Bill Text: MI SB0623 | 2013-2014 | 97th Legislature | Engrossed
Bill Title: Businesses; nonprofit corporations; nonprofit corporation act; make general revisions. Amends secs. 103, 104, 105, 106, 107, 108, 109, 110, 121, 122, 123, 131, 132, 133, 141, 143, 151, 202, 209, 212, 215, 217, 221, 241, 242, 243, 246, 251, 261, 275, 301, 303, 304, 305, 307, 308, 309, 313, 317, 331, 332, 338, 402, 403, 404, 405, 407, 413, 415, 421, 422, 423, 441, 442, 444, 446, 451, 455, 461, 485, 487, 501, 505, 506, 511, 521, 523, 527, 528, 531, 541, 548, 551, 552, 553, 561, 562, 563, 565, 567, 569, 601, 602, 611, 615, 631, 641, 642, 643, 701, 707, 741, 753, 801, 804, 805, 811, 815, 817, 821, 823, 851, 855, 901, 911, 913, 922, 923, 925, 932, 1001, 1002, 1012, 1015, 1016, 1021, 1032, 1035, 1041, 1042, 1051, 1060, 1104, 1107, 1145 & 1162 of 1982 PA 162 (MCL 450.2103 et seq.); adds secs. 303a, 303b, 303c, 303d, 314, 336, 341a, 343, 344, 345, 392, 406, 408, 409, 412, 432, 447a, 466, 467, 468, 472, 473, 488, 489, 491a, 492a, 493a, 494, 495, 496, 497, 514, 515a, 529, 545a, 564a, 564b, 564c, 571, 703a, 706, 711, 712, 713, 724, 735, 736a, 745, 746, 751, 754, 841a, 842a, 1013 & 1056 & repeals secs. 312, 315, 361, 363, 365, 371, 411, 447, 481, 491, 492, 493, 515, 545, 546, 564, 703, 721, 722, 723, 731, 732, 736, 737, 825, 841, 842, 843 & 935 of 1982 PA 162 (MCL 450.2312 et seq.). TIE BAR WITH: SB 0624'13
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Passed) 2014-12-31 - Assigned Pa 0557'14 With Immediate Effect [SB0623 Detail]
Download: Michigan-2013-SB0623-Engrossed.html
SB-0623, As Passed House, December 18, 2014
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 623
A bill to amend 1982 PA 162, entitled
"Nonprofit corporation act,"
by amending sections 103, 104, 105, 106, 107, 108, 109, 110, 121,
122, 123, 131, 132, 133, 141, 143, 151, 202, 209, 212, 215, 217,
221, 241, 242, 243, 246, 251, 261, 275, 301, 303, 304, 305, 307,
308, 309, 313, 317, 331, 332, 338, 402, 403, 404, 405, 407, 413,
415, 421, 422, 423, 441, 442, 444, 446, 451, 455, 461, 485, 487,
501, 505, 506, 511, 521, 523, 527, 528, 531, 541, 548, 551, 552,
553, 561, 562, 563, 565, 567, 569, 601, 602, 611, 615, 631, 641,
642, 643, 701, 707, 741, 753, 801, 804, 805, 811, 815, 817, 821,
823, 851, 855, 901, 911, 913, 922, 923, 925, 932, 1001, 1002, 1012,
1015, 1016, 1021, 1032, 1035, 1041, 1042, 1051, 1060, 1104, 1107,
1145, and 1162 (MCL 450.2103, 450.2104, 450.2105, 450.2106,
450.2107, 450.2108, 450.2109, 450.2110, 450.2121, 450.2122,
450.2123, 450.2131, 450.2132, 450.2133, 450.2141, 450.2143,
450.2151, 450.2202, 450.2209, 450.2212, 450.2215, 450.2217,
450.2221, 450.2241, 450.2242, 450.2243, 450.2246, 450.2251,
450.2261, 450.2275, 450.2301, 450.2303, 450.2304, 450.2305,
450.2307, 450.2308, 450.2309, 450.2313, 450.2317, 450.2331,
450.2332, 450.2338, 450.2402, 450.2403, 450.2404, 450.2405,
450.2407, 450.2413, 450.2415, 450.2421, 450.2422, 450.2423,
450.2441, 450.2442, 450.2444, 450.2446, 450.2451, 450.2455,
450.2461, 450.2485, 450.2487, 450.2501, 450.2505, 450.2506,
450.2511, 450.2521, 450.2523, 450.2527, 450.2528, 450.2531,
450.2541, 450.2548, 450.2551, 450.2552, 450.2553, 450.2561,
450.2562, 450.2563, 450.2565, 450.2567, 450.2569, 450.2601,
450.2602, 450.2611, 450.2615, 450.2631, 450.2641, 450.2642,
450.2643, 450.2701, 450.2707, 450.2741, 450.2753, 450.2801,
450.2804, 450.2805, 450.2811, 450.2815, 450.2817, 450.2821,
450.2823, 450.2851, 450.2855, 450.2901, 450.2911, 450.2913,
450.2922, 450.2923, 450.2925, 450.2932, 450.3001, 450.3002,
450.3012, 450.3015, 450.3016, 450.3021, 450.3032, 450.3035,
450.3041, 450.3042, 450.3051, 450.3060, 450.3104, 450.3107,
450.3145, and 450.3162), sections 106, 404, 505, 548, 611, 901, and
922 as amended by 2008 PA 222, sections 108, 561, 562, 563, 565,
567, and 569 as amended by 1993 PA 129, section 110 as amended by
1990 PA 39, section 123 as amended by 2008 PA 482, section 131 as
amended by 2005 PA 219, sections 133, 141, 143, 151, 405, 407, 413,
421, 441, 446, 451, and 521 as amended by 2008 PA 9, section 209 as
amended by 1996 PA 397, sections 261, 501, and 541 as amended by
2009 PA 88, section 911 as amended by 1996 PA 84, section 1060 as
amended by 2012 PA 309, and sections 1104, 1107, 1145, and 1162 as
added by 1984 PA 209, and by adding sections 303a, 303b, 303c,
303d, 314, 336, 341a, 343, 344, 345, 392, 406, 408, 409, 412, 432,
447a, 466, 467, 468, 472, 473, 488, 489, 491a, 492a, 493a, 494,
495, 496, 497, 514, 515a, 529, 545a, 564a, 564b, 564c, 571, 703a,
706, 711, 712, 713, 724, 735, 736a, 745, 746, 751, 754, 841a, 842a,
and 1013; and to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 103. This act shall be liberally construed and applied to
promote its underlying purposes and policies which include all of
the following:
(a) To simplify, clarify, and modernize the law governing
nonprofit corporations.
(b) To provide a general corporate form for the conduct or
promotion
of lawful nonprofit activities or purposes, with such any
variations and modifications from the form as interested parties in
any
corporation may agree upon, on,
subject only to overriding
interests of this state and of third parties.
Sec. 104. The definitions contained in sections 105 to 110
shall
control only in the interpretation of this act, unless the
context otherwise requires.
Sec.
105. (1) "Administrator" means the director of commerce
or
the head of any other agency or department authorized by law to
administer
this act, the department or a his
or her designated
representative. of
that person.
(2) "Articles of incorporation" includes any of the following:
(a) the The original articles of
incorporation or any other
instrument filed or issued under any statute to organize a domestic
or foreign corporation, as amended, supplemented, or restated by
certificates of amendment, merger, conversion, or consolidation, or
other certificates or instruments filed or issued under any
statute. ;
or
(b) a A special act or charter
creating a domestic or foreign
corporation, as amended, supplemented, or restated.
