Guidelines for shareholders to request a financial inspection in a joint-stock company

In joint-stock companies, shareholders’ rights to supervise financial matters are of paramount importance. One of these rights is the right to request a financial inspection, which enables shareholders to gain a clear understanding of the company’s financial position and operations. Such a right also serves as a tool to detect irregularities and prevent legal violations in financial management. The following article clarifies the concept, benefits, and relevant legal provisions concerning shareholders’ requests for financial inspections.

I. Current situation concerning shareholders’ requests for financial inspections

At present, in many joint-stock companies, shareholders’ exercise of the right to request financial inspections has attracted increasing attention. However, a number of practical issues remain, such as delays by enterprises in implementing inspections, refusals or restrictions on information disclosure, leading to disputes between shareholders and the company.

Some shareholders are not fully aware of their rights and the legal conditions for requesting a financial inspection, while certain enterprises have not yet established transparent and clear mechanisms for handling such requests. Such a reality highlights the need for proper guidance, legal solutions, and effective supervisory mechanisms in relation to shareholders’ rights to financial inspection.

II. Concept of shareholders’ requests for financial inspections

The right to request a financial inspection is an important instrument enabling shareholders to supervise a company’s financial operations. It helps protect shareholders’ lawful interests and ensure transparency in corporate governance. Such a section clarifies the concept, purposes, and role of the right to request a financial inspection.

1. What is a shareholder’s request for a financial inspection?

Pursuant to Clause 3, Article 4 of the Law on Enterprise 2020 (as amended and supplemented in 2025), a shareholder is an individual or organization owning at least one share of a joint-stock company. In other words, a shareholder is a person who contributes capital to a joint-stock company and owns a corresponding portion of charter capital represented by the number of shares acquired.

A shareholder’s request for a financial inspection means the exercise of the shareholder’s lawful right to require the company to examine and review financial activities, accounting books and records, financial statements, and related transactions in order to ensure transparency, legality, and the protection of the shareholder’s lawful interests. Such a right enables shareholders to supervise the management and use of the company’s capital and assets, and to promptly detect violations or financial risks.

2. What is the purpose of shareholders requesting a financial inspection in an enterprise?

The purpose of shareholders requesting a financial inspection goes beyond merely checking accounting figures; it aims to ensure transparent and lawful corporate governance. Specifically:

• Verification of the truthfulness and legality of financial activities: Determining whether the management and use of capital, assets, revenues, and expenses comply with law, the company charter, and resolutions of the General Meeting of Shareholders;
• Detection and prevention of violations: Timely identification of signs of financial fraud, misappropriation of assets, abuse of managerial authority, or acts infringing shareholders’ rights;
• Protection of shareholders’ lawful rights and interests: Particularly for minority shareholders, a financial inspection request is a vital tool for self-protection against non-transparent decisions or conduct;
• Enhancement of corporate governance effectiveness: Through financial supervision mechanisms, enterprises can rectify internal operations, strengthen shareholder and investor confidence, and improve sustainable development.

Accordingly, shareholders’ requests for financial inspections serve both to protect shareholders’ interests and to promote transparency, financial discipline, and the sustainable development of enterprises.

3. Is the right to request a financial inspection considered a form of corporate supervision?

The right to request a financial inspection constitutes a form of exercising shareholders’ corporate supervision rights.

Pursuant to Points (a) and (c), Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025), shareholders or groups of shareholders meeting statutory thresholds have the right to review, inspect, and extract financial books and records, and to supervise the company’s management and administration. On that basis, a shareholder’s request for a financial inspection is a specific mechanism to verify transparency and integrity in the management and use of the company’s capital and assets.

A financial inspection request enables shareholders to promptly detect violations and provides grounds to request remedial measures or to initiate legal proceedings under Article 166 of the Law on Enterprise 2020 (as amended and supplemented in 2025).

Therefore, the right to request a financial inspection is not an independent right separate from supervision rights, but rather a concrete manifestation of shareholders’ corporate supervision rights, recognized by law to protect shareholders’ lawful interests and ensure transparent and effective corporate governance.

III. Legal provisions governing shareholders’ requests for financial inspections

Law on Enterprise recognizes shareholders’ rights to supervise the company’s financial operations in order to ensure transparency and protect lawful rights and interests. In certain circumstances, shareholders or groups of shareholders meeting statutory ownership thresholds are entitled to request financial inspection where there are grounds to believe that management or administration shows signs of legal violations or infringements of shareholders’ rights.

