This article is for directors and shareholders of Irish private companies who need to understand the rules around buying and selling shares when they have access to confidential information.
If you're wondering whether you can legally trade shares in your private company, what counts as insider dealing, or what restrictions apply before major announcements, this guide covers the criminal insider dealing laws that apply to all Irish companies, when information becomes price-sensitive, and the practical obligations directors face when dealing in shares.
Key Takeaways
• Criminal insider dealing laws apply to all Irish companies, not just listed ones, with penalties up to 10 years imprisonment.
• Directors trading shares while possessing confidential price-sensitive information risk breaching criminal law and fiduciary duties.
• Information is price-sensitive when it would influence a reasonable investor's decision, including sale negotiations or financial crises.
• Tipping off others about inside information or encouraging them to trade is a criminal offence, even without personal trading.
• Directors must declare their interest in share transactions at board meetings; failure to disclose is a criminal offence.
Laura Ryan is a practising Barrister at the Bar of Ireland. She graduated from the Honourable Society of King’s Inns in 2024, having previously qualified and practised as a Chartered Accountant in a big four accounting firm.
Do market abuse rules apply to private companies in Ireland?
No, the EU Market Abuse Regulation (MAR) only applies to companies with securities traded on regulated markets, so private limited companies fall outside its scope. However, criminal insider dealing laws under the Criminal Justice Act 2010 apply to all Irish companies regardless of whether they're listed or private.
Can I as a director freely buy or sell shares in my own private company?
Directors aren't automatically prohibited from trading shares in their company, but you face heightened obligations compared to ordinary shareholders. If you trade while possessing confidential information obtained through your role, you risk breaching criminal insider dealing provisions and fiduciary duties. Many company constitutions also require board approval or trigger pre-emption rights before shares can be transferred.
What counts as "price-sensitive information" in a private company?
Information is price-sensitive when it would influence a reasonable investor's decision to buy or sell shares. Examples include ongoing sale negotiations, major contract wins or losses, undisclosed cash flow problems, breakthrough product developments, pending material litigation, or the resignation of a founder or critical employee. The information must be specific enough to allow conclusions about its potential effect on share value.
What are the penalties if I'm convicted of insider dealing?
Insider dealing is a criminal offence carrying severe penalties including imprisonment and unlimited fines. On summary conviction, you face up to 12 months' imprisonment and/or a fine, while conviction on indictment can result in up to 10 years' imprisonment and an unlimited fine. Criminal prosecution can also lead to restriction or disqualification from acting as a director.
Can I tip off a family member or friend about confidential company information?
No, Section 110 prohibits disclosing inside information to others or encouraging dealing, even if you don't personally trade on the information. Tipping off family members or friends about confidential price-sensitive matters constitutes a criminal offence, and the law catches both the person disclosing information and those acting on tips received.
Do I have to tell other shareholders when I buy or sell shares in our private company?
Private company shareholders have no statutory requirement to disclose their share dealings to others, unlike listed companies which must disclose under MAR when holdings cross certain thresholds. However, you must disclose if your shareholders' agreement contains notification requirements, and directors must separately disclose their shareholdings under Section 140.
What must I declare as a director before buying or selling shares in the company?
You must declare your interest in the proposed transaction at the first board meeting where the matter is considered, disclosing the nature and extent of your interest. This declaration must be recorded in the board meeting minutes, and you generally cannot vote on matters where you have a material interest. Failure to declare constitutes a criminal offence with fines.
Can I refuse to sell my shares because I know something other shareholders don't?
Yes, deciding not to sell shares based on inside information is generally not insider dealing, as the offence requires actual dealing (buying or selling), not merely holding shares. However, you cannot actively mislead potential buyers with false information, and encouraging others to hold based on inside information may constitute prohibited tipping.
