Re-registration

Explanatory Notes CA 2014 Part 20

The Whole Notes

Section 1289 explains what Chapter 3 does. It sets out the special requirements for reregistration depending on the destination company type in question. Section 1290 sets out the particular requirements for re-registration as a private company limited by shares. This section derives in part from section 14 of the Companies (Amendment) Act

1983. A company may be re-registered as a private company limited by shares if, in addition to the relevant Chapter 2 requirements being complied with, the requirements set out in this section are

complied with. Where the company is a PLC, the 28 day period during which an application under section 1287 for the cancellation of the special resolution must have expired without any such

application having been made, or where such an application has been made, the application must have been withdrawn. Alternatively, where either an order, not falling within clause (II) has been made

under section 1287 confirming the special resolution, or if an order has been made under that section confirming the resolution but providing that re-registration shall not take effect unless specified terms

and conditions are satisfied, those terms and conditions must be satisfied and in either case, a certified copy of that order must have been delivered to the Registrar.

Where the company is an unlimited company, the special resolution required by section 1285(1)(a) must include a statement that the liability of the members is to be limited by shares and if the resultant

company is to have an authorised share capital, specifying what is to be that authorised share capital and the fixed amount of the shares into which that share capital is to be divided; or if the resultant

company is not to have an authorised share capital, specifying the fixed amount of the shares into which the company’s share capital is to be divided.

Section 1291 sets out the requirements for re-registration as a PLC. In addition to compliance with the relevant Chapter 2 requirements and section 1292, the requirements as set out must be

complied with. The company must deliver the following documents to the Registrar (i) a copy of the balance sheet of the company prepared at a date not more than 7 months before the date on which the

application for re-registration is received by the Registrar, (ii) an unqualified report by the company’s statutory auditors on that balance sheet, (iii) a copy of a written statement by the statutory auditors of

the company that, in their opinion, at the balance sheet date, the amount of the company’s net assets was not less than the aggregate of its called-up share capital and undistributable reserves and (iv) a 

copy of any report prepared under section 1292. The statement of compliance must include an extra statement confirming that, between the balance sheet date and the date of the making by the company

of the application for re-registration, there has been no change in the financial position of the company that has resulted in the amount of the company’s net assets becoming less than the aggregate

of its called-up share capital and undistributable reserves. Subsection (1)(c) provides that where the company is an unlimited company, the special resolution required by section 1285(1)(a) shall include

a statement that the liability of the members of the resultant company is to be limited by shares, and specifying what is to be the authorised share capital of the resultant company and the fixed amount of

the shares into which that share capital is to be divided. 

Subsection (2) provides that the Registrar shall not, on foot of the application to re-register a company as a PLC, issue a certificate of incorporation if it appears to the Registrar that (a) by either of the

means specified in section 84(2), a reduction of the company’s capital has taken place after the date of the passing of the special resolution that the company should be re-registered as a PLC and (b) the

reduction has the effect of bringing the nominal value of the company’s allotted share capital below the authorised minimum.

Subsection (3) states that a qualification shall be treated for the purposes of the definition in this section of an “unqualified report” as not being material in relation to any balance sheet if, but only if,

the person making the report states in writing that the thing giving rise to the qualification is not material for the purposes of determining, by reference to that balance sheet, whether, at the balance

sheet date, the amount of the company’s net assets was not less than the aggregate of its called-up share capital and undistributable reserves.

This section is comprised in substance of those requirements in section 9 of the Companies (Amendment) Act 1983, which are particular to PLCs.

