TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Section 3. Nonprofit Corporations, 14-3-101 through 14-3-1703.

ARTICLE 16 RECORDS AND REPORTS

14-3-1620. Furnishing financial statements to members.

1. A corporation upon request in writing or by electronic transmission from a member shall furnish that member its latest prepared annual financial statements, which may be consolidated or combined statements of the corporation and one or more of its subsidiaries or affiliates, in reasonable detail as appropriate, that include a balance sheet as of the end of the fiscal year and statement of operations for that year. If financial statements are prepared for the corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared on that basis.
2. If annual financial statements are reported upon by a public accountant, the accountant's report must accompany them. If not, the statements must be accompanied by the statement of the president or the person responsible for the corporation's financial accounting records:
   1. Stating the president's or other person's reasonable belief as to whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and
   2. Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.

(Code 1981, §14-3-1620, enacted by Ga. L. 1991, p. 465, § 1; Ga. L. 2004, p. 508, § 63.)

COMMENT

This section is based on the Model Act and on its Business Code counterpart. Subsection (a) follows the Model Act, rather than the Business Code. It does not specifically require corporations to prepare annual financial statements. Like the Business Code, this section requires that the most recent financial statements be provided to a member who has requested them in writing. Although some nonprofit corporations' bylaws require that annual financial statements be mailed to the members, this section eschews such a requirement as being financially prohibitive for many corporations. See also section 14-3-1601, requiring corporations to "maintain appropriate accounting records."