Oklahoma shareholders have the right to inspect and make copies of the corporation’s stock ledger, shareholder list, and other corporate books and records. 18 Okla. Stat. Ann. § 1065(B)(2010). To exercise this right, the request must be in writing and under oath and state the purpose of the inspection. The inspection must take place during the corporation’s regular business hours. 18 § 1065(B).
Under the Oklahoma statute, the demand must be for a proper purpose. A proper purpose is one that is “reasonably related” to shareholder status. § 1065(B). Improper purposes would be simply to “gratify [the shareholder’s] curiosity or for “speculative or vexatious purposes.” Wolozyn v. Begarek, 378 P.2d 1007, 1010 (Okla. 1963).
If the corporation refuses to allow an inspection where a demand was properly executed, the corporation has the burden to show that the shareholder had an improper purpose. 18 § 1065(D). In that situation, a court may establish limits or conditions on the inspection.
Oklahoma does not provide for judicial or involuntary dissolution of a corporation. See 18 Okla. Stat. Ann. § 1096. An Oklahoma corporation can only be dissolved in a manner prescribed under the statute. Sutter v. Sutter Ranching Corp., 14 P.3d 58, 62 (Okla. 2000). Id.
One exception to this rule has been noted, however. A court of equity can, at the instance of minority stockholders appoint a receiver for corporation, to take charge of its business, and, if necessary, to wind up its business, if the shareholders shows “mismanagement, collusion, or fraud.” Weston v. Acme Tool, Inc., 441 P.2d 959, 962 (Okla. 1968); see Dill v. Johnson, 179 P.608, 610 (Okla. 1919).
Actions by shareholders to address wrongs against the corporation for actions taken by officers and directors are derivative suits. Beard v. Love, 173 P.3d 796, 802 (Okla. Civ. App. 2007).
To file a derivative suit, the shareholder’s petition must be verified and state that the plaintiff was a shareholder at the time the action complained of occurred. 12 § 2023.1; 18 § 1126. The petition must contain “definite and certain allegations of ultimate facts and not mere conclusions and broad statements of condemnation.” Weston., 441 at 962, citing 13 Fletcher Cyclopedia Corporations § 5947. The shareholder must also “allege with particularity” what the shareholder has done to have the directors take the desired actions before filing suit. 12 § 2023.1. If the shareholder has not approached the directors regarding the desired actions, the shareholder must address why he failed to do so. If the shareholder did approach the directors, but the board took no action, the shareholder’s petition should address this as well. 12 § 2023.1.
In addition, the filing shareholder must “fairly and adequately represent” similarly situated shareholders in the corporation. 12 § 2023.1.
Once filed, a derivative suit will not be dismissed without prior court approval. 12 § 2023.1.
We are licensed only in Texas
In order to remain on the cutting edge of business owner rights law, Fryar Law Firm keeps abreast of legal developments in all 50 states. This 50-state survey is presented for educational purposes. However, we do not hold ourselves out as experts on the law of any jurisdiction other than Texas, and we may not practice law in any other state, with the following exceptions:
The lawsuit involves a non-Texas company but may be brought in Texas courts--example, if the client is a Texan or the company operates in Texas.
We are part of a legal team that includes local counsel. Out of state legal teams benefit from our experience when we consult. We may also act as lead counsel, if we have local co-counsel and permission of the court.
We are offering general consultation and are performing our work in Texas. We often consult with out-of-state clients on litigation strategy or assist them in organizing for litigation or settlement or in putting together a legal team. We also assist out-of-state clients in exercising their rights to corporate information.
This post represents our opinion regarding the relevant shareholder oppression and minority ownership rights law. However, not everyone agrees with us, and the law is changing quickly in this area. This page may not be up to date. Be sure to consult with qualified counsel before relying on any information of this page. See Terms and Conditions.