Companies Act, 1959

What is this act about?

This law, the Companies Act, 1959, amends and expands previous company laws, primarily focusing on how companies manage their shares, financial assistance, and the relationships between holding and subsidiary companies.

Who it applies to: Companies limited by shares; Holding companies and their subsidiary companies.

At a glance

Country: Ireland
Area of law: Commercial and corporate law
Articles: 12
Source: irishstatutebook.ie
Text retrieved: 2026-06-17
Explanation updated: 2026-07-07

What does this act regulate?

The issuance and redemption of preference shares by companies.
Prohibitions on companies providing financial assistance for the purchase of their own shares or those of their holding company.
Rules regarding a subsidiary company's membership in its holding company.
The definitions of "holding company" and "subsidiary" for the purposes of the Act.

Who does this act apply to?

Companies limited by shares.
Holding companies and their subsidiary companies.
Directors and managers of companies.

What are the key points?

A company limited by shares may issue redeemable preference shares if authorized by its articles, but these shares must be fully-paid and redeemed from profits or fresh share issues.
Companies are generally prohibited from giving financial assistance for the purchase of their own shares or their holding company's shares, with some exceptions for employee share schemes or lending as part of ordinary business.
A body corporate cannot be a member of its holding company, and any such allotment or transfer of shares is void, with exceptions for personal representatives or trustees.
A company is deemed a subsidiary if another company controls its board of directors or holds more than half in nominal value of its equity share capital or voting shares.

Commercial and corporate law

Registry of Friendly Societies Act, 1936

Transport Act, 1966

Shannon Free Airport Development Company Limited (Amendment) Act, 1989

Industrial and Commercial Property (Protection) (Neuchatel Agreement) Act, 1947

Irish Shipping Limited (Amendment) Act, 1984

Industrial Development Act 2009

European Communities and Swiss Confederation Act, 2001

Industrial Grants (Amendment) Act, 1964

Commercial and corporate law

Legal text

Contents (12)

Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Section 11
Section 12

Companies Act, 1959 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.ie) Translations (Houses of the Oireachtas) Government Publications for Sale EU Law (EUR-Lex) FAQ Disclaimer Feedback Helpdesk Search Baile Reachtaíocht Achtanna an Oireachtais Ionstraimí Reachtúla Reachtaíocht Réamh-1922 Bunreacht Acmhainní Seachtracha Billí (Tithe an Oireachtais) Iris Oifigiúil Achtanna Athbhreithnithe (CAD) (An Coimisiún um Athchóiriú an Dlí) Liosta Rangaithe Reachtaíochta Aistriúcháin (achtanna.ie) Aistriúcháin (Tithe an Oireachtais) Foilseacháin Rialtais ar Díol Dlí AE (EUR-Lex) CCanna (Ceisteanna Coitianta) Séanadh Aiseolas Deasc chabhrach Cuardach TitleTeideal Year(s) or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 1959 Companies Act, 1959 Companies Act, 1959 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Print Full ActPriontáil an tAcht Iomlán Number 7 of 1959.

COMPANIES ACT, 1959.

ARRANGEMENT OF SECTIONS Section

Section 1

Interpretation.

Section 2

Power to issue redeemable preference shares.

Section 3

Prohibition of provision of financial assistance by company for purchase of or subscription for its own, or its holding company's shares.

Section 4

Membership of holding company.

Section 5

Meaning of “holding company” and “subsidiary”.

Section 6

Extraordinary and special resolutions.

Section 7

Annual list of members.

Section 8

Power to acquire shares of shareholders dissenting from scheme or contract approved by majority.

Section 9

Change of name of company registered by name specified by statute.

Section 10

Construction of references, in other Acts to holding companies and subsidiary companies.

Section 11

Repeal.

Section 12

Short title and collective citation.

Acts Referred to Companies (Consolidation) Act, 1908 1908, c. 69 Companies (Foreign Interests) Act, 1917 1917, c. 18 Number 7 of 1959.

COMPANIES ACT, 1959.

AN ACT TO AMEND AND EXTEND THE COMPANIES ACTS, 1908 TO 1924. [5th May, 1959.] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:— Interpretation.

1.—(1) In this Act— “the principal Act” means the Companies (Consolidation) Act, 1908 , and references in this Act to the principal Act or to any provision of that Act shall be construed as references to that Act or that provision as amended by any subsequent enactment, including this Act; “holding company” means a holding company as defined by section 5 of this Act; “subsidiary” means a subsidiary as defined by section 5 of this Act.

(2)References in this Act to a body corporate shall be construed as not including a corporation sole but as including a company incorporated outside the State.

(3)This Act shall be construed as one with the Companies Acts, 1908 to 1924.

Power to issue redeemable preference shares.

