This guide is based on UK law as at 1st February 2010, unless otherwise stated.
Before the Companies Act 2006, a company’s share register was open to inspection by all: shareholders could see it for free; everyone else had to pay a charge, but only a modest one. What’s more, copies had to be supplied on request.
This ready access, however, was open to abuse – not only by direct marketing companies after a cheap mailing list, but also by those with more sinister motives. To protect shareholders, the government introduced a ‘proper purpose’ test. What exactly that means is not defined in the legislation and is left to the courts to decide. Shareholders wanting to communicate with each other, or a bidder wanting shareholder information as a prelude to a takeover, are likely to be ‘proper’; junk mailers and those pursuing an unlawful purpose are not.
The person wanting to inspect the register or receive a copy of it (whether they are a shareholder or not) must first supply the company with:
It is a criminal offence for a person to supply false, misleading or deceptive information in such a request, or to supply information from the share register to a person who hasn’t been named.
Having received a request, the company has five working days either to comply or, if it wishes to refuse, to apply to the court. The court can either uphold the request for access, in which event the company must supply the information immediately, or direct the company to deny it.