amount outstanding" means
the amount of the outstanding liabilities of the person for whom
the transaction, arrangement or agreement in question was made, or,
in the case of a guarantee or security, the amount guaranteed or
secured.
COMPANIES ACT 1990 - SECT 44
Further provisions relating to licensed banks.
44.—(1) Subject to section 45, a company which is, or is the
holding relating to licensed company of, a licensed bank, shall
maintain a register containing banks. a copy of every transaction,
arrangement or agreement of which particulars would, but for section
41 (6), be required by subsection (1) or (2) of that section to
be disclosed in the company's accounts or group accounts for the
current financial year and for each of the preceding ten financial
years (but excluding any financial year ending prior to the passing
of this Act) or, if such a transaction, arrangement or agreement is
not in writing, a written memorandum setting out its terms.
(2) Subsection (1) shall not require a company to keep in its
register a copy of any transaction, arrangement or agreement made
for a connected person if—
(a) it is entered into in the ordinary course of the company's
business, and
(b) its value is not greater, and its terms no more favourable,
in respect of the person for whom it is made, than that or those
which—
(i) the company ordinarily offers, or
(ii) it is reasonable to expect the company to have offered,
to or in respect of a person of the same financial standing but
unconnected with the company.
(3) Subject to section 45, a company which is, or is the holding
company of, a licensed bank shall before its annual general meeting
make available, at the registered office of the company for not
less than the period of 15 days ending with the date of the
meeting, for inspection by members of the company a statement
containing the particulars of transactions, arrangements and agreements
which the company would, but for section 41 (6), be required by
subsection (1) or (2) of that section to disclose in its accounts
or group accounts for the last complete financial year preceding
that meeting and such a statement shall also be made available for
inspection by the members at the annual general meeting.
(4) Subsection (3) shall not require the inclusion in the statement
of particulars of any transaction, arrangement or agreement if—
(a) it is entered into in the ordinary course of the company's
business, and
(b) its value is not greater, and its terms no more favourable,
in respect of the person for whom it is made, than that or those
which—
(i) the company ordinarily offers, or
(ii) it is reasonable to expect the company to have offered,
to or in respect of a person of the same financial standing but
unconnected with the company.
(5) It shall be the duty of the auditors of the company to
examine any such statement before it is made available to the
members of the company in accordance with subsection (3) and to
make a report to the members on that statement; and the report
shall be annexed to the statement before it is made so available.
(6) A report under subsection (5) shall state whether in the
opinion of the auditors the statement contains the particulars
required by subsection (3) and, where their opinion is that it does
not, they shall include in the report, so far as they are
reasonably able to do so, a statement giving the required
particulars.
(7) Subsection (3) shall not apply in relation to a licensed bank
which is for the purposes of section 150 of the Principal Act the
wholly owned subsidiary of a company incorporated in the State.
(8) Where a company fails to comply with subsection (1) or (3),
the company and every person who at the time of that failure is a
director of the company shall be guilty of an offence and liable
to a fine.
(9) It shall be a defence in proceedings for an offence under
subsection (8) for the defendant to prove that he took all
reasonable steps for securing compliance with subsection (1) or (3),
as the case may be.
COMPANIES ACT 1990 - SECT 45
Arrangements excluded from sections 41 and 44.
45.—(1) Section 41 (1) and (2) and section 44 do not apply to
arrangements of the kind mentioned in section 32 (2) entered into
by a company or by a subsidiary of the company for a person who
at any time during the relevant period was a director of the
company or of its holding company or was connected with such a
director, if the aggregate of the values of each arrangement so
made for that director or any person connected with him, less the
amount (if any) by which the liabilities of the person for whom
the arrangement was made has been reduced, did not at any time
during the relevant period exceed £2,500.
(2) Subsections (1) (c) and (2) (c) of section 41 do not apply,
in relation to any accounts prepared by a company in respect of
any relevant period, to any transaction or arrangement with a
company or any of its subsidiaries in which a director of the
company or of its holding company had, directly or indirectly, a
material interest if—
(a) the value of each transaction or arrangement within
subsection (1) (c) or (2) (c), as the case may be, in which that
director had, directly or indirectly, a material interest and which
was made after the commencement of that relevant period with the
company or any of its subsidiaries; and
(b) the value of each such transaction or arrangement which was
made before the commencement of that period less the amount (if
any) by which the liabilities of the person for whom the
transaction or arrangement was made have been reduced;
did not at any time during the relevant period exceed in the
aggregate £1,000 or, if more, did not exceed £5,000 or one per
cent of the value of the net assets of the company preparing the
accounts in question as at the end of the relevant period for
those accounts, whichever is the less and for this purpose, "net
assets" has the same meaning as in section 29 (9).
COMPANIES ACT 1990 - SECT 46
Duty of auditors of company in breach of section 41 or 43.
46.—If in the case of any group or other accounts of a company
the requirements of section 41 or 43 are not complied with, it
shall be the duty of the auditors of the company by whom the
accounts are examined to include in their report on the balance
sheet of the company, so far as they are reasonably able to do
so, a statement giving the required particulars.
