Ireland: The Companies Act 2014 For Lenders

Last Updated: 4 June 2015
Article by Peter O達rien

The Companies Act 2014 (the Act) is due to commence on 1st June 2015 and as this date fast approaches, lenders should be aware of some of the practical changes to the law introduced by the Act which will impact on their commercial lending transactions with Irish corporations.

Registration of charges

  • Priority of Security

The Act provides for two methods of registration of charges with the Companies Registration Office (CRO). The first method consists of filing a Form C1 in the CRO. This Form C1 must be filed within 21 days after the creation of the relevant charge. After the commencement of the Act, it will not be necessary to include on the form the amount the charge secures or the fact that the charge contains a negative pledge.

The second method of registration of a charge involves the new two stage process. This consists of filing a Form C1A in the CRO, which gives notice of intention to create a charge. In order to be accepted by the CRO, the Form C1A must contain the full particulars of the charge. The second step in this two stage process is the filing of a Form C1B which must be filed within 21 days of the filing of the Form C1A. The Form C1B will reference the date of the charge and the submission number contained in the corresponding Form C1A. If this Form C1B is not filed within 21 days of the filing of the Form C1A then the corresponding Form C1A will lapse.

Under the Act, priority of security speaks from the date of registration at the CRO and not the date of creation of the charge itself as was previously the case under the Companies Act 1963 (the 1963 Act).

  • E-Filing

The Act will also allow for e-filing in order to register the charge at the CRO. This aims to create a more intuitive online filing environment and enable filing procedures for the registration of charges to operate more efficiently.

  • Definition of a 'Charge'

The Act also sets out a new detailed definition of a charge pursuant to which registration is required with the CRO. As a result of the changes made by this definition, there will no longer be a requirement to ensure registration with the CRO in respect of a charge over a bank account or a charge over shares. Lenders should note however, that a filing ought still be made at the CRO in respect of a debenture which contains security over a mix of registrable and non-registrable assets.

Financing documentation

  • Loan Agreements - Lender consent required

Under the Act, amended constitutions must be filed to the CRO upon re-registration as one of the new forms of private companies. Therefore, lenders may soon receive requests from corporate borrowers asking for their consent in respect of any loan agreements containing covenants which restrict the borrowers from amending their constitutions.

Financial Assistance

  • Principal Purpose Test

The Act introduces widescale revisions to the existing financial assistance prohibition contained under Section 60 of the 1963 Act. Section 60 prohibits a company giving, either directly or indirectly, any financial assistance 'for the purpose of or in connection with a purchase or subscription...for any shares in the company, or, where the company is a subsidiary company, in its holding company.'

There has been much discussion as to the legal definition of 'in connection with', little of which has provided clarification as to the instances in which a company can enter into such transactions. This was the impetus for reform and section 60 has been replaced by section 82 of the Act which states that 'It shall not be lawful for a company to give any financial assistance for the purpose of an acquisition made or to be made by any person of any shares in the company, or , where the company is a subsidiary, in its holding company.'

The scope of the prohibition is narrowed with the deletion of the 'in connection with' criteria and the inclusion of a 'principal purpose' test as the means of determining whether the transaction is permissible under the section.

Summary Approval Procedure

A key innovation under the Act is the introduction of a new Summary Approval Procedure (SAP), providing a standardised method to authorise, amongst others, the giving of financial assistance that may fall foul of the prohibition under Section 82 of the Act.

The SAP, which is modelled on the 'whitewash' procedure in section 60 of the 1963 Act, may be used to validate this and other restricted activities.

  • Declaration

The procedure to be followed in implementing the SAP differs somewhat from the traditional whitewash procedure. The SAP procedure includes the making of a declaration by the company directors as to the post-transaction solvency of the corporate borrower, following which the transaction is approved by special resolution of the company's shareholders. The directors' declaration must be in writing and made at a meeting of directors not more than 30 days before the shareholders' meeting and/or signing of the shareholders' written resolution. Failure to deliver the declaration to the CRO within 21 days of the giving of financial assistance invalidates the activity in question and from a lender's perspective the relevant transaction shall be voidable against any person who had notice of the facts which constitute the contravention.

Lenders need to be well-informed of these and a number of other changes introduced by the Act in order to ensure that their lending transactions proceed as smoothly as possible.

This article first appeared in Business & Finance Magazine's May issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you致e read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq痴 use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor痴 own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq痴 Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq痴 Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq痴 right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions