You are a shareholder of a corporation. Maybe you are on your way out. Maybe you have been kept in the dark by the directors or other shareholders. Or maybe you have some other reason for simply wanting to know more about the corporation. Do you have a right to request records of the corporation? Yes.
Under Minn. Stat. § 302A.461, subd. 4, a shareholder has a right to examine and copy certain records of the corporation within 10-days of a written demand. The request to review records must be made for a “proper purpose” which is defined as one “reasonably related to the person’s interest as a shareholder, beneficial owner, or holder of a voting trust certificate of the corporation.” This can be a point of contention that we will focus on during a different blog.
The records that the shareholder, if the demand is proper, has a statutory right to review are as follows:
- the share register;
- records of all proceedings of shareholders for the last three years;
- records of all proceedings of the board for the last three years;
- the corporation’s articles and all amendments currently in effect;
- the corporation’s bylaws and all amendments currently in effect;
- financial statements required by section 302A.463 and the financial statement for the most recent interim period prepared in the course of the operation of the corporation for distribution to the shareholders or to a governmental agency as a matter of public record;
- reports made to shareholders generally within the last three years;
- a statement of the names and usual business addresses of its directors and principal officers;
- voting trust agreements described in section 302A.453;
- shareholder control agreements described in section 302A.457; and
- a copy of agreements, contracts, or other arrangements or portions of them incorporated by reference under section 302A.111, subdivision 7.
Such a request for records is often a prelude to litigation between the shareholder and/or the corporation, but, in some instances, can be a simple check of the viability of the corporation. It is important for the corporation to ensure that such records are maintained and available if such a request is properly made. Ensuring the maintenance of these records is also important as it relates to any veil-piercing claim as previously discussed.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney. All information contained in links are the property of the linked site.