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501 c question

 
 
Reply Fri 26 Aug, 2005 03:34 pm
Hi. I'm a member of a 501 c 3 (non-profit educational) corporation founded in Arizona. A while ago I submitted a written request to receive copies of the minutes of our monthly meetings, and copies of our last year's financial records. I offered to pay up to $20 dollars, up front for the reproduction costs). My request to denied; the reason given was "that my request was not made in good faith".

I was under the assumption that I had a legal right to most of the corporation's paperwork (reproduction at my expense). Anyone have any "free" advice or any recourse that might be available to me?

LLH
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Type: Discussion • Score: 1 • Views: 1,019 • Replies: 8
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jespah
 
  1  
Reply Sat 27 Aug, 2005 08:08 am
Wacky. There's more to it than what you're telling us, I figure. Is the corporation being investigated by the IRS? Or is it possible that they would be? If so, that could be a potential reason why they don't want you to see the books. Or perhaps they're paying someone a salary, or a higher salary than you get (if you get a salary from them, that is), and, unless you're conducting some sort of an investigation, they figure it's not your business. Or maybe they are embroiled in a lawsuit with you, or think they would be. If so, they need not provide any information to you without a subpoena or request for discovery (depends upon the state as to what's needed).

Ask why, and see what they say. If they keep repeating the same old, same old, go up the chain of command. If the chain keeps repeating the "not in good faith" line, then you may very well have stumbled upon something their attorneys have told them to say.
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LordoftheLeftHand
 
  1  
Reply Tue 30 Aug, 2005 12:16 pm
The rest of the story:

The organization is not involved in any legal troubles (with me or anyone). I attend the monthly meetings in question, and I suspect (just from watching her) that the secretary has not keeping minutes of the meetings. Strangely, at our last meeting (first meeting after my request) I noticed a tape recorder (for the first time) in front of her.

Any more thoughts?

LLH
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LordoftheLeftHand
 
  1  
Reply Tue 30 Aug, 2005 12:35 pm
More back story:

I initially requested the minutes because there was some argument regarding exactly for what purpose we had appropriated certain funds. Later the treasurer gave me access to enough documents to satisfy my interest. Now I am wondering if we even have minutes or how detailed they are. Is there a legal guideline for what minutes should contain? For example:

Should they contain every motion?

During a roll call vote, do they need to list each member and their vote?

Thanks again,

LLH
0 Replies
 
Ticomaya
 
  1  
Reply Fri 9 Sep, 2005 10:22 pm
LLH: You indicated you were a "member" of the corporation, but you didn't indicate in what capacity. Are you a shareholder, director, officer? Arizona law probably provides a statutory mechanism for the inspection of corporate books and records. In my state, the request to inspect must be made by way of a formal demand under oath, and the demand must state the purpose for making the request, and it must be a "proper purpose." This appears to also be the case in Arizona.

A.R.S. § 10-1602 limits a shareholder's right to inspect:

Quote:
C. A shareholder may inspect and copy the records described in subsection B of this section only if all of the following conditions are met:

1. The shareholder's demand is made in good faith and for a proper purpose.

2. The shareholder describes with reasonable particularity its purpose and the records it desires to inspect.

3. The records are directly connected with the shareholder's purpose.


I suggest you familiarize yourself with A.R.S. § 10-1601-1604.
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JPB
 
  1  
Reply Fri 9 Sep, 2005 10:29 pm
You're up late, Tico.

This pumpkin is done in. Have a good night!
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Ticomaya
 
  1  
Reply Fri 9 Sep, 2005 10:31 pm
J_B wrote:
You're up late, Tico.

This pumpkin is done in. Have a good night!


And answering legal question, to boot. Laughing

Night.
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roger
 
  1  
Reply Fri 9 Sep, 2005 11:38 pm
I recently found there are at least some legal guidelines for minutes, at least in NM. The company paid dividends in 2004 for the year 2003. Our DOL (state) auditor required a copy of the minutes authorizing the payment. Had we not had them, the dividends would have been reclassified as wages, at least for the purpose of state unemployment insurance.

Not especially relevant to the main question, but I thought it interesting.
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LordoftheLeftHand
 
  1  
Reply Thu 15 Sep, 2005 10:00 am
Thanks for pointing me in the right direction Ticomaya. I will read "A.R.S. § 10-1601-1604".

LLH
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