What should a company partner do if they cannot access the company's accounting records?

One of the most common problems faced by partners in limited liability companies is the inability to access company ledgers, accounting records, bank statements, and documents showing the company's financial status. Especially if the company is managed by one partner or director, the other partner may eventually be excluded from the company. In this case, the partner may lose access to information such as the company's revenue, debt, payments made, profit distribution, and the company's true financial situation.

A company partner's inability to access company records doesn't simply mean a lack of information. It often signals more serious partnership disputes. Issues such as improper withdrawal of funds from the company, concealment of profits, a partner using company resources for their own benefit, falsified or inaccurate accounting records, hiding company debts, or a company director failing to account for their actions can all arise in this way.

Therefore, if a limited company partner's access to the company's books is blocked, a written and legal course of action must be taken.

Can a company partner examine the company's books?

Yes. A limited liability company partner has the right to obtain information about the company's affairs and accounts and to conduct investigations on certain matters. This right is granted so that the partner can learn the true financial situation of the company and exercise their partnership rights.

A company partner is not merely a passive individual who contributes capital. The partner has the right to information in order to oversee the company's management, pursue their dividend rights, ascertain whether the company director is managing the company correctly, and protect the value of their own shares.

In this context, the partner may wish to examine the company's business books, accounting records, bank transactions, invoices, contracts, accounts receivable and payable, and company operations.

Which ledgers and documents can be examined?

The documents a company partner might want to see vary depending on the specific dispute. For example, if there are allegations of money being withdrawn from the company, bank statements and cash records are important. If dividends are not being paid, the balance sheet, income statement, and dividend distribution decisions should be examined. If company debts are being concealed, tax, social security, and credit records are crucial.

The main documents that may be requested by the partner are as follows:

Commercial ledgers,

Journal,

General Ledger,

Stock book,

Share register,

Minutes book of the partners' meeting,

Board of directors' decision book,

Bank account statements,

Cash register records,

Accounting vouchers,

Invoices,

Current account records,

The company's list of receivables and payables

Tax debt and social security debt documents,

Financial statements,

Balance sheet and income statement,

Contracts signed on behalf of the company,

Payments made from the company to the partners,

Accounts receivable from partners,

Company credit card statements,

Documents relating to vehicles, real estate, and equipment registered in the company's name.

Not all of these documents need to be requested in every case. The request must be specific, proportionate, and related to the partnership right.

Is the company manager required to show the ledgers?

The company director cannot arbitrarily obstruct the shareholders' right to access information and conduct inspections. The director is responsible for the management of the company and must also be accountable to the shareholders to a certain extent.

When a partner wants to know the company's financial situation, the manager cannot completely deny them the right to access this information by saying things like "I'm not showing it," "you can't interfere," "I manage the company," or "only the accountant sees the books.".

However, this right is not unlimited. If there is a risk that the partner may use the information obtained to the detriment of the company, for example, if the partner is engaged in competing activities in the same sector or is trying to take over the company's customers, the director may restrict the investigation to the necessary extent. However, this restriction must be based on concrete grounds. It is not sufficient for the director to simply state "company secret" in an abstract manner.

What should a partner do first if they are excluded from the company?

If a company partner cannot access the accounting records, bank accounts, or is constantly being stalled by the manager, the first thing to do is to submit a written application.

Verbal requests are often unsubstantiated. Therefore, the partner should apply to the company and the director in writing, clearly stating which documents they wish to see.

The application may include specific requests such as the following:

I request permission to examine the company's accounting records for the past three years.

I request that the company's bank account statements be provided to me.

I request a disclosure of the accounts receivable from partners and payments made by the company to the partners.

I request that the company be provided with documents showing its current tax and social security debt status.

I request that the company's balance sheets, income statements, and financial statements for the past three years be provided to me.

Making such a concrete and written request is of great importance in the event that a lawsuit is filed in the future.

Should a notarized notice be sent?

If the company director or majority shareholder refuses to provide the company records, sending a notarized notice is often the most effective first step. A notarized notice formally demonstrates the shareholder's desire to exercise their right to access and inspect the company records.

In the notary's notice;

the partner is a company partner,

He wanted to examine the company's books and documents

which documents were requested,

A suitable day and time for the inspection should be determined

documents are required to be submitted within a specific period

otherwise legal action will be taken

It must be written clearly.

A notarized notice is strong evidence that the director refused to provide information and that the partner has made a formal application to exercise their rights.

How should a request to view company ledgers be written?

