ANNUAL GENERAL MEETINGS (“AGM")
Irish companies are required by law to hold an AGM every year with a maximum 15 month interim period between each AGM. For newly incorporated companies, an AGM must be held within 18 months of its incorporation. A minimum of 21 ‘clear’ days prior notice must be given to all members entitled to attend. Shorter notice is permitted where all members entitled to attend and vote agree and where the auditors also agree (if appointed).
At first instance, companies should review the requirements of their constitution and ensure same is compatible with current public health policies. Typically, AGMs are conducted in person but are not subject to such limitation. The 2014 Act provides for hybrid and remote options whereby some members can attend by telephone or video conference (i.e. a physical meeting of a small number of shareholders that enables other shareholders to participate by electronic means):
s.176 (4), states that the meeting may be held in “two or more venues… at the same time using any technology that provides members, as a whole, with reasonable opportunity to participate.”
If not already done so, it is good practice for the board to agree, unless the company constitution specifies otherwise, that such hybrid remote meetings are permitted and how they ought to be regulated. If necessary, an amendment to the constitution can be made by way of written special resolution. If a company’s directors are not all located in Ireland, thought should be given to any tax or regulatory consequences that may arise as a result of sitting in a foreign jurisdiction.
The Law Society's Business Law Committee recommends that the method used when issuing notices of the AGM to members should be revised in order to avoid any “at-risk physical handling” of documents. It also advises that companies should distribute an informative leaflet outlining the protocols taken by the company to limit the spread of Covid-19.
For some company types such as private limited companies limited by shares (LTDs) or single member companies it may be possible to dispense the need to hold physical AGMs in a given year by way of a written resolution acknowledging receipt of financial statements and resolving all matters that would have been resolved at the AGM. Inclusion should be given to the re-appointment of the company auditor.
Dispense with the holding of an AGM
However, this option is limited in its application and does not apply to designated activity companies (DACs); companies limited by guarantee (CLGs) and Public Limited Companies (PLCs) with more than one member.
ProxiesCompanies Act 2014 s.183 allows a member to appoint another person to attend an AGM and vote on their behalf. If a small number of proxies were appointed to represent a larger number of shareholders then this would allow the AGM to be carried out whilst ensuring the government requirement of social distancing is respected as a result of ensuring the least number of members are physically present.
Delaying an AGM:
Companies are afforded the opportunity of delaying their AGM under the following circumstances:• If notice of the AGM has not yet been sent, then the company can postpone the AGM to a later date.
• In such a case where companies have already notified members of an upcoming AGM, and subject to the constitution of the company; as per the 2014 Act, s.187(4), the chairperson of a general meeting, with the consent of the members, may arrange to have the meeting adjourned. Notification of such should be served to its members.
• Hybrid AGMs allow for AGMs to be conducted both in person and online, simultaneously; as previously discussed under Section 176 (4) of the 2014 Act.
BOARD MEETINGSBoard meetings allow an opportunity for directors to discuss the company’s dealings and perform certain tasks. Their frequency is dependent on the company's individual need or preference.
In light of government restrictions following the Covid 19 pandemic, where possible board meetings should be held by use of electronic means or by way of unanimous written resolutions.
Electronic MeansSubject to the company’s Constitution, directors may participate in board meetings and voting via telephone or videoconferencing. Companies must ensure that those present can hear and be heard in order to satisfy the quorum requirements. If the quorum is not met, the meeting should be adjourned.
Companies should be mindful of security concerns in respect of any electronic communication by those present and minimise the risk of data corruption and unauthorised access.
Subject to the constitution of the company permitting written resolutions (and no other tax residency or other constraints), the directors of a company may opt to consider and approve items of business by way of a written board resolution instead of holding a board meeting. In this instance, a draft should be circulated to all directors and must be signed off by each one (or a majority) of the directors, in line with company’s constitutional requirements. Counterpart written resolutions are usually acceptable.
It is doubtful as to whether a series of emails may constitute a valid board meeting as they are not conductive to contemporaneous discussion, but a written board resolution could be passed by email. It is untested as to whether a meeting may be held by an instant messaging, oral communication methods are preferred.
To what extent can online technology constitute meetings?
Before the meeting:
Practical points to be considered for remote meetings:
• Consider the means of communication. Audio only meetings may be more reliable than video meetings and more suitable for a large board.
• Check the company’s constitution regarding notice requirements, which may specify the means of communication. The process for accessing the technology to be used and the ground rules for the meeting should also be circulated in advance.
• Directors should receive all relevant materials before the meeting. If circulated by email then password protection is appropriate.
• Ensure IT support is accessible during the meeting.
• Consider if alternates should be appointed for directors who may be unwell or located in a jurisdiction which may result in tax or regulatory issues for your company.
During the meeting:
• Ensure a properly constituted quorum are present on the telephone or video link. All directors attending must be able to hear and be heard so that they can participate and vote on the business of the meeting.
• The meeting should be adjourned if the telephone or video link ceases to work and reconvened when working. This should be reflected in the minutes.
• The chairperson should make use of the mute and unmute functions to ensure all directors get a say.
• If screen sharing is possible, this is a useful way of sharing the agenda and tabling documents.
• If directors are required to vote on a resolution, it is advisable to voice such votes as opposed to voting by a show of hands over a video conference. Consider if voting software is available on the video conferencing platform.
After the meeting:
• The minutes of the meeting should be circulated and ideally the directors who were present would confirm that the minutes are accurate to avoid any confusion or misunderstanding.
• The minutes should be signed by the chairperson where he/she is physically located. Subject to the company constitution board minutes and written resolutions may be signed electronically as opposed to by ‘wet ink’ signature.
Although some companies must hold physical AGMs and board meetings due to specific requirements (legal, tax or otherwise), alternative arrangements are available to members and directors of other companies for hybrid or remote meetings.
Written by Conor Folan and Alice Normoyle.
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