As the world endeavours to rise to the challenges that COVID-19 has presented, we set out below some considerations from a company secretarial perspective.
The Companies Registration Office ("CRO") is closed and therefore unable to process submissions or answer queries at this time.
However, the Registrar of Companies has communicated that all annual returns due to be filed with the CRO between now and 30 June 2020 will be deemed to have been filed on time if all elements of the annual return are completed and filed by that date.
For summary approval procedure filings, which are time critical, they can be scanned and delivered to a dedicated email address. The only documents that will be accepted into this email address are in respect to the summary approval procedure other than members voluntary liquidations.
We are advised that all other documents posted to the CRO and received by them will be treated as having arrived on time when the CRO is in a position to process them.
Finally, it is not currently possible to change a company name or re-register a company, but from 2 April, it should be possible to incorporate companies.
The Companies Act 2014 (the “Act”) permits a director to appoint, with the approval of a majority of directors, an alternate director to act in his or her place.
The alternate, while he or she holds office, is entitled to notice of directors’ meetings, to attend such meetings as a director, and in place of the appointing director, to vote at such meetings as a director.
The appointment of an alternate director could be useful in the event of the unavailability of the appointing director. In order to be effective, the procedure set out in the Constitution (if any), or the Act, must be followed. Once appointed, a filing has to be made at the CRO.
The board of directors could consider authorising what is known as a registered person who can bind the company i.e. an authority that is not restricted to a particular transaction or class of transactions. This ability would provide a further alternative in the event of the unavailability of directors. The appointment of a registered person is required to be notified to the CRO on the relevant statutory form. That office is not in a position to process such a filing until at least 14 April and once it can, this is a viable option.
The affixing of a company’s common seal to a deed, or other document, will require, unless the company’s Constitution provides otherwise, the signature of at least one director and the counter-signature of either a second director, the company secretary or another person appointed by the directors for that purpose. Some companies may have a provision in the Constitution requiring only one signature upon the fixing of the common seal and the Constitution should be checked to determine the relevant provisions.
The affixing of the common seal must be authorised by the board of directors – see below for considerations in relation to directors’ meetings and resolutions of directors.
It may currently be difficult for the directors of a company to hold a physical directors’ meeting. In these circumstances, it may be possible for the directors to act by way of a written resolution instead of holding a physical meeting, or for the directors could meet by electronic means.
Under the Act, unless the company’s Constitution provides otherwise, a resolution signed by all the directors entitled to receive notice of a directors’ meeting will be as valid as if it had been passed at a directors’ meeting duly convened and held. The resolution must be unanimous and where one or more directors may be unable to sign the same piece of paper, the written resolution can consist of several documents, each signed by one or more directors, and will take effect from the date it was signed by the last director.
The Act also provides for majority resolutions of directors where one or more directors (but not the majority of the directors of a company) is not permitted to vote on a directors’ resolution e.g. in the event of a conflict of interest.
The Act provides that, unless the Constitution provides otherwise, electronic participation at a directors’ meeting is possible i.e. a directors’ meeting consisting of a conference between some or all of the directors situated in different locations. The directors must be able to speak to one another and be heard by the other participants. Electronic participation can take the form of telephone, video or other electronic form of communications and a director participating in this way will be deemed to be present in person at the meeting, will be entitled to vote and be counted in the quorum. Such a meeting will be deemed to take place where the largest group of participants in the conference is assembled. Where there is no such group, the meeting is deemed to take place where the chairperson is located. Where neither of these scenarios apply, the meeting itself can decide the location. Careful consideration will need to be given to the deemed location of any board meeting for tax residency purposes in order to evidence that central management and control and strategic board decisions are made in the correct location for tax purposes.
There are various aspects of general meetings which should be considered in the current environment, particularly with a view to reducing the number of members physically required to attend a general meeting, whether that is at an annual general meeting (“AGM”) or at an extraordinary general meeting.
Subject to the provisions of the Constitution, members are entitled to appoint a proxy to attend and vote at a general meeting on their behalf. This will enable the meeting and voting to proceed while limiting the number of members required to attend in person so that as few people as possible are required to be physically present to ensure a quorate general meeting.
The forms of proxy should include the appointment of an alternative proxy should the preferred proxy not be able to attend the general meeting, e.g. due to travel restrictions or illness.
The Constitution should be reviewed in order to determine the location for delivery of completed proxy forms and the timeframe for receipt of same so as to ensure proxies received are valid.
The Act provides for members to participate at a general meeting by technological means, such as video conferencing. However, this would not be a virtual meeting, such that a physical location for the general meeting would still be required and a quorum would still need to be met. The general meeting can be held in one or more locations, either inside or outside the State, at the same time. Subject to appropriate provisions in a company’s Constitution, members could vote electronically, without the use of a proxy, and minimise the requirement for personal attendance.
The location of the meeting should permit sufficient space so as to minimise physical contact between the attendees. Bear in mind that the location for the meeting as set out in the notice of the meeting may need to be changed, requiring timely and sufficient communication to members and others entitled to receive notice.
Certain types of companies, including private companies by shares (LTDs), may avail of a procedure under the Act to dispense with the need to hold a physical AGM in a particular year. This option is not available to all types of companies, e.g. multi member DACs or plcs.
All members entitled to attend and vote at the AGM may sign a written resolution dispensing with the requirement to hold an AGM and this must be done before the latest date for holding the AGM. The resolution would acknowledge receipt of the financial statements that would have been laid before the AGM, resolve all matters that would have been resolved at the AGM and confirm that there were no changes proposed in the appointment of the auditor (where an auditor is appointed).
In the current circumstances, a company may consider it appropriate to adjourn a meeting. The Act permits the chairperson to adjourn the meeting with the consent of a quorote general meeting. In other words, subject to the Constitution, in order to adjourn the meeting, the meeting should first be commenced and then immediately adjourned. When a meeting is adjourned for thirty days or more, notice of the adjourned meeting must be given.
It is important to note the statutory requirement to hold an AGM once in every calendar year, within nine months of the company’s financial year end, with no more than 15 months elapsing since the previous AGM. In the case of a newly incorporated company, the first AGM must be held within 18 months of incorporation.
Some important points to bear in mind in the context of adjourning the AGM include where a Constitution might require directors to retire and be re-elected at an AGM, there may be a question over whether the directors continue to hold office where there is a delay or absence in holding an AGM.
A resolution in writing signed by or on behalf of the members of a company entitled to attend and vote can be used instead of holding a physical general meeting. A written resolution is as valid and effective for all purposes as if the resolution had been passed at a general meeting.
Similar to a written resolutions of directors, a written resolution of members can consist of separate counterparts, each signed by/on behalf of the voting members and the resolutions are deemed to have been passed at a meeting held on the date on which the resolution was signed by the last member to sign.
The Act provides for both unanimous and majority resolutions and prescribes certain formalities in order to avail of the written resolution procedure. However, written resolutions are not permitted for certain decisions, e.g. the removal of a director from office.
The ability to manage corporate affairs is proving a difficult task with the advent of COVID-19. However, the Act and the provisions of a company’s own Constitution can provide useful ways of maintaining the status quo.