(3)
"Assets" means the properties and rights entered upon the
books
of a corporation in accordance with generally accepted
accounting
principles, or the current fair market value of such
properties
and rights.
(3) (4)
"Authorized shares" means
shares of all classes that a
corporation is authorized to issue.
(4) "Ballot" means an instrument in written or electronic form
that is designed to record the vote or votes of shareholders or
members under section 408 or section 409 or at a meeting of the
shareholders or members.
(5)
"Board" means the board of directors or trustees or other
governing board of a corporation.
(6) "Bonds" includes secured and unsecured bonds, debentures,
and notes.
(7) "Business corporation" or "domestic business corporation"
means
a corporation for profit organized formed under Act No. 284
of
the Public Acts of 1972, as amended, being sections 450.1101 to
450.2099
of the Michigan Compiled Laws, the
business corporation
act,
or existing on January 1, 1973 and theretofore
formed before
January 1, 1973 under any other statute of this state for a purpose
for which a corporation for profit may be organized under that
act.statute.
(8) "Business corporation act" means the business corporation
act, 1972 PA 284, MCL 450.1101 to 450.2098.
Sec. 106. (1) "Charitable purpose corporation" means a
nonprofit
domestic corporation that meets any of the following:
(a) Is recognized by the United States internal revenue
service as exempt or qualifies for exemption under section
501(c)(3) of the internal revenue code of 1986, 26 USC 501.
(b)
Is a corporation whose purposes, structure, or and
activities are exclusively those that are described in section
501(c)(3) of the internal revenue code of 1986, 26 USC 501.
(c) Is a corporation organized or held out to be organized
exclusively for 1 or more charitable purposes.
(2) "Corporation" or "domestic corporation" means a nonprofit
corporation formed under this act, or formed under any other
statute of this state and subject to this act under section 121 or
123 or under any other section of this act.
(3) "Department" means the department of licensing and
regulatory affairs.
(4) (3)
"Director" means an
individual who is a member of the
board of a corporation. The term is synonymous with "trustee" of a
corporation or other similar designation.
(5) "Distribution" means a direct or indirect transfer of
money or other property, except the corporation's shares or
memberships, or debt incurred by the corporation to or for the
benefit of its shareholders or members in connection with the
corporation's shares or memberships. A distribution may be in the
form of a dividend, a purchase, redemption or other acquisition of
shares or memberships, an issuance of indebtedness, the conversion
of stock or membership in the corporation to bonds or other
indebtedness, or any other declaration or payment to or for the
benefit of the shareholders or members.
(6) (4)
"Electronic transmission"
or "electronically
transmitted" means any form of communication that meets all of the
following:
(a) It does not directly involve the physical transmission of
paper.
(b) It creates a record that may be retained and retrieved by
the recipient.
(c) It may be directly reproduced in paper form by the
recipient through an automated process.
Sec. 107. (1) "Foreign business corporation" means a
corporation
for profit organized that
is formed under laws other
than
the laws of this state, which that
includes in its purposes a
purpose
for which a corporation may be organized formed under Act
No.
284 of the Public Acts of 1972, as amended.the business
corporation act.
(2) "Foreign corporation" means a nonprofit corporation
organized
formed under laws other than the laws of this state,
conducting
affairs in this state for if
its purpose or purposes are
a
purpose or purposes for which a corporation may be organized
formed under this act.
(3)
"Insolvent" means being unable to pay debts as they become
due
in the usual course of a debtor's business.
Sec.
108. (1) "Member" means a person having that has a
membership in a corporation in accordance with the provisions of
its articles of incorporation or bylaws.
(2)
"Nondirector volunteer" means an individual, other than a
volunteer
director, performing services for a nonprofit corporation
who
does not receive compensation or any other type of
consideration
for the services other than reimbursement for
expenses
actually incurred.
(2) (3)
"Nonprofit corporation"
means a corporation
incorporated to carry out any lawful purpose or purposes that does
not
involving involve pecuniary profit or gain for its directors,
officers, shareholders, or members.
(3) (4)
"Person" means an
individual, a partnership, a
domestic corporation, a domestic business corporation, a foreign
corporation, a foreign business corporation, a limited liability
company,
or any other association, corporation, trust, or any other
legal entity.
(4) (5)
"Predecessor act" means
an act or part of an act
repealed by this act, or an act or part of an act repealed by an
act that this act repeals.
(5) "Private foundation" means a tax exempt corporation
described in section 501(c)(3) of the internal revenue code of
1986, 26 USC 501, that is classified as a private foundation under
section 509(a) of the internal revenue code of 1986, 26 USC 509.
Sec. 109. (1) "Shareholder" means a person that holds shares
of a domestic corporation, foreign corporation, domestic business
corporation, or foreign business corporation.
(2) "Shares" means the units into which interests of
shareholders in a domestic corporation, foreign corporation,
domestic business corporation, or foreign business corporation are
divided.
(3) "Services in a learned profession" means services provided
by a dentist, an osteopathic physician, a physician, a surgeon, a
doctor of divinity or other clergy, or an attorney at law.
Sec.
110. (1) "Treasury shares" means shares which have been
issued,
have been subsequently acquired by a corporation, and have
not
been canceled. Treasury shares are issued shares, but not
outstanding
shares."Volunteer"
means an individual who performs
services for a corporation, other than services as a volunteer
director, who does not receive compensation or any other type of
consideration for the services other than reimbursement for
expenses actually incurred.
(2) "Volunteer director" means a director who does not receive
anything of more than nominal value from the corporation for
serving as a director other than reasonable per diem compensation
and reimbursement for actual, reasonable, and necessary expenses
incurred by a director in his or her capacity as a director.
Sec. 121. (1) Except as otherwise provided in this act or by
other law, this act applies to all of the following:
(a)
Every domestic corporation organized formed under this act
or under a predecessor act, for a purpose or purposes for which a
corporation
might be organized formed under this act.
(b)
Every foreign corporation which that
is authorized to or
does conduct affairs in this state except as otherwise provided
under this act or another statute.
(c) Any other domestic corporation or foreign corporation that
is not formed under this act to the extent, if any, provided under
section 123 or any other provision of this act or under a provision
of
any law governing such that domestic or foreign corporation.
(2)
A corporation organized formed
under or subject to a
predecessor act is subject to this act except to the extent that
this act conflicts with the articles and bylaws of the corporation
lawfully
made pursuant to under the predecessor act. The
corporation may amend its articles and bylaws to bring itself in
conformity with this act.
Sec. 122. (1) A reference in any statute of this state to
parts
of any act which that are repealed by this act is deemed
considered to be a reference to this act, unless the context
requires otherwise.
(2) The following statutes do not apply to a domestic
corporation: ,
as defined in section 106:
(a)
Chapter 55 of the Revised Statutes of 1846, entitled
"general
provisions relating to corporations", as amended, being
sections
450.504 to 450.525 of the Michigan Compiled Laws.1846 RS
55, MCL 450.504 to 450.525.
(b)
Act No. 156 of the Public Acts of 1955, being sections
450.701
to 450.704 of the Michigan Compiled Laws.1955 PA 156, MCL
450.701 to 450.704.
(3) The uniform fraudulent transfer act, 1998 PA 434, MCL
566.31 to 566.43, does not apply to distributions permitted under
this act.
Sec.
123. (1) Unless Subject to
subsection (3), unless
otherwise provided in, and to the extent not inconsistent with, the
act under which a corporation is or has been formed, this act
applies
to a corporation that is or has been organized formed under
an act other than this act and not repealed by this act.
(2)
A corporation covered by described
in subsection (1)
includes,
but is not limited to, all any
of the following:
(a) A cooperative corporation classified as a nonprofit
corporation under section 98 of 1931 PA 327, MCL 450.98.
