Today we are going to discuss in 6 easy steps, how to issue shares in your company to new investors through the CRO.
[TL;DR] – Watch the video below ↓ and subscribe to our channel for more great business tips.[restrict]
STEP 1: Forms & Contracts
- When you issue shares, make sure the raise is not considered a public offering (this is regulated by the Companies Act)
- Get Contracts drafted by a solicitor and once terms have been agreed, all parties should sign the contract
- Provide the Applicants with an Application Form (they should complete and return)
- Ensure your company receives the cash investment from the new investors
STEP 2: Board Resolution
- First offer the shares to existing shareholders (there are certain exceptions to this rule)
- Once 14 days have passed, you can offer the shares to the proposed new shareholder
- Convene a board meeting with all directors to consider the investment application
- Directors should “resolve to issue the shares” to the shareholder
- Complete the meeting minutes (board meeting notes)
STEP 3: Issue Share Certificates
- Under Section 99 of the Companies Acts, the company must issue share certificates within 2 months of the date of allotment.
- Get two directors (or one director and the Company Secretary) to sign and date the Share certificate.
- Don’t forget to stamp the Company Seal on the Share Certificates
STEP 4: File Form B5 with Companies Registration Office
- The company must file Form B5 with the CRO within 30 days of the date of allotment.
- Need to post Form B5 along with a bank draft / postal order / cheque of €15
- Pretty simple form to fill out
STEP 5: Update the Share Register
- Under Section 169 of the Companies Acts, the company must update the Share Register within 28 days of the board meeting.
- An entity effectively becomes a shareholder when they acquire the unconditional right to be included in the Register of Members.
STEP 6: Update Company Documents
- Ensure to include the new shareholder and shareholding when completing your B1 Annual Return on its NARD (next annual return date).
- Ensure to include the new shareholder and shareholding when completing the company Financial Statements (don’t forget to assign a portion to share capital and a portion to share premium)
Uh-oh. I need to issue shares but I’m still unsure what to do!
Talk to your accountant – or even better, get some advice from us!
So there you have it – hopefully issuing shares is a little more clear and a little less scary to you.[/restrict]