Available classes of shares in an Irish Company
When Incorporating a company in Ireland there are different classes of shares to be considered and its important to understand the available classes of shares in an Irish Company.
When incorporating an Irish Company a constitution is put in place which outlines the shareholdings and how they work. The Companies Act 2014 allows for different classes of shares to be put in place and in most cases it relates to voting rights within the shareholders. The constitution of the company is a very important document and it should be noted that this document should not be a one page document showing who owns the shares, it should contain important information outlining what is allowed within the company and it should activate everything within the act that keeps the Officers compliant. If you are unsure about the constitution please ask your agent before you incorporate. Share classes and the owners of the shares are listed within the constitution usually on the final page of a constitution.
The most common type of share class is ordinary shares. Ordinary shares are issued for cash or Non-Cash being invested in the business. Powers and voting rights can be listed within the constitution being outlines between different share classes like Ordinary A, B, C shares etc.
A golden share is generally issued to a founding member to hold complete control over the company, and to facilitate smooth financial transactions between different entities.
Redeemable shares can be redeemed for cash once a company has sufficient reserves to do so. It allows a shareholder to remove risk by knowing that they can extract funds for shares at a point in time.
Preference Share Options
Preference or deferred shares can be put in place where the ordinary shares are already in place. The function of preference shares are to provide priority where the company is being wound up, or where dividends are paid out. Shareholders who have invested more in the company generally negotiate preference shares.
Share options can be more commonly known as sweat equity. Companies will put these in place for employees as an incentive for profit sharing schemes. The schemes that can be put in place allow for employees to have a tax efficient way of taking shares in a company.