COMPANIES ACT 1990 - SECT 47
Disclosure by directors of interests in contracts, etc.
47.—(1) Any reference in section 194 of the Principal Act to a
contract shall be construed as including a reference to any
transaction or arrangement (whether or not constituting a contract)
made or entered into on or after the commencement of this section.
(2) For the purposes of the said section 194, a transaction or
arrangement of a kind described in section 31 made by a company
for a director of the company or a person connected with such a
director shall, if it would not otherwise be so treated (and
whether or not prohibited by that section), be treated as a
transaction or arrangement in which that director is interested.
(3) The following shall be substituted for subsection (3) of the
said section 194—
"(3) Subject to subsection (4), for the purposes of this section, a
general notice given to the directors of a company by a director
to the effect that—
( a ) he is a member of a specified company or firm and is to
be regarded as interested in any contract which may, after the date
of the notice, be made with that company or firm; or
( b ) he is to be regarded as interested in any contract which
may after the date of the notice be made with a specified person
who is connected with him (within the meaning of section 26 of the
Companies Act, 1990),
shall be deemed to be a sufficient declaration of interest in
relation to any such contract.".
Supplemental
COMPANIES ACT 1990 - SECT 48
Power to alter financial limits under Part III.
48.—(1) The Minister may, by order, alter any of the financial
limits specified in this Part.
(2) Every order made under this section shall be laid before each
House of the Oireachtas as soon as may be after it is made and
if a resolution annulling the order is passed by either House
within the next 21 days on which that House has sat after the
order is laid before it, the order shall be annulled accordingly
but without prejudice to the validity of anything previously done
thereunder.
COMPANIES ACT 1990 - SECT 49
Cessation of section 192 of Principal Act.
49.—section 192 of the Principal Act shall cease to have effect
except—
(a) in relation to accounts and directors' reports prepared in
respect of any financial year ending before the commencement of this
section; and
(b) in relation to accounts and directors' reports prepared in
respect of the first financial year ending after the commencement of
this section but only in relation to loans and contracts entered
into before the commencement of this section which do not subsist
on or after that day.
COMPANIES ACT 1990 - SECT 50
Inspection of director's service contracts.
50.—(1) Subject to the provisions of this section every company
shall keep at an appropriate place—
(a) in the case of each director whose contract of service with
the company is in writing, a copy of that contract;
(b) in the case of each director whose contract of service with
the company is not in writing, a written memorandum setting out the
terms of that contract;
(c) in the case of each director who is employed under a
contract of service with a subsidiary of the company, a copy of
that contract or, if it is not in writing, a written memorandum
setting out the terms of that contract;
(d) a copy or written memorandum, as the case may be, of any
variation of any contract of service referred to in paragraph (a),
(b) or (c);
and all copies and memoranda kept by a company in pursuance of
this subsection shall be kept at the same place.
(2) Where a contract of service is only partially in writing,
paragraphs (a), (b), (c) and (d), as appropriate, of subsection (1),
and subsections (4) and (5), shall also apply to such a contract.
(3) The following shall, as regards a company, be appropriate places
for the purposes of subsection (1), namely—
(a) its registered office;
(b) the place where its register of members is kept if other
than its registered office;
(c) its principal place of business.
(4) Every company shall send notice in the prescribed form to the
registrar of companies of the place where copies and memoranda
required by subsection (1) to be kept by it are kept and of any
change in that place, save in a case in which they have at all
times been kept at its registered office.
(5) Subsection (1) shall not apply in relation to a director's
contract of service with the company or with a subsidiary of the
company if that contract required him to work wholly or mainly
outside the State, but the company shall keep a memorandum—
(a) in the case of a contract of service with the company,
setting out the name of the director and the provisions of the
contract relating to its duration;
(b) in the case of a contract of service with a subsidiary of
the company setting out the name of the director, the name and
place of incorporation of the subsidiary and the provisions of the
contract relating to its duration,
at the same place as copies and the memoranda are kept by the
company in pursuance of subsection (1).
(6) Every copy and memorandum required to be kept by subsections
(1) and (5) shall, during business hours (subject to such reasonable
restrictions as the company may in general meeting impose, so that
not less than two hours in each day be allowed for inspection), be
open to the inspection of any member of the company without charge.
(7) If default is made in complying with subsection (1) or (5) or
if an inspection required under subsection (6) is refused, the
company and every officer of the company who is in default shall
be liable on summary conviction to a fine not exceeding £1,000,
and, for continued contravention, to a daily default fine not
exceeding £50 and, if default is made for 14 days in complying
with subsection (4), the company and every officer of the company
who is in default shall be liable to a fine not exceeding £1,000
and, for continued contravention, to a daily default fine not
exceeding £50.
(8) In the case of a refusal of an inspection required under
subsection (6) of a copy or memorandum the court may by order
compel an immediate inspection thereof.
