Connecticut corporations are required to maintain certain records in the course of doing business. Shareholders have a right to view and inspect those records, within certain limits. Corporations should understand their rights and responsibilities under state law. Those who violate this obligation can expose themselves unnecessarily to liability. A Connecticut business law firm can help you understand this important legal requirement.
Connecticut General Statute § 33-945 is a law that every corporation needs to understand. There are a variety of permanent records that these businesses must maintain:
- Minutes of all meetings of its shareholders and board of directors
- A record of all actions taken by the shareholders or board of directors without a meeting
- A record of all actions taken by a committee in place of the board of directors on the corporation’s behalf
- Accounting records
- A record of its shareholders
These documents may be kept in the form of an electronic record, provided it is easily convertible to paper form. The following are to be maintained at the corporation’s principal office:
- Certificate of incorporation or restated certificate of incorporation, plus all amendments to them currently in effect
- Bylaws or restated bylaws and all amendments to them currently in effect
- Certain resolutions adopted by the board of directors concerning shares and their relative rights, preferences and limitations
- Minutes of all shareholders’ meetings and records of actions taken by shareholders without a meeting for the past three years
- All written communications to shareholders generally within the past three years, including financial statements furnished for the past three years
- A list of the names and business addresses of its current directors and officers
- Its most recent annual report delivered to the Secretary of the State
If you have a question about your corporation’s obligations under the record-keeping statutes, don’t hesitate to ask. A knowledgeable Connecticut business law attorney can assist.
Shareholders have rights to inspection of these records under General Statute § 33-946. The shareholder must provide signed written notice of a demand to inspect within five business days of the inspection date. The inspection shall take place at the corporation’s principal office during regular business hours.
The shareholder can inspect and copy the following:
- Excerpts from minutes of any meeting of the board of directors or a committee acting in place of the board
- Minutes of any meeting of the shareholders
- Records of action taken by the shareholders, the board of directors or a committee of the board without a meeting
- Accounting records of the corporation
- The record of shareholders
However, there are some requirements imposed on the shareholder. The shareholder may inspect and copy the records only if:
- The demand is made in good faith and for a proper purpose
- The shareholder describes with reasonable particularity their purpose and the records they desire to inspect
- The records are directly connected with the stated purpose
Corporations cannot use their governing documents to limit or abolish these rights. If the shareholder’s rights are denied, they can take legal action. This may include filing an action in superior court to force the company to produce the records. The court may also compel the corporation to pay the expenses incurred to compel this action. An exception to this would be if the corporation’s refusal was in good faith. An experienced Connecticut business attorney can explain these obligations in more detail.
WE HELP CORPORATIONS NAVIGATE THEIR LEGAL RESPONSIBILITIES
Operating a corporation carries numerous responsibilities under state law. Record-keeping rules are just one facet of this obligation. Aeton Law Partners is here to help you work through these requirements. If you have a question about record-keeping laws or related matters, you can count on us. Call us today and find out more about how we can serve you.