Companies Act 1990

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Companies Act 1990
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Purpose
This act outlines the procedures to be followed,
when setting up, running and winding up both
private and public companies.
Knowledge of public companies not required for
Leaving Certificate.
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What is a company?
The following words are associated with a
company, more details in next slides.

• Shareholders
• Authorised Share Capital
• Issued Share Capital
• Limited Liability
• Separate Legal Entity
• Annual General Meeting or AGM
• Directors
• Managing Director
• EGM
• Registered office
• Audited accounts

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What is a shareholder?
I put money into the company.
I am invited to the AGM each year.
I am not involved in the day to day running of
the company.
At the AGM I have 1 vote per share.
As a reward for my money I get Dividends.
Also my shares might go up in value.
So I get rich and can continue to play my golf.
So bang would go my pension!! Help life without
golf.
The company allocates me shares in the company
for my money.
However my friends keep warning me I could lose
all I have invested.
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Authorised and Issued share Capital

• When a company is being formed, it must
  declare the amount money it plans to raise
  through the sale of shares and pay stamp duty on
  the same, This is known as the Authorised share
  capital.

Issued share capital is the total number of
shares sold multiplied by the initial value of
each share and it cannot exceed the Authorised
share capital, until the relevant stamp duty has
been paid.
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Limited Liability and Separate Legal Entity
Limited liability, means that a shareholder can
only loose the amount he contributed to
purchasing his shares.

• Companies can also be sued and sue in court
  themselves rather than the owners being sued or
  suing on behalf of the company, this is known as
  the company having separate legal entity.

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AGM

• This is the meeting all shareholders are
  invited to attend each year.

They have one vote per share.
If there is important business during the year an
other meetings of shareholders can be called,
these are called EGMs.
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Directors and Managing Director

• At the AGM the shareholders appoint Directors.
• Directors do not necessary have to be
  shareholders.
• These people will meet on a more regular basis to
  oversee the running of the company and will
  appoint from among themselves a company
  chairperson and company secretary.
• In some cases the directors will appoint a
  Managing Director to run the company on a day to
  day basis.
• Directors must declare their interests in other
  companies, in case of divided loyalties and
  fraudulent trading by a director can lead to a
  director loosing the protection of limited
  liability.
• If a director is involved in a company that has
  become insolvent, they are known as restricted
  directors and are prohibited from starting
  another company unless they can produce a certain
  amount of capital themselves.

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Registered office Audited accounts

• Each company must register an address with the
  companies office.
• Each company must have their accounts checked
  over (audited) by an auditor each year and a copy
  of these accounts presented to the companies
  office each year.

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Private Company

• When shareholders are selling their shares, the
  approval of the other shareholders must be
  sought, as to who the new shareholders will be.
• Shares not sold on the stock exchange.
• A private company can have only one shareholder,
  provided there are two directors.
• Maximum number of shareholders that a private
  company can have is fifty.

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Formation of a private limited company

• Memorandum of Association
• Articles of Association
• Form A1
• The appropriate fee to cover stamp duty on
  authorised share capital and registration fee.

Click for result
Certificate of Incorporation Incorporated
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Memorandum of Association

• The name of the company with Limited or Teoranta
  after it.
• The objectives of the company.
• The names of the subscribers and how much each
  are contributing.
• Each subscriber must sign the memorandum of
  association.
• A statement stating "The liability of the
  shareholders is limited by shares.".

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Ultra Vires
Memorandum of Association states we have
permission to sell confectionery
We sell computers
Memorandum of Association
This is ultra vires
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Articles of Association

• Procedure for calling company meetings.
• The voting procedure at company meetings.
• Details of how the company would be wound up, if
  this were to happen.
• Policy with regard to the payment of dividend, as
  opposed to putting the profits into reserves.
• Details of policy to be followed, if one of the
  shareholders id selling some or all of their
  shares.
• Procedures for appointing and removing directors.

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Form A1

• Statement of the amount of the Authorised share
  capital
• Declaration of compliance with the Company's Acts
  1963-1990
• Name of the first company secretary
• Names of the first directors
• Company's registered office

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16
RESULT

• Private Company

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17
Companies Act 1990
The end
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