Under the New York Business Corporation Law, shareholders of a corporation have the right to inspect the corporation’s books and records. This right is granted to shareholders in order to provide transparency and accountability, and to enable shareholders to monitor the actions of the corporation and its management.
The specific rules and procedures for accessing books and records under New York law are set out in Section 624 of the Business Corporation Law. According to this section, a shareholder may make a written demand to inspect the corporation’s books and records, and the corporation must provide access to those records within five business days of receiving the demand.
The shareholder’s written demand must be made in good faith and for a proper purpose, such as to investigate potential wrongdoing or mismanagement by the corporation’s directors or officers. The demand must also specify the particular books and records that the shareholder wishes to inspect, and the shareholder may be required to provide proof of their ownership of shares in the corporation.
The corporation may refuse to provide access to certain books and records if it determines that the shareholder’s demand is not made in good faith or for a proper purpose, or if the requested records contain confidential or proprietary information that could harm the corporation’s competitive position if disclosed. However, if the corporation denies the shareholder’s request for access, the shareholder may seek relief in court to enforce their rights under the Business Corporation Law by filing a specific petition compelling access to the corporation’s books and records.
Access to information is critical for any dispute. Before you consider an all-out war, you may want to vet your options for obtaining relevant information first by filing a petition for access to books and records.
