Litigation Guidelines for Disputes over Shareholders' Right to Know
In many situations, it is highly necessary for company shareholders to file a "lawsuit for shareholders' right to know". However, in practice, when shareholders file lawsuits, they usually merely apply templates or copy legal provisions, resulting in insufficiently comprehensive and clear litigation requests. However, based on the principle of disposition, the scope of the objects that the plaintiff's litigation requests need to review is usually only reduced and not increased in the judgment, which leads to insufficient exercise of shareholders' rights. This not only incurs the burden of litigation but also fails to effectively achieve the litigation purpose. Therefore, based on the author's experience in handling cases, the more standard litigation requests in this article are recommended, and at the same time, the specific basis for the subject matter to be consulted listed therein is clearly defined. It should be noted that this article only provides macro litigation guidance for shareholders' right to know lawsuits. In specific cases, it is still necessary to follow the advice of lawyers to make corresponding adjustments in combination with the actual situation of the company and the specific litigation purposes that shareholders want to achieve.
PART.01 Applicable Scenarios of Shareholders' right to Know lawsuits
Shareholders' right to information is a fundamental, inherent and continuous right enjoyed by shareholders, and it has the attributes of both self-benefit rights and co-benefit rights. The modern corporate system emphasizes the separation of ownership and management rights. That is, the shareholders' meeting is a collection of investors, and the board of directors is a collection of managers. The two work in collaboration, share powers and checks and balances, thus forming good governance within the company. Based on this, in different situations, lawsuits for shareholders' right to know are highly necessary:
Firstly, in joint-stock companies, especially listed companies, the "separation of rights and interests" is more thorough, which is a standard modern company form. However, this may lead to conflicts and contradictions between shareholders and management. Shareholders need to exercise their right to know to understand the actual operating conditions of the company and assess investment risks.
Secondly, in limited liability companies, due to the high overlap between shareholders' meeting members and board members, the main conflicts usually do not occur between shareholders and management or only occur formally between them. In fact, more conflicts and contradictions are concentrated between major shareholders and small and medium-sized shareholders. In many cases, small and medium-sized shareholders, in order to resist the absolute suppression of major shareholders, can first file a lawsuit for shareholders' right to know, and then launch an effective combination of measures, that is, based on the collected evidence materials, file further lawsuits for the validity of company resolutions, lawsuits for liability for damaging the company's interests, and even criminal charges, etc.
Thirdly, whether it is a joint stock company or a limited company, new shareholders have the right to know all the business information of the company since its establishment (especially those who have obtained the company's equity through the execution of debt settlement with assets), which is a necessary condition for them to make subsequent decisions and exercise their shareholder rights accordingly.
In the practice of company law in our country, as long as the purpose of shareholders exercising their right to know is reasonable and legitimate, the exercise of their right to know can be supported by the court (the time, place and scope of review and copying may be adjusted). Reasonable and legitimate purposes generally include the company's long-term failure to distribute dividends, the management's lack of due diligence, and the major shareholder's abuse of shareholder rights affecting the company's business order, etc.
PART.02 Claims for Shareholders' Right to Know
The defendant is ordered to provide, within ten days from the date of the judgment taking effect, the articles of association of the company, the register of shareholders, the minutes and resolutions of the shareholders' meeting, the minutes and resolutions of the board of directors' meeting, the minutes and resolutions of the board of supervisors' meeting, and financial accounting reports (including the balance sheet, income statement, and cash flow statement) from the date of the company's establishment to the date of the actual performance of the judgment at its actual place of business or the location of its books. Profit distribution tables, tax return forms and tax payment records, etc. as relevant supplementary schedules; Notes to the financial statements, financial situation explanations; The audit report shall be made available for on-site review and copying by the plaintiff and the certified public accountants, lawyers and other professionals entrusted by the plaintiff. The review and copying period shall be within 30 working days from the date of the first review and copying.
2. Order the defendant to provide the accounting books (including general ledgers, subsidiary ledgers, cash journals, and bank deposit journals) from the date of the company's establishment to the date of actual performance of the judgment within ten days from the date of the judgment taking effect at its actual place of business or the location of the books. Accounts receivable and payable as other auxiliary ledgers, fixed asset card detail lists, etc., and accounting vouchers (including original vouchers and bookkeeping vouchers; The relevant contracts, bank statements, transaction details, etc. recorded as original vouchers for future reference shall be available for on-site review by the plaintiff and the professionals entrusted by the plaintiff, such as certified public accountants and lawyers. The review period shall be within 30 working days from the date of the first review (during the review, the plaintiff may make corresponding excerpts of the materials, and the defendant must affix its seal to confirm the excerpts made by the plaintiff).
