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In need of a nominee shareholder?
Coddan may provide nominee service for your Irish company. Whether you require a shareholder to fulfill minimum Irish requirements, or if you need a nominee to maintain anonymity, Coddan can help. Sign up today for our Irish nominee shareholder service for £450 per year. In all situations, we aim to provide the most cost-effective and comprehensive services. Take a look at the other services we offer: |
You can request your Irish company via our online order form. Company formation is usually completed within 5-10 business days. It only takes minutes to enter your details and to submit a registration form.
We provide a wide range of quality and reliable company formation services and administrative support not only to Irish nationals, but also to international clients located anywhere in the world. Why not get started today?
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Irish Nominee Shareholder for £450 per year:
A private company is widely recognised as one of the most cost-effective and easily managed corporate entities with which to establish a new business. This is a company where the privately owned, or publicly owned, shares in the company are held by shareholders. The liability of the shareholders should the company fail is limited to the value of the shares. There are two types of private limited companies: a company limited by shares and a limited by guarantee company; the most frequently used type of private limited company is that limited by shares. The information within this section concentrates on this form of company. In a private limited company limited by shares, members' liability is limited to the amount unpaid on shares that are held by them. In the case that shareholders do not want to become public by submitting their personal details to the CRO, Coddan may offer our nominee shareholder service to clients.
Another reason to use nominee shareholders is to allow us to help you perform tasks and fulfill duties of those individuals. Those company shareholders, who may also be considered members, are responsible for making various decisions, such as dismissing a director or appointing new directors to the board, and, of course, the shareholders also authorise directors to issue new shares in the company. Generally, the rights and duties of a member will depend on the articles of association of the company. The principal duty of a member who is a shareholder in a limited liability company with share capital is to pay the company any outstanding amount of the purchase price agreed for the allotted shares. This sum becomes payable either where the company makes a call for funds, or, in circumstances where the terms of issue of the shares provide for the payment of installments, on the payment date.
Certain rights apply only to members who are shareholders in a company; basically someone who is appointed as a member of a company limited by shares must also be a shareholder in the company. Where a company has a share capital, the company may, in its memorandum or articles of association, create a power to issue different classes of shares, including ordinary, preference and redeemable shares.
Types of Shares:
Ordinary shares basically carry the right to a vote. When a company is wound up, they generally have the right to participate in any leftover funds beyond the fixed amount which they originally invested in their shares. In the case that ordinary shares carry weighted or differing levels of voting power, but carry equal entitlements in respect of dividends and capital, they are normally divided into “classes”.
Preference shares carry preferential rights on dividends or capital. A share which is “preferred as to dividend” usually entitles the member to be paid their dividend with priority over the ordinary shareholders. Preference shareholders’ entitlements to dividends are expressed as a right to a percentage per annum of the nominal amount of the share. Also, when a company is being wound up, share which is “preferred as to capital” entitles the member to have their capital investment in the company completely repaid before the ordinary shareholders are returned their capital.
Redeemable shares are shares which the company is entitled to redeem, or buy back, from its members. When shares are redeemed, the company generally cancels them; however, a treasury share is a share which is retained on redemption by the company and can later be re-issued.
Finally, bonus shares are shares issued to the shareholders in proportion to their existing shareholdings. These shares are issued as having been fully paid, meaning the shareholders are not required to pay for them; in fact, the shares are usually paid from accumulated profits that have been transferred to capital (capitalised).
Transfer of Shares:
The Articles of Association of a company set out the powers of the members and those powers which are delegated to the directors of the company. The articles generally provide that the business of the company is managed by the directors, subject to the provisions of the articles of association, and that under certain conditions, those directors may also delegate responsibilities to members. The transfer of shares is only one example that illustrates the relationship between the powers of directors and members.
It is normal that a member decides to sell the shares they hold. A member’s shares in a company are transferable personal property; however, in a private company, various restrictions are placed on the transfer of shares. These restrictions are normally implemented by granting the directors of a private company the discretion to refuse to register the transfer of shares to a person of whom they do not approve. The directors can also require that the shareholder wishing to sell their shares initially offers those shares for sale to existing members of the company, rather than outside parties.
