Section 53 of the Companies Act, 1956 - Service of documents on members by company - Green Initiatives in the Corporate Governance - Clarification regarding service of documents by e-mode instead of Under Posting Certificate (UPC)
CIRCULAR NO. 17/2011, DATED 21-4-2011
The Ministry of Corporate Affairs has taken a "Green Initiative in the Corporate Governance" by allowing paperless compliances by the Companies after considering sections 2, 4, 5, and 81 of the Information Technology Act, 2000 for legal validity of compliances under Companies Act through electronic mode.
Section 53 of the Companies Act, 1956 provides service of documents under ‘Certificate of posting’ as one of the accepted mode of service. Whereas the Department of posts has recently discontinued the postal facility under ‘Certificate of posting’ vide their letter dated 23-2-2011. The Information Technology Act, 2000 also permits service of documents etc., in electronic mode.
Keeping in view of 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 the company has obtained e-mail addresses of its members for sending the notice/documents through e-mail by giving an advance opportunity to every shareholders to register their e-mail address and changes therein from time to time with the company.
In cases where any member has not registered his e-mail address with the company, the service of document etc. will be effected by other modes of service as provided under section 53 of the Companies Act, 1956.