A shareholder in a closely held Minnesota corporation who wants the core corporate records has one question to answer: is the corporation publicly held? If it isn’t, the right to the share register and the documents enumerated in Minn. Stat. § 302A.461, subd. 2, is absolute — no purpose required, ten days — and everything beyond that tier requires only a demonstrated proper purpose. We wrote about that regime in our guide to Minnesota shareholder books-and-records demands.
An LLC member doesn’t get one simple question. In a Minnesota LLC, the scope of the information right depends on whether the operating agreement made the company manager-managed — and if it did, the member lost the broad right and doesn’t necessarily know it. A third regime, narrower still, applies to a member who’s already left. Almost no operating agreement drafted in this state addresses that third regime at all.
The section that governs is Minn. Stat. § 322C.0410, and it’s really three statutes stacked in one.
Is my Minnesota LLC member-managed or manager-managed?
Start here, because everything else follows from it. Under Minn. Stat. § 322C.0407, subd. 1, a Minnesota LLC
is a member-managed limited liability company unless the operating agreement … expressly provides that … the company is or will be “manager-managed” or “board-managed” … “managed by managers” or “managed by a board” … management of the company is or will be “vested in managers” or “vested in a board”; or … includes words of similar import.
Member-managed is the default. It takes affirmative drafting to leave it. That drafting usually happens in a single clause, early, in a form document, and it’s frequently the only place in the agreement where the choice shows up. Members sign it without realizing they’ve traded away the broader of the two information rights the statute offers.
Read that clause before you draft a demand letter. It decides which subdivision governs, and the two subdivisions aren’t close variants of each other.
What can a member of a member-managed Minnesota LLC demand?
Nearly everything material, with no stated purpose and no written demand required. Section 322C.0410, subd. 1(1) provides:
On reasonable notice, a member may inspect and copy during regular business hours, at a reasonable location specified by the company, any record maintained by the company regarding the company’s activities, 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.
Look at what’s missing. No demand “in a record.” No purpose statement. No particularity requirement. The member gives reasonable notice and inspects. The only limit is materiality to the member’s rights and duties. That’s a real limit, but it’s measured against the rights and duties of a member who helps manage the company, and that’s a wide field.
Then the statute does something the corporate regime doesn’t do at all: it makes the flow of information affirmative. Under subd. 1(2), the company shall furnish to each member
without demand, any information concerning the company’s activities, financial condition, and other circumstances which the company knows and is material to the proper exercise of the member’s rights and duties … except to the extent the company can establish that it reasonably believes the member already knows the information; and … on demand, any other information … except to the extent the demand or information demanded is unreasonable or otherwise improper under the circumstances.
Two things about that sentence matter in litigation. The exception puts an affirmative burden on the company: it must establish that it reasonably believed the member already knew. Silence isn’t a defense. It’s a violation with a burden attached. And subd. 1(3) extends the same duty to each member individually, “to the extent the member knows any of the information described in clause (2).” In a member-managed LLC, the majority member personally owes the disclosure duty, not just the entity. That matters when the entity is judgment-proof or controlled and the individual isn’t.
What changes when the LLC is manager-managed?
The broad right shifts away from the members. Section 322C.0410, subd. 2(1) is blunt about it:
The informational rights stated in subdivision 1 and the duty stated in subdivision 1, clause (3), apply to the managers or governors and not the members.
What the member gets instead is subd. 2(2) — access, during regular business hours at a reasonable location specified by the company, to “full information regarding the activities, financial condition, and other circumstances of the company as is just and reasonable,” but only on three conditions:
(i) the member seeks the information for a purpose material to the member’s interest as a member;
(ii) the member makes a demand in a record received by the 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.
Three separate gates, and a company will litigate every one of them. The purpose has to qualify. The demand has to be written and particular as to both documents and purpose. And each category requested has to connect to the purpose. A demand that recites a purpose and then asks for “all financial records” fails the third gate on its face, even where the purpose is unimpeachable.
The company’s matching obligation is the member’s best procedural tool. Under subd. 2(3), within ten days after receiving a demand the company “shall in a record inform the member” of the information it will provide and when and where it will provide it — and, “if the company declines to provide any demanded information, the company’s reasons for declining.” A company that ignores a conforming demand has breached a discrete statutory duty on a fixed clock. A company that answers has put its reasons in writing, and it’ll have to live with them.