Section 1292 sets out special requirements as to share capital for companies which are reregistering as a PLC. It provides that a company shall not be re-registered unless, at the time of the

special resolution that the company should be re-registered as a PLC is passed –

a) the nominal value of the company’s allotted share capital is not less than the authorised minimum;

b) each of its allotted shares is paid up at least as to one-quarter of the nominal value of that share and the whole of any premium on it;

c) where any share in the company or any premium payable on it has been fully or partly paid up by an undertaking given by any person that that person or another should do work or perform services for the company or another, the undertaking has been performed or otherwise discharged; and

d) where shares have been allotted but as fully or partly paid up to their nominal value or any premium payable on them otherwise than in cash and the consideration for the allotment consists of or includes an undertaking (other than one to which paragraph (c) applies) to the company either – that undertaking has been performed or otherwise discharged; or there is a contract between the company and any person pursuant to which that undertaking must be performed within 5 years after that time.

This section derives from section 10 of the Companies (Amendment) Act 1983.

Section 1293 derives from section 9(5) of the Companies (Amendment) Act 1983. It has been removed from the general provisions as to re-registration since it applies only to companies applying

to register as a PLC. It provides that where shares are allotted by the company applying to re-register as a PLC between the balance sheet date and the passing of the special resolution and those shares

have been allotted as fully or party paid up as to their nominal value, or any premium on them, otherwise than in cash, the company shall not make an application for registration under this Part

unless, before making the application, the consideration for that allotment has been valued in accordance with the provisions of Chapter 3 of Part 17 that are applied by this section, and a report

with respect to the value of the consideration has been made to the company in accordance with those   provisions during the 6 months immediately preceding the date of that allotment.

Section 1294 concerns the application of certain other provisions of Part 17 on allotments to a company that has passed a resolution for re-registration. This section derives from section 37 of the

Companies (Amendment) Act 1983. The effect of this section is to extend to an existing private company, or an unlimited company which has duly resolved to re-register as a PLC, the restrictions

that apply to PLCs regarding the payment of non-cash consideration for the allotment of shares (including the provisions for the independent valuation of such shares).

Section 1295 reproduces section 71 of the Companies Act 1963 and provides that an unlimited company has the power to provide for reserve share capital on re-registration.

Section 1296 sets out the particular requirements which need to be fulfilled in order that a limited company can re-register as an unlimited company. A limited company may be re-registered

as an unlimited company if, in addition to the company complying with the relevant Chapter 2 requirements, all of the members of it have assented to its being so re-registered and the following

steps are compiled with – (a) the company must deliver to the Registrar the prescribed form of assent  together with the financial statements and report on them of the company’s statutory auditors on

financial statements and (b) the statement of compliance includes confirmation by a director or secretary of the company that (i) the persons by whom, or on whose behalf, the form of assent

referred to in paragraph (a) is subscribed constitute the whole membership of the company; and (ii) if any of the members have not, themselves, subscribed that form, that the directors have taken all

reasonable steps to satisfy themselves that each person who subscribed it on behalf of a member was lawfully empowered to do so.

Subsection (3) provides that the financial statements referred to in subsection (1)(a)(ii) are financial statements of the company covering a period that (a) ends on a date that is not more than 3 months

prior to the date of the application to re-register; and (b) subject to subsection (4), is of at least 12 months duration.

This section is modelled on section 52 of the Companies (Amendment) Act 1983. The statutory declaration of the directors as to the completion of the assent by all members has been replaced by the

inclusion of this confirmation in the statement of compliance in order to facilitate e-filing.

Section 1297 sets out the particular requirements for re-registration of a company as a CLG.

This section is new, as, prior to the introduction of the Companies Act 2014, the Companies Acts did not provide for conversion to a guarantee company. A company may be re-registered as a company

limited by guarantee if, in addition to the company complying with the relevant Chapter 2 requirements, the requirements as set out below are also complied with.

In the case of a company with a share capital, all the members must assent to its being re-registered as a company limited by guarantee and the conditions specified in subsection (2) must be satisfied.

These conditions in subsection (2) are that the company delivers to the Registrar the form of assent to the company’s being re-registered as a company limited by guarantee subscribed to by, or on behalf

of, all members of the company together with a statement of guarantee; the statement of compliance must include confirmation that the persons by whom, or on whose behalf, the form of assent

subscribed constitute the whole membership of the company; and if any of the members have not, themselves, subscribed that form, that the directors have taken all reasonable steps to satisfy

themselves that each person who subscribed to it on behalf of a member was lawfully empowered to do so.

