§ 55-16-20. Financial statements for shareholders. - North Carolina Statutes

Part 2. Reports.

§ 55‑16‑20. Financial statements for shareholders.

(a)        A corporation shallmake available to its shareholders annual financial statements, which may beconsolidated or combined statements of the corporation and one or more of itssubsidiaries, as appropriate, that include a balance sheet as of the end of thefiscal year, an income statement for that year, and a statement of cash flowsfor the year unless that information appears elsewhere in the financialstatements.  If financial statements are prepared for the corporation on thebasis of generally accepted accounting principles, the annual financialstatements must also be prepared on that basis.

(b)        If the annualfinancial statements are reported upon by a public accountant, his report mustaccompany them.  If not, the statements must be accompanied by a statement ofthe president or the person responsible for the corporation's accountingrecords:

(1)        Stating hisreasonable belief whether the statements were prepared on the basis of generallyaccepted accounting principles and, if not, describing the basis ofpreparation; and

(2)        Describing anyrespects in which the statements were not prepared on a basis of accountingconsistent with the statements prepared for the preceding year.

(c)        A corporation shallmail the annual financial statements, or a written notice of theiravailability, to each shareholder within 120 days after the close of eachfiscal year; provided that the failure of the corporation to comply with thisrequirement shall not constitute the basis for any claim of damages by anyshareholder unless such failure was in bad faith.  Thereafter, on writtenrequest from a shareholder who was not mailed the statements, the corporationshall mail him the latest financial statements. (1901, c. 2, ss. 38, 45, 49;Rev., ss. 1179‑1181; C.S., ss. 1170, 1172; G.S., ss. 55‑107, 55‑109;1955, c. 1371, s. 1; 1965, c. 609; 1973, c. 469, s. 11; 1989, c. 265, s. 1.)