Shareholder Access to Corporate Books and Records: the Abrogation Debate

N. Browning Jeffries, Atlanta's John Marshall Law School

Abstract

This article discusses the analytical and practical problems presented when shareholders who do not meet the state statutory requirements for access to corporate books and records instead request access to such documents under common law theories. In a majority of jurisdictions, courts will grant access pursuant to a common law right even when the statutory requirements are not met. In other words, a majority of jurisdictions reject the notion that state statutory schemes prescribing shareholder inspection rights, comprehensive though they may be, abrogate common law inspection rights.

In this article, I demonstrate that the rationales asserted by the majority of jurisdictions that adhere to this policy of non-abrogation of the common law no longer make sense in light of modern books and records statutes and that an abrogation approach is more consistent with legislative intent. Additionally, I present a number of sound policy arguments that support adoption of the position that inspection statutes abrogate common law inspection rights. At the end of the article, I propose some changes to the Model Business Corporation Act that, if adopted, would clarify the confusion surrounding this area of the law and support an abrogation approach going forward in jurisdictions that adopt the change.