The Court of Appeal has considered two issues regarding a request to inspect a company's register of members. First, whether a request is valid if it does not contain all the information required by the Companies Act 2006 and, secondly, the circumstances in which a request by a non-member satisfies the proper purpose test.

Section 116 of the Companies Act 2006 gives members of a company and others the right to inspect and ask for a copy of the company's register of members. The section prescribes the information which the request must contain. This includes the purpose for which the information will be used and whether it will be disclosed to any other person, in which case the request must also include certain details about the recipient.

A company must within five working days of receipt of a section 116 request either comply with it or, if it believes that the request is not made for a proper purpose, apply to court. If the court considers that the request is not for a proper purpose, it must direct the company not to comply.

The Act does not set out any guidance on what is, or is not, a proper purpose. However, the Institute of Chartered Secretaries and Administrators (ICSA) has published guidance which is intended to provide an industry view, with examples, of what ICSA considers should constitute a proper purpose and what is likely to be an improper purpose.

Burberry Group plc received a section 116 request from the appellant, who ran a tracing agency tracing lost members in public quoted companies. His stated purpose was to help members of the company who might otherwise be unaware of their entitlements to reassert their rights. However, his request did not state that the information would be disclosed by the tracing agency to specialist researchers nor include the names and addresses of those specialist researchers.

Decision: Upholding the first instance decision and dismissing the appeal, the Court of Appeal unanimously held that the request was invalid as it did not contain all the information about the recipients of the information required by the legislation. Receipt of an invalid request did not set running the five working days in which the company had to comply with a request or refer the matter to court.

The Court of Appeal was also asked to consider whether the appellant's purpose was a proper one. At first instance the High Court had held that it was not. The Court of Appeal unanimously upheld this decision, though for slightly different reasons.

In particular, the court rejected the High Court's view that, to satisfy the proper purpose test, a request by a non-shareholder must be in the interests of the shareholders of the company as a class. Richards LJ noted that the Act makes no such distinction and applies the same purpose test to all requests. Regardless of who is making the request, whether a purpose is proper may, but does not necessarily, depend on whether it is in the interests of shareholders.

The Court of Appeal also reiterated a point previously made by it in In Re Burry & Knight Ltd [2014] EWCA Civ 604 that, in deciding whether a purpose is proper, it may be necessary to look at both the objective and the means of achieving that objective. The latter may render improper an otherwise proper purpose. Here, the appellant, having obtained details of the company's shareholders, intended to use that information to notify them that he had information that would lead to them recovering an asset to which they were entitled, but not give them any information about that asset or its value, nature or location until they had paid his commission. It was this aspect of the appellant's actions that rendered improper what could otherwise have been a proper purpose.

In its judgment the Court of Appeal referred to the ICSA guidance "Access to the register of members; proper purpose test 2013". This provides an industry view, with examples, of what ICSA considers should form a proper purpose and what is likely to be an improper purpose. It is a useful reference point for companies receiving a request for inspection of the register of members. However, as this case demonstrates, what constitutes a proper purpose in any particular case is dependent on the facts and circumstances of that case.

It is worth noting that Part 21A of the Companies Act 2006 (Information about people with significant control) also includes a procedure for inspection of a company's PSC register and a proper purpose requirement. Given, however, that the underlying purpose of the PSC register is to provide transparency of company ownership, the courts may well approach the proper purpose differently in that context.