Being locked out does not remove your rights as an owner — and the first move is almost always the records, not the confrontation. For a D.C. LLC, D.C. Code § 29–804.10 gives a member the right, on reasonable notice, to inspect and copy company records. Exercising it early establishes what the business was doing and what has changed, before anything is tidied up. The duties the other owner owes you do not lapse because they changed the locks.
Step one: the records
(a) In a member-managed limited liability company, the following rules shall apply: (1) On reasonable notice, a member may inspect and copy during regular business hours, at a reasonable location specified by the company, any record maintained by the company regarding the company’s activities and affairs, financial condition, and other circumstances, to the extent the information is material to the member’s rights and duties under the operating agreement or this chapter.
D.C. Code § 29–804.10 — Right to information
Make the request in writing and keep the response — a refusal is itself evidence, and it is something a court can address.
Step two: the duties still apply
(b) The duty of loyalty of a member in a member-managed limited liability company shall include the duties to: (1) Account to the company and to hold as trustee for it any property, profit, or benefit derived by the member: (A) In the conduct or winding up of the company’s activities and affairs; (B) From a use by the member of the company’s property; or (C) From the appropriation of a limited liability company opportunity; (2) Refrain from dealing with the company in the conduct or winding up of the company’s activities and affairs as or on behalf of a person having an interest adverse to the company; and (3) Refrain from competing with the company in the conduct of the company’s activities and affairs before the dissolution of the company.
D.C. Code § 29–804.09(b)
If the lockout is accompanied by money or opportunities moving, that is a separate and more urgent problem — see partner diverting company funds.
Step three: who sues, and how
(a) Subject to subsection
D.C. Code § 29–808.01 — Direct action by member
An LLC member has an express statutory direct action. A corporate shareholder is generally on the derivative route — see shareholder disputes.
What can be done while it is running?
(b) The Superior Court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian pendente lite with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing can be held.
D.C. Code § 29–312.21(b)
The court can preserve assets and keep the business trading, and may appoint a receiver or custodian meanwhile — see court-appointed receiverships.
And if the relationship is finished?
A dissolution petition is not the only outcome. Under § 29–312.24 the company or the other owners may elect to purchase the petitioner’s shares at fair value instead — and the election is irrevocable once filed. See business ownership disputes and business dissolution.
What can a locked-out owner actually do under D.C. law?
Being locked out does not remove an owner’s statutory rights — and the first move is the records demand, not the confrontation. The provisions below run in order of how quickly they can be used.
| Move | D.C. Code provision | Official heading |
|---|---|---|
| Demand the records | § 29–804.10 | “Right of members, managers, and dissociated members to information” |
| Establish the duty breached | § 29–804.09 | “Standards of conduct for members and managers” |
| Sue in your own name | § 29–808.01 | “Direct action by member” |
| Ask the court to dissolve | § 29–312.21 | “Procedure for judicial dissolution” |
| Face — or make — the buyout election | § 29–312.24 | “Election to purchase in lieu of dissolution” |
Frequently asked questions
Can they legally lock me out?
Changing the locks does not change your ownership or the duties owed to you. What it does change is your access to information, which is why the statutory records right matters immediately.
What if they will not give me the records?
§ 29–804.10 gives the right on reasonable notice. Refusal is something a court can address, and it is evidence in its own right.
Can I be forced out of the company?
In a dissolution proceeding the other owners may elect to buy your interest at fair value under § 29–312.24. That is a purchase, not a forfeiture.
Should I confront them first?
Secure the records first. A confrontation before that is how information disappears.
Who still owes duties to an owner who has been shut out?
The members and managers continuing to run the company. Exclusion does not suspend the statutory duty of loyalty in D.C. Code § 29–804.09(b), which requires accounting for company property and opportunities and refraining from dealing adversely to the company.
Why do the records come before the lawsuit?
Because a lockout hides the facts that decide the claim — what has been paid out, to whom, and on whose authority. Information rights under D.C. Code § 29–804.10 are enforceable in their own right and do not require proving the underlying wrong first.
When does a lockout become a reason to end the company?
When the conduct reaches the statutory grounds. For a corporation, D.C. Code § 29–312.20 supplies the grounds for judicial dissolution and § 29–312.21 the procedure; for an LLC, § 29–807.01 lists the events causing dissolution.
Where does a locked-out owner go for immediate help?
The Superior Court of the District of Columbia, which under D.C. Code § 11–921 hears civil matters brought in the District, and which may appoint a receiver or custodian under § 29–312.22 where the business itself needs protecting.
How does an owner force the company to open the books?
By making the demand under D.C. Code § 29–804.10 and, if it is refused, applying to the Superior Court. A refusal is frequently more probative than the documents eventually produced, because it has to be explained.
Who pays for the valuation if the dispute ends in a buyout?
The price is fixed in the proceeding itself. Where a corporation or its other shareholders elect to purchase under D.C. Code § 29–312.24(a), the shares are bought at fair value and the election is irrevocable unless the court determines it is equitable to set it aside — so the valuation contest becomes the substance of the case.
Sources and legal authorities
- D.C. Code § 29–804.10 — Right to information
- D.C. Code § 29–804.09 — Standards of conduct
- D.C. Code § 29–808.01 — Direct action by member
- D.C. Code § 29–312.21 — Procedure for judicial dissolution
- D.C. Code § 29–312.24 — Election to purchase in lieu of dissolution
General information about D.C. law, not legal advice. Which rule applies depends on the entity, the agreement and the facts.
Related: Business Ownership & Partner Disputes · Partner Diverting Company Funds · LLC Member Disputes · Breach of Fiduciary Duty · Court-Appointed Receiverships · Business Litigation. Call (301) 901-3109 or use the contact page.