Illinois law gives cannabis LLC members (and some former members) the right to get material information about the company’s activities and financial condition, plus the records to be kept by statute. Cite 805 ILCS 180/10-15 and 805 ILCS 180/1-40. The company must respond to an Illinois LLC Books & Records Demands within 10 days by producing the information, describing what it will produce and when, or stating reasons for any refusal. Fee-shifted court relief is available if it stonewalls.
Core cannabis records include QuickBooks exports, bank statements, cap tables, tax returns and financials, material contracts, and relevant IDOA/IDFPR filings. Operating Agreements can impose reasonable confidentiality and use restrictions, but cannot gut the statutory minimum. Courts can add protective orders and still compel access. If ignored: file an action to compel with injunctive-style relief and ask for fees.
Why this matters now (and the legal hook)
Timely access to books and records is how cannabis operators validate cash flow, trace capital contributions, confirm distributions, and keep regulators happy. Illinois codifies that right and gives you a short fuse to enforce it.
The two core statutes to cite
805 ILCS 180/10-15: Requires the company to furnish information a member demands—covering activities, financial condition, and other circumstances material to the member’s interest. It sets a 10-day response rule, extends certain rights to dissociated members, allows reasonable restrictions (e.g., confidentiality), and authorizes actions to compel with potential fee awards.
805 ILCS 180/1-40: Lists the records to be kept (member list, articles, tax returns for the 3 most recent years, financial statements), gives inspection rights, and authorizes court actions to compel with potential fee awards—especially when the company acts unreasonably toward a transferee.
Who has standing to demand records?
Current members
Current members can demand material information and inspect statutory records. The company must respond within 10 days by providing the info, describing what it will provide and when, or explaining any refusal.
Dissociated (former) members
Former members may access information they were entitled to while members if it pertains to that period and the request aligns with the statute’s purpose. The same 10-day response mechanics apply.
Transferees and proper purpose
Transferees (holders of economic interests) have narrower rights: they can inspect statutory records for a proper purpose, with written demand particularizing what and why. The company must respond within 10 days; fee shifting may apply if it acted unreasonably.
Agents and counsel
Members and dissociated members can exercise these rights through agents or attorneys; any operating agreement or statutory conditions also bind the agent.
What records are core for cannabis LLCs
Financials, ledgers, and bank data
- QuickBooks: general ledger, trial balance, profit and loss, cash disbursements and receipts journals.
- Bank: monthly statements, check images, deposit detail, merchant processing statements.
These fit financial condition and material company information under 10-15, and overlap with the financial statements and tax returns listed in 1-40.
### Ownership and cap table
Current cap table, member contributions and distributions, unit/percentage schedules, option or profits-interest awards, and transfer ledgers. These tie directly to the statutory member list and contributions data mandated by 1-40.
Contracts and key approvals
Leases, loan agreements, major vendor master service agreements, IP and brand agreements, wholesale and white-label deals, management agreements, and any board/manager consents approving them—so members can assess risk, obligations, and related-party issues. Materiality under 10-15 supports inclusion.
Agency filings (IDOA/IDFPR)
Filings and correspondence with regulators for cultivation/processing (IDOA) and dispensing (IDFPR), plus any portal confirmations that affect licensure or operations. These are commonly material given compliance exposure.
Operating Agreement overlays (and limits)
Operating Agreements often add inspection procedures (notice windows, data-room access) and confidentiality rules. Illinois permits reasonable restrictions and designations (trade secrets, third-party confidentiality), but the company bears the burden to prove reasonableness. The OA can supplement process; it cannot nullify the statutory minimum. Courts can also impose protective conditions.
How to draft and serve a compliant demand
Elements to include:
- Statutory hooks: cite 805 ILCS 180/10-15 and 805 ILCS 180/1-40.
- Standing: state you’re a current member, dissociated member (seeking period-specific information), or transferee with a proper purpose.
- Purpose: e.g., evaluating financial condition, distributions, compliance, and governance—squarely within 10-15(a).
- Scope: list specific record sets (QuickBooks exports, bank statements, cap table, contracts, tax returns, financial statements, agency filings). Tie each category to materiality or statutory records to be kept.
- Format: request searchable PDFs and native data (QBB/QBW exports, CSV bank data).
- Timeline: invoke the 10-day statutory response requirement and propose a production schedule (rolling production within 14 days thereafter).
- Confidentiality: pre-offer an NDA or protective-order framework to remove excuses based on confidentiality.
Where and how to serve
Serve the demand in a record (written), to the company’s registered agent and any designated notice addresses. Keep verifiable delivery (e-service per OA, certified mail, and email).
Deadlines and practical timelines
- Day 0: Serve demand.
