“Who Owns the Corporate Data?”: Shareholder Rights Over High-Value Data Assets During Corporate Insolvency

Author

Aditya Mishra , Akshat Mishra , Md Saqib Ansari

Abstract

 This paper examines shareholder rights over high-value corporate data assets during corporate insolvency in India. It investigates whether customer databases, proprietary datasets, behavioural information, algorithms, trained artificial-intelligence models, and related data infrastructure can be treated as corporate assets capable of transfer and monetisation during insolvency proceedings. The paper argues that corporate data cannot be reduced to a single category of property. Its legal and economic value depends upon ownership, control, contractual rights, confidentiality, processing authority, technological infrastructure, and the purposes for which personal data was collected. The analysis evaluates the relationship between the Companies Act, 2013, the Insolvency and Bankruptcy Code, 2016, and the Digital Personal Data Protection Act, 2023. It argues that shareholders do not possess a direct proprietary interest in corporate data merely because such data contributes to share value. However, they may possess important governance and remedial interests where directors seek to dispose of the company’s principal data undertaking, transfer data to related parties, or destroy enterprise value through an undervalued transaction. The paper further argues that a resolution applicant may acquire only the corporate debtor’s lawful and transferable interests in data. Insolvency approval cannot create unrestricted authority to process personal information. The paper concludes by proposing mandatory data-asset disclosure, privacy-sensitive valuation, shareholder safeguards, data-transfer schedules, and coordination among insolvency, company-law, data-protection, competition, and sectoral regulators.

Keywords

shareholder rights; corporate insolvency; data assets; Digital Personal Data Protection Act, 2023; Insolvency and Bankruptcy Code, 2016; Companies Act, 2013; data fiduciary; artificial intelligence; resolution applicant; privacy; data governance.

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References

Corporate data cannot be understood through a simple ownership model. A company may control databases, algorithms, AI models, trade secrets, and data-processing infrastructure, but that control does not mean that shareholders own the underlying information or that the company possesses an unrestricted right to exploit it. Corporate data is better understood as a composite and conditional asset. Its value depends upon the company’s legal title, contractual rights, processing authority, confidentiality interests, technological infrastructure, and ability to use the data for a lawful purpose.

The separate legal personality principle prevents shareholders from claiming direct ownership over customer databases, proprietary datasets, goodwill, or AI models. Shareholders own shares and possess governance, voting, dividend, and statutory remedial rights. Where data constitutes the company’s principal undertaking, however, those governance rights become significant. Section 180 of the Companies Act, 2013 may require shareholder approval for the disposal of the whole or substantially the whole of a data-intensive undertaking. Sections 241 and 242 may also provide remedies where directors transfer core data value to related parties, act for improper purposes, or conduct corporate affairs in a manner oppressive or prejudicial to members. These provisions protect corporate value and the integrity of decision-making, but they do not convert shareholders into owners of personal data.

The IBC introduces a further shift in priorities. During insolvency, the objective is to preserve the corporate debtor as a going concern and maximise lawful value for stakeholders. A resolution applicant may therefore acquire the corporate debtor’s transferable rights in databases, software, algorithms, model weights, trade secrets, and related contracts. Yet, approval of a resolution plan cannot create rights that the corporate debtor never possessed. Third-party data held under trust, contract, agency, or processing arrangements cannot automatically be sold merely because it is physically stored in the debtor’s systems.

The DPDP Act establishes the most important limit on data monetisation. A purchaser may acquire a data-enabled business, but it does not receive an unrestricted licence to process personal data for every commercially attractive purpose. The purchaser must respect the original purpose of collection, applicable processing grounds, security obligations, retention duties, correction and erasure rights, and the continuing interests of data principals. A resolution plan should therefore contain a data-transfer schedule, privacy assessment, compliance warranty, data-subject rights protocol, and clear allocation of liability for historical and future breaches.

The principal conclusion is that insolvency law should maximise lawful data-generated value, not merely the sale price of information. Data should be valued after accounting for privacy restrictions, contractual limits, provenance defects, cybersecurity risks, deletion obligations, and the cost of future compliance. The Companies Act, IBC, and DPDP Act should operate as complementary regimes: the Companies Act governs corporate authority and accountability, the IBC governs resolution and value distribution, and the DPDP Act governs the lawful processing of personal data.

The answer to the question “Who owns the corporate data?” is therefore necessarily plural. The company may hold enterprise-level control, shareholders hold governance interests, creditors hold insolvency claims, resolution applicants acquire only transferable rights, and data principals retain legally protected interests in the use of their personal information. Recognising these differentiated interests is essential if data is to become a legitimate corporate asset class without being reduced to unrestricted property available for sale to the highest bidder.

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