Shareholders are people or companies which invest in a company in return for shares. These shares give the holders various rights, such as the right to vote at general meetings, the right to receive a dividend and shareholders have the power to remove or appoint directors.

The minimum number of shareholders is one (a single member company), the maximum number of shareholders in a private company is ninety nine. Corporate shareholders are allowed and shares may be held jointly by two or more people. A Single Member company can now be incorporated where the proprietor wishes to hold the entire share capital.

The members of a company exercise control over the company at its meetings. The main statutory provisions concerning meetings of a company are set out at sections 131 to 146 of the Companies Act. All companies, except single member companies, must every year hold an annual general meeting. Not more than fifteen months should elapse between AGM’s.

Members of Irish companies have the right to inspect and obtain copies of certain company information:

  • Memorandum and articles of association
  • Minutes of general meetings and resolutions
  • Register of members, register of directors and the register of directors’ interests
  • Unabridged financial statements, directors’ report and auditors’ reports
  • Unabridged financial statements of any subsidiary company for the preceding ten years

Authorised – nominal share capital

The nominal or authorised share capital of a company is the amount of shares that a company has available for future allotment. In order to avoid having to increase the share capital at a later stage it is usually set at a high figure of €100,000.

Issued share capital

The issued share capital is the amount of shares that a company has issued out of its potential nominal share capital.

Allotted share capital

Allotted shares capital is the total value of the shares that the board of directors has issued over and above those initially issued by the company’s registration agent. They are referred to as allotted because they are being issued for the first time and therefore are not being transferred from one party to another.

The value of shares

The term nominal value is used for a company’s shares since the true value will depend on how much a third party or existing shareholder is willing to pay for shares in the company. All shares with a nominal value must have had at least the nominal value paid into the company.

Ordinary and preference shares

In general there are two types of shares ordinary and preference. Preference shares provide a benefit over and above those available to ordinary shares. The benefit will relate to either voting rights and/or payment of company dividends depending on the provisions of the articles of association.

Shares in a new company

The minimum issued share capital is €1.00 in the case of a Single Member Company. In the case of most domestic Irish companies we will initially issue 100 with a nominal value of €1.00 each.

Alterations to shares

An increase or reduction in the number of shares or the value of shares involves a change to the memorandum and articles of the company. A new issue of share capital requires the submission of a form B5 to the Companies Registration Office. A transfer of issued shares is filed with the Revenue Commissioners and the transfer is recorded in the companies next annual return.

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