Subdivision 2(4) adds a trigger that’s easy to miss. Whenever the chapter or the operating agreement calls for a member to give or withhold consent, then before consent is given or withheld the company must, without demand, provide the member “all information that is known to the company and is material to the member’s decision.” Every consent solicitation — an amendment, a merger, a related-party transaction, a capital call under an agreement requiring member approval — carries its own disclosure obligation. It attaches in a manager-managed LLC where the general information right doesn’t, and the failure to satisfy it is a defect in the consent itself, not merely a records violation. It pairs directly with the dilution mechanics in Minnesota LLC capital calls and dilution.
The two regimes, side by side
| Member-managed (subd. 1) | Manager-managed / board-managed (subd. 2) | |
|---|---|---|
| Written demand required? | No — “reasonable notice” | Yes — “a demand in a record received by the company” |
| Purpose statement required? | No | Yes — a purpose material to the member’s interest as a member |
| Particularity required? | No | Yes — reasonable particularity as to information and purpose |
| Company must push information out? | Yes — subd. 1(2)(i), without demand | Only on consent matters — subd. 2(4) |
| Individual duty on other owners? | Yes — subd. 1(3), on each member | Yes, but on managers/governors, not members — subd. 2(1) |
| Fixed response deadline? | Not stated | Ten days, in a record, with reasons — subd. 2(3) |
Does a dissociated member of a Minnesota LLC keep any right to the books?
Yes, and this is the provision operating agreements essentially never address. Under Minn. Stat. § 322C.0603, subd. 1(3), once a person is dissociated, “any transferable interest owned by the person immediately before dissociation in the person’s capacity as a member is owned by the person solely as a transferee.” And § 322C.0410, subd. 6 says flatly that the rights under the section “do not extend to a person as transferee.”
Put those two provisions together and the right would be gone entirely, except that subd. 3 carves it back out:
On ten days’ demand made in a record received by a limited liability company, a dissociated member may have access to information to which the person was entitled while a member if the information pertains to the period during which the person was a member, the person seeks the information in good faith, and the person satisfies the requirements imposed on a member by subdivision 2, clause (2).
Each of the four conditions narrows:
- Ten days’ demand, in a record received by the company. Written, and it does not ripen immediately.
- Only information the person was entitled to while a member — the ceiling is the right held before leaving, not the right a current member has now.
- Only the period during which the person was a member. Nothing after the dissociation date. This defeats the departed member who wants to see what the company did with the business after they left.
- Good faith, plus the full subd. 2(2) showing — purpose material to the interest, written demand with reasonable particularity, information directly connected to the purpose.
The fourth is the one worth sitting with. A dissociated member of a member-managed LLC doesn’t keep the purpose-free subd. 1 right. Subdivision 3 routes every dissociated member, from either kind of company, through the manager-managed showing. Someone who could walk in and inspect on reasonable notice on Monday must, after dissociating on Tuesday, serve a particularized written demand stating a qualifying purpose and wait ten days. The company’s obligation is the same on the back end: subd. 3 directs that it “shall respond to a demand made pursuant to this subdivision in the manner provided in subdivision 2, clause (3).”
In practice, the information a departing member will need to value the interest should be in hand before the dissociation event closes. We set out what else disappears at that moment in what you lose when you dissociate from a Minnesota LLC, and how the interest is valued in Minnesota LLC member disputes and buyouts.
What can the company charge, and what can it impose?
On charges, the statute is narrow. Under subd. 4, the 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.” That’s the entire authorization. It doesn’t reach attorney review time, the cost of assembling or searching for records, or an access fee. A company that answers a conforming demand with a five-figure “production cost” estimate isn’t invoking subd. 4. It’s negotiating.
On agents, the member wins and the company keeps its restrictions. Under subd. 5, a member or dissociated member may exercise these rights “through an agent or, in the case of an individual under legal disability, a legal representative” — so an accountant or a lawyer may do the inspecting. But the same sentence provides that “[a]ny restriction or condition imposed by the operating agreement or under subdivision 7 applies both to the agent or legal representative and the member or dissociated member.”
On restrictions, the company has real power and a real burden. Subdivision 7 allows an LLC, “as a matter within the ordinary course of its activities,” to impose
reasonable restrictions and conditions on access to and use of information … including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient.
So confidentiality designations and a signed NDA as a condition of production are statutorily authorized, not overreach. But the subdivision ends with the sentence that decides most fights about them: “In a dispute concerning the reasonableness of a restriction under this subdivision, the company has the burden of proving reasonableness.” A restriction so broad that it keeps the member from using the documents for the very purpose that entitled them to the documents is where that burden gets hard to carry.
