You are a shareholder in your own medical practice, same as your partner. You have asked for the profit and loss statement, the bank statements, or simply login access to QuickBooks, and the answer keeps coming back as “later,” “I will get to it,” or nothing at all.
Maybe a distribution looked off. Maybe your production numbers do not match what you were paid. Maybe you just want to know where the practice's money is actually going. Whatever set this off, being kept in the dark about your own practice's finances is not a minor annoyance. It is a warning sign, and California law gives you more leverage than most physician owners realize.
Why This Matters Right Now
When a partner controls the books and will not let you see them, you are exposed on several fronts at once. You cannot confirm your compensation or distributions were calculated correctly. You cannot verify the numbers on your own K-1 before you file taxes. You cannot tell whether the practice's cash position matches what you were told at the last partner meeting. And if money is actually being diverted, every month you go without the records is a month that problem has to compound before you catch it.
A common misconception is that a physician owner has to file a lawsuit before getting a first look at the numbers. That is backward. Physician shareholder inspection rights in California exist precisely so you do not have to sue first to get that first look. Litigation is the fallback if your partner refuses a proper demand, not the starting point.
What Are My Shareholder Inspection Rights as a Physician Partner in California?
California physicians who practice through a corporation generally do so through a professional medical corporation governed by the Moscone-Knox Professional Corporation Act, Corporations Code sections 13400 through 13410. California physicians also generally cannot practice medicine through an LLC. When physicians use a corporate entity to render medical services, California law generally requires a professional medical corporation, so physician owners typically hold their ownership as shares of stock, not as membership interests in an LLC or partnership.
That distinction matters here because it determines which set of inspection rights applies to you. As a shareholder rather than a partner in an unincorporated partnership, your rights come from Corporations Code section 1601. Under that statute, a shareholder may make a written demand on the corporation to inspect and copy the accounting books, records, and minutes of proceedings of the shareholders and the board and its committees. The corporation must allow that inspection at a reasonable time during usual business hours, and the shareholder may do it personally or send an agent or attorney in their place.
The one condition the statute attaches is that your purpose has to be reasonably related to your interest as a shareholder. That is a low bar for a physician partner in this situation. Confirming that your compensation and distributions were calculated correctly, checking the accuracy of your K-1 before you file taxes, and looking into a suspected diversion of practice funds all fit comfortably within the statute. You do not have to explain a litigation strategy or prove wrongdoing before you can ask to see the books. You just need to be a shareholder asking for a legitimate, ownership-related reason.
The scope of what you can demand is broad. It reaches the practice's accounting books and records, which in practice means the profit and loss statement, the general ledger, bank and merchant account statements, and the underlying QuickBooks or accounting software records, along with the minutes of shareholder and board meetings. If your partner has been managing the books alone and telling you to trust the summary numbers, section 1601 is what lets you insist on seeing the underlying records instead.
Can My Partner or the Corporation Limit This Right?
No, not through the corporation's own paperwork. Section 1601 specifically states that the shareholders' right of inspection cannot be limited by the articles of incorporation or the bylaws. If your shareholder agreement has a clause that tries to restrict when or how you can review the books, that clause does not override the statute.
Since a 2022 amendment that took effect January 1, 2023, you also have the option to request that the records be produced by mail or electronically, as long as you cover the reasonable cost of copying or converting the documents. That option matters in a locked-out scenario. If your partner controls the physical office and you no longer feel comfortable showing up to review paper files in person, you can request the records be sent to you instead.
How Do I Send a Proper Written Demand for the Books?
The demand has to be in writing. A hallway conversation or a text message asking your partner to send the P&L does not create the kind of record you want if this ends up in front of a judge later.
A solid written demand identifies you as a shareholder, lists the specific categories of records you want to inspect (financial statements, bank statements, the general ledger, QuickBooks access, and meeting minutes are common categories), and states a purpose tied to your interest as a shareholder, such as verifying compensation or distributions. It should ask for a reasonable window to produce the records or schedule the inspection, and it should be sent in a way you can prove was delivered and received, such as certified mail or email with a read receipt.
