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41 2006

Investment Funds, Companies and Miscellaneous Provisions Act 2006

PART 2

Amendments of Companies Acts

Statutory declarations for purposes of Companies Acts.

6 .— (1) A statutory declaration made in a place outside the State (in pursuance of or for the purposes of the Companies Acts) shall be regarded as having been validly made (in pursuance of those Acts or for the purposes of them) if it is made in such a place before—

(a) a person entitled under the Solicitors Act 1954 to practise as a solicitor in the State, or

(b) a person authorised, under the law of that place, to administer oaths in that place and subsection (3), (4) or (5), as the case may be, is complied with.

(2) Subsection (1) is—

(a) without prejudice to the circumstances set out in the Statutory Declarations Act 1938 in which a statutory declaration may be made, and

(b) in addition to, and not in substitution for, the circumstances provided under the Diplomatic and Consular Officers (Provision of Services) Act 1993 or any other enactment in which a statutory declaration made by a person in a place outside the State is regarded as a statutory declaration validly made (whether for purposes generally or any specific purpose).

(3) In cases falling within subsection (1)(b) and unless subsection (4) or (5) applies, the signature of the person making the declaration (the “declarer”) and, to the extent that that law requires either or both of the following to be authenticated:

(a) the capacity in which the declarer has acted in making that declaration,

(b) the seal or stamp of the person who has administered the oath to the declarer,

shall be authenticated in accordance with the law of the place referred to in subsection (1)(b).

(4) If the place referred to in subsection (1)(b) is situate in a state that is a contracting party to the EC Convention, then (unless that Convention does not extend to that particular place) the provisions of that Convention with regard to authentication shall apply in relation to the statutory declaration concerned, including the procedures for verification of any matter in circumstances where serious doubts, with good reason, arise in respect of that matter.

(5) If the place referred to in subsection (1)(b) is situate in a state that is a contracting party to the Hague Convention but is not a contracting party to the EC Convention, then (unless the Hague Convention does not extend to that particular place) the provisions of the Hague Convention with regard to authentication shall apply in relation to the statutory declaration concerned, including the procedures for verification of any matter in circumstances where serious doubts, with good reason, arise in respect of that matter.

(6) The registrar of companies may, before receiving any statutory declaration purporting to be made in pursuance of, or for the purposes of, the Companies Acts, being a declaration—

(a) falling within subsection (1)(b), and

(b) to which neither the provisions of the EC Convention nor the Hague Convention apply as regards the authentication of it,

require such proof, as he or she considers appropriate, of any particular requirements of the law referred to in subsection (3).

(7) A statutory declaration made before the passing of this Act—

(a) in a place outside the State,

(b) before—

(i) if the place is not a place in England and Wales, Northern Ireland or Scotland, a person authorised, under the law of that place, to administer oaths or a person entitled under the Solicitors Act 1954 to practise as a solicitor in the State, or

(ii) if the place is a place in England and Wales, Northern Ireland or Scotland—

(I) a person entitled under the law of England and Wales, Northern Ireland or Scotland, as the case may be, to practise as a solicitor in England and Wales, Northern Ireland or Scotland, as the case may be, or to administer oaths there, or

(II) a person entitled under the Solicitors Act 1954 to practise as a solicitor in the State,

and

(c) purporting to be made in pursuance of, or for the purposes of, the Companies Acts,

shall, if the declaration was delivered to the registrar of companies before that passing, be valid and deemed always to have been valid notwithstanding anything in the Diplomatic and Consular Officers (Provision of Services) Act 1993 or any other enactment and anything done on foot of that declaration’s delivery to the registrar, including any subsequent registration of that declaration by the registrar, shall be valid and be deemed always to have been valid notwithstanding anything in that Act or any other enactment.

(8) Nothing in subsection (7) affects any proceedings commenced before the passing of this Act.

(9) In this section—

“EC Convention” means the Convention Abolishing the Legalisation of Documents in the Member States of the European Communities of 25 May 1987;

“ Hague Convention ” means the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents done at the Hague on 5 October 1961;

“statutory declaration”, in addition to the meaning assigned to it by the Interpretation Act 2005 , means a declaration that conforms with the requirements of the Statutory Declarations Act 1938 , save for any requirements contained in section 1 of that Act, or any other provision of it, expressly or impliedly limiting the class of persons who may take and receive a declaration or the places in which a declaration may be received or taken.

