The Department of Enterprise, Trade and Employment published the General Scheme of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 (the Bill) confirming that the government has approved the priority drafting of the Bill.
The Bill will amend provisions of the Companies Act 2014, which include the following:
- Common Seal: A new Section 43A is proposed, reinstating the temporary measure which was previously available for the duration of the "interim period", facilitating the execution of instruments under seal on separate counterparts.
- Virtual General Meetings: A permanent amendment is proposed, largely modelled on section 174A which was introduced for the duration of the "interim period" (due to expire on 31 December 2024), which will give companies the option to conduct general meetings in fully virtual or in hybrid format, where not expressly prohibited by the constitution. It is proposed that the new provision will apply to private companies and PLCs.
- Proxies: Section 183(6) is to be amended to exclude weekends and any public holidays from the time counted towards the minimum 48-hour notice required to appoint a proxy.
- SAP Declarations: It is proposed that the Summary Approval Procedure Declarations will be required to be delivered to the Registrar in "prescribed form".
- Domestic Mergers: Proposed amendments include providing that a merger may take place between two (or more) DACs and where a group of subsidiary companies is wholly owned by the same parent company a merger by absorption may be facilitated in one transaction.However, the General Scheme does not address the issue identified in relation to Section 471(1) which requires a merging company to make available audited financial statements for the preceding three years.
- Involuntary Strike-Off: Three additional grounds are proposed for involuntary strike-off of a company by the Registrar: (1) failure to deliver notice of change of registered office; (2) where there is no company secretary recorded in the CRO; and (3) failure to file beneficial ownership information with the RBO.
- PLCs:
- Alternative Special Majority for Schemes of Arrangement – proposed amendments to Section 1087D provide that when a relevant issuer is organising a vote on a scheme of arrangement, a special majority may be constituted either: (1) under Section 449(1) for a vote on a scheme of arrangement; or (2) as calculated for relevant issuers under Section 1087D(1) subject to the presence of a "super-quorum" at the scheme meeting.
- Record Date for Adjourned Meetings of "relevant issuers" – proposed amendments to Section 1087G provide that the "record date" for an adjourned meeting shall be the record date of the original meeting, subject to the adjourned meeting occurring within 14 days of the original meeting. Weekends and public holidays are to be excluded for the purposes of computation of the record date.
- Notice of Virtual Meeting for Traded PLC – to address the specific details to be included in the notices of general meeting for a "traded plc" where the meeting is hybrid or fully virtual.
The Bill will also provide for enhanced powers for the Corporate Enforcement Authority, the CRO and IASSA and amendments to provisions related to corporate insolvency and regulation of receivers.
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.