Right to a Dividend:
A dividend is a distribution of certain company assets to its shareholders. Dividends can only be proposed by the directors, and, then, this proposal must be approved by the members. There is no legal obligation on a company to declare a dividend even where there are sufficient distributable profits available. However, once a final dividend is declared on a shareholder’s share, that shareholder is entitled to payment. In the event of non-payment, the company can be sued for arrears, similar to how a creditor may sue for debt. A dividend can only be paid out of a company’s available net accumulated profits. However, other company profits and reserves, such as unrealised profits, or any premium charged over and above the nominal value of an issued share, can not be used for the purposes of paying a dividend. Furthermore, in the case of a public limited company (plc), can only make a distribution when its net assets are not less than the aggregate of its “called-up” share capital and its reserves that are not yet permitted to be distributed (undistributable shares).
Statutory Pre-Exemption Rights:
Section 23 of the Companies (Amendment) Act, 1983 gives the existing members of a private company a statutory ‘pre-emption’ right, which means that when new shares in the company are being issued, the existing shareholders have an automatic right of first refusal to purchase these shares in proportion to their existing shareholdings. Therefore, if the existing shareholders decline to exercise their pre-emption rights, parties other than the existing shareholders will, be entitled to purchase newly issued shares in the company. Under the statutory pre-emption scheme, the offer of shares to the existing shareholders must be served to the members in the same way that notices of general meetings are given, and there will be period of at least twenty-one days during which the offer can be accepted or declined.
The statutory pre-emption rights can generally be removed by the memorandum of association, the articles of association, or by a special resolution, which is passed by a 75% vote. In addition to holding a meeting, the directors must also furnish the members with a written statement that explains their reasons for the proposed departure from the statutory pre-emption scheme. Statutory pre-emption rights are not given to shareholders having preference shares or where the allotment is of preference shares. Also, pre-emption rights are not granted when the allotment of shares is in respect of an employees’ share scheme or if any portion of the allotment is to be paid via a non-cash consideration.
Winding up or Restoration:
A shareholder also has the right to participate in the winding up, or termination, of a company. Once the creditors and expenses of the liquidator have been paid, all remaining funds are returned to the shareholders in proportion to their shareholdings, unless the articles of association state otherwise. In the case that a company is struck off due to, for example, failing to file an annual return, the liability, if any, of every director, officer and member of the company is still enforced, as though the company is still active. If any member chooses, they can apply to the Registrar of Companies for the restoration of the Company within 12 months of the strike off, and provided that the Registrar is satisfied that all outstanding documents have been filed and all outstanding fees paid, he can restore the company to the register. If the Registrar restores the company to the register, the company is deemed to have continued in existence as though it had not been struck off.
On the other hand, if 12 months has already passed after a company was struck off, any member of the company can apply to the High Court to have the company restored to the register, as long as it is within 20 years of having had been struck off. Where the High Court is willing to restore the company to the register, the company is viewed as having had continued in existence as though it had not been struck off. However, the Court also has the right to order, in certain cases, that the officers be held personally liable for any debts incurred by the company during the strike off period.
Right to Information:
A member of a company has, at any time, the right to access information concerning the company. A copy of the memorandum and articles of association of the company should be read by the members in order to familiarise themselves of their rights as members, in addition to the company’s rules and powers. It is also advised to inspect and obtain copies of the minutes of general meetings and resolutions, as well as the various company registers, financial statements, auditors reports, and financial documents of any branches that may exist.
Meetings and Resolutions:
The members of a company exercise control over the company at its meetings, and the main statutory provisions concerning meetings of a company are set out at sections 131 to 146 of the Companies Act, 1963. All companies, except single member companies, must hold an annual general meeting (AGM) each year, and not more than fifteen months should lapse between the meetings.
At an AGM, a company will generally consider ordinary business, such as:
 The directors’ recommendation to declare a dividend, if a recommendation has been made,
The financial statements, the directors’ report and the auditor’s report,
The election of persons as directors in the place of those retiring,
The appointment of new auditors and the fixing of auditors’ remuneration, and
Other business, such as the amendment of the memorandum or articles of association, which is considered “special business”, and which requires the tabling of special resolutions.
