The Companies (Miscellaneous Provisions) (COVID-19) Bill came into effect on 21 August 2020 and will be welcomed as a positive development designed to aid companies still struggling to battle against the unprecedented operational and economic difficulties caused by the ongoing COVID-19 crisis.
The temporary measures of the Act when enacted will be set to initially operate for the duration of the interim period, until 31 December 2020, with a potential extension of those provisions as may be effected by order of the Government.
Some of the key amendments to the existing Companies legislation are namely:
Execution of Documents
During the interim period, documents that require to be executed by company seal and signatures of the company officers may be executed separately and will be treated as the one document for the purposes of a valid execution. This will prove useful as it will facilitate execution in order to allow the completion of a transaction, which may have otherwise been delayed due to individuals not being able to attend at the same location as a result of public health guidelines.
Section 10 provides Directors who recommended the declaration of a dividend be approved by the company prior to the onset of COVID-19 to withdraw the resolution to approve the dividend, or propose an amendment to the resolution to provide for a dividend at a reduced amount should the directors be of the opinion ''that due to the actual or perceived consequences of COVID-19 on the affairs of the company, the dividend ought to be cancelled or reduced''
- Companies now have up until the end of the year to hold an AGM.
- General meetings may be held virtually and, conducted wholly or partly by electronic means, as long as all individuals permitted to attend have a reasonable opportunity to participate in the meeting.
- Directors can now, should they deem it necessary, at any time up until the end of the day prior to the meeting taking place be able to cancel the meeting, change its venue or the particular means of holding the meeting or more further cancel the meeting at any time prior to the holding of that meeting if this is deemed necessary due to exceptional and unexpected circumstances in accordance with the public health guidelines.
- Meetings such as those convened to commence the winding of the company at the instigation of its creditors, may be held virtually and, conducted wholly or partly by electronic means, as long as all individuals permitted to attend have a reasonable opportunity to participate in the meeting.
Insolvency and Corporate Restructuring
- The statutory threshold amount under Section 570 of the Companies Act 2014 Act, whereby a company is deemed unable to pay its debts as they fall due is increased from ?10,000 and ?20,000 where there is more than one creditor to a total aggregate debt amount of ?50,000.
- The current maximum period of protection for companies under examinership has been extended to 150 days, with an increase of a further 50 days. It should be noted this extension of time sought by the examiner must be owing to the exceptional circumstances on the actual or potential impact of COVID-19 on the company that made it not possible for the examiner to make their report to the Court within the standard 70 day period.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.