(b) A secret society or lodge.
(c)
A trustee corporation holding that
holds property for
charitable, religious, benevolent, educational, or other public
benefit purposes.
(d) A church trustee corporation.
(e) An educational corporation that is organized as a trustee
corporation or a nonprofit corporation.
(f) An ecclesiastical corporation.
(g) A public building corporation.
(h) A street railway under the nonprofit street railway act,
1867
PA 35, MCL 472.1 to 472.31.472.27.
(3) Except as provided in subsection (2)(h), this act does not
apply
to insurance , or
surety companies, credit unions,
savings
and loan associations, fraternal benefit societies, railroad,
bridge,
or tunnel companies, union depot companies, and or banking
corporations.
Sec. 131. (1) A document required or permitted to be filed
under this act shall be submitted by delivering the document to the
administrator together with the fees and accompanying documents
required by law. The administrator may establish a procedure for
accepting delivery of a document submitted under this subsection by
facsimile or by other
electronic transmission. However, by December
31,
2006, the administrator shall establish a procedure for
accepting
delivery of a document submitted under this subsection by
electronic
mail or over the internet. Beginning January 1, 2007,
the
The administrator shall accept delivery of documents
submitted
by electronic mail or over the internet.
(2) If a document submitted under subsection (1) substantially
conforms to the requirements of this act, the administrator shall
endorse
upon on it the word "filed" with the
administrator's his or
her official title and the dates of receipt and of filing, and
shall file and index the document or a reproduction of the document
pursuant to the records reproduction act, 1992 PA 116, MCL 24.401
to
24.406, in the administrator's his
or her office. If requested
at the time of the delivery of the document to the administrator's
office, the administrator shall include the hour of filing in the
endorsement on the document.
(3)
The administrator shall may
return a copy of a document
filed
under subsection (2), other than an annual report, or, at his
or
her discretion, the original, to the person who that submitted
the document for filing. The administrator shall mark the filing
date
on the copy or original before returning it or , if the
document
was submitted by electronic mail or over the internet, may
provide
proof of the filing date to the person who that submitted
the document for filing in another manner determined by the
administrator.
(4) The records and files of the administrator relating to
domestic and foreign corporations shall be open to reasonable
inspection by the public. The administrator may maintain the
records or files either in their original form or in the form of
reproductions pursuant to the records reproduction act, 1992 PA
116, MCL 24.401 to 24.406, and may destroy the original of the
reproduced documents.
(5)
The administrator may make copies reproductions of any
documents filed under this act, or any predecessor act, pursuant to
the records reproduction act, 1992 PA 116, MCL 24.401 to 24.406,
and may destroy the originals of the reproduced documents.
(6) A document filed under subsection (2) is effective at the
time it is endorsed unless a subsequent effective time, not later
than 90 days after the date of delivery, is set forth in the
document.
(7) The administrator shall charge 1 of the following
nonrefundable fees if expedited filing of a document by the
administrator is requested and the administrator shall retain the
revenue collected under this subsection and the department shall
use it to carry out its duties required by law:
(a) For any filing that a person requests the administrator to
complete within 1 hour on the same day as the day of the request,
$1,000.00. The department may establish a deadline by which a
person must submit a request for filing under this subdivision.
(b) For any filing that a person requests the administrator to
complete within 2 hours on the same day as the day of the request,
$500.00. The department may establish a deadline by which a person
must submit a request for filing under this subdivision.
(c) Except for a filing request under subdivision (a) or (b),
for the filing of any formation or qualification document that a
person requests the administrator to complete on the same day as
the day of the request, $100.00. The department may establish a
deadline by which a person must submit a request for filing under
this subdivision.
(d) Except for a filing request under subdivision (a) or (b),
for the filing of any other document concerning an existing
domestic corporation or a qualified foreign corporation that a
person requests the administrator to complete on the same day as
the day of the request, $200.00. The department may establish a
deadline by which a person must submit a request for filing under
this subdivision.
(e) For the filing of any formation or qualification document
that a person requests the administrator to complete within 24
hours of the time the administrator receives the request, $50.00.
(f) For the filing of any other document concerning an
existing domestic corporation or a qualified foreign corporation
that a person requests the administrator to complete within 24
hours of the time the administrator receives the request, $100.00.
Sec. 132. (1) A document filed with the administrator shall be
in the English language, except that the corporate name need not be
in the English language if written in English letters or Arabic or
Roman
numerals. , and the articles of incorporation of a foreign
corporation
need not be in the English language.
(2) A document required or permitted to be filed under this
act
which that is also required by this act to be executed on
behalf
of the domestic or foreign corporation
, shall be signed in
ink
by the chairperson or
vice-chairperson of the board or the
president
or a vice-president. an
authorized officer or agent of
the domestic or foreign corporation. If the board has not yet met,
the document shall be signed by the incorporator or a majority of
incorporators if there are more than 1. If the domestic or foreign
corporation is in the hands of a receiver, trustee, or other court
appointed
officer, the document shall be signed in ink by the
fiduciary
or the a majority of them, the fiduciaries, if there are
more than 1. The name of a person signing the document and the
capacity
in which the person he or
she signs , shall be stated
beneath
or opposite the his or her
signature. The document may, but
need not, contain any of the following:
(a) The corporate seal.
(b) An attestation by the secretary or an assistant secretary
of the corporation.
(c) An acknowledgment or proof.
Sec. 133. If a document relating to a domestic or foreign
corporation
that is filed with the administrator under this act is
was at the time of filing an inaccurate record of the corporation
action referred to in the document or was defectively or
erroneously executed, or the document was electronically
transmitted and the electronic transmission was defective, the
document may be corrected by filing with the administrator a
certificate of correction on behalf of the corporation. A
certificate entitled "certificate of correction of... (correct
title of document and name of corporation)" shall be signed as
provided in this act with respect to the document being corrected
and filed with the administrator. The certificate shall set forth
the name of the corporation, the date the document to be corrected
was filed by the administrator, the provision in the document as
corrected
or eliminated, it should have
originally appeared, and if
the execution was defective, the proper execution. The corrected
document is effective in its corrected form as of its original
filing
date except as to a person who that
relied upon on the
inaccurate portion of the document and was, as a result of the
inaccurate portion of the document, adversely affected by the
correction.
Sec.
141. When, If, under this act or the articles of
incorporation or bylaws of a corporation or by the terms of an
agreement or instrument, a corporation or the board or any
committee of the board may take action after notice to any person
or after lapse of a prescribed period of time, the action may be
taken without notice and without lapse of the period of time, if at
any time before or after the action is completed the person
entitled to notice or to participate in the action to be taken or,
in
case of a shareholder or member, by the shareholder or member's
his or her attorney-in-fact, submits a signed waiver or a waiver by
electronic transmission of the requirements.
Sec.
143. (1) When If a notice or communication is required or
permitted by this act to be given by mail, it shall be mailed,
except
as otherwise provided in this act, to the person to whom
which it is directed at the address designated by that person for
that purpose or, if none is designated, at that person's last known
address. The notice or communication is given when deposited, with
postage prepaid, in a post office or official depository under the
exclusive care and custody of the United States postal service. The
mailing shall be sent by registered, certified, or other first
class
mail except where unless otherwise provided in required under
this act.
(2)
When If a notice is required or permitted by this act to
be given in writing, electronic transmission is written notice.