1. In which circumstances may shareholders request a financial inspection?

Shareholders’ requests for financial inspections typically arise in the following circumstances, based on the supervisory rights provided under Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025):

• Where shareholders or groups of shareholders suspect that financial statements and accounting books and records are not transparent or truthful, or show discrepancies compared with the company’s actual operations;
• Where there are indications of violations in financial management or administration, such as asset dissipation, misuse of capital, conflicted-interest transactions, or acts exceeding managerial authority;
• Where shareholders’ lawful rights and interests are affected, particularly dividend entitlements, access to financial information, or the right to supervise corporate operations;
• Where shareholders or groups of shareholders meeting statutory ownership thresholds request the Supervisory Board to examine specific matters relating to management and administration, including financial and accounting matters, pursuant to Point (c), Clause 2, Article 115 of the Law on Enterprise 2020.

Accordingly, shareholders’ requests for financial inspections generally arise where there are reasonable grounds to question financial transparency or governance conduct, with a view to protecting shareholders’ lawful rights and interests.

2. What are the share ownership thresholds for shareholders to request a financial inspection?

The statutory ownership thresholds for shareholders to request a financial inspection are clearly prescribed in Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025).

Accordingly, shareholders or groups of shareholders holding at least 5% of the total ordinary shares, or a lower percentage as stipulated in the company charter, are entitled to exercise key supervisory rights, including:

• Reviewing, inspecting, and extracting interim and annual financial statements, reports of the Supervisory Board, resolutions and decisions of the Board of Directors, and documents relating to the company’s management and administration;
• Requesting the Supervisory Board to examine specific matters relating to the management and administration of the company, including financial and accounting matters.

Requests for financial inspection must be made in writing and must specify shareholder information, the number and percentage of shares held, the matters to be examined, and the purpose of the examination, under Point (c), Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025).

Thus, the law permits only shareholders or groups of shareholders meeting the prescribed ownership thresholds to request financial inspections, in order to safeguard legitimate supervisory rights while preventing abuse that could disrupt normal business operations.

3. Legal provisions on the scope and contents of financial inspections at shareholders’ request

The Law on Enterprise 2020 (as amended and supplemented in 2025) does not specifically prescribe the scope and contents of financial inspections requested by shareholders. However, pursuant to Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025), shareholders or eligible shareholder groups may request the Supervisory Board to examine specific matters relating to the management and administration of the company. On that basis, the scope and contents of financial inspections may be determined as follows:

• Scope of financial inspection: Limited to specific financial and accounting matters directly related to corporate management and administration, and not a comprehensive audit in the absence of specific grounds;
• Contents of financial inspection may include:
  + Preparation, recording, and presentation of interim and annual financial statements;
  + Management and use of capital, assets, revenues, and expenses;
  + Contracts and transactions subject to Board of Directors’ approval involving financial elements;
  + Compliance with legal provisions and the company charter in financial operations;
• Legal limits: Inspections must not infringe the company’s trade secrets or business secrets, except where otherwise provided by law, pursuant to Point (a), Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025).

Accordingly, the law allows shareholders to request financial inspections within a defined scope and for specific purposes in order to exercise supervisory rights, while maintaining a balance with the company’s autonomy and confidentiality of information.

4. What obligations does an enterprise have upon receiving a shareholder’s request for a financial inspection?

Upon receiving a valid request for a financial inspection from eligible shareholders or shareholder groups, the enterprise has the following obligations:

• To receive and consider the shareholder’s request in accordance with the procedures and conditions prescribed in Clause 2, Article 115 of the Law on Enterprise 2020;
• To instruct the Supervisory Board to carry out the inspection of the requested financial matters within the stated scope and purpose;
• To provide fully and promptly the information and documents relevant to the inspection to the Supervisory Board, pursuant to Point (a), Clause 2, Article 115 of the Law on Enterprise 2020, except for documents constituting trade secrets or business secrets;
• Not to obstruct or hinder the lawful exercise of shareholders’ supervisory rights under the Law on Enterprise 2020 (as amended and supplemented in 2025) and the company charter.

Where the enterprise or its managers fail to comply with or obstruct lawful inspection requests, depending on the nature and seriousness of the violation, legal liability may arise in accordance with applicable law.

IV. Questions regarding shareholders’ requests for financial inspections

In corporate governance practice, shareholders’ requests for financial inspections often raise questions concerning eligibility conditions, approval authority, and enterprises’ responsibilities. A proper understanding of the law enables shareholders to protect their lawful supervisory rights while minimizing internal conflicts. The following addresses frequently asked questions under the Law on Enterprise 2020 (as amended and supplemented in 2025).

1. Is there any requirement on the duration of share ownership to request a financial inspection?

The law does not prescribe any minimum shareholding period for exercising the right to request a financial inspection. Pursuant to Point (a), Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025), eligibility depends solely on the ownership threshold (at least 5% of ordinary shares or a lower percentage as stipulated in the company charter), regardless of the length of time the shares have been held.

