Today, Minister for Enterprise, Trade and Employment, Peter Burke, announced the commencement of the majority of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024, following its enactment and signature by the President of Ireland on 12 November.
The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 was signed into law on November 12th, 2024. This legislation aims to modernize and strengthen Ireland’s corporate governance framework.
Key provisions of the Act include:
- Enhanced corporate governance: The Act introduces stricter rules on corporate governance, including director duties, board composition, and related party transactions.
- Strengthened enforcement powers: The Companies Registration Office (CRO) will have increased powers to investigate and enforce compliance with company law.
- Improved insolvency procedures: The Act introduces reforms to the insolvency regime, aimed at facilitating more efficient and effective corporate restructuring and insolvency processes.
- Modernized company law: The Act updates various aspects of company law to reflect current best practices and international standards.
The first phase of the Act came into effect on December 3rd, 2024, introducing a number of important changes, including:
- Electronic communications: The Act allows for the use of electronic communications in general meetings, making it easier for companies to hold virtual meetings.
- Involuntary strike-off: The Act introduces new grounds for the involuntary strike-off of companies, providing a more efficient way to remove inactive companies from the register.
The remaining provisions of the Act are expected to come into effect in 2025, following necessary technical updates to the CRO’s systems.
These changes are expected to have a significant impact on Irish businesses, particularly in terms of corporate governance, financial reporting, and insolvency procedures. It is important for companies to familiarize themselves with the new provisions and take steps to ensure compliance.
Announcing its commencement, Minister Burke said:
“Following extensive consultation and engagement with stakeholders, the 2024 Act introduces a diverse range of amendments to the Companies Act 2014 primarily in the areas of corporate governance, company law enforcement and supervision, company law administration and corporate insolvency.
“The improvements brought about with this Act strike a balance between providing flexibility to companies to efficiently conduct their business – by streamlining and improving processes, creating efficiencies and removing unnecessary administration on the one hand, and equipping the statutory bodies with the tools to ensure increased compliance with company law. The changes brought about by this Act will ultimately benefit businesses, companies, their members and creditors, as well as the ordinary citizen”.
Minister of State for Trade Promotion, Digital Transformation and Company Regulation Dara Calleary, said:
“The Act strengthens the State’s capability to investigate company law breaches by equipping the CEA with increased powers to investigate evidence of corporate wrongdoing. Similarly, the Act confers additional powers on IAASA and the CRO. These measures will equip our enforcement agencies to tackle incidences of white-collar crime and corruption and will further boost Ireland’s reputation as a well-regulated and transparent economy.
“In recognition of the increasingly virtual and hybrid environment within which we work and conduct our business the Act gives companies and industrial and provident societies the option to hold hybrid or fully virtual general meetings. The measures commenced today ensure accountability, transparency and afford adequate opportunity for full engagement at meetings whether in virtual , physical or hybrid form.”
Effect of the Order
The Order will commence the 2024 Act and give effect to the 64 of the Act’s 90 provisions amending the Companies Act 2014 including:
- to provide for the conduct of, and participation in, general meetings of a company or industrial and provident society by the use of electronic communications technology
- to provide for additional grounds for involuntary strike off of companies
- to provide for the disapplication of the Probation of Offenders Act 1907 to an offence under section 343 of the Companies Act 2014
- to provide for an offence of obstructing, interfering with or impeding an officer of the Corporate Enforcement Authority
- to make certain amendments to the rescue process for small and micro companies
- to enable the Irish Auditing and Accounting Supervisory Authority to issue an interim direction in certain circumstances
- to extend the list of competent authorities to which the Corporate Enforcement Authority may disclose information, books or documents under section 792 of the Companies Act 2014
- to enable specified bodies to disclose information to the Corporate Enforcement Authority under section 944Q of the Companies Act 2014.
- to enable the Irish Auditing and Accounting Supervisory Authority to use money paid into the reserve fund in accordance with section 919 of the Companies Act 2014 in the performance of its functions under section 934 of that Act
- to repeal certain provisions of the Companies Act 2014 and the Industrial and Provident Societies Act 1893
For commencement in 2025:
The 26 provisions not commencing on 3 December 2024 are those that require technical updates to be made to the CRO’s ICT systems to facilitate the changes proposed. These provisions relate to the prescription of forms for submission to the CRO and the removal of the automatic loss audit exemption for small companies on a first occasion of failure to file annual account. It is intended to commence these provisions in 2025.
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