You have an investor ready to put money in, or a co-founder who finally needs to be on the share register. Issuing new shares in an Irish private company is not complicated, but the order of the steps matters. Get the sequence wrong and the mess surfaces years later, during due diligence.
What does issuing new shares actually mean?
When you issue shares (the CRO calls it an allotment), the company creates brand new shares in the company and allocates them to a person or a body corporate. The total in issue rises and every existing holding is diluted. That is different from a transfer of shares, where existing shares change hands; a transfer normally attracts 1% stamp duty, while a fresh issue does not.
Why all the paperwork? A company is a separate legal entity, so ownership sits with its members, not its directors. Members get limited liability in return, capped at any amount unpaid on the shares they hold.
One caveat. This guide covers the standard private company limited by shares, the LTD companies registered under Part 2 of the Companies Act 2014. Ireland recognises other company types too, including designated activity companies, public limited companies, unlimited companies, and the company limited by guarantee, which has no shares to issue at all.
What should you check before issuing shares?
Irish company law leaves much of this to your constitution, so read it first (for a DAC, the memorandum and articles of association). Confirm four things:
- Directors' authority to allot, granted by the constitution or by the members.
- Pre-emption rights. Section 69 of the Companies Act 2014 gives each existing shareholder first refusal in proportion to their holding, unless your constitution or a special resolution disapplies it.
- Any cap on authorised share capital, which may need increasing first.
- The commercial terms: number of shares, class, price and payment timing, agreed in writing.
A shareholders' agreement can add extra consent requirements, so check that too. Haven't opened the constitution since you set up the company in Ireland? Now is the time.
What are the six steps to issue new shares through the CRO?
|
Step |
What happens |
Timing |
|
1. Prepare the paperwork |
Solicitor-drafted subscription agreement, draft resolutions and waivers |
Before anything is signed |
|
2. Offer to existing shareholders |
Pro-rata pre-emption offer, acceptances or waivers documented |
Set a clear acceptance deadline |
|
3. Board resolution |
Directors approve the allotment and authorise the filings |
On the allotment date |
|
4. Issue share certificates |
Certificates delivered to each new holder |
Within 2 months of allotment |
|
5. File Form B5 |
Return of allotments filed with the CRO through CORE |
Within 30 days of allotment |
|
6. Update the registers |
Register of members, cap table and records updated |
Straight after filing |
Step 1 is where most DIY share issues go wrong. The share class, price, allotment date and investor details must match across every document.
Step 2 protects the people already on the register. Make the offer formally, set a deadline, and keep written evidence of every acceptance or refusal. Members can waive their rights by special resolution, at a general meeting or as a written resolution.
Step 3 is the formal decision. Whether the company has one director or two directors, the board passes a resolution recording the shares, consideration and allotment date, then minutes it.
Steps 4 and 5 carry statutory deadlines. Certificates must go out within 2 months of allotment under section 99 of the Act, and the Form B5 must be submitted to the CRO within 30 days, online through CORE. The CRO's leaflet 37 on share capital and resolutions covers the detail.
Step 6 closes the loop. The register of members of the company, normally kept at its registered office, is the legal record of ownership. Update it the same day, refresh the cap table, and notify the CRO of any related changes via the post-registration forms.
What happens after the share issue?
The allotment ripples into your ongoing compliance. The share capital note in your next financial statements has to agree with the B5, and your next annual return will show the new capital and members. File that return late and your audit exemption is at risk.
Future investors will expect clean registers and board records before they hand over money; our piece on what investors expect to see at board meetings covers what they look for. If keeping registers, minutes and filings current is nobody's actual job, a company secretarial service takes it off your desk.
What else do founders ask about issuing new shares?
Do I need shareholder approval to issue new shares?
Often, yes. The directors need authority to allot, and pre-emption rights apply unless your constitution disapplies them or the members waive them by special resolution.
What is Form B5?
Form B5 is the CRO's return of allotments. It records the allotment date, the number and class of shares, the amount paid on them, and each allottee's details. It must be filed within 30 days of the allotment.
How long do I have to issue share certificates?
Two months from the allotment date. Each certificate should show the company name and number, the holder's details, the number and class of shares, and the required signatures.
Which company type does this process apply to?
A private limited company (LTD). Your company type is printed on your certificate of incorporation; other forms follow a similar but not identical path.
Want your share issue done right first time?
We handle board resolutions, pre-emption offers, share certificates, the B5 filing and register updates, and we make sure the year end accounts reconcile to the share register afterwards. Get in touch today and book a consultation.
Disclaimer: This guide is for general information purposes only and does not constitute professional advice. Speak to a qualified accountant about your specific circumstances before acting on anything covered here.