Where certain companies allot shares they must file a Form B5 (Return of Allotments) in the Companies Registration Office (CRO). This return will detail the persons receiving the shares, the number of shares issued and the consideration paid for those shares.
Problems can arise where a Form B5 is filed in the CRO with an error on it. Section 122 (5) of the Companies Act 1963 permits rectification of a company's own register of members provided any person adversely affected agrees to the rectification and the company is obliged to give notice of the rectification to the CRO. This type of rectification may be effected without a court application.
However if the correction of an error in the company's share capital results in a reduction in the nominal value of the share capital recorded in the CRO then the CRO will require the Company to produce an Order of the High Court.
The High Court Order will provide for the rectification of the Register of Members of the company pursuant to Section 122 of the Companies Act 1963. It will also provide for the amendment to the Form(s) B5 and, if applicable, other affected forms lodged with the CRO to permit that the correct position be reflected regarding the shares.
This practice of the CRO was confirmed by Ms Justice Laffoy in an unreported High Court decision in April 2007.
An application to the High Court will require preparation of a sworn affidavit together with an Originating Notice of Motion directing that the Register of Members be rectified and amending the CRO forms. Notification of the proposed rectification will need to be sent to any shareholders affected by the rectification and to the creditors to confirm their agreement to the application. A...