The General Scheme of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024

The General Scheme of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 was published on the 15^th of March 2024.

The Bill seeks to ensure that the Companies Act 2014 remains fit for purpose by focusing on what Minister Calleary called “practical, pro-enterprise reforms”.

This Bill reflects many of the temporary Covid measures brought in by the Companies (Miscellaneous Provisions) (Covid-19) Act 2020. Many of these temporary measures came to a halt in December 2022 following the conclusion of the “interim period”.

The proposed Bill speaks to our new online environment and multi-location world with remote working, sometimes in different countries, being the new norm. The themes of digitalising and facilitating online and hybrid working activities as well as supporting SME’s can be seen from the proposed Bill.

Some of the key proposed amendments are as follows:

1. Conducting Virtual General Meetings:
   Companies will be able to hold a virtual or hybrid meetings, save where it is expressly prohibited by the Company Constitution.

1. Execution of Documents under seal:
   The Bill allows for multi-location execution and sealing of documents. The proposed change allows for sealed documents to be executed in several counterparts, with the total number of documents being regarded as a single document. It is intended to permanently deal with the issue, where the signatories and the seal are in different places and delivering the signatures on the same document would cause significant delays. Interestingly, this provision is intended to operate “notwithstanding any provision of the company’s constitution”.

1. Annual Returns:
   SME’s shall have a little more flexibility when it comes to late annual returns. Currently failing to meet the CRO deadline means a loss of audit exemption for the following 2 years. The loss of this audit exemption is mainly affecting small and micro enterprises. Once the audit exemption is lost either an auditor must be appointed, or a court order obtained for an extension to the annual return date. Both options are costly and the Bill proposes that the audit exemption shall only be forfeit if a company fails to file its annual return more than once in any five year period.

The Bill also brings the Companies Act up to date with recent EU case law, by enhancing enforcement with regard to i) change in registered office ii) where there is no secretary registered in the CRO and iii) failure to file beneficial ownership in the RBO now proposed as new grounds for involuntary strike off.

Overall the proposed changes are seen as very positive and necessary for our now ever evolving digitalised world.

This document has been prepared by Reddy Charlton Solicitors LLP for general guidance only and should not be regarded as a substitute for professional advice. Please contact one of our team at Reddy Charlton and we would be happy to advise you on your unique circumstances.

For further information contact Elaine McGrath emcgrath@reddycharlton.ie