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Introduction to this document

Obtaining shareholder consent to e-communication flow chart

If a company wishes to send notices and other information to shareholders electronically, it must obtain its shareholders’ consent. Our flow chart explains the process.

Company websites and e-mails

If a company needs to send out lengthy documents to their shareholders, such as accounts and reports, even just reproducing them a handful of times and posting them out can be costly and time consuming. Accessing information online is second nature to many people, and it may increase shareholder participation if information is shared with them as soon as it is ready and they can read it at their convenience.

Alternatively, companies may wish to send the information out by e-mail, rather than by post.

Requirement for consent

Companies can share information with their shareholders in this way as long as the shareholders consent individually. As consent must be obtained from each shareholder, the company needs to send out “invitations” to them to receive information electronically. See our Invitation to Shareholders to Consent to E-communication.

Shareholder’s response

The company must note whether the shareholder rejects or accepts the invitation, update its records and communicate with the shareholder accordingly. Shareholders can change their minds at any time by consenting, or withdrawing their consent, to receiving information electronically.

What happens if a shareholder does not reply? In the case of invitations to receive information from the company by e-mail, if the shareholder ignores the invitation they must continue to receive notices and other information in hard copy by post.

If the invitation related to receiving documents and information via a website, a shareholder who ignores the invitation for at least 28 days is deemed to consent, as long as the company’s articles or a shareholder resolution allow documents and other information to be disseminated in this way. The shareholder can expressly accept or reject the invitation at any time, however.

Record keeping

A key factor in successfully using e-communication with shareholders in a company of any size is up-to-date record keeping. Make sure that e-mail addresses are accurately recorded, and follow up any e-mails that are automatically rejected.