Posts

Shareholder Inspection Rights for Closely Held Corporations

By Peter Webb

The North Carolina Business Court recently strengthened the hands of minority shareholders in closely-held corporations.  N.C. Gen. Stat. § 55-16-02(b) affords qualified shareholders the right to “inspect and copy: (1) [r]ecords of any final action taken with or without a meeting of the board of directors . . . ; (2) [a]ccounting records of the corporation; and (3) [t]he record of shareholder.”  In the recent case of Sharman v. Fortran Corp., the Business Court not only enforced the minority shareholder’s right to inspect and copy corporate and accounting records, but also awarded attorneys’ fees and court costs to the shareholder plaintiff.[1]  The decision sends a strong message to the directors of closely held corporation: Shareholders have a right to know how you are running the corporation.[2]

Read more