Books and Records
Corporate documents, accounts, and communications a Texas corporation must maintain and that shareholders may inspect on written demand. Scope substantially narrowed by SB 29 effective May 14, 2025.
"Books and records" refers to the corporate documents, accounts, and communications that a Texas corporation is required to maintain and that shareholders have a statutory right to inspect on written demand. SB 29, effective May 14, 2025, narrowed what counts as a corporate record for a shareholder demand and, for some corporations, added grounds on which a demand may be refused.
Records the corporation must keep
Under § 3.151, every filing entity, including a corporation, must keep (1) books and records of accounts, (2) minutes of the proceedings of its owners, governing authority and committees, (3) a current record of the name and mailing address of each owner, and (4) other books and records required by the title governing the entity. For a corporation, § 21.173 adds records of share issuances and transfers and of the number and class of shares held by each current and past shareholder.
Inspection right
Under § 21.218(b), a holder of shares for at least six months immediately preceding the demand or holding at least 5% of all outstanding shares may, on written demand stating a proper purpose, examine and copy specified records of the corporation at a reasonable time.
SB 29 narrowing of scope (eff. May 14, 2025)
Amended § 21.218 specifies that the records of the corporation do not include emails, text messages, or similar electronic communications, or information from social media accounts, unless the particular communication effectuates an action by the corporation. It applies to all Texas corporations, not solely publicly-traded or opt-in corporations.
Additional restriction for opt-in corporations (§ 21.218(b-2))
A corporation with voting shares listed on a national securities exchange, or that has elected to be governed by § 21.419, may treat a demand as lacking a proper purpose if it reasonably determines that the demand is in connection with (1) an active or pending derivative proceeding that is or is expected to be instituted or maintained by the holder or the holder's affiliate, or (2) an active or pending civil lawsuit in which the corporation (or its affiliate) and the holder (or its affiliate) are or are expected to be adversarial named parties. The holder keeps the right to discovery in that litigation and the right to seek a court order compelling production under § 21.218(c).
The email exclusion is written for demands under § 21.218(b). Subsection (c) separately preserves a court's power to compel production on proof of a proper purpose, and the litigation-related limit in subsection (b-2) applies only to listed corporations and those that have elected to be governed by § 21.419.
Practice guide: Shareholder Disputes in Texas