Legislator Seeks To Require Inspection Of Records In California

Corporations Code Section 1601 requires that records "be open to inspection . . . at any reasonable time during usual business hours . . .".  The statute is silent on where the inspection must occur. In Innes v. Diablo Controls, Inc., 248 Cal. App. 4th 139 (2016), the Court of Appeal held that Section 1601 requires that the records be made available for inspection at the office where those records are kept.  The Court of Appeal cautioned, however, that "maintaining the records in a remote location to intentionally impede inspection would be contrary to the purpose of section 1601".  See  Court Holds Inspection Statute Does Not Require That Records Be Brought To California.  

Assembly Member Brian Maienschein apparently disagrees with the result.  Earlier this week, he introduced AB 2237 which would amend Section 1601 to require inspection at the corporation’s principal office in California.  If the corporation does not have a principal office in California, inspection must occur at the physical location for the corporation’s registered agent for service of process.  This requirement would apply to domestic corporations and to foreign corporations keeping their records or having their principal executive office in California.  As an alternative, the shareholder may elect to request that the corporation produce the records by mail or electronically, if the shareholder pays for the reasonable costs for copying or converting the records to electronic format.