§4058. Information rights

Link to law: http://legislature.vermont.gov/statutes/section/11/025/04058
Published: 2015

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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.)
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