Your partner demanded the books and records.

A books-and-records demand is not a lawsuit, and silence is the worst available answer. New York gives a shareholder a short statutory list under BCL 624 and gives an LLC member a different list under LLC Law 1102. The two statutes are not the same. Answer inside the statute, produce what it compels, and state a ground for everything else.

Your partner sent a letter using the words “books and records,” and it probably set a deadline. It is the first move in a dispute that has already started, and what you do next decides whether the fight is about the company or about your conduct. The first question is not what the letter asks for. It is what entity you are.

What does BCL 624 require a New York corporation to produce?

BCL 624(b) gives a shareholder of record, on at least five days’ written demand, the right to examine during usual business hours, in person or by agent, the minutes of shareholder proceedings and the record of shareholders, and to make extracts. BCL 624(e) separately requires annual financial statements on written request.

Read the statutory list closely, because it is shorter than most demand letters assume. Section 624(b) names two categories: the minutes of the proceedings of the shareholders, and the record of shareholders. It does not name the general ledger, the bank statements, the vendor contracts or the email. One extension sits inside the paragraph: where the request covers beneficial owners, the corporation must produce beneficial-owner information already in its possession from a broker, dealer, bank or other fiduciary. Section 624(a) separately requires complete books and records of account and minutes of the shareholders, board and any executive committee. Keeping and producing are different obligations.

Four procedural details do real work. The demand must be written and must give at least five days before the inspection. The purpose must be reasonably related to the demander’s interest as a shareholder. An agent or attorney must be authorized in a writing satisfying BCL 609(b), the proxy provision. Voting trust certificate holders count as shareholders. And the corporation produces in written form and in any other format it maintains, and need not build another. Paper minute book, paper production.

Then 624(e). On written request of any shareholder, the corporation gives or mails an annual balance sheet and profit-and-loss statement for the preceding fiscal year, plus the most recent interim statement if one was distributed or made public. The statute allows a reasonable time to prepare the annual statements. That is a timing right, not an excuse for permanent silence.

One warning before you rely on the length of the list. The common-law right of inspection is broader than the statutory right, and a shareholder acting in good faith for a proper purpose may reach records beyond 624(b) and (e). The ledger is outside the statute, not outside the courthouse.

Law: N.Y. Bus. Corp. Law 624(a), (b), (e); 609(b). Case: Ret. Plan for Gen. Emps. of N. Miami Beach v. McGraw-Hill Cos., 120 A.D.3d 1052 (1st Dep’t 2014).

What does LLC Law 1102 require a New York LLC to keep and show?

LLC Law 1102(a) requires every domestic limited liability company to maintain five categories of records, and 1102(b) lets any member inspect and copy them at the member’s own expense, for any purpose reasonably related to membership, along with maintained financial statements for the three most recent fiscal years and other just and reasonable information.

The catch-all is what your partner is relying on. It is open-ended by design and not unlimited: the purpose must still be reasonably related to his interest as a member, and the court sets the scope. Two limits sit in the same subdivision. The right is subject to reasonable standards set in, or pursuant to, the operating agreement, and copying is at the member’s expense.

Then the lever most managers do not know they have. Section 1102(c) permits certain members or managers, if provided in the operating agreement, to keep information confidential for a period they deem reasonable, where they reasonably believe it is in the nature of trade secrets, or believe in good faith that disclosure is against the company’s best interest. Silent agreement, no carve-out.

How do the corporation and LLC inspection statutes actually differ?

The corporate statute is narrower in scope but richer in procedure; the LLC statute is broader in scope but thinner on machinery. BCL 624 names two inspectable categories plus financial statements, permits denial where a statutory affidavit is refused, and supplies an express court route. LLC Law 1102 names five categories, adds a catch-all, and supplies neither.

Who carries the burden if you refuse the demand?

The corporation carries it, but only after the shareholder clears the threshold. In Crane Co. v. Anaconda Co., a shareholder-list case under BCL 1315, the Court of Appeals held that a stockholder who alleges compliance with the statute is assumed to act in good faith, and the corporation must then justify refusal by showing improper purpose or bad faith.

Courts apply the same allocation under 624. The demander does not have to prove you did anything wrong. He has to say he is a shareholder of record and that he complied. Good faith is then presumed, and you are the one with something to prove.

Crane also states the common-law side, where the right is qualified and the shareholder must establish good faith and a proper purpose. Recognized proper purposes include ascertaining financial condition, valuing stock, investigating management’s conduct, and aiding legitimate litigation. Suspected mismanagement counts even if inspection establishes no wrongdoing. Past the categories in 624(b), good faith and proper purpose are the battlefield. Not the length of the list.

A refusal with no stated reason gives the court nothing to weigh.

Cases: Crane Co. v. Anaconda Co., 39 N.Y.2d 14 (1976); Matter of Tatko v. Tatko Bros. Slate Co., 173 A.D.2d 917 (3d Dep’t 1991).

Silence is not a defense. It is a concession wearing the costume of a strategy.

