23rd July 2020 - In light of the restrictions imposed on businesses on account of COVID-19 the General Scheme of the Companies and Industrial and Provident Societies (Covid-19) (Amendment) Bill 2020 has been published, outlining proposed emergency measures for companies, and Industrial and Provident societies dealing with issues caused by the pandemic.
The proposed measures are temporary and are expected to last for the interim period expiring on 31 December 2020. There is a provision to extend until 20 June 2021 if deemed necessary.
As most companies and organisations have adapted to holding meetings virtually over the past number of months, the proposals aim to help companies effectively hold electronic meetings while complying with the COVID-19 social distancing guidelines issued by the Government.
Companies will have until 31 December 2020 to hold an AGM
Companies can hold general meetings by electronic means notwithstanding the provisions in the company constitution
The bill includes the introduction of a new director’s duty for companies approaching insolvency - The directors of a company who believe, or who have reasonable cause to believe, that a company is unable or likely to be unable to pay its debts as they fall due, shall– (a) have regard to the interests of the company’s creditors; and (b) preserve the company’s property
Other changes to note:
The bill also introduces other changes and regulations regarding the notice, attendance and voting at general meetings;
Company directors are permitted to withdraw a dividend resolution or to reduce the dividend proposed to be declared by resolution at a general meeting, due to a change of opinion on their part following the issue of the notice of general meeting;
Documents under seal to be executed in different counterparts - with the company seal in one location and the directors, secretary and registered persons in other locations, this head is aimed at enabling documents under seal to be executed in different counterparts, with the aggregate of the documents to be considered to be the one instrument.
COVID-19 has significantly accelerated digitalisation of the workplace as companies and businesses of all types have adopted new processes and systems of working, to continue operations. The changes outlined in the amendment are progressive and will offer some level of comfort for businesses at management level, as we face continued uncertainty in the months ahead.
For more information, you can download the amendment in full via the link below.Download Companies Bill