Amendment of section 33 of Companies Act 1963.

7 .— The following section is substituted for section 33 of the Companies Act 1963 :

“Meaning of ‘private company’.

33.— (1) For the purposes of this Act, ‘ private company ’ means a company which has a share capital and which, by its articles—

(a) restricts the right to transfer its shares, and

(b) limits the number of its members to 99 or fewer persons, not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company, were, while in that employment, and have continued after the determination of that employment to be, members of the company, and

(c) prohibits any invitation or offer to the public to subscribe for any shares, debentures or other securities of the company.

(2) A provision of a company’s articles that prohibits any invitation to the public to subscribe for any shares or debentures of the company shall be construed as a prohibition on any invitation or offer being made to the public to subscribe for any shares, debentures or other securities of the company.

(3) Where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this section, be treated as a single member.

(4) Subsections (5) and (6) shall apply for the purposes of —

(a) subsection (1)(c), and

(b) unless a contrary intention appears in the company’s articles, any provision of a company’s articles which—

(i) corresponds in its terms to those of subsection (1)(c),

(ii) incorporates by reference the terms of subsection (1)(c), or

(iii) has the same legal effect as subsection (1)(c) even though its terms are not identical to those of subsection (1)(c) (and the cases to which this subparagraph applies include the case where subsection (2) applies to the interpretation of the provision).

(5) Each of the following offers of debentures by a company (wheresoever made) shall not be regarded as falling within subsection (1)(c) or the provision of a company’s articles referred to in subsection (4)(b), namely—

(a) an offer of debentures addressed solely to qualified investors,

(b) an offer of debentures addressed to fewer than 100 persons, other than qualified investors,

(c) an offer of debentures addressed to investors where the minimum consideration payable pursuant to the offer is at least €50,000 per investor, for each separate offer,

(d) an offer of debentures whose denomination per unit amounts to at least €50,000,

(e) an offer of debentures where the offer expressly limits the amount of the total consideration for the offer to less than €100,000,

(f) an offer of those classes of instruments which are normally dealt in on the money market (such as treasury bills, certificates of deposit and commercial papers) having a maturity of less than 12 months.

(6) The following offer of shares by a company (of any amount or wheresoever made) shall not be regarded as falling within subsection (1)(c) or the provision of a company’s articles referred to in subsection (4)(b), namely an offer of shares addressed to—

(a) qualified investors, or

(b) 99 or fewer persons, or

(c) both qualified investors and 99 or fewer other persons.

(7) A word or expression that is used in this section and is also used in the Prospectus (Directive 2003/71/EC) Regulations 2005 (S.I. No. 324 of 2005) shall have in this section the same meaning as it has in those Regulations.

(8) For the purposes of subsection (7), the Regulations referred to in that subsection shall have effect as if Regulation 8 were omitted therefrom.”.

Amendment of section 21 of Companies (Amendment) Act 1983.

8 .— The following section is substituted for section 21 of the Companies (Amendment) Act 1983 :

“Shares and debentures of private company not to be offered to public.

21.— (1) A private company and any officer of the company who is in default shall be guilty of an offence if the company—

(a) offers to the public (whether for cash or otherwise) any shares in or debentures of the company, or

(b) allots, or agrees to allot, (whether for cash or otherwise) any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public.

(2) Subsection (1) does not apply to the following offers or allotments (wheresoever made):

(a) an offer of debentures addressed or allotment made solely to qualified investors,

(b) an offer of debentures addressed to fewer than 100 persons, other than qualified investors,

(c) an offer of debentures addressed to investors where the minimum consideration payable pursuant to the offer is at least €50,000 per investor, for each separate offer,

(d) an offer of debentures whose denomination per unit amounts to at least €50,000,

(e) an offer of debentures where the offer expressly limits the amount of the total consideration for the offer to less than €100,000, or

(f) an offer of those classes of instruments which are normally dealt in on the money market (such as treasury bills, certificates of deposit and commercial papers) having a maturity of less than 12 months,

(g) an offer of shares addressed to—

(i) qualified investors, or

(ii) 99 or fewer persons, or

(iii) both qualified investors and 99 or fewer other persons,

(h) an allotment of shares or debentures, or an agreement to make such an allotment, with a view to those shares or debentures being the subject of any one or more of the offers referred to in paragraphs (a) to (g).

