Our previous article focussed on how businesses can continue to enter into agreements and make decisions remotely in the altered corporate and commercial landscape existing due to the impact of Covid-19. In particular, we focussed on existing provisions enabling remote execution of documents and remote decision-making.

Two newly published bills have made proposals which, if enacted, will supplement the existing provisions in the context of Covid-19 and update the law more generally. 

Companies (Miscellaneous Provisions) (Covid-19) Bill 2020

The Companies (Miscellaneous Provisions) (Covid-19) Bill 2020 (the "Companies Bill") has now been introduced to Seanad Éireann and has completed first stage. The Companies Bill proposes putting exceptional temporary measures on a legislative footing to mitigate Covid-19's impact on conducting business in Ireland.

One of the main aspects of the Companies Bill is to propose temporary measures relating to examinership, liquidation, restructuring and insolvency. Our Restructuring and Insolvency colleagues have looked at these provisions in their article available here.

From a general corporate perspective, particularly in terms of document execution and decision-making, it is useful to note the following aspects of the Companies Bill:

1. An instrument which is to be executed or made by a company under seal may consist of several documents. These documents may be executed separately and will nonetheless be treated as one valid and effective instrument.

In our previous article, we mentioned the difficulties which the continuing Irish corporate requirement of the company seal has in terms of execution of documents, particularly deeds. Currently, when a company seal is required on a document, the seal and signature of two directors (or a director and secretary) must all be on the one page.

This provision attempts to mitigate some of these difficulties by permitting execution of deeds and other documents in counterparts. In practical terms, this could mean that:

(i) One copy of a document is signed by one director;

(ii) A separate copy of the document is countersigned by a different director or secretary; and

(iii) The company seal is applied on a separate copy of the document.

Each of these several documents will be taken together as one valid and effective document. Similar provisions apply to execution by a registered person.

2. Facilitation of the holding and conduct of general meetings.

The proposed measures can be summarised as follows:

- Postponing AGM: The time for holding an annual general meeting ("AGM") will be extended. In a case where a company is due to a hold its AGM at some date throughout 2020, it may postpone its AGM to a date not later than 31 December 2020.

- Ability To Cancel General Meeting on Public Health / Exceptional Grounds:

In respect of a general meeting, directors may: 

- cancel the meeting;

- change the venue of the meeting; or

- change the means of holding the meeting (eg by electronic means),

at any time up to the end of the day before the day on which the general meeting is to be held if, in the opinion of the directors, it becomes necessary to do so in order to comply with public health guidance.

Similarly, directors may cancel a general meeting any time prior where they deem it necessary for "exceptional and unexpected circumstances".

- Electronic General Meetings / Electronic Communications Technology: Companies may conduct general meetings wholly or partly by electronic means. All attendees must have a reasonable opportunity to participate in meetings conducted electronically.

There are further provisions around the use and nature of electronic communications and the requirements of same (eg security, content requirements for notice).

- Voting: There are also provisions about voting on resolutions at general meetings held electronically. Voting can take place by way of a show of hands or by way of technology.

Notably, these measures will apply notwithstanding the provisions of a company's constitution so, for example, electronic means for general meetings will be permissible even if not currently permitted by a company's constitution.

3. Withdrawal of Dividend Resolutions: Where directors have recommended the declaration of a dividend to be adopted at general meeting, the directors may (i) withdraw the resolution; or (ii) propose an amendment for a lesser dividend, if the directors have formed the opinion prior to convening the general meeting that due to Covid-19 it should be so withdrawn or reduced.  

4. Industrial and Provident Societies: The Companies Bill also proposes similar provisions in respect of the Industrial and Provident Societies Act 1893 (the "1893 Act"). Such provisions include permitting societies subject to the 1893 Act to hold AGMs electronically. As set out above, the time for holding such AGMs will also be extended.

It should be noted that it is currently envisaged that the proposed temporary measures will only apply for an interim period, ending 31 December 2020. The interim period can be extended to no later than 30 June 2021.

As Covid-19 continues to spread globally and with many businesses facing significant disruption, these proposed measures will assist companies in mitigating some of the technical and bureaucratic difficulties that arise in decision-making and execution of documents.  

Civil Law and Criminal (Miscellaneous Provisions) Bill 2020

Also of note is the Civil Law and Criminal Law (Miscellaneous Provisions) Bill 2020 which has also been introduced to Seanad Éireann and has completed first stage. As well as more general modernisation measures, including in respect of the use of electronic means in civil and criminal proceedings, the Bill proposes to modernise the law around swearing of affidavits and statutory declarations.

As many businesses will be aware, currently where an affidavit or statutory declaration is being sworn, the declarant is required to indicate their religious faith (and/or be subject to enquiries in respect of their faith).

Instead, this Bill proposes a concept of a 'statement of truth' which may be in electronic form and may simply contain a statement that the person has an honest belief that the facts stated therein are true. It will be an offence to make such statement without an honest belief as to its truth.

This Bill also provides for remote hearings and meetings of State bodies which will attempt to reflect some of the electronic measures applicable to companies.

Contact

We will provide further updates on the above, to include the progress of both Bills, as they progress through the Houses of the Oireachtas and are enacted into law.

If you would like to discuss the above, or the legal implications of Covid-19 on your organisation more generally, please contact Peter O'Neill or Ryan Duggan. Eversheds Sutherland is a full service international law firm with 69 offices in 34 countries including Dublin and Belfast. Given Covid-19's global impact, we feel Eversheds Sutherland is best placed to provide businesses with advice from the necessary global perspective in order to help address the unique challenges posed by Covid-19.

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.