(3) If a corporation is required or permitted to provide its
shareholders or members with a written notice or other written
report, statement, or communications under this act, the articles
of incorporation, or the bylaws, the corporation may provide that
notice, report, statement, or communication to all shareholders or
members that share a common address by delivering 1 copy of it to
the common address if all of the following are met:
(a) The corporation addresses the notice, report, statement,
or communication to the shareholders or members that share the
common address as a group, individually, or in any other form to
which any of those shareholders or members have not objected.
(b) At least 60 days before the first delivery or any delivery
to a common address under this subsection, the corporation gives
notice to each of the shareholders or members that share that
common address that it intends to provide only 1 copy of notices,
reports, statements, or other communications to shareholders or
members that share a common address.
(c) The corporation has not received a written objection from
any shareholder or member that shares a common address to
deliveries under this subsection to that shareholder or member. If
it receives a written objection under this subdivision, the
corporation within 30 days shall begin providing the objecting
shareholder or member with separate copies of any notices, reports,
statements, or communications to the shareholders or members, but
the corporation may deliver 1 copy of the notices, reports,
statements, or communications to all of the shareholders or members
at that common address that have not objected.
(4) (3)
When If a notice or communication is permitted by this
act to be transmitted electronically, the notice or communication
is given when electronically transmitted to the person entitled to
the notice or communication in a manner authorized by the person.
(5) If the administrator is required under this act to give
notice to a corporation, the administrator may electronically
transmit the notice to the corporation's resident agent in the
manner authorized by the corporation.
(6) As used in subsection (3), "address" means a street
address, post office box, electronic mail address for electronic
transmissions by electronic mail, or telephone facsimile number for
electronic transmissions by facsimile.
Sec.
151. (1) If the administrator refuses fails to promptly
file a document, other than an annual report, submitted for filing
under this act, the administrator shall within 10 days after
receipt
from the person submitting the document for filing of
receiving
a written request for the filing of to file the
document
from the person that submitted the document for filing give written
notice
of the refusal failure to file the document to that person,
specifying
the reasons for the refusal failure
to file the
document.
If the document was not originally submitted by
electronic
transmission, the administrator shall not give the
written
notice by electronic transmission. The
administrator may
give written notice under this subsection by posting the notice on
the administrator's website; by sending the notice by mail to the
address provided by the person that submitted the document; or, if
the person that submitted the document has provided the
administrator with an electronic mail address, by sending the
notice to that electronic mail address. The person may seek
judicial
review of the refusal to file the document pursuant to
under sections 103, 104, and 106 of the administrative procedures
act of 1969, 1969 PA 306, MCL 24.303, 24.304, and 24.306.
(2) If the administrator refuses to authorize or revokes the
authorization of a foreign corporation to conduct affairs in this
state
pursuant to under this act, the foreign corporation may seek
judicial
review pursuant to under sections 103, 104, and 106 of the
administrative procedures act of 1969, 1969 PA 306, MCL 24.303,
24.304, and 24.306.
Sec. 202. The articles of incorporation shall contain all of
the following:
(a) The name of the corporation.
(b)
The purposes for which the corporation is organized.
formed.
It shall not be is not sufficient
to state substantially
that the corporation may engage in any activity within the purposes
for
which a corporation may be organized formed under this act. A
corporation
which proposes to conduct educational purposes shall
state
such purposes and If a
corporation proposes to organize and
operate a school, college, or other educational institution
described in section 170 of 1931 PA 327, MCL 450.170, other than a
public school academy as defined in section 5 of the revised school
code, 1976 PA 451, MCL 380.5, it shall state its educational
purposes in its articles of incorporation and comply with all
requirements
of sections 170 to 177 of Act No. 327 of the Public
Acts
of 1931, as amended, being sections 450.170 to 450.177 of the
Michigan
Compiled Laws.1931 PA 327,
MCL 450.170 to 450.177.
(c)
In the case of a If the corporation organized is formed on
a
stock basis, the aggregate number of shares which that the
corporation has authority to issue.
(d)
In the case of a If the corporation organized is formed on
a
stock basis, and if the shares are , or are to be
, divided into
classes,
to the extent that the designations, numbers, relative
rights,
preferences, and limitations have been determined: the
designation
of each class, ; the
number of shares in each class, ;
and a statement of the relative rights, preferences, and
limitations of the shares of each class, to the extent that the
designations, numbers, relative rights, preferences, and
limitations have been determined.
(e)
In the case of a If the corporation organized is formed on
a nonstock basis, a description and statement of the value of any
assets
of the corporation that are classified as to real and
personal property and the terms of the general scheme of financing
the corporation.
(f)
In the case of a If the corporation organized is formed on
a
nonstock basis, a statement that the corporation is organized
formed on a membership basis or a statement that the corporation is
organized
formed on a directorship basis.
(g) The street address, and the mailing address if different
from the street address, of the corporation's initial registered
office and the name of the corporation's initial resident agent at
that address.
(h)
The names and addresses of all the incorporators. ,
whether
or not fewer than all the incorporators sign the articles
pursuant
to section 201(2).
(i) The duration of the corporation if other than perpetual.
Sec. 209. (1) The articles of incorporation may contain any
provision
consistent that is not inconsistent
with this act and not
expressly prohibited by any other statute of this state, including,
but not limited to, any of the following:
(a)
A provision regarding the for
management of the business
and conduct of the affairs of the corporation, or creating,
defining, limiting, or regulating the powers of the corporation,
its directors, officers, members, or shareholders, or a class of
directors, shareholders, or members.
(b) A provision that under this act is required or permitted
under
this act to be included set forth in the bylaws. of the
corporation.
(c)
A provision that eliminates the personal or limits a
director's
or volunteer officer's liability of
a volunteer director
or
volunteer officer to the
corporation, its shareholders, or its
members
for monetary money damages for a breach of the director's
or
officer's fiduciary duty. The provision does not eliminate or
limit
the liability of a director or officer any action taken or
any failure to take any action as a director or volunteer officer,
except liability for any of the following:
(i) A breach of the director's or officer's duty of
loyalty to
the
corporation, its shareholders, or its members.The amount of a
financial benefit received by a director or volunteer officer to
which he or she is not entitled.
(ii) Acts or omissions not in good faith or that
involve
intentional
misconduct or a knowing violation of law. Intentional
infliction of harm on the corporation, its shareholders, or
members.
(iii) A violation of section 551(1).551.
(iv) A transaction from which the director or
officer derived
an
improper personal benefit.An
intentional criminal act.
(v) An act or omission occurring before the
effective date of
the
provision granting limited liability.A liability imposed under
section 497(a).
(vi) An act or omission that is grossly negligent.
(d)
For a tax exempt corporation under section 501(c)(3) of
the
internal revenue code, whose
purposes, structures, and
activities are exclusively those described in section 501(c)(3) of
the internal revenue code of 1986, 26 USC 501, a provision that the
corporation assumes all liability to any person other than the
corporation, its shareholders, or its members for all acts or
omissions of a volunteer director occurring on or after January 1,
1988 incurred in the good faith performance of the volunteer
director's duties.
(e)
A provision that a nonprofit the
corporation assumes the
liability for all acts or omissions of a volunteer director,
volunteer officer, or other volunteer occurring on or after the
effective
date of the provision granting that
grants limited
liability if all of the following are met:
(i) The volunteer was acting or reasonably believed he or she
was acting within the scope of his or her authority.
(ii) The volunteer was acting in good faith.
(iii) The volunteer's conduct did not amount to gross
negligence or willful and wanton misconduct.
(iv) The volunteer's conduct was not an intentional tort.
(v) The volunteer's conduct was not a tort arising out of the
ownership, maintenance, or use of a motor vehicle for which tort
liability
may be imposed as provided in under
section 3135 of the
insurance
code of 1956, Act No. 218 of the Public Acts of 1956,
being
section 500.3135 of the Michigan Compiled Laws.1956 PA 218,
MCL 500.3135.
