The Internicola Law Firm, P.C.

New York Shareholders: Right to Inspect Books and Records

When faced with a shareholder dispute, one statutory right that is commonly overlooked related to a shareholders "right" to inspect the company's records. This right is particularly important to minority and/or non-managerial shareholders who lack access to the corporations records. When faced with a dispute with a controlling shareholder the invocation of this statutory right could prove useful in (a) obtaining information and (b) establishing your overall litigation strategy.

Pursuant to New York Business Corporation Law Section 624:

(a) Obligation to Maintain Corporate Records. Corporations are required to establish and maintain "complete books and records of account", minutes of shareholder meetings and records respecting shareholders on stock ownership;

(b) Shareholder Right to Inspect Corporate Records. Shareholders of New York corporations possess the right - upon at least 5 days prior written notice - to examine "in-person" and during normal business hourse, the corporations records;

(c) Shareholder Right to Demand Financial Statements. Shareholders of New York corporations possess the right to demand - upon written request - copies of the corporations "annual balance sheet and profit and loss statement for the preceding fiscal year" - and to "interim" blanace sheets and profit and loss statements.

When faced with a shareholder dispute - far too often - minority shareholders and their lawyers overlook these critical inspection rights.