(9) This section shall not require to be kept a copy of, or
memorandum setting out the terms of, a contract or a copy of, or
memorandum setting out the terms of a variation of, a contract at
a time at which the unexpired portion of the term for which the
contract is to be in force is less than three years or at a time
at which the contract can, within the next ensuing three years, be
terminated by the company without payment of compensation.
COMPANIES ACT 1990 - SECT 51
Register of directors and secretaries.
51.—The Principal Act is hereby amended by the substitution for
section 195 of the following section—
"195—(1) Every company shall keep at its registered office a
register of its directors and secretaries.
(2) Subject to subsection (3), the said register shall contain the
following particulars relating to each director—
(a) his present forename and surname and any former forename and
surname; and
(b) his date of birth; and
(c) his usual residential address; and
(d) his nationality; and
(e) his business occupation, if any; and
(f) particulars of any other directorships of bodies corporate,
whether incorporated in the State or elsewhere, held by him or
which have been held by him.
(3) It shall not be necessary for the said register to contain on
any day particulars of any directorship—
(a) which has not been held by a director at any time during
the ten years preceding that day;
(b) which is held or was held by a director in bodies
corporate of which the company is or was the wholly owned
subsidiary or which are or were the wholly owned subsidiaries either
of the company or of another body corporate of which the company
is or was the wholly owned subsidiary;
and for the purposes of this subsection a body corporate shall be
deemed to be the wholly owned subsidiary of another if it has no
members except that other and that other's wholly owned subsidiaries
and its or their nominees.
(4) Subject to subsection (5), the said register shall contain the
following particulars relating to the secretary or, where there are
joint secretaries, in relation to each of them—
(a) in the case of an individual, his present forename and
surname, any former forename and surname and his usual residential
address; and
(b) in the case of a body corporate, the corporate name and
registered office.
(5) Where all the partners in a firm are joint secretaries of a
company, the name and principal office of the firm may be stated
instead of the said particulars.
(6) The company shall, within the period of 14 days from the
happening of—
(a) any change among its directors or in its secretary, or
(b) any change in any of the particulars contained in the
register,
send to the registrar of companies a notification in the prescribed
form of the change and of the date on which it occurred.
(7) A notification sent to the registrar of companies pursuant to
subsection (6) of the appointment of a person as a director,
secretary or joint secretary of a company shall be accompanied by a
consent signed by that person to act as director, secretary or
joint secretary, as the case may be.
(8) Without prejudice to subsection (6), a person who has ceased to
be a director or secretary of a company may send to the registrar
of companies a notification in the prescribed form of such
cessation, and of the date on which it occurred.
(9) Subsection (6) shall not apply to any change in the particulars
contained in a company's register of directors and secretaries made
solely by reason of the coming into force of section 51 of the
Companies Act, 1990 but if after any such change has occurred and
before the company makes its next annual return, any other change
in those particulars occurs, the company shall send to the registrar
of companies a notification in the prescribed form of any such
earlier changes and the date on which they occurred at the same
time as it notifies the registrar of the later changes in
accordance with this section.
(10) The register to be kept under this section shall, during
business hours (subject to such reasonable restrictions as the
company may by its articles or in general meeting impose, so that
not less than 2 hours in each day be allowed for inspection) be
open to the inspection of any member of the company without charge,
and of any other person, on payment of one pound or such less sum
as the company may prescribe, for each inspection.
(11) It shall be the duty of each director and secretary of a
company to give information in writing to the company as soon as
may be of such matters as may be necessary to enable the company
to comply with this section.
(12) If any inspection required under this section is refused or if
default is made in complying with subsection (1), (2), (4), (6) or
(7), the company and every officer of the company who is in
default shall be liable to a fine not exceeding £1,000 and, for
continued contravention, to a daily default fine not exceeding £50.
(13) In the case of any such refusal, the court may by order
compel an immediate inspection of the register.
(14) A person who fails to comply with subsection (11) shall be
guilty of an offence and liable to a fine.
(15) For the purposes of this section—
(a) in the case of a person usually known by a title different
from his surname, the expression 'surname' means that title;
( b ) references to a 'former forename' or 'surname' do not
include—
(i) in the case of a person usually known by a title different
from his surname, the name by which he was known previous to the
adoption of or succession to the title; or
(ii) in the case of any person, a former forename or surname where
that name or surname was changed or disused before the person
bearing the name attained the age of 18 years or has been changed
or disused for a period of not less than 20 years; or
(iii) in the case of a married woman, the name or surname by
which she was known previous to the marriage.".
COMPANIES ACT 1990 - SECT 52
Directors to have regard to interests of employees.
52.—(1) The matters to which the directors of a company are to
have regard in the performance of their functions shall include the
interests of the company's employees in general, as well as the
interests of its members.
(2) Accordingly, the duty imposed by this section on the directors
shall be owed by them to the company (and the company alone) and
shall be enforceable in the same way as any other fiduciary duty
owed to a company by its directors.