Ark. Code Ann. § 4-26-715 (2026)
Books and records — Examination
- Each corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders and board of directors and shall keep at its registered office or principal place of business in this state, or at the office of its transfer agent or registrar in this state, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each.
- Any person who shall have been a shareholder of record for at least six (6) months immediately preceding his or her demand, upon written demand stating the purpose thereof, shall have the right to examine, in person or by agent or attorney, at any reasonable time, for any proper purpose, its books and records of account, minutes, and record of shareholders and to make extracts therefrom.
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- Upon refusal by the corporation or by an officer or agent of the corporation to permit an inspection of the corporation's books, records of account, minutes, or record of shareholders, the person making demand for inspection may file a civil action in the circuit court of the county in which the corporation maintains either its principal place of business or its registered office for the purpose of securing an order of the court directing the corporation, its officers, and agents to permit the requested inspection.
- The proceeding shall be advanced upon the docket of the court; and the court shall hear the parties summarily, by affidavit or otherwise.
- If the applicant establishes that he or she is qualified and entitled to the inspection, the court shall grant an order permitting the inspection, subject to any limitations which the court may prescribe; and the court may grant such other relief as to the court may seem just and proper.
- The court may deny or restrict inspection if it finds that the shareholder has improperly used information secured through any prior examination of the books and records of accounts or minutes or record of shareholders of the corporation or of any other corporation, or that he or she was not acting in good faith or for a proper purpose in making his or her demand.
- Upon the written request of any shareholder of a corporation, the corporation shall mail to the shareholder its most recent financial statements showing in reasonable detail its assets and liabilities and the results of its operations.
History. Acts 1965, No. 576, § 53; A.S.A. 1947, § 64-312.
Case Notes
Burden of Proof.
This section clearly and unambiguously provides that the shareholders bear the burden of proving entitlement to inspection. Ashley Bancstock Co. v. Meredith, 2017 Ark. App. 598, 534 S.W.3d 762 (2017).
This section includes no language requiring a shareholder to include specific allegations of wrongdoing in order to be entitled to records. Only a proper purpose must be established. Ashley Bancstock Co. v. Meredith, 2017 Ark. App. 598, 534 S.W.3d 762 (2017).
Shareholders proved a proper purpose to inspect requested records where their demand letter explained that the corporation had reported significant losses and expenses that they believed were from a subsidiary sale and significant loan write-offs, and this section did not require specific allegations of wrongdoing. Ashley Bancstock Co. v. Meredith, 2017 Ark. App. 598, 534 S.W.3d 762 (2017).
Evidence.
Entries upon books of corporation are prima facie evidence against it as admissions, and become conclusive evidence against it when the entries have been duly made by the recording officer. City Elec. S. Ry. v. First Nat'l Exch. Bank, 62 Ark. 33, 34 S.W. 89 (1896) (decision under prior law).
Record of stock of corporation constituted the best evidence as to who were stockholders. Berlin v. Rainwater, 174 Ark. 66, 294 S.W. 368 (1927) (decision under prior law).
The minute book of a corporation when identified, is competent evidence as to recitals therein and even though unsigned, the minutes may be used to prove what took place at the meeting and that a resolution was passed thereat. Grand Nat'l Bank v. Taylor, 176 Ark. 1, 1 S.W.2d 818 (1928) (decision under prior law).
Where the proposed minutes of the board of directors' meeting were not in the corporation record book, the plaintiff failed to carry its burden of proof as to the genuineness of the action of the board in providing apparent authority of its agent. National Surety Corp. v. Crystal Springs Fishing Village, Inc., 326 F. Supp. 1171 (W.D. Ark. 1971).
Minutes.
Where meeting was legal meeting, authority conferred thereby would not be impaired because proper minutes thereof were not written up. Engles v. Shaffer, 143 Ark. 31, 219 S.W. 343 (1920) (decision under prior law).
Records Subject to Inspection.
Court of Appeals of Arkansas, Division Four, concludes that a broad definition of the term books and records of account is proper for purposes of this section. Courts tend to broadly define the term so that shareholders' rights are protected. Adopting this approach, the Court of Appeals holds liability-insurance policies are books and records of account within the meaning of the statute. Insurance policies are contracts. And contracts are business records pertinent to the operations of a corporation. Ashley Bancstock Co. v. Meredith, 2017 Ark. App. 598, 534 S.W.3d 762 (2017).
Subsection (b) of this section provides that a corporation is required to produce its books and records of account after a proper demand from a shareholder. The Court of Appeals of Arkansas, Division Four, interprets this provision to mean that a corporation must provide to shareholders only the books and records it possesses. Ashley Bancstock Co. v. Meredith, 2017 Ark. App. 598, 534 S.W.3d 762 (2017).
Subsidiary Records.
Because subsidiaries are assets of a corporation, their books and records are corporate records. By the plain language of this section, they are subject to inspection. The Court of Appeals of Arkansas, Division Four, holds that this section authorizes a shareholder to inspect records of a corporation's subsidiaries. Ashley Bancstock Co. v. Meredith, 2017 Ark. App. 598, 534 S.W.3d 762 (2017).
Time Limit.
This section imposes no time limit on the inspection of records. The rules of statutory construction require that a time limit cannot be assumed. Ashley Bancstock Co. v. Meredith, 2017 Ark. App. 598, 534 S.W.3d 762 (2017).