Members of a company have the right to access the company’s acts and documents, and that procedure is regulated by the provisions of the Companies Act.

A member of the company submits a written request to the company with the mandatory elements of the request (Art. 81 para. 2), and if the company does not act in accordance with that request within 8 days from receipt, the member has a period of 30 days to request from the competent court in non-contentious proceedings to order the company to act upon the request (Art. 81 para. 4). However, the company has the right to deny access for reasons prescribed by law for each specific legal form of the company; a member who obtains access to acts or documents of the company must use them exclusively for the purposes stated in the request (Art. 82 para. 1).

For example, in accordance with Article 241, the director is obliged to make available to every member (as well as a former member for the period during which he was a member), upon his written request, the documents and acts from Article 240, financial statements and other documents related to the company’s operations or the exercise of the members’ rights, for the purpose of inspection and copying at his own expense, as well as to enable, under Article 242, the informing of the company member on all relevant facts. If he fails to act upon the request from Article 241, the member is entitled to seek legal protection from the court in non-contentious proceedings within 5 working days from receipt of the request (Article 244). In cases specified in Article 243, the director has the right to deny the right from Articles 241 and 242.

According to the decision of the Commercial Appellate Court Pž 380/2016 of 24 August 2016, the basis on which the director may deny the right to information represents a legal standard that is determined in each individual case, and therefore the director does not have the possibility to assess the expediency of access. Thus, for a joint-stock company, this is specifically regulated by Articles 465–467 of the Companies Act.

This means that the basic obligation is defined by Articles 81 and 82 of the Companies Act, while additional obligations and clarifications are found in the provisions relating to the specific form of the company.

Purpose of access to acts and documents

By the decision of the Supreme Court of Cassation Prev 1678/2022 of 12 April 2023, it was emphasized that the right of a company member to access the company’s acts and documents must have an appropriate purpose and does not apply to all acts and documents, that is, that a specific purpose for which the applicants submitted the request justifies the obligation of the applicant to provide specific acts for inspection.

In relation to this, it was determined that the company is not obliged to make available to a company member, under Articles 240–244 of the Companies Act, documents related to travel expenses and payment traffic statements, because these are individual accounting documents in which individual expenses incurred during operations are recorded, whereas a company member can be informed about the total operating expenses by inspecting the financial statements in which all expenses burdening the business year are collectively and analytically presented (Answers to questions of commercial courts adopted at the session of the Department for Commercial Disputes of the Commercial Appellate Court of 12.11.2013 and 14.11.2013).

Consequences of failure to access inspection

Regarding the consequences of failing to inspect documents after initiating non-contentious proceedings, under the decision of the Commercial Appellate Court 2 Pvž 334/2022 of 3 November 2022, it was determined that if a member fails to appear at the scheduled time for the realization of the right to access acts and documents (without justified reasons), it necessarily leads to rejection of the proposal because the company acted in accordance with the written request.

How precise must the request be?

By the decision of the Commercial Appellate Court 1 Pvž 14/2022 of 19 January 2023, a request referring to the delivery of all other useful and relevant information and documentation concerning the current and planned financial situation is indefinite and indeterminable, and that a document titled ‘business plan’ as such is not defined by any material regulation nor covered by Article 240, so the opposing party has no obligation to keep such a document.

An exception is found in Article 465 para. 3 – in the case of initiated proceedings based on a lawsuit of a shareholder (former shareholder), the board of directors/executive board is obliged to make available to the shareholder, upon written request, the acts from Article 464, but exceptionally from Article 81 para. 2 item 2, the written request does not have to precisely specify essential data on acts and documents related to the subject of the dispute, but it is sufficient that they are determinable.

Do members of an LLC have the right to inspect data considered trade secrets?

If data considered trade secrets are not available to company members, then the member has no right to inspect documentation containing such data. However, some of the data that are considered trade secrets cannot be secret to company members, and the primary purpose of protecting trade secrets is defined as protection from unfair competition, so such information may be available to company members if there is no possibility of unfair competition.

Also, members cannot be provided with data considered personal data within the meaning of the Personal Data Protection Act unless such data are essential for exercising the rights of the company member himself (Z. Stefanović, Commentary on the Companies Act: Fourth amended and supplemented edition, 2022, Official Gazette, pp. 534–535).

What are the restrictions in a joint-stock company?

Article 464 specifies which documents a joint-stock company must keep. Amendments to the Companies Act (Official Gazette No. 99/11) specified that shareholders have the right to inspect annual business reports of the company, consolidated annual reports, and the company’s financial statements, but no longer have the right to inspect the minutes of meetings of the board of directors or the executive board and the supervisory board if the management of the company is two-tiered (Decision of the Commercial Appellate Court Pvž. 1051/2012 of 10.01.2013).

More precisely, under Article 465 para. 1, the board of directors or the executive board is obliged to make available to each shareholder and former shareholder (for the period during which he was a shareholder), upon his written request and in accordance with Article 81, the acts and documents from Article 464 para. 1 items 1–5 and item 9, as well as the financial statements, for inspection and copying at his own expense. These documents relate to the incorporation act, the company registration decision, the articles of association (including amendments), the company’s general acts, the minutes from the general meeting and decisions as well as the annual business reports of the company.

We now return to the stated exception regarding the determinability of documents, but we will also see it in relation to the accessible documentation. Article 465 para. 3 states that in the event of initiated proceedings based on a lawsuit of a shareholder or former shareholder, the board of directors or executive board is obliged to make available to the shareholder (former shareholder) the acts from Article 464 para. 1 items 1–10 and items 12–13 for inspection and copying, and that exceptionally from Article 81 para. 2 item 2, essential data on acts and documents related to the subject of the dispute do not need to be precisely specified, but only determinable. Now we also have additional documentation for inspection – the act on the establishment of each branch or other organizational form of the company, documents proving ownership and other property rights of the company, minutes from meetings of the board of directors or executive and supervisory boards, reports of the board of directors/executive and supervisory boards, contracts concluded by directors or members of the supervisory board (or related persons) with the company, and the entire documentation related to the approval and conclusion of a legal transaction or undertaking of a legal action involving personal interest.

Here we also have a special limitation – Article 467 states that a person who gains access to acts and documents of the company in accordance with Articles 465 and 466 may not publish them in a manner that would harm the company and its reputation.

Note: This text expresses solely the author’s personal opinion and does not constitute legal advice.