1. Companies Act 1990
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2. 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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3. What is a company? Shareholders Authorised Share Capital
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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4. What is a shareholder? I put money into the company.
I am invited to the AGM each year.
As a reward for my money I get Dividends.
I am not involved in the day to day running of the company.
At the AGM I have 1 vote per share.
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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5. 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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6. 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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7. 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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8. 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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9. 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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10. 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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11. 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.
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Certificate of Incorporation = Incorporated
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12. 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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13. Memorandum of Association states we have permission to
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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14. 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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15. Form A1 Statement of the amount of the Authorised share capital
Declaration of compliance with the Company's Acts
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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