From Electronic Governance to Green Governance

MCA has launched “Green initiative for Corporate Governance”, to facilitate paperless communication in order to promote green governance. The government has allowed companies to send notices and documents to their shareholders and members electronically in order to facilitate paperless communication.

The “Green Initiative for Corporate Governance” announcement by the Corporate Affairs Ministry comes after the Department of Posts discontinued the postal facility under the ‘Certificate of Posting’. It is also in line with the Information Technology Act, 2000, which “permits service of documents, etc, in electronic mode”, the ministry said in a circular. “Keeping in view the above, it is hereby clarified that a company would have complied with Section 53 of the Companies Act if the service of document has been made through electronic mode, provided that the company has obtained e-mail addresses of its members for sending the notice/documents through e-mail…,” it said.

Section 53 of the Companies Act, 1956, allows companies to provide service documents to its members and shareholders under the ‘Certificate of Posting’ as one of the accepted modes of service. While companies have been asked to maintain a data bank of email-addresses of its members and shareholders, the ministry has also made it clear that companies will have to give them enough time to get their email-ids registered.