Many physician owners have an attorney send this letter rather than sending it themselves. That is not just about formality. A demand letter from counsel puts the corporation on clear notice of a legal obligation, and it starts building the record you will need if your partner still refuses and you have to ask a court to step in.
What If My Partner Still Refuses to Turn Over the Books?
If the corporation refuses a lawful demand, Corporations Code section 1603 lets you take the matter to the superior court. The court can enforce your right of inspection directly, and for good cause, it can go further and appoint an independent inspector or accountant to audit the books and report back. That second option is worth knowing about. If your relationship with your partner has broken down to the point that you do not trust a stack of papers handed over after months of stonewalling, asking the court to appoint a neutral accountant can get you a more reliable answer than reviewing the records yourself.
Corporations Code section 1604 adds real weight to this process. If the court finds that the corporation's failure to comply with a proper demand was without justification, it may order the corporation to reimburse your reasonable expenses, including attorney's fees, for bringing the matter to court. That shifts the financial risk of stonewalling back onto the side that refused a legitimate request in the first place.
What Not to Do When Your Partner Will Not Show You the Books
A few common reactions tend to make this situation worse rather than better. Do not try to access the practice's QuickBooks, bank portal, or billing system without authorization, even if you believe you have every right to see what is inside. Self-help access can create a separate dispute over how you obtained the information and can undercut your position later, even when your underlying concern is legitimate.
Do not rely on verbal or text requests and assume that is enough. Without a written demand, you do not have the same footing to ask a court to enforce the statute or shift fees under section 1604.
Do not wait indefinitely and hope your partner comes around, particularly if you suspect the delay is covering up a diversion of practice funds. If that is the real concern, the clock on any related claim starts running long before you finally get the records, and our companion post on when a physician partner is misappropriating practice funds walks through what that timeline can look like.
Do not sign a buyout offer, a settlement, or any agreement affecting your ownership interest before you have actually reviewed the underlying numbers. And do not assume a partner who is blocking your access to records will stop there. Refusing to produce financial records is sometimes the opening move in a broader effort to squeeze a co-owner out of the practice entirely, which our companion post on physician partner freeze-outs covers in more detail.
Documents to Gather Before You Send a Demand or Call an Attorney
Before you send a demand letter or sit down with an attorney, it helps to have the following on hand.
- Your shareholder or buy-sell agreement, the corporate bylaws, and the articles of incorporation, so your attorney can confirm your exact rights and any procedure the corporation has for records requests.
- Copies of any partial financials, K-1s, or compensation summaries your partner has already provided, even informally.
- Any prior written or email requests you made for records, along with your partner's responses or lack of response.
- Whatever record you have of practice bank account, billing system, or EHR access and who currently controls it.
- Proof of your shareholder status, such as a stock certificate or an entry in the corporate minute book, in case that ever becomes an issue.
When to Bring in an Attorney
A single delayed response to a records request is not automatically a legal emergency. But a few signals mean it is time to get counsel involved rather than continuing to ask on your own. If your partner ignores a written demand entirely, if you have specific reasons to suspect the numbers have been manipulated or funds diverted, or if the practice is heading toward a buyout, a dissolution, or your own exit, you want an attorney reviewing the situation before you take your next step. Claims tied to fiduciary duty and misappropriation carry their own filing deadlines, and our pillar guide to California's statute of limitations for business lawsuits is a useful starting point for understanding how those clocks run.
The Takeaway
Physician shareholder inspection rights in California start with Corporations Code section 1601, which gives you the right to inspect and copy the accounting books, records, and minutes on written demand, for any purpose reasonably related to your ownership interest. If your partner refuses, sections 1603 and 1604 let you take the matter to the superior court, with the possibility of recovering your attorney's fees if the refusal was not justified. The tools exist. Using them correctly, starting with a proper written demand, is what makes them work.
Talk to LawPLA About Your Rights as a Physician Shareholder
If you are facing this situation, the sooner you get counsel involved, the more options you have. LawPLA works with California business owners statewide, including physician shareholders in professional medical corporations, to protect their business, livelihood, and legacy. Call our office at 213-293-7881 or reach us through our contact page to discuss your case.