Divisions (New)

Part 9 – Reorganisations, Acquisitions, Mergers and Divisions

The part of the Act which relates to divisions is new.

It is now possible for an Irish company to be divided so that its undertaking is split between two other Irish companies.

The rules in relation to divisions mirror the merger provisions. For most of the sections, you could substitute “division” for “merger” and you would have the division provision.

For example, this part of the Act applies where at least one of the companies involved in the division is a company limited by shares (“CLS”) and none of the companies is a PLC (Section 486). The provisions apply to three kinds of division: (1) division by acquisition; (2) division by absorption; (3) division by formation of a new company (Section 487).

The same can be said of the provisions relating to:

  • The common draft terms of division
  • The directors’ explanatory report
  • The expert’s report
  • The division financial statement
  • Documents which need to be sent to the CRO

And so on.

All other provisions are the same as they are for mergers. Specific reference to divisions can be found in the Companies Act 2014 from Chapter 4 which begins at Section 485 onwards.