SECTIONS 12590-12594 - California Statutes

CORPORATIONS CODE

SECTION 12590-12594

12590. (a) Each corporation shall keep:
(1) Adequate and correct books and records of account;
(2) Minutes of the proceedings of its members, board, and
committees of the board; and
(3) A record of its members giving their names and addresses and
the class of membership and number of membership units held by each.
(b) Those minutes and other books and records shall be kept either
in written form or in any other form capable of being converted into
clearly legible tangible form or in any combination of the
foregoing. When minutes and other books and records are kept in a
form capable of being converted into clearly legible paper form, the
clearly legible paper form into which those minutes and other books
and records are converted shall be admissible in evidence, and
accepted for all other purposes, to the same extent as an original
paper record of the same information would have been, provided that
the paper form accurately portrays the record.

12591. (a) A corporation shall notify each member yearly of the
member's right to receive a financial report pursuant to this
subdivision. Except as provided in subdivision (c), upon written
request of a member, the board shall promptly cause the most recent
annual report to be sent to the requesting member. An annual report
shall be prepared not later than 120 days after the close of the
corporation's fiscal year. Unless otherwise provided by the articles
or bylaws and if approved by the board of directors, that report and
any accompanying material sent pursuant to this section may be sent
by electronic transmission by the corporation (Section 20). That
report shall contain in appropriate detail the following:
(1) A balance sheet as of the end of that fiscal year and an
income statement and a statement of cashflows for that fiscal year.
(2) A statement of the place where the names and addresses of the
current members are located.
(3) Any information required by Section 12592.
(b) The report required by subdivision (a) shall be accompanied by
any report thereon of independent accountants, or, if there is no
report, the certificate of an authorized officer of the corporation
that the statements were prepared without audit from the books and
records of the corporation.
(c) This section does not apply to corporations that do not have
more than 25 members at any time during the fiscal year.

12592. (a) Any provision of the articles or bylaws notwithstanding,
every corporation shall furnish annually to its members and
directors a statement of any transaction or indemnification of a kind
described in subdivision (d) or (e), if any such transaction or
indemnification took place. If the corporation issues an annual
report to all members, this subdivision shall be satisfied by
including the required information in the annual report. A
corporation which does not issue an annual report to all members,
pursuant to subdivision (c) of Section 12591, shall satisfy this
section by mailing or delivering to its members the required
statement within 120 days after the close of the corporation's fiscal
year. Unless otherwise provided by the articles or bylaws and if
approved by the board of directors, that statement may be sent by
electronic transmission by the corporation (Section 20).
(b) Except as provided in subdivision (c), a covered transaction
under this section is a transaction in which the corporation, its
parent, or its subsidiary was a party, and in which either of the
following had a direct or indirect material financial interest:
(1) Any director or officer of the corporation, or its parent or
subsidiary.
(2) Any holder of more than 10 percent of the voting power of the
corporation, its parent or its subsidiary.
For the purpose of subdivision (d), an "interested person" is any
person described in paragraph (1) or (2).
(c) Transactions approved by the members of a corporation, under
subdivision (a) of Section 12373, are not covered transactions. For
the purpose of subdivision (b), neither a mere common directorship
nor a member-patron relationship on terms available to all members
constitutes a material financial interest.
(d) The statement required by subdivision (a) shall describe
briefly:
(1) Any covered transaction (excluding compensation of officers
and directors) during the previous fiscal year involving more than
one thousand dollars ($1,000), or which was one of a number of
covered transactions in which the same interested person had a direct
or indirect material financial interest, and which transactions in
the aggregate involved more than one thousand dollars ($1,000).
(2) The names of the interested persons involved in such
transactions, stating such person's relationship to the corporation,
the nature of such person's interest in the transaction and, where
practicable, the amount of such interest; provided, that in the case
of a transaction with a partnership of which such person is a
partner, only the interest of the partnership need be stated.
(e) The statement required by subdivision (a) shall describe
briefly the amount and circumstances of any loans, guaranties,
indemnifications, or advances aggregating more than one thousand
dollars ($1,000) paid or made during the fiscal year to any officer
or director of the corporation pursuant to Section 12377; provided
that no such report need be made in the case of a loan, guaranty, or
indemnification approved by the members under paragraph (2) of
subdivision (e) of Section 12377 or a loan or guaranty not subject to
the provisions of subdivision (a) of Section 12375.

12593. (a) The superior court of the proper county shall enforce
the duty of making and mailing or delivering the information and
financial statements required by this article and, for good cause
shown, may extend the time therefor.
(b) In any action or proceeding under this section, if the court
finds the failure of the corporation to comply with the requirements
of this article to have been without justification, the court may
award the member reasonable expenses, including attorneys' fees, in
connection with such action or proceeding.

12594. For a period of 60 days following the conclusion of an
annual, regular, or special meeting of members, a corporation shall,
upon written request from a member, forthwith inform the member of
the result of any particular vote of members taken at the meeting,
including the number of memberships voting for, the number of
memberships voting against, and the number of memberships abstaining
or withheld from voting. If the matter voted on was the election of
directors, the corporation shall report the number of memberships, or
votes if voted cumulatively, cast for each nominee for director. If
more than one class or series of memberships voted, the report shall
state the appropriate numbers by class and series of memberships.