Shareholder’s Right for Inspection
One of the critical rights and obligations of a shareholder in regards to small companies is his or her right to inspect important company documents. Different countries have different regulations on the subject, but the majority of them allow shareholders to access the documents. However, the difference lies in the ability of companies to be able to deny such a request. In the United States, shareholders have a limited right to access the accounting books, but they are not able to inspect contracts and communications (Duff, 2021). After sending a request, a company is given five days to either accept or deny the request (“Shareholder’s right to inspect company documents,” 2020). If there is no valid reason for denial, then the court can be involved because shareholder’s rights are protected (Banerjee, 2016). In the UK, the regulations state that there are clear differences in a shareholder’s capability to inspect based on how many shares the given individual possesses (Campion, 2021). In general, shareholders are not able to inspect the documents, which are not already available publicly (Watson et al., 2021). Some documents, which can be requested by a shareholder, are records of meetings, the terms of director’s provisions and agreements, and the Register of Members (Korchak, 2014).
In Australia, a shareholder has no automatic right to inspect a company, but the court might provide such a right under good-faith (ERA, 2017). In Ireland, shareholders have no right to inspect company accounts except for general meeting records and statutory registers (Corplaw, 2014). In Canada, shareholders cannot access the accounting records and minutes of director meetings (“Corporate records and other corporate obligations,” 2016). The latter also includes director resolutions and committee minutes (Norton Rose Fulbright, 2019).
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Duff, V. (2021). Does a basic shareholder have the right to inspect the accounting records of a company? Chron. Web.
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Korchak, J. (2014). What rights do shareholders have? Inform Direct. Web.
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Watson, N., McKenzie, B., & Smith, T. (2021). Shareholders’ rights in private and public companies in the UK: Overview. Thomson Reuters. Web.