3. The litigation costs of this case shall be borne by the defendant.
PART.03 The litigation request specifies the specific basis for the subject matter
(1) A list of specific documents and materials that are relatively clear in the Company Law
The Company Law of the People's Republic of China (Revised in 2023)
Article 57 Shareholders have the right to review and copy the articles of association, the register of shareholders, minutes of shareholders' meetings, resolutions of the board of directors, resolutions of the board of supervisors and financial accounting reports.
Shareholders may request to review the company's accounting books and accounting vouchers. If a shareholder requests to review the company's accounting books or accounting vouchers, he or she shall submit a written request to the company, stating the purpose. If the company has reasonable grounds to believe that shareholders' review of accounting books and accounting vouchers has improper purposes and may harm the company's legitimate interests, it may refuse to provide the review and shall reply in writing to the shareholders within fifteen days from the date of their written request, explaining the reasons. If the company refuses to provide access, shareholders may file a lawsuit with the people's court.
Shareholders may entrust intermediary institutions such as accounting firms and law firms to review the materials as prescribed in the preceding paragraph.
Shareholders and the intermediary institutions they entrust, such as accounting firms and law firms, shall abide by the provisions of laws and administrative regulations on the protection of state secrets, business secrets, personal privacy and personal information when reviewing and copying relevant materials.
Where a shareholder requests to review and copy relevant materials of a wholly-owned subsidiary of the company, the provisions of the preceding four paragraphs shall apply.
Article 110 Shareholders have the right to review and copy the articles of association, the register of shareholders, minutes of shareholders' meetings, resolutions of the board of directors, resolutions of the board of supervisors, and financial and accounting reports, and to make suggestions or inquiries regarding the company's operations.
Shareholders who have held, either individually or collectively, three percent or more of the company's shares for a continuous period of 180 days or more and request to review the company's accounting books and accounting vouchers shall be subject to the provisions of the second, third and fourth paragraphs of Article 57 of this Law. Where the articles of association of a company have relatively low provisions on the shareholding ratio, such provisions shall prevail.
Where a shareholder requests to review and copy relevant materials of a wholly-owned subsidiary of the company, the provisions of the preceding two paragraphs shall apply.
Shareholders of listed companies who consult or copy relevant materials shall abide by the provisions of the Securities Law of the People's Republic of China and other laws and administrative regulations.
(2) List of materials that should be further clarified in the "Financial Accounting Report"
Regulations on Enterprise Financial Accounting Reports
Article 6 Financial accounting reports are classified into annual, semi-annual, quarterly and monthly financial accounting reports.
Article 7 Annual and semi-annual financial accounting reports shall include: (1) Accounting statements; (II) Notes to the financial statements; (III) Financial Situation Statement.
Accounting statements should include the balance sheet, income statement, cash flow statement and related supplementary schedules.
Article 12, Paragraph 1: The relevant supplementary schedules are supplementary statements reflecting the financial position, operating results and cash flows of an enterprise, mainly including the profit distribution statement and other supplementary schedules stipulated by the unified national accounting system.
Article 16 An enterprise shall prepare and submit its annual financial accounting report at the end of each fiscal year. Where the unified national accounting system stipulates that enterprises shall prepare and report semi-annual, quarterly and monthly financial accounting reports, such provisions shall prevail.
2. Accounting Law of the People's Republic of China (Revised in 2024)
Article 20, Paragraph 2 Where laws and administrative regulations stipulate that financial accounting reports must be audited by certified public accountants, the audit reports issued by the certified public accountants and their accounting firms shall be provided together with the financial accounting reports.
3. The National Judges College and the Judicial Case Research Institute of the Supreme People's Court have compiled the "China Courts 2025 Annual Cases - Company Disputes", which selected the civil judgment (2023) Sichuan 18 Min Zhong No. 744 issued by the Intermediate People's Court of Ya 'an City, Sichuan Province. This judgment clearly states that financial accounting reports include tax return forms (which are relevant appendices). Furthermore, as tax records are important materials that can be cross-verified with tax returns, it is reasonable for shareholders to request the company to provide them at the same time. Therefore, the author suggests that they be claimed together in the lawsuit.