(f) A provision that reserves to 1 or more members,
shareholders, or other persons all or part of the authority to
exercise the corporate powers or to manage the business and affairs
of the corporation, including the resolution of any issue about
which there exists a deadlock among directors, shareholders, or
members. A provision authorized under this subsection that limits
the discretion or powers of the board relieves the directors of,
and imposes on the person or persons in which the discretion or
powers are vested, liability for acts or omissions imposed by law
on directors to the extent that the discretion or powers of the
directors are limited by the provision. The person or persons in
which the discretion or powers are vested are treated as a director
or directors for the purposes of any limitation or assumption of
liability under this section and, except as otherwise provided in
the articles of incorporation or bylaws, have the same rights and
obligations with respect to indemnification as a director or
directors.
(2) If the articles of incorporation contain a provision that
eliminates the liability of a volunteer director or volunteer
officer that was filed before the effective date of the amendatory
act that added this subsection, that provision is considered to
eliminate the liability of a director or volunteer officer under
subsection (1)(c).
Sec. 212. (1) The corporate name of a domestic or foreign
corporation formed or existing under or subject to this act shall
conform to all of the following:
(a) Shall not contain a word or phrase, or abbreviation or
derivative
thereof, which of a word
or phrase, that indicates or
implies
that the corporation is organized formed for a purpose
other than 1 or more of the purposes permitted by its articles of
incorporation.
(b)
Shall not be the same as, or confusingly similar to, the
corporate
name of a domestic corporation, a domestic business
corporation,
a foreign corporation authorized to conduct affairs in
this
state, or a foreign business corporation authorized to
transact
business in this state; a corporate name currently
reserved
under this act, a predecessor act, or Act No. 284 of the
Public
Acts of 1972, as amended; or a name assumed under section
217
or under section 217 of Act No. 284 of the Public Acts of 1972,
as
amended, being section 450.1217 of the Michigan Compiled Laws,
unless
the written consent of the other domestic corporation,
domestic
business corporation, foreign corporation, or foreign
business
corporation or holder of a reserved name, to the adoption
of
a confusingly similar name, but not the same name, is filed in
the
office of the administrator, or, in lieu of the consent, there
is
filed a certified copy of a final judgment of a court of
competent
jurisdiction establishing the prior right of the
corporation
to the use of the name in this state.Shall distinguish
the corporate name in the records in the office of the
administrator from all of the following:
(i) The corporate name of any other domestic corporation or
foreign corporation authorized to conduct affairs in this state.
(ii) The corporate name of any domestic business corporation
or foreign business corporation authorized to transact business in
this state.
(iii) A corporate name currently reserved, registered, or
assumed under this act or the business corporation act.
(iv) The name of any domestic limited partnership or foreign
limited partnership as filed or registered under the Michigan
revised uniform limited partnership act, 1982 PA 213, MCL 449.1101
to 449.2108, or any name currently reserved or assumed under that
act.
(v) The name of any domestic limited liability company or
foreign limited liability company as filed or registered under the
Michigan limited liability company act, 1993 PA 23, MCL 450.4101 to
450.5200, or any name currently reserved or assumed under that act.
(c)
Shall not contain a word or phrase, or an abbreviation, or
derivative
thereof, of a word or
phrase, the use of which is
prohibited or restricted by any other statute of this state, unless
the
use of the name complies with
that restriction. has
been
complied
with.
(2)
Whenever If a foreign corporation is unable to obtain a
certificate of authority to conduct affairs in this state because
its
corporate name does not comply with the provisions of
subsection
(1), it the foreign
corporation may apply for authority
to conduct affairs in this state by adding to its corporate name in
such
the application a word, abbreviation, or other
distinctive and
distinguishing element, or alternatively, adopting for use in this
state an assumed name otherwise available for use. If in the
judgment
of the administrator this assumed that name would comply
with
the provisions of subsection (1), that subsection shall does
not
be a bar to the issuance to prevent
the administrator from
issuing
the foreign corporation of a
certificate of authority to
conduct affairs in this state. The certificate issued to the
foreign
corporation shall be issued in this assumed the name
applied
for and the foreign corporation
shall use this that name in
all its dealings with the administrator and in the conduct of its
affairs in this state.
(3)
A charitable purpose corporation incorporated for the
purpose
of receiving and administering funds for perpetuation of
the
memory of persons, preservation of objects of historical or
natural
interest, educational, charitable, or religious purposes,
or
public welfare may use the name
foundation.word
"foundation" in
its corporate name or in an assumed name. This subsection does not
prohibit a corporation from continuing to use the word "foundation"
in its corporate name or in an assumed name if the corporation was
in existence and used the word "foundation" in its corporate name
or in an assumed name before the effective date of the amendatory
act that added this sentence.
(4) The fact that a corporation complies with this section
does not create substantive rights to use of a corporate name.
Sec.
215. (1) A person may reserve the right to use of a
corporate name by executing and filing an application to reserve
the name. If the administrator finds that the name is available for
corporate
use, the administrator he
or she shall reserve it for
exclusive
use of the applicant for a period expiring that expires
at
the end of the fourth sixth
full calendar month following the
month in which the application was filed.
(2)
The administrator, for good cause shown, may extend the
reservation
for periods of not more than 2 calendar months each.
Not
more than 2 extensions shall be granted.
(2) (3)
The A person may transfer a right to exclusive use of
a
corporate name so reserved may be transferred under subsection
(1) to another person by filing a notice of the transfer, executed
by
the applicant for whom which
the name was reserved, and stating
that states the name and address of the transferee.
Sec. 217. (1) Except as provided in section 212 or otherwise
prohibited by law, a domestic or foreign corporation may conduct
its affairs under any assumed name or names other than its
corporate
name, not precluded from use by section 212, and the same
name
may be assumed by 2 or more corporations participating
together
in any partnership or joint venture by
filing a
certificate stating the true name of the corporation and the
assumed
name under which its affairs are to be conducted. The A
certificate
shall be of
assumed name is effective, unless
sooner
terminated
by the filing of a certificate of termination or by the
dissolution
or withdrawal of the corporation, for a period expiring
that expires on December 31 of the fifth full calendar year
following
the year in which it was filed. It A certificate of
assumed name may be extended for additional consecutive periods of
5
full calendar years each by the filing of similar certificates
not
earlier than 90 days preceding the expiration of any such the
initial or a subsequent 5-year period. The administrator shall
notify the corporation of the impending expiration of the
certificate
of assumed name no not later than 90 days before the
expiration
of the initial or subsequent 5-year
period. will expire.
This
If authorized by the
corporation, the administrator may
electronically transmit the notice to the resident agent of the
corporation. A certificate of assumed name filed under this section
does not create substantive rights to the use of a particular
assumed name.
(2) Two or more corporations, or 1 or more corporations and 1
or more business corporations, limited partnerships, limited
liability companies, or other enterprises that participate together
in a partnership or joint venture may assume the same name. Each
participant corporation shall file a certificate under this
section.
(3) A corporation that participates in a merger, or any other
entity that participates in a merger under section 735 or 736a, may
transfer to the surviving entity the use of an assumed name for
which a certificate of assumed name is on file with the
administrator before the merger, if the transfer is noted in the
certificate of merger under section 707(1)(f), 712(1)(c), or
736a(3)(f) or other applicable statute. The use of an assumed name
transferred under this subsection may continue for the remaining
effective period of the certificate of assumed name on file before
the merger, and the surviving entity may terminate or extend the
certificate of assumed name under subsection (1).
