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New law for remote AGMs requires new government - DBEI

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IoD chief executive Maura Quinn. Photo: INPHO/James Crombie

IoD chief executive Maura Quinn. Photo: INPHO/James Crombie

©INPHO/James Crombie

IoD chief executive Maura Quinn. Photo: INPHO/James Crombie

Companies legally blocked from holding their AGMs remotely will be stuck in a Catch-22 until a new government is in place - or lockdown restrictions end.

The Department of Business, Enterprise and Innovation (DBEI) spelled out the few options available after the Institute of Directors in Ireland (IoD) called for legal safeguards permitting firms nationwide to hold remote AGMs for the rest of the year.

Nearly three out of 10 firms polled by the IoD say they cannot amend their constitutions without holding a physical AGM first.

"There is a growing and added sense of urgency about this matter as, for many companies that have already postponed their AGMs, the clock is ticking down," said IoD chief executive Maura Quinn. "Business leaders want to continue to run their businesses meeting their legal and fiduciary duties."

While firms face a risk of fines if they fail to hold this year's AGM within 15 months of the previous meeting, DBEI said it still was awaiting a recommendation "shortly" from the inter-departmental Company Law Review Group.

The IoD first wrote to the DBEI, as well as the Office of the Director of Corporate Enforcement, seeking action on this issue in late April.

"Any amendment to the Companies Act in this regard would need to be made by way of primary law and would therefore require a Bill to go through the Oireachtas," the DBEI told the Irish Independent. "Any changes to primary legislation could only be made with a new government in place."

Ms Quinn said quicker action by Government should be possible.

"We need a provisional solution to this during the current crisis," she said. "We believe it is appropriate to make virtual AGMs acceptable across the board for an initial period, possibly until the end of the year at least, and their decisions and motions should be legally binding and effective."

The DBEI said a legal exception existed for firms with no dissenting shareholders.

These firms could avoid an AGM if "a unanimous written resolution is passed by the members after they have had sight of the financial statements that would have been presented at the meeting.

"Members must acknowledge that there is nothing in controversy that would have arisen at the meeting and that the outgoing auditors are being retained," the DBEI said.

Irish Independent