§ 10A-3A-4.20 — Financial Statements for Members

Alabama § 10A-3A-4.20

• Jurisdiction: Alabama
• Title 10A: Alabama Business and Nonprofit Entities Code
• Ch. 3A: Alabama Nonprofit Corporation Law
• Art. 4: Records and Reports
• Div. B: Financial Statements for Members

Text

(a) Upon the written request of a member, a membership nonprofit corporation shall deliver or make available to the requesting member by posting on its website or by other generally recognized means annual financial statements for the most recent fiscal year of the membership nonprofit corporation for which annual financial statements have been prepared for the membership nonprofit corporation. If financial statements have been prepared for the membership nonprofit corporation on the basis of generally accepted accounting principles for that specified period, the membership nonprofit corporation shall deliver or make available those financial statements to the requesting member. If the annual financial statements to be delivered or made available to the requesting member are audited or otherwise reported upon by a public accountant, the report shall also be delivered or made available to the requesting member.
(b) A membership nonprofit corporation shall deliver, or make available and provide written notice of availability of, the financial statements required under subsection (a) to the requesting member within five business days of delivery of the written request to the membership nonprofit corporation.
(c) Notwithstanding the provisions of subsections (a) and (b) of this section:
(1) as a condition to delivering or making available financial statements to a requesting member, the membership nonprofit corporation may require the requesting member to agree to reasonable restrictions on the confidentiality, use, and distribution of the financial statements; and
(2) the membership nonprofit corporation may, if it reasonably determines that the member’s request is not made in good faith or for a proper purpose, decline to deliver or make available the financial statements to that member.
(d) If a membership nonprofit corporation does not respond to a member’s request for annual financial statements pursuant to this section in accordance with subsection (b) within five business days of delivery of the request to the membership nonprofit corporation:
(1) The requesting member may apply to the designated court, and if none, the circuit court for the county in which the membership nonprofit corporation’s principal office is located in this state, and if none in this state, the circuit court for the county in which the membership nonprofit corporation’s most recent registered office is located for an order requiring delivery of or access to the requested financial statements. The court shall dispose of an application under this subsection on an expedited basis.
(2) If the court orders delivery or access to the requested financial statements, it may impose reasonable restrictions on their confidentiality, use, or distribution.
(3) In the proceeding, if the membership nonprofit corporation has declined to deliver or make available the financial statements because the member had been unwilling to agree to restrictions proposed by the membership nonprofit corporation on the confidentiality, use, and distribution of the financial statements, the membership nonprofit corporation shall have the burden of demonstrating that the restrictions proposed by the membership nonprofit corporation were reasonable.
(4) In the proceeding, if the membership nonprofit corporation has declined to deliver or make available the financial statements pursuant to Section 10A-3A-4.20(c)(2), the membership nonprofit corporation shall have the burden of demonstrating that it had reasonably determined that the member’s request was not made in good faith or for a proper purpose.
(5) If the court orders delivery or access to the requested financial statements, it shall order the membership nonprofit corporation to pay the member’s expenses incurred to obtain the order unless the membership nonprofit corporation establishes that it had refused delivery or access to the requested financial statements because the member had refused to agree to reasonable restrictions on the confidentiality, use, or distribution of the financial statements or that the membership nonprofit corporation had reasonably determined that the member’s request was not made in good faith or for a proper purpose.

Legislative History

(Act 2023-503, §1.)