COVID-19: Company law changes

On the 30 July 2020 the Irish Government passed the Companies (Miscellaneous Provisions) (COVID-19) Bill 2020 and on 1 August the President signed it into law. 

The Act represents a response to the circumstances surrounding the current COVID-19 pandemic and brings about temporary changes to a number of areas in the Companies Act, 2014 to reflect these circumstances. 

The temporary changes are in place for an interim period until 31 December 2020, and there is also an option to extend this period as far as 30 June 2021. 

Outlined below is a summary of some of the key changes provided by the Act: 

Execution of instruments during the interim period

The Act provides for greater use of the company seal when executing documents during the interim period.  Companies are not required to have the signatures of the directors, the company secretary and the company seal all included on the same page, these can now be provided on separate pages in circumstances where all three are in different locations. 

General meetings deadline extended 

The deadline for companies to hold their annual general meeting (AGM) is extended to 31 December 2020 for all companies. With this extension, companies are allowed to hold their annual general meeting on any date prior to 31 December 2020. 

Companies are also allowed to delay or rearrange meetings prior to the meeting being held. This also includes changing the venue, changing the means by which the meeting is held (physical / virtual), or to cancel the meeting entirely for public health concerns. 

Virtual meetings 

In addition to the extension of the AGM deadline, companies are also allowed to convene AGMs and extraordinary general meetings (EGMs) virtually provided that the technology meets certain conditions such as: 

• The technology used to convene the meeting is available in real time using audio and visual technology that is reasonably available and accessible to participants.
• The technology should provide for the security of access to the meeting, the communications by the attendee, and that the information and data is free from corruption. 

Creditors meetings 

In the same way that AGMs and EGMs can be held virtually, this also applies to creditors’ meetings with the same provisions applying for the use of the technology available. In addition to this, the meeting notice should specify: 

• The electronic platform being used for the meeting and details of how to access the platform. 
• The time and manner each attendee has to confirm their attendance at the meeting. 
• How attendees are to be identified and their attendance documented for the meeting. 
• The procedure communicating throughout questions and comments during the meeting. 
• How voting on resolutions is to take place. 

Extension of the examinership period

Another key change is the potential for the High Court to increase the examinership period by up to 50 days beyond the current maximum 100-day limit. This is to assist with any delays that may arise in securing an investor or finalising the scheme of arrangement which may be brought about by the COVID-19 pandemic. 

Increase in the threshold for creditor winding-up petitions

The Act also includes an increase in the claim amount which a creditor can use as grounds for a winding up petition. The prior threshold of €10,000 for a single creditor (€20,000 for two or more creditors acting together) has been increased to €50,000 in an effort to assist companies who may be experiencing difficulty during the COVID-19 pandemic. 

The Act provides some sensible solutions to logistical issues caused by the COVID-19 pandemic and provides some welcome breathing space for companies struggling to deal with the economic consequences of the pandemic.  

If you wish to find out more about any aspect of the above or wish to seek professional advice, please do not hesitate to contact our team for a confidential consultation.