Extraordinary General Meetings:
Any meeting of a company which is not an AGM is known as an extraordinary general meeting (EGM). Directors may generally call an EGM where they see fit, for example where they wish to obtain the prior approval of members before taking a certain course of action. In addition, the directors are obliged to convene an EGM in certain circumstances e.g. where the company’s net assets (i.e. total assets less total liabilities) have fallen to 50% or less of its called-up share capital.
Members of a company, who hold at least a total of 10% of the paid-up share capital and who have voting rights in the company, can requisition the directors of the company to call an EGM. To do so, a signed requisition is lodged at the company’s registered office, and the purpose of the EGM should be stated. Then, the directors must convene the EGM within 21 days of the date of requisition, and the meeting must be held within two months.
Resolutions:
Decisions of the members at a general meeting are made by resolution, and all resolutions must be passed in accordance with the requirements of the Companies Acts and the company’s articles of association. Most standard business conducted at an AGM is carried via ordinary resolutions, which merely requires a simple majority of more than 50% of voting members. Special resolutions are used to conduct certain business at EGMs or any special business at AGMs, such as the alteration of the articles of association. For special resolutions, a qualified majority of 75% is required. In the case of a single member company, the requirement to pass a resolution is replaced by the simple action of producing a written decision of the sole member.
Right to Notice of Meetings:
At least 21 days’ notice must be given to call an AGM. In the case of an EGM, 7 days’ notice is required for private companies, and 14 days is needed for public companies. However, 21 days is usually required in order to pass a special resolution, unless 90% of the members of the company agree to shorter notice. The 7 day period for private companies can be shortened if the members and the company’s auditors agree to a shorter notice. Also, an extended notice of 28 days must be given if a resolution is used to remove a director, or when an auditor should be replaced or removed before the expiration date of his term of office.
To be valid, a meeting must be properly convened via a notification, and a quorum of a minimum number of members must be present. A quorum is generally fixed at two members, in the case of a private company, and three members, in the case of a public company. Special resolutions and certain other significant resolutions must be forwarded by the company to the Registrar of Companies within 15 days of the time they are passed. Also, if indicated in a company’s articles of association, a written resolution can be signed by all of the members who are normally entitled to attend and vote at a general meeting; in fact, this is as valid and effective as if the resolution had actually been passed at a general meeting.
Polls:
A standard version of the company’s articles of association provides that every resolution shall be decided by a show of hands unless a poll is demanded. The standard articles describe when, and by whom, a poll may be demanded; and, if a poll is not ever needed, a declaration by the Chairman, stating that a resolution has been carried, or lost, on a show of hands, will be conclusive evidence of the proceedings.
The standard articles of association states that a poll may be demanded by the Chairman of the meeting, or by at least three members or by those members who represent at least 10% of the total voting rights of all members who normally have the right to vote at meetings. Also, those voting members who hold shares with an aggregate sum of at least 10% of the paid-up share capital may demand a poll. It should be noted that the members of a company can, of course, alter the terms of the standard articles of association either at the time of incorporation or subsequently, and this can be done if 75% of the members agree. However, when amendments are attempted to be made with regards to polls, these changes are considered void and will not be recognised.
Proxies:
Any member of the company who is entitled to vote at a general meeting of the company can appoint a ‘proxy’, which is a person nominated by the member to attend the meeting and to exercise the member’s vote on their behalf. Under the standard version of the articles of association, the proxies must be nominated in writing, and the nomination should be signed by the member who is being represented. Also, if the proxy is being nominated on behalf of a company, the appointment is required to be stamped with the company seal. Finally, the appointment of the proxy must be presented to the company holding the meeting at least 48 hours prior to the meeting.
Keeping up with all of the requirements of the CRO is now more complicated and time-consuming than ever. Our professional and experienced staff can offer our nominee company shareholder service to you. Coddan aims to provide you with the tools you need to move forward with your Irish company formation. Whether you want to form a new company, ask us about our nominee shareholder service, or request further information, contact us today.
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