Bill Text: MI HB6217 | 2025-2026 | 103rd Legislature | Introduced
Bill Title: Businesses: nonprofit corporations; power of nonprofit corporations to spend in elections or ballot issues; revoke. TIE BAR WITH: HB 6216'26, HB 6218'26
Sponsorship: Partisan Bill (Democrat 10)
Status: (Introduced) 2026-07-14 - Bill Electronically Reproduced 07/03/2026 [HB6217 Detail]
Download: Michigan-2025-HB6217-Introduced.html
HOUSE BILL NO. 6217
A bill to amend 1982 PA 162, entitled
"Nonprofit corporation act,"
by amending sections 261, 271, 821, 1012, and 1041 (MCL 450.2261, 450.2271, 450.2821, 450.3012, and 450.3041), sections 261, 821, and 1012 as amended by 2014 PA 557 and section 1041 as amended by 2014 PA 559, and by adding section 261a.
the people of the state of michigan enact:
Sec. 261. (1) A corporation, subject to any limitation provided in this act, including, but not limited to, section 261a, in any other statute of this state, or in its articles of incorporation, has the power in furtherance of its corporate purposes to do any of the following:
(a) Have perpetual duration.
(b) Sue and be sued in all courts and participate in actions and proceedings, judicial, administrative, arbitrative, or otherwise, in the same manner as an individual.
(c) Have a corporate seal, alter the seal, and use it by causing it or a facsimile to be affixed, impressed, or reproduced in any other manner.
(d) Adopt, amend, or repeal bylaws, including emergency bylaws, relating to the purposes of the corporation, the conduct of its affairs, its rights and powers, and the rights and powers of its shareholders, members, directors, or officers.
(e) Elect or appoint officers, employees, and other agents of the corporation, prescribe their duties, fix their compensation and the compensation of directors, and indemnify corporate directors, officers, employees, and agents.
(f) Purchase, receive, take by grant, gift, devise, bequest, or otherwise, lease, or otherwise acquire, own, hold, improve, administer, employ, use, and otherwise deal in and with, real or personal property, or an interest in real or personal property, wherever situated, either absolutely, in trust, or as an endowment or donor restricted fund, and without limitation as to amount or value.
(g) Sell, convey, lease, exchange, transfer, or otherwise dispose of, or mortgage or pledge, or create a security interest in, any of its property , or an interest in the property, wherever situated.
(h) Purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, employ, sell, lend, lease, exchange, transfer, or otherwise dispose of, mortgage, pledge, use, and otherwise deal in and with, bonds and other obligations, shares or other securities or interests or memberships issued by others, whether engaged in similar or different business, governmental, or other activities, including banking corporations or trust companies. A corporation organized or conducting affairs in this state under this act shall not guarantee or become surety on a bond or other undertaking securing the deposit of public money.
(i) Make contracts, give guarantees, and incur liabilities, borrow money at rates of interest as the corporation may determine, issue its notes, bonds, and other obligations, and secure any of its obligations by mortgage or pledge of any of its property or an interest in the property, wherever situated. Without limiting the preceding, these powers include the powers to give guarantees and to incur joint indebtedness that are necessary or convenient to the conduct, promotion, or attainment of the purposes of any of the following entities, whether or not subject to this act, and those guarantees or joint indebtedness is considered to be in furtherance of the corporate purpose purposes of the contracting corporation:
(i) A corporation, foreign corporation, domestic business corporation, or foreign business corporation, if all of its outstanding shares are owned, directly or indirectly, or all of the outstanding memberships are owned or controlled, directly or indirectly, by any of the following:
(A) The contracting corporation.
(B) A directorship corporation whose directors are all elected or appointed, directly or indirectly, by the contracting corporation.
(C) A domestic or foreign limited liability company, if all of its membership interests are owned or controlled, directly or indirectly, by the contracting corporation.
(ii) A corporation or foreign corporation that owns or controls, directly or indirectly, all of the outstanding shares of the contracting corporation; or that owns or controls, directly or indirectly, all of the outstanding membership interests of the contracting corporation; or that elects or appoints, directly or indirectly, all of the directors of the contracting directorship corporation.
(iii) A corporation or foreign corporation, if all of its outstanding shares are owned or controlled, directly or indirectly, or all of its outstanding memberships are owned or controlled, directly or indirectly, by an affiliate; or a directorship corporation, if all of its directors are elected or appointed, directly or indirectly, by an affiliate. As used in this subparagraph, "affiliate" means a nonprofit corporation, whether or not subject to this act, or a foreign corporation, that owns or controls, directly or indirectly, all of the outstanding shares of the contracting corporation; or that owns or controls, directly or indirectly, all of the outstanding memberships of the contracting corporation; or that elects or appoints, directly or indirectly, all of the directors of the contracting corporation if it is a directorship corporation.
(j) Lend money, invest and reinvest its funds, and take and hold real and personal property as security for the payment of funds loaned, invested, or reinvested.
