Business Law

Ask a Business Lawyer. Get Business Law Questions Answered ASAP.

Ask a Lawyer,
Get an Answer ASAP!

Business Law

ONY SOCRATEASER SHOULD ANSWER THIS QUESTION. IF YOU ARE NOT

Customer Question
ONY SOCRATEASER SHOULD ANSWER THIS...
ONY SOCRATEASER SHOULD ANSWER THIS QUESTION. IF YOU ARE NOT SOCRATEASER, YOUR ANSWER WILL NOT BE ACCEPTED.

I was a partner of a Nebraska limited partnership that began in 1954 and ended June 2007. If the partnership agreement contained no record-keeping requirements, what length of time would the books, records and materials regarding the partnership and its activities need to be retained by the general partner? If the partnership agreement did state a length of time for document retention, would that requirement persist beyond the end of the partnership? In other words if the partnership agreement specified a three-year document retention period, would the general partner be required to still maintain possession of the records today for a partnership that ended in June 2007? It is the 1993 Restated Partnership Agreement that I need a copy of. If the general partner has failed in his duty of record retention, what are the consequences? Can a court make a determination that this failure was intentional? If the successor LLC contains the language:


"WHEREAS, the Members (defined below) are all of the partners of a previously created Nebraska general partnership under the name M&M pursuant to a partnership agreement dated as of October 1, 1954 and a Restated Partnership Agreement dated as of December 22, 1993, and

WHEREAS, the Members desire to convert the Partnership into a Missouri limited liability company,

NOW, THEREFORE the Members agree as follows:"


referencing the Restated Partnership Agreement, would the Manager of that LLC be required to retain a copy of that restated Agreement for three years if the LLC Operating Agreement contained this language:


"5.5 COMPANY INFORMATION. Upon request, the Manager shall supply to any Member information regarding the Company or its activities. Each Member or his authorized representative shall have access to and may inspect and copy all books, records and material in the Manager's possession regarding the Company of its activities."


The language "all .. material(s) in the Manager's possession" makes it sound like he can avoid responsibility by discarding or simply claiming not to have any particular document. Can he do that? What, if anything, can be done about it?


Is there any way to compel the draftor of the Restated Partnership Agreement (a law firm) to produce the document, if they have it? Are they likely to be retaining a copy of an agreement they drafted in 1993? Can I make demand for a copy from them simply by having been a partner of M&M? My mailing address is the same today as it was in 1993. How would one locate that law firm if their identity was unknown? If I do know the identity of the law firm, and I believe I do, how should they be approached on the subject?

I believe I need the Restated Partnership Agreement to prove that the succeeding LLC agreement departed from the Restated Partnership Agreement in ways detrimental to me. I was entered into the LLC Agreement by my mother by exercise of a power of attorney. I would therefore like to maintain a cause of action against her for breach of loyalty and perhaps personal enrichment.
Submitted: 7 years ago.Category: Business Law
Show More
Show Less
Ask Your Own Business Law Question
Answered in 1 hour by:
12/1/2009
Business Lawyer: socrateaser, Attorney replied 7 years ago
socrateaser
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39,346
Experience: Retired (mostly)
Verified

Hey there. Thanks for asking for me. I need to cogitate on this. I may not get through it until morning. I hope that's okay with you.

 

 

Terms and Conditions: By your continuing in this conversation with me, or by your clicking “Accept”, you are expressly agreeing to all of the following: (1) our communication is for entertainment purposes only; (2) you are not consulting me in my professional capacity as an attorney; (3) you do not seek to establish an attorney-client relationship with me, nor do I with you; (4) you will not rely on anything I say and you will obtain appropriate legal counsel via a traditional/office consultation with an attorney licensed to practice in the jurisdiction where your legal issue arises (and you may not use our communication to avoid taxpayer penalties imposed by the U.S. Dept. of Treasury); (5) by communicating with me in this public forum you are irrevocably waiving any right to privacy, confidentiality and attorney-client privilege concerning the matters discussed. You further separately declare that any payment made by you is not consideration for this contract, nor offered for any services rendered by me on your behalf, but rather is made in genuine admiration and respect for my desire to help others. If you do not agree with these terms and conditions, then you must advise me immediately.

