Shareholder's Individual Information Right: Prerequisites and Boundaries

Abstract

Every shareholder as an economic owner of a limited liability company must have the possibility of executing his rights in the company effectively. Therefore, the law confers on shareholders the right to obtain information. The shareholder’s right to information is considered to be the most important of his membership rights. Estonian courts have been able to form a set of basic principles of shareholders’ information rights. For example, Estonian case law shows a clear trend toward wider disclosure. This means that the acceptable grounds for denial of a shareholder's information claim are actually quite limited. According to Estonian case law, a shareholder is entitled to receive basic information about management costs. A former shareholder, on the other hand, may receive information about only the time during which he was a shareholder. Such an approach provides the company with proper protection against situations wherein a former shareholder makes a claim for information about the activities of the company after having lost his membership and therefore while having no legal interest in receiving detailed information any longer.

Keywords: Shareholders' rights, right to information, minority shareholders, Estonian company law, access to information, shareholder’s right to inspect

JEL Classification: K22, G34