Under the Companies Act 2006 a company may now save itself time and money by communicating electronically with its members.
Electronic communication can take three forms:
- email, fax or other form where the document is delivered electronically;
- as a document on electronic media, such as a CD Rom or memory stick, where the format is electronic but the CD Rom is delivered by hand or post; or
- by use of a website.
This will be of particular interest to companies whose directors and shareholders are in different locations; where speed of communication is important or where there are many shareholders and so cost benefits can be achieved through electronic communications. If the company wishes to use any of these electronic methods of communication, it must obtain its members' consent. The consent can be given generally (ie for all communications) or specifically (for certain named communications, for example, notices of meetings, or reports and accounts). If the company wishes to receive communications from its members electronically, it must also provide consent and publicise the addresses at which it wants to receive those communications.
Website communication
If a company wishes to use a website to communicate with its members, the following conditions must also be satisfied:
- the members must either pass a resolution to allow the company to use the website in this way or the company's articles of association must contain a provision to this effect;
- each member must also be individually asked by the company to consent to communication by means of a website (either generally or in relation to specific documents); and
- the company’s request must clearly state the effect of a failure to respond by the member (eg that he would be deemed to have consented if he does not reply within 28 days starting with the date on which the request is sent).
- the company's request must not be sent less than 12 months after a previous request made to that member in respect of a similar class of documents.
If the company satisfies all of this, it may communicate, by means of a website, with members who consent or who fail to respond within 28 days starting with the date on which the request for consent is sent.
Jordans' services
Our e-communication services include the following:
- An electronic communication policy for the company to adopt, incorporating provisions for the company to receive communications electronically if required;
- A letter to members seeking consent and a form of election for the member to provide consent;
- All necessary minutes to seek the members' consent, and, if applicable, to amend the company’s articles or pass the resolution to use a website for communication;
- A full procedural guide on completing the documentation; and
- A detailed information sheet on the electronic communications provisions of the Companies Act 2006.
Next steps
We offer 3 services which allow companies to obtain all necessary consents to take advantage of the electronic communication provisions in the Companies Act 2006:
- Email/fax communication - £350 + VAT
Documentation to obtain the members' consent to electronic communication other than by means of a website (eg by email, fax or CD Rom). - Website communication - £425 + VAT
Documentation to obtain the members' consent to e-communication by means of a website only. - Full e-communication - £500 + VAT
Documentation to obtain the members' consent to any form of communication, ie by email, fax, CD Rom and website.
Contact our Corporate Legal Services team for more information
