What Records is a Member Entitled to Obtain from an LLC Under the Florida Revised LLC Act?
On January 1, 2015, the Florida Revised Limited Liability Company Act (“Revised Act“) became effective in Florida. Under section 605.0410 of the Revised Act, an LLC is required to keep, and a member is permitted to inspect and copy, the following records:
- A current list of the full names and known business, residence and mailing addresses of each member and manager;
- A copy of the then-effective operating agreements and all amendments;
- A copy of the articles of organization, articles of merger, articles of interest exchange, articles of conversion, and articles of domestication;
- A copy of the LLC’s tax returns for the three most recent years;
- A copy of the LLC’s financial statements for the three most recent years; and
- A record stating the amount of cash and the agreed value of the property or other benefits contributed and agreed to be contributed by each member.
Indeed, the Revised Act imposes certain obligations upon the LLC and its managers to produce the above and other reasonable information to the LLC’s members. Sometimes, the LLC must notify the members of certain material information or changes regardless of whether a member has made a demand. In contrast, the LLC must produce other information only upon a member’s demand.
Without demand, an LLC affirmatively is required to notify its members of information concerning the LLC’s activities, affairs and financial condition that the LLC or its managers know is material to the proper exercise of the member’s rights and duties. An example would be the managers amending the operating agreement.
Only upon demand, however, an LLC is obligated to produce to its members information concerning the LLC’s activities, affairs or financial condition when the information is not considered material to the proper exercise of the member’s rights and duties. The exception for the LLC to produce demanded information, is if the request is “unreasonable or improper under the circumstances.” What constitutes “unreasonable or improper under the circumstances” is subject to debate.
As to timing, the LLC must respond to a member’s demand within 10 days by specifying the location and time of production. If the LLC is objecting to producing the demanded information, however, the LLC must provide to the member the reasons for not producing the requested information.
Under section 605.04.10, an LLC must operate with a certain level of transparency with its members, including affirmatively producing certain material records and information that affect the rights and duties of its members. Likewise, if a member makes a demand for records that may bear on the member’s status as a member, or the value of the member’s interest, the LLC is obligated to share the requested information in a reasonable and timely manner.