Invitation to shareholders to consent to e-communication

Companies sometimes have to send documents out to their shareholders. Many companies choose to do this via a website or by e-mail, in which case they need each shareholder’s consent.

E-mails

For smaller companies, it can be convenient to share information with shareholders via e-mail, as this cuts down on admin time and costs without having to maintain a secure area on their website. If you want to communicate with shareholders in this way, they must opt in. If they reject the invitation, or do not reply, you must continue to send them information in hard copy by post.

Websites

If you have more than a handful of shareholders, posting the information on a secure area of your website and then notifying the shareholders that it is available may be a better option. You need to obtain your shareholders’ consent to accessing the information this way and to receiving notifications that information is available by electronic means, e.g. e-mail, text or via an app. Otherwise, you would have to send the shareholders a letter in the post to tell them how to access the information on the website.

Shareholders can opt in or reject the invitation. If they do not reply, and your articles or a shareholder resolution allow use of a website for these purposes, they are deemed to consent to accessing the information on the website. However, note that you will have to send such a shareholder notification by post when information is available, unless they have already provided you with an e-mail address for the service of information. They can expressly consent or opt out at any time.

Repeat invitations

For shareholders who do not reply, or who opt out, you can send repeat invitations. However, it is advisable to limit these to once a year. If the company is relying on a shareholder’s deemed consent, this is invalid if they have invited the shareholder to consent more than once in a twelve-month period.