South Florida Arbitration & Litigation Lawyer Blog
Financial Statements Required by Florida Law for Company Shareholders.
Florida Statute 607.1620 labeled “financial statements for shareholders” sets forth the legal requirements that must be satisfied, by a Florida corporation, concerning its responsibility to provide financial statements to its shareholders. This disclosure requirement is significant for it provides stockholders with the necessary information to determine the financial condition of their company and whether or not management is doing its job.
Please note that this post is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be considered as legal or investment advice. If you have any questions concerning this post, you should contact a qualified professional.
Florida Statute 607.1620 states as follows:
(1) Unless modified by resolution of the shareholders within 120 days of the close of each fiscal year, a corporation shall furnish its shareholders annual financial statements which may be consolidated or combined statements of the corporation and one or more of its subsidiaries, as appropriate, that include a balance sheet as of the end of the fiscal year, an income statement for that year, and a statement of cash flows for that year. If financial statements are prepared for the corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared on that basis.
(2) If the annual financial statements are reported upon by a public accountant, his or her report must accompany them. If not, the statements must be accompanied by a statement of the president or the person responsible for the corporation’s accounting records:
(a) Stating his or her reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and
(b) Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.
(3) Any corporation required by subsection (1) to furnish annual financial statements to its shareholders shall furnish such annual financial statements to each shareholder within 120 days after the close of each fiscal year or within such additional time thereafter as is reasonably necessary to enable the corporation to prepare its financial statements if, for reasons beyond the corporation’s control, it is unable to prepare its financial statements within the prescribed period. Thereafter, on written request from a shareholder who was not furnished the statements, the corporation shall furnish him or her the latest annual financial statements.
(4) If a corporation does not comply with the shareholder’s request for annual financial statements pursuant to this section within 30 days of delivery of such request to the corporation, the circuit court in the county where the corporation’s principal office (or, if none in this state, its registered office) is located may, upon application of the shareholder, summarily order the corporation to furnish such financial statements. If the court orders the corporation to furnish the shareholder with the financial statements demanded, it shall also order the corporation to pay the shareholder’s costs, including reasonable attorney’s fees, reasonably incurred to obtain the order and otherwise enforce its rights under this section.
(5) The requirement to furnish annual financial statements as described in this section shall be satisfied by sending such annual financial statements by mail or electronic transmission. If a corporation has an outstanding class of securities registered under s. 12 of the Securities Exchange Act of 1934, as amended, the requirement to furnish annual financial statements may be satisfied by complying with 17 C.F.R. s. 240.14a-16, as amended, with respect to the obligation of a corporation to furnish an annual financial report to shareholders pursuant to 17 C.F.R. s. 240.14a-3(b), as amended.
If your company refuses to comply with the above requirements, it will be necessary for you to take appropriate remedial action to protect your interests or that of your company.