Can shareholders see a company’s financial records? Key rights & conditions

Shareholders naturally will want to see the financial information that shows how their investment is performing — but access isn’t without limits. While transparency is a cornerstone of good governance, the law sets clear boundaries on what shareholders can and can’t access. 

Here, Suzi Gardener explores the rights of shareholders to access financial information relating to a private limited company. 

What financial information can shareholders access? 

A shareholder of a private limited company is generally entitled to receive a copy of the company’s most recent annual accounts and reports free of charge upon request. 

In addition, each year the company must send copies of its annual accounts and reports to all shareholders, provided that the company has a current address for them. 

However, there is no general right for shareholders to inspect the company’s accounting records more generally (such as management accounts and reports) unless such a right is specifically given in the company’s articles of association or some other form of agreement between the company and its shareholders (such as a shareholders’ agreement). 

If a shareholder is also a director, does that change anything?

As directors are responsible for the management of a company, they generally have a right to inspect the company’s books and records — including its accounting records — so that they’re able to properly carry out their role as directors. 

However, a director would not be entitled to access accounting records if they intend to use them for an improper purpose (generally being a purpose which is unrelated to a director carrying out their role). If a company wishes to refuse access to a director on the basis of there being an improper purpose, then it’s for the company to prove that this is the case. 

Therefore, it does not automatically follow that simply because someone is a director, they will always be entitled to all financial information about a company. If a director is, for example, intending to use the information in connection with a dispute involving the company, legal advice should be sought before access is given or refused, as the position can be fact specific and there may circumstances in which access can be restricted. 

Talk to us  

Tensions often arise when shareholders feel shut out of company decisions or denied access to documents that they believe they’re entitled to. As specialists in shareholder rights, we can ensure that shareholders are aware of their rights to company information and work alongside you to resolve disputes, whether they concern the way that the business is being run or the scope of information available. 

Talk to us by calling 0151 600 3493, emailing hello@shareholderrights.co.uk or completing our contact form.