Shareholder Right to Information: Boundaries of Book Inspection Rights
Shareholders' right to information is a fundamental right, and the exercise of inspection rights must have clear legal boundaries.
In judicial practice, determining whether a shareholder has an improper purpose typically involves consideration of the following factors: whether the shareholder is engaged in a competing business with the company, whether the purpose of inspection is related to protecting the shareholder’s legitimate rights and interests, and whether the scope of inspection is reasonable. A company’s refusal to permit inspection solely on the grounds that the shareholder has previously raised objections or filed lawsuits generally does not constitute a reasonable defense.
The right to inspect account books is a core aspect of shareholder information rights, but shareholders must have a proper purpose and may not use the information for competitive purposes.
It is advisable for the company to set out detailed provisions in its articles of association regarding the manner, time, and place for the exercise of shareholders' inspection rights, so as to both protect the lawful rights and interests of shareholders and prevent abuse of such rights. As for shareholders, when making an inspection request, they should clearly state the specific purpose and scope of the inspection.
