Opinion ID: 2359851
Heading Depth: 1
Heading Rank: 18

Heading: Count II and Count III Failure To Provide Annual Shareholder Report

Text: The state statutory provision provides that the corporation's board shall send an annual report to the shareholders not later than 180 days after the close of the fiscal year. . . . [3] If the corporation fails to do so, it will be liable for a penalty of $25 per day starting 30 days after receipt of a written request, up to a maximum of $1,500. [4] This statutory requirement creates a corporate obligation to individual shareholders and an associated penalty for non-compliance. Again, although the statute creates an individual cause of action, the obligation to provide an annual report rests with the corporation and the Board of Directors, not the individual directors. Under ANCSA 43 U.S.C. § 1606(o), [5] the corporation's accounts shall be audited annually in accordance with generally accepted auditing standards and transmitted to each stockholder. 43 U.S.C. § 1607(c) provides that 43 U.S.C. § 1606(o) applies to village corporations. However, the statute does not create an individual cause of action or provide for statutory remedies. Again, although the statute creates an individual cause of action, the obligation to provide an annual audit rests with the corporation and the board of directors, not the individual directors.