The Covid-19 crisis has had a significant impact on how companies are operating. In particular it has affected company's ability to ensure compliance with their corporate governance obligations under the Companies Act 2014. The Companies (MIscellaneous Provisions) (Covid-19) Act 2020 (the Act), passed on 31 July 2020, aims to deal with these issues. The following are some of the key points provided for in the Act from a compliance perspective.
General Provisions
- The provisions under the Act shall only apply for the interim period. This period runs from the commencement of the act to 31 December 2020.
- The Minister may extend the interim period in consultation with the Minister for Health based on the threat to public health presented by Covid-19, the need to restrict movement and the need to mitigate the economic effects of the crisis.
Annual General Meeting
- A company may defer holding their AGM until the end of the interim period. This means that a company has until 31 December 2020 to hold their AGM and they will not be in breach of the requirement to hold an AGM within 15 months of the previous AGM.
Shareholders Meetings
- A company may hold a general meeting by electronic means.
- There can be a hybrid meeting where some attendees are physically present, and others are attending by electronic means.
- A company can provide an electronic means for casting votes.
- Any technology used shall as far as practicable be secure, minimise the risk of data corruption and unauthorised access and provide certainty as to the source of the communications.
- Any disruption shall be remedied as soon as practicable.
- The technology used should enable all participants to hear what is said and be able to speak and submit questions.
- Any temporary electronic failure or disruption does not invalidate the meeting.
- A company may cancel a meeting, change the venue of a meeting or change the means of holding in order to comply with public health guidance. This can be done with the consent of all members or on notice given in the usual manner unless this not reasonably practicable. In that case notice shall be given through:
- The company's website;
- An email to all members of the company; and
- Publication in a national newspaper.
- Where a meeting is held by electronic means the notice of the meeting must contain:
- Details of the electronic platform to be used.
- Details for accessing the electronic platform.
- The time and manner of confirming attendance at meeting.
- Any requirements or restrictions for identifying attendees.
- The procedures for questions and comments by attendees.
- The procedure for voting.
- A show of hands vote in an electronic meeting is permitted where the chairperson is satisfied that he or she can identify the members entitled to vote.
- These provisions shall apply to all shareholders meetings including AGMs, EGMs and meetings of a particular class of shareholder.
Company's Seal
- Documents which require the affixation of the company seal on execution may be signed in a number of counterparts. The default position under Companies Act 2014 is that documents which are required to be executed under seal must be signed by two persons – usually directors or one director and the secretary, or persons authorised by the directors. The amendment allows a company seal and the necessary signatures to be on separate documents which will then be counted as one single document. Whilst this is helpful where the company seal and the persons signing the document are in different locations, in reality most companies have worked around this difficulty by appointing powers of attorney or authorising persons other than directors (eg solicitors) to witness the seal.
Comment
In offering flexibility to companies holding general meetings, the amendments introduced the Act are welcome. Most practitioners and companies would like to see the rules relating to the holding of electronic meetings become a permanent feature and not just for the interim period. The Act includes similar provisions relating to the holding of meetings of Industrial & Provident Societies. The Act also provides for some amendments to the insolvency provisions of the Companies Act, 2014 and these are highlighted in Barry Cahir's article here.
"Note the provisions of the Act will not commence until a Ministerial Commencement Order is signed."
For more information or to discuss any COVID-19 related issues impacting your business, please get in touch with Damian Maloney (Corporate and Commercial), Máire Cunningham (Corporate and Commercial), Dorit McCann (EU, Competition & Procurement), Barry Cahir (Litigation and Insolvency), Thomas O'Dwyer & Sharon Delaney (Litigation), Sandra Masterson Power & Paul Gough (Employment), Aidan Marsh & Gerry Gallen (Commercial Property) or your usual Beauchamps contact.
