All corporations are mandated to keep and preserve records of business transactions and minutes of

meetings between stockholders and members, and between the board and trustees, at their main
offices.

All records should indicate the following information:

Time and place of the meeting

How it was authorized

The kind of notice given

Whether the meeting was special or regular

In the case of special meetings: the object, who was present or absent, and every act done or ordered
done during the meeting

Any director, trustee, stockholder or member can demand that the minutes include any and
all times that a director, trustee, stockholder or member joined or left the meeting. Similarly, the yeas
and nays on any motion or proposition must be duly noted and recorded.

Stockholders can also ask to see financial statements – corporations are mandated by law to provide
their latest financial statement, including a balance sheet and a profit or loss statement corresponding
to the last taxable year. The financial statement must discuss assets, liabilities, and the results of the
corporation’s operations in reasonable detail. The documents must be provided within 10 days of
receiving a written request from a stockholder or member.

During regular meetings between stockholders and members, the board of trustees must also present
a financial report of the corporation’s operations from the previous year. The presentation must include
financial statements that have been signed and certified by an impartial certified public accountant.

The right of inspection

All stockholders have the right to inspect the books of a corporation, allowing them to learn about the
transactions and dealings entered into by the directors and officers on the corporation’s behalf.

This fundamental right of the stockholder to inspect a corporation’s books stems from Section 74 of the
Corporation Code, details of which are as follows:

“The records of all business transactions of the corporation and the minutes of any meeting shall be
open to inspection by any director, trustee, stockholder or member of the corporation at reasonable
hours on business days and he may demand, in writing, for a copy of excerpts from said records or
minutes, at his expense.

Any officer or agent of the corporation, who shall refuse to allow any director, trustee, stockholder or
member of the corporation to examine and copy excerpts from its records or minutes, in accordance
with the provisions of this Code, shall be liable to such director, trustee, stockholder or member for
damages and, in addition, shall be guilty of an offense, which shall be punishable under Section 144 of
this Code.”

However, the right of inspection is not absolute. In Puno vs. Puno Enterprises Inc., GR 177066,
September 11, 2009, the Supreme Court ruled that the right of inspection can only be exercised by a
stockholder of record or an individual whose name appears on the corporation’s books and will thus
receive dividends and distributions from the corporation. Therefore, the corporation can refuse to grant
the right of inspection to individuals who are not stockholders of record.

No corporation should be burdened by the demands of unreasonable stockholders who wish to exercise
their right of inspection, especially if the corporation’s business efforts could suffer as a result.