OMC Constitution - Articles of Association • Automatic Membership – Sec 8 (MUD Act) • Confined to the subscribers and the unit owners • Where ownership of a residential unit in a MUD has been transferred, membership of the OMC is transferred without the need to execute a transfer or have it approved by the Directors of the OMC.
OMC Constitution - Articles of Association • Membership – cont’d • Membership certificate to be issued as soon as practicable and that the register of members is updated • A unit owner is required to provide certain information to the OMC and to notify them of any changes in these particulars
Articles of Association - Voting • Sec 14 (MUD Act) - one vote shall attach to each residential unit in a MUD to which the OMC relates, and that no other person has voting rights in respect of such determination • Conflict: • Companies Act 2014 – one member one vote • MUD Act - one unit one vote
Articles of Association - Voting • No member shall be entitled to exercise a vote in respect of a Unit at any general meeting (or by signing a resolution in writing) unless all moneys payable to the Company including any service charge or sinking fund contributions in respect of that Unit have been paid in full
Articles of Association - Annual Service Charge • Sec 18 (MUD Act) - An OMC shall establish, as soon as practicable, a scheme in respect of annual service charges from which the OMC may discharge ongoing expenditure reasonably incurred on the provision of common or shared services to the owners and occupiers of the units in the development
Articles of Association - Annual Service Charge • The annual service charge in respect of a MUD relating to a particular period shall not be levied unless it has been considered by a general meeting of the members concerned called for that purpose • If the proposed service charge is disapproved by not less than 75% of the persons present and voting at the meeting, the proposed service charge shall not take effect
Articles of Association - Annual Service Charge • Instead the charge applying for the previous period shall continue to apply pending the adoption of a service charge for the period concerned • If disapproved and no service charge applied in the previous period, the directors may determine a scheme for four months
Articles of Association - Sinking Fund • Sec 19 (MUD Act) - An OMC shall establish a sinking fund for the purposes of discharging expenditure reasonably incurred on the MUD. • Sec 19 sets out the expenditure the sinking fund maybe used for including expenditure on maintenance of a non-recurring nature
Articles of Association - Sinking Fund • The owner of each unit in a MUD shall be obliged to make payment to the sinking fund of the amount of contribution fixed in respect of the unit concerned. • The amount of the contribution to be paid by each unit owner to the sinking fund in respect of each particular year shall be the amount of € 200 or such other amount as may be agreed by a meeting of the members
Articles of Association – House Rules • An OMC may make house rules as respects the development or part of the development relating to the effective operation and maintenance of the development and with the objective of enhancing the quiet and peaceable occupation of units generally in the development • House rules shall not be made unless the rules have been considered and approved by a meeting of the members not less than 21 days notice is given to each member
Articles of Association - Directors • A person shall not be appointed as a Director of an OMC for life or for a term greater than 3 years. • If this situation existed the Director must have resigned within 3 years of enactment of the MUD Act.
Articles of Association - Contracts • An OMC shall not, enter into a contract for the provision of a service or the purchase of goods — • which is expressed to run for a period in excess of 3 years from the date the contract is entered into by the OMC, or • which provides for a penalty to be imposed on or damages to be paid by the OMC if the contract is terminated by it after a period of 3 years from the date the contract is entered into by the owners’ management company.
What Is Annual Company Secretarial Compliance? • Prepare & File an Annual Return & upload the Financial Statements • Hold Directors Meeting to Approve & sign Financial Statements • Prepare and Hold an AGM • Maintain the Statutory Register & Minute Book and comply with disclosure requirements • Update the Register of Beneficial Owners where necessary
Audit or Audit Exempt • A CLG may avail of the requirement to have the financial statements audited if under the audit exemption thresholds • One member may object in writing one month before the financial year end in which the exemption is to be availed of
Holding Company Meetings • An important requirement in the governance of any company is making decisions • The Covid-19 pandemic has made the holding of meetings and the governance of a company more difficult • Review the constitution, Companies Act 2014, MUD Act and obtain legal advice prior to holding meetings
Holding Company Meetings • Physical meetings should not be held and if they do social distancing should be strictly observed • Member meetings should consider dispensing, adjourning, using proxy forms or using written resolutions • If AGM is not held there may be issues with directors continuing who were due to retire by rotation or the approval of the annual service charge and contribution to the sinking fund
Holding Company Meetings • Board (Directors) Meetings • Physical Meeting • Electronic Meeting • Written Resolution • Members Meetings • AGM or EGM • Physical Meeting • Electronic Meeting • Written Resolution
Company Meeting Rules to Review • Electronic Meeting Provisions • Who has the power to convene • Notice – Contents, notice period, entitled to receive • Location • Proxy Forms (Member meetings) • Quorum • Chairperson • Voting • Minutes
Board Meetings CA 2014 – Part 4 Corporate Governance - Chapter 4 • Sec 157-167 may be amended in the constitution • Sec 158 The business of the company shall be managed by • its directors who may pay all expenses incurred in promoting and registering the company and may exercise all such powers of the company as are not, by this Act, (the MUD Act) or by the constitution, required to be exercised by the company in general meeting Sec 160 - The directors of a company may meet together • for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit.
