Dealing With Requests To Inspect A Company's Register Of Members

The High Court has considered two issues regarding a request to inspect a company's register of members. First, whether a request is valid if it does not contain all the information required by the Companies Act 2006 and, secondly, the circumstances in which a request by a non-member satisfies the proper purpose test to which the Act refers.

Background

Section 116 of the Companies Act 2006 gives members of a company and others the right to inspect and ask for a copy of the company's register of members. The section prescribes the information which the request must contain. This includes the purpose for which the information will be used and whether it will be disclosed to any other person, in which case the request must also include certain details about the recipient.

A company must within five working days of receipt of a section 116 request either comply with it or apply to court. If the court considers that the request is not for a proper purpose, it must direct the company not to comply. The Act does not set out what is, or is not, a proper purpose.

Facts

Burberry Group plc received a section 116 request from the defendant, who ran an agency tracing lost members in public quoted companies. His stated purpose was to help members of the company who might otherwise be unaware of their rights to reassert them. However, his request did not include the names and addresses of the "specialist researchers" to whom the information from the register would be disclosed.

Decision

The court held that the defendant's request was invalid as it had not included all the information which section 116 requires. Receipt of an invalid request did not set running the five working days in which the company had to comply with a request or refer the matter to court.

On the proper purpose question, the court took into account guidance published by the Institute of Chartered Secretaries and Administrators. This provides examples of what ICSA considers should form a proper purpose and what is likely to be an improper purpose. Among the likely improper purposes it identifies a request made by an agency specialising "...in identifying and recovering unclaimed assets for their own commercial gain by then contacting and extracting commission or fees from the beneficiaries, where the company is not satisfied that such activity is in the interests of shareholders."

In this case the court...