- By Day 10: Company must produce, describe what it will produce and when, and/or state reasons for any refusal—in a record.
- Days 10–30: Reasonable production window; schedule inspection if needed at a reasonable time/place.
- If stalled: Move promptly for an order compelling access; request fee shifting and court-ordered protective conditions.
If you’re ignored: court relief that actually works
Illinois authorizes an action to compel production of information and statutory records, with courts empowered to tailor restrictions and award fees when the company fails to comply (or, for transferees under 1-40, acts unreasonably). Seek injunctive-style relief directing production on a short schedule.
Protecting confidentiality without blocking access
Propose a protective order that designates trade secrets and private data as confidential, limits use to member oversight, restricts sharing to counsel and experts, and allows targeted redactions (account numbers). Illinois law contemplates reasonable restrictions and lets courts impose them—so confidentiality is a management issue, not a veto.
Pitfalls and common defenses (and how to counter)
- “Improper purpose.” Answer with a clear, company-focused purpose (financial condition, distributions, compliance). That fits 10-15(a).
- Overbreadth/burden. Offer staged, category-based production (financials first), narrow date ranges, or sampling.
- “It’s confidential.” Offer NDA/protective order; the statute permits restrictions, not denial. The company bears the burden to prove its restriction is reasonable.
- “Not a statutory record.” 10-15 covers material information, not just the 1-40 list. Use both statutes together.
- Privilege. Accept privilege logs where applicable; seek non-privileged underlying facts and business records.
- Third-party agreements. Protective order plus redaction solves vendor confidentiality clauses.
Remedies, fee dynamics, and leverage
If the company fails to comply, courts may award reasonable costs and attorney’s fees to the requesting party under both sections (with unreasonableness expressly referenced for transferees under 1-40). Ask for: (i) an order compelling production, (ii) a compliance schedule, (iii) fee shifting, and (iv) a confidentiality regimen.
Sample Illinois LLC Books & Records Demands demands framework (short version)
Use this as a structure for your Illinois LLC Books & Records Demands and not a full template–more of a checklist:
- Intro & standing: Identify yourself as a member/dissociated member/transferee; state proper purpose.
- Statutes: “This demand is made under 805 ILCS 180/10-15 and 805 ILCS 180/1-40.”
- Scope (time-boxed):
- QuickBooks general ledger, journal entries, P&L, balance sheet, trial balance.
- Bank statements, check images, deposit detail, merchant statements.
- Cap table; member contributions/distributions; transfer ledger.
- Financial statements (3 most recent fiscal years) and federal/state/local tax returns (3 most recent).
- Material contracts (leases, loans, brand/wholesale, management).
- IDOA/IDFPR applications, renewals, notices, and compliance correspondence relevant to operations.
- Delivery & timeline: Native data (.QBB/.CSV) plus PDFs; rolling production; propose dates; note the 10-day statutory response obligation.
- Confidentiality: Attach NDA/protective-order draft mirroring 10-15(h).
- Non-retaliation & preservation: Request confirmation of no retaliation and acknowledgement of a litigation hold.
- Counsel: Direct communications to your counsel (if any) for logistics.
FAQ
Can a minority member demand bank statements and QuickBooks?
Yes—if the request targets information “material” to the member’s interest (10-15) and the company’s financial condition. Pair that with the statutory records list (1-40) to cover financial statements and tax returns.
What if the manager says it’s confidential?
Confidentiality isn’t a veto. Illinois permits reasonable restrictions (e.g., NDA, redactions), and courts can impose protective terms while still compelling access. The company bears the burden to prove its restriction is reasonable.
Do former members have rights?
Yes—dissociated members may access information related to the time they were members, using the same 10-day response mechanics and good-faith purpose.
What’s the actual deadline to respond?
Within 10 days of receiving your demand, the company must produce, describe its planned production and timing, and/or state reasons for any refusal—in a record.
Can a transferee make a demand?
Yes, but only for a proper purpose, with a particularized written demand. The company must respond within 10 days; fee shifting can apply if it acted unreasonably.
Do I have to do an in-person inspection?
Not necessarily. You can request electronic production and a remote inspection protocol; the statute allows reasonable logistics, timing, and locations.
What if the company ignores me?
File an action to compel under 10-15 and/or 1-40. Request a short production schedule, protective terms, and fee shifting.
Are agency filings really part of “books and records”?
If the filings are material to operations, licensure, revenue, or risk (they usually are), they’re squarely within 10-15’s scope; many are kept as part of standard records anyway.
CTA
Need a tight, compliant plan to secure your records without escalating unnecessarily? Request a confidential consult with us to scope your demand, set timelines, and, if needed, prepare a fast motion to compel.
Disclaimer
Informational only, not legal advice.
