Does a private country club, a PA non-profit corp, have to supply to an equity member financial statements?

Question

I requested financial statements and was refused access to them. Is that legal?

Answer 1

If the question is: "Is it legal for a Pennsylvanian fraternal non-profit corporation to adopt bylaws which do not require the disclosure of financial statements to equity members?", then the answer is, "Yes, if the corporation adopts such bylaws, then they would be legal".

An equity member is not like a shareholder of a for-profit corporation. In a for-profit corporation, a shareholder is an owner, who is entitled by law to full disclosure, including financial statements.

However, there are no shareholders of a non-profit. A better analogy in this case is that an equity member is like the beneficiary of a trust. The non-profit is organized for the benefit of its members, the "beneficiaries" (equity members and non-equity members), and the corporation is directed and managed by its board, in accordance with its articles of incorporation and bylaws. Therefore, in a non-profit, the board members are entitled to full access to the financial statements, but not the beneficiary-like members.

However, we do not have sufficient facts to determine whether or not the equity members in this case are entitled to the financials. (This issue is not the same as the question above, which concerns whether it "could" be legal.) Whether or not it "is" legal depends on how this particular non-profit is organized:

(1) Do the bylaws permit all equity members to have the financials?

(2) Are all members entitled to receive copies of the tax returns (this is probably affirmative)?

(3) Are there various classes of members, some but not all of whom are entitled to the financials?

Please repost with these and other related facts, and we will use our best efforts to provide information.

Hope this helps.

Answer 2

Why worry it is non-profit -- legal eagles handle the financial affairs...

Answer 3

What reason did they give you?????????