(4) A corporation that survives a merger may use as an assumed
name the corporate name of a merging corporation, or the name of
any other entity that participates in the merger under section 735
or 736a, by filing a certificate of assumed name under subsection
(1) or by providing for the use of the name as an assumed name in
the certificate of merger. The surviving corporation also may file
a certificate of assumed name under subsection (1) or provide in
the certificate of merger for the use as an assumed name of an
assumed name of a merging entity that is not transferred under
subsection (3). A provision in the certificate of merger under this
subsection is considered a new certificate of assumed name.
(5) A business organization into which a corporation has
converted under section 745 may use an assumed name of the
converting corporation, if the corporation has a certificate of
assumed name for that assumed name on file with the administrator
before the conversion, by providing for the use of the name as an
assumed name in the certificate of conversion. The use of an
assumed name under this subsection may continue for the remaining
effective period of the certificate of assumed name on file before
the conversion, and the surviving business organization may
terminate or extend the certificate of assumed name under
subsection (1).
(6) A corporation into which 1 or more business organizations
have converted under section 746 may use as an assumed name the
name of any business organization converting into that corporation,
or use as an assumed name an assumed name of that business
organization, by filing a certificate of assumed name under
subsection (1) or by providing for the use of that name or assumed
name as an assumed name of the corporation in the certificate of
conversion. A provision in the certificate of conversion under this
subsection is considered a new certificate of assumed name.
Sec.
221. The corporate existence shall begin of a corporation
begins on the effective date of the articles of incorporation as
provided in section 131. Filing of the articles of incorporation is
conclusive evidence that all conditions precedent required to be
performed under this act have been fulfilled and that the
corporation
has been organized formed under this act, except in an
action or special proceeding by the attorney general.
Sec. 241. Each domestic corporation and each foreign
corporation authorized to conduct affairs in this state shall have
and continuously maintain in this state both of the following:
(a)
A registered office which that
may be the same as its
place of business.
(b)
A resident agent. , which agent may be either an Any of
the following may serve as resident agent:
(i) An individual resident in this state whose business office
or
residence is identical with the corporation's
registered office.
,
a
(ii) A domestic or corporation, a domestic business
corporation,
or a foreign or corporation,
a foreign business
corporation, a limited liability company, or another entity, if it
is authorized to conduct affairs or transact business in this state
and
having it has a business office identical with the
corporation's
registered office.
Sec. 242. (1) A domestic corporation or a foreign corporation
authorized to conduct affairs in this state may change its
registered
office or change its resident agent, or both, upon by
filing
a statement , which with
the department. The statement may
be
executed by any of the individuals set forth described in
section 132 or by the secretary or assistant secretary of the
corporation. ,
setting forth:The statement
shall provide all of the
following information:
(a)
The corporate name. of the corporation.
(b)
The street address of its then the
corporation's
registered office at the time of filing, and its mailing address if
different from its street address.
(c)
If the address of its the
corporation's registered office
is changed, the street address and the mailing address, if
different from the street address, to which the registered office
is to be changed.
(d)
The name of its then the
corporation's resident agent at
the time of filing.
(e)
If its the corporation's resident agent is changed, the
name of its successor resident agent.
(f)
That the address of its the
corporation's registered
office
and the address of the business office of its resident
agent, as changed, will be identical.
(g)
That such the change was authorized by resolution duly
adopted
by its the corporation's board,
or, if no board has been
appointed, by the incorporators.
(2) If a resident agent changes its business or residence
address to another place within this state, the resident agent may
change the address of the registered office of any domestic or
foreign corporation of which the person is a resident agent by
filing the statement required under subsection (1), except that the
statement need only be signed by the resident agent, need not be
responsive to subsection (1)(e) or (g), and shall recite that a
copy of the statement has been mailed to the corporation.
Sec. 243. A resident agent of a domestic or foreign
corporation may resign by filing a written notice of resignation
with
the president or a vice-president vice president of the
corporation
and with the administrator. The A
corporation shall
promptly appoint a successor resident agent after its resident
agent
has resigned. The appointment of the
a resigning resident
agent
terminates upon appointment of a successor or upon expiration
of
when a successor is appointed
or 30 days after receipt of the
notice by the administrator, whichever first occurs. When a
resignation becomes effective under this section, the business or
residence address of the resigned agent is no longer the registered
office of the corporation.
Sec.
246. (1) The resident agent so appointed by a corporation
is
an agent of the corporation upon whom on which any process,
notice,
or demand required or permitted by law to be served upon on
the corporation may be served.
(2)
A person, If an
individual, whether a resident or
nonresident
of this state, by acceptance of accepts
election,
appointment, or employment as a director or officer of a
corporation
organized formed under this act or in existence on the
effective
date of this act, by such the
acceptance is held to have
appointed
considered an appointment of the resident agent of the
corporation
as the person's his or her
agent upon whom on which
process
may be served while the person he
or she is a director or
officer, in any action commenced in a court of general jurisdiction
in
this state, arising out of or founded upon on any
action of such
a
the domestic corporation or of such person the individual as a
director
or officer of the domestic corporation. Upon After
accepting service of process, the resident agent shall promptly
forward
it to the director or officer at the director or officer's
his or her last known address.
(3) The administrator may serve a notice described in
subsection (1) by electronically transmitting the notice to the
resident agent of the corporation in the manner authorized by the
corporation.
Sec.
251. (1) Except if required by law to incorporate under
another
statute of this state, a A corporation may be formed under
this act for any lawful purposes not involving pecuniary gain or
profit for its officers, directors, shareholders, or members, other
than a purpose for which a corporation may be formed under any
other statute of this state and that statute expressly prohibits
formation under this act. A corporation that is formed under this
act for a purpose for which a corporation may be formed under
another statute of this state does not have any powers or
privileges conferred by that other statute that are not conferred
under this act.
(2) In time of war or other national emergency, a corporation
may
conduct take any lawful activity, action to provide aid,
including
any business activity, in aid thereof, notwithstanding
the purposes set forth in its articles of incorporation, at the
request or direction of a competent governmental authority.
Sec. 261. (1) A corporation, subject to any limitation
provided in this act, in any other statute of this state, or in its
articles
of incorporation, or otherwise by law, 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 a natural person.an individual.
(c)
Have a corporate seal, and 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, or 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 upon on a
bond or other undertaking securing the deposit of public money.
(i) Make contracts, give guarantees, and incur liabilities,
borrow
money at such 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 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, or invested, or reinvested.
(k) Make donations for any of the following: the public
welfare; or
for a community fund; , or hospital; ,
or a charitable,
educational,
scientific, civic, or similar purposes, and purpose. A
corporation also has the power to provide aid in time of war or
other
national emergency. in aid 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 participate with others 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 by under this act in any
jurisdiction
within or without 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 such that
business, receive, collect,
and
disburse such that money, and engage in such 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 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 corporations are subject to the jurisdiction of the
Michigan
public service commission pursuant to 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 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 all powers granted under this
act and under the revised school code, 1976 PA 451, MCL 380.1 to
380.1853. However, in the event of an inconsistency between this
act and the revised school code, the revised school code shall
control.
(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 provided in section 209(1)(d) or section
209(1)(e), any duly licensed or authorized individual who is
Seante Bill No. 623 (H-1)* as amended December 16, 2014
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, or by any individual under
his or her 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 for any resulting liabilities
and expenses as provided in this act and under other applicable
law.
[
]
Sec. 275. A domestic corporation or foreign corporation,
whether or not formed at the request of a lender or in furtherance
of a business enterprise, may by agreement in writing, and not
otherwise, agree to pay a rate of interest in excess of the legal
rate
and in such case is prohibited
from asserting the defense of
usury
is prohibited.in an action
on the debt.
