Posted on: 01 Sep 2020

The Companies (Miscellanous Provisions) (Covid-19) Act 2020 (the “ 2020 Act”) brings 

some welcomed clarification on the practical difficulties and issues faced by Irish companies during the Covid-19 pandemic. The 2020 Act was formally commenced on 21 August 2020.

The provisions of the 2020 Act will apply until the 31st of December 2020, unless extended further by the Government (the “Interim Period”). Some of the new changes brought in under the 2020 Act include:

1. Execution of Legal Documents

Usually, a company’s execution of a legal document requires a signature of one director, which is countersigned by the company’s secretary or a second director and the company’s common seal is affixed to the document - all on the one page. The public health restrictions and the increase in remote working created practical difficulties for companies when executing legal documents.

What has changed?
During the Interim Period, the required signatures and company seal can be executed/affixed on separate pages (in counterpart) and then considered as one single legal document.

2. Deadline for AGMs extended

Under Irish law, a company must hold its Annual General Meeting (“AGM”) within 15 months from its last AGM (unless it is an newly incorporated company where such a company can hold its first AGM within 18 months afte the date of its incorporation).

What has changed?
Companies have until the 31st of December 2020 to hold their AGM, notwithstanding the provisions of the Company Law Act 2014 and the company’s constitution. 

3. Virtual meetings are now permitted

Irish Law does not provide for fully virtual meetings. Understandably, this presented difficulties for companies when trying to hold their general meetings while complying with public health restrictions imposed due to Covid-19.

What has changed?
Notwithstanding the provisions in a company’s consitution, the 2020 Act permits companies to hold their general meetings by fully virtual means e.g. via Zoom, provided that all of those entitled to attend have a reasonable opportunity to participate.

The date, location and means of holding an AGM can also be changed by giving notice at any time up until the day before scheduled meeting.

Creditors meetings can also be held virtually. 

4. Winding up – Debt Threshold increased

Under Irish Law, a creditor’s voluntary winding up can be initiated by a statutory demand of a creditor for the amount of €10,000 in the case of a single creditor or €20,000 for a number of creditors acting together. These unprecedented times have left companies facing liquidity and cash flow difficulties and consequently, some are at risk of being wound up even though they may be capable of recovery post-pandemic.

What has changed?
The debt threshold for such statutory demand by a creditor/creditors has been increased to €50,000 for the Interim Period.

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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