In a member-managed limited liability company, the following rules apply:
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Terms Used In Utah Code 48-3a-410
Manager-managed limited liability company: means a limited liability company that qualifies under Subsection 48-3a-407(1). See Utah Code 48-3a-102
Member: means a person that:
(a)
has become a member of a limited liability company under Section 48-3a-401 or was a member in a company when the company became subject to this chapter under Section 48-3a-1405; and
Member-managed limited liability company: means a limited liability company that is not a manager-managed limited liability company. See Utah Code 48-3a-102
Operating agreement: means the agreement, whether or not referred to as an operating agreement and whether oral, implied, in a record, or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in Subsection 48-3a-112(1). See Utah Code 48-3a-102
Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Utah Code 48-3a-102
Transferee: means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a member. See Utah Code 48-3a-102
(a)
On reasonable notice, a member may inspect and copy during regular business hours, at a reasonable location specified by the limited liability company, any record maintained by the limited liability company regarding the limited liability company’s activities, affairs, financial condition, and other circumstances, to the extent the information is material to the member’s rights and duties under the operating agreement or this chapter.
(b)
The limited liability company shall furnish to each member:
(i)
without demand, any information concerning the limited liability company’s activities, affairs, financial condition, and other circumstances which the limited liability company knows and is material to the proper exercise of the member’s rights and duties under the operating agreement or this chapter, except to the extent the limited liability company can establish that it reasonably believes the member already knows the information; and
(ii)
on demand, any other information concerning the limited liability company’s activities, affairs, financial condition, and other circumstances, except to the extent the demand or information demanded is unreasonable or otherwise improper under the circumstances.
(c)
The duty to furnish information under Subsection (1)(b) also applies to each member to the extent the member knows any of the information described in Subsection (1)(b).
(2)
In a manager-managed limited liability company, the following rules apply:
(a)
The informational rights stated in Subsection (1) and the duty stated in Subsection (1)(c) apply to the managers and not the members.
(b)
During regular business hours and at a reasonable location specified by the limited liability company, a member may inspect and copy full information regarding the activities, affairs, financial condition, and other circumstances of the limited liability company as is just and reasonable if:
(i)
the member seeks the information for a purpose reasonably related to the member’s interest as a member;
(ii)
the member makes a demand in a record received by the limited liability company, describing with reasonable particularity the information sought and the purpose for seeking the information; and
(iii)
the information sought is directly connected to the member’s purpose.
(c)
Not later than 10 days after receiving a demand pursuant to Subsection (2)(b)(ii), the limited liability company shall in a record inform the member that made the demand of:
(i)
the information that the limited liability company will provide in response to the demand and when and where the limited liability company will provide the information; and
(ii)
the limited liability company’s reasons for declining, if the limited liability company declines to provide any demanded information.
(d)
Whenever this chapter or an operating agreement provides for a member to give or withhold consent to a matter, before the consent is given or withheld, the limited liability company shall, without demand, provide the member with all information that is known to the limited liability company and is material to the member’s decision.
(3)
Subject to Subsection (9), on 10 days’ demand made in a record received by a limited liability company, a person dissociated as a member may have access to information to which the person was entitled while a member if:
(a)
the information pertains to the period during which the person was a member;
(b)
the person seeks the information in good faith; and
(c)
the person satisfies the requirements imposed on a member by Subsection (2)(b).
(4)
A limited liability company shall respond to a demand made pursuant to Subsection (3) in the manner provided in Subsection (2)(c).
(5)
A limited liability company may charge a person that makes a demand under this section the reasonable costs of copying, limited to the costs of labor and material.
(6)
A member or person dissociated as a member may exercise rights under this section through an agent or, in the case of an individual under legal disability, a legal representative. Any restriction or condition imposed by the operating agreement or under Subsection (9) applies both to the agent or legal representative and the member or person dissociated as a member.
(7)
Subject to Subsection (9), the rights under this section do not extend to a person as transferee.
In addition to any restriction or condition stated in the operating agreement, a limited liability company, as a matter within the ordinary course of its activities and affairs, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a restriction under this Subsection (9), the limited liability company has the burden of proving reasonableness.
