In a case of interest to Indiana business lawyers, Abdalla v. Qadorh-Zidan, the Indiana Court of Appeals addressed issues relating to corporate and limited liability company (“LLC”) fiduciary duties owed to former shareholders and members with respect to preparation of tax returns for time periods prior to members and shareholders’ relationship being terminated. In this case, the Court held that LLCs and corporations owe a fiduciary duty to former members and shareholders regarding preparation of tax returns for periods prior to former members and shareholders’ separation from the company’s incorporation when these tax returns are prepared for time periods where former members and shareholders were associated with the corporation and LLC. The Court recognized that shareholders in a closely held corporation owe each other fiduciary duties, and fiduciaries must deal fairly, honestly and openly with the corporation and fellow stockholders and must not be distracted from their performance of such duties by personal interests. The Court in this matter held that former shareholders of a corporation and members of an LLC are entitled to inspect books of the corporation or LLC with respect to tax records and information relating to transactions that occurred prior to the termination of their interest in the corporation and/or LLC.
Abdalla v. Qadorh-Zidan, 913 N.E.2d 280 (Ind. Ct. App. 2009).
Jeremy L. Fetty is an associate at Parr Richey whose practice focuses on corporate law, utility law, municipal law, and labor and employment law. The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.