Inspecting Company’s Records and Documents by Minority Shareholders

It is established in the case of Wong Kar Gee Mimi v Hung Kin Sang Raymond & Anor [2011] 5 HKC 361 that shareholders have a right to apply for a court order to inspect company’s documents given that there is a proper purpose and good faith. The test is enshrined in the Companies Ordinance (Cap.622) s.740. This right is particularly important to minority shareholders, who might be put in an unjust position without the power to control the board, do not have access to the company’s documents.

In Wong Kar Gee, the plaintiff was entitled to inspect the defendant’s records because she has a proper purpose both subjectively and objectively and that she honestly believed that there were wrongdoings in the company. In a recent case Wong Tak Ming & Anor v Creative Pacific Ltd [2020] HKCU 1456, the court applied the same test to hold that the inspection of company’s records was made in good faith and for a proper purpose despite placing a limit to the records to be inspected, because the plaintiffs were kept in the dark to the company’s affairs and were informed that their investments of HK$6,600,000 had been lost without any explanation.

Therefore, shareholders would be given ‘liberty to apply’ for an inspection order if they can prove a proper purpose and good faith.

If necessary, you can also apply for legal aid. Ms. Ngan is a member of the lawyers at the Legal Aid Department for Criminal, Divorce/Family Law, Employees’ Compensation, Personal Injury, Medical Negligence, and Land Disputes. If legal aid is approved, the aided person has the right to choose a lawyer to represent.

Please feel free to contact us at 69776708 for Mr Lam or make an appointment.

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