Brief survey of New Hampshire shareholder law.

New Hampshire Shareholder Law Survey

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Books and Records

Rights to Inspect Books and Records

Shareholders in Nevada close corporations can inspect and copy: articles of incorporation, bylaws, resolutions, minutes of shareholder meetings, resolutions adopted by the board of directors, all written communications to shareholders within the last three years (including financial statements sent to shareholders), names and business address of current directors and officers, and the most recent annual report. N.H. Rev. Stat. Ann. § 293-A:16.01, 16.02 (2010).

The inspection must take place during regular business hours at the corporation’s principal place of business. § 293-A: 16.02(a). The shareholder must give the corporation at least five business days notice in writing. § 293-A: 16.02(a). The demand to inspect must be made in good faith and must state a proper purpose. § 293-A: 16.02(c). In addition, the shareholder must specify which documents he wishes to inspect. These records must be directly related to the shareholder’s proper purpose. § 293-A: 16.02(c).

The right to inspect may not be limited by the corporation’s articles of incorporation or bylaws. § 293-A: 16.02(d).

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Shareholder Oppression

New Hampshire shareholders may apply for judicial dissolution if the directors are “acting in a manner that is illegal or fraudulent.” § 293-A:14.30(b) (2010).

New Hampshire shareholders may also bring a direct claim (as opposed to a derivative suit) when the shareholder’s rights are directly affected. Durham v. Durham, 871 A.2d 41, 44 (N.H. 2005). Shareholders have a direct claim if “there is a special duty, such as a contractual duty between the wrongdoer and the shareholder or the shareholder suffered an injury separate and distinct from that suffered by other shareholders. Id. (quoting 12 B W. Fletcher, Fletcher Cylopedia of the Law of Private Corporations § 5911, at 421 (rev. perm. ed. 1984)).

New Hampshire courts recognize that in close corporations, determining whether an action is direct or derivative can be difficult. Id.

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Derivative Suits

Shareholder Derivative Suits

To have standing to bring a derivative suit, the shareholder must own shares in the corporation at the time the act complained of occurred and must “fairly and adequately represent the interests of the corporation in enforcing the right of the corporation.” § 293-A:7.41(1)-(2).

Before filing a derivative suit, the shareholder must first make a written demand upon the corporation. The corporation then has 90 days to address the demand or reject it. If the corporation rejects the demand, the shareholder may file before the expiration of the 90 day period. § 293-A:7.42(1)-(2).

The derivative suit, once filed, may only be dismissed or settled with prior court approval. § 293-A:7.44-45.