Board Meetings • Electronic Meeting: Sec 161 (6) - A meeting of the directors or of a committee may consist of a conference between some or all of the directors who are not all in one place, but each of whom is able (directly or by means of telephonic, video or other electronic communication) to speak to each of the others and to be heard by each of the others and shall be counted in the quorum and entitled to vote • Meeting occurs at place with largest group or where the chairperson is located or the meeting decides the location – important for tax residency
Board Meetings • Convene: Sec 160 (3) - A director may, and the secretary on the requisition of a director shall, at any time summon a meeting of the directors. • Notice: All directors are entitled to reasonable notice • Quorum: necessary for the transaction of the business of the directors may be fixed by the directors, and unless so fixed shall be 2 but, where the company has a sole director, the quorum shall be one.
Board Meetings • Chairperson: The directors may elect a chairperson of their meetings and determine the period for which he or she is to hold office • Voting: Questions arising at any such meeting shall be decided by a majority of votes and where there is an equality of votes, the chairperson shall have a second or casting vote. • Written Resolutions: permitted in Sec 161 (1) – all the directors must sign and resolution can consist of several documents and is effective from the time the last director signs
Board Meetings - Minutes Sec 166 (1) A company shall cause minutes to be entered in • books kept for that purpose of all resolutions and proceedings at all meetings of its directors and of committees of directors. Such minutes shall be entered in the foregoing books as • soon as may be after the resolution concerned has been passed. Any such minute, if purporting to be signed by the • chairperson of the meeting at which the proceedings were had, or by the chairperson of the next succeeding meeting, shall be evidence of the proceedings. ODCE has right to access the minute book •
General Meetings • CA 2014 – Part 4 Corporate Governance Chapter 6 • Members meetings – AGM’s & EGM’s • AGM – statutory requirement • EGM – to consider and if thought fit pass a resolution • Resolutions may also be passed by written resolution • Optional Provisions may be amended in the constitution
Annual General Meeting • Sec 175 (1) - A company shall in each year hold a general meeting as its annual general meeting and not more than 15 months shall elapse between AGM’s • Sec 17 (MUD) - Annual Meeting once each year for consideration of annual report • First AGM must be held within 18 months of Date of Incorporation • Financial Statements to be laid before members within 9 months of financial year end
General Meeting – Electronic Meeting • Sec 176(4) - A meeting may be held in 2 or more venues (whether inside or outside of the State) at the same time using any technology that provides members, as a whole, with a reasonable opportunity to participate • No limit on the number of venues • Details should be sent out on the notice • Advice on whether technology allows attendees to vote and if the constitution provides for this
General Meeting – Adjourn the Meeting • Member meetings may be adjourned and re- convened to a later date. • The meeting must be held first with a quorum and then immediately adjourned to a later date
General Meeting – Location • Sec 176 - an annual general meeting of a company or an extraordinary general meeting of it may be held inside or outside of the State • Sec 17 (MUD Act) - meeting to take place within reasonable proximity of the MUD and at a reasonable time unless agreed in writing by 75% of the members • Careful consideration to the location of the venue given the current restrictions
General Meeting – Convening • The directors of a company may, whenever they think fit, convene an extraordinary general meeting • Sec 178 & 1203 - The directors of a company shall, on the requisition of one or more members holding, or together holding, at the date of the deposit of the requisition, not less than 10 per cent of the total voting rights of all the members having, at the date of the deposit, the right to vote at general meetings of the company, forthwith proceed duly to convene an extraordinary general meeting of the company
General Meeting - Notice • Sec 180 – Notice of every general meeting of a company shall be given to • Every member (whether entitled to vote or not), • personal representative of a deceased member with right to vote, • the assignee of a bankrupt member, • the directors & the secretary
General Meeting - Electronic Notice • Sec 218 – Notice may be sent electronically if constitution contains provisions (Optional provision) • That the member has consented in writing to the company, or the officer of it, using electronic means to serve or give notices in relation to him or her
General Meeting - Notice & Short Notice • Sec 181 – Unless the constitution provides for longer notice, notice shall be:- • 21 days notice for AGM & passing special resolutions • 7 days notice for EGM • Meeting maybe held at shorter notice if all members entitled to attend and vote and the auditors consent in writing • Neither the day on which the notice is served nor the day of the meeting for which it is given shall be counted
General Meeting - Notice Contents • Should make it clear members should not attend in person • The notice of a meeting shall specify (a) the place, the date and the time of the meeting; (b) the general nature of the business to be transacted at the meeting; (c) in the case of a proposed special resolution, the text or substance of that proposed special resolution; and
General Meeting - Notice Contents (If proxies are provided for in the constitution) (d) with reasonable prominence a statement that — (i) a member entitled to attend and vote is entitled to appoint a proxy using the form set out in section 184 to attend, speak and vote instead of him or her; (ii) a proxy need not be a member; and (iii) the time by which the proxy must be received at the company’s registered office or some other place within the State as is specified in the statement for that purpose.
