The most pressing question we at Ross Pitcoff Law tend to receive is: what are my rights to inspect the books and records of the company? Quite often that is a two layered question.
Question Number 1: Do I have such a right? And if yes, what items then do I have an absolute right to review? The first thing that you should do is check either your operating agreements, your LLC, your shareholder agreements, the bylaws and also check your partnership agreements.
If you are simply acting as a business-partnership and you are probably wondering, in what ways you may inspect the records and what records you are allowed to inspect? As long as you are a current standing member when you request such information, you do not need any special justification to receive them. For example, if you are dealing with a managing member, the CEO, or whoever it may be that is giving you pushback asking for you to justify the reason for the record reviews, you have a statutory right to do so.
Question Number 2: The next question would be, what can I, as a managing member, review? Is there anything else that I can look at that I have not thought of before? May I look at invoices? May I look at business contracts? May I look at the business expenses?
Typically that’s going to depend on the circumstances that surround the reason for your wanting to inspect the books and records. Sometimes this is what a judge is going to deal with in court, so you need to make a good face showing as to what additional records above those relating to taxes that you may be entitled to review. If you are ever curious to know about what your rates are, be sure to check your operating agreements and your contracts. You should also know that at times, even if you are entitled to inspect books and records, you may not be entitled to inspect confidential information such as: trade-secrets. Typically there are reasons for that, that are outlined in the operating agreement or shareholder’s agreement itself, but nevertheless, it is something to consider.
If you are in need of speaking with an attorney at Ross Pitcoff Law, call our office at: (646) 386-0990 or email: email@example.com to schedule your free consultation today. We would be happy to assist you with your legal matter.