Once commenced, the Bill will be operational until 31 December 2020 (the "Interim Period"). However, the Bill allows for the Interim Period to be extended for such a period considered appropriate if the current situation persists.
The following key changes to the 2014 Act are proposed under the Bill:
- Execution of documents
Section 5 of the Bill will amend the 2014 Act in relation to the execution of documents during the Interim Period. Under the 2014 Act, documents which are required to be executed under seal must be signed by the company director and secretary. However, during the pandemic administrational issues can arise in circumstances where it is not possible for the company seal, director and secretary to be in the same location. This amendment to the 2014 Act will allow a company seal and the necessary signatures to be on separate counterparts of a transaction document which will then be counted as one single document for the purpose of the 2014 Act during the Interim Period.
- Annual General Meetings, electronic meetings and re-scheduling meetings
A proposed amendment of the 2014 Act pursuant to section 6 of the Bill will allow a company the option of deferring their annual general meeting until 31 December 2020.
This section 6 will also permit a company to hold fully electronic / remote meetings, or hybrid meetings, whereby some participants would participate remotely while others would be physically present at the meeting. The Bill also provides for remote and secure members voting, which means a member or proxy will not be required to attend in person when a vote is cast. All members who attend electronically will also be counted in the quorum of the meeting.
Furthermore, section 6 of the Bill will allow a company to cancel, relocate or change the means of holding a general meeting should it be necessary to do so in order to comply with Government guidelines in the interest of public health.
- Withdrawal or amendment of dividend resolutions
Section 10 will insert a new section into the 2014 Act, which provides for the withdrawal or amendment of dividend resolutions. In circumstances where the directors of a company have recommended a declaration of a dividend at a general meeting, they may amend or cancel the dividend due to the impact of Covid-19 on the activities of the company. This section also provides that the resolution to approve the dividend may be withdrawn or amended notwithstanding any provision to the contrary in the company’s constitution where all members of the company agree in writing and the relevant notice has been given.
Section 13 of the Bill will insert a new subsection into the 2014 Act, extending the examinership process from 100 to 150 days during the Interim Period. The court may provide an examiner with an additional 50 days within which to present his or her report to the court in circumstances whereby he or she would be unable to do so within the initial 70 days, or the 30 additional days already provided for under the 2014 Act. In order to be granted additional time under this section, the examiner will have to demonstrate to the court that there are exceptional circumstances requiring such additional time.
- Increase in the threshold for which a company can be wound up
A proposed amendment to section 570 of the 2014 Act by way of section 14 of the Bill will allow for an increase in the threshold at which a statutory demand can be issued on a company to be wound up from €10,000 (single creditor) and €20,000 (multiple creditors) to €50,000.
- Electronic creditors’ meeting
Section 19 will insert a new section into the 2014 Act which provides that a creditors’ meeting may be held either wholly or partly by electronic communications for the duration of the Interim Period so long as all of those who are entitled to attend have a reasonable opportunity to participate, and that there is a mechanism for casting votes either before or during the meeting.
The Bill provides alternative methods by which companies can continue to perform obligations under the 2014 Act and allows for sufficient scope and leeway so that they are not unduly penalised by the ever-evolving pandemic situation.
The unique circumstances of the current situation means that technology is being embraced in a way never seen before in order to cope with the restrictions. Fieldfisher LLP will be monitoring the progression of the Bill and will provide further updates.
The text of the Bill can be found here.
Written by Daniel Faulkner and Hugh O'Neill.
A phased return to work is taking place in different sectors. Fieldfisher is committed to supporting you through the transition and beyond. We continue to be available to our clients either remotely or in person, with your business as usual matters, as well as for C-19 support. Please review our Covid-19 hub for updates and get in touch if you require further information.
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