Sec. 301. (1) A payment or distribution of any part of the
assets,
income, or profit of a corporation shall be in conformity
with
conform to the purposes of the corporation.
(2) A corporation may confer benefits on its shareholders or
members
in conformity with that
conform to the purposes of the
corporation.
(3) A corporation shall not make a direct or indirect transfer
of money or other property or incur indebtedness to or for the
benefit of its directors or officers without adequate
consideration. This subsection does not prevent a corporation from
paying compensation to its directors and officers in reasonable
amounts for services rendered to the corporation or from entering
into transactions with officers and directors under sections 545a
and 548.
(4) (3)
A corporation shall not pay
dividends or distribute
make distributions of any part of its assets, income, or profit to
its
shareholders , or
members, directors, or officers, except
as
follows:
(a)
A corporation may pay compensation in a reasonable amount
amounts
to shareholders , or members ,
directors, or officers for
services rendered to the corporation.
(b)
Upon dissolution as permitted by this act, a If a
corporation dissolves, the corporation may make distributions of
assets, other than assets held for charitable purposes, to
shareholders or members as permitted under this act and the
corporation may distribute assets held for charitable purposes to 1
or more member or shareholder domestic corporations, foreign
corporations, trusts, or similar entities that are organized and
operated exclusively for charitable purposes that are not
inconsistent with the charitable purposes for which the corporation
holds the assets.
(c) The articles of incorporation or bylaws of a corporation
whose lawful purposes include providing a benefit to its member or
shareholder corporation may provide that the corporation may pay
dividends or distribute its income or profit to its member or
shareholder corporation.
(d)
As permitted in subsection (4).A
corporation whose lawful
purposes include selling services or products to its shareholders
or members may make distributions of profit to its shareholders or
members if both of the following are met:
(i) The profit is derived solely from the charging of fees or
prices to its shareholders or members for its services or products.
(ii) The profit is distributed to the shareholders or members
on the basis of, or in proportion to, the fees or prices paid by
the shareholders or members to the corporation for its services or
products.
(e)
If provision for redemption of shares is made pursuant to
sections
361 to 365.A corporation may
make distributions to
shareholders or members that are domestic or foreign corporations,
trusts, or similar nonprofit entities organized and operated
exclusively for charitable purposes that are not inconsistent with
the purposes of the corporation.
(f) A corporation may make distributions to shareholders or
members that are domestic corporations or foreign corporations,
trusts, or similar nonprofit entities organized and operated
exclusively for purposes that are consistent with the purposes of
the corporation.
(g) A corporation may make distributions of stock or
memberships in another domestic or foreign corporation to its
shareholders or members if its shareholders or members will have no
greater rights to receive distributions from the domestic
corporation or foreign corporation whose stock or memberships are
being distributed than the shareholders or members have with
respect to the corporation making the distribution.
(5) (4)
A corporation whose lawful
activities include the
charging of fees or prices for its services or products may receive
the
income and may make a profit as a result of its receipt. All
such
Except as authorized in
subsections (2), (3), and (4), the
corporation
shall apply all of that resulting
profit shall be
applied
to the maintenance, expansion, or
operation of the lawful
activities
of the corporation. and shall not be distributed to the
shareholders,
members, directors, or officers of the corporation.
However,
profit derived solely from the charging of fees or prices
by
a corporation to its shareholders or members for its services or
products
may be distributed to the shareholders or members on the
basis
of, or in proportion to, the fees or prices paid by
shareholders
or members to the corporation for its services or
products.
(6) (5)
This act shall not be deemed to
permit interpreted in
a way that permits assets held by a corporation for charitable
purposes to be used, conveyed, or distributed for noncharitable
purposes.
Sec.
303. (1) A corporation that is organized upon on a
stock
basis may issue the number of shares authorized in its articles of
incorporation.
Except as otherwise provided in this act, the
articles
of incorporation or bylaws may prescribe the
qualifications,
liquidation rights, preferences, and limitations,
and
other rights, preferences, and limitations of or upon the
shareholders
of the corporation.All of the
following apply to
shares issued by the corporation:
(a) The shares may be all of 1 class or may be divided into 2
or more classes. Each class shall consist of shares that have the
designations and relative voting, distribution, liquidation, and
other rights, preferences, and limitations, that are consistent
with this act, stated in the articles of incorporation or bylaws.
(b) The articles of incorporation or bylaws may deny, limit,
or otherwise prescribe the distribution or liquidation rights of
shares of any class. Approval by the shareholders and each affected
class of shareholders, if any, voting as a class, is required to
adopt, amend, or repeal any bylaw denying, limiting, or otherwise
prescribing the voting rights of shareholders or the affected class
of shareholders.
(c) If the shares are divided into 2 or more classes, the
shares of each class shall be designated to distinguish them from
the shares of the other classes.
(d) Each share is equal to every other share of the same
class.
(2)
The articles of incorporation may provide that the shares
of
a corporation shall be all of 1 class or shall be divided into 2
or
more classes. If the shares are divided into 2 or more classes,
the
shares of each class shall be designated to distinguish them
from
the shares of the other classes. Except as otherwise provided
in
this act, each class shall consist of shares of the designation
and
number stated in the articles of incorporation, and having
relative
qualifications, liquidation rights, preferences, and
limitations,
and other rights, preferences, and limitations as may
be
stated in the articles of incorporation or the bylaws. Each
share
shall be equal to every other share of the same class.
(3)
Each shareholder shall have 1 vote for each share of stock
held
by that shareholder on each matter submitted to a vote of
shareholders,
unless the articles or bylaws provide that each
shareholder
shall have 1 vote regardless of shares held by that
shareholder
or unless the articles or bylaws deny, limit, or
otherwise
prescribe the voting rights of shares of any class. The
shareholders
and each affected class of shareholders, if any, shall
adopt,
amend, or repeal any bylaw denying, limiting, or otherwise
prescribing
the voting rights of shareholders or any class of
shareholders.
(e) (4)
Except as otherwise provided by the
articles or
bylaws,
shares of stock shall not be are
not transferable and shall
be canceled upon the death or resignation of the owner of the
shares.
(f) Any of the voting, distribution, liquidation, or other
rights, preferences, or limitations of a class may be made
dependent on facts or events ascertainable outside of the articles
of incorporation or the bylaws, if the manner in which the facts or
events operate on the rights, preferences, or limitations is set
forth in the articles of incorporation or the bylaws.
(2) (5)
A corporation may adopt rules of
qualification and
government of its shareholders pursuant to its articles and bylaws.
Adopted rules shall be reasonable, germane to the purposes of the
corporation, and equally enforced as to all shareholders of the
same class. A corporation may provide for the cancellation of the
stock
of a shareholder who that fails to comply with adopted rules
without liability for an accounting.
Sec. 303a. The board of a corporation that is organized on a
stock basis by resolution may adopt and file an amendment of the
articles of incorporation deleting any reference to par value.
Sec. 303b. (1) If provided in the articles of incorporation,
and subject to the restrictions in sections 301 and 303c, a
corporation may issue shares that are convertible at the option of
the holder or the corporation or on the happening of a specified
event, into shares of any class or into bonds. A corporation may
convert shares into bonds only if the corporation could at the time
of conversion have purchased, redeemed, or otherwise acquired the
shares by issuing the bonds under section 345. Authorized shares,
whether issued or unissued, may be made convertible as provided in
this subsection within the period and on the terms and conditions
authorized in the articles of incorporation.
