Background
On 30 July 2020: the Companies (Miscellaneous Provisions) (Covid-19) Bill 2020 was passed by the Dáil. The Bill makes temporary amendments to the Companies Act 2014 and the Industrial and Provident Societies Acts 1893 – 2018 to address issues arising as a result of Covid-19. It is hoped that provisions contained in the Bill will assist those businesses who have been adversely impacted by Covid-19 and address practical issues facing business with regard to compliance and solvency. Measures will be operative for an interim period (up until 31 December 2020) and will be extended by Government if it’s deemed necessary.
Features of the Bill
The main provisions of the Bill may be summarised as follows:
- Businesses may hold AGM’s, general meetings and creditors’ meetings electronically;
- AGMs may be postponed until 31 December 2020;
- Documents which are required to be executed under seal are allowed to be executed in counterpart;
- The period of Examinership has been extended from 100 to 150 days, subject to court approval;
- An increase in the amount at which a creditor can issue a statutory demand, from €10,000 to €50,000 for an individual debt, or from €20,000 to €50,000 for aggregate debts owed to a single creditor;
- A statutory fiduciary duty on directors of a company approaching insolvency to have regard for the interests of the company’s creditors and to preserve company property;
- Provide the Minister with regulation making power in respect of extending the interim period and amending the operational detail of virtual general meetings.
Immediate Benefits
- Viable companies have sufficient breathing space to restructure and trade through the crisis.
- A welcome relief to smaller businesses around the country – shops, cafés hairdressers etc.as this change will mean that these businesses will not be wound up for relatively small debts of €10,000.
- Online meetings will comply with public health guidance on health and travel restrictions.
- Address the situation where a company seal and its directors and secretary are in separate locations due to remote working, a small amendment with practical impact.
- New duty to creditors on insolvency.
- Reduces the administrative burden on companies.
What’s next?
Company Law Amendments were introduced to mitigate the impact of the Covid-19 crisis on Irish companies; to give them some breathing space while maintaining solvency and compliance. The changes will apply during the interim period up to December 2020 which will serve as a trial run for practical changes such as AGMs being held virtually. Government will use this time to consult with stakeholders on what is working and what is not.
We are here to help. Should you have questions on this topic or need advice regarding any aspect of compliance or business continuity, contact Jamie O’Hanlon at info@avidpartners.ie or telephone 0818 303 087.
Further Reading
Check out Avid Partners’ Covid-19 Resource for a comprehensive list of business supports available. This page is updated regularly as regulations change and new schemes are introduced.
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