§ 490.1606 — Exception to notice requirement

Iowa § 490.1606

• Jurisdiction: Iowa
• Title XII: BUSINESS ENTITIES
• Ch. 490: BUSINESS CORPORATIONS

Text

See §490.141(13).
490.1607 through 490.1619 Reserved.
PART 2
REPORTS
490.1620 Financial statements for shareholders.
1. Upon the written request of a shareholder, a corporation shall deliver or make
available to such requesting shareholder by posting on its internet site or by other generally
recognized means annual financial statements for the most recent fiscal year of the
corporation for which annual financial statements have been prepared for the corporation.
If financial statements have been prepared for the corporation on the basis of generally
accepted accounting principles for such specified period, the corporation shall deliver
or make available such financial statements to the requesting shareholder. If the annual
financial statements to be delivered or made available to the requesting shareholder are
audited or otherwise reported upon by a public accountant, the report shall also be delivered
or made available to the requesting shareholder.
2. A corporation shall deliver, or make available and provide written notice of availability
of, the financial statements required under subsection 1 to the requesting shareholder within
five business days of delivery of such written request to the corporation.
3. A corporation may fulfill its responsibilities under this section by delivering the
specified financial statements, or otherwise making them available, in any manner permitted
by the applicable rules and regulations of the federal securities and exchange commission.
4. Notwithstanding the provisions of subsections 1, 2, and 3, all of the following apply:
a. As a condition to delivering or making available financial statements to a requesting
shareholder, the corporation may require the requesting shareholder to agree to reasonable
restrictions on the confidentiality, use, and distribution of such financial statements.
b. The corporation may, if it reasonably determines that the shareholder’s request is not
madeingoodfaithorforaproperpurpose, declinetodeliverormakeavailablesuchfinancial
statements to that shareholder.
5. If a corporation does not respond to a shareholder’s request for annual financial
statements pursuant to this section in accordance with subsection 2 within five business
days of delivery of such request to the corporation all of the following shall apply:
a. The requesting shareholder may apply to the district court of the county where the
corporation’s principal office, or if none in this state, its 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.
b. If the court orders delivery or access to the requested financial statements, it may
impose reasonable restrictions on their confidentiality, use, or distribution.

c. In such proceeding, if the corporation has declined to deliver or make available such
financial statements because the shareholder had been unwilling to agree to restrictions
proposed by the corporation on the confidentiality, use, and distribution of such financial
statements, the corporation shall have the burden of demonstrating that the restrictions
proposed by the corporation were reasonable.
d. In such proceeding, if the corporation has declined to deliver or make available such
financial statements pursuant to subsection 4, paragraph “b”, the corporation shall have the
burden of demonstrating that it had reasonably determined that the shareholder’s request
was not made in good faith or for a proper purpose.
e. If the court orders delivery or access to the requested financial statements it shall
order the corporation to pay the shareholder’s expenses incurred to obtain such order unless
the corporation establishes that it had refused delivery or access to the requested financial
statements because the shareholder had refused to agree to reasonable restrictions on the
confidentiality, use, or distribution of the financial statements or that the corporation had
reasonably determined that the shareholder’s request was not made in good faith or for a
proper purpose.