While it may seem like common sense that you have a right to information about your company, a surprising number of majority business owners refuse to give the others owners information about the business.
Minority business owners (those with under 50% ownership interest) have rights to important information about their company.
Under Minnesota law, a minority business owner’s right to company information arises from the fiduciary duties that all owners in a closely held business owe each other as well as rights established by statutes. Here are the more common statutory rights.
The rights of shareholders in Minnesota corporations, including S corporations, are governed by Minnesota Statutes chapter 302A.
As owners of corporations, shareholders are entitled to certain company financial statements under Minnesota Statutes section 302A.463. Shareholders are entitled access or obtain copies of other information about the company including financial records, the share register listing the other shareholders, board meeting minutes, and other corporate documents under Minnesota Statutes section 302A.461. As a minority shareholder, you are entitled to this information ten (10) days after you request it.
Like shareholders, members of an LLC have similar rights to information. Minnesota limited liability companies (LLCs) are governed by Minnesota Statutes chapter 322B.
As owners of LLCs, members are entitled to certain company financial statements under Minnesota Statutes section 322B.376. LLC members are entitled access or obtain copies of other information about the company including financial records, the ownership interests of the other members, board meeting minutes, and other company documents under Minnesota Statutes section 322B.373. As a minority LLC owner, you are entitled to this information ten (10) days after you demand it.
Partners in Minnesota have similar rights. Minnesota partnerships are governed in part by the Minnesota Uniform Partnership Act of 1994.For example, partners are entitled to inspect books and records kept by the partnership, information concerning the partnership’s business and affairs, and any other information reasonably concerning the partnership’s business and affairs under Minnesota Statutes section 323A.0403.
These are just a few of the important statutes that protect business owners who own a minority percentage of a closely held company.
This area of law is fascinating because, although it is relatively complex, there is a sense of justice when minority shareholders are able to use the law to assert their rights.