ACCOUNTING DEMAND LETTER

[LETTERHEAD]

[DATE]

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND EMAIL: [EMAIL ADDRESS]

[RECIPIENT NAME]
[RECIPIENT TITLE]
[COMPANY/PARTNERSHIP NAME]
[ADDRESS]
[CITY, STATE ZIP]

Re: Formal Demand for Accounting
[Business/Partnership/Entity Name]

Dear [RECIPIENT NAME]:

This firm represents [CLIENT NAME] ("our Client") in connection with [his/her/its] [ownership interest in / partnership with / relationship with] [BUSINESS/PARTNERSHIP/ENTITY NAME] ("the [Company/Partnership/Entity]"). We write to formally demand a complete accounting of all [Company/Partnership/Entity] financial affairs, transactions, and dealings.

I. BACKGROUND AND RELATIONSHIP

Our Client [is/was] a [shareholder/member/partner/owner] of [BUSINESS/PARTNERSHIP/ENTITY NAME], holding [a ___% interest / ___ shares representing approximately ___% of the outstanding [shares/membership interests/partnership interests]].

[ADDITIONAL RELEVANT BACKGROUND - e.g., Our Client has been a partner since [DATE]. Our Client served as [position] until [DATE]. Our Client invested $[AMOUNT] in the entity. etc.]

II. RIGHT TO AN ACCOUNTING

Our Client is entitled to a full and complete accounting pursuant to:

☐ Partnership Agreement: Section [___] of the Partnership Agreement dated [DATE], which provides for [DESCRIBE PROVISION];

☐ Operating Agreement: Section [___] of the Operating Agreement dated [DATE], which provides for [DESCRIBE PROVISION];

☐ Shareholder Agreement: Section [___] of the Shareholder Agreement dated [DATE], which provides for [DESCRIBE PROVISION];

☐ Revised Uniform Partnership Act: [STATE STATUTE CITATION], which provides that a partner may maintain an action against the partnership or another partner for an accounting;

☐ State Corporation Code: [STATE STATUTE CITATION], which provides shareholders with inspection and accounting rights;

☐ Common Law Fiduciary Duty: Under applicable common law, fiduciaries owe a duty to provide an accounting to those to whom they owe fiduciary duties;

☐ Other Legal Authority: [DESCRIBE];

III. DEMAND FOR ACCOUNTING

On behalf of our Client, we hereby demand a full, complete, and accurate accounting of all financial affairs of [BUSINESS/PARTNERSHIP/ENTITY NAME], including but not limited to the following:

A. Financial Statements and Records

1. ☐ Complete financial statements for the fiscal years [YEAR] through [YEAR], including:
   - Balance sheets
   - Income statements / Profit and loss statements
   - Statements of cash flows
   - Statements of changes in equity/capital

2. ☐ General ledger and all supporting journals for the period [DATE] through [DATE];

3. ☐ Trial balances for each fiscal year from [YEAR] through [YEAR];

4. ☐ Chart of accounts;

5. ☐ Bank statements for all accounts held by or on behalf of the [Company/Partnership/Entity] for the period [DATE] through [DATE];

6. ☐ Bank reconciliations for the period [DATE] through [DATE];

7. ☐ Cancelled checks and check registers;

B. Tax Records

8. ☐ Federal and state income tax returns (and all schedules and attachments) for tax years [YEAR] through [YEAR];

9. ☐ K-1 forms issued to partners/members/shareholders for tax years [YEAR] through [YEAR];

10. ☐ Quarterly estimated tax payment records;

11. ☐ Any correspondence with tax authorities;

C. Capital and Distributions

12. ☐ Complete accounting of all capital contributions made by each [partner/member/shareholder], including dates and amounts;

13. ☐ Complete accounting of all distributions, dividends, and draws made to each [partner/member/shareholder], including dates and amounts;

14. ☐ Capital account statements for each [partner/member/shareholder] from [DATE] through the present;

15. ☐ Records of any loans made to or by [partners/members/shareholders];

D. Compensation and Related Party Transactions

16. ☐ Complete accounting of all compensation (including salary, bonuses, benefits, expense reimbursements, and any other form of compensation) paid to each [partner/member/shareholder/officer/director/manager] from [DATE] through the present;

17. ☐ Records of all transactions between the [Company/Partnership/Entity] and any [partner/member/shareholder/officer/director/manager] or their related parties;

18. ☐ Records of all transactions between the [Company/Partnership/Entity] and any affiliated entities;

19. ☐ Employment agreements, consulting agreements, and compensation arrangements;

E. Assets and Liabilities

20. ☐ Inventory of all assets owned by or held on behalf of the [Company/Partnership/Entity];

21. ☐ Schedule of all real property, including deeds, leases, and encumbrances;

22. ☐ Schedule of all equipment, vehicles, and tangible personal property;

23. ☐ Schedule of all accounts receivable (aged);

24. ☐ Schedule of all accounts payable (aged);

25. ☐ Schedule of all debts, loans, and obligations;

26. ☐ Documentation of any liens, security interests, or encumbrances;

F. Contracts and Agreements

27. ☐ All material contracts and agreements to which the [Company/Partnership/Entity] is a party;

28. ☐ All leases (real property and equipment);

29. ☐ All loan agreements and promissory notes;

30. ☐ All insurance policies;

G. Corporate/Entity Records

31. ☐ Minutes of all [board of directors/managers/partners] meetings from [DATE] through the present;