Requests for ledger review should not be abstract. Instead of a general request such as "I want to see all company documents," specific documents and periods should be indicated.

For example, demand would be stronger if it were like this:

“I request permission to examine, either myself or through my financial advisor, the company’s journal, general ledger, inventory ledger, shareholders’ meeting resolution book, bank account statements, cash records, balance sheet, income statement, invoice records, and accounts receivable from shareholders for the years 2023, 2024, and 2025.”

A request made in this way is both serious and verifiable. If the director remains silent or rejects the request, the application to the court becomes more powerful.

What happens if the manager rejects the request?

If the director refuses the request for information and investigation, the partner may appeal to the general assembly. If the general assembly unfairly obstructs this right, the partner may take the matter to court.

The court will assess whether the partner's request to examine the books is justified, the relevance of the requested documents to the partnership rights, the claim of company secrecy, and whether the use of the information would be detrimental to the company.

If the court finds the partner's request justified, it may order an examination of the company's books and records. This decision is an important legal tool for the partner to learn about the company's financial situation.

Which court should be applied to?

A limited liability company partner's request to examine the company's books and documents constitutes a dispute arising from company law. Therefore, the competent court is usually the Commercial Court of First Instance.

Regarding jurisdiction, the court located where the company's headquarters are situated is important. However, the type of lawsuit, the form of the claim, and the issue of jurisdiction should be evaluated separately according to the specifics of the case.

Before filing a lawsuit, the company's articles of association, trade registry records, shareholding ratios, previous written applications, and notarized notices should be prepared.

Can evidence be gathered if company ledgers are not shown?

In some cases, there may be a risk that company books are concealed, altered, destroyed, or falsified. Evidence gathering may become necessary, especially if there are serious disagreements among partners, the company director refuses to share documents, and there is suspicion of money being embezzled from the company.

Through evidence gathering, company ledgers, accounting records, bank transactions, cash flow, invoice records, and specific commercial transactions can be examined by an expert.

This method is especially important in emergencies, because some documents may be lost, altered, or access to company records may become more difficult over time.

Can I request the accounting records directly from an accountant?

A company partner may sometimes wish to request books and documents directly from the company's financial advisor. However, the financial advisor is the person with whom the company has a contractual relationship and may generally hesitate to provide every document directly to the partner unless instructed by a company official.

Therefore, the most appropriate approach is to direct the request to the company and its director. If necessary, the notice can state that the books are held by the financial advisor and request that a suitable time and place for the inspection be specified.

The director cannot prevent access to information by citing the records held by the financial advisor. The fact that company records are with the accountant does not negate the partner's right to access information.

Can the company manager refuse to show the ledgers by claiming "trade secrets"?

The company director may claim that certain information is a trade secret. However, this justification is not always sufficient. It must be clearly explained which information is a trade secret, why it is considered a trade secret, and what the risk is of the partner using this information to the detriment of the company.

For example, a company's customer list, special pricing policy, or production technique may be sensitive in some cases. However, a company's balance sheet, income and expense records, bank transactions, tax debt, social security debt, or payments made from the company to its partners cannot be completely concealed.

The partner should be able to learn the true state of the company. The justification of trade secrets should not be used in a way that completely eliminates the right to access information.

Can the right of a competing partner to inspect company books be restricted?

If the partner company is engaged in activities that compete with the other company, the company may be reluctant to share certain information. For example, a partner who has founded a competing firm might want unrestricted access to the company's customer list, price quotes, or business strategies, which could create a risk for the company.

However, this does not eliminate the partner's right to access all information. The director can only restrict information that could be used to the detriment of the company to the necessary extent. The partner's right to access information regarding the company's financial situation, capital structure, profit and loss statement, and matters concerning their shareholding rights should still be protected.

Proportionality is key here. Both the company's trade secrets must be protected, and the partner's rights must not be unfairly restricted.

Would the inability to access company records affect a dividend lawsuit?

Yes. Company books and financial statements are extremely important in dividend disputes. Shareholders can see from the books whether the company made a profit, whether there is distributable profit, why the profit was not distributed, and how company resources were used.

If company books are not shown, it becomes difficult for shareholders to calculate their share of the profits. Therefore, exercising the right to obtain information and examine the books is often necessary before filing a profit-sharing lawsuit.

If a company is making a profit but not distributing it, while a manager or majority shareholder is withdrawing money from the company, an accounting audit can reveal this situation.

Could the failure to present the accounting records be grounds for withdrawal from the partnership?

The persistent exclusion of a company partner from the company, the denial of access to information, the failure to provide accounting records, and the lack of transparency in company management may, in some cases, constitute grounds for a lawsuit to withdraw from the partnership.