(3) A word or expression that is used in this section and is also used in the Prospectus (Directive 2003/71/EC) Regulations 2005 (S.I. No. 324 of 2005) shall have in this section the same meaning as it has in those Regulations.

(4) Nothing in this section shall affect the validity of any allotment or sale of shares or debentures or of any agreement to allot or sell shares or debentures.

(5) A person guilty of an offence under subsection (1) shall be liable on summary conviction to a fine not exceeding €1,904.61.”.

Exemption from audit requirement.

9 .— (1) Part III of the Companies (Amendment) (No. 2) Act 1999 is amended—

(a) in section 32(1) (as amended by the Companies (Auditing and Accounting) Act 2003 )—

(i) by substituting “Subject to sections 32A and 32B” for “Subject to sections 32A and 33(1)”, and

(ii) by substituting the following paragraph for paragraph (ii):

“(ii) unless and until—

(I) circumstances, if any, arise in that financial year which result in one or more of the said conditions not being satisfied in respect of that year, or

(II) circumstances otherwise arise by reason of which the said company is not entitled to the exemption in respect of that financial year,

the provisions mentioned in subsection (2) shall not apply to the said company in respect of that year.”,

(b) in section 32(3)—

(i) by substituting, in paragraph (a)(ii), “€7.3 million” for “€1,500,000” (inserted by the Companies (Auditing and Accounting) Act 2003 ), and

(ii) by substituting, in paragraph (a)(iii), “€3.65 million” for “£1,500,000”,

(c) by inserting the following section after section 32A (inserted by the Companies (Auditing and Accounting) Act 2003 ):

“Exemption conditional on notice under section 33(1) not being served.

32B.— Notwithstanding that the conditions specified in section 32(3) are satisfied, a company is not entitled to the exemption in a financial year if a notice, with respect to that year, is served, under and in accordance with section 33(1) and (2), on the company.”,

(d) in section 33—

(i) by substituting the following subsections for subsections (1) and (2):

“(1) Any member or members of a company holding shares in the company that confer, in aggregate, not less than one-tenth of the total voting rights in the company may serve a notice in writing on the company stating that that member or those members do not wish the exemption to be available to the company in a financial year specified in the notice.

(2) A notice under subsection (1) may be served on the company either—

(a) during the financial year immediately preceding the financial year to which the notice relates, or

(b) during the financial year to which the notice relates (but not later than 1 month before the end of that year).”,

(ii) by deleting subsection (3), and

(iii) in subsection (4), by substituting the following paragraph for paragraph (c):

“(c) no notice under subsection (1) has, in accordance with subsection (2), been served on the company, and”,

and

(e) in section 35, by substituting the following subsection for subsection (1):

“(1) Whenever by reason of—

(a) circumstances referred to in section 32(1)(ii) arising in the financial year concerned the exemption ceases to have effect in relation to a company in respect of that year, or

(b) circumstances otherwise arising a company is not entitled to the exemption in respect of the financial year concerned,

it shall be the duty of the directors of the company to appoint an auditor of the company as soon as may be after those circumstances arise and such an appointment may be made by the directors notwithstanding the provisions of section 160 of the Principal Act.”.

(2) Nothing in subsection (1)(b) prejudices the future exercise of the power under subsection (7) of section 32 of the Companies (Amendment) (No. 2) Act 1999 in relation to subsection (3) (as it stands amended by subsection (1)(b)) of that section 32.

Application of section 9 and transitional provisions.

10 .— (1) The amendments effected by section 9 shall apply as respects—

(a) a financial year of a company that commences not earlier than the commencement of that section, and

(b) subject to subsection (2), a financial year of a company that ends not earlier than 2 months after the commencement of that section (not being a financial year to which paragraph (a) applies).

(2) In cases falling within subsection (1)(b), section 9 shall have effect as if, instead of the subsection (2) inserted by that section in section 33 of the Companies (Amendment) (No. 2) Act 1999 , there were inserted the following subsection in that section 33 :

“(2) In cases falling within section 10 (1)(b) of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, a notice under subsection (1) may be served on the company not later than 1 month before the end of the financial year to which the notice relates.”.

Restrictions on, and disqualifications of, persons from acting as directors, etc.

11.— (1) Section 150 (as amended by the Company Law Enforcement Act 2001 ) of the Act of 1990 is amended by substituting the following subsection for subsection (4B):

“(4B) The court, on the hearing of an application for a declaration under subsection (1) by the Director, a liquidator or a receiver (in this subsection referred to as the ‘applicant’), may order that the directors against whom the declaration is made shall bear—

(a) the costs of the application, and

(b) the whole (or such portion of them as the court specifies) of the costs and expenses incurred by the applicant—

(i) in investigating the matters the subject of the application, and

(ii) in so far as they do not fall within paragraph (a), in collecting evidence in respect of those matters,

including so much of the remuneration and expenses of the applicant as are attributable to such investigation and collection.”.

(2) Section 160 (as amended by the Company Law Enforcement Act 2001 ) of the Act of 1990 is amended by substituting the following subsection for subsection (9B):

“(9B) The court, on the hearing of an application for a disqualification order under subsection (2), may order that the persons disqualified or against whom a declaration under section 150 is made as a result of the application shall bear—

(a) the costs of the application, and

(b) in the case of an application by the Director, the Director of Public Prosecutions, a liquidator, a receiver or an examiner (in this paragraph referred to as the ‘applicant’), in addition to the costs referred to in paragraph (a), the whole (or such portion of them as the court specifies) of the costs and expenses incurred by the applicant—

(i) in investigating the matters the subject of the application, and

(ii) in so far as they do not fall within paragraph (a), in collecting evidence in respect of those matters,

including so much of the remuneration and expenses of the applicant as are attributable to such investigation and collection.”.

Dematerialisation.

12 .— Section 239 of the Act of 1990 is amended—

(a) by inserting the following subsection after subsection (1):

“(1A) Subject to any exceptions that may be specified in the regulations, the regulations may, in respect of—

(a) securities of companies admitted to trading on a regulated market,

(b) securities of companies admitted to trading on a market other than a regulated market, or

(c) securities of public limited companies of a specified class,

provide that the means provided by the regulations for evidencing and transferring title to such securities shall constitute the sole and exclusive means for doing so (and, accordingly, that any purported transfer of such securities otherwise than by those means shall be void).”,

(b) in subsection (5), by adding the following paragraph:

“(c) The regulations may—

(i) require the provision of statements by a company to holders of securities (at specified intervals or on specified occasions) of the securities held in their name;

(ii) make provision removing any requirement for the holders of securities to surrender existing share certificates to issuers; and

(iii) make provision that the requirements of the regulations supersede any existing requirements in the articles of association of a company which would be incompatible with the requirements of the regulations.”,

and

(c) by inserting the following subsection after subsection (5):

“(5A) Without prejudice to the generality of subsections (4) and (5), the regulations shall not contain provisions that would result in a person who, but for the regulations, would be entitled—

(a) to have his or her name entered in the register of members of a company, or

(b) to give instructions in respect of any securities,

ceasing to be so entitled.”.

Amendment of section 43 of Act of 2005.

13 .— The following section is substituted for section 43 of the Act of 2005:

“Restriction of liability where non-equity securities solely involved.

43.— Where a prospectus is issued solely in respect of non-equity securities—

(a) only—

(i) the offeror or the person who has sought the admission of the securities to which the prospectus relates to trading on a regulated market, and

(ii) subject to, and to the extent provided in, paragraph (c), the guarantor (if any),

and no other person referred to in section 41 shall be liable under that section in the circumstances in which that section applies unless—

(I) the prospectus expressly provides otherwise, or

(II) that other such person is convicted on indictment of an offence created by Irish prospectus law or an offence under section 48 in respect of the issue of that prospectus,

(b) section 383(3) of the Act of 1963 shall not apply to the directors or secretary of the issuer to the extent that such application would thereby impose a liability under section 41 on such directors or secretary, and

(c) no liability shall attach under section 41 to a guarantor of such securities save in respect of statements included in, or information omitted from, the prospectus that relate to the guarantor or the guarantee given by the guarantor.”.

Amendment of section 45 of Act of 2005.

14 .— The following section is substituted for section 45 of the Act of 2005:

“Expert’s consent to inclusion in prospectus of statement attributed to him or her.

45.— (1) The prohibition in subsection (2) only applies in relation to a prospectus if EU prospectus law requires the inclusion in the prospectus of a statement of the kind referred to in paragraph (b) of that subsection.

(2) A prospectus including a statement that is attributed to an expert shall not be issued unless—

(a) the expert has given and has not, before the publication of the prospectus, withdrawn, in writing, his or her consent to the inclusion in the prospectus of the statement in the form and context in which it is included, and

(b) a statement that the expert has given and not withdrawn, in writing, that consent appears in the prospectus.

