Important changes to company law will mitigate impact of Covid-19

14/07/2020

Fine Gael TD for Dublin Fingal, Alan Farrell, has welcomed the planned implementation of amendments to the Companies Act of 2014.

Deputy Farrell said, “Today’s announcement that amendments will be made to the Companies Act of 2014 is of significant importance and will help companies across the island avoid the worst impacts of economic turbulence, caused by the Covid-19 pandemic.”

“Following recommendations from the Company Law Review Group (CLRG), the Tánaiste, has confirmed that a number of changes will be sought, including:

  • Providing for virtual general and creditors meetings;
  • Allowing companies to postpone an AGM until December 31st;
  • Extending the examinership process to a total of 150 days; allowing documents required to be executed under seal to be signed in separate counterparts;
  • Codifying a director’s duty to creditors as a company approaches insolvency;
  • Increasing the amount at which a creditor can issue a statutory demand from €10,000 for a single creditor and €20,000 in the aggregate to €50,000.

These changes are intended to be introduced as temporary measures until December 31st, 2020, in line with CLRG recommendations and with the possibility of extension.”

Deputy Farrell continued, “These proposed amendments will better equip businesses to deal with the immediate impact of the crisis and provide them with greater scope to adapt to the situation while maintaining their livelihoods.”

“I am pleased that the Tánaiste has also confirmed that the CLRG will be requested to examine corporate rescue of SMEs and Micro-Enterprises as a priority.”

Deputy Farrell added, “SMEs and Micro-Enterprises are vital to our economy and recovery in the post-Covid period. By pre-empting problems that they may face we can avoid unnecessary damage to the sector and help sustain them through the crisis, protecting countless jobs in the process.”