What happens if you just ignore the letter?

BCL 624(d) converts a bare refusal into a court proceeding on a short fuse. On refusal to permit inspection of shareholder minutes or the record of shareholders, the demander may apply to Supreme Court in the judicial district of the corporation’s office, on such notice as the court directs, for an order to show cause.

On the return day the court hears the parties summarily, by affidavit or otherwise. That means no discovery runway and usually no live testimony. If it appears the applicant is qualified and entitled, the court grants an order compelling inspection and further relief as seems just and proper. Compulsion is not discretionary once those findings are made. Scope is: a court can trim an overbroad demand, and may hold a hearing to fix it.

Two provisions tighten the vise. Section 624(f) preserves the power of courts to compel production of corporate books and records, so the short list is no shield once litigation is under way. Section 624(g) makes the 624(a) records prima facie evidence of the facts stated in them, in favor of the plaintiff, in any action or special proceeding against the corporation or its officers, directors or shareholders. That is rebuttable, but the rebutting is yours to do.

Law: N.Y. Bus. Corp. Law 624(d), (f), (g).

Your own minute book can be read into the record against you. Keep it as if it will be.

What are your actual grounds to narrow or refuse the demand?

Legitimate grounds exist, but each is textual and each must be stated, not assumed. For a corporation, BCL 624(c) permits denial of a 624(b) inspection where the shareholder refuses the affidavit the statute prescribes. For an LLC, the 1102(c) confidentiality carve-out operates only if the operating agreement provides for it.

The 624(c) affidavit goes to the corporation, its transfer agent or its registrar. In it the shareholder states that the inspection is not desired for a purpose in the interest of a business or object other than the business of the corporation, and that he has not within five years sold or offered for sale any list of shareholders of any corporation, or aided anyone in procuring one for that purpose. A demander who will not furnish it may be denied the 624(b) inspection. May, not must, and the denial does not reach a common-law demand.

The levers:

• Standing. BCL 624(b) runs to a person who has been a shareholder of record; 1102(b) runs to a member. An assignee of a bare economic interest is automatically neither. But 624(b) is written in the past tense, so do not assume a former record holder has none.
• Scope. Match every request to a statutory category, in writing. A request for the general ledger is not a request for the minutes of the proceedings of the shareholders.
• The affidavit. Request the 624(c) affidavit in writing before the inspection, not after the petition is filed.
• Format and timing. Produce in written form and in any format the corporation maintains; 624(e) allows a reasonable time to prepare the annual statements.
• Cost. Under 1102(b), inspection and copying are at the member’s own expense.
• Reasonable standards. 1102(b) subjects the member’s right to reasonable standards in or pursuant to the operating agreement.
• Confidentiality. 1102(c) is available only if the operating agreement provides it. Check before you invoke it.

I read the operating agreement or the by-laws before I read the demand letter, because the governing document is where the confidentiality lever either exists or does not. I confirm the demander’s status on the record of shareholders or the member list before I answer a single request.

How should you answer a books-and-records demand in writing?

A written response inside the statutory frame is the answer that protects you. It identifies the entity type, cites the governing section, produces every item plainly inside BCL 624(b) and (e) or LLC Law 1102(a) and (b), and states a specific ground for each item withheld. Nothing else removes as much argument.

Do not argue the merits of the grievance. Do not explain why your partner is wrong about the distribution, the salary or the deal he disliked. A 624(d) proceeding is heard summarily on whether the demander is qualified and entitled, and on scope. Everything else you write is free discovery.

Also stop deleting things. Once litigation is reasonably anticipated, a duty to preserve attaches. Spoliation sanctions are discretionary and run from an adverse inference to a stricken pleading. Documents that go missing after a demand are their own exhibit.

What should you do in the next five days?

Five days is the minimum notice a shareholder must give under BCL 624(b) before inspecting; it is not a response deadline imposed on the corporation. Neither statute sets one. Use the window anyway for document work, not argument: establish the entity, the demander’s status, the governing instrument, and the line between compelled and discretionary.

• Calendar the date on the demand, not the date you opened it, and the earliest date access could be insisted on.
• Confirm the entity type from the filed certificate of incorporation or articles of organization. Everything turns on which statute applies.
• Pull the governing instrument — by-laws, or the operating agreement and every amendment. Read 1102(c) against the actual text before you plan to withhold.
• Verify status against the shareholder record or the current member list.
• Segregate the compelled items: shareholder minutes and the shareholder record, or the 1102(a) categories.
• Locate the statements required by 624(e), or the three maintained years under 1102(b).
• Request the 624(c) affidavit in writing if the shareholder record is sought.
• Issue a litigation hold in writing across email, accounting systems and cloud storage, to everyone with access.
• Respond in writing, item by item, with the statutory section next to each answer.

A books-and-records demand is a test of whether you can be made to look evasive. Answer it inside the statute and the argument stays inside the statute. Ignore it and it becomes an order to show cause with your refusal as the central fact.