2.—(1) Subject to the provisions of this section, a company limited by shares may, if so authorised by its articles, issue preference shares which are, or at the option of the company are to be liable, to be redeemed:

Provided that— (a) no such shares shall be redeemed except out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption; (b) no such shares shall be redeemed unless they are fully-paid; (c) the premium, if any, payable on redemption, must have been provided for out of the profits of the company or out of the company's share premium account (if any) before the shares are redeemed; (d) where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend be transferred to a reserve fund, to be called “the capital redemption reserve fund”, a sum equal to the nominal amount of the shares redeemed, and the provisions of the principal Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the capital redemption reserve fund were paid-up share capital of the company.

(2)Subject to the provisions of this section, the redemption of preference shares thereunder may be effected on such terms and in such manner as may be provided by the articles of the company.

(3)The redemption of preference shares under this section by a company shall not be taken as reducing the amount of the company's authorised share capital.

(4)Where in pursuance of this section a company has redeemed or is about to redeem any preference shares, it shall have power to issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued, and accordingly the share capital of the company shall not for the purpose of any enactments relating to stamp duty be deemed to be increased by the issue of shares in pursuance of this subsection:

Provided that, Where new shares are issued before the redemption of the old shares, the new shares shall not, so far as relates to stamp duty, be deemed to have been issued in pursuance of this subsection unless the old shares are redeemed within one month after the issue of the new shares.

(5)The capital redemption reserve fund may, notwithstanding anything in this section, be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares.

(6)There shall be included in every balance sheet of a company which has issued redeemable preference shares a statement specifying what part of the issued capital of the company consists of such shares, the amount paid up thereon and the earliest date on which the company has power to redeem those shares.

If a company fails to comply with the provisions of this subsection, the company shall be liable on summary conviction to a fine not exceeding one hundred pounds and every director and manager of the company who knowingly and wilfully authorises or permits the failure shall be liable on summary conviction to a like penalty.

Prohibition of provision of financial assistance by company for purchase of or subscription for its own, or its holding company's shares.

3.—(1) Subject as provided in this section, it shall not be lawful for a company to give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company, or, where the company is a subsidiary company, in its holding company:

Provided that nothing in this section shall be taken to prohibit— (a) where the lending of money is part of the ordinary business of a company, the lending of money by the company in the ordinary course of its business; (b) the provision by a company, in accordance with any scheme for the time being in force, of money for the purchase of, or subscription for, fully-paid shares in the company or its holding company, being a purchase or subscription by trustees of or for shares to be held by or for the benefit of employees or former employees of the company, including any person who is or was a director holding a salaried employment or office in the company; (c) the making by a company of loans to persons, other than directors, bona fide in the employment of the company with a view to enabling those persons to purchase or subscribe for fully-paid shares in the company or its holding company to be held by themselves by way of beneficial ownership.

(2)The aggregate amount of any outstanding loans made under the authority of provisos (b) and (c) to subsection (1) of this section shall be shown as a separate item in every balance sheet of the company.

(3)If a company acts in contravention of this section, the company shall be liable on summary conviction to a fine not exceeding one hundred pounds and every director and manager of the company who knowingly and wilfully authorises or permits the contravention shall be liable on summary conviction to the like penalty.

Membership of holding company.

4.—(1) Except in the cases hereafter in this section mentioned, a body corporate cannot be a member of a company which is its holding company, and any allotment or transfer of shares in a company to its subsidiary shall be void.

(2)Nothing in this section shall apply where the subsidiary is concerned as personal representative, or where it is concerned as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.

(3)This section shall not prevent a subsidiary which is, at the commencement of this Act, a member of its holding company from continuing to be a member but, subject to the last foregoing subsection, the subsidiary shall have no right to vote at meetings of the holding company or any class of members thereof.

(4)Subject to subsection (2) of this section, subsections (1) and (3) thereof shall apply in relation to a nominee for a body corporate which is a subsidiary, as if references in the said subsections (1) and (3) to such a body corporate included references to a nominee for it.

(5)In relation to a company limited by guarantee or unlimited which is a holding company, the reference in this section to shares, whether or not it has a share capital, shall be construed as including a reference to the interest of its members as such, whatever the form of that interest.

Meaning of “holding company” and “subsidiary”.

5.—(1) For the purposes of this Act, a company shall, subject to the provisions of subsection (3) of this section, be deemed to be a subsidiary of another if, but only if,— (a) that other— (i) is a member of it and controls the composition of its board of directors; or (ii) holds more than half in nominal value of its equity share capital; or (iii) holds more than half in nominal value of its shares carrying voting rights (other than voting rights which arise only in specified circumstances); or (b) the first mentioned company is a subsidiary of any company which is that other's subsidiary.

