Extension of Companies (Miscellaneous Provisions) (Covid-19) Act 2020

On 28 April 2022 the Government approved the extension to the interim period of the Companies (Miscellaneous Provisions) (COVID-19) Act 2020 (the Covid Act) to the 31 December 2022. Despite what is provided for in a company’s constitution or in the Companies Act 2014 (the Companies Act), the extension will enable companies to avail of the following flexibilities:

• the ability to hold AGMs and creditors' meetings virtually;
• the ability to revise of the issue of dividends;
• the ability for documents which are to be executed under seal to be executed in counterpart;
• an increase in the threshold before a creditor can issue a statutory demand; and
• the ability to extend the examinership process to up to 150 days.

Board Meetings

The Covid Act extension eases legal requirements to industrial and provident societies in Ireland to hold their general meetings virtually, providing relief to businesses until the end of 2022. Whilst the Companies Act allowed attendees to participate in general meetings virtually or via hybrid form, meetings were still required to have a physical location. The Covid Act amends this requirement and permits shareholder meetings to be held virtually (either wholly or partially) during the intervening period. Under section 174A(9)(a), a company that provides for the use of a virtual meeting for participation in a general meeting by an attendee “shall ensure, as far as practicable” that such virtual meeting:

(i) provides for the security of such virtual meeting by the attendee;
(ii) minimises the risk of data corruption and unauthorised access; and
(iii) provides certainty as to the source of the virtual meeting.

Notice period

Section 7 of the Covid Act provides a number of amendments to the notice requirements outlined in section 181 (5) of the Companies Act. Under section 7 of the Covid Act, the notice of a general meeting must clarify:

(i) the electronic platform to be used for the general meeting;
(ii) the details for access to the electronic platform;
(iii) the time and manner by which an attendee must confirm his or her intention to attend the meeting;
(iv) any requirements or restrictions which the company has put in place in order to identify attendees who intend to attend the meeting;
(v) the procedure for attendees to communicate questions and comments during the meeting; and
(vi) the procedure to be adopted for voting on resolutions proposed to be passed at the meeting.

Execution of instruments

The prevalence of remote and hybrid working models has in some cases caused a dislocation between company Boards. It is now not uncommon for the company seal, the directors, the secretary and the registered persons to each be based in different locations. Section 5 of the Covid Act addresses this by allowing during the interim period, documents under seal to be executed in counterparts and then to be regarded as a single document.

Concluding points

The extension of the Covid Act will provide welcomed relief to Boards who have enjoyed the benefits of running hybrid, virtual and recorded general meetings. A recent survey conducted by the Chartered Governance Institute noted only 45% of Boards were planning on holding in person only AGMs this year. Furthermore, 49% of the interviewed Boards expressed their plans to adopt a hybrid approach to general meetings in 2022. The survey reported a consensus that general meetings had become more efficient in regards to the planning and running of meetings online.

For further information, please contact our corporate services team.