27

Jul

2022

The keys to the partner’s right to information in a limited liability company

The keys to the partner's right to information in a limited liability company

As soon as the general meeting has been convened, any shareholder may obtain from the company, immediately and free of charge, a series of documents of the financial year.

This right must be recorded in the document convening the meeting.

 

As we all know, the shareholder is the person who makes a contribution to the company’s capital stock, or who later joins the company by means of a capital increase. The creation of such condition endows the shareholder with certain responsibilities and rights, among which the right to information stands out, as established in the Capital Companies Law.

It follows that, regardless of the shareholding quota held by the shareholder in the company, the shareholder will have the right to access documentation related to the issues and resolutions to be discussed at the General Shareholders’ Meeting, as well as at the Shareholders’ Meetings to be held. In this regard, the administrative body shall be obliged to provide the information requested by the shareholder, provided that this is done in a consistent manner, i.e. the shareholder does not verbally request, for example, the drafting of a report, and without sufficient notice prior to the holding of the Meeting. In such cases, the administrative body may postpone, for a reasonable period of time, the delivery of such report.

Along the same lines, it is also important to mention that, from the moment the general meeting has been called, any shareholder may obtain from the company, immediately and free of charge, the management report of the accounts, as well as the corresponding auditor’s report on the balance sheet, the income statement and the annual report for the year. This right must be recorded in the document convening the meeting.

The right to information also implies that, during the course of meetings and assemblies, the members shall have the right to ask questions, as well as to request the clarifications and pertinent information they require on the specific points dealt with at the meeting.

To be more specific, the same Capital Companies Law provides that, when a meeting is called to amend the bylaws of a limited liability company, all shareholders will have the right to examine the full text of the proposed amendment at the registered office of the company.

At this point it is worth mentioning that the right to information is not absolute, but in certain cases it may be limited in the following situations:

– When there is an obstacle of bad faith on the part of the partner in the use of the information to be obtained.

– When the shareholding of the shareholder or shareholders requesting the information does not reach 25% of the share capital of the company.

– When the administrative body considers that the information requested is not related in any way to the aspects dealt with at the General Meeting to which it refers.  

Finally, if it is considered that the right to information has been violated, the shareholder will have the option to demand the corresponding notarial minutes of the meeting that has been held, even being able to provide them in the event of a subsequent legal proceeding.

For further information, please consult with Business consulting.