Inspecting The Shareholder List

Section 1600(a) of the California General Corporation Law establishes the "absolute right" of a shareholder or shareholders to inspect the shareholder list.  To be eligible to exercise this right, the shareholder or shareholders must hold at least:

• 5% in the aggregate of the outstanding voting shares of the corporation; or
• 1% of those voting shares and have filed a Schedule 14A with the 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) (Form F-6 was actually eliminated two decades ago, apparently no one has noticed (see FIL 10-95).

But there is another requirement that the casual reader might miss.  Corporations Code Section 185 defines "shareholder" to mean "one who is a holder of record of shares".   This definition effectively excludes beneficial owners.  Acosta v. Pacific Enterprises, 950 F.2d 611, 619 (9th Cir. Cal. 1991) ("Under California law, only shareholders of record have the right to inspect or receive a list of names and addresses of all shareholders of record and the amount of their shareholdings.").