Stock ledger and shareholder list for a New York corporation

NY BCL § 624 books and records

Section 624(a) of the New York Business Corporation Law requires every NY corporation to keep correct books and records of accounts, plus a list of shareholders (effectively, the stock ledger). The stock ledger must show:

• The names and addresses of all shareholders
• The number and class of shares held by each
• The dates of acquisition and disposition of shares
• The certificate numbers (where certificated)

Unlike California, New York does not require the stock ledger to be kept at the principal office. Records may be kept anywhere, in or out of New York, by or on behalf of the corporation. The records must be capable of being produced in legible form within a reasonable time.

The 6-month / 5% inspection threshold

BCL § 624(b) imposes one of the most distinctive features of New York corporate law: the inspection threshold. The right to inspect books and records is available to:

• Shareholders of record who have held shares for at least six months immediately before the demand, OR
• Holders of at least 5% of any class of outstanding shares

This threshold filters out very-short-term holders or holders of nominal positions from making inspection demands. It is distinct from Delaware (proper purpose, no holding threshold) and California (no threshold at all). The threshold is parallel to the Texas TBOC § 21.218 regime.

Shareholder list for meetings (§ 607)

BCL § 607 requires the corporation to prepare a list of shareholders entitled to vote at any meeting, available for inspection at least 10 days before the meeting. The list must be alphabetically arranged within each class of stock and must show each shareholder's address and the number of shares held. The list must be available for inspection at the meeting itself.

Unlike the general § 624 inspection right, the § 607 right to inspect the meeting list applies to every shareholder regardless of holding period or percentage, the list is meeting-specific and short-term.

Practical considerations

New York's 6-month/5% threshold has practical consequences for new investors and small holders. A shareholder who has just acquired shares cannot demand inspection until either six months pass or the holding crosses 5%. This is sometimes a frustration for new institutional investors evaluating a NY-incorporated portfolio company.

The threshold can be defeated by coalition: a group of shareholders collectively holding 5%+ may aggregate their holdings for an inspection demand, provided the aggregation is authorized in writing.