The principal barrier in the 1985 Act to electronic communications for those transactions is the requirement that they be supported by a statutory declaration of compliance with the Act. As statutory declarations must be sworn before a solicitor or notary, they cannot be made electronically. Consequently, the draft order will replace them with statements, which can be made electronically. False statements will be as serious as false declarations, and will attract equivalent penalties. The order deals also with communications from a company to its members.
Many companies already use websites to publish shareholder information.
However, certain information that the Companies Act 1985 requires companies to send to shareholders must currently be sent by post in hard copy. Under the order, companies will be able to send that information by electronic communication to any shareholder who agrees to receive it in that way. The information covered by the order is the annual report and accounts, summary financial statements and notices of general meetings. The order includes provision for that information to be published on a website, accompanied by a communication to members notifying them how to access the information. In addition, the draft order covers communications from a member to the company.