24 January 2020
ICSA in Ireland acknowledges the mammoth task undertaken by the Company Law Review Group (which includes a representative from the ICSA Republic of Ireland Region), while being aware of the challenge it poses for company secretaries in getting to grips with one of the largest Bills in the history of the State.
For company secretaries, the Companies Bill is a welcome consolidation of existing laws, which also introduces some overdue modern concepts. Most importantly, the position of company secretary will be enhanced, as the existing requirement that all Irish companies must have a company secretary is retained. This is in marked contrast to the position in the UK, where private companies are no longer required to have a company secretary.
The Bill imposes a duty on the company to ensure that the person appointed as company secretary has the necessary skills to discharge his/her statutory and other legal duties. Indeed, the Bill proposes that the appointee must make a public declaration acknowledging that he/she has legal duties and obligations imposed on him/her by the Companies Acts, other statutes and common law.
One of the first things a company secretary must do is consider the different types of companies proposed by the Bill and decide which one would best suit their existing company’s activities. It would be unwise to simply assume that the new model private company is suitable in all cases.
The Bill allows the appointment of one or more persons to bind a company, who will be deemed to have the required authority to exercise all powers of a company and to permit others to do so. Such appointments must be registered with the CRO and the company secretary will need to ensure that, when such an appointment is revoked, the necessary filing is made immediately with the Companies Registration Office, as the revocation only takes effect upon such filing.
Currently ordinary and special resolutions can be passed using the ‘written resolution’ methodology, provided that all voting members sign the resolution. The Bill proposes that for certain companies such resolutions will only need to be signed by the requisite number of voting members. In order to be effective, the company secretary will need to: (a) ensure that the proposed text of the resolution and an explanation of its main purpose are circulated to the members; and (b) ensure that the signed resolutions returned to the company constitute the required majority. The company secretary will now have to monitor any change to the company’s financial year end, as that term is now defined and rules are prescribed in relation to changing it.
ICSA in Ireland will be running CPD courses to help company secretaries fulfil their statutory and other legal duties. Feedback is being sought from Members on areas of the Bill where the Institute needs to make submissions to the Government. One such submission will be to amend the Bill to permit Chartered Secretaries to be liquidators of companies placed into members’ voluntary liquidation.
This article by Salvador Nash, Head of Company Secretarial Services at KPMG and a Council Member for the ICSA Republic of Ireland Region first appeared in the March 2013 edition of Governance & Compliance and is reproduced here with their kind permission.