(3) If any prospectus is issued in contravention of this section the issuer and every person who is knowingly a party to the issue thereof shall be guilty of an offence and liable to a fine.”.

Amendments of Act of 2005 consequential on amendment made by section 14.

15 .— The Act of 2005 is amended—

(a) in section 38, by inserting the following subsection after subsection (3):

“(3A) Without limiting the meaning of that expression in any other context in which it is used in this Part, ‘statement’ in section 45(2) (other than paragraph (b) thereof) and any other section of this Part that makes provision in respect of an expert includes a report and a valuation.”,

(b) in section 41—

(i) by re-numbering the existing section as subsection (1) thereof, and

(ii) by adding the following subsection:

“(2) In addition to the persons specified in subsection (1) as being liable in the circumstances there set out, an expert who has given the consent required by section 45 to the inclusion in a prospectus of a statement purporting to be made by him or her shall, subject to sections 42 and 43, be liable to pay compensation to all persons who acquire any securities on the faith of the prospectus for the loss or damage they may have sustained by reason of an untrue statement in the prospectus purporting to be made by him or her as an expert.”,

(c) in section 42—

(i) by deleting subsection (1),

(ii) in subsection (3)(d)(ii), by substituting “and, where required by section 45, that that person had given his or her consent to the inclusion of the statement in the prospectus” for “and that that person had given his or her consent to the issue of the prospectus”,

(iii) in subsection (4), by substituting “the inclusion in the prospectus of the statement concerned” for “the issue of the prospectus concerned”,

(iv) in subsection (5), by deleting “as a person who has authorised the issue of the prospectus”,

(v) in subsection (6)—

(I) by deleting “as a person who has authorised the issue of a prospectus”, and

(II) in paragraph (a), by substituting “the inclusion in the prospectus of the statement” for “the issue of the prospectus”,

(d) in section 44—

(i) in subsection (1)(b), by substituting “the inclusion in a prospectus of a statement purporting to be made by him or her” for “the issue of a prospectus”, and

(ii) by deleting subsection (3),

and

(e) in section 48, by deleting subsection (4).

Amendment of section 9 of Companies (Auditing and Accounting) Act 2003.

16 .— Section 9(2) of the Companies (Auditing and Accounting) Act 2003 is amended by inserting the following paragraph after paragraph (m):

“(ma) to perform the functions conferred on it by transparency (regulated markets) law (within the meaning of Part 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006) in respect of the matters referred to in Article 24(4)(h) of the Transparency (Regulated Markets) Directive (within the meaning of that Part);”.

Amendment of section 10 of Companies (Auditing and Accounting) Act 2003.

17 .— Section 10 of the Companies (Auditing and Accounting) Act 2003 is amended—

(a) in subsection (4)—

(i) in paragraph (a), by substituting “section,” for “section, or”,

(ii) in paragraph (b), by substituting “recognition of that body, or” for “recognition of that body,”,

(iii) by inserting the following paragraph after paragraph (b):

“(c) a person on whom a relevant obligation or obligations is or are imposed to comply with that obligation or those obligations,”,

and

(iv) by substituting “the body or other person concerned may fail or has failed to comply with the rule, guideline, term or condition or obligation or obligations, as the case may be.” for “the body concerned may fail or has failed to comply with the rule or guideline or with the term or condition, as the case may be.”,

and

(b) by adding the following subsection:

“(5) In subsection (4), the reference to a relevant obligation or obligations that is or are imposed on a person is a reference to an obligation or obligations that is or are imposed on the person by—

(a) provisions of transparency (regulated markets) law (within the meaning of Part 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006) that implement Article 24(4)(h) of the Transparency (Regulated Markets) Directive (within the meaning of that Part), or

(b) rules adopted by the Supervisory Authority under subsection (3) concerning the matters that relate to its functions under section 9(2)(ma).”.

Amendment of section 29 of Companies (Auditing and Accounting) Act 2003.

18 .— Section 29 of the Companies (Auditing and Accounting) Act 2003 is amended by substituting the following subsection for subsection (7):

“(7) On application under subsection (4) of section 10 for an order compelling compliance with—

(a) a rule adopted or guideline issued by the Supervisory Authority,

(b) a term or condition of recognition, or

(c) an obligation or obligations referred to in that subsection,

the Court may make any order or give any direction it thinks fit.”.