Summary Approval Procedure (SAP)

The Summary Approval Procedure (SAP) is a validation procedure which includes the passing of a special resolution and the swearing by directors of statutory declaration of solvency. As per the Companies Act 2014, the SAP eliminates the need for court approval for the following seven transactions-

  • Financial assistance for acquisition of own shares
  • Directors Loans and persons connected to them
  • Reducing a company’s share capital
  • Variation of capital on reorganisations
  • Domestic mergers of certain Irish companies
  • Members’ voluntary winding-ups
  • Pre-acquisition reserves

Who can avail of the SAP?

The SAP can be availed of by a Private Company Limited by Shares (LTD), Designated Activity Company (DAC) and a Company Limited by Guarantee (CLG). Certain Company types must pass special restrictions rather than using ordinary resolutions to effect certain procedures.

A Public limited companies (PLC) may avail of the Summary Approval Procedure but are limited to the following three transactions:

  • to effect a members’ voluntary winding up,
  • treatment of pre-acquisition profits and
  • for the making of loans to directors or connected persons.


The Procedure

Members of a company will be required to pass a special resolution to approve and provide the directors with the authority to carry out the restricted activity. The resolution must be passed no more than 12 months prior to the commencement of the activity. Following this, the directors of the company must then deliver a declaration to the Companies Registration Office containing the information regarding the restricted activity. This must be done within 21 days of the activity being carried out or else the activity will be declared invalid.

Certain restricted activities have extra requirements as the nature of the declaration is not synonymous across all activities.

Civil sanction is available to a liquidator, creditor or member of a company or to the ODCE where a declaration was made without reasonable grounds for doing so under section 210 of the Companies Act 2014 and a director, who has signed the declaration may be held personally responsible without limited liability for all and any of the debts and liabilities of the company.

Directors’ Declaration

The content of a declaration after proceeding with a SAP varies depending on the restricted activity involved however, in all situations must include validation that a full inquiry has been made into the affairs of the company and that the company is able to pay its debts and liabilities as they fall due for a period of 12 months after the restricted activity is carried out.

Civil sanction can be available to a liquidator, creditor or to the ODCE if a declaration was made without reasonable grounds. Under to section 210 of the Companies Act 2014, a director, who has signed the declaration may be held personally responsible without limited liability for all debts and/or liabilities of the company.

Financial assistance for the acquisition of Shares

Under the new Act, it is an offence for a company to give any kind of financial support for the acquisition of shares in the company or in the company’s holding company. The prohibition applies whether the support is given directly or indirectly or is by means of a loan or guarantee, the provision of security or otherwise

However, there are exceptions which allows the financial support in the situation where the company’s main purpose in giving the support is not for the purpose of the acquisition or where it is incidental in relation to some larger purpose and the assistance is given in good faith. The exceptions to the prohibition include:

  • The giving of financial support in accordance with the Summary Approval Procedure
  • For dividends or distribution out of profits
  • For discharge of lawfully incurred liabilities
  • Lending money as part of ordinary business
  • Employee share schemes
  • Re-financing
  • Representations, warranties and indemnities
  • Fees, commissions and expenses.


Company Bureau can carry out the Summary Approval Procedure on behalf of your company and ensure it is done in the most efficient and cost friendly manner. For more information on the Summary Approval Procedure please do not hesitate to contact us on 01 646 1625 or email

Contact us now for further details

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