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Email May Not Suffice For Boards To Act – Corporate/Commercial Law

Email May Not Suffice For Boards To Act – Corporate/Commercial Law

Email May Not Suffice For Boards To Act – Corporate/Commercial Law

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United States: &#13
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Email May Not Suffice For Boards To Act&#13

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Q:  Our board of directors generally wants to act&#13
promptly outside of our regular conferences.  Can we just vote by&#13
electronic mail?

A:  Whilst voting by e mail may feel like an&#13
economical way to conduct business, a board might not use e-mail to&#13
acquire a common the greater part vote.  An email exchange does not&#13
qualify as a valid meeting below the New Hampshire Organization&#13
Company Act, which calls for that all taking part administrators be&#13
equipped to at the same time hear every single other for the duration of the conference.

Directors may as an alternative use electronic mail to authorize an motion by&#13
unanimous penned consent if this technique is not usually precluded&#13
by the corporation’s article content of incorporation or bylaws. &#13
An motion by unanimous prepared consent needs the vote to be&#13
both of those: (i) unanimous (even if only a the vast majority vote would be required&#13
at a assembly) and (ii) in creating, signed by just about every director, and&#13
bundled in the corporate documents.

The need of unanimity makes this process most effective suited to&#13
uncontroversial decisions or actions that have by now been&#13
talked about and deliberated by the board in a prior assembly, as the&#13
motion is not legitimate if even one director fails to give consent.

The unanimous written consent should evidently point out the motion to&#13
be taken and ought to be signed by each and every director.  Under New&#13
Hampshire company legislation, the definition of “indicator” or&#13
“signature” involves an intent to sign or authenticate a&#13
doc, and incorporates a manual, facsimile (scanned), conformed, or&#13
digital signature, which is broadly defined as “an&#13
digital sound, image, or process attached to or logically&#13
related with a history.”

A very carefully-worded email requesting a “certainly” vote from&#13
just about every director and an affirmation of his or her intent to indication could&#13
qualify as a signed doc, but it is not the advised process,&#13
as it can result in unclear responses and cumbersome&#13
report-trying to keep.  It also might not be acknowledged as a legitimate&#13
motion by 3rd functions these as banking institutions.

A far better apply is for directors to signal a printed duplicate of the&#13
consent and e-mail a scanned copy to the corporate secretary or&#13
attorney to compile, or to use digital signature software package these types of&#13
as DocuSign or RightSignature, which streamlines the course of action by&#13
allowing for directors to securely sign files without having the will need for&#13
a printer or scanner.  Each procedures allow administrators to consider&#13
valid corporate action by electronic mail as lengthy as the acceptance is&#13
unanimous.

Know the Law is a bi-weekly column sponsored by McLane&#13
Middleton.  Questions and thoughts for long term columns really should be&#13
emailed to [email protected].  Know the Legislation presents&#13
standard legal information and facts, not lawful suggestions.  We propose&#13
that you consult with a lawyer for assistance unique to your individual&#13
predicament.

Published in the Union Leader (10/10/2021)

The written content of this posting is intended to offer a common&#13
guide to the subject matter subject. Specialist tips ought to be sought&#13
about your specific situation.

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