Related-party transactions are dealings between an Irish company and people or entities connected through ownership, control, management or influence. They can include director loans, group funding, management charges, property rent, asset transfers and sales or purchases. They are normal in many owner-managed businesses and groups, but their terms and recoverability can materially change a credit or acquisition assessment.
Direct answer
Open the latest financial statements and search the notes for “related party”, “director”, “group undertaking”, “controlling party”, “key management” and “amounts owed to/from”. Record the relationship, transaction type, year-end balance, terms and movement. A disclosed balance is not automatically risky; the central questions are whether it is commercial, approved, enforceable, recoverable and likely to remain available.
Confirm the company and its group first
Related-party analysis fails when the wrong legal entity is reviewed. Match the company name and CRO number to the contract, invoice or proposed transaction. Then identify holding companies, subsidiaries, common ownership and directors. A balance described only as “group undertakings” is easier to understand when you know which companies form the group.
Use CRO filings and the accounts together. Public annual returns provide dated shareholder and officer information, while financial statements may disclose parent, subsidiary and related-party relationships. Read how to trace an Irish company group and how shareholder and beneficial-ownership records differ.
Common related parties and transactions
| Relationship | Examples | Main question |
|---|---|---|
| Director or shareholder | Loans, expenses, remuneration arrangements, asset use or rent | Is the balance due to the company or from it, and on what terms? |
| Parent or subsidiary | Intercompany funding, management fees, trading and guarantees | Can support be withdrawn, and is the counterparty able to pay? |
| Company under common control | Shared staff, premises, customers, procurement or cash management | Are costs and benefits allocated on a defensible basis? |
| Key management or close family connection | Services, employment, property or asset transactions | Was the arrangement approved and conducted on commercial terms? |
| Associate or joint venture | Loans, investment, sales, purchases or shared projects | What rights, obligations and exposure sit outside the headline balance? |
The precise definition comes from the applicable accounting framework and law, not from everyday language. A person can be related through control or significant influence even without appearing as a current director.
Where to find the disclosures
Begin with the notes index, but do not stop at a note called “related-party transactions”. Relevant information can appear under debtors, creditors, directors’ transactions, group undertakings, ultimate controlling party, investments, guarantees, commitments and post-balance-sheet events. The cash flow statement may show shareholder or group financing, while the directors’ report can provide context.
Compare both the transaction volume during the year and the balance outstanding at year end. A company may transact heavily with a related party but settle normally. Conversely, a modest transaction can leave a large overdue receivable. Review comparative figures and changes in classification.
Amounts owed by related parties
An amount owed to the company is an asset only to the extent that it is recoverable. Ask who owes it, why it arose, when it is due, whether interest is charged, whether security exists and what evidence supports repayment. A debtor controlled by the same owner may not be independent, and repayment may depend on the same group cash flows as the reporting company.
Large director or group receivables can reduce the practical quality of net assets and working capital. Inspect impairment allowances and post-year-end settlement. Our guide to directors’ loan accounts covers the difference between amounts due to and from directors and the questions that follow.
Amounts owed to directors or group companies
Funding from a director, shareholder or parent can demonstrate support, but the legal terms matter. “Interest free and repayable on demand” can create immediate liquidity exposure. A documented facility that is subordinated to other creditors and unavailable for withdrawal during the forecast period offers different support.
Do not assume a parent will rescue a subsidiary because it has done so before. Look for a current support letter, facility agreement, board approval and evidence that the provider has the resources to perform. Consider whether the support is legally enforceable and whether conditions permit termination.
Management charges, rent and shared services
Owner-managed groups often centralise staff, premises, technology, marketing or administration. One company may charge another. Assess whether the expense is necessary for the reporting company to operate and whether the amount is broadly commercial. If support services were withdrawn after a sale or dispute, the company might need to replace them at a different cost.
Related-party rent can also affect valuation. Identify the property owner, lease terms, rent review, arrears and whether the premises are essential. A company can appear asset-light because valuable operating property sits with another connected entity.
Asset sales and acquisitions
A related-party asset transfer may move equipment, intellectual property, a business, shares or property within a group. Ask how the price was determined, whether cash was paid, whether a balance remains outstanding and whether the transaction generated a profit. A one-off accounting gain is different from recurring trading performance.
Where the transaction is material, review board minutes, contracts, valuations, tax treatment and any shareholder approvals with appropriate advisers. Related-party status does not invalidate a transaction, but it raises the importance of conflicts, authority and fair presentation.
Why public disclosure may be limited
Schedule 3 of the Companies Act requires particulars for material related-party transactions not concluded under normal market conditions, subject to stated rules and exceptions. Accounting frameworks have their own disclosure requirements and exemptions. Transactions may be aggregated by nature, and wholly owned group transactions can receive different treatment. Small or micro public filings may contain less detail than full company records.
Therefore, “no related-party transactions disclosed” does not prove that none occurred. It may mean that transactions were not material, were on normal market terms, fell within an exemption, were omitted from an abridged public filing or were not present. Do not make an allegation from absence alone.
Worked interpretation example
Suppose a company reports net assets of €600,000, including €450,000 owed by a company under common control. The balance is unsecured, interest free and repayable on demand. The reporting company also owes its director €200,000 on the same stated terms. Headline net assets remain positive, but much of their quality depends on collecting the related-company receivable. At the same time, the director can legally request repayment unless other terms apply.
Ask for both counterparties’ current financial information, settlement history, loan agreements and post-year-end bank movements. Recalculate tangible or adjusted working capital under a scenario where only part of the receivable is collected and the director balance becomes due.
Related-party due-diligence checklist
- Identify the ultimate controlling party and all material counterparties.
- Separate trading balances from loans, dividends, rent and management charges.
- Record interest, security, subordination, repayment date and demand terms.
- Check comparative movements and post-year-end settlement.
- Assess the counterparty’s independent ability to pay or continue support.
- Look for guarantees, commitments and shared assets or staff.
- Test whether a sale, ownership dispute or director departure would change the arrangement.
- Request contracts, approvals and valuations where exposure is material.
Sources and editorial review
This guide was reviewed on 2 September 2026 using the related-party disclosure requirements in Schedule 3 of the Companies Act 2014, the Financial Reporting Council’s current FRS 102 materials, including Section 33, and the CRO’s financial-statement guidance. It is general information, not accounting, legal, tax, investment or credit advice.