A William Fry briefing note on the Companies (Miscellaneous Provisions) (COVID-19) Bill 2020 points out that its proposals will allow companies to hold their AGMs on any date before the end of 2020, regardless of any other deadlines that would usually apply.

This legislation seeks to tackle company law issues which have arisen in the context of COVID-19 response measures.

Measures

The measures include ongoing restrictions on the number of attendees at indoor events and on international travel.

If enacted, the changes will remain in force until the end of the year.

The Bill also allows for electronic meetings, using real time, two-way audio-visual or audio communication, without the need for a physical venue, provided all attendees have a reasonable opportunity to participate.

Actions

Meanwhile, the Office of the Director of Corporate Enforcement (ODCE) has issued guidelines on how directors’ actions will be assessed as a result of the pandemic.

The Companies Act 2014 requires a liquidator to send a report to the ODCE.

The ODCE says statutory deadlines continue to apply and liquidators of insolvent companies are obliged to submit their section 682 reports within six months of their appointment.

The ODCE has no discretion to extend this deadline but says it appreciates that liquidators may be operating in a severely constrained manner due to current movement restrictions.

The ODCE is relying on the broad flexibility allowed for under the legislation, in order to assess directors’ actions.

Reassurance

While not guaranteeing that a director will not be subject to restriction orders, as a result of insolvency caused by the pandemic, the guidance offers reassurance to directors who act in a professional manner, in their company, creditors, and employees’ best interests.

In assessing directors’ actions, the ODCE will assess:

• Any decision to continue trading out of difficulties,
• tax liabilities which pre-existed or have arisen,
• procedures for monitoring financial position,
• whether professional advice has been sought,
• steps taken to reduce costs or restructure.

If decisions were made in good faith and with honesty and responsibility, the ODCE is believed to be unlikely to make restriction orders on such directors.