September 17, 2021

Volume XI, Number 260

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Court Denies Common Law Inspection Rights To Beneficial Owners

Yesterday's post discussed the Court of Appeal's holding in Ramirez v. Gilead Sciences, Inc., 2021 Cal. App. LEXIS 558, that a beneficial owner has no right to inspect corporate records under California Corporations Code Section 1601.  The petitioner in that case also argued that the common law right of inspection extends to beneficial owners as well as record holders of shares.  The Court of Appeal, however, rejected this argument, finding that the "clear and unequivocal" language in Section 1601 demonstrates a legislative intent to modify the broader common law rule.

In reaching this conclusion, the Court of Appeal did not address whether Section 1601 displaces entirely common law rights of inspection.  The California Supreme Court recognized a shareholder's common law rights to inspection in Hobbs v. Tom Reed Gold Mining Co., 164 Cal. 497, 129 P. 781 (1913), a case which quite obviously predates the current statute and actually involved an Arizona corporation.

© 2010-2021 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XI, Number 196
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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