1. Company law update
The Investment Funds, Companies and Miscellaneous Provisions
Acts 2006 (the "2006 Act") became law on 24 December
The Irish company law statutes are now collectively referred
to as the Companies Acts 1963 to 2006.
2. Increased membership numbers for private companies
Private companies will now be entitled to have up to 99
members. The limit, which was previously set at 50 members, was
increased to reflect EU law.
In its first Report the Company Law Review Group recommended
the maximum number of members be increased to 150, but this
figure had to be decreased in light of the Prospectus Directive
which required that a company issue a prospectus where shares
were offered to 100 or more persons.
In addition to being reflective of EU-led changes to Irish
company law, the increase to 99 members is sensible as now a
private company may be able to delay converting to a PLC (which
have no limit on the number of their members) to raise share
capital from new members.
3. Permitted offers by private companies
On the adoption of the Prospectus Directive into Irish law
(by the Investment Funds Companies and Miscellaneous Provisions
Act, 2005 and the Prospectus Regulations) there was a concern
that the new legislation had unwittingly broadened the
definition of a 'public offer' to such an extent that
any communication or private placement of securities by a
private company could be considered a 'public
This was a problem because section 33 of the Companies Act,
1963 provides that a private company is one which
"prohibits any invitation to the public to subscribe for
any shares or debentures of the company". This has been
satisfactorily addressed by the 2006 Act which clarifies that a
private company can make an offer of:-
shares to qualified investors, to fewer than 99 persons,
debentures solely to 'qualified investors' (such
as credit institutions, investment firms, insurance companies
and collective investment schemes);
debentures to fewer than 100 persons;
debentures to investors where the minimum consideration
payable is at least Ä50,000 per investor, or the
denomination per unit is at least Ä50,000; and
debentures where the total consideration for the offer is
limited to less than Ä100,000. The changes take effect
retrospectively, from 1st July 2005 (the date of the Act of
2005 and the Prospectus Regulations).
4. Audit exemption
The 2006 Act has made some improvements in relation to the
audit exemption for...