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Article
The Law and Practice of Shareholder Inspection Rights: A Comparative Analysis of China and the United States
Vanderbilt Journal of Transnational Law
  • Randall S. Thomas, Vanderbilt University Law School
  • Robin Hui Huang, Chinese University of Hong Kong
Document Type
Article
Publication Date
1-1-2020
Keywords
  • shareholder inspection rights,
  • agency costs,
  • proper purpose requirement
Disciplines
Abstract

Shareholder inspection rights allow a shareholder to access the relevant documents of the company in which they hold an interest, so as to address the problem of information asymmetry and reduce the agency costs inherent in the corporate structure. While Chinese corporate governance and American corporate governance face different sets of agency cost problems, this Article shows that shareholder inspection rights play an important role in both China and the United States. On the books, while shareholder inspection rights in both countries are broadly similar, there are some important differences on issues such as the proper purpose requirement. The empirical analysis of this Article further sheds light on how inspection rights operate on the ground. A good number of inspection cases are filed in both China and in Delaware. These cases are resolved by the courts relatively quickly. While inspection rights in both countries are frequently used as a presuit discovery device, the types of subsequent litigation that can be filed in each country are quite different. Efforts are made to explain, and draw implications from, the similarities and differences on shareholder inspection rights between the two countries.

Citation Information
Randall S. Thomas and Robin Hui Huang. "The Law and Practice of Shareholder Inspection Rights: A Comparative Analysis of China and the United States" Vanderbilt Journal of Transnational Law Vol. 53 (2020) p. 907 ISSN: 0090-2594
Available at: http://works.bepress.com/randall-thomas/72/