The Companies Act 2014 ("the Act") introduced a number of significant reforms to Irish company law, some of which are of great assistance to completing corporate transactions in Ireland. Set out below are a number of reforms introduced by the Act that are of assistance to the completion of corporate transactions in and through Ireland.
Before the Act, Irish company law did not provide any statutory procedure for the merger of two Irish private companies. Since 1 June 2015, it is now however possible to transfer the assets and liabilities of one Irish private company to another Irish private company, provided that one of the companies is limited, and then dissolve the former company. The Act provides three ways of implementing such a merger:
merger by absorption - an existing private company acquires all the assets and liabilities of its wholly owned subsidiary and the subsidiary is dissolved without going into liquidation; merger by acquisition - acquisition by a company of all of the assets and liabilities of another company in exchange for the issue of shares or securities in the acquiring company to the members of company being acquired. The acquired company is then dissolved without going into liquidation; and merger by formation - two or more companies transfer all of their assets and liabilities into a newly formed company in exchange for the issue of shares or securities in the newly formed company to the members of two existing companies, which are then dissolved without going into liquidation. The introduction of this statutory merger procedure will be of benefit to companies with intricate group structures. Groups of companies can use the merger procedure to tidy-up their group structure for example by merging and dissolving dormant or unnecessary companies within the group without the need to put them into liquidation.
Summary Approval Procedure
The Act introduced a new corporate procedure called the Summary Approval Procedure ("SAP") which was modelled on the procedure previously used to validate financial assistance. The procedure allows certain transactions to be approved by special resolution in circumstances where the directors of a company have made a declaration as to the post-transaction solvency of the company. Transactions that can be carried out by this method in a private company include:
a reduction of share capital; financial assistance for the acquisition of shares; a...