COMPANIES ACT 2014
The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 was published on 24 July 2024 (together with an Explanatory Memorandum) and is progressing through Dáil Éireann. This follows publication of the General Scheme of the Bill in March. The Bill will amend certain provisions of the Companies Act 2014 (the Companies Act), the Industrial and Provident Societies Act 1893 and the Registration of Business Names Act 1963.
Key proposed amendments to the Companies Act include provisions allowing:
- for the execution of instruments under seal on separate counterparts;
- private companies and PLCs to conduct general meetings in fully virtual or in hybrid format, where not expressly prohibited by the company's constitution; and
- a domestic merger to take place between two (or more) DACs and mergers by absorption involving multiple subsidiaries merging into their parent to take place in one transaction.
An amendment is proposed to section 1087G (Record date for participation and voting in general meeting) fixing the record date for an adjourned meeting to that of the original meeting, subject to the adjourned meeting occurring within 14 days of the original meeting. However, the proposed provision does not include the exclusion of weekends and public holidays from the computation period for the record date, as had been previously proposed in the General Scheme.
The Bill does not include the proposed amendment to section 1087D (Alternative special majority for Schemes of Arrangement) which was set out in the General Scheme and provided an adjusted mechanism for calculating the special majority where there is a super quorum at the scheme meeting.
For further information on other key provisions of the Bill, see our recent Insights: Draft Legislation to Amend the Companies Act 2014 Published and Execution of Documents under Seal: Update.
The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 (the Act) was signed into law on 9 May 2024 and commenced with effect from 1 July 2024. The Act makes certain amendments to the existing collective redundancy regime in insolvency situations and amends the Companies Act to improve the dissemination of information to employees as creditors in a corporate insolvency situation. Further detail on these aspects of the Act is available in our Briefing: Increased Protection for Employees in Insolvency Situations Signed into Law.
The Act also amends the provisions in the Companies Act concerning reckless trading, including changing the test from a subjective to an objective one.
For more, see our recent Insights: Companies Act 2014: Changes to Test for Reckless Trading.
The European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024 came into operation on 1 July 2024 and amend the Companies Act to increase the qualifying criteria (in terms of turnover and balance sheet total) for certain companies/groups. The amendments:
- will have the effect of increasing the number of companies and groups that can avail of certain exemptions relating to their financial statements under the Companies Act; and
- may impact whether or when an undertaking or group falls within scope of the new sustainability reporting obligations under the European Union (Corporate Sustainability Reporting) Regulations 2024 (which transpose the Corporate Sustainability Reporting Directive into Irish law) and consequently under Article 8 of the Taxonomy Regulation.
For more, see our recent Insights: Adjustments to Size Criteria for Companies/Groups Take Effect.
EU DIRECTIVE ON DIGITAL TOOLS
The European Parliament has adopted the directive on digital tools and processes in company law. The directive aims to enhance cross-border corporate transparency through the establishment of a Business Registers Interconnection System which will be accessible across the EU. The introduction of a common digital EU power of attorney and EU Company Certificate are intended to reduce formalities in cross-border transactions, by not requiring apostille or translation of official documents. Once it is formally adopted by the Council, the directive will enter into force and Member States will have two and a half years within which to transpose it into national law.
COLLECTIVE LITIGATION LEGISLATION
The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 was commenced from 30 April 2024, establishing a new civil litigation mechanism through which representative actions can be brought on behalf of consumers for alleged infringement of their rights under relevant legislation.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
