Authorised share capital is the maximum amount of shares which a company can issue. Issued share capital is the amount of shares issued (or allotted) directly from the company to shareholders. They are called allotted because they are being issued for the first time rather than being transferred from one party to another. In Ireland, directors need to be given the power to allot shares.
What Are Pre-Emption Rights?
A pre-emptive right provides that when new shares in a company are issued, existing shareholders have an automatic right of first refusal to purchase these shares in proportion to their existing shareholdings. Where pre-emption rights exist, parties other than existing shareholders are only entitled to purchase newly issued shares in the company if the existing shareholders decline to exercise their pre-emption rights.
In Irish company law, a “golden share” is a particular type of share, issued for the sole purpose of giving its holder the power to control the board of directors of the company which has allotted the golden share.
There are various methods of changing both the authorised and issued share capital in Irish companies. A common transaction would be the allotment of shares. Whilst the redenomination or consolidation of shares are options which do not commonly occur on a day to day basis, these methods can be quite effective where particular amendments to share capital are concerned.
Irish companies can have many types of share classes by setting out those classes and the rights attached to each class in their memorandum and articles of association. There are no legal definitions of such classes and shares with the same name may have different rights in different companies. If a company has only one class of shares they will be ordinary shares and will carry equal rights.