32. ☐ Minutes of all [shareholder/member/partner] meetings from [DATE] through the present;

33. ☐ All written consents and resolutions;

34. ☐ Current [articles of incorporation/articles of organization/partnership agreement] and all amendments;

35. ☐ Current [bylaws/operating agreement] and all amendments;

36. ☐ Stock/membership interest ledger and all transfer records;

H. Specific Transactions

(Include if demanding accounting of specific transactions)

37. ☐ Complete documentation and accounting related to:

a. [DESCRIBE SPECIFIC TRANSACTION 1]:
_____________________________________________________________

b. [DESCRIBE SPECIFIC TRANSACTION 2]:
_____________________________________________________________

c. [DESCRIBE SPECIFIC TRANSACTION 3]:
_____________________________________________________________

IV. DEADLINE FOR RESPONSE

We demand that you provide the complete accounting described above within [30/45/60] days of the date of this letter, no later than [SPECIFIC DATE].

If you are unable to provide all requested information within this timeframe, please provide:

1. A written response within [14] days acknowledging this demand and confirming your intent to comply;

2. A detailed list of which items you will provide and a proposed schedule for production;

3. An explanation for any items you contend you are not required to provide, with legal citations supporting your position.

V. PRESERVATION OF DOCUMENTS

You are hereby put on notice of our Client's claims and potential litigation. Accordingly, you are required to preserve all documents, records, and electronically stored information ("ESI") relating to the [Company/Partnership/Entity], our Client, and the matters described herein.

You must immediately implement a litigation hold to prevent the destruction, alteration, or deletion of any potentially relevant documents or data, including but not limited to:

• All documents, emails, text messages, and other communications;
• All financial records, accounting data, and supporting documentation;
• All backup tapes, archives, and electronic storage media;
• All documents on personal devices, home computers, and cloud storage;

Spoliation of evidence may result in severe sanctions, including adverse inference instructions and monetary penalties.

VI. RESERVATION OF RIGHTS

Our Client expressly reserves all rights and remedies available at law and in equity, including but not limited to:

• The right to seek judicial relief compelling an accounting;
• The right to pursue claims for breach of fiduciary duty;
• The right to seek appointment of a receiver or custodian;
• The right to seek dissolution of the [partnership/entity];
• The right to pursue damages for any losses caused by your misconduct;
• The right to recover attorneys' fees and costs.

This letter is sent in a good faith effort to resolve these matters without the need for litigation. However, if you fail to comply with this demand, our Client is prepared to take all necessary legal action to protect [his/her/its] interests.

VII. RESPONSE

Please direct all responses and communications to the undersigned. Do not contact our Client directly.

We look forward to your prompt response and cooperation.

Very truly yours,

_______________________________
[ATTORNEY NAME]
[FIRM NAME]
[ADDRESS]
[CITY, STATE ZIP]
[TELEPHONE]
[EMAIL]

Counsel for [CLIENT NAME]

cc: [CLIENT NAME]
[OTHER PARTIES, IF APPROPRIATE]

ENCLOSURES CHECKLIST

(Attach copies of relevant documents)

☐ Copy of Partnership/Operating/Shareholder Agreement (relevant sections)
☐ Evidence of Client's Ownership Interest
☐ Prior Requests for Information (if any)
☐ Prior Responses (if any)
☐ [OTHER ENCLOSURES]

STATE-SPECIFIC NOTES

California

• Cal. Corp. Code 1600-1601: Shareholders entitled to inspect books and records
• Cal. Corp. Code 16403: Partners' rights to information under RUPA
• Written demand required; 5-business-day response period for shareholder inspection
• Proper purpose required for inspection demand

Texas

• Tex. Bus. Orgs. Code 3.151-3.152: Governing persons must maintain books and records
• Tex. Bus. Orgs. Code 152.213: Partner's right to information
• Tex. Bus. Orgs. Code 21.218: Shareholder inspection rights
• 5-day written demand required for shareholder inspection

Florida

• Fla. Stat. 607.1602: Shareholder inspection rights
• Fla. Stat. 620.8403: Partner's right to information under RUPA
• Written demand with 5-day notice required
• Proper purpose requirement for inspection

New York

• NY BCL 624: Shareholder's right to inspect
• NY Partnership Law 121-403: Partner's right to information
• Written demand required
• Corporation must respond within 5 business days

PRACTICE NOTES

1. Right to Accounting: The right to an accounting depends on the type of relationship (partner, shareholder, member, beneficiary) and the governing documents. Review all applicable agreements and statutes.

2. Standing: Ensure client has standing to demand an accounting. Generally requires ownership interest or fiduciary relationship.

3. Proper Purpose: Some jurisdictions require a "proper purpose" for inspection/accounting demands. Document the legitimate business reasons.

4. Scope: Tailor the demand to relevant time periods and subject matter. Overly broad demands may be challenged.

5. Litigation Hold: Include document preservation language to establish a clear date for spoliation purposes.

6. Deadline: Set a reasonable but firm deadline. 30-60 days is typical depending on complexity.

7. Follow-Up: If the demand is not satisfied, follow up in writing before filing suit. Document all non-compliance.

8. Court Action: If demand is refused, be prepared to file a petition/motion to compel an accounting. Some jurisdictions have expedited procedures.

9. Costs: In some jurisdictions, the party demanding an accounting may be required to bear the costs. Check applicable law.

10. Confidentiality: Consider whether any requested information is subject to confidentiality restrictions.