What Corporate Records Are Shareholders Entitled To?
A limited amount for most in Georgia, unless they can show a purpose for moreBy Doug Mentes, Esq. | Last updated on January 27, 2023
Use these links to jump to different sections:
- What Records Must Georgia Corporations Permit Inspection Of?
- What if a Shareholder Wants Further Records?
- What Is a Proper Purpose for Corporate Records?
What Records Must Georgia Corporations Permit Inspection Of?Georgia law designates two tiers of corporate records of shareholder’s right to inspect. Under the first tier, limited information is available to any shareholder, regardless of reason. These records consist of the corporation’s:
- Articles of incorporation
- Updated bylaws
- Resolutions adopted by either shareholders or the board of directors that increase or decrease the number of directors or change the classification of directors
- Resolutions adopted by its board of directors creating one or more classes or series of shares, and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding
- Meeting minutes of all shareholders’ meetings, executed waivers of notice of meetings, and executed consents, delivered in writing or by electronic transmission, evidencing all action taken by shareholders without a meeting, for the past three years
- Communications in writing or by electronic transmission to shareholders generally within the past three years, including the financial statements furnished for the past three years required by Georgia law
- Names and business addresses of its current directors and officers
- Most recent annual registration with the Secretary of State
What if a Shareholder Wants Further Records?A second tier of records is available to shareholders of Georgia corporations, but those shareholders of a corporation must demonstrate the need for that information. Those records may include:
- Excerpts from minutes of any meeting of the board of directors
- Records of any action of a committee of the board of directors while acting in place of the board of directors on behalf of the corporation
- Minutes of any meeting of the shareholders, and records of action taken by the shareholders or board of directors without a meeting
- Further accounting records of the corporation
- A list of all shareholders
- The demand for records is made in good faith for a proper purpose that is reasonably relevant to the shareholder’s legitimate interest as a shareholder
- The shareholder describes with reasonable particularity the shareholder’s purpose and the records desired to be inspected
- The records are directly connected with the shareholder’s purpose
- The records are to be used for the stated purpose
What Is a Proper Purpose for Corporate Records?Georgia case law contains some examples of what a proper purpose is to obtain these wider range of records, which include:
- Determining the financial condition of the corporation
- Ascertaining the legality of a shareholder’s meeting
- Assessing whether assets were properly managed by a corporation
- Determining the value of a decedent’s shares for estate tax purposes
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