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March 27, 2013
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March 27, 2013

Brave new world: Virtual boardrooms in cyberspace

G&T_Virtual“O Wonder!…O Brave New World” (Shakespeare) 

One of the innovations brought in by our “new” Companies Act is that company meetings may now be held via electronic communication, opening the door for companies to use cyber services such as email, online messaging, voice and video conferencing (easy with services like Skype, SightSpeed, iChat etc) to replace traditional “face-to-face all in one place” boardroom meetings.

The result – directors and shareholders in different cities and countries around the world no longer have to travel to attend meetings – they can legally be “held” online from your various locations.   Not only does this offer up huge savings in time and travel costs, but it means that urgent meetings can (subject to notice and other requirements as below) be held at short notice, and decisions taken and recorded online.

Even if a ‘meeting’ (physical or online) isn’t actually held, decisions can be “adopted by written consent of a majority of the directors” via electronic communication (subject, again, to notice and other requirements).

Follow the formal requirements 

  1. Make sure that the Companies Act’s requirements in regard to proper notice, conduct and minuting of meetings are complied with,
  2. Comply with the requirements of ECTA (the Electronic Communications and Transactions Act) in regard to identification of originator, accessibility, storage, retrieval etc,
  3. Electronic meetings can be held unless your MOI (Memorandum of Incorporation) specifically provides otherwise, but if you want to avoid any uncertainty draw your MOI to allow them in clear terms,
  4. The “electronic communication facility” employed must “ordinarily [enable] all persons participating in that meeting to communicate concurrently with each other without an intermediary, and to participate effectively in the meeting” – in which event they are all as “present” at the meeting as if they were physically all in one location.

Shareholders 

Shareholders’ meetings can likewise take place via electronic communication subject to similar requirements to those applying to board meetings.  In fact meetings of public company shareholders “must be reasonably accessible within the Republic for electronic participation by shareholders… irrespective of whether the meeting is held in the Republic or elsewhere”.

© DotNews, 2005-2013. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

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