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Tax And Legal

Summary Approval Procedure

Using the Summary Approval Procedure to Enable Restricted Activities

Introduced as a new tool with the Companies Act 2014, the Summary Approval Procedure (SAP) allows companies to carry out certain procedures that would otherwise be restricted under company law. Many of these restricted activities will arise over the lifetime of a company, so it is a vital tool for advisors to have in their repertoire.

The SAP process is undoubtedly innovative and helpful, but, if incorrectly applied or misunderstood, it will not achieve what the company requires. It is vital that a client receives advice on the requirements of the specific SAP in question. For example, there are timelines that need to be met and certain business benefits that need to be demonstrated. If the necessary statutory requirements are not met, the transaction may not be valid under company law.

It is also important to note that a SAP cannot be performed retrospectively.

In addition to these considerations, various documents and declarations need to be drafted with due knowledge and care.

The Summary Approval Procedures are undoubtedly innovative and helpful, but, if incorrectly applied or misunderstood, they will not achieve what the company requires

To discuss your client's SAP requirements, email us or call us on 053-9100000. We look forward to working with your practice.

How We Can Help

As one the first service firms to use the SAP for clients, OmniPro’s in-house team of company law experts is uniquely positioned to advise you and your client. We are also to advise on the tax implications on implementing a SAP or any proposed future actions once the relevant SAP is approved (e.g. too implications of mergers, distributions, share buyback, share for undertaking.

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Moreover, we have established direct relationships with some of Ireland’s top legal firms to advise on contentious legal matters in the area of SAPs.

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From the initial phone call, OmniPro can take you through the steps that are required, the benefits and pitfalls that might arise, and the various matters that need to be raised with your client.

OmniPro offers a complete solution for the drafting and execution of SAPs. We can take a firm through the entire process and, in so doing, draft all the relevant company secretarial documentation.

The Summary Approval Procedure - In Detail

The seven restricted procedures that SAP can enable are as follows:

  • Financial assistance for share acquisition* (Section 82)
  • Reduction of company capital* (Section 84)
  • Variation of capital on reorganisation* (Section 91)
  • The treatment of pre-acquisition profits or losses in a holding company’s financial statements as profits available for distribution (Section 118)**
  • Provision of loans etc. to directors and connected persons (Section 239)
  • Mergers* (Section 464)
  • Members’ voluntary winding up (Section 579)

*Cannot be used by a PLC

** Cannot be used by a private subsidiary company where the parent is a PLC

The procedure can take different paths, depending on the nature of the SAP being executed. However, the steps below summarise the process at an overall level.

  • Establish whether the proposed transaction is restricted and a SAP is required
  • Arrange a board meeting and recommend that the transaction occurs
  • Prepare a statement of assets and liabilities (if required)
  • Directors make declaration
  • Draft a special resolution
  • Obtain independent person’s report (if required)
  • Complete various CRO forms and file with the CRO

To discuss your client's SAP requirements, email us or call us on 053-9100000. We look forward to working with your practice.