Shareholder Inspection Rights

Crane Co. v. Anaconda Co.

A shareholder has the right to inspect corporate documents when: The shareholder is acting in good faith The inspection is for a proper purpose

RMBCA Approach

A shareholder may inspect the corporation's books, papers, accounting records, shareholder records

The right of inspection may not be

Abolished or limited by the articles or bylaws.

Proper purpose

Are those purpose reasonably related to the person's interest as a shareholder

In order to exercise a shareholder inspection right, the shareholder must give

Five days' written notice of his request, stating a proper purpose for the inspection

Inspection by Court Order

If a corporation does not allow a required inspection, a court may order that the inspection and copying take place.

The shareholder need not

Personally conduct the inspection; he may send an attorney, accountant, or other agent.

Shareholder Inspection Rights

Shareholders can inspect corporate books and records if they have a proper purpose

State ex rel. Pillsbury v. Honeywell, Inc.

Shareholders must have a proper purpose germane to their economic interest in the corporation to inspect corporate records. A shareholder therefore may not inspect corporate records if his sole purpose in doing so is to convince the corporation to adopt his political concerns, absent any regard for his financial interest in the corporation.

Any shareholder may inspect the following records regardless of purpose

The corporation's articles and bylaws, Board resolutions regarding classification of shares, Minutes of shareholders' meetings from the past three years, Communications sent by the corporation to shareholders over the past three years, A list of the names and business addresses of the corporation's current directors and officers, and A copy of the corporation's most recent annual report.