(2)For the purposes of the foregoing subsection, the composition of a company's board of directors shall be deemed to be controlled by another company if, but only if, that other company by the exercise of some power exercisable by it without the consent or concurrence of any other person can appoint or remove the holders of all or a majority of the directorships; but for the purposes of this provision that other company shall be deemed to have power to appoint to a directorship with respect to which any of the following conditions is satisfied, that is to say— (a) that a person cannot be appointed thereto without the exercise in his favour by that other company of such a power as aforesaid; or (b) that a person's appointment thereto follows necessarily from his appointment as director of that other company; or (c) that the directorship is held by that other company itself or a subsidiary of it.

(3)In determining whether one company is a subsidiary of another— (a) any shares held or power exercisable by that other in a fiduciary capacity shall be treated as not held or exercisable by it; (b) subject to the two following paragraphs, any shares held or power exercisable— (i) by any person as a nominee for that other (except where that other is concerned only in a fiduciary capacity); or (ii) by, or by a nominee for, a subsidiary of that other, not being a subsidiary which is concerned only in a fiduciary capacity; shall be treated as held or exercisable by that other; (c) any shares held or power exercisable by any person by virtue of the provisions of any debentures of the first-mentioned company or of a trust deed for securing any issue of such debentures shall be disregarded; (d) any shares held or power exercisable by, or by a nominee for, that other or its subsidiary (not being held or exercisable as mentioned in the last foregoing paragraph) shall be treated as not held or exercisable by that other if the ordinary business of that other or its subsidiary, as the case may be, includes the lending of money and the shares are held or power is exercisable as aforesaid by way of security only for the purposes of a transaction entered into in the ordinary course of that business,

(4)For the purposes of this Act, a company shall be deemed to be another's holding company if, but only if, that other is its subsidiary.

(5)In this section “company” includes any body corporate and “equity share capital” means, in relation to a company, its issued share capital excluding any part thereof which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution.

Extraordinary and special resolutions.

6.—(1) Section 69 of the principal Act is hereby amended— (a) by the substitution in subsection (1) of “as, being entitled so to do, vote” for “entitled to vote as are present”; (b) by the substitution of the following subsection for subsection (2): “(2) A resolution shall be a special resolution when it has been passed by such a majority as is required for the passing of an extraordinary resolution and at a general meeting of which not less than twenty-one days' notice specifying the intention to propose the resolution as a special resolution has been duly given:

Provided that if all the members entitled to attend and vote at any such meeting so agree, a resolution may be proposed and passed as a special resolution at a meeting of which less than twenty-one days' notice has been given.”; (c) by the deletion of “or confirmed” in subsection (3) and in subsection (4); and (d) by the substitution in subsection (5) of “cast for and against the resolution” for “to which each member is entitled by the articles of the company”.

(2)Section 70 of the principal Act is hereby amended— (a) by the substitution in subsection (1) of “passing of the resolution” for “confirmation of the special resolution, or from the passing of the extraordinary resolution, as the case may be,”; and (b) by the substitution in subsection (2) of “passing” for “confirmation”.

(3)(a) Any reference to section 69 or 70 of the principal Act contained in any Act which was passed before the passing of this Act shall be construed as a reference to that section as amended by this section. (b) Any reference to an extraordinary or special resolution of a company contained in any Act which was passed or document which existed before the passing of this Act shall be construed as a reference to such resolution as defined by section 69 of the principal Act as amended by this section.

Annual list of members.

7.—Subsection (2) of section 26 of the principal Act shall have effect as if it contained the following additional provisions: (a) a provision that the list may, in any year, if the list for any of the five immediately preceding years has given as at the date of that list the full particulars required by the said subsection (2), give only such of the said particulars as relate to persons ceasing to be or becoming members since the date of the last list and to shares transferred since that date; and (b) a provision that if the names in the list are not arranged in alphabetical order, the list must have annexed to it an index sufficient to enable the name of any person in the list to be readily found.

Power to acquire shares of shareholders dissenting from scheme or contract approved by majority.

8.—(1) Where a scheme or contract involving the transfer of shares or any class of shares in a company (in this section referred to as “the transferor company”) to another company, whether a company within the meaning of the principal Act or not (in this section referred to as “the transferee company”), has, within four months after the making of the offer in that behalf by the transferee company been approved by the holders of not less than four-fifths in value of the shares whose transfer is involved (other than shares already held at the date of the offer by, or by a nominee for, the transferee company or its subsidiary), the transferee company may, at any time within two months after the expiration of the said four months, give notice to any dissenting shareholder that it desires to acquire his shares, and when such notice is given the transferee company shall, unless on an application made by the dissenting shareholder within one month from the date on which the notice was given the court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which, under the scheme or contract, the shares of the approving shareholders are to be transferred to the transferee company:

Provided that where shares in the transferor company of the same class or classes as the shares whose transfer is involved are already held, as aforesaid to a value greater than one-fifth of the aggregate of their value and that of the shares (other than those already held as aforesaid) whose transfer is involved, the foregoing provisions of this subsection shall not apply unless— (a) the transferee company offers the same terms to all holders of the shares (other than those already held as aforesaid) whose transfer is involved, or, where those shares include shares of different classes, of each class of them; and (b) the holders who approve the scheme or contract, besides holding not less than four-fifths in value of the shares (other than those already held as aforesaid) whose transfer is involved, are not less than three-fourths in number of the holders of those shares.

