If you're a shareholder, you might think twice about investing in Nevada corporations. Case in point from Keith Paul Bishop:
In a recent blog post, Delaware lawyer Francis Pileggi discusses a recent ruling by Vice Chancellor J. Travis Laster ordering Yahoo! Inc. to produce personal emails of directors and electronically stored information in response to a stockholder inspection demand pursuant to Section 220 of the Delaware General Corporation Law. Amalgamated Bank v. Yahoo!, Inc., C.A. No. 10774-VCL (Del. Ch. Feb. 2, 2016). The ruling caused me to reflect on how Nevada’s stockholder inspection statute, NRS 78.257, compares to Delaware’s Section 220.
Who may inspect. Nevada grants inspection to “Any person who has been a stockholder of record of any corporation and owns not less than 15 percent of all of the issued and outstanding shares of the stock of such corporation or has been authorized in writing by the holders of at least 15 percent of all its issued and outstanding shares”. NRS 78.257(1). Delaware is much more egalitarian, granting inspection rights to “any stockholder”.
Exceptions. Nevada’s inspection statute does not apply to: (i) any corporation that furnishes to its stockholders a detailed, annual financial statement, or (ii) any corporation that has filed during the preceding 12 months all reports required to be filed pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934. NRS 78.257(6) (there is an exception for certain Subchapter S corporations). Delaware, in contrast, does not grant similar exceptions.