(3) The list of materials that should be further clarified in the "accounting books"
Accounting Law of the People's Republic of China (Revised in 2024)
Article 15, Paragraph 1: The registration of accounting books must be based on audited accounting vouchers and comply with relevant laws, administrative regulations and the unified national accounting system. Accounting books include general ledgers, subsidiary ledgers, journals and other auxiliary books.
2. The National Judges College and the Judicial Case Research Institute of the Supreme People's Court have compiled the "China Courts 2025 Annual Cases - Company Disputes", which selected the civil judgment (2023) Sichuan 18 Min Zhong No. 744 issued by the Intermediate People's Court of Ya 'an City, Sichuan Province. This judgment clearly states that accounting books include current accounts and the detailed list of fixed asset cards (which belong to other auxiliary books).
(4) The list of materials that should be further clarified in the "Accounting Vouchers"
Accounting Law of the People's Republic of China (Revised in 2024)
Article 14, Paragraph 1 Accounting vouchers include original vouchers and bookkeeping vouchers.
In the case of Li Shujun, Wu Xiang, Sun Jie and Wang Guoxing v. Jiangsu Jiade Real Estate Development Co., Ltd. regarding the dispute over shareholders' right to know in the Bulletin of the Supreme People's Court (Issue 8, 2011), the court held that "according to accounting standards, relevant contracts and other related materials are also the basis for preparing bookkeeping vouchers and should be recorded as attachments to the original vouchers for future reference." Accordingly, the scope of the four appellants' exercise of the right to review should include accounting books (including general ledgers, subsidiary ledgers, journals and other auxiliary books) and accounting vouchers (including bookkeeping vouchers, relevant original vouchers and related materials recorded as attachments to the original vouchers for future reference).
3. The National Judges College and the Judicial Case Research Institute of the Supreme People's Court have selected the civil judgment No. (2023) Sichuan 18 Min Zhong 744 issued by the Intermediate People's Court of Ya 'an City, Sichuan Province, in the book "Corporate Disputes of Chinese Courts in 2025". The judgment clearly states that accounting vouchers include bank statements and transaction details (which are relevant materials recorded as attachments to the original vouchers for future reference).
PART.04 Other details to be particularly noted when filing a lawsuit
(1) Fully perform the pre-litigation procedures to reduce the burden of litigation
According to the Company Law of our country, whether it is a joint stock company or a limited company, the review of accounting books and accounting vouchers should go through the pre-procedure and meet the requirements of the legitimacy of the purpose (it should also be noted that there are restrictions on the holding period and shareholding ratio when shareholders of a joint stock company review accounting books and accounting vouchers). That is, the shareholder submits a written application for review to the company and the company explicitly refuses it or fails to reply within 15 days. In practice, to reduce the burden on the parties involved in litigation, if a shareholder directly requests a review in the complaint without going through the pre-procedure and the company responds and clearly expresses opposition, it is generally also regarded as the shareholder having fulfilled the pre-procedure against the company.
Based on the author's experience in handling cases, whether shareholders have fully fulfilled the pre-procedure before exercising their rights is often treated with a rather cautious attitude and is subject to key examination. That is, not only is it required that shareholders submit a written application to the company (with clear and verifiable records of sending and receiving), but also the scope of the subject matter listed in the application must be as detailed as that listed in the subsequent litigation requests. It is not advisable to simply state "request to review all meeting and financial materials", otherwise the relevant claims will be hard to gain support.
Therefore, to avoid trouble and reduce the burden of litigation, the author suggests that before filing a lawsuit for shareholders' right to know, one should first send wechat messages and emails to the legal representative of the company, and simultaneously send EMS express to the company's registered address and emails to the company's registered email. The content listed for review in the application should be as specific and detailed as possible. File a lawsuit only after receiving a clear rejection reply or after the 15-day period has expired.
(2) Time for preparing materials and time for consulting and copying
When shareholders exercise their right to know, they should give the company a reasonable period of time to prepare relevant materials. Generally, "ten days" is a reasonable period that can be supported by the court.
For the time of review and copying after shareholders exercise their rights, as long as it is within a reasonable range, the court will not make too many adjustments. Therefore, it is advisable to write as much as possible and clearly state "working days". Otherwise, if the content of the materials that need to be reviewed and copied is too vast, while the time required for review and copying in the lawsuit is too short, it is no different from setting up self-barriers. (Although many judicial viewpoints hold that shareholders' right to know is a continuous right, and multiple lawsuits for shareholders' right to know do not constitute repeated lawsuits, for the sake of reducing the burden of litigation, it is still advisable to make a thorough plan in one lawsuit.) Generally, "twenty working days" to "thirty working days" are all reasonable periods that can be supported by the court.