(2)Where, in pursuance of any such scheme or contract as aforesaid, shares in a company are transferred to another company or its nominee, and those shares together with any other shares in the first-mentioned company held by, or by a nominee for, the transferee company or its subsidiary at the date of the transfer comprise or include four-fifths in value of the shares in the first-mentioned company or of any class of those shares, then— (a) the transferee company shall within one month from the date of the transfer (unless on a previous transfer in pursuance of the scheme or contract it has already complied with this requirement) give notice of that fact to the holders of the remaining shares or of the remaining shares of that class, as the case may be, who have not assented to the scheme or contract; and (b) any such holder may within three months from the giving of the notice to him require the transferee company to acquire the shares in question; and where a shareholder gives notice under paragraph (b) of this subsection with respect to any shares, the transferee company shall be entitled and bound to acquire those shares on the terms on which under the scheme or contract the shares of the approving shareholders were transferred to it, or on such other terms as may be agreed or as the court on the application of either the transferee company or the shareholder thinks fit to order.

(3)Where a notice has been given by the transferee company under subsection (1) of this section and the court has not, on an application made by the dissenting shareholder, ordered to the contrary, the transferee company shall, on the expiration of one month from the date on which the notice has been given, or, if an application to the court by the dissenting shareholder is then pending, after that application has been disposed of, transmit a copy of the notice to the transferor company together with an instrument of transfer executed on behalf of the shareholder by any person appointed by the transferee company and on its own behalf by the transferee company, and pay or transfer to the transferor company the amount or other consideration representing the price payable by the transferee company for the shares which by virtue of this section that company is entitled to acquire, and the transferor company shall thereupon register the transferee company as the holder of those shares:

Provided that an instrument of transfer shall not be required for any share for which a share warrant is for the time being outstanding.

(4)Any sums received by the transferor company under this section shall be paid into a separate bank account, and any such sums and any other consideration so received shall be held by that company on trust for the several persons entitled to the shares in respect of which the said sums or other consideration were respectively received.

(5)The following provisions shall have effect in relation to the giving by the transferee company of notices under this section: (a) a notice may be given either personally or by sending it by registered post to the shareholder to his address registered in the books of the transferor company, or, if he has no address within the State so registered, to the address, if any, within the State supplied by him to the transferor company for the giving of notices to him, (b) if the shareholder has no address within the State so registered and has not supplied to the transferor company an address within the State for the giving of notices to him, a notice addressed to him and advertised in a newspaper circulating in the neighbourhood of the registered office of the transferor company, shall be deemed to be duly given to him on the day on which the advertisement appears, (c) a notice may be given to the joint holders of a share by giving the notice to the joint holder named first in the register in respect of the share, (d) a notice may be given to the persons entitled to a share in consequence of the death or bankruptcy of the shareholder by sending it to them by registered post, the letter being addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description, at the address, if any, in the State supplied for the purpose by the persons claiming to be so entitled, or (until such an address had been so supplied) by giving the notice in any manner in which it might have been given if the death or bankruptcy had not occurred.

(6)In this section “dissenting shareholder” includes a shareholder who has not assented to the scheme or contract and any shareholder who has failed or refused to transfer his shares to the transferee company in accordance with the scheme or contract.

Change of name of company registered by name specified by statute.

9.—A company which was registered by a name specified by statute, may, notwithstanding anything contained in that statute, change its name in accordance with subsection (3) of section 8 of the principal Act, but if the Minister for Industry and Commerce is of opinion that any other Minister is concerned in the administration of the statute which specified the name of the company, he shall not approve of the change of name save after consultation with that other Minister.

Construction of references in other Acts to holding companies and subsidiary companies.

10.—References, in whatever terms, in any Act passed before the passing of this Act to a holding company or to a subsidiary company shall be construed in like manner as if this Act had not been passed.

Repeal.

11.—The Companies (Foreign Interests) Act, 1917, is hereby repealed.

Short title and collective citation.

12.—(1) This Act may be cited as the Companies Act, 1959.

(2)The Companies Acts, 1908 to 1924, and this Act may be cited together as the Companies Acts, 1908 to 1959.

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