Can an operating agreement eliminate a member’s right to information?
No. Information rights sit on the short list of things Minnesota’s LLC act protects from private ordering. Minn. Stat. § 322C.0110, subd. 3 enumerates what an operating agreement “may not” do, and clause (6) is directly on point:
An operating agreement may not … unreasonably restrict the duties and rights stated in section 322C.0410.
Look at how that clause is built.
The verb is “unreasonably restrict,” not “eliminate.” Compare clauses (1), (2), (3), and (7) of the same subdivision, which use “vary” — an absolute bar. Clause (6) leaves room for restriction and forbids only unreasonable restriction. A confidentiality condition, a business-hours-and-notice protocol, a requirement that copying costs be paid in advance: these are restrictions, and nothing in clause (6) condemns them. A clause reciting that “no member shall be entitled to inspect the books or records of the Company” is a different animal, and it’s the kind of clause that still shows up in agreements circulating in Minnesota.
And the “manifestly unreasonable” framework doesn’t apply here. Section 322C.0110, subd. 8 gives courts a structured test — decided as of the time the term became part of the agreement, invalidating only where “it is readily apparent” that the objective or the means is unreasonable — but by its own terms it governs “any claim under subdivision 4 that a term of an operating agreement is manifestly unreasonable.” Subdivision 4 is the fiduciary-duty-modification provision. Clause (6) of subdivision 3 isn’t subdivision 4, and it uses a different word. Don’t concede the more deferential standard by importing it. The broader map is in what your operating agreement cannot override and Minnesota LLC fiduciary duty versus the operating agreement.
What this means in practice
For a member who suspects something: read the management clause first, then draft to the harder standard. A demand that satisfies subd. 2(2) also satisfies subd. 1 — written, particular, purpose-stated. The reverse isn’t true, and a company that gets an informal request in a manager-managed LLC will treat it as a nullity and be right to.
For a member about to leave: get the records before the exit closes. Subdivision 3 is a real right, but it’s narrower, it costs ten days, and it reaches nothing after the dissociation date.
For a company on the receiving end: answer within ten days even if the answer is no. Producing nothing and saying nothing converts a scope dispute into a statutory violation.
For anyone drafting: the information clause isn’t boilerplate. It’s one of the few clauses whose enforceability the legislature has expressly limited, and it decides whether a future dispute starts with documents or with guesses.
Madgett Law, LLC represents Minnesota LLC members and former members making and enforcing information demands under § 322C.0410, and advises companies responding to them. If you own part of a Minnesota LLC and can’t see what it’s doing with your money, that’s a problem the statute already answers. Send us a message or call 612-470-6529.
Sources: Minn. Stat. § 322C.0410 (right of members, managers, governors, and dissociated members to information — subd. 1, clauses (1)–(3), the member-managed inspection right on reasonable notice, the without-demand and on-demand duties to furnish, the company’s burden to establish reasonable belief the member already knows, and the parallel duty on each member; subd. 2, clauses (1)–(4), the transfer of subd. 1 rights to managers or governors, the three-condition demand in a record, the ten-day obligation to respond in a record with reasons for declining, and the without-demand disclosure required before a member gives or withholds consent; subd. 3, the dissociated member’s ten-day demand, the period limitation, the good-faith requirement, and incorporation of subd. 2, clause (2); subd. 4, charges limited to the reasonable costs of copying, labor and material; subd. 5, agents and legal representatives and the application of restrictions to them; subd. 6, exclusion of transferees; subd. 7, reasonable restrictions and conditions including confidentiality designations and nondisclosure obligations, and the company’s burden of proving reasonableness); Minn. Stat. § 322C.0407, subd. 1 (member-managed default absent express manager-managed or board-managed language in the operating agreement); Minn. Stat. § 322C.0110, subd. 3(6) (an operating agreement may not unreasonably restrict the duties and rights stated in § 322C.0410), subd. 3 generally (the enumerated non-waivable list, including the “vary” clauses used for comparison), subd. 4 (provisions particularly but not exclusively authorized), and subd. 8 (the manifestly-unreasonable standard, by its terms applicable to claims under subd. 4); Minn. Stat. § 322C.0603, subd. 1(3) (on dissociation, the transferable interest is owned solely as a transferee) (Minnesota Office of the Revisor of Statutes). This article is general legal information about Minnesota law, not legal advice, and reading it does not create an attorney–client relationship. No outcome is promised or implied.