(k) Make donations for any of the following: the public welfare; a community fund; or a hospital; or a charitable, educational, scientific, civic, or similar purpose. A corporation also has the power to provide aid in time of war or other national emergency.
(l) Pay pensions, establish and carry out pension, federally qualified profit sharing, savings, thrift, and other retirement, incentive, and benefit plans, trusts, and provisions for any of its directors, officers, and employees.
(m) Purchase, receive, take, otherwise acquire, own, hold, sell, lend, exchange, transfer, otherwise dispose of, pledge, use, and otherwise deal in and with its own shares, bonds, and other securities.
(n) Participate with others in any domestic corporation, foreign corporation, domestic business corporation, foreign business corporation, partnership, limited partnership, limited liability company, limited liability partnership, joint venture, or other association of any kind, or in any transaction, undertaking, or agreement that the participating corporation would have power to conduct by itself, whether or not the participation involves sharing or delegation of control with or to others.
(o) Cease its corporate activities and dissolve.
(p) Conduct its affairs, carry on its operations, and have offices and exercise the powers granted under this act in any jurisdiction in or outside the United States, and, in the case of a corporation the purpose or purposes of which require the transaction of business, the receipt and payment of money, the care and custody of property, and other incidental business matters, transact that business, receive, collect, and disburse that money, and engage in those other incidental business matters as are naturally or properly within the scope of its articles.
(q) Have and exercise all powers necessary or convenient to effect any purpose for which the corporation is formed.
(2) A corporation that is subject to the uniform prudent management of institutional funds act, 2009 PA 87, MCL 451.921 to 451.931, has all powers granted under both this act and that act. However, in the event of an inconsistency between the 2 acts, the uniform prudent management of institutional funds act, 2009 PA 87, MCL 451.921 to 451.931, controls.
(3) The corporate existence of all corporations incorporated before January 1, 1983, without capital stock, for religious, benevolent, social, or fraternal purposes, shall be is considered to be in perpetuity. A limitation or term fixed in the articles or in the law under which the corporation originally incorporated is not effective unless the corporation affirmatively waived its right to perpetual existence after September 18, 1931, by fixing a definite term of existence by amendment to its articles.
(4) Any nonprofit power corporation that is authorized to furnish electric service may construct, maintain, and operate its lines along, over, across, or under any public places, streets, and highways, and across or under the waters in this state, with all necessary erections and fixtures. A nonprofit power corporation may exercise the power of eminent domain, in the manner provided by the uniform condemnation procedures act, 1980 PA 87, MCL 213.51 to 213.75. As a condition to the exercise of any of these powers, nonprofit power corporations are subject to the jurisdiction of the Michigan public service commission under 1909 PA 106, MCL 460.551 to 460.559, 1919 PA 419, MCL 460.54 to 460.62, and 1939 PA 3, MCL 460.1 to 460.11.
(5) A corporation formed under this act that is operating a public school academy as that term is defined in section 5 of the revised school code, 1976 PA 451, MCL 380.5, is a public body corporate and a governmental agency and shall have has all powers granted under this act and under the revised school code, 1976 PA 451, MCL 380.1 to 380.1853. 380.1852. However, in the event of if there is an inconsistency between this act and the revised school code, the revised school code shall control.controls.
(6) Subject to the limitations on the practice of law by corporations contained in 1917 PA 354, MCL 450.681, a domestic corporation may be formed and a foreign corporation may be authorized to conduct affairs in this state for the purpose of providing services in a learned profession and may employ and enter into other arrangements with duly licensed or authorized individuals who shall furnish those services on behalf of the corporation.
(7) Except as otherwise provided in section 209(1)(d) or section 209(1)(e), (e), any duly licensed or authorized individual who is employed by a corporation described in subsection (6) is personally and fully liable and accountable for any negligent or wrongful acts or misconduct committed by him or her, the individual, or by any individual under his or her the individual's direct supervision and control, while rendering professional services on behalf of the corporation to the person for whom those professional services were being rendered. However, the corporation that employs that duly licensed or authorized individual may indemnify him or her the individual for any resulting liabilities and expenses as provided in this act and under other applicable law.
Sec. 261a. (1) Except as otherwise provided in subsection (3), a domestic corporation does not have any power to pay, contribute, or expend money or anything of value in support of, or in opposition to, a candidate, political party, political committee, or ballot question. The performance of an act described in this subsection by a domestic corporation is invalid and subject to disgorgement.
(2) Except as otherwise provided in subsection (3), a foreign corporation does not have any power, privilege, or right to pay, contribute, or expend money or anything of value in support of, or in opposition to, a candidate, political party, political committee, or ballot question in this state. The performance of an act described in this subsection by a foreign corporation is invalid and subject to disgorgement.
(3) Subsections (1) and (2) do not apply to either of the following:
(a) An existing contract, debt instrument, security, or other legal obligation validly entered into before the effective date of the amendatory act that added this section.
(b) A bona fide news story, commentary, or editorial distributed through the facilities of a broadcasting station or of any print, online, or digital newspaper, magazine, blog, or other periodical publication, unless the broadcasting, print, online, or digital facility is owned or controlled by a candidate, political party, or political committee.
