California Legislature—2013–14 Regular Session

Assembly Bill No. 2238

Introduced by Assembly Member Allen

February 21, 2014

An act to amend Section 1600 of the Corporations Code, relating to corporations.

LEGISLATIVE COUNSEL’S DIGEST

AB 2238, as introduced, Allen. Shareholder: rights of inspection.

Existing law, the General Corporation Law, provides for the regulation of corporations. Existing law, among other things, requires the record of shareholders to be open to inspection and copying by any shareholder or holder of a voting trust certificate at any time during usual business hours upon written demand on the corporation for a specified purpose.

This bill would make a nonsubstantive change to that provision.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1600 of the Corporations Code is
amended to read:

1600.  

(a) A shareholder or shareholders holding at least 5
percent in the aggregate of the outstanding voting shares of a
corporation or who hold at least 1 percent of those voting shares
and have filed a Schedule 14A with the United States Securities
and Exchange Commission (or in case the corporation is a bank
the deposits of which are insured in accordance with the Federal
Deposit Insurance Act, have filed a Form F-6 with the appropriate
federal bank regulatory agency) shall have an absolute right to do
either or both of the following: begin delete (1) inspect and end delete

begin insert (1) end insert begin insert   end insert begin insert Inspect and end insert copy the record of shareholders’ names and
addresses and shareholdings during usual business hours upon five
business days’ prior written demand upon the begin delete corporation, or (2)
obtain from end delete begin insert corporation. end insert

begin insert (2) end insert begin insert   end insert begin insert Obtain from end insert the transfer agent for the corporation, upon
written demand and upon the tender of its usual charges for such
a list (the amount of which charges shall be stated to the
shareholder by the transfer agent upon request), a list of the
shareholders’ names and addresses, who are entitled to vote for
the election of directors, and their shareholdings, as of the most
recent record date for which it has been compiled or as of a date
specified by the shareholder subsequent to the date of demand.
The list shall be made available on or before the later of five
business days after the demand is received or the date specified
therein as the date as of which the list is to be compiled. A
corporation shall have the responsibility to cause its transfer agent
to comply with this subdivision.

(b) Any delay by the corporation or the transfer agent in
complying with a demand under subdivision (a) beyond the time
limits specified therein shall give the shareholder or shareholders
properly making the demand a right to obtain from the superior
court, upon the filing of a verified complaint in the proper county
and after a hearing, notice of which shall be given to begin delete such end delete begin insert those end insert
persons and in begin delete such end delete begin insert a end insert manner as the court may direct, an order
postponing any shareholders’ meeting previously noticed for a
period equal to the period of begin delete such end delete begin insert this end insert delay. begin delete Such end delete begin insert This end insert right shall
be in addition to any other legal or equitable remedies to which
the shareholder may be entitled.

(c) The record of shareholders shall also be open to inspection
and copying by any shareholder or holder of a voting trust
certificate at any time during usual business hours upon written
demand on the corporation, for a purpose reasonably related to
begin delete such end delete begin insert that end insert holder’s interests as a shareholder or holder of a voting
trust certificate.

(d) Any inspection and copying under this section may be made
in person or by agent or attorney. The rights provided in this section
may not be limited by the articles or bylaws. This section applies
to any domestic corporation and to any foreign corporation having
its principal executive office in this state or customarily holding
meetings of its board in this state.