By Antonia Nikolic, 11th October 2022
Increasing Authorised Share Capital
Authorised share capital is the maximum amount of shares that a company is authorised to issue to its shareholders. This amount does not have to be paid for, nor is there any liability for this amount. The authorised share capital is stated in the constitution of the company. Increasing the authorised share capital of a company, whether it is increasing the amount of the existing share class or adding a new one, requires a change to the constitution of the company. This change must be approved by the company’s members by passing a special resolution during a meeting.
Company Bureau can assist with amending company constitutions, along with preparing the special resolution and forms that must be filed with the CRO in order to make this change. A private company limited by shares, under Part 2 of the Companies Act 2014, can also choose to have unlimited authorised share capital. A high authorised or unlimited share capital will put you in a more flexible position should there be changes to the Share Structure in the future.
Increasing Issued Share Capital
Issued share capital refers to the total amount of the share capital that has been issued (allotted) to the shareholders. Shares can be issued for cash or non-cash consideration. In order for new shares to be issued, future shareholders must submit an application for share issue to the company. The submitted application must then be approved by the directors at a meeting. Company Bureau can assist with preparing the relevant documentation for this process, including a letter of application on allotment, meeting minutes, and share certificates and forms that need to be filed with the CRO within one month of the allotment date.
Since the abolition of companies’ capital duty, which came into effect on 7th December 2005, forms for issuing new shares with an effective date on or after that date should be filed directly with the CRO. Only a form that has an effective date prior to 7 December 2005 should be filed to the Revenue Commissioners with the appropriate capital duty. Capital duty is a matter for the Revenue.
Need some help?
If you require assistance regarding the increase of Authorised Share Capital or Issued Share Capital for your company, the team here at Company Bureau would be more than happy to help. Contact us today on +353(0)1 6461625 or fill out our online contact form.
Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.