2020 Georgia Code
Title 14 - Corporations, Partnerships, and Associations
Chapter 3 - Nonprofit Corporations
Article 1 - General Provisions
Part 4 - Definitions; Notice
§ 14-3-140. Definitions

As used in this chapter, the term:

1. "Articles of incorporation" or "articles" includes amended and restated articles of incorporation and articles of merger.
2. "Board of directors" or "board" means the person or persons vested with the authority to manage the affairs of the corporation, irrespective of the name by which such group is designated, but shall not include any person solely by virtue of powers delegated to him or her by Code Section 14-3-801.
3. "Business corporation" means a corporation for profit, incorporated under the provisions of Chapter 2 of this title.
4. "Bylaws" means the code of rules other than the articles adopted pursuant to this chapter for the regulation or management of the affairs of the corporation, irrespective of the name or names by which such rules are designated.
5. "Class" refers to a group of memberships which have the same rights with respect to voting, dissolution, redemption, and transfer. For the purpose of this Code section, rights shall be considered the same if they are determined by a formula applied uniformly.
6. "Corporation" or "domestic corporation" means a corporation, other than a foreign corporation, incorporated under or subject to the provisions of this chapter.
7. "Delegate" means a person elected or appointed to vote in a representative assembly for the election of a director or on other matters.
8. "Deliver" includes delivery by hand, mail, private carrier, and electronic transmission.
9. "Distribution" means the payment of a dividend or any part of the income or profit of a corporation to its members, directors, or officers. Payment of indemnification or reasonable compensation, fees, or expenses incurred in the performance of duties on behalf of the corporation is not a distribution.
10. "Effective date of notice" is defined in Code Section 14-3-141.
11. "Electronic network" means any medium for sending, receiving, and viewing electronic transmissions among persons.
12. "Electronic transmission" or "electronically transmitted" means any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved, and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process. Electronic transmissions include, but are not limited to, telegraphs, telegrams, cablegrams, teletypes, e-mail, and facsimile transmissions.
13. "Employee" includes an officer but not a director. A director may accept duties that make him or her also an employee.
14. "Entity" includes corporation and foreign corporation; business corporation and foreign business corporation; profit and nonprofit unincorporated association; business trust, estate, general partnership, limited partnership, trust, two or more persons having a joint or common economic interest; limited liability company and foreign limited liability company; limited liability partnership and foreign limited liability partnership; state, United States, and foreign government; and regional commission solely for the purpose of implementing subsection (f) of Code Section 50-8-35.
15. "Foreign business corporation" means a corporation for profit incorporated under a law other than the law of this state.
16. "Foreign corporation" means a corporation incorporated under a law other than the law of this state which would be a nonprofit corporation if incorporated under, or subject to, this chapter.

    (16.1) "Foreign limited liability company" means a limited liability company formed under the laws of a jurisdiction other than this state.

17. "Governmental subdivision" includes an authority, county, district, and municipality or any other political subdivision.
18. "Includes" denotes a partial definition.
19. "Individual" includes the estate of an incompetent or deceased individual.

    (19.1) "Limited liability company" means any limited liability company formed under Chapter 11 of this title.

20. "Mail" includes the United States mail.
21. "Means" denotes an exhaustive definition.
22. "Member" means without regard to the name by which a person is designated in the articles or bylaws any person who is entitled to vote for the election of a director or directors pursuant to a provision of the corporation's articles or bylaws that expressly provides for or contemplates the existence of members. A person is not a member by virtue of any of the following:
    1. Any rights such person has as a delegate;
    2. Any rights such person has to designate or confirm a director or directors; or
    3. Any rights such person has as a director.
23. "Notice" is defined in Code Section 14-3-141.
24. "Person" includes an individual and an entity.
25. "Principal office" means the office in or out of this state so designated in the annual registration where the principal executive offices of a domestic or foreign corporation are located.
26. "Proceeding" includes civil suit and criminal, administrative, and investigatory action.
27. "Record date" means the date established under Article 6 or 7 of this chapter on which a corporation determines the identity of its members for purposes of this chapter. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.
28. "Secretary" means the corporate officer to whom the board of directors has delegated responsibility under subsection (b) of Code Section 14-3-840 for custody of the minutes of the meetings of the board of directors and of any members and for authenticating records of the corporation.
29. "Signature" or "sign" includes any manual, facsimile, conformed, or electronic signature.
30. "State," when referring to a part of the United States, includes a state, commonwealth, the District of Columbia (and their agencies and governmental subdivisions) and a territory and insular possession (and their agencies and governmental subdivisions) of the United States.
31. "Superior court" means the superior court of the county in which the corporation's registered office is located; or, if the corporation has no registered office, the county in which the corporation's principal office is located; or, if the corporation has neither a registered office nor a principal office, then the Superior Court of Fulton County.
32. "United States" includes district, authority, bureau, commission, department, and any other agency of the United States.
33. "Voting power" means the total number of votes entitled to be cast for the election of directors at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event that has not occurred at the time. Where a class is entitled to vote as a class for directors, the determination of voting power of the class shall be based on the percentage of the number of directors the class is entitled to elect out of the total number of authorized directors.

(Code 1981, §14-3-140, enacted by Ga. L. 1991, p. 465, § 1; Ga. L. 1992, p. 2108, § 2; Ga. L. 1997, p. 1165, § 12.1; Ga. L. 1999, p. 405, § 17; Ga. L. 2004, p. 508, § 22; Ga. L. 2005, p. 60, § 14/HB 95; Ga. L. 2008, p. 181, § 14/HB 1216; Ga. L. 2016, p. 225, § 2-2/SB 128.)

