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XPN: the stock and transfer book may be kept in the principal 1. Action for mandamus or damages
office of the corporation or in the office of its stock transfer agent, 2. Civil and criminal liability
if one has been appointed by the corporation
Liability of corporate officer or agent who violates the SH’s
Requirement in order for the minutes of the board right to inspection
meetings be given probative value
Liable for a fine of not less than 1,000 pesos but not more than
The minutes of board meetings should be signed by the corporate 10,000 or by imprisonment for not less than 30 days but not more
secretary. Without such signature, neither probative value nor than 5 years, or both, in the discretion of the court.
credibility could be accorded such minutes
Requisites for existence of probable cause to file a criminal
minutes od meeting without the signature of the corporate case of violation of SH’s right to inspect
secretary have no probative value, and therefore cannot be
demanded for inspection or examination. 1. A director, etc, has made a prior demand in writing for a copy
or excerpts from the corporation’s records or minutes;
Right to inspect 2. Any officer or agent of the concerned corporation shall refuse
to allow the said director, etc. to examine and copy said
The right to inspect is a right of a SH, subject to the following excerpts;
limitations: 3. If such refusal is made pursuant to a resolution or order of the
1. The right must be exercised during reasonable hours or BODs, the liability for such action shall be imposed upon the
business days; directors or trustees who voted for such refusal;
2. The person demanding the right has not improperly used any 4. Where the officer or agent of the corporation sets up the
information obtained through any previous examination of defense that the person demanding to examine and copy
the books and records of the corporation excerpts from the records and minutes has improperly used
3. The demand is made in good faith or for legitimate purpose any information secured through any prior examination of
germane to his interest as a stockholder. the same or was not acting in good faith or for a legitimate
purpose in making his demand, the contrary must be shown
GOOD PURPOSE MAY BE: or proved.
a. to investigate acts of management;
b. to investigate financial conditions; fix value of NOTE: no specific amount of interest is required for the exercise of
shares; such right
c. mailing list of proxies; or
d. information for litigation Refusal to allow inspection is a criminal offense
4. It should follow then formalities that may be required in the Such refusal, when done in violation od Section 74(4) of
by-laws; Corporation Code, properly falls within the purview of Section
5. The right does not extend to trade secrets; and 144 of the same code and this may be penalized as an offense.
6. It is subject to limitations under special laws
DEFENSES THAT MAY BE SET UP:
NOTE: the right to inspect extends to the books and records of the a. Improper use of information obtained in the past;
wholly-owned subsidiary of the corporation b. There was bad faith;
c. Use the information for an illegitimate purpose
Rationale behind right of inspection