Summary Approval Procedure and Reducing Share Capital in Ireland

The summary approval procedure (SAP) is a route in the Companies Act 2014 that lets a company carry out certain restricted activities, including a reduction of share capital, without going to court, provided the directors make a formal declaration and the members pass the required resolution. It is the alternative to a High Court-confirmed capital reduction. This guide outlines how the SAP works for a reduction of share capital, what the alternative court route involves, and which declarations and filings to expect. It is a general overview rather than legal advice, and the company secretary usually coordinates the paperwork (see our guide to company secretary duties in Ireland).

Two routes to reduce company capital

Section 84 of the Companies Act 2014 (as shown on the Irish Statute Book) says that, unless the constitution provides otherwise, a company may reduce its capital in any way it thinks expedient, and gives examples: extinguishing or reducing liability on shares that are not fully paid up, cancelling paid-up capital that is lost or not represented by available assets, and repaying paid-up capital that exceeds the company's needs. The reduction must be made either by the summary approval procedure or by a special resolution confirmed by the court. The section adds that a transaction in breach of it is voidable against anyone with actual notice and that breach is an offence for the company and any officer in default.

The Companies Registration Office (CRO) share capital page, last updated 17 November 2025, says in similar terms that a reduction of issued share capital generally requires a High Court order or can be done through the SAP.

What the court route involves

Section 85 sets out the court confirmation process. In outline, the company advertises the resolution once in a daily newspaper in the district of its registered office or principal place of business, and notifies creditors outside the State by post. Where the reduction involves unpaid capital or paying shareholders from paid-up capital, creditors who can show their debt is put at risk may object, and the court settles a list of such creditors. The court can confirm the reduction on terms it considers fit, once satisfied that objecting creditors have consented or been paid or secured. Under section 86, the court order and an approved minute are submitted to the Registrar, and the reduction takes effect only on registration.

The Act does not say that the court route is better or worse. It is simply the route that involves the court and the creditor process. Our suggestion: ask your adviser to compare both routes against the company's facts, including the creditor position and the timetable.

What the summary approval procedure is

The CRO describes the SAP (Chapter 7 of Part 4 of the Act) as permitting "certain restricted activities that would otherwise be prohibited" where the people the restrictions protect consent through a special resolution. The CRO page (last modified 7 August 2025) lists the restricted activities as:

• financial assistance for the acquisition of shares (section 82);
• reduction in company capital (section 84);
• variation of company capital on reorganisations (section 91);
• treating pre-acquisition profits or losses in a holding company's accounts as distributable (section 118);
• loans to directors and connected persons (section 239);
• domestic mergers (section 464); and
• members' voluntary winding up (section 579).

Section 200 of the Act defines the same seven activities as "restricted activities". The CRO page notes that some activities have extra requirements and that the declaration differs by activity. This post concentrates on the capital reduction.

The declaration, the resolution and the report

Section 202 describes the procedure. A special resolution of the company is required, and the directors must make a written declaration at a directors' meeting. The declaration is sent with the meeting notice, or appended to the proposed text of a written resolution. According to the section, it must be made no earlier than 30 days before the meeting (or the date of the last member's signature), and it must be made by the directors or, where there are more than two directors, by a majority of them.

The CRO page adds practical detail:

• Capital reduction declarations are completed by the directors or a majority of them, and the page lists declaration forms in the SAP series, which are filed alongside the special resolution (Form G1). The forms are on the CRO forms page.
• An independent person's report is required for the declaration to have effect. It is prepared by the company's statutory auditor or a person qualified to be its auditor, and states whether, in that person's opinion, the declaration is not unreasonable.
• Declarations generally describe the transaction, the parties, its purpose and benefit to the company and that a full inquiry was made. For capital reductions they also require asset and liability totals before and after, and confirmation that the declarants know of no material future liability within 12 months. Asset and liability figures must be as at a recent date; see the page for the limit.
• A director who signs a declaration made without reasonable grounds may be held personally responsible, without limited liability, for the company's debts and liabilities.

Timing points to watch

The CRO page and section 202 state that the special resolution must be passed no more than 12 months before the restricted activity starts. Section 84 adds that, under the SAP, if the resolution sets no date the reduction takes effect 12 months after the resolution is passed; if it sets a date, it takes effect on that date. The CRO page says the declaration must be filed with the Registrar within 21 days after the activity starts and that late filing invalidates the activity, although the High Court can validate an incorrectly completed SAP. These periods are stated on pages dated 2025 and can change, so check the CRO page on the day.

Section 211 adds a waiting period and a challenge mechanism. Unless holders of more than a stated majority of the voting shares in each class approve, the company must wait before carrying out the activity, and members holding a minimum proportion of the issued share capital can apply to court to cancel the resolution within a short window. The court may confirm, partly confirm or cancel the resolution. Read section 211 for the figures; they are not repeated here because the consolidated text should be checked.

The CRO page does not list fee amounts, and this guide does not cover them. It warns against posting original hard copies after emailing them, because that creates a duplicate filing with a non-refundable processing fee. Submissions go to the CRO's SAP email address or postal address shown on the page.

Who cannot use the SAP, and related filings

The ODCE's guide to restriction and disqualification of directors (May 2015) says a company with a restricted person on its board cannot use the SAP, except for a members' voluntary winding up. Because that guide dates from 2015, confirm the current position with the Corporate Enforcement Authority (which the CRO now refers to) or your adviser.

The SAP is also the usual route into a members' voluntary winding up, which the CRO says requires a declaration of solvency and a special resolution; our guide to voluntary liquidation in Ireland explains how that process works. After a reduction, the company's records and filings should reflect the new capital position, including its next annual return, covered in our guide to CRO annual return B1 filing requirements.

A practical approach: keep one file per reduction containing the board minute, the directors' declaration, the auditor's report, the special resolution, evidence of filing and the updated constitution or registers. This is our suggestion, not a statutory requirement, and it helps whoever deals with the next audit or due diligence request.

Learnsignal's offices are off Baggot Street in Dublin, and we offer in-person training from there. For current details, see our CPD pages.

Frequently asked questions

Can a company reduce its share capital without going to court?

Section 84 says a reduction must be made either by the summary approval procedure or by a special resolution confirmed by the court. So yes, the SAP is the route that avoids court confirmation, provided its conditions are met.

Who signs the directors' declaration?

Section 202 says it is made by the directors or, if there are more than two, by a majority of them. The CRO page notes that a director who signs without reasonable grounds may face personal responsibility for company debts.

Is an auditor's report needed?

The CRO page says an independent person's report, prepared by the statutory auditor or a person qualified to be its auditor, is required for the declaration to have effect.

How long does the resolution last?

The CRO page and section 202 say the special resolution must be passed no more than 12 months before the activity starts. Check the current pages for any change.

What does the CRO charge?

The CRO's SAP page does not list a fee amount. Check the CRO website for current fees.

The SAP is a structured procedure with a defined paper trail, so treat the declaration, the resolution and the filings as one package and diarise each date.