Colorado § 7-116-104 - Court-ordered inspection of corporate records.

§ 7-116-104. Court-ordered inspection of corporate records.

(1) If a corporation refuses to allow a shareholder, or the shareholder's agent or attorney, who complies with section 7-116-102 (1) to inspect or copy any records that the shareholder is entitled to inspect or copy by said section, the district court for the county in this state in which the street address of the corporation's principal office is located or, if the corporation has no principal office in this state, the district court for the county in which the street address of its registered agent is located or, if the corporation has no registered agent, the district court for the city and county of Denver may, on application of the shareholder, summarily order the inspection or copying of the records demanded at the corporation's expense.

(2) If a corporation refuses to allow a shareholder, or the shareholder's agent or attorney, who complies with section 7-116-102 (2) and (3) to inspect or copy any records that the shareholder is entitled to inspect or copy by section 7-116-102 (2) and (3) within a reasonable time following the shareholder's demand, the district court for the county in this state in which the street address of the corporation's principal office is located or, if the corporation has no principal office in this state, the district court for the county in which the street address of its registered agent is located or, if the corporation has no registered agent, the district court for the city and county of Denver may, on application of the shareholder, summarily order the inspection or copying of the records demanded.

(3) If a court orders inspection or copying of the records demanded, unless the corporation proves that it refused inspection or copying in good faith because it had a reasonable basis for doubt about the right of the shareholder or the shareholder's agent or attorney to inspect or copy the records demanded:

(a) The court shall also order the corporation to pay the shareholder's costs, including reasonable counsel fees, incurred to obtain the order;

(b) The court may order the corporation to pay the shareholder for any damages the shareholder incurred;

(c) If inspection or copying is ordered pursuant to subsection (2) of this section, the court may order the corporation to pay the shareholder's inspection and copying expenses; and

(d) The court may grant the shareholder any other remedy provided by law.

(4) If a court orders inspection or copying of records demanded, it may impose reasonable restrictions on the use or distribution of the records by the demanding shareholder.

Source: L. 93: Entire article added, p. 846, § 1, effective July 1, 1994. L. 96: (1) and (2) amended, p. 1327, § 48, effective June 1. L. 2003: (1) and (2) amended, p. 2331, § 275, effective July 1, 2004.

ANNOTATION

Annotator's note. Since § 7-116-104 is similar to § 7-5-117 as it existed prior to the 1993 recodification of the "Colorado Business Corporation Act", articles 101 to 117 of title 7, cases construing that provision and its predecessors have been included in the annotations to this section.

A court may refuse inspection of corporate books when the person is not acting in good faith. Dines v. Harris, 88 Colo. 22, 291 P. 1024 (1930).

For the indiscriminate examination by stockholders of corporate records is not favored. Weck v. District Court, 158 Colo. 521, 408 P.2d 987 (1965).

Burden of proving bad faith. Mere allegations of improper motives or bad faith on the part of one seeking to inspect the corporate books are not enough, and the burden of proof is on those who desire to deny inspection. Dines v. Harris, 88 Colo. 22, 291 P. 1024 (1930).

Officer, not corporation, is necessary party in mandamus for inspection. In order to enforce the right of inspection by mandamus, it is not necessary to make the corporation a party respondent, but merely its officer upon whom the statutory duty is devolved. Merrill v. Suffa, 42 Colo. 195, 93 P. 1099 (1908).

Applicability of section to foreign corporations. Since nothing in the language of this section indicates an intent by the general assembly to limit its effect to domestic corporations, this section also applies to foreign corporations as provided by § 7-9-104. Jefferson Indus. Bank v. First Golden Bancorp., 762 P.2d 768 (Colo. App. 1988).