AGM – Sec 186 Standard Business a) the consideration of the Company’s statutory financial statements and the report of the directors and, unless the Company is entitled to and has availed itself of the audit exemption under section 360 or 365, the report of the statutory auditors on those statements and that report; b) the review by the members of the Company’s affairs; c) the declaration of a dividend (if any) of an amount not exceeding the amount recommended by the directors; and d) the authorisation of the directors to approve the remuneration of the statutory auditors (if any); e) save where the Company is entitled to and has availed itself of the exemption referred to in paragraph (a), the appointment or re- appointment of statutory auditors. f) Retirement by rotation
OMC AGM Additional Requirements • Sec 17 (MUD Act) - A copy of the OMC annual report to be furnished to each member at least 10 days before the meeting • Consideration of the annual service charge • Consideration of the contribution to the sinking fund
OMC Annual Report • a statement of income and expenditure relating to the period covered by the report; • a statement of the assets and liabilities of the company; • where the owners’ management company is required to establish and maintain a sinking fund — (i) a statement of the funds standing to the credit of the sinking fund, and (ii) details of the amount of the annual contribution to the fund and the basis on which such contribution is calculated; • a statement of the amount of the annual service charge and the basis of such charge in respect of the period covered by the report; • a statement of the projected or agreed annual service charge relating to the current period;
OMC Annual Report • a statement of any planned expenditure on the refurbishment, improvement or maintenance of a nonrecurring nature which it is intended to carry out in the current period; • a statement of the insured value of the multi-unit development, the amount of the premium charged, the name of the insurance company with which the policy of insurance is held and a summary of the principal risks covered; • a statement setting out, in general terms, the fire safety equipment installed in the development and the arrangements in place for the maintenance of such equipment; and • a statement fully disclosing any contracts entered into or in force between the owners ’ management company and a director or shadow director of the company or a person who is a connected person as respects that director or shadow director
General Meeting - Quorum • Sec 182 - No business shall be transacted at any general meeting of a company unless a quorum of members is present at the time when the meeting proceeds to business. • Save to the extent that its constitution provides otherwise 2 members of a company present in person or by proxy at a general meeting of it shall be a quorum. • Various opinions on whether electronic presence is deemed to be present in person so advice should be obtained
General Meeting – Proxy Forms Sec 183 & 1205 - any member of a company entitled to attend • and vote at a meeting of the company shall be entitled to appoint another person (whether a member or not) as his or her proxy to attend and vote instead of him or her. May only appoint one proxy unless constitution provides • otherwise – Optional provision for a CLG Useful to appoint the chairperson of the meeting in case the • proxy cannot attend the meeting given the restrictions Proxy form to be deposited at the registered office 48 hours • before the time for holding the meeting Sec 184 – Form of proxy •
General Meeting – Proceedings at Meetings • Sec 187 - The chairperson, if any, of the board of directors shall preside as chairperson at every general meeting of the company • Unless a poll is demanded in accordance with section 189, at any general meeting — (a) a resolution put to the vote of the meeting shall be decided on a show of hands; and (b) a declaration by the chairperson that a resolution has, on a show of hands, been carried or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book containing the minutes of the proceedings of the company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.
General Meeting – Proceedings at Meetings • Where there is an equality of votes, whether on a show of hands or on a poll, the chairperson of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote.
