Navigating Company Law Reform in Ireland: Key Changes and Their Impacts on Business

In March 2024, Ireland's Department of Enterprise, Trade and Employment released the General Scheme of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024. The proposed amendments aimed to update several aspects of the Companies Act 2014 (as amended) (the”2014 Act”). The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 (the “Act”) has now been enacted and is mostly in effect, with 64 out of its 90 provisions becoming operational on December 3, 2024. This Act aims to bolster and refine the governance, enforcement, and regulatory aspects of the 2014 Act. The amendments introduced by the Act focus on four main areas of company law: corporate governance, enforcement and supervision, administration, and insolvency. Below are the key changes introduced under the Act.

Enhanced Powers of the CEA

The Act significantly expands the authority of the Corporate Enforcement Authority (CEA), which replaced the Office of the Director of Corporate Enforcement in July 2022. The CEA is responsible for investigating and prosecuting breaches of the 2014 Act, with serious offences referred to the Director of Public Prosecutions.

With increased funding from the Irish government's 2025 Budget, the CEA's powers have been notably enhanced. These include the ability to share confidential information with other statutory bodies, expanded information-gathering capabilities, greater oversight powers, and the authority to intervene when individuals under disqualification, restriction, or bankruptcy seek court permission to return to company management.

Under the Act, the CEA must now be notified in all proceedings where an undischarged bankrupt person applies to act as a company director or secretary, with at least 14 days' notice provided to allow for objections. Auditors, previously required to notify the CEA of certain offences, must now also provide certified copies of documents upon request. The Act also introduces an offence for obstructing, interfering with, impeding, or intimidating a CEA officer.

New Grounds for Company Strike Off

The Act introduces three new grounds for striking off a company:

• Failure to deliver beneficial ownership information;

• Failure to notify of a change of registered office; and

• Absence of a recorded company secretary.

These provisions do not disqualify the company's directors, and the Act includes measures to prevent the continuation of the strike-off process on these grounds.

Multi-Company Mergers

The Act amends Section 1129 of the 2014 Act, allowing for multi-company mergers within a group to be conducted in a single transaction. This change will streamline the merger process for Irish companies, making it more efficient and cost-effective, especially for corporate groups with multiple entities. Key amendments include:

• Mergers for Designated Activity Companies (DACs): Previously, the summary approval procedure for mergers could only be used if at least one of the companies involved was a private company limited by shares. The Act now permits this procedure to be used where at least one of the companies is an LTD or a DAC. This allows two or more DACs to merge using the summary approval procedure without needing an LTD.

• Concurrent Mergers by Absorption: The Act enables the merger by absorption of multiple wholly owned subsidiaries in a single transaction. Previously, under the 2014 Act, a separate merger process was required for each subsidiary. The new provisions eliminate the need for multiple concurrent mergers, significantly simplifying the process.

Simplified Record Date for Meetings

The Act amends Section 1087G of the 2014 Act, ensuring that the record date for adjourned meetings remains the same as the original meeting if the adjournment is within 14 days. This simplifies the proxy submission process for traded PLCs.

Permanent Virtual and Hybrid Meetings

A significant update introduced by the Act is the support for virtual meetings. This change brings Irish company meeting practices in line with modern business needs, which have evolved considerably, especially due to the restrictions on in-person meetings during the Covid-19 pandemic. While many companies, particularly larger publicly traded companies with numerous shareholders, had already modified their constitutional documents to allow for virtual meetings, the Act now facilitates this more broadly. Key aspects include:

• Hybrid and Fully Virtual General Meetings: The Act modifies the 2014 Act to permit companies to hold general meetings either entirely virtually or in a hybrid format, unless explicitly prohibited by the company's constitution. If a company has opted out of all optional provisions under the 2014 Act, it must include a specific regulation in the constitution to enable virtual meetings. This allows eligible participants to join meetings online without needing a physical venue.

• Participation and Voting: Attendees of virtual meetings are considered present, and the Chairperson has the authority to adjourn the meeting if there are issues with the electronic communication platform. Resolutions can only be voted on if the Chairperson can verify the identity of those entitled to vote and confirm the accuracy of the voting instructions provided by online participants.

Flexible Execution of Deeds

Ireland remains one of the few common law jurisdictions that requires the execution of deeds and certain other documents under company seal. This process necessitates two company officers to sign the same document in wet ink, with the company seal affixed next to the signatures.

While the requirement to execute deeds under seal has been retained, the Act introduces an amendment allowing companies to execute documents under seal in counterpart. This means that the two signatories do not need to physically sign the same document. This amendment permanently reinstates a measure that was temporarily introduced during the Covid-19 pandemic, which proved effective in facilitating documents being entered into where company officers and the company seal were at different locations. These amendments are expected to be particularly beneficial for corporate groups looking to rationalise their structures, reducing the administrative burden and associated costs.

Upcoming Changes in 2025

Significant changes to be commenced later in 2025 include amendments to the legislation regarding the loss of an audit exemption. Currently, a company loses its audit exemption for a first late filing of annual returns to the CRO. This will change to allow a company to file late once in a five-year period without losing its exemption, reducing the need for District Court applications for audit exemption restoration or retention.

Furthermore, upcoming changes in 2025 will enhance the transparency of receivers' fees by mandating detailed remuneration disclosures. Once fully commenced, the Act will align the remuneration of receivers with that of liquidators, requiring details of receivers' fees to be available to members and creditors within seven days of a request. Extensions to the court's power to fix receivers' remuneration have already commenced.

Take Aways

In conclusion, the Act marks a significant advancement in Irish company law. By enhancing the powers of the CEA, introducing new grounds for company strike-off, streamlining the merger process, and simplifying meeting and document execution procedures, the Act aims to create a more efficient and transparent business environment. The reforms are expected to reduce administrative burdens, improve corporate governance, and facilitate better compliance. As businesses adjust to these changes, they will be better equipped to handle the complexities of corporate law, thereby contributing to a more dynamic and resilient Irish economy.

How We Can Help

Whatever sector your business operates in, our Legal, Compliance and Company Secretarial teams offer a full range of cost effective services required for the establishment, operation and management of your companies, giving you assurance that your entities are being managed by a team with the expertise and experience to ensure that your entities are fully compliant with all statutory and fiscal obligations. We consider ourselves to be an extension of your business and operations, so that we are anticipating your every need.

For more information, or to find out how Cafico International can assist your business, please contact our Head of Company Secretarial, Ronan Donohoe.