Companies are required to send a copy of its annual accounts and reports for each financial year to every shareholder of the company. … Shareholders are not however entitled to receive or inspect copies of general a company’s financial records.
Shareholders are entitled to inspect the company’s financial books and records, including, but not limited to, financial statements, shareholder lists, corporate stock ledgers, and meeting minutes.
Can shareholders inspect books of accounts? The members of the company are not vested with any such right to inspect the books of account anywhere specifically in the Companies Act, 2013. However, the articles of the company can provide for such right of inspection for its shareholders and the timing for it.
On request, a corporation’s shareholders and creditors can access the following records:
- articles of amendment, including amended articles of incorporation or restated articles of incorporation.
- by-laws and their amendments.
- any unanimous shareholder agreement.
- minutes of meetings and shareholder resolutions.
At a general meeting, the shareholders can also pass a resolution telling the directors how they must act when it comes to a particular matter. If this is done, the directors must then take the action that the shareholders have decided upon.
Common shareholders are granted six rights: voting power, ownership, the right to transfer ownership, dividends, the right to inspect corporate documents, and the right to sue for wrongful acts.
Question: Can shareholders insist on seeing management accounts, bank statements or other detailed financial information? Answer: No. Their rights to see financial information are limited to the company’s annual filed accounts.
Rights of all shareholders
All company shareholders have the right to: Inspect company information, including the register of members (s. 116 Companies Act 2006) and a record of resolutions and minutes (s. 358) without any charge.
It is important to note that shareholders cannot sue a corporation simply whenever they have a disagreement. … If a shareholder does decide to take legal action against a corporation, they can only do so in one of two ways: either through a direct lawsuit or an indirect derivative lawsuit.
Shareholders may inspect and copy any of the previously listed business records provided that written notice is given to the corporation at least five business days before the date they intend to inspect and copy.
Section 476 of the Companies Act 2006, states that even if a company is usually exempt from auditing its accounts, it must hold an audit if shareholders who hold at least 10% of the company’s shares request it to do so. … This form of template letter can be used by shareholders to make such a request.
Can the shareholders overrule the board of directors? … Shareholders can take legal action if they feel the directors are acting improperly. Minority shareholders can take legal action if they feel their rights are being unfairly prejudiced.