Not Receiving Financial Information From a Business Partner

Answer:

As a knowledgeable Delaware County Business Attorney, I get questions all the time from clients about business partners not providing any financial information your company.

In such a case, the first thing you need to determine is what kind of company it is. Is it a corporation, a limited liability company or a general partnership?

Your corporate governance documents will control the particular issue initially. The documents will contain the rights of a shareholder, rights of a member, or rights of a partner to certain financial information and/or transactions. If you’re a partner or an owner; you’re entitled to know the information that’s there.

There are statutory provisions about corporations governing the obligation of directors to provide information about finances and transactions to you. If they, you have the right to request it in writing and they have the obligation to respond under a statutory obligation in the business corporation law.

If they fail to do so, there is a business code that says you can go to court and request the court to issue an order that requires that partner or that shareholder or corporate director to issue that information.

In a partnership, there is a partnership provision in the Uniform Partnership Law or the Partnership Law of Pennsylvania that says the individual partner has the obligation to report to his co-partner certain transactions that took place.

If that partner oversees the finances or accounting, they have an obligation to respond to a request for what happened in a particular accounting.

You have a right to the financial information: your balance sheet, daily account records, payments, and what your debts and obligations are and any information from the bank. That is the obligation of each partner to the other one. Partnerships involve a statutory obligation that is set forth, and getting information if it fails to be delivered is a relatively easy process.

In limited liability corporations, there is no specific statutory authority that says, “My partner or my manager has the obligation to provide the financial information with regard to the company.” However, each member, manager, or third-party manager does have the obligation to account for the individual profits; they have the obligation to account for certain information.

If you are not getting that information, you can file a request saying they are violating the obligation set forth in the operating agreement or in the statute, but it doesn’t specifically set forth, “I have the right to inspect.”

While you must sometimes “massage” a request a little bit to get the information you are entitled to, you are entitled to certain transactional information under each of these forms of business entities.

This educational video was brought to you by experienced Business Lawyer Walter J. Timby. Our law firm proudly represents clients throughout Delaware County, as well as Pennsylvania, the greater Philadelphia area, Delaware and New Jersey.

If you have any questions about Business Partners not giving you any Financial Information from your Company, please contact our Delaware County Business Attorneys for a free case evaluation. Let our experience work for you.