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Searching 2019-2020 Session

The Vermont Statutes Online

 

Title 11 : Corporations, Partnerships and Associations

Chapter 025 : LIMITED LIABILITY COMPANIES

Subchapter 004 : RELATIONS OF MEMBERS TO EACH OTHER AND TO LIMITED LIABILITY COMPANY

(Cite as: 11 V.S.A. § 4058)
  • § 4058. Information rights

    (a) In a member-managed limited liability company, each member has the right, subject to such reasonable standards, including standards governing what information and documents are to be furnished and at what time and location, as may be set forth in the articles of organization, an operating agreement, or otherwise established by the members to obtain from the company from time to time and upon reasonable demand for any purpose reasonably related to the member's interest as a member of the limited liability company during the period in which he or she was a member:

    (1) information concerning the company's business or affairs reasonably required for the proper exercise of the member's rights and duties under the operating agreement or this chapter; and

    (2) other information concerning the company's business or affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.

    (b) In a manager-managed limited liability company:

    (1) the right to receive information as stated in subdivision (a)(1) of this section shall apply to the managers and not the members;

    (2) during regular business hours and at a reasonable location specified by the company, a member may inspect and copy information regarding the activities, affairs, financial condition, and other circumstances of the company as is just and reasonable if:

    (A) the member seeks the information for a purpose reasonably related to the member's interest as a member;

    (B) the member makes a demand in a record received by the company, describing with reasonable particularity the information sought and the purpose for seeking the information; and

    (C) the information sought is directly connected to the member's purpose; and

    (3) the managers shall have the right to keep confidential from members who are not managers, for such period of time as the managers deem reasonable, any information which the managers reasonably believe to be in the nature of trade secrets or other information the disclosure of which the managers in good faith believe is not in the best interest of the company.

    (c) A company may impose a reasonable charge, limited to the costs of labor and material, for copies of records or other information furnished under this section.

    (d) A company may maintain its records in other than written form if such form is capable of conversion into written form within a reasonable time or into an electronic form that may be prescribed by the Secretary of State.

    (e) Any demand under this section shall:

    (1) be in writing;

    (2) be made in good faith and for a proper purpose; and

    (3) describe with reasonable particularity the purpose and the records or information desired.

    (f)(1) A member or person dissociated as a member may exercise the rights under this section through an agent or, in the case of an individual under legal disability, a legal representative.

    (2) Any restriction or condition imposed by the operating agreement or under subsection (h) of this section applies both to the agent or legal representative of such a member and to a person dissociated as a member.

    (g) Subject to section 4075 of this title, the rights under this section do not extend to a person who is a transferee of an interest in a limited liability company, except that a transferee is entitled to an account of the company's transactions only from the date of dissolution.

    (h)(1) In addition to any restriction or condition stated in this section or the company's operating agreement, a limited liability company may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient.

    (2) In a dispute concerning the reasonableness of a restriction under this subsection, the company has the burden of proving reasonableness.

    (i) Failure of the company to keep or maintain any of the records or information required pursuant to this section shall not be grounds for imposing liability on any person for the debts and obligations of the company. (Added 2015, No. 17, § 2.)