The Government has made a further extension until 31 December 2024 of one of the significant interim measures brought in by the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (the "Covid Act") that permitted companies and co-operatives to hold annual, general and creditor meetings virtually.
Two statutory instruments (the "Orders") have been published in respect of (i) companies and (ii) industrial and provident societies to underpin this extension from a legislative perspective (SI No. 646 of 2023 and SI No. 647 of 2023 respectively).
However, the measures currently in place in respect of the threshold at which a company is deemed unable to pay its debts look set to end on 31 December 2023.
Virtual Meetings
As discussed in our previous insight, the measure in respect of the ability to hold meetings virtually was due to expire at the end of this year. The extension means it will continue to apply until 31 December 2024.
In the press announcement of the extension, Minister Calleary commented as follows: "The further extension of this important provision will provide longer term certainty for companies and co-operatives. It will allow companies and co-operatives to continue to comply with their legal obligations and allow members to hold directors accountable."
Threshold for Winding Up
As noted above, the Covid Act had also originally extended the threshold at which a company is deemed to be unable to pay its debts on foot of an unsatisfied statutory demand, for the purposes of a creditor's petition to put a company into liquidation, to €50,000 for both a debt due to a single creditor and to two or more creditors in aggregate. Although, as set out in our previous insight, that measure was extended to the end of this year it has not been further extended under the Orders and accordingly, in the absence of having been legislated for, will cease to apply on 31 December 2023.
On that basis, from 1 January 2024 the threshold will revert to the position prior to the Covid Act such that a company will be deemed unable to pay its debts where a statutory demand in an amount of either (i) €10,000 due to a single creditor or (ii) an aggregate amount of €20,000 due to two or more creditors, is unsatisfied1.
Conclusion
Although in the Government's press release Minister Calleary indicates the Government will "continue to provide significant support to Irish businesses throughout this challenging time of rising cost of living and cost of doing business", the imminent significant reduction of the threshold at which a company is deemed unable to pay its debts is likely to have a significant impact on the number of companies susceptible to winding up in the new year.
In respect of the provision facilitating virtual meetings, Minister Calleary also indicated that "This extension will provide for consistency into 2024, when my Department will be bringing forth permanent legislative provisions in relation to virtual and hybrid meetings." It therefore is likely that this interim measure will be put on a permanent statutory basis before the expiry of this latest extension.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.