Annual General Meetings – Do you need to hold one?
March 31, 2022
Annual General Meetings – Do you need to hold one?March 31, 2022 With the interim period of the Companies (Miscellaneous Provisions) (Covid-19) Act due to come to an end on 30 April 2022, it may be an opportune time to re-acquaint yourself with the requirements relating to Annual General Meetings and the importance of holding one. The convening of the Annual General Meeting (“AGM”) is an important compliance obligation for Irish companies. Each Company incorporated in Ireland is required under the Companies Act 2014 (the “2014 Act”) to hold an AGM during each calendar year. The gap between each AGM may not be longer than 15 months and must take place within nine months of the financial year-end of the financial statements to be laid before the shareholders at the AGM. There are however two circumstances where a company does not need to hold an AGM during the calendar year. (i) Where a company holds its first AGM within 18 months of its incorporation, it does not need to hold an AGM in the year of its incorporation or the following year; and (ii) Where a written resolution dealing with all matters to be considered at the AGM is signed by the company’s member(s), entitled to attend and vote at the AGM before the latest date for the holding of such AGM. With regard to the latter, the written resolution is a useful method to avoid the time, effort and expense of convening an AGM and should be considered where signatures of the member(s) can be obtained. However, while this option is available to all Private Companies Limited by Shares, it is only available to single-member DACs, PLCs, CLGs and Unlimited Companies. Where a Company fails to hold its AGM, the Company and any officer who is in default shall be guilty of a Category 3 Offence and liable, on summary conviction to a fine of up to €5,000 or imprisonment for a term up to six months or both. These penalties also apply where the company and any officer in default fail to comply with a direction from the Office Director of Corporate Enforcement (“ODCE”) in relation to the holding of the AGM. The ODCE can direct a company to convene an AGM or direct a company to modify or supplement its constitution to facilitate the holding of the AGM on application by any member of a company where such company in default of its obligation to hold an AGM. The Companies (Corporate Enforcement Authority) Act 2021, proposes to establish a new independent agency, the Corporate Enforcement Authority (“CEA”) in place of the ODCE, with the aim of increasing compliance with Company law requirements in Ireland. Its operation may result in an increase in enforcement actions against companies that fail to hold their AGM in accordance with company law. While the penalties for failing to hold an AGM apply to both large and small companies equally, they are likely to be more keenly felt by small companies with less financial resources to pay the fine. Such companies may be unaware, or may overlook this requirement. Although the written resolution procedure offers a cost effective and efficient way for companies to dispense with the requirement to hold an AGM in any year, its availability is limited and time sensitive. At Eversheds Sutherland, we have a highly skilled company secretarial team who can provide assistance and advice on this and on all aspects of company law and corporate governance and we will also continue to keep you abreast of changes and updates in company law that may affect your company. If your company or its officers require assistance with any of their statutory obligations, please contact a member of our team.Liam Boyle, Head of Company Secretarial - LiamBoyle@eversheds-sutherland.ie Gavin Clare, Company Secretary - GavinClare@eversheds-sutherland.ie Key contacts
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