Brief survey of Wyoming shareholder law.
Wyoming Shareholder Law Survey
Inspect Books and Records
Right to Inspect Books and Records
Wyoming shareholders have the right to inspect and corporate books and records, including: minutes of both shareholder and director meetings, accounting records, list of shareholders, by-laws, and articles of incorporation. Wyo. Stat. Ann. §§ 17-16-1601(e); 17-16-1602 (2010). The shareholder must make a written demand that gives the corporation at least five business days notice of the date on which the shareholder wishes to review the records. § 17-16-1602. The inspection must occur during regular business hours at the corporation’s principal office. § 17-16-1602.
To exercise this right, the shareholder must be a record owner of shares for at least six months and own at least 5% of all shares outstanding. § 17-16-1602(b).
The request to inspect must be made “in good faith and for a proper purpose.” § 17-16-1602(c)(i). The request must also “describe with reasonable particularity [the] purpose and the records” the shareholders wants to inspect. § 17-16-1602(c)(ii),(iii). The corporation may expand the right to inspect through its articles of incorporation or by-laws, but it may not limit this right. Wyoming Coal Mining Co. v. State, 1906, 15 Wyo. 97, 87 P. 337, reh’g denied 15 Wyo. 97, 87 P. 984.
Shareholders in a Wyoming close corporation may petition the district court relief if the directors are acting in a way that is “illegal, oppressive, fraudulent or unfairly prejudicial.” § 17-17-140.
A shareholder may also petition the district court for corporate dissolution if the shareholder can establish that the directors are acting in an “illegal, oppressive[,] or fraudulent” manner. § 17-16-1430 (ii).
In a closely-held corporation, officers/directors owe a fiduciary duty to one another. J Bar H, Inc. v. Johnson, 822 P.2d 849, 859 (Wyo. 1991). In that case, the corporation was not “technically a statutory close corporation” and the plaintiff was not a minority shareholder because she owned half the shares. Id. The court still applied the close corporation standard. Id.
To file a derivative suit, the shareholder must have been a shareholder at the time the act complained of occurred. The shareholder must also “fairly and adequately” represent the interests of the corporation. § 17-16-741.
Before filing a derivative suit, the shareholder must first make a written demand upon the corporation to take the desired action. § 17-16-742. The corporation then has 90 days to take the requested action or to reject the shareholder’s demand. § 17-16-742. However, the shareholder may file suit before the expiration of the 90-day period if “irreparable injury” would result should the shareholder be forced to wait the entire 90 days before filing suit. § 17-16-742.
A derivative suit cannot be dismissed or settled without prior court approval. § 17-16-745.