§ 10A-8A-4.10 — Right of Partner and Former Partner to Information

Alabama § 10A-8A-4.10

• Jurisdiction: Alabama
• Title 10A: Alabama Business and Nonprofit Entities Code
• Ch. 8A: Alabama Partnership Law
• Art. 4: Relations of Partners to Each Other and to Partnership

Text

(a) Subject to subsection (f), a partner, without having any particular purpose for seeking the information, may inspect and copy during regular hours at a reasonable location specified by the partnership, required information and any other records maintained by the partnership regarding the partnership’s business or not for profit activity and financial condition.
(b) Subject to subsection (f), each partner and the partnership shall furnish to a partner:
(1) without demand, any information concerning the partnership’s business or not for profit activity reasonably required for the proper exercise of the partner’s rights and duties under the partnership agreement or this chapter; and
(2) on demand, any other information concerning the partnership’s business or not for profit activity, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.
(c) Subject to subsections (e) and (f), on 10 days’ demand made in a writing received by the partnership, a person dissociated as a partner may have access to the information and records described in subsection (a) at the location specified in subsection (a) if:
(1) the information or writing pertains to the period during which the person was a partner;
(2) the person seeks the information or record in good faith; and
(3) it is determined that:
(i) the person seeks the information for a purpose reasonably related to the person’s interest as a partner;
(ii) the person’s demand describes with reasonable particularity the information sought and the purpose for seeking the information; and
(iii) the information sought is directly connected to the person’s purpose.
(d) Within 10 days after receiving a demand pursuant to subsection (c), the partnership in a writing shall inform the person that made the demand:
(1) what information the partnership will provide in response to the demand;
(2) when and where the partnership will provide the information;
(3) if the partnership declines to provide any demanded information, the partnership’s reasons for declining; and
(4) what, if any, restrictions will be imposed pursuant to the partnership agreement or subsection (f).
(e) If a partner dies, Section 10A-8A-5.04 applies.
(f) In addition to any restriction or condition stated in its partnership agreement, a partnership, as to a matter within the ordinary course of its business or not for profit activity, may:
(1) 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; and
(2) keep confidential from the partners and any other person, for such period of time as the partnership deems reasonable, any information that the partnership reasonably believes to be in the nature of trade secrets or other information the disclosure of which the partnership in good faith believes is not in the best interest of the partnership or could damage the partnership or its business or not for profit activity, or that the partnership is required by law or by agreement with a third party to keep confidential.
In any dispute concerning the reasonableness of a restriction under this subsection, the partnership has the burden of proving reasonableness.
(g) A partnership may charge a person that makes a demand under this section reasonable costs of copying, limited to the costs of labor and material.
(h) A partner or person dissociated as a partner may exercise the rights under this section through an attorney or other agent. Any restriction imposed under subsection (f) or by the partnership agreement applies both to the attorney or other agent and to the partner or person dissociated as a partner.
(i) The rights under this section do not extend to a person as transferee, but the rights under subsection (c) of a person dissociated as a partner may be exercised by the legal representative of an individual who dissociated as a partner under Section 10A-8A-6.01(6).
(j) Any partner who, without reasonable cause, refuses to allow any partner or person dissociated as a partner, or his or her agent or attorney to inspect or copy any records of the partnership to which such partner or person dissociated as a partner is entitled under this section, shall be personally liable to the partner or person dissociated as a partner for a penalty in an amount not to exceed 10 percent of the fair market value of the transferable interest of the partner or person dissociated as a partner, in addition to any other damages or remedy.

Legislative History

(Act 2018-125, §7; Act 2021-299, §5.)