(3) The time range for different shareholders to exercise their right to know
It should be noted that, according to the perspective of the selected cases in the "2025 Annual Cases of Chinese Courts - Company Disputes" compiled by the National Judges College and the Judicial Case Research Institute of the Supreme People's Court, new shareholders can review and copy all business information and relevant materials since the establishment of the company after joining it. The starting time for exercising the shareholder's right to know is not limited to the time point of joining the company.
However, for shareholders who have already withdrawn from the company, according to Article 7, Paragraph 2 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (IV)", shareholders who have withdrawn can only review and copy specific documents and materials of the company during their holding period, and they need to initially prove that their legitimate rights and interests were infringed upon during their holding period.
(4) The subject matter listed in the litigation request should be "detailed rather than broad".
For the "financial accounting reports", "accounting books" and "accounting vouchers" in the litigation requests, specific details should be as clear as possible. Although according to Article 10, Paragraph 1 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (IV)", courts should clearly specify in their judgments the list of specific documents and materials of the company to be consulted or copied, in practice, based on the principle of disposition, if the plaintiff's litigation request is too general, that is, the specific documents and materials are not clearly defined, Then it may be regarded as a waiver of the corresponding right to access. In the subsequent performance and enforcement, the company may thereby refuse to provide specific documents and materials not explicitly listed in the effective judgment.
(5) The subject matter listed in the litigation request should be "more rather than fewer".
In the course of handling cases, the author has found that if the defendant company only entrusts its employees to appear in court without a lawyer, it is very likely to agree to all the plaintiff's claims on the spot based on other considerations (such as agreeing to all the plaintiff's claims but the materials submitted have been lost or only willing to provide copies). In such circumstances, it is too late for the defendant to change his mind after the trial. Based on the principle of disposition, all the plaintiff's claims can generally be supported, even if some of the objects listed in the claims do not have clear and sufficient basis.
However, in the event that the defendant explicitly refuses, for the subject matter that lacks sufficient basis and which the shareholder wishes to include in the litigation request, while submitting similar precedents that are favorable to them, the shareholder should also express their opinions to the court around the following key points: First, based on the interpretation of purpose, the shareholder's right to know system aims to fully protect shareholders' rights. However, in practice, the exercise of shareholders' right to know is not ideal. Therefore, in the application of law, its application can be appropriately expanded or even analogically applied (modern civil law does not prohibit filling legal loopholes through analogical application). Second, based on historical interpretation, the scope of the objects of shareholders' right to know is showing a gradually expanding trend. Third, the content of this object cannot be separated from other materials that can be consulted and copied in accordance with the law, or the authenticity of other materials can only be judged by consulting and copying this object. Fourth, seizing on the defendant's defense that the relevant materials have been lost, it is proposed that in such circumstances, if other materials cannot be consulted as supplements, the plaintiff's right to know cannot be effectively realized.
(6) Examine whether the defendant has any branches or wholly-owned subsidiaries
A branch company is merely a branch established outside the head office and does not have independent legal person status or independent property. Its relevant materials can be consulted and copied together, so it should be clearly stated in the litigation request.
According to Article 57, Paragraph 5 of the Company Law of the People's Republic of China, if the defendant has a wholly-owned subsidiary, its relevant materials can also be consulted and copied at the same time. Therefore, this should also be clearly stated in the litigation request.
(7) Review whether there are any relaxed provisions regarding the scope of review in the company's articles of association
According to Article 7, Paragraph 1 and Article 9 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (IV)", shareholders' right to know is an inherent right. The articles of association of a company shall not substantially deprive or restrict the exercise of shareholders' right to know. However, the articles of association may expand the scope of the objects of shareholders' right to know to ensure the full exercise of shareholders' right to know.
(8) Evidence materials for shareholders' right to know lawsuit
The evidence materials for a shareholder's right to know lawsuit should focus on the following aspects: First, evidence materials proving that the shareholder has the subject qualification to exercise rights; Secondly, preliminary evidence materials that prove the reasonable and legitimate purpose of the shareholders' exercise of their rights (such as those that can initially demonstrate the company's long-term failure to distribute dividends, the management's lack of due diligence, and the major shareholder's abuse of shareholder rights affecting the company's business order, etc.); Thirdly, evidence materials proving that shareholders have fully fulfilled the pre-procedure before filing the lawsuit for shareholders' right to know; Fourth, other materials that need to be submitted in the individual case.
