The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 was published by the Department of Enterprise, Trade and Employment yesterday, 24 July 2024, together with an Explanatory Memorandum.
As signposted when the General Scheme of the Bill was published earlier this year (read our March 2024 insights here), one of the proposed amendments relates to the execution of documents under seal.
The proposed amendment, which has been widely welcomed, would reinstate the so-called 'interim fix' for the execution of documents by a company under seal, introduced during the COVID-19 pandemic. The 'interim fix' allowed a company to execute documents under its common seal on separate counterparts between 21 August 2020 and 31 December 2022, and proved extremely useful in practice for companies when a company's seal, and the persons authorised to countersign it, were located in different places.
Under the Bill as published yesterday, that mechanism would now be placed on a permanent footing from later this year once the Bill completes its passage through the Houses of the Oireachtas.
The wording of the new proposed Section 43A of the Companies Act 2014 is identical to the wording used for the temporary Section 43A during the COVID-19 pandemic (save that it does not refer to an "interim period"). Once it comes into force, a company's seal and the signatures of those who countersign it may be on separate copies of the relevant agreement or deed with the aggregate considered as one instrument.
A key point to bear in mind is that this provision will apply "notwithstanding any provision of the company's constitution": it will be an alternative to any provision regarding the affixing of the common seal set out in the company's constitution.
It is also important to note that, if the proposed Section 43A is enacted in the form set out in the Bill, where a company has specified in its constitution that only one countersignature is required when affixing the seal, that company must obtain an additional countersignature if it wishes to rely on Section 43A.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.