Has your company or partner failed or refused to comply with your requests for access to inspect the Company’s books and records? Are you trying to obtain internal records from your LLC or Corporation? Partnership and Shareholder disputes are common.
Is your business partner wrongfully using corporate funds? If you review financial information and discover that your partner has been disbursing/using your companies funds to pay for his personal expenses, consider calling an experienced business lawyer. You should examine the corporate records. Is your partner refusing to turn over records? Has your partner breached his fiduciary duty?
This is what the law provides: Section 3.151 of the Texas Business Organizations Code states that each filing entity shall keep: (1) books and records of accounts; (2) minutes of the proceedings of the owners or members of the governing authority of the filing entity and committees of the owners or members or governing authority of the filing entity; (3) at its registered office or principal place of business, or at the office of its transfer agent or registrar, a current record of the name and mailing address of each owner or member of the filing entity; and (4) other books and records as required by the title of this code governing the entity. The books, records, minutes and ownership or membership records of any filing entity, including those described in Subsection (a)(4), may be in written paper form or another form capable of being converted into written paper form within a reasonable time. The records required by Subsection (a)(2) need not be maintained by a limited partnership or a limited liability company except to the extent required by its governing documents.
Accordingly, your company is required to keep the books and records identified above. Further, Section 3.153 of the Texas Business Organizations Code states that each owner or member of a filing entity may examine the books and records of the filing entity maintained under Section 3.151 and other books and records of the filing entity to the extent provided by the governing documents of the entity and the title of this code governing the filing entity.
If you are a member of a company or an LLC, then you are entitled to examine, inspect, and review your company’s’ books and records. Section 3.152 of the Texas Business Organizations Code states that a governing person of a filing entity may examine the entity’s books and records maintained under Section 3.151 and other books and records of the entity for a purpose reasonably related to the governing person’s service as a governing person.
A court may require a filing entity to open the books and records of the filing entity, including the books and records maintained under Section 3.151, to permit a governing person to inspect, make copies of, or take extracts from the books and records on a showing by the governing person that (1) the person is a governing person of the entity; (2) the person demanded to inspect the entity’s books and records; (3) the person’s purpose for inspecting the entity’s books and records is reasonably related to the person’s service as a governing person; and (4) the entity refused the person’s good faith demand to inspect the books and records.
A court may award a governing person attorney’s fees and any other proper relief in a suit to require a filing entity to open its books and records under Subsection (b). Based on Section 3.152 of the Texas Business Organizations Code, you are authorized, as a governing person of the company, is authorized to bring this action against the company, and the Defendants for failure to comply with your demands for inspection of the company’s books and records.
Section 101.501 of the Texas Business Organizations Code states the following: (a) In addition to the books and records required to be kept under Section 3.151, a limited liability company shall keep at its principal office in the United States, or make available to a person at its principal office in the United States not later than the fifth day after the date the person submits a written request to examine the books and records of the company under Section 3.152(a) or 101.502: (1) a current list that states: (A) the percentage or other interest in the limited liability company owned by each member and (B) if one or more classes or groups of membership interests n or under the certificate of formation or company agreement, the names of the members of each specified class or group; (2) a copy of the company’s federal, state, and local tax information or income tax returns for each of the six preceding tax years; (3) a copy of the company’s certificate of formation, including any amendments to or restatements of the certificate of formation; (4) if the company agreement is in writing, a copy of the company agreement, including any amendments to or restatements of the company agreement; (5) an executed copy of any powers of attorney; (6) a copy of any document that establishes a class or group of members of the company as provided by the company agreement; (7) except as provided by Subsection (b), a written statement of: the amount of a cash contribution and a description and statement of the agreed value of any other contribution made or agreed to be made by each member; the dates any additional contributions are to be made by a member; any event or occurrence of which requires a member to make additional contributions; any event the occurrence of which requires a winding up of the company; and the date each member became a member of the company.
Section 101.502 of the Texas Business Organizations Code states that a member of a limited liability company or an assignee of a membership interest in a limited liability company, or a representative of the member or assignee, on written request and for a proper purpose, may examine and copy at any reasonable time and at the member’s or assignee’s expense: (1) records required under Sections 3.151 and 101.501; and (2) other information regarding the business, affairs, and financial condition of the company that is reasonable for the person to examine and copy. A limited liability company shall provide to a member of the company or an assignee of a membership interest in the company, on written request by the member or assignee sent to the company’s principal office in the United States or, if different, the person and address designated in the company agreement, a free copy of: (1) the company’s certificate of formation, including any amendments to or restatements of the certificate of formation; (2) if in writing, the company agreement, including any amendments to or restatements of the company agreement; and (3) any tax returns described by Section 101.501(a)(2).
Do you suspect shareholder oppression? Do you suspect that your partner is stealing money from you or the company? Have you have made a demand to review Corporate records and the corporation or company refuses provide the records to you or allow you to review and inspect the Company’s books and records, then consider calling an experienced business lawyer. A Houston based business lawyer can further explain your rights and offer a strategy in an effort to archive your goals. You are welcome to contact us at 713-572-4900.