Form with which a shareholder may demand the opportunity to inspect the records of a corporation in which the shareholder holds stock.
The Kentucky Demand Inspection of Books — Corporate Resolutions is a legal process that allows shareholders of a corporation to request access to the company's books and records. This procedure is outlined in the Kentucky Revised Statutes (MRS) Section 271B.7-400. The demand for inspection of books is usually made by a shareholder or a group of shareholders who suspect mismanagement or fraudulent activities within the corporation. It acts as a mechanism to ensure transparency and accountability, as shareholders have the right to review relevant records to verify the company's financial statements and governance practices. The demand for inspection must be made in writing, stating the purpose for the inspection and the specific documents or books to be viewed. It is essential to provide a detailed explanation of how the requested records are relevant to the demand and how they might support the allegations made by the shareholders. There are several types of Kentucky Demand Inspection of Books — Corporate Resolutions based on the purpose and scope of the inspection: 1. Financial Records Inspection: Shareholders may request access to financial statements, accounting records, ledgers, balance sheets, income statements, cash flow statements, and any other financial documentation necessary for auditing and assessing the company's financial health. 2. Board of Directors Resolutions Inspection: Shareholders can demand access to corporate resolutions and minutes of board of directors meetings, where they can review discussions and decisions made by the board. This inspection allows shareholders to evaluate the decision-making process and ensure compliance with corporate governance standards. 3. Executive Compensation and Bonus Plans Inspection: Shareholders may examine executive compensation plans, bonus structures, and any related records to assess fairness, reasonableness, and alignment with company performance. 4. Corporate Contracts and Agreements Inspection: This type of inspection enables shareholders to review contracts, agreements, and other legally binding documents entered into by the corporation. It ensures compliance with any legal obligations and evaluates the contractual relationships that may impact the company's financial position or reputation. It is important to note that the demand for inspection should comply with the procedural requirements stated in MRS 271B.7-400. Once a valid and proper demand is made, the corporation must respond within five business days, either granting the inspection or providing a specific reason for denial. If the corporation denies the demand, shareholders may resort to legal action to enforce their right to inspect the requested documents.
