O.C.G.A.

O.C.G.A. § 14-2-1604 (2019)

Court-ordered inspection

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)

Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.

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(a) If a corporation does not allow a shareholder who complies with subsection (b) of Code Section 14-2-1602 to inspect and copy any records required by that subsection to be available for inspection, the superior

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court of the county where the corporation’s registered office is located may summarily order inspection and copying of the records demanded at the corporation’s expense upon application of the shareholder. (b) If a corporation does not within a reasonable time allow a shareholder to inspect and copy any other record, the shareholder who complies with subsections (c) and (d) of Code Section 14-2-1602 may apply to the superior court in the county where the corporation’s registered office is located for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis. (c) If the court orders inspection and copying of the records demanded, it shall also order the corporation to pay the shareholder’s costs (including reasonable attorneys’ fees) incurred to obtain the order unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the shareholder to inspect the records demanded. (d) If the court orders inspection and copying of the records demanded, it may impose reasonable restrictions on the use or distribution of the records by the demanding shareholder.

History

(Code 1981, § 14-2-1604, enacted by Ga. L. 1988, p. 1070, § 1.)

Annotations

Law reviews. - For annual survey on business associations, see 61 Mercer L. Rev. 45 (2009). COMMENT Source: Model Act, § 16.04. This replaces former § 14-2-122(d) & (e). Section 14-2-1604 provides a judicial remedy if a corporation refuses to grant the right of inspection provided by Section 14-2-1602. Subsection (a) provides for judicial enforcement of the shareholders’ right of inspection under Section 14-2-1602(b). As to these records, no showing of proper purpose need be made. Subsection (b) provides, by contrast, that if inspection is demanded under Section 14-2-1602(c) and (d), the shareholder’s good faith and purpose may be in issue; in this situation subsection (b) directs the court to handle the proceeding ‘‘on an expedited basis.’’ The purpose of this phrase is to discourage dilatory tactics to avoid or delay inspection without requiring the court to resolve these issues on a summary basis. While subsection (a) provides that the corporation shall bear the costs of inspection and copying of the records covered therein, subsection (c) does not address who should bear the cost of reproducing other records ordered by the court; this is a matter for the courts to decide in light of the policy of the Code that costs of reproduction are generally the responsibility of the requesting shareholder and should be assessed against him. The principal sanction against unreasonable delay or refusal to grant inspection is provided by subsection (c), which imposes on the corporation that plaintiff ’s costs, including attorneys’ fees, unless the corporation can establish that it acted reasonably. The corporation may avoid these costs by

showing that the corporation refused inspection in good faith because it had a reasonable basis for doubt about the right of the shareholder to inspect the records demanded. The phrase ‘‘in good faith because if had a reasonable basis for doubt’’ establishes a partially objective standard, in that the corporation must be able to point to some objective basis for its doubt that the shareholder was acting in good faith or had a purpose that was proper. Subsection (d) authorizes the court to enter such protective orders as it shall deem necessary on the use or distribution of records to be produced for a shareholder. Cross-References Corporate records, see §§ 14-2-1601 & 14-2-1602. ‘‘Principal office’’: defined, see § 14-2-140; designated in annual registration, see § 14-2-1622. Registered office: designated in annual registration, see § 14-2-1622; required, see §§ 14-2-202 &

Notes of Decisions

Cited in 17 cases (2 in the last 5 years), 1995–2024 · leading case: Barnett v. Fullard, 701 S.E.2d 608 (Ga. Ct. App. 2010).

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Barnett v. Fullard, 701 S.E.2d 608 (Ga. Ct. App. 2010). · cites it 8× “See OCGA § 14-2-1604 (a), (b). 2 If the trial court enters an order authoring inspection and copying of the records, the shareholder is entitled to recover from the corporation his attorney fees and costs incurred in obtaining the order, “unless the corporation proves that it…”

Grapefields, Inc. v. Kosby, 710 S.E.2d 816 (Ga. Ct. App. 2011). · cites it 16× “After Grapefields failed to respond, Kosby applied pursuant to OCGA § 14-2-1604 to the superior court for an order permitting inspection and copying of the records and imposition of attorney fees.”

Motor Warehouse, Inc. v. Richard, 510 S.E.2d 600 (Ga. Ct. App. 1998). · cites it 10× “Richard then petitioned for an award of attorney fees and costs pursuant to OCGA § 14-2-1604 and attached an affidavit from her counsel, David Maslia, in support of this petition.”

G.I.R. Sys., Inc. v. Lance, 466 S.E.2d 597 (Ga. Ct. App. 1995). · cites it 8× “The authority of a court to order a corporation to share in the expense of an inspection is found in OCGA § 14-2-1604. OCGA § 14-2-1604 (c) provides: “If the court orders inspection and copying of the records demanded, it shall also order the corporation to pay the shareholder’s…”

Richardson v. Locklyn, 793 S.E.2d 640 (Ga. Ct. App. 2016). · cites it 2× “Likewise, in the context of an award under OCGA § 14-2-1604, which contains an automatic fee award under certain conditions and also lacks an explicit hearing requirement, this Court has held that a party opposing a claim for attorney fees has a basic right to confront and…”

Langdale Co. v. Langdale, 671 S.E.2d 863 (Ga. Ct. App. 2008). · cites it 4× “When they were not allowed to see the requested records, they filed with the Superior Court of Lowndes County a Verified Application for Inspection of Books and Records pursuant to OCGA § 14-2-1604 on February 20, 2007. The trial court held a hearing on the application on April…”

O'NEAL v. Home Town Bank of Villa Rica, 514 S.E.2d 669 (Ga. Ct. App. 1999). · cites it 2× “46 OCGA §§ 14-2-1604; 14-2-1602. 47 (Citation and punctuation omitted.”

G.I.R. Sys., Inc. v. Lance, 491 S.E.2d 530 (Ga. Ct. App. 1997). · cites it 4× “OCGA § 14-2-1604 allows for a court-ordered inspection by a shareholder of the corporation’s records if: (1) the shareholder’s demand is made in good faith, for a proper purpose; (2) he describes with reasonable particularity his purpose and the records he desires to inspect;…”

Parker v. Clary Lakes Rec. Ass'n, 534 S.E.2d 154 (Ga. Ct. App. 2000). · cites it 4× “8 OCGA § 14-2-1604. 9 Riser v. Genuine Parts Co.”

Advanced Automation, Inc. v. Fitzgerald, 718 S.E.2d 607 (Ga. Ct. App. 2011). · cites it 10× “(AAI), appeals from the trial court’s grant of minority shareholder Barbara Fitzgerald’s Application for Inspection of Corporate Records and award of attorney fees pursuant to OCGA § 14-2-1604, contending that the trial court lacked jurisdiction under OCGA § 14-2-940 and,…”

Bell v. Waffle House, Inc., 771 S.E.2d 132 (Ga. Ct. App. 2015). · cites it 2× “” 5 Likewise, in the context of an award under OCGA § 14-2-1604, which contains an automatic fee award under certain conditions and also lacks an explicit hearing requirement, this Court has held that “[a] party opposing a claim for attorney fees has a basic right to confront…”

Westbury Square Townhouses Ass'n v. Bryan, 479 S.E.2d 190 (Ga. Ct. App. 1996). · cites it 4× “This procedure is authorized by OCGA § 14-3-1604, which is based on the corresponding statute in the Georgia Business Corporation Code, OCGA § 14-2-1604, which in turn is based on § 16.”

Show all 17 citing cases →

— 14-2-1604(c) — 1 case

Cardea Corp. Holdings, Inc. v. Carolyn Larocco (Ga. Ct. App. 2024).

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