Ask Your Own Business Law Question
Customer reply replied 7 years ago
Absolutely. I look forward to it.
Business Lawyer: socrateaser, Attorney replied 7 years ago

Q: I was a partner of a Nebraska limited partnership that began in 1954 and ended June 2007. If the partnership agreement contained no record-keeping requirements, what length of time would the books, records and materials regarding the partnership and its activities need to be retained by the general partner?

 

A: There's no statutory requirement in NE. However, the IRS would generally require any legal entity to maintain its records for at least seven years. So, the failure to do so, would be a breach of due care by the general partner. Which makes seven years the operative duration.

 

Q: If the partnership agreement did state a length of time for document retention, would that requirement persist beyond the end of the partnership?

 

A: Yes. Because the IRS could still come back and audit the organization.

 

Q: In other words if the partnership agreement specified a three-year document retention period, would the general partner be required to still maintain possession of the records today for a partnership that ended in June 2007?

 

A: Yes.

 

Q: It is the 1993 Restated Partnership Agreement that I need a copy of. If the general partner has failed in his duty of record retention, what are the consequences? Can a court make a determination that this failure was intentional?

 

A: You could sue for breach of due care, and yes, the court could find that the action was willful.

 

Q: If the successor LLC contains the language: "WHEREAS, the Members (defined below) are all of the partners of a previously created Nebraska general partnership under the name M&M pursuant to a partnership agreement dated as of October 1, 1954 and a Restated Partnership Agreement dated as of December 22, 1993, and WHEREAS, the Members desire to convert the Partnership into a Missouri limited liability company, NOW, THEREFORE the Members agree as follows:" referencing the Restated Partnership Agreement, would the Manager of that LLC be required to retain a copy of that restated Agreement for three years if the LLC Operating Agreement contained this language: "5.5 COMPANY INFORMATION. Upon request, the Manager shall supply to any Member information regarding the Company or its activities. Each Member or his authorized representative shall have access to and may inspect and copy all books, records and material in the Manager's possession regarding the Company of its activities." The language "all .. material(s) in the Manager's possession" makes it sound like he can avoid responsibility by discarding or simply claiming not to have any particular document. Can he do that?

 

A: He could, but he would appear pretty silly to a court, in my view.

 

Q: What, if anything, can be done about it?

 

A: Sue for breach of due care.

 

Q: Is there any way to compel the draftor of the Restated Partnership Agreement (a law firm) to produce the document, if they have it?

A: Yes. By subpoena. The attorney-client privilege begins and ends with communications between attorney and client. It does not extend to a document that was intended for third parties. But, if the document isn't signed, then there's no way to know if what the attorney has is actually the final draft used by the partnership.

 

Q: Are they likely to be retaining a copy of an agreement they drafted in 1993?

 

A: Yes, unless they turned over their file to the client - which is possible.

 

Q: Can I make demand for a copy from them simply by having been a partner of M&M?

 

A: You would have to sue the partnership or its former members. Then you could subpoena the document. Otherwise, the law firm doesn't have to comply with your request.

 

Q: My mailing address is the same today as it was in 1993. How would one locate that law firm if their identity was unknown?

 

A: Sue the partnership and its former members and then force disclosure of the law firm's identity.

 

Q: If I do know the identity of the law firm, and I believe I do, how should they be approached on the subject?

 

A: With a subpoena, after suing the former partners and the partnership. Otherwise, you'll be wasting your time.

Ask Your Own Business Law Question
Customer reply replied 7 years ago
A: There's no statutory requirement in NE. However, the IRS would generally require any legal entity to maintain its records for at least seven years.

Would the restated partnership agreement be one of the "records" that the IRS would require to be retained? Would a power of attorney used by one partner to vote in another's stead on partnership matters also be part of those "records?"

Short of suing or threatening to sue for breach of due care, how might I prompt the managing partner of the former general partnership to give me a copy of the restated partnership agreement, assuming he has one?

Business Lawyer: socrateaser, Attorney replied 7 years ago

Q: Would the restated partnership agreement be one of the "records" that the IRS would require to be retained?

 

A: The IRS concerns itself with financial proof. If the partnership agreement would be reasonably necessary to demonstrate a right to a deduction, then it would have to be retained -- otherwise not. I can't think of a scenario off hand where the agreement would have to be retained for IRS purposes. For your purposes, the issue is whether or not the partnership management could have reasonably believed that you would have a claim against the partnership which would have necessitated reference to the agreement. If so, and the document was destroyed anyway, then that could show a breach of loyalty.

 

It's definitely a tough call. And, NE law re LLC's is very thin, so there's not much to rely on.

