Pennsylvania § 1554 - Financial reports to shareholders.

§ 1554. Financial reports to shareholders.

(a) General rule.--Except as otherwise provided in subsection (d) or unless otherwise agreed between a business corporation and a shareholder, every corporation shall furnish to its shareholders annual financial statements, including at least a balance sheet as of the end of each fiscal year and a statement of income and expenses for the fiscal year. The financial statements shall be prepared on the basis of generally accepted accounting principles, if the corporation prepares financial statements for the fiscal year on that basis for any purpose, and may be consolidated statements of the corporation and one or more of its subsidiaries. The financial statements shall be mailed by the corporation to each of its shareholders entitled thereto within 120 days after the close of each fiscal year and, after the mailing and upon written request, shall be mailed by the corporation to any shareholder or beneficial owner entitled thereto to whom a copy of the most recent annual financial statements has not previously been mailed. In lieu of mailing the statements, the corporation may send them by facsimile, e-mail or other electronic transmission to any shareholder who has supplied the corporation with a facsimile number or address for electronic transmissions for the purpose of receiving financial statements from the corporation. Statements that are audited or reviewed by a certified public accountant or a public accountant shall be accompanied by the report of the accountant; in other cases, each copy shall be accompanied by a statement of the person in charge of the financial records of the corporation:

(1) Stating his reasonable belief as to whether or not the financial statements were prepared in accordance with generally accepted accounting principles and, if not, describing the basis of presentation.

(2) Describing any material respects in which the financial statements were not prepared on a basis consistent with those prepared for the previous year.

(b) Contrary agreement.--An agreement restricting the rights specified in subsection (a) shall be set forth in a writing that, except as provided in subsection (c), is separate from the articles, bylaws and share certificate or notice provided pursuant to section 1528(f) (relating to uncertificated shares). The agreement may provide that it is binding on the shareholder and all persons who are shareholders in the corporation solely by reason of acquiring shares directly or indirectly from the shareholder in one or more transactions that, if the corporation were a statutory close corporation, would be described in section 2322(b)(2), (4), (5) or (6) (relating to exception).

(c) Transitional provision.--A bylaw adopted on or before June 30, 1991, that:

(1) provides that this section shall not apply to the shares of the corporation or to shares outstanding on a specified or otherwise determinable date; or

(2) restricts the right of shareholders to receive financial information in a manner permissible under the Business Corporation Law of 1933;

shall be deemed, for the purposes of subsection (b), to be a separate written agreement between the corporation and any person holding shares, option rights or securities having conversion or option rights, or to whom the corporation is otherwise obligated to issue shares on June 30, 1991, but only with respect to the shares held by the person on that date or to be acquired pursuant to such option rights, securities having conversion or option rights or other obligation of the corporation.

(d) Exception.--Subsection (a) shall not apply to a corporation that is required by law to file financial statements at least once a year in a public office.

(e) Certain provisions of articles ineffective.--This section may not be relaxed by any provision of the articles.

(f) Cross references.--See section 2511 (relating to financial reports to shareholders) and 42 Pa.C.S. § 2503(7) (relating to right of participants to receive counsel fees).

(Dec. 19, 1990, P.L.834, No.198, eff. imd.; Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days)

2001 Amendment. Act 34 amended subsec. (a).

1992 Amendment. Act 169 amended subsec. (a), relettered subsec. (d) to subsec. (e), relettered subsec. (e) to subsec. (f) and added present subsec. (d).

1990 Amendment. Act 198 amended subsec. (c), amended and relettered subsec. (d) to subsec. (e) and added present subsec. (d).

Cross References. Section 1554 is referred to in sections 1106, 2511 of this title.