The Companies (Miscellaneous Provisions (Covid-19)) Act 2020 extension date of 31 December 2023 is fast approaching. Included in this extension was the continuation of virtual general and creditor meetings and the winding up thresholds.
The Companies (Miscellaneous Provisions (Covid-19)) Act 2020brought about a major change in how most companies conducted their General Meetings, in that it allowed the company to conduct the meetings wholly or partly by the use of Electronic Communications Technology, as long as all attendees have a reasonable opportunity to participate in the meeting as outlined below:
174A. (6) (a) A company may provide for participation in a general meeting by providing or facilitating, for that purpose, the use of electronic communications technology, including a mechanism for casting votes by a member, whether before or during the meeting.
(b) The mechanism referred to in paragraph (a) shall not require the member to be physically present at the general meeting or require the member to appoint a proxy who is to be physically present at the meeting
Previously this was not permitted in Companies Act 2014 unless such was permitted in the constitution or shareholders agreement.
If a Company elects to use an Electronic Platform for their general meeting the platform that they choose must allow for the following under S.174A(9) CA2014;
• All attendees have a reasonable opportunity to participate in the meeting
• A mechanism for casting votes by a member, either before or during the meeting
• A system for identifying attendees and security of the technology, minimises data corruption and provides certainty as to the source of the electronic communications
• In the case of failure or disruption to the technology, the failure or disruption is remedied as soon as practicable.
• Enables the attendee to hear what is said by the chairperson and any person introduced by the chairperson
• Allows the attendee to speak and submit questions and comments during the meeting to the chairperson to the extent that the attendee is entitled to do so under the constitution of the company.
What are the guidelines for holding a General Meeting via Electronic Means?
The necessary guidelines for the practicable use of Virtual Meetings and the participation by the attendees are outlined as follows:
• Guarantees the security of the communication by the attendees,
• Minimise the risk of data corruption,
• Minimise the risk of unauthorised access,
• Provides certainty as to the source of the electronic communication.
It is important to note that the Company is not responsible for any technological failings or disruptions relating to the equipment of the attendees and any such event does not invalidate the meeting. We recommend that any Company that utilises virtual meetings, that they test extensively ahead of the meeting the chosen electronic platform to ensure they are happy with the technology as well as the audio and audio-visual components. In the event of any technological failings or disruptions on the Company’s behalf, these should be attempted to be remedied as soon as possible.
Attendees must be allowed to speak and submit questions and comments during the meeting, to the extent they are entitled to. In this way, a provision must be made to allow the submission of questions, whether this be during the meeting or ahead of time by email, text message, messaging applications or any similar software ensuring that all forms of communication are secure
With regards to voting, the company must identifya manner in which the Chairperson can identify votes cast by the individual members, especially in the case where there are large numbers of members to ensure that those who are entitled to vote can do so and it is clearly identifiable by the Chair.
Will these provisions be here to stay?
Unless the Companies (Miscellaneous Provisions (Covid-19)) Act 2020 is extended in the coming weeks before its deadline of 31 December 2023 and if virtual meetings are notpermitted in constitution or shareholders agreement, a Company will not be permitted to use a virtual general meeting and will have to revert to physical or hybrid general meetings.
However there is good news on the horizon or companies who in recent years have adapted to virtual meetings, the Public Consultation on proposals to enhance the Companies Act 2014 introduced by The Department of Enterprise, Trade and Employment, asked stakeholders to provide feedback on the use and efficiency of Virtual Meetings, or whether they should be prohibited.
If you would like to discuss any of the above with a member of our team please contact a member of staff at 0539100000.
Please note this information is accurate as of the time of publication.
The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article. The information at the time of publishing was accurate and could be subject to final changes.
