In accordance with Section 329 of the Companies Act 2014, the directors’ shareholdings and/or their interest in debentures of the company or any group company and the movements therein during the financial year ended are required to be disclosed. The requirement is in respect of interests at the end of the financial year in question and also at the beginning of the financial year. An illustration of such a disclosure is outlined below:
Illustrated disclosure of directors interests in shares or debentures of the company and/or group:
In accordance with Section 329 of the Companies Act 2014, the directors’ shareholdings and the movements therein during the financial year ended 31 December 2015 were as follows:
|Ordinary shares of €1 each||Preference shares of €1 each||Share options in Ordinary shares|
Disclosures of directors’ interests should include interests of any shadow and de facto directors and also should include the interests held by any connected parties of the directors. Any information required with respect to directors is also required to be given in respect of the person who was secretary of the company at the end of the financial year concerned. *
Interests in shares does not just cover a direct interest in the ordinary or preference shares of a company but also includes “all references to all interests required to be recorded in the register of interests under Section 267”. Such interests therefore would include share options over the company’s or a group company’s shares. Furthermore, an interest would, under the meaning of the Act, include where the individual is not necessarily the registered holder of the interest but they are entitled to exercise or control the exercise of any right conferred by the holding of such shares or debentures (Section 258).
CA 2014 update:
Section 260 outlines that where the director or secretary together with their spouse/civil partner/sibling hold 1% or less of the nominal value of a particular class of shares (where such class carries a right to vote) or where they hold interests in shares or debentures carrying no rights to vote, then no disclosure is required in respect of that particular class.
Section 329 of the Companies Act 2014 requires the directors’ and secretary’s interests to be stated in the directors’ report (rather than the notes to the financial statements). This has an implication for presentation in small company abridged financial statements where there is no requirement to present a directors’ report. Such interests are required to be annexed to the company’s annual return in an extract from the directors’ report. Further details on this are outlined at: Directors Reports.
If there are no interests held by the directors or the secretary, this fact should be stated as Section 329 specifically requires positive or negative confirmation as the circumstances dictate.
Where the company in question has no share capital, interests in shares shall be taken to constitute:
(a) in relation to an undertaking with capital but no share capital – rights to share in the capital of the undertaking, and
(b) in relation to an undertaking without capital –
(i) any rights to share in the profits or share in the imposition of liability to contribute to the losses of the undertaking, or
(ii) interests giving rise to an obligation to contribute to the debts or expenses of the undertaking in the event of a winding up.
*Firstly, the definition of what constitutes a director has been expanded to include de facto directors. Section 222 of the Act outlines that a de facto director is a person who occupies the position of director of a company but who has not been formally appointed. The section does clarify however that a person shall not be a de facto director of a company by reason only of the fact that he or she gives advice in a professional capacity to the company or any of the directors of it.
Furthermore, a ‘director’ also includes any shadow director. A shadow director is defined in Section 221 of the Act and is a person in accordance with whose directions or instructions the directors of a company are accustomed to act.