The general principle of the Companies Act 2006 is that companies should, subject to shareholder approval, be able to default to using e-communications. Individuals however will retain the right to receive information on paper if they wish. The company communications provisions set out in the Act apply to all companies, public and private.
Yes. If a company already has an individual shareholder's agreement to circulate the annual report and accounts, summary financial statement or AGM notice to the shareholder by website under the terms required by sections 238, 251 or 369 of the 1985 Act, the company will be able to continue to do this under paragraph 9 of Schedule 5 to the new Act. As under existing law, paragraph 13 of Schedule 5 requires the company to notify the shareholder each time information is posted on the website.
No. If the articles already contain provisions to the effect that the company may send or supply documents or information to members by website, no resolution is required. However, where a company wishes to go further than the terms of the articles, for example where the articles only cover certain documents, then a new resolution will be required to provide general cover for other documents that the issuer wishes to communicate by website.
Companies traded on a regulated market are subject to the FSA rules, which will include a transitional provision to ensure that where a company could already lawfully use electronic means to communication to shareholders (or holders of debt securities) under existing law, the company will be able to continue doing so.
The company needs to seek individual agreement of each intended recipient to receive information by email. Where an individual does not agree or fails to provide an email address, the company will need to send information in hard copy.
The company will need both to seek individual agreement of each intended recipient and to pass a resolution for the company to use website communications as the default. Where an individual fails to respond within 28 days, the company may consider this as the individual's deemed agreement to website communications. Where an individual does not agree to website communications, the company cannot ask again for his or her agreement within less than 12 months. The company must notify the individual each time information is published on the website.
The 1985 Act continues to apply to the substantive requirement to give notice and those to whom it must be given, and there have been no changes to that as a result of the First Commencement Order. This provision does not prevent a company making provision in its articles not to send notice of a general meeting to members for whom the company no longer has a valid address.
When a company defaults to website communications, it must notify – either by email or in hard copy – each shareholder that information has been posted on the website. One option would be to ensure that such notification – whether an email or a postcard or letter – includes, for example, the time and date of the AGM, a list of the resolutions and instructions on how to vote or give proxy voting instructions. This would enable those, who are not able or not willing to communicate with the company electronically, to 'post' their proxy voting instructions back to the company.
Yes. An individual and a company can communicate by text message. Clearly, the individual and the company will wish to consider what form of documentary evidence they might wish to keep to record that information has been sent.