Minority shareholder

4 posts in this topic

Does a minority shareholder in a closely held S corporation have the rights to financial statements and or tax returns of the corporation.

Would the answer differ if there was reason to believe that this shareholder was trying to undermine the corporations' other shareholders by trying to take an existing contract away from them. 

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They have a right to the tax returns. 


The IRS's Internal Revenue Manual, at paragraph contains the following under Persons Who May Have Access to Returns and Return Information Pursuant to IRC §6103(e):



If a corporation was an electing small business corporation under Subchapter S of chapter 1, any person who was a shareholder during any part of the period covered by such return during which an S corporation election was in effect. All types of shareholders, regardless of the percentage of shares held, may receive Subchapter S returns and return information. A return or return information cannot be disclosed to a person who was not a shareholder during some part of the year for which the return in question was filed. Nor may a shareholder receive returns or return information for any period during which the election was not in effect.


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