Opinion ID: 1991103
Heading Depth: 1
Heading Rank: 2

Heading: Stockholder Inspection Rights

Text: Delaware corporate law provides for a separation of legal control and ownership. [5] The legal responsibility to manage the business of the corporation for the benefit of the stockholder owners is conferred on the board of directors by statute. [6] The common law imposes fiduciary duties upon the directors of Delaware corporations to constrain their conduct when discharging that statutory responsibility. [7] Stockholders' rights to inspect the corporation's books and records were recognized at common law because [a]s a matter of self-protection, the stockholder was entitled to know how his agents were conducting the affairs of the corporation of which he or she was a part owner. [8] The qualified inspection rights that originated at common law are now codified in Title 8, section 220 of the Delaware Code, which provides, in part: (b) Any stockholder, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose. Section 220 provides stockholders of Delaware corporations with a powerful right. [9] By properly asserting that right under section 220, stockholders are able to obtain information that can be used in a variety of contexts. Stockholders may use information about corporate mismanagement, waste or wrongdoing in several ways. For example, they may: institute derivative litigation; seek an audience with the board [of directors] to discuss proposed reform or, failing in that, they may prepare a stockholder resolution for the next annual meeting, or mount a proxy fight to elect new directors. [10]