LLC Member’s Right to information

The right to information is a management right and one of the fundamental rights of the members of a limited liability company, which right is manifested in two fundamental obligations of the company’s management board towards the members of the company:

  • the obligation of the company’s management to inform the members about the company’s affairs and
  • the obligation to allow them access to the company’s business books and documentation.

The purpose of this right is manifested in the exercise of membership rights in a company because it allows members a better perspective upon making important decisions, both in the form of voting decisions in the assembly and the form of personal decisions about their membership in the company. The importance of the right to information is especially recognized in companies in which the members of the company are not also members of the management board, ie they are not members of the management structure of the company.

The right to be informed in an LLC is acquired by acquiring a business share in the company and every member of the company has it, regardless of the size of his business share. It can be exercised in the assembly or outside of it, all in accordance with the procedure prescribed by the Companies Act, if the Articles of Association do not regulate the procedure for exercising the said right.

Right to information in a limited liability company extends to all data related to internal affairs and relations in the company, the operation of the company, inspection of the books and documents of the company, no matter which forms they are in, insight in relationships with other people and members of the company, relationship of the company with affiliated companies and all information that a member of the company needs to assess the internal and external relations of the company.

The right to information is guaranteed by law and cannot be excluded even by a social contract (Articles of Association). The management board of the company is obliged to meet the request of each member of the company to exercise the right to information without delay, immediately upon receipt of his request. However, there are certain restrictions that can be prescribed by the Articles of Association – for example, the establishment of a special procedure and form for giving information, the introduction of provisions on professional secrecy, and similar.


Request for exercising the right to information

  • the form is not prescribed by law. Therefore, the request can be submitted in any way.
  • is submitted to the company’s management board.
  • it is not obligatory, but as a rule, it is stated exactly what is required by it and what information is required in order for the management board to prepare for faster and easier realization of this right.
  • must be delivered to the company in order to be valid. Therefore, it is always recommended to send a request in writing by registered mail with a return receipt.

Although the law does not specifically prescribe a term for making information and documentation available to members of the company, it still stipulates that they must be given without delay, which indicates the need for urgent action. However, one should be guided by the circumstances of each individual case and act on the request as quickly as reasonably possible and reasonable.

The form of giving notifications is also not prescribed, so the management board of the company can decide whether to give them orally or in writing. Also, the right of access includes the right to inspect the business books and documentation of the company, regardless of their form and where they are located. The company must in any case make them available to members. As a rule, the inspection is performed in the company’s business premises, and if necessary in another place through third parties, if the documentation is there. In doing so, the company is obliged to provide the necessary staff and technical means for insight to the member who exercises the right. A member of the company has the right to make notes and copies during the inspection, and the company must assist him in this.

The right to information is not strictly personal, so a member of the company can use a proxy to exercise it, but only those who, given their professional obligations, are obliged to keep business secrets (lawyer, auditor, tax advisor).


Denial of the right to information

The company may deny the right to information, ie it may refuse to give the member information about the company’s affairs and access to business books and documentation if the company has a supervisory board because it has the same powers as members of the company. Thus, this would mean that the management can only deny the direct exercise of the right to information and then the said right can refer to the rights that members can exercise in this regard in the assembly.

Also, the possibility of denying the right to information is provided when there is a concern that a member of the company could use this right for purposes not related to his membership in the company and that it could cause damage to the company. Here we are talking about objective probability, which means that there must be stronger indications of the actions of the member who submitted a request to exercise the right to information, in the form of using the information to the detriment of society (in favor of competitors, media coverage, etc.)

The right to information may also be denied in the case of obvious abuse of that right (often frequent requests for information), if the member requests information that the company does not have and cannot obtain for legal or factual reasons, if the company would have to expose to unreasonably high costs or if the information is constantly available on the company’s website.

The assembly of the company decides on the denial (by a simple majority of votes) and the above stated cannot be derogated even by the provisions of the Articles of Association.


Judicial obtaining of the right to information

Members of the company can exercise their right, if they cannot exercise it in the manner described above, in court, as follows:

  1. In non-contentious proceedings by submitting a request for exercising the right to information to the commercial court competent by the company’s registered seat within 15 days from the day of the assembly at which the exercise of the right was denied, or from not responding to the request for information.
  1. In a civil proceeding, by presenting a lawsuit for the withdrawal of a member from a limited liability company, which lawsuit can be filed if there are justified reasons in terms of the company’s refusal to provide data and information.

Note that the exhaustion of non-contentious proceedings is not a procedural precondition for filing a lawsuit and conducting civil proceedings. They can, in fact, be initiated at the same time.