If the continuation of the company partnership has become unbearable for the partner, a lawsuit for withdrawal from the partnership can be filed based on just cause. In this lawsuit, failure to present the books, the company director's failure to account for their actions, and the obstruction of the partner's rights are among the important pieces of evidence.

Therefore, requests for ledger inspection must be made in writing, a notarized notice must be sent, and if rejected, this process must be documented.

Does the failure to show the registers incur liability for the principal?

The company director's failure to provide information to the shareholders and his withholding of company records may give rise to directorial liability. The director is obligated to manage the company in accordance with the principle of honesty and not to obstruct the shareholders from exercising their legal rights.

If a director conceals irregularities, company losses, cash outflows, or mismanagement by withholding accounting records, this can be a significant factor in a director liability lawsuit.

A manager's lack of transparency is often a sign of larger legal problems. Therefore, the refusal to show the records should be taken seriously.

Where are company records examined?

The location and method of examining company books may be determined on a case-by-case basis. The books may be examined at the company headquarters, at the financial advisor's office, or in a manner determined by the court.

The partner may often request a copy of the ledgers. However, in some cases, an on-site inspection may be deemed appropriate. The scope of the request, the nature of the document, the claim of company secrecy, and the status of the dispute are all taken into consideration.

The partner may wish to conduct the review through their own financial advisor or lawyer. This should be clearly stated in the request.

What to do if company records are incomplete or irregular?

When the ledgers are presented, it may be revealed that the records are incomplete, contradictory, or irregular. For example, bank transactions may not match accounting records. The cash account may not reflect reality. The accounts receivable from partners may be inflated. Invoices may be missing. Company debts may be concealed.

In this case, simply reviewing the company books is insufficient. The company director's liability, compensation, dividend claims, withdrawal from the partnership, withdrawal of funds from the company, tax risks, and even criminal law aspects must be evaluated separately.

If necessary, an expert examination can be requested to reveal the company's true financial situation.

Which evidence should be preserved?

A partner who does not have access to the company's books must document the process. The following evidence should be preserved:

Written applications submitted to the company,

Notary notices,

The manager's answers,

Unanswered requests,

Email and WhatsApp conversations,

Partners' board calls,

Meeting minutes,

Commercial registry records,

Company agreement,

Documents showing the share ratio,

Any previously obtained financial statements,

Existing documents relating to bank and payment records.

These documents are important for proving in court that the partner's right to access information was denied.

What should a partner avoid doing if they can't see the ledgers?

A partner who cannot access company records should not resort to illegal means, even if they are in the right. Unauthorized access to company computers, secretly obtaining documents from the accountant, illegally accessing company emails, or unlawfully collecting personal data may have negative consequences for the partner in the future.

Evidence must be collected lawfully. Otherwise, a legitimate partnership dispute could turn into a personal data breach, privacy violation, or illegally obtained evidence dispute.

Therefore, the process must be carried out through legal means such as written applications, notarized notices, court applications, and evidence gathering.

What is the role of a lawyer in this process?

A company partner's inability to access the company's books is often the beginning of a larger internal dispute. Therefore, it is important to prepare the request correctly and to execute the process properly.

The lawyer during this process;

It assesses the partner's right to access and inspect information

It determines which ledgers and documents will be requested

prepares a written application to the company

The notary sends a warning notice

evaluates the manager's reasons for rejection,

follows the general assembly process,

He requests that the right to obtain and examine information from the court be granted

It conducts the evidence gathering process

If irregularities are found in the ledgers, the manager plans the proceedings for liability, profit sharing, compensation, or withdrawal from the partnership.

It is impossible to know the true state of the company without access to its records. Therefore, the legal process must be carefully established from the outset.

Conclusion

Preventing a company partner from accessing the company's books constitutes a serious violation of rights in limited liability companies. A partner has the right to obtain information about the company's affairs and accounts and to conduct investigations on certain matters. The company director cannot arbitrarily obstruct this right.

A partner who cannot access the company's ledgers should first submit a written application, clearly stating which documents they wish to see. If this is unsuccessful, they should send a notarized notice and, if necessary, take legal action. The concealment of company ledgers can constitute significant evidence in cases involving withdrawal from the partnership, managerial liability, dividend claims, compensation, and internal company irregularities.

In limited liability companies, transparency is essential for maintaining trust among shareholders and ensuring the sound management of the company. If company records are being withheld from shareholders, this situation should be addressed legally without delay.