Loraine is a shareholder of Taley Corp She would like to inspect and copy the company's minute book, accounting records, and shareholder lists. Under what circumstances is Loraine allowed to inspect or copy corporate records?
A company's obligation to provide shareholders with financial information depends upon whether it is publicly or privately held. Even if a company is not required to volunteer information, shareholders have the right to obtain certain information upon request. Under the Model Business Corporation Act, Loraine has a legal right to inspect and copy corporate records if she acts in good faith and has a proper purpose. A "proper purpose" is one that aids the shareholder in managing and protecting her investment. If she believes the company is being mismanaged and wants a shareholder list to see if others will join her in a lawsuit against the company, the company must make records available to her. If, on the other hand, she only wants a list of shareholders to obtain names/addresses of potential customers for her new business, this would not be a proper purpose.
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