How to Allot New Shares in an Irish Company

When an Irish company allots new shares, it creates shares and issues them to a subscriber. Every allotment by a company limited by shares must generally be notified to the Companies Registration Office on Form B5 within 30 days. The decision can dilute existing owners and alter voting, dividend and control rights, so the corporate authority and transaction terms should be settled before the filing is prepared.

What is an allotment?

An allotment is the company’s decision to appropriate new shares to a person. It differs from a transfer of shares already held by an existing member. A funding round, founder issue, employee arrangement, conversion or restructuring may involve an allotment, but the precise legal steps depend on the transaction.

Read how an Irish share transfer works if existing shares—not new shares—are moving between holders.

Form B5 deadline

The CRO states that allotments should be submitted on Form B5 within 30 days of the allotment. Late filing constitutes a Category 4 offence. A company should therefore agree who will prepare, check and file the return before the board completes the allotment.

Pre-allotment checks

• confirm the company type permits shares and identify the existing issued capital;
• review the constitution, shareholder agreement and any investor documents;
• confirm the directors have authority to allot the proposed class and number;
• identify statutory or contractual pre-emption rights and obtain valid waivers where appropriate;
• check whether the class rights already appear in the constitution or a registered resolution;
• agree the consideration and when it is payable;
• model dilution, voting thresholds and beneficial-ownership changes;
• review tax, securities-law, employment and regulatory implications.

Step-by-step allotment workflow

1. Document the proposal. Specify subscriber, class, number, nominal value, premium and consideration.
2. Confirm authority and rights. Review company documents and obtain member approvals or waivers where required.
3. Approve the allotment. Record the valid board and, where necessary, shareholder decisions.
4. Receive or document consideration. Keep reliable payment or non-cash consideration evidence.
5. Update internal registers. Record the allotment and new member particulars in the register of members.
6. Issue share certificates. Prepare certificates in accordance with the law and company procedure.
7. File Form B5 within 30 days. Reconcile the form to the resolutions, register and certificates.
8. File additional documents if required. New class rights not otherwise registered may require Form B11; other capital alterations can require separate filings.
9. Update beneficial ownership. Recalculate direct, indirect and other control following dilution or a new controlling holding.
10. Reconcile the next B1. Ensure the annual return agrees with the internal records and B5.

What Form B5 should reconcile

The filing should match the allotment date, number and class of shares, nominal value, amount paid or due, consideration and subscriber particulars. A mismatch between the B5, resolutions, bank evidence, certificates, cap table or register of members creates avoidable uncertainty during investment, lending or sale due diligence.

When Form B11 may also matter

CRO guidance states that Form B11 should be submitted where a company allots shares with rights not stated in its constitution or in a resolution or agreement to which the relevant registration rules apply. The deadline is also 30 days. Specialist advice is appropriate when creating preferred, growth, redeemable or other bespoke share rights.

Dilution example

If a company has 100 ordinary shares and issues 25 more of the same class to a new investor, an owner who held 50 shares moves from 50% to 40%, assuming no other changes. The owner still holds 50 shares, but the denominator is now 125. This simple calculation does not capture different class rights, options, convertibles or contractual vetoes.

Does allotting shares trigger Stamp Duty?

Stamp Duty commonly concerns transfers of existing shares, while an allotment creates new shares. That does not mean a share issue has no tax consequences. The subscriber, company and existing holders may face income tax, capital gains, employment-related securities, valuation or other issues depending on the facts. Obtain transaction-specific tax advice.

Common mistakes

• using a transfer form when the company is issuing new shares;
• missing the 30-day B5 deadline;
• allotting beyond the directors’ authority;
• overlooking member pre-emption rights;
• creating undocumented class rights;
• using inconsistent allotment dates or consideration figures;
• not updating certificates, the register of members and cap table;
• ignoring RBO consequences and the next annual return.

Official sources

Use the CRO’s current share-capital and resolutions guidance and forms list. This article is general information, not legal, tax, investment or valuation advice.