Legal Question in Business Law in Michigan
Business records
My husband and 3 other men bought a tugboat to resell. We all had to pledge all of our assets to secure the bank loan. The 4 men were equal partners and the women, were not. The corporation was going for 16 months. When we sold this tug last November, we asked the accountant for a copy of all the books and taxes for the whole 16 months which we never have gotten. One of the wives, keep the books and for some reason, she is reluctant to tell us anything. None of the other 3 partners have seen one thing about money earned or spend or even the taxes that were paid for 1997 or 1998. Should we take this to court or what should we do. We don't even know where all the books are now. Doesn't every partner have the legal right to a copy of these books and tax returns? I would appreciate your answer ASAP-thank you, --
2 Answers from Attorneys
Re: Business records
You need to make a legal demand on the partnership to satisfy your interest in the financial health of the organization. This is done by an accounting of the partnership. Usually to facilitate this effort, a motion is filed in the circuit court compelling the accounting. Contact a reputable lawyer in your area to file this motion for you.
Patrick Tracy
Patrick J. Tracy, Esq, P.E., P.C.
P.O. Box 34576
Re: Business records
Any officer or shareholder of the corporation should be able to demand from the accountant a copy of the corporate records and financial documents held by the accountant. The accountant could face liability if he/she fails to surrender the records and/or if he/she colludes with one of the officers to prevent the other officers/shareholders from having access to the information. It is unlikely that the accountant will put him-/herself at personal risk. Your demand for the documents should be put in writing.
In the absence of voluntary disclosure of the documents by the other officer/shareholder, the remaining shareholders could bring an action in court to enforce their rights to access to the books and records of the corporation and for an accounting of all assets and revenue of the corporation. An attorney must be retained for that purpose, inasmuch as a corporation may not be represented in court by an officer or a shareholder. A corporation may appear in a lawsuit only through a licensed attorney.
This response should not be considered legal advice, nor is it intended to constitute legal advice. No attorney/client relationship is created as a result of this response.
Stephen Scapelliti
Couzens, Lansky, Fealk, Ellis, Roeder & Lazar, P.C.
39395 W. Twelve Mile Road, Suite 200
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