The Government has announced the extension until 31 December 2023 of two significant temporary measures brought in by the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (the "Covid Act").
The first is that the threshold at which a company is deemed to be unable to pay its debts, and at which a creditor can seek to put a company into liquidation, will remain at the higher level of €50,000 for both a debt due to a single creditor and to two or more creditors in aggregate. Prior to the Covid Act, a company was deemed to be unable to pay its debts where an amount of €10,000 was due to a single creditor or an aggregate amount of €20,000 was due to two or more creditors.
Secondly, the ability of companies and co-operatives to hold annual, general and creditor meetings virtually has been extended. The Department of Enterprise, Trade and Employment press release1 indicates that the purpose of this measure is to enable companies and co-operatives "to comply with their legal obligations and to allow members to hold the directors accountable".
The Covid Act implemented these and other measures to ease some of the governance burdens that arose for Irish businesses during the pandemic by way of temporary amendment to the Companies Act 2014 and the Industrial and Provident Societies Act 1893 for a defined "interim period". This interim period had been due to expire on 31 December 2022 but despite earlier Government indications that there would be no further extensions, this has now been extended in so far as these particular provisions are concerned.
The Covid Act had also originally extended the maximum period for the examinership process from 100 to 150 days (subject to court approval) and given some additional flexibility to what can be a very tight time frame for corporate restructurings. However, this measure has not been extended again and will now cease on 31 December 2022. The maximum period for the examinership process will therefore revert back to 100 days from that date.
A further measure under the Covid Act that allowed documents that are required to be executed under seal to be executed in counterpart will also cease on 31 December 2022.
Commenting on the measures, Minister Calleary stated: "The further extension of these important provisions will provide longer term certainty for businesses at this critical phase of the response to the pandemic and serves to bolster the Government’s commitment to backing business, supporting economic recovery and making sure as many people as possible retain their jobs.”
The extended measures are to be welcomed as they continue to be relied on by Irish businesses and it is expected that the provisions facilitating virtual meetings will be put on a permanent statutory footing in the near future.
If you would like to know more about this topic, please visit our Covid-19 Insights Centre, which hosts a range of useful material on this topic or reach out Tony O'Grady, Kevin Gahan or your usual Matheson contact.