The 2016 amendment, effective July 1, 2016, added paragraphs (16.1) and (19.1).

- Status of corporations as persons, § 1-2-1.

While some Articles and Parts of the Code contain specialized definitions applicable only to those Articles and Parts, this section contains defined terms used throughout the Code. Many of these definitions are the same as their Business Code counterparts, and most of those that are not are self-explanatory.

The term "articles" is synonymous with "articles of incorporation" throughout the Code.

"Board of directors" is synonymous with "board" throughout the Code and is defined to mean the person(s) authorized to manage the corporation's affairs, regardless of the name or title given to such person(s).

"Distribution" is a central concept of the Code and it differs from its Business Code counterpart. The term is defined to include the payment of any part of a nonprofit corporation's income or profit to its members, directors, or officers. Distributions are generally prohibited except as permitted in section 14-3-1302. Payment by the corporation of such expenses as reasonable compensation or indemnification is not a "distribution."

"Member" is defined as any person who is entitled to vote for the election of a director or directors pursuant to a provision in the corporation's bylaws or articles that expressly provides for members or contemplates the existence of members. If the articles or bylaws so provide, the person with such voting right is a "member" for purposes of the Code, regardless of the name or title by which such person is designated in the corporation's articles or bylaws.

"Superior court" is defined to cover contingencies such as the absence of a registered or principal office of a nonprofit corporation.

Source: Model Act § 2.

Note to 1997 Amendment The 1997 amendment amended paragraph (13) by adding limited partnerships, limited liability companies, and limited liability partnerships to the list of entities, conforming the definition to that of the Business Corporation Code.

JUDICIAL DECISIONS

Editor's notes.

- In light of the similarity of the statutory provisions, decisions under former Code 1933, § 114-101, are included in the annotations for this Code section.

Test for determining whether organization is nonprofit is not whether it has an excess of income over expenses for several years. Georgia Osteopathic Hosp. v. Strickland, 123 Ga. App. 86, 179 S.E.2d 560 (1970) (decided under former Code 1933, § 114-101).

"Charitable" and "nonprofit" are not synonymous. Georgia Osteopathic Hosp. v. Strickland, 123 Ga. App. 86, 179 S.E.2d 560 (1970) (decided under former Code 1933, § 114-101).

- Prior to 1975, when § 34-9-1 read "corporation engaged in any business operated for gain or profit," it included by definition only the profit-making private business corporation as provided for in Ch. 2 of this title. The deletion by the 1975 amendment of the words "operated for gain or profit" broadened the coverage of the § 34-9-1 definition of employer to include private nonprofit corporations as provided for in Ch. 3 of this title. Fulton-DeKalb Hosp. Auth. v. Gaither, 241 Ga. 572, 247 S.E.2d 89 (1978) (decided under former Code 1933, § 114-101).

- The phrase "corporations engaged in any business" in § 34-9-1 includes only those corporations governed by the Georgia Business Corporation Code. Hospital authorities are not governed by Georgia Business Corporation Code, but are expressly exempted therefrom. Fulton-DeKalb Hosp. Auth. v. Gaither, 241 Ga. 572, 247 S.E.2d 89 (1978) (decided under former Code 1933, § 114-101).

- For purposes of interlocutory injunctive relief, the trial court properly found that the second of two factions controlled a nonprofit corporation. There was evidence that the corporation, a temple, had members, consisting of people who regularly attended the temple and participated in its events; furthermore, there was evidence that the members had been properly notified of an annual meeting and that more than 50 percent of the members appeared at the meeting and voted unanimously to elect the second faction to the board of directors. Nguyen v. Tran, 287 Ga. App. 888, 652 S.E.2d 881 (2007).

- Trial court properly dismissed the tobacco farmers' claim for an equitable accounting of a tobacco cooperative because it was undisputed that that the tobacco cooperative was a foreign corporation organized under North Carolina law and, therefore, the trial court lacked the authority to order an inspection of the tobacco cooperative's records. Rigby v. Flue-Cured Tobacco Coop. Stabilization Corp., 327 Ga. App. 29, 755 S.E.2d 915 (2014).

- Georgia Public Service Commission was authorized to dismiss a natural gas company's application for certification because creation of a natural gas company as a Limited Liability Company (LLC) wholly owned by the city's utility board was in derogation of a city charter as the charter required the utility board to create a wholly owned subsidiary in the form of a non-profit corporation rather than a LLC, thus, the city's creation of a LLC was an ultra vires act. Infinite Energy v. Marietta Natural Gas, 349 Ga. App. 343, 826 S.E.2d 189 (2019).

Cited in Bartley v. Augusta Country Club, Inc., 166 Ga. App. 1, 303 S.E.2d 129 (1983).

OPINIONS OF THE ATTORNEY GENERAL

Regional Development Center as "entity".

- Because a Regional Development Center is a public agency and an instrumentality of the municipalities and counties in its region, it is not an entity authorized by law to create a nonprofit corporation. 1992 Op. Att'y Gen. No. 92-1.

RESEARCH REFERENCES

Am. Jur. 2d.

- 18 Am. Jur. 2d, Corporations, § 1 et seq.

- 10 C.J.S., Beneficial Associations, § 7.

- Applicability to corporations not organized for profit of statutes prescribing conditions under which foreign corporations may do business within state, 37 A.L.R. 1283.

Nonprofit purposes and character which warrant creation of nonprofit corporation, 16 A.L.R.2d 1345.