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Use of electronic communications in company business

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Posted by Robert Lee on 20 March 2013

Robert Lee Partner - Head of Corporate

One of the key aspects of The Companies Act 2006 (which was finally implemented in 2009) was bringing methods of communication up to date. 

Communications with shareholders

Under previous legislation, companies could use electronic and website communications in certain contexts but it was not clear whether or not communication specified to be “in writing” could be satisfied solely by electronic communication or also required hard copies to be sent. This uncertainty was resolved by the Companies Act 2006 which provides for electronic and website communications.

This has meant that companies can now communicate more efficiently and cost-effectively and particular with shareholders. The Act provides that if a shareholder consents, then communication via a website can be the default position. Such a provision only applies to individual shareholders who have agreed or been deemed to have agreed that the company may supply documents to them in this manner. Further, to rely on this “deemed consent” this must be permitted by the Company’s articles or the members must have resolved to permit this. 

If a company contends to put a notice on a website it is necessary for members to be notified that the notice has been posted. 

Email communication

The Act also contains provisions for a company to communicate by email. Information may be supplied by a company by email to a person who has expressly consented that that information may be supplied in electronic form and the recipient has provided an email address for this purpose. The deemed approach will not work here. 

In order to pursue these forms of communication, a request letter should be posted to each shareholder to obtain consent to receiving documents and information by means of a website; to obtain consent to receiving communications by email; and to obtain an email address for electronic communications. 

Conversely, shareholders are able to communicate with the company electronically where the company has agreed to this and has provided an email address for communication. This will occur where the company has given notice convening a meeting or a proxy form.

For more information on the use of electronic communications for conducting company business, please contact Robert Lee. 

About the author

Robert Lee

Partner - Head of Corporate

Robert specialises in mergers and acquisitions, and corporate restructuring.

Robert Lee

Robert specialises in mergers and acquisitions, and corporate restructuring.

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