The Oireachtas has now enacted The Companies (Miscellaneous Provisions) (Covid-19) Act 2020. The Act temporarily amends certain areas of the Companies Act 2014 (2014 Act) and the Industrial and Provident Societies Acts 1893 to 2018 (1893 Act).
The government announced in December that the "interim period" during which these temporary measures apply, and which was due to expire 31 December 2020, has been extended to 9 June 2021.
Changes to document execution
The Act eases the law in respect of document execution.
Ordinarily, two directors or one director and the company secretary are required to countersign a single document to which the company's common seal is applied. Under the new Act, documents may now be signed and sealed in different counterparts.
Changes to general meetings
The Act introduces some relaxations around the requirements for convening and conducting general meetings. These include:
- a company due to hold its annual general meeting (AGM) can now do so on any date before 31 December 2020, regardless of the deadlines set out in the 2014 Act or under their own constitutions;
- general meetings do not need to be held at a physical venue and may now be conducted wholly or partly by electronic means, provided all those entitled to attend have a reasonable opportunity to participate. Each member and proxy who participates via electronic means will be counted in the quorum, regardless of what is set out in a company's constitution;
- the chair of a general meeting conducted by electronic means is now able to conduct a vote by a show of hands of participating members if they are of the opinion that they can identify the members entitled to vote;
- directors are empowered to cancel, change the venue or change the means of holding a general meeting where they deem it necessary to do so in order to comply with public health advice; and
- directors are empowered to withdraw a dividend resolution or to reduce the dividend amount proposed to be declared by resolution at a general meeting after the notice of the meeting has been issued where they deem it necessary due to the actual or perceived impact of Covid-19 on the company's business.
The Act introduces similar amendments to the 1893 Act around general meetings. These permit registered societies to delay AGMs until before 31 December 2020; conduct general meetings by electronic means; and cancel or change the date of general meetings.
Changes to creditors' meetings
The Act allows certain creditors' meetings, such as in winding up or examinership proceedings, to be conducted wholly or partly by electronic means provided all those entitled to attend have a reasonable opportunity to participate.
Changes to examinerships and winding up
For companies in examinership, the maximum period of court protection from creditors may be extended from 100 to 150 days. This extension is at the discretion of the court, and only applies in exceptional circumstances.
The debt threshold for the commencement of a winding up by the court has now increased from €10,000 for individual debts or €20,000 for aggregate debts to €50,000.
Co-written by Maeve O'Brien of Pinsent Masons, the law firm behind Out-Law.