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2018 Georgia Code 14-3-742 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-3-742 Case Law from Google Scholar Amendments to OCGA 14-3-742

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

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

ARTICLE 7 MEETINGS

14-3-742. Demand for suitable action by corporation required.

  1. No derivative proceeding may be commenced until:
    1. A written demand has been made upon the corporation to take suitable action; and
    2. Ninety days have expired from the date the demand was made unless the complainant has earlier been notified that the demand has been rejected by the corporation or unless irreparable injury to the corporation would result by waiting for the expiration of the 90 day period.
  2. In the case of corporations described in subsection (a) of Code Section 14-3-1302, the complainant shall deliver a copy of the demand to the Attorney General within ten days of making the demand on the corporation.

(Code 1981, §14-3-742, enacted by Ga. L. 1991, p. 465, § 1.)

COMMENT

Subsection (b) requires notice to the Attorney General of a demand made on a corporation described in section 14-3-1302(a)(2). The purpose of this requirement is to ensure that the Attorney General is notified of alleged improprieties involving charitable corporations.

JUDICIAL DECISIONS

Procedures required must be met.

- A director and member of a nonprofit corporation were required to follow the procedures of O.C.G.A. § 14-3-742 before bringing a derivative action against directors for breach of fiduciary duties. Dunn v. Ceccarelli, 227 Ga. App. 505, 489 S.E.2d 563 (1997).

Failure to make proper demand to bring derivative action.

- In a declaratory judgment action filed by the plaintiff against the association, challenging an amendment to the association's governing documents, the association's motion to dismiss for lack of standing was properly granted because, whether valid or invalid, the October 2016 amendment plainly affected all of the members of the association whether the members were then leasing out the members' townhomes or simply had a right to do so; and any relief would affect every members' ability to lease out their townhome; thus, the plaintiff did not allege a special injury in Count I, and the plaintiff's claims in Count I were derivative and not direct, but, the plaintiff failed to make a proper demand necessary to bring such a claim. Ga. Appreciation Prop. v. Enclave at Riverwalk Townhome Ass'n, 345 Ga. App. 413, 812 S.E.2d 157 (2018).

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