Under the Revised Model Business Corporation Act, which of the following statements is correct regarding a shareholder's right to inspect corporate books and records?

Answer options:

A shareholder has an absolute right to inspect all corporate records, including board minutes and accounting records, without stating a purpose.

A shareholder may inspect the minutes of board meetings and accounting records only if the demand is made in good faith and for a proper purpose.

A shareholder must own at least 5% of the outstanding shares to have any inspection rights.

A shareholder has no right to inspect the shareholder list.

How to approach this question

Distinguish between 'absolute' rights (Articles, Bylaws, Annual Reports) and 'qualified' rights (Minutes, Accounting Records, Shareholder List) which require a 'proper purpose'.

Full Answer

B.A shareholder may inspect the minutes of board meetings and accounting records only if the demand is made in good faith and for a proper purpose.✓ Correct

Under the RMBCA, shareholders have a qualified right to inspect accounting records and minutes of board meetings. They must give 5 days written notice and state a 'proper purpose' (e.g., valuing shares, investigating mismanagement).

Common mistakes

Thinking all inspection rights are absolute.

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