Comments Off on Sending Notices to Stockholders and Members of the Board through E-mail

Sending Notices to Stockholders and Members of the Board through E-mail


Sending Notices to Stockholders and Members of the Board through E-mail

Section 50 of the Corporation Code requires that a notice of writing of the meeting be given to the stockholders at least two weeks prior to a regular meeting and at least one week prior to a special meeting unless otherwise provided by the by-laws of the Corporation. Section 53 of the Corporation Code, on the other hand, requires that the notice of regular or special meetings be furnished to the director at least one day prior to the scheduled meeting. These requirements are mandatory and are essential for the validity of the said meetings. In this regard, proceedings and resolutions passed during meetings with defective notices are null and void.

As a general rule, the written notice of the meeting must be sent through regular post mail, given to the stockholders, directors or trustees within the periods provided in the Corporation Code. It is worth noting, however, that the law allows the corporation to provide a different mode of notice in its by-laws.

Given these stringent requirements, the question, may the notices be sent through e-mail, was raised before the Securities and Exchange Commission (SEC) in 2013.

In SEC-OGC Opinion No. 13-10, the SEC recognized the validity of e-mail as a mode of sending notices of meetings to stockholders and directors. To be valid, however, there are certain requirements that must be complied with. The pertinent portion of the SEC-OGC reads:

“In this connection, since the Corporation Code merely requires notice of the meeting ‘in writing,’ an e-mail notice may be included as a mode of notice in the by-laws of a corporation, since an e-mail is considered ‘in writing.’ In such a case, the by-laws must, likewise, provide for the mechanics of such sending of notices through e-mail, including the indication, recording, changing and recognition of e-mail addresses of each stockholder/director. However, it must be stressed that absent such specific provisions on notice requirements in a corporation’s current and standing by-laws, the general/default rule-written notice sent through regular postal mail- applies.

Be that as it may, it should be noted that the Corporation Code allows the express or implied waiver of the notice requirement by stockholders, members, directors or trustees. In this wise, it may be conjectured that a signature of a stockholder/director/trustee acknowledging receipt of a notice of meeting sent through e-mail may be considered such a waiver.”

Filed in: Corporate Services

Recent Posts

Bookmark and Promote!

SEO Powered by Platinum SEO from Techblissonline