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Out-Law Analysis 3 min. read

Directors should take note of recent updates to Irish corporate law


In recent months there have been a number of significant updates to Irish corporate law.

The reforms - which cover everything from company filing rules, the continuing fallout caused by the Covid-19 pandemic and white-collar crime - have introduced a new regime for the investigation and enforcement of corporate offences in Ireland and some welcome clarifications to Irish company law.

But the changes also have the potential to cause some logistical headaches for directors and their advisers and require close attention.

The new Corporate Enforcement Authority

The 2021 Companies (Corporate Enforcement Authority) Act, which came into force earlier this year, has dramatically changed the landscape of company law enforcement and corporate offences in Ireland.

The main focus of the Act was to transform the Office of the Director of Corporate Enforcement (ODCE) into a statutory and independent agency called the Corporate Enforcement Authority (CEA). The CEA will be given additional resources to investigate and prosecute white collar crime and will be better placed to deal with larger and more complex investigations.

The authority is a standalone body with a commission structure and can have up to three full time commissioners, one of whom will be designated as its chair. The CEA can also appoint its own staff and appoint up to 16 members of An Garda Siochana on secondment.

The Act also gives the new authority additional resources compared to those provided to the ODCE. New powers and other enhancements will be kept under review. 

Changes to company filing rules

Another change introduced by the 2021 Companies (Corporate Enforcement Authority) Act will change rules on company filings. The change, expected to come into force in November this year, will mean directors will have to include an Irish Personal Public Service (PPS) number with their filings in the Companies Registration Office. This information will have to be included in new incorporation forms, annual return forms and change in director forms after the rules commence.

If a non-Irish tax resident director does not have a PPS number, they will need to apply for a Companies Registration Office number instead to allow filings to be made. The exact procedure for company filing is still to be finalised but could involve directors swearing a ‘declaration of identity’ which, if made outside of Ireland, will have to be done in the presence of a notary public.

Clarifying company law

The 2021 Act also includes some technical changes to the 2014 Companies Act, after the Irish Company Law Review Group, the Business Law Committee of the Law Society of Ireland (of which I am a member) and others identified several areas of law that required clarification.

For example, the new Act makes clear that a company may transfer its undertaking to another company in consideration for the issuance of shares to the shareholders of the transferring company. The only stipulation is that the transferring company has distributable reserves that are at least equal to the value of the undertaking that is being transferred.

The update clarifies that a reduction of capital which is made in compliance with the 2014 Act is not considered a distribution under the Act requiring the normal rules on distributions to be followed. The 2021 Act also sets out how an unlimited company can acquire its own shares without the need for distributable reserves.

If a company acquires its own shares through a statutory merger or division, such shares can be treated as treasury shares and may be cancelled or re-issued, according to the new legislation. Some clarity has been also provided on the circumstances in which a company’s share premium account can be used.

Further clarification is expected on a number of other issues related to the 2014 Act in future legislation.

Covid-19 legislation

Temporary measures to address issues arising from the pandemic were first introduced by the 2020 Companies (Miscellaneous Provisions) (Covid 19) Act. While the measures were due to expire at the end of April 2022, they have now been extended to the end of the calendar year.

The temporary measures include rules governing how to hold fully virtual annual general meetings and extraordinary general meetings, and legislation to allow more flexibility over how Irish companies execute deeds under the common seal in allowing the directors or company secretary who sign and countersign the affixing of the seal to sign in separate counterparts. This measure also facilitates the use of electronic signatures.

Companies in financial difficulty are helped by the increase in the threshold at which a company is unable to pay its debts, and therefore deemed insolvent, from €10,000 to €50,000. The period of examinership to allow a company protection from its creditors to restructure has been extended to 150 days rather than the maximum period of 100 days which usually applies.

Future legislation is expected to put some of these measures on a permanent basis.

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