O.C.G.A.
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.
(a) 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.
(b) 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.
History
(Code 1981, § 14-3-742, enacted by Ga. L. 1991, p. 465, § 1.)
Annotations
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), cert. denied, 2018 Ga. LEXIS 732 (Ga. 2018).
Notes of Decisions
Cited in
9
cases (
2 in the last 5 years), 1997–2026 · leading case:
Dunn v. Ceccarelli, 489 S.E.2d 563 (Ga. Ct. App. 1997).
Dunn v. Ceccarelli, 489 S.E.2d 563 (Ga. Ct. App. 1997).
· cites it 9× “” They contend the court erred in failing to address this issue and in failing to grant them summary judgment since in bringing suit, Ceccarelli and McClellan did not comply with OCGA § 14-3-742 (a) of the Georgia Nonprofit Corporation Code.”
Pinnacle Benning, LLC v. Clark Realty Capital, LLC, 724 S.E.2d 894 (Ga. Ct. App. 2012).
· cites it 4× “”); OCGA § 14-3-742 (a) (1) (“No derivative proceeding may be commenced until. . . [a] written demand has been made upon the corporation to take suitable action .”
Longanecker v. Diamondhead Country Club, 760 So. 2d 764 (Miss. 2000).
“See Ga.Code Ann. § 14-3-742 (1991). The official comment to the Model Nonprofit Corporation Act, on which Mississippi's statutes are based, sets out the purpose of the demand rule, stating, "[t]he demand allows the directors to investigate the *770 claim and to act on behalf of…”
Dunn v. Ceccarelli, 521 S.E.2d 237 (Ga. Ct. App. 1999).
· cites it 2× “In so doing, this Court held the trial court should have treated appellees’ complaint seeking injunctive relief and an accounting of appellant-defendant Association board members as a time-barred derivative action for failure to comply with the ante litem demand requirements set…”
Girish Modi v. India-Am. Cultural Ass'n, No. A23A1569 (Ga. Ct. App. Jan. 10, 2024).
· cites it 4× “ivate actors such as [IACA]”; (3) Modi’s repeated failure to take steps to establish standing despite repeatedly being placed on notice that his various amended complaints/claims presented standing issues; and (4) Modi’s attempt to bring his claims in a derivative capacity in…”
St. Michael's Bay Homeowners Ass'n v. Aleshia Hadden-kaser, No. A26A0490 (Ga. Ct. App. June 25, 2026).
· cites it 2× “8 Accordingly, the trial court did not need to reach the issue of whether the Members satisfied the required pre-suit notice for a derivative proceeding under OCGA § 14-3-742(a)(1), and we do not address this issue.”
Gary Longanecker v. Diamondhead Country Club & Prop. Owners, No. 1999-CA-00484-SCT (Miss. Feb. 12, 1999).
“See Ga. Code Ann. § 14-3-742 (1991). The official comment to the Model Nonprofit Corporation Act, on which Mississippi's statutes are based, sets out the purpose of the demand rule, stating, "[t]he demand allows the directors to investigate the claim and to act on behalf of the…”
14-3-742(a)(1): 1 case
St. Michael's Bay Homeowners Ass'n v. Aleshia Hadden-kaser, No. A26A0490 (Ga. Ct. App. June 25, 2026).
“8 Accordingly, the trial court did not need to reach the issue of whether the Members satisfied the required pre-suit notice for a derivative proceeding under OCGA § 14-3-742(a)(1), and we do not address this issue.”
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