(4) A domestic corporation that performs an act described in subsection (1) is subject to dissolution as provided in section 821. A foreign corporation that performs an act described in subsection (2) is subject to revocation of the foreign corporation's authority to transact business in this state as provided in section 1041.
(5) The attorney general or the administrator may bring an action for any of the following:
(a) A declaration that the performance of an act is invalid under subsection (1) or (2).
(b) An order of disgorgement under subsection (1) or (2).
(c) An injunction against the performance of an act under subsection (1) or (2).
(6) As used in this section:
(a) "Ballot question" means that term as defined in section 2 of the Michigan campaign finance act, 1976 PA 388, MCL 169.202.
(b) "Candidate" means that term as defined in section 3 of the Michigan campaign finance act, 1976 PA 388, MCL 169.203.
(c) "Domestic corporation" and "foreign corporation" do not include a political committee.
(d) "Political committee" means a committee as that term is defined in section 3 of the Michigan campaign finance act, 1976 PA 388, MCL 169.203.
Sec. 271. An Except as otherwise provided in section 261a, an act of a corporation and a transfer of real or personal property to or by a corporation, otherwise lawful, is not invalid because the corporation was without capacity or power to do the act or make or receive the transfer of property. However, the lack of capacity or power may be asserted in any of the following:
(a) By a shareholder or member, or by a director who has not authorized or consented to the act or transfer, in an action against the corporation to enjoin the doing of an act or the transfer of real or personal property by or to the corporation.
(b) In an action by or in the right of the corporation to procure a judgment in its favor against an incumbent or former officer or director of the corporation for loss or damage due to an unauthorized act by that person.
(c) In an action or special proceeding by the attorney general to dissolve the corporation or to enjoin it from the conducting of unauthorized affairs.
Sec. 821. (1) The attorney general may bring an action in the circuit court for the county in which the principal place of business or registered office of a corporation is located or for Ingham county County for dissolution of a corporation on the ground that the corporation has committed any of the following acts:
(a) Procured its organization through fraud.
(b) Repeatedly, willfully, and materially exceeded the authority conferred on it by law.
(c) Repeatedly, willfully, and materially conducted its affairs in an unlawful manner.
(d) Performed an act described in section 261a(1).
(2) The enumeration in this section of grounds for dissolution does not exclude any other statutory or common law action by the attorney general for dissolution of a corporation or revocation or forfeiture of its corporate franchises.
Sec. 1012. (1) Without excluding other activities that may not constitute conducting affairs in this state, a foreign corporation is not considered to be conducting affairs in this state for the purposes of this act solely because it is carrying on in this state any 1 or more of the following activities:
(a) Maintaining, defending, or settling any proceeding.
(b) Holding meetings of the board of directors, shareholders, or members or carrying on other activities concerning internal corporate affairs.
(c) Maintaining bank accounts.
(d) Maintaining offices or agencies for the transfer, exchange, or registration of the corporation's own securities or maintaining trustees or depositories with respect to those securities.
(e) Selling through independent contractors.
(f) Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts.
(g) Soliciting or obtaining donations, whether by mail, by telephone or other form of remote communications, by electronic transmission, or through employees, agents, volunteers or otherwise, if the donations are made to a foreign corporation that has its principal place of business outside the state.
(h) Creating or acquiring indebtedness, mortgages, or security interests in real or personal property.
(i) Securing or collecting debts or enforcing mortgages and security interests in property that secures those debts.
(j) Owning, without more, real or personal property.
(k) Conducting an isolated transaction that is completed within 30 days and that is not 1 transaction in the course of repeated transactions of a similar nature.
(l) Transacting business in interstate commerce.
(2) This section does not apply in determining the contracts or activities that may subject a foreign corporation to service of process or taxation in this state or to regulation under any other statute of this state.
(3) This section does not authorize a foreign corporation to perform an act described in section 261a(2).
Sec. 1041. In addition to any other ground for revocation provided by law, the administrator may revoke the certificate of authority of a foreign corporation to conduct affairs in this state, in the manner described in section 1042, on any of the following grounds:
(a) The corporation fails to maintain a resident agent in this state as required under this act.
(b) The corporation, after changing its registered office or resident agent, fails to file a statement of the change as required under this act.
(c) The corporation fails to file an amended application if required under this act.
(d) The corporation, after becoming the survivor in a merger, consolidation, or conversion, fails to file a certificate that attests to the occurrence of the merger, consolidation, or conversion as required under this act.
(e) The corporation fails to file its annual report within the time required under this act, or fails to pay an annual fee required under this act.
(f) The corporation performs an act described in section 261a(2).
Enacting section 1. This amendatory act does not take effect unless all of the following bills of the 103rd Legislature are enacted into law:
(a) Senate Bill No. ____ (request no. S05239'25) or House Bill No. 6218 (request no. H05239'25).
(b) Senate Bill No. ____ (request no. S05651'25) or House Bill No. 6216 (request no. H05651'25).