Accordingly, shareholders who meet the statutory ownership threshold may request a financial inspection even if they have only recently acquired the shares.

2. What should shareholders do if the enterprise refuses a request for a financial inspection?

Where an enterprise refuses a financial inspection request contrary to law, shareholders or eligible shareholder groups may take the following steps:

• Request written explanations: request the Supervisory Board or the Board of Directors to provide written reasons for refusal, in order to safeguard lawful supervisory rights;
• Request convening of a General Meeting of Shareholders: where the Board of Directors seriously infringes shareholders’ rights or fails to discharge its obligations, eligible shareholders or shareholder groups may request the convening of a General Meeting of Shareholders under Clause 3, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025);
• Initiate court proceedings: where lawful rights and interests continue to be infringed, shareholders may initiate proceedings to seek protection pursuant to Article 186 of the Civil Procedure Code 2015.

The law allows shareholders to utilize both internal corporate mechanisms and judicial remedies to address unlawful refusals of financial inspection requests.

3. In which cases may an enterprise lawfully refuse a shareholder’s request for a financial inspection?

An enterprise may lawfully refuse a shareholder’s request for a financial inspection only in the following cases:

• The shareholder does not meet the ownership threshold prescribed in Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025);
• The request is not made in writing or lacks mandatory contents, such as shareholder information, ownership percentage, matters to be examined, and the purpose of the inspection, as prescribed in Point (c), Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025);
• The requested matters exceed the lawful scope of inspection or are unrelated to the company’s management, administration, or financial condition;
• The request infringes the company’s trade secrets or business secrets, except where otherwise provided by law, pursuant to Point (a), Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025);
• The request constitutes an abuse of shareholder rights that disrupts the enterprise’s normal operations and is not aimed at legitimate supervision.

Enterprises may not arbitrarily refuse financial inspection requests and may do so only where shareholders fail to satisfy statutory conditions. Unlawful refusals may be deemed infringements of shareholders’ lawful supervisory rights.

4. What is the statutory time for resolving shareholders’ requests for financial inspections?

The Law on Enterprise 2020 (as amended and supplemented in 2025) does not specify a concrete statutory time limit for enterprises or the Supervisory Board to resolve shareholders’ requests for financial inspections.

However, based on Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025), the handling of requests must adhere to the following principles:

• Being implemented within a reasonable time, commensurate with the nature, scope, and contents of the requested inspection;
• Complying with the company charter, where the charter prescribes specific timeframes;
• Not being unjustifiably delayed or postponed in a manner that infringes shareholders’ lawful supervisory rights.

Although no specific timeframe is prescribed by law, enterprises are obliged to consider and resolve shareholders’ financial inspection requests within a reasonable period. Unjustified delays or evasions may constitute violations of shareholders’ rights under the Law on Enterprise.

5. Do shareholders’ requests for financial inspections affect business operations?

In principle, shareholders’ requests for financial inspections do not affect an enterprise’s normal business operations when implemented in accordance with the Law on Enterprise 2020 (as amended and supplemented in 2025). Specifically:

• Pursuant to Clause 2, Article 115 of the Law on Enterprise 2020 (as amended and supplemented in 2025), eligible shareholders may request inspection of specific matters relating to management, administration, and finance, rather than comprehensive, prolonged audits;
• The scope of inspection must have a clear purpose serving lawful supervisory rights and must not obstruct or disrupt production and business activities;
• Inspections must respect the enterprise’s trade secrets and business secrets as required by law.

Where requests for financial inspections are made within statutory authority, scope, and purpose, they do not adversely affect business operations; on the contrary, they enhance transparency and improve corporate governance effectiveness.

V. Why seek legal advice from NPLaw for issues concerning shareholders’ requests for financial inspections

When shareholders exercise the right to request financial inspections, both enterprises and shareholders often encounter difficulties relating to conditions, scope, procedures, and dispute resolution. Timely legal consultation helps ensure the lawful exercise of supervisory rights while minimizing legal risks for enterprises. NPLaw provides effective support by:

• Correctly identifying legal grounds and conditions for shareholders’ financial inspection requests under the Law on Enterprise 2020 (as amended and supplemented in 2025);
• Advising on and assisting with the drafting of financial inspection requests in proper form, content, and purpose as prescribed by law;
• Supporting the handling of cases where enterprises delay, refuse, or improperly discharge obligations upon receiving lawful requests;
• Protecting shareholders’ lawful rights and interests during financial supervision, while reducing the risk of internal conflicts and protracted disputes;
• Advising on dispute resolution through negotiation, mediation, or representation in court proceedings where necessary.

The above information is for reference purposes only. For case-specific legal advice regarding shareholders’ requests for financial inspections, please contact: