RIGHT OF STOCKHOLDER TO EXAMINE BOOKS OF CORPORATIONS SUBSIDIARY

The right of a stockholder to inspect the books and records of a corporation extends to a subsidiary wholly owned by the corporation.

It is in consonance with equity, good faith and fair dealing if the right of the shareholder will be so extended.

Right recognized
a.) It has been held that where a corporation owns approximately no property except the shares of stock of subsidiary corporations which are merely agents or instrumentalities of the holding company, the legal fiction of distinct corporate entities may be disregarded and the books, papers, and documents of all the corporations may be required to be produced for examination, and that a writ of mandamus may be granted, as the records of the subsidiary were, to all intents and purposes, the records of the parent even though the subsidiary was not named as party. b.) Mandamus was likewise held proper to inspect both the subsidiarys and the parents corporations books upon proof of sufficient control or dominion by the parent showing the relation of principal or agent or something similar thereto. c.) Stockholders were also held entitled to inspect the records of a controlled subsidiary corporation which used the same offices and had identical officers and directors

Right Refused Mandamus at the suit of a stockholder was refused where the subsidiary corporation is a separate and distinct corporation domiciled and with its books and records in another jurisdiction, and is not legally subject to the control of the parent company, although it owned a vast majority of stocks in the subsidiary. Likewise, inspection of the books of an allied corporation by a stockholder of the parent company which owns all the stock of the subsidiary has been refused on the ground that the stockholder was not within the class persons having an interest.

SEC. 75. RIGHT TO FINANCIAL STATEMENTS.

- Within ten (10) days from receipt of a written request of any stockholder or member, the corporation shall furnish to him its most recent financial statement, which shall include a balance sheet as of the end of the last taxable year and a profit or loss statement for said taxable year, showing in reasonable detail its assets and liabilities and the result of its operations.

At the regular meeting of stockholders or members, the board of directors or trustees shall present to such stockholders or members a financial report of the operations of the corporation for the preceding year, which shall include financial statements, duly signed and certified by an independent certified public accountant.

However, if the paid-up capital of the corporation is less than P50,000.00, the financial statements may be certified under oath by the treasurer or any responsible officer of the corporation. (n)

This additional right given to a stockholder or member reinforces his right of inspection and examination of corporate books and records. FINANCIAL STATEMENTS INCLUDED: a) Balance sheet as of the end of the last taxable year;

b) Profit and Loss statement for said year; showing in reasonable details its assets and liabilities and the result of its operations;
c) C