Subsection (2) (c) adds a further condition that unless the position concerning the allotted share capital of the company, is as referred to in subsection (3) at the date of the application for reregistration,

the court, on application to it by the company in that behalf, sanctions its re-registration as a company limited by guarantee and give directions as to how its company capital is to be treated in

the framework of the resultant company.

Subsection (3) provides that the position concerning the company’s allotted share capital in subsection (2)(c), is that the following conditions are satisfied – no amount is paid up on it; and its nominal value

does not exceed the aggregate maximum amount that the company’s shareholders, who become members of the resultant company on the issue of the certificate of incorporation under section

1285(6), would be liable to pay by virtue of the latter company’s memorandum were the latter immediately then to be wound up.

Where the company is an unlimited company, the special resolution required by section 1285(1)(a) must include a statement that the liability of the members of the resultant company is to be limited as

provided for in the relevant alterations of the constitution made by that resolution.

Section 1298 deals with the particular requirements for re-registration of a company as a DAC limited by shares. A company may be re-registered as a DAC limited by shares if the requirements (in

addition to the relevant Chapter 2 requirements) set out are also complied with. 

Where the company is a PLC these requirements are that, where the period during which an application under section 1287 for the cancellation of the special resolution has expired without any

such application having been made (28 days from date of passing), or where such an application has been made, the application has been withdrawn; or either an order, has been made confirming the

resolution or if an order has been made under that section confirming the resolution but providing that re-registration shall not take effect unless specified terms and conditions are satisfied, those terms and

conditions are satisfied, and in either case, a certified copy of that order has been delivered to the Registrar.

Where the company is an unlimited company, the special resolution required by section 1285(1)(a)must include a statement that the liability of the members of the resultant company is to be

limited by shares and must specify what is to be the authorised share capital of the resultant company and the fixed amount of the shares into which that share capital is to be divided.

Section 1299 deals with the particular requirements for re-registration of a company as a DAC limited by guarantee. A company may be re-registered as a DAC limited by guarantee if the

requirements (in addition to the relevant Chapter 2 requirements) set out are also complied with.

Where the company is a PLC these requirements are, where the period during which an application under section 1287 for the cancellation of the special resolution has expired without any such

application having been made (28 days from date of passing), or where such an application has been made, the application has been withdrawn; or either an order has been made confirming the resolution

under section 1287, or if an order has been made under that section confirming the resolution but providing that re-registration shall not take effect unless specified terms and conditions are satisfied,

those terms and conditions are satisfied, and in either case, a certified copy of that order has been delivered to the Registrar. 

Where the company is an unlimited company, the special resolution required by section 1285(1)(a)  must include a statement that the liability of the members of the resultant company is to be limited as

provided for in the relevant alterations of its constitution made by that resolution. Where the company is a company with a share capital, all the members of it must assent to it being re-registered as a DAC

limited by guarantee and the conditions specified in subsection (2) must be satisfied.

Subsection (2)(c) adds a further condition, that unless the position concerning the allotted share capital of the company, is as referred to in subsection (3) at the date of the application for re-registration, the

court, on application to it by the company in that behalf, must sanction its re-registration as a DAC limited by guarantee and gives directions as to how its company capital is to be treated in the

framework of the resultant company.

Subsection (3) provides that the position concerning the company’s allotted share capital in subsection (2)(c), is that the following conditions are satisfied – no amount is paid up on it; and its nominal value

does not exceed the aggregate maximum amount that the company’s shareholders, who become members of the resultant company on the issue of the certificate of incorporation under section 1285(6), would be liable to pay by virtue of the latter company’s memorandum were the latter immediately then to be wound up. 

The text in italics on this page is sourced from the DJEI Explanatory Memorandum  and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to  2015.