memorandum to clients
Regarding Access to Corporate Records

The laws regulation business and not-for-profit corporations contain specific sections delineating shareholder and member inspection rights.  The Business Corporations Act's §607.1602, Fla. Stat. (1991) regulates shareholder inspection rights for business corporations.   The Not-for-Profit Corporation Act's §617.1601(2) Fla. Stat. (1991) Delineates members' rights to review records in not for profit corporations which are not condominium or cooperative associations.  Access to condominium association records is governed by 21§18.111(c) Fla. Stat. (1991).  Cooperative's records are governed by §719.104(2) Fla. Stat. (1991) which has not been amended since 1986.

     A.     General Not-For-Profit (non-condominium or cooperative associations)

Because of the unique natures and purposes of for profit corporations, records for these entities are generally available to members.  Specifically, §617.1601(2) Fla. Stat. (1991) provides:

All books and records of a corporation must be kept in written form or in another form capable of conversion into written form within a reasonable time and be inspected by any member, or his agent or attorney, for any proper purpose at any reasonable time.

If a member is impeded in the member's effort to obtain records, and there is litigation to enforce access rights, the member shall be entitled to recover his or her reasonable attorney's fees for the litigation from the Association if the member prevails.

    B.   Business

Upon five days written notice from a shareholder to a business corporation, the corporation is required to provide at a reasonable location specified by the corporation, minutes of shareholders and directors meetings, accounting records, the current shareholder's records, and other books and records; however, these items are to be made available only if the shareholder's request is made in good faith with a specifically stated proper purpose and if the records are connected with the purpose.   Additionally, a shareholder in a business corporation is entitled to inspect and copy without limitation the corporation's Articles of Incorporation, and Bylaws and amendments to both, Board of Directors Resolutions concerning shareholder's rights, shareholders' meetings and written records of shareholders' actions, and written communications to shareholders and financial statements, the name and address roster of the directors and owners, and the corporation's most recent Annual Report provided to the Florida Department of State.  The Business Corporation Act also provides for shareholders to receive photocopies of records and enforce their review rights meaning.

C. Condominium

As most condominium units owners know, §718.111(c) Fla Stat.has long provided unit owners access to most of association corporate records.  Amendments to this section, originally planned to be effective January 1, 1992, now delayed until April 1, 1992, provide that in essence all Association records are subject to inspection and that production of records shall occur within five days of a request.  It is likely that the legislature will allow the previously passed amendment to stand substantially unchanged.

D. Requests

When dealing with a request for corporation records, most corporations have found it expeditious to produce the records sought.  No matter how aggravating a records request may be, producing the records is not only legally necessary, but in many times will stop further conflict or difficulties with a shareholder or member.  First, as a practical matter, the records may have to be produced as a matter of law to avoid a fine or penalty.  Second, to the extent that the records are produced, the shareholder or member can not claim that the Association or its officers and directors are hiding documents or that the officers and directors or involved in a conspiracy to defraud the owners. Third, because records request are frequently voluminous, the shareholder or member's attention will be consumed by their review.  Of course, corporations are entitled to be paid the reasonable cost for duplication the information provided.