Corporate Governance In the Coronavirus Crisis

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As a result of COVID-19, restrictions such as travel bans, social distancing and self-isolation have made it difficult to conduct business as usual. Orpen Franks has put together this brief guide on running your company in the current crisis. We look at key issues like director’s duties, company filings, decision-making, and contracts.

Directors Duties & COVID-19

Directors have statutory duties under company law. Some of their main duties include the following:

  1. To act in good faith in what the director considers to be in the interests of the company;
  2. To act honestly and responsibly in relation to the conduct of the affairs of the company; and
  3. To have regard to the interests of its employees in general, and have regard to the interests of its members.

In light of the above, directors have a duty to identify the risks of COVID-19 to their company and their employees. They should be proactive and take the necessary steps to reduce any risks identified and/or future risks.

One practical step which directors can take is to have a crisis management structure. This structure should have a key person responsible for reviewing the evolving situation and reporting same to the company. If this person becomes unable to work due to illness there should be someone else responsible for replacing them.

CRO Office & Filings

The public office is closed but you can access the CRO online services here and check for updates on the main CRO website here.

Signature pages can be posted to the CRO office.

You can read the latest update on filing annual returns here.

Annual General Meetings (AGM)

There a number of different options for companies with upcoming AGM’s:

 Adjourning your AGM

A company may already have a date for an AGM, in light of COVID-19 they may consider adjourning it until a later date in the year.

Dispensing with the AGM

A Private Company Limited by shares may choose to dispense with a physical AGM and choose to use the written procedure (section 175(3) of Companies Act 2014).

Attendance by Electronic Means

Shareholders may participate in AGM’s via electronic means such as videoconferencing. This enables the shareholders to take part without physically being together and are also adhering to the government’s advice of social distancing. In this scenario, there will be a need to consider where the deemed location of the meeting is.

When considering the above options, it is always important to check the Company’s Constitution and what it specifies.

Extraordinary General Meetings (EGM)

The members can pass sanctions by unanimous written resolutions. A resolution in writing can be signed by all members of a company entitled to attend and vote on it. This shall be as valid and effective for all purposes as if it had been passed at a general meeting.

Executing Contracts

Under the Electronic Commerce Act 2000, you can sign contracts with an electronic signature. There are two conditions which must be met. All applicable execution formalities must be satisfied. Also, there must be no restrictions on the use of electronic signatures in relation to the document in question.

Documents ‘Under Seal’ and Powers of Attorney

Where an Irish company executes a deed it generally does so ‘under seal’ by affixing it’s common seal as authorised by the board of directors. Usually a director and company secretary must sign this. But there is an alternative way. The company may grant power of attorney to one or more individuals to execute documents on its behalf. The attorney can then execute the document using their electronic signature where appropriate. This way, there is no requirement for the company seal to be affixed.

Please contact us if you need further advice on the above. You can call 353 1 637 6200 or email claire.morgan@orpenfranks.ie or gergana.moran@orpenfranks.ie

Contact Us

Address:

Orpen Franks Solicitors

28 & 30 Burlington Road, Dublin 4, Ireland

Telephone: +353 1 637 6200

Facsimile: +353 1 637 6262

Email: law@orpenfranks.ie