Print
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
§
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.)