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COVID-19 AND HOLDING AN AGM – WHAT ARE YOUR OPTIONS?

By: Valerie O'Driscoll | Posted on: 25 Apr 2020

Due to the on-going lockdown restrictions put in place by the Irish Government as a result of the COVID-19 pandemic, we have received a number of queries from our clients regarding the options available to them when it comes to holding an Annual General Meeting (AGM). We discuss these options below, however, it is vitally important that one checks the company’s constitution when it comes to assessing the options available to the company in question.

When must a company hold its AGM?

A company must hold its AGM annually and within 15 months from the preceding AGM. However, for newly incorporated companies, an AGM must be held within 18 months after the date of its incorporation.

Financial statements and reports must be put before the company at the AGM within 9 months after the company’s financial year end.

Is a company obligated to hold an AGM?

A single member company or a private company limited by shares (Ltd) can dispense with the requirement to hold an AGM in a given year, where all the members entitled to attend and vote sign a written resolution which:

(a) acknowledges receipt of the financial statements that would have been put before the AGM;
(b) resolves all other matters that would have been resolved at the AGM; and
(c) confirms no change of appointment of the statutory auditor of the company.

Importantly, a Designated Activity Company (DAC), a Company Limited by Guarantee (CLG) and a Public Limited Company (PLC) with more than 1 member cannot dispense of the requirement to hold an AGM.

Are Virtual AGMs permissible?

No. Virtual AGMs are not permissible under Irish Law.

“Hybrid” AGMs

S176(4) of the Companies Act 2014 provides that and AGM “may be held in 2 or more venues (whether inside or outside of the State) at the same time using any technology that provides members, as a whole, with a reasonable opportunity to participate.”

Subject to what is provided for in the company’s constitution, a “Hybrid AGM” whereby there is a physical in-person meeting that facilitates members to participate by electronic means is permissible. A Hybrid AGM is understood to be an AGM conducted both in person and online, simultaneously. Those members participating by electronic means should be able to vote and speak at the meeting.

Quorum

Of course, the quorum of members as required under the company’s constitution must be present at the AGM. The company should not rely on the members participating online to form a quorum.

Proxies

A member can appoint another person to attend an AGM and vote on their behalf. This would allow the AGM to be carried out while ensuring the quorum is physically present. Availing of proxies will reduce the number of people in attendance of the meetings and ensure compliance with the Government’s lockdown restrictions.

Members should be encouraged to attend and vote at AGMs by way of proxy.

The AGM Notice

We would recommend enclosing a “Covid-19 Notice” with the notice of the AGM, outlining the measures being put in place as a result of the Covid-19 pandemic, including but not limted to encouraging members to appoint a proxy.

Can the AGM be delayed?

If the notice of the AGM has not yet been issued, a company can delay holding its AGM. 

Subject to the constitution of the company, the chairperson may, with the consent of those at the meeting with a  quorum present, adjourn the meeting. In order to adjourn the meeting, the meeting must usually have firstly commenced. 

Furthermore, most constitutions of companies permit postponement of the AGM to a later date.

When delaying, adjourning or postponing the AGM it is important to note that the company must always be in compliance with the timeline requirements for AGMs outlined above.

In light of the current circumstances, it is important to address the issue of holding an AGM sooner rather than later in preparation for the extension of the lockdown restrictions by the Irish Government.

Key contacts:

Justin Fennell

Valerie O’Driscoll

Disclaimer: This document is for information purposes only and does not represent legal advice. If you have any queries in relation to the above matters, please refer to the contacts above or alternatively to your usual contact in P.J. O’Driscoll & Sons LLP.

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