 

Q: Would a power of attorney used by one partner to vote in another's stead on partnership matters also be part of those "records?"

 

A: That would be something that both the LLC and the partner who used the POA to vote, would want to retain in order to prove that he/she had the right to vote. Again, the issue of how long to retain is not statutory -- it's more about knowing that there is a potential claim and a breach of loyalty in failing to maintain the records. Still very thin.

 

Q: Short of suing or threatening to sue for breach of due care, how might I prompt the managing partner of the former general partnership to give me a copy of the restated partnership agreement, assuming he has one?

 

A: Money.

 

This is an "all or nothing deal." The person must believe he/she is at some risk of legal action, where the outcome will be worse by not disclosing than the opposite. Otherwise, there's no good reason to disclose the document.

Ask Your Own Business Law Question
Customer reply replied 7 years ago
I'm sorry. I forgot to mention that although the original was a Nebraska general partnership, the successor was a Missouri LLC. Would that change any of your answers?
Business Lawyer: socrateaser, Attorney replied 7 years ago
I'm in the midst of a storm today. I'll get back to ths tomorrow. Thanks for your understanding.
Ask Your Own Business Law Question
Customer reply replied 7 years ago
Not a problem.
Business Lawyer: socrateaser, Attorney replied 7 years ago

Under RSMo 347.091 (1)(4), the LLC must maintain copies of any operating agreements for inspection by members during regular business hours. Financial records and tax returns must be retained for at least 5 years, but there is no express record retention requirement for the operating agreements.

 

Under RSMo 347.141(6), a claim against the LLC is barred after three years, unless the LLC was dissolved for the primary purpose of defrauding a member,creditor or other interested party.

 

You might be able to claim that the destruction of the operating agreements during the three years statute of limitations period is evidence of fraudulent intent. Regardless, if the instrument is no longer in existence from any source, then proof of its terms and condtions would have to be inferred from the conduct of the LLC. This would be a daunting and expensive bit of forensic analysis, and it would leave many holes.

 

Here's a link to RSMo Chapter 347 concerning LLCs.

Ask Your Own Business Law Question
Customer reply replied 7 years ago
Again, my apologies. It is the Nebraska general partnership agreement that I need a copy of. I already have a copy of the Missouri LLC operating agreement. Have you already addressed that fully? [Sue for breach of due care]
Business Lawyer: socrateaser, Attorney replied 7 years ago

If the original partnership was purchased by the LLC, then the partnership agreement would arguably be a financial record of the LLC, because it represents the essence of what the LLC purchased. Which could get you to a violation of the three year retention period.

 

The original general partners would still have a fiduciary duty to each other, which reasonably means providing a copy of the articles of partnership. But, there's no retention period, so, I wouldn't hold out much hope on this angle of attack.

 

 

socrateaser
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39,346
Experience: Retired (mostly)
Verified
socrateaser and 87 other Business Law Specialists are ready to help you
Ask your own question now
Ask socrateaser Your Own Question
socrateaser
socrateaser
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39,346
39,346 Satisfied Customers
Experience: Retired (mostly)

socrateaser is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Infolawyer

Infolawyer

Attorney

1,793 satisfied customers

Experienced lawyer

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

1,611 satisfied customers

Run my own successful business/contract law practice.

MShore Law

MShore Law

Attorney

1,233 satisfied customers

Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements

RGMacEsq

RGMacEsq

Attorney

742 satisfied customers

Licensed Texas General Practice Attorney

Barrister

Barrister

Attorney

640 satisfied customers

17 years practicing attorney, JD, BA, MBA

Ely

Ely

Attorney

564 satisfied customers

Counselor at Law.

J.Hazelbaker

J.Hazelbaker

Attorney

393 satisfied customers

Experienced and trained in the area of business law.

