Transcript This act outlines the procedures to be followed, when

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.
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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
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.
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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 EGM’s.
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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
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Memorandum of Association
Articles of Association
Form A1
The appropriate fee to cover stamp duty on authorised share capital
and registration fee.
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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RESULT
Private Company
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Companies Act 1990
The end
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