The Companies Act 2006 allows for companies to use the Internet etc. in order to communicate with its members. One way this can be done is by changing the company’s articles if they don’t already allow this to happen.
Check the articles
To communicate with shareholders online, firstly check the company’s articles to see if it’s expressly allowed. Even it is, each member must be asked if they’re happy to agree to this method of communication. They have 28 days to reply and if they don’t bother to respond within this timeframe, they’re deemed to have consented.
If the company’s articles don’t include this right, then the members can amend them. To do this the company’s articles can be changed by a special resolution, which will require a 75% “yes” vote. The company can either arrange for a general meeting to be set up or achieve the same result by using the written resolution procedure.
Remember
If you’re proposing a change to the company’s articles, the amendment must be spelled out in full in the resolution so that the members know what the new wording will say.
Don’t forget to also send out a request letter to each member stating very clearly the effect of not responding to the proposal within 28 days, i.e. they’re taken to have agreed to accept the receipt of documents or information via the company’s website.
Advice
The company must notify shareholders who’ve agreed to website communications whenever it posts new shareholders’ documents on its website. This will need to be done in hard copy unless the shareholder has also agreed to be communicated to by e-mail and/or fax. Not only must you notify the shareholders of the new document(s) but you’re also required to tell them how to access it, where on the website it can be accessed and if it’s a meeting, include details of the date, time and place.
If you’re planning to go down the electronic route, it’s sensible to also get the shareholders to agree that you can communicate with them by e-mail. To achieve this, you must ask them to agree in writing and provide an e-mail address.
Caution
It’s still possible for a member who’s agreed to receive an electronic version of a document to require the company to send them a hard copy too. If such a request is received, make sure the information is sent out free of charge, within 21 days of the date of the request, otherwise an offence is committed.
Note. The company must ensure it includes on its website and on its business e-mails:
• its full registered name
• where it is registered, e.g. England and Wales
• its registration number
• the registered office address and that it is the registered office
• the name “limited”.