A company that is considering purchasing the trade may wish to just purchase the trade instead of transferring the shares in the target company to the acquiring company. The trade of the target company may be transferred to the acquiring company in exchange for shares in the acquiring company.

In a share-for-undertaking exchange, the acquiring company issues shares either to the target company (a two-party exchange) or to the shareholders in the target company (a three-party exchange) in exchange for the undertaking (trade) or part of the undertaking of the target company. An undertaking must be a business, and in the case of a part of an undertaking, it must be capable of comprising a separate business.

A summary approval procedure (SAP) maybe required under particular circumstances

Stamp duty is applicable on the transfer of undertaking, but relief can be obtained if the conditions set out in s80 of the Stamp Duties Consolidation Act 1999 are met.

Satisfying the Revenue conditions of a bona fide scheme of reconstruction is a vital step in the process.

A merger by absorption may also be considered as an alternative to a share for undertaking for companies in a group.

Tax Advice

Appropriate tax advice should be obtained prior to any transaction being commenced.

How Can CLS Help

We will work with the tax adviser to prepare a step plan and implement the proposed share for undertaking drafting all the necessary board minutes, resolutions of members, CRO forms and declarations and arrange for the necessary share transfer forms to be processed in ROS.

If you are considering a share for share for undertaking please contact any one of the team on 059 9186776 or send us an email.


Please Note:

Our CLS Insights aims to bring you practical information and news on Company Law and Company Secretarial. We cover the topics that matter to your business and give practical tips and also the benefit our experiences. Please remember this article is a guide and legal advice should always be obtained. If you have any queries please contact one of the team and we would be happy to help.

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