< Previous | Next >

Related Business Law Questions
I'd like to look into opening an business account for an LLC
Second opinion] I'd like to look into opening an business account for an LLC with a member that's currently incarcerated... and a personal account for the person that's incarcerated. My guess is a tru… read more
Richard - Bizlaw
Richard - Bizlaw
Juris Doctor
3,682 satisfied customers
Business Law Question: We have an LLC set-up (Delaware) and
Business Law Question: We have an LLC set-up (Delaware) and are finally ready to pitch for investor funding... One of our main partners got into some financial troubles last year, and to put it bluntl… read more
LegalPro
LegalPro
Doctoral Degree
563 satisfied customers
Regarding terminating a business contract with a billing
Regarding terminating a business contract with a billing company that processes our billing. Both I and my partner signed contract as required by our Operating Agreement for the business . The billing… read more
LegalGems
LegalGems
Juris Doctorate
10,153 satisfied customers
I have an existing TX LLC, doing business in CA. This LLC
Hello. I have an existing TX LLC, doing business in CA. This LLC will generate income from all over the world. I am going to register the TX LLC as a foreign LLC doing business in CA. At the same time… read more
Roy Hadavi
Roy Hadavi
Attorney
Juris Doctorate
883 satisfied customers
Converting my llc business to a c corporation and looking
Converting my llc business to a c corporation and looking for a lawyer to sign the paperwork … read more
Richard - Bizlaw
Richard - Bizlaw
Juris Doctor
3,682 satisfied customers
I have a limited partnership with the general partner
I have a limited partnership with the general partner interest being held by a trust. I am the only trustee. I want to turn the trust over to my daughter. My thought is to "appoint" her a trustee of t… read more
Damien Bosco
Damien Bosco
2,978 satisfied customers
Is an LLC operating agreement between 4 members valid if
Is an LLC operating agreement between 4 members valid if only 3 members signed it ? … read more
Roy Hadavi
Roy Hadavi
Attorney
Juris Doctorate
883 satisfied customers
I have a partnership with a business partner. We sell goods
Hello. I have a partnership with a business partner. We sell goods online and formed an S corp. We both have put equal amounts of investment and we have spent somewhat close to the same amount of time… read more
Ray
Ray
Lawyer
Doctoral Degree
30,179 satisfied customers
I have a business partner for an LLC in Florida. He is
Hello, I have a business partner for an LLC in Florida. He is withdrawing and says I have to buy him out. Is that correct, do I have to buy him out? … read more
Roy Hadavi
Roy Hadavi
Attorney
Juris Doctorate
883 satisfied customers
In State of Mississippi does a limited partnership
In State of Mississippi does a limited partnership automatically dissolve if the sole general partner resigns without giving the limited partners the required notice required under the limited partner… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
In state of Alabama; A limited partnership contains
In state of Alabama;A limited partnership contains following provision:The limited partners may withdraw the general partner for no consideration upon 60 days written notice and general partner will t… read more
N Cal Atty
N Cal Atty
Doctoral Degree
59 satisfied customers
Can a managing member of a limited partnership also be a
Can a managing member of a limited partnership also be a limited partner … read more
TaxAttorneytoHelp
TaxAttorneytoHelp
Owner
Doctoral Degree
2,542 satisfied customers
Question: Is a "general" partnership formed for the purposes
Question: Is a "general" partnership formed for the purposes of renting residential property not "transferred" to the partnership, required to be registered by the Division of Corporations under Flori… read more
Irwin Law
Irwin Law
Juris Doctor JD
7,049 satisfied customers
Amending the Operating Agreement. We are replacing the sole
Amending the Operating Agreement. We are replacing the sole Manager in our LLC. The LLC has an Operating Agreement (OA) where the manager is indicated by name. Therefore we need to either amend the OA… read more
Michael Gonzalez
Michael Gonzalez
JD
518 satisfied customers
I have a limited partnership filed in 1993. I have never
I have a limited partnership filed in 1993. I have never been asked for my Exhibit A prior to a current real estate deal by a title company. When I found my exhibit a the contribution of capital porti… read more
Amadeo Rivera
Amadeo Rivera
JD
77 satisfied customers
I am covered under an LLC operating agreement with a
I am covered under an LLC operating agreement with a noncompete clause. I have been told in an email (by the managing partner) that I am no longer a member due to a freeze-out merger but I have not se… read more
Ely
Ely
Attorney
Juris Doctor
564 satisfied customers
My LLC in does not have an Operating Agreement and 2 of the
My LLC in Virginia does not have an Operating Agreement and 2 of the members would like to voluntarily withdraw leaving myself and 1 other member with the LLC. Do we need an Operating agreement before… read more
LawGuy
LawGuy
Juris Doctor
123 satisfied customers
My roommate and I would like to start a general partnership
My roommate and I would like to start a general partnership so that we can make money together on projects we collaborate on as well as still do our own freelance work. However, the developer lives in… read more
Infolawyer
Infolawyer
Attorney
Doctoral Degree
1,793 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x