General Meeting - Voting • Sec 188 & 1206 Companies Act 2014 & Sec 14 MUD Act • Where a matter is being decided (whether on a show of hands or on a poll), every member present in person and every proxy shall have one vote of equal value for each unit he owns in the development and no other person other than the unit owners shall have a vote
General Meeting - Voting • No Member shall be entitled to exercise a vote in respect of a Unit at any general meeting (or by signing a resolution in writing) unless all moneys payable to the Company including any service charge or sinking fund contributions in respect of that Unit have been paid in full
General Meeting Right to Demand a Poll • Sec 189 - At a meeting, a poll may be demanded in relation to a matter (whether before or on the declaration of the result of the show of hands in relation to it). • (2) A demand for such a poll may be made by — (a) the chairperson of the meeting; (b) at least 3 members present in person or by proxy; (c) any member or members present in person or by proxy and representing not less than 10 per cent of the total voting rights of all the members of the company concerned having the right to vote at the meeting; or
General Meeting - Minutes Sec 199 A company shall, as soon as may be after their • holding or passing, cause — (a) minutes of all proceedings of general meetings of it, and (b) the terms of all resolutions of it, to be entered in books kept for that purpose; all such books kept by a company in pursuance of this subsection shall be kept at the same place. Any such minute, if purporting to be signed by the • chairperson of the meeting at which the proceedings were had, or by the chairperson of the next succeeding meeting, shall be evidence of the proceedings. Members right to inspect in accordance with Sec 215 to • 217 of Companies Act 2014
Types Of Member’s Resolutions • Act sets out in the appropriate sections where it requires an ordinary or special resolution • Sec 198 - Special resolutions & certain ordinary resolutions to be filed with CRO within 15 days • Always check whether a director or members resolution is required and if a members’ resolution is required is it an ordinary or special resolution • Ordinary Resolutions – passed by more than 50% of members and 7 days notice given • Special Resolutions – passed by not less than 75 % of members and 21 days notice given • MUD Act – some resolutions require a simple majority, 60% or 75% of the members to approve
Written Resolutions • Sec 192 (8) “a written resolution means either an ordinary resolution or special resolution passed in accordance with Section 193 or 194” • Written Resolutions must be kept like minutes • Unanimous written resolutions (Sec 193) • All members sign & becomes effective on date last member signed • Majority written resolutions (Sec 194) are dis- applied for CLG’s
Common Changes in an OMC • Filing a CRO form does not give the proposed change legal effect! • The necessary resolution must be approved either by the directors or the members, the statutory register updated and the necessary form filed in the CRO and the Register of Beneficial Owners updated if required
Appointing an additional or alternate director • Having additional directors or alternate directors (or a registered person) to act and sign on behalf of the company may assist in the running of the company • Appointment of the directors should be carefully considered by the existing directors and any potential new directors
Appointing an Additional Director • Review the constitution • Typically a matter for members however the directors have the right to fill a casual vacancy • Board or member meeting to be held at which the appointment is approve, register is updated and B10 filed • The date of the resolution to appoint the director is the effective date not the filing of the B10 in the CRO
Ceasing to Act as a Director Retire at the AGM and not re-elected • Sec 148 - The office of director shall be vacated if the director: • (a) Is adjudicated bankrupt or being a bankrupt has not obtained a certificate of discharge in the relevant jurisdiction; or (b) Becomes or is deemed to be subject to a disqualification order within the meaning of Chapter 4 of Part 14. Save to the extent that the company’s constitution provides • otherwise, the office of director shall be vacated if: (a) The director resigns his or her office by notice in writing to the company; or
Ceasing to Act as a Director (b) The health of the director is such that he or she can no longer be reasonably regarded as possessing an adequate decision making capacity; or (c) A declaration of restriction is made in relation to the director and the directors, at any time during the currency of the declaration, resolve that his or her office be vacated; or (d) The director is sentenced to a term of imprisonment following conviction of an indictable offence; or (e) The director is for more than 6 months absent, without the permission of the directors, from meetings of the directors held during that period.
Removal of a Director • A director may be removed from office by ordinary resolution of the members • Obtain legal advice prior to pursuing this!
Appointment of a Company Secretary • Sec 129 - The secretary shall be appointed by the directors of the company for such term, at such remuneration and upon such conditions as they may think fit; and any secretary so appointed may be removed by them • The directors of a company shall have a duty to ensure that the person appointed as secretary has the skills or resources necessary to discharge his or her statutory and other duties
Changing the Constitution • Directors should prepare a new draft of the constitution • Convene an EGM of the members • Pass a special resolution (75%) • File a G1 and the new constitution • Send copy of new constitution to every member
OMC Restoration • Sec 30 -Where a OMC has been struck off the register, if a member or officer of a company is aggrieved by the fact of the company having been struck off the register, the registrar of companies, • An application made by the member or officer before the expiration of 6 years from the publication in Iris Oifigiúil of the notice that the company was struck off the register, provided that the registrar has received all annual returns outstanding, if any, from the company, may restore the name of the company to the register.
OMC Restoration • This Sec applies to an OMC which immediately prior to the name of the company having been struck off the register the OMC had vested in it ownership of the common areas or a part thereof of the MUD in respect of which the company was incorporated. • Each application shall be accompanied by a certificate from a solicitor or an accountant certifying that the company is an owners’ management company operating as such. • After 6 years or the OMC does not satisfy the criteria above, an application must be made to the High Court
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