Based on some of the recommendations of the Company Law Review Group the Government has approved priority drafting of the Companies and Industrial and Provident Societies (COVID-19) (Amendment) Bill 2020 with a view to early enactment.
The Corporate Governance Committee of the CLRG (of which KPMG’s Salvador Nash is Chair) proposed amendments (which are adopted in the Bill) to specifically provide that companies can have virtual general meetings to include cancellation and rescheduling of meetings, provide for a variation or withdrawal of dividend resolutions, an extension of time for the holding of the 2020 Annual General Meeting (with the exception of regulated entities) and permitting the execution of documents under seal by the use of counterparts. Similar general meeting provisions are also provided for in the Bill in respect to Industrial and Provident Societies.
There were also recommendations from the Corporate Insolvency Committee and some amendments worth highlighting include the following: -
It is important to highlight the foregoing amendments (with the exception of a director's duty to creditors) would only remain operative until 31 December 2020, subject to extension to 30 June 2021.
Additionally, no amendments are being proposed to: -
The foregoing is most likely because of the Director of Corporate Enforcement’s statement on COVID-19 and the insolvency functions of that office. It is of the view that it would generally not consider directors to have acted dishonestly or irresponsibly in circumstances where a company has become insolvent as a consequence of events outside the director’s control.
The Office of the Parliamentary Counsel will now be requested to draft the Bill before it is presented to the Dáil and the Seanad.