Delaware Section 220: Corporation Law Explained In Simple English
As a shareholder of any corporation, you have certain rights described by the Delaware Corporations Code and Section 220. However, it may not always be clear which parts of the Section 220 Delaware Corporation Law applies to your situation.
Whether you are a new shareholder or considering whether it is a risk you are willing to take for yourself, it is important to fully understand what information you have a right to obtain. It could make all the difference when it comes to feeling confident that you are making a wise investment for yourself and your future.
If you are curious about Delaware Section 220, here are some definitions of legal terms used in the section:
|Stockholder||A person who holds a record of stock in a stock corporation, or someone who is an owner of shares of stock held in a voting trust or by a nominee on behalf of the person.|
|Subsidiary||An entity directly or indirectly owned, in whole or in part, by the corporation of which the stockholder is a stockholder and over the affairs of which the corporation directly or indirectly exercises control, and includes, without limitation, corporations, partnerships, limited partnerships, limited liability partnerships, limited liability companies, statutory trusts or joint ventures.|
|Under oath||Statements the declarant affirms to be true under penalty of perjury under the laws of the United States or any state.|
If you aren’t sure how to get started, DoNotPay can help. We know that it can be confusing for new investors or shareholders, and as the world's first robot lawyer, we aim to simplify the process for everyone.
Understanding the Section 220 Delaware Corporate Proceedings Procedure
Under Delaware law, you have the right to access books and financial records for any company that you are a shareholder or potential investor in. However, it is up to you to first serve a demand for an inspection.
A company or entity is not required to provide you with any information unless you ask for it. Once you have asked, the company may still be able to deny your request. At this time, it will be your responsibility to decide if you want to start a Section 220 Procedure.
The first step of this process is to establish your reasons for seeking select information about the company. The requirements for this include:
Establishing a “Proper Purpose” for the Inspection
The term "proper purpose" means establishing a purpose for why you need to see the books. This may be:
- Mismanagement Concerns
- Improper Transactions
You must be fully able to provide some burden of proof showing that some wrongdoing may have occurred.
Proof You Seek Only What is Necessary
If you have a concern regarding improper transactions or the mismanagement of funds, you should seek only to have the information related to the company's financials.
How to Take Advantage of Section 220 and Delaware Code Inspection Rights Yourself
The Delaware Code Section 220 is designed to help shareholders within a corporation protect their assets. However, because you must establish a proper purpose for your request, it is not always easy to start the process without help.
Delaware courts are generally quite conservative regarding providing privileged documents to shareholders. Beyond that, since there is no real reason for a corporation to give you the documents, your demand may be denied.
Therefore, many people turn to lawyers who fully understand Section 220 Delaware Corporation Law. Unfortunately, this is not always the best option for shareholders who have a lot at stake.
What to Do If You Cannot Access Information Alone?
The benefit of allowing a lawyer to take over your demand for information is simple. Lawyers know and understand fully how Delaware Corporate Law Section 220 works. They can also draft a more effective demand letter.
However, traditionally, lawyers are expensive to hire and may not be in a hurry to see that your demands are met. Therefore, if it is information that you need quickly, you may not want to rely on them for help.
If you want to know that the lawyer you choose is truly on your side regarding Section 220 Delaware law, your other option is to give DoNotPay a try. We can do our part to ensure that your needs are met:
- Easily: We take the confusion out of legal processes by doing the complex parts for you.
- Quickly: Our processes are fast because, unlike typical lawyers, we do not rely on hourly pay for our income.
- Securely: All your private matters will be handled with total confidentiality.
Just take a look at how easy we make the process for you.
DoNotPay Can Help You Take Advantage of Delaware Corporation Code Section 220
You have a legal right to the information you need as a shareholder or investor in any company. Our goal at DoNotPay is to ensure that your rights are fully protected.
If you want to submit a Delaware Code 220 request but don't know where to start, DoNotPay has you covered. Create your own demand letter in 3 easy steps:
- Search Delaware Code or Stock Inspection on DoNotPay.
- Confirm that the company you are hoping to inspect is a Delaware Corporation and that you are a stockholder.
- Tell us why you are requesting the information and what you plan on doing with it.
- Specify the names or types of documents you are requesting.
- That's it! DoNotPay will generate the formal request letter on your behalf and send it to the company.
What Else Can DoNotPay Do for You?
Not only can DoNotPay assist with helping you tackle demand letters and understanding Delaware Corporation Laws, but we also offer a variety of other valuable services for businesses and individuals to use. Some things we may be able to tackle for you include:
- Settling a Breach of Contract
- Canceling Timeshares
- Filing Complaints Against Companies or HR Departments
- Gathering information Through the Freedom of Information Act
If you would like to take advantage of the services provided by DoNotPay, all you have to do is visit us online, let us know what you need, and we will get started working for you quickly. We are available 24/7.