Directors’_&_Secretaries’_Interests_in_Shares_&_Debentures_Of_Irish_Private_CompaniesThe Obligation To Notify 

Section 53 of the Companies Act 1990 (“the 1990 Act”) imposes an obligation on the directors and secretary of any Irish private company to notify the company of any interests held by them in shares or debentures of:

  • The company;

  • A subsidiary of the company; or

  • A parent of the company. 

Specifically, the director or secretary is obliged to notify the company, at the date of commencement of the section or on assuming the role of director or secretary, of:

  1. The subsistence of their interests at the relevant time; and

  2. The number of shares of each class in, and the amount of debentures of, each class of the company or the subsidiary or parent company. 

Existing Directors Obligations 

Further, a director or secretary of an Irish private company is obliged to notify the company of the occurrence of any of the events set out in section 53(2) of the 1990 Act which are:

  1. Any event in consequence of which the director or secretary becomes, or ceases to be interested in shares in, or debentures of, the company or any other body corporate being the company's subsidiary or holding company or a subsidiary of the company's holding company;

  2. The entering into by him of a contract to sell any shares or debentures;

  3. The assignment by him of a right granted to him by the company to subscribe for shares in, or the debentures of, the company; and

  4. The grant to him by another body corporate, being the company's subsidiary or holding company or a subsidiary of the company's holding company, of a right to subscribe for shares in, or debentures of, that other body corporate, the exercise of such a right granted to him and the assignment by him of such a right so granted; stating the number of amount or class, of shares or debentures involved.

Persons affected by section 53 are obliged to notify the company within 5 days of their becoming aware of  obligations. The sanction for failure to comply with the requirements or notify within the prescribed time is that no right or interest of any kind in respect of the shares or debentures is enforceable by legal proceedings. A person who fails to comply with section 53 without reasonable excuse is guilty of an offence. 

Obligation On The Irish Private Company 

In addition to the requirement that notice be given to the company, there is an obligation on the company itself to keep a register of information received from relevant persons and, whenever the company grants to a director or secretary a right to subscribe for shares in, or debentures of, the company. The following information must be included in the register:

  • The date on which the right was granted;

  • The period during which or time at which it is exercisable;

  • The consideration for the grant, if any; and

  • The description of shares or debentures involved and the number or amount thereof and the price to be paid therefor.

If a company fails to keep a register in the manner required by the 1990 Act, the company and any officer involved is guilty of an offence and is liable to a fine.

Failure To Notify

The law pertaining to the disclosure of interests in private companies incorporated in Ireland is complex and must be strictly adhered to.

Failure to notify the company where required can result in serious consequences for the person concerned, including an inability to enforce rights in relation to the shares in subsequent legal proceedings and criminal prosecution.

Learn more about Company Directors in Ireland by reading related blog posts now.

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