(2) Unless otherwise provided in the articles of
incorporation, and subject to sections 301 and 303c, a corporation
may issue bonds that are convertible at the option of the holder
into other bonds or into shares of the corporation within the
period and on the terms and conditions as fixed by the board.
(3) If the shareholders approve the issue of bonds or shares
convertible into shares of the corporation, the approval may
provide that the board is authorized by amendment of the articles
of incorporation to increase the authorized shares of any class to
the number that will be sufficient, when added to the previously
authorized but unissued shares of the class, to satisfy the
conversion privileges of any bonds or shares convertible into
shares of the class.
Sec. 303c. (1) A corporation shall not issue bonds that are
convertible into shares or shares convertible into other shares of
a corporation unless 1 of the following conditions is satisfied:
(a) A sufficient number of authorized but unissued shares of
the appropriate class are reserved by the board to be issued only
in satisfaction of the conversion privileges of the convertible
bonds or shares when issued.
(b) The aggregate conversion privileges of the convertible
bonds or shares when issued do not exceed the aggregate of any
shares reserved under subdivision (a) and any additional shares
which the board may authorize under section 303b(3).
(2) The corporation shall cancel bonds that are converted into
shares. Unless otherwise provided in the articles of incorporation,
shares that are converted into other shares shall be restored to
the status of authorized but unissued shares.
Sec. 303d. The articles of incorporation may provide for 1 or
more classes of shares that are redeemable, in whole or in part, at
the option of the shareholder, or the corporation, or if a
specified event occurs. Subject to restrictions imposed in sections
301 and 345, the shares may be redeemable in cash, bonds,
securities, or other property at prices, within the periods, and
under conditions stated in the articles of incorporation.
Sec. 304. (1) Except as otherwise provided in this act, the
articles
of incorporation or bylaws of a corporation organized upon
on a membership basis may prescribe the number, voting rights,
qualifications, liquidation rights, preferences, and limitations,
and
other rights, preferences, and limitations of or upon on the
members of the corporation.
(2)
A corporation organized upon on
a membership basis may
have 1 or more classes of members. Except as otherwise provided in
this act, any provision for classes of members and the relative
number, voting rights, qualifications, liquidation rights,
preferences, and limitations, and other rights, preferences, and
limitations
of or upon on each class shall be set forth in the
articles of incorporation or the bylaws. Each member of any class
of
members shall have has equal rights with all members of that
class.
(3)
Each Except as provided in
the articles of incorporation
or
bylaws, each member of a corporation,
regardless of class, shall
be
is entitled to 1 vote on each matter submitted to a
vote of
members, unless the articles of incorporation or bylaws deny,
limit, or otherwise prescribe the voting rights of any class of
members. The members and each affected class of members of a
corporation organized on a membership basis, if any, shall adopt,
amend, or repeal any bylaw denying, limiting, or otherwise
prescribing the voting rights of any class of members.
(4)
Members of a condominium association formed organized for
the purposes of administering the affairs of a condominium project
are
entitled to the voting rights as designated by in the
master
deed of the condominium.
(5) The articles of incorporation or the bylaws may provide
that members of a homeowners or property owners association are
entitled
to voting rights predicated based
on the number of lots
owned by each member.
(6) Except as otherwise provided in this act, the articles of
incorporation, or the
bylaws, membership shall is
not be
transferable
and shall be is terminated by death, resignation,
expulsion, or expiration of a term of membership.
(7) A corporation may adopt rules of qualification and
government of its members, including rules of admission to,
retention
of, and expulsion from membership, pursuant to under its
articles
and of incorporation or bylaws,
. Such rules shall be if
those rules are reasonable, germane to the purposes of the
corporation, and equally enforced as to all members.
(8) The articles of incorporation of a corporation that is
organized
upon on a membership basis may provide that membership
shall
be is limited to persons who that are
members in good
standing in other corporations. The articles of incorporation may
provide that failure to remain a member in good standing in the
other corporation constitutes grounds for expulsion of a member if
the articles of incorporation or bylaws of the corporation
prescribe
describe the nature of the evidence and that is required
and
establish the procedures for expulsion which
shall be
followed.of a member.
Sec.
305. (1) A corporation that is organized upon on a
directorship basis may or may not have members. If a corporation
that
is organized upon on a
directorship basis has members, the
members
shall not be are not entitled to
notice of or to vote on
any matter, including, but not limited to, any action denying,
limiting, or otherwise prescribing their rights as members or
excluding them from membership.
(2)
Unless the context of a provision of Except as otherwise
provided
in this act, otherwise
requires, all matters which that
are
subject to membership vote or other action in under this
act in
the
case of a membership corporation shall be are subject to duly
authorized action by the board of directors of a directorship
corporation. This subsection does not, however, allow the board of
directors of a directorship corporation to adopt an amendment to
the articles of incorporation under section 407(1) permitting
action by the board of directors by less than unanimous written
consent.
Sec. 307. (1) A subscription for shares or membership made
before
or after organization of a corporation is formed is not
enforceable unless it is in writing and signed by the subscriber.
(2) A subscription for shares of or membership in a
corporation
to be organized may provide that it formed is
irrevocable
and may be accepted by the corporation may accept it
for a period of 6 months, unless otherwise provided in the
subscription agreement or unless all of the subscribers consent to
its revocation.
(3) A contract with a corporation to purchase its shares to be
issued
or its treasury shares is a subscription agreement and not
an executory contract to purchase shares, unless otherwise provided
in the contract.
Sec. 308. Unless otherwise provided in the subscription
agreement:
(a) A subscription for shares or for membership made before or
after
organization formation of a corporation , shall be paid in
full
at such the time, or in such installments and at such the
times,
as shall be determined by the board determines.
(b) A call made by the board for payment on subscriptions
shall
be is ratable as to all shares or members of the same
class.
(c) A corporation may retain a security interest in any shares
or memberships as security for performance by the subscriber of the
subscriber's obligations under a subscription agreement and subject
to
the power of sale or rescission upon on default provided in
section 309.
Sec.
309. (1) In case of default If
a subscriber defaults in
payment of an installment or call or other amount due under a
subscription
agreement, including an amount which may become that
becomes due as a result of a default in performance of any
provision
thereof, of a subscription
agreement, the corporation has
the following rights and duties:
(a) It may collect the amount due in the same manner as any
other debt owing to it.
(b)
If the corporation is organized on a stock basis and if
the
articles of incorporation or bylaws of a corporation organized
upon
a stock basis permit the transfer
of shares, it may the
corporation may at any time before full satisfaction of the claim
or a judgment sell the shares in any reasonable manner that is
consistent
therewith at any time before full satisfaction of the
claim
or a judgment therefor. Notice with
the articles of
incorporation and bylaws. The corporation shall give notice of the
time and place of a public sale or of the time after which a
private
sale may be had, together with a occur, and a written
statement
of the amount due upon on each share, shall be given in
writing
to the subscriber personally or by
registered or certified
mail
at least 20 days before any such the time stated in the
notice.
Any The corporation shall
pay any excess of net proceeds
realized
over the amount due plus interest shall be paid to the
subscriber. If the sale is made in good faith, in a reasonable
manner , and upon such notice, after the notice required in this
subdivision, the corporation may recover the difference between the
amount due plus interest and the net proceeds of the sale. A good
faith purchaser for value acquires title to the sold shares free of
any
right of the subscriber even though if the corporation fails to
comply with 1 or more of the requirements of this subdivision.
(b) (c)
It may rescind the subscription,
with the effect
provided in section 310, and may recover damages for breach of
contract. In the case of transferable shares of a corporation
organized
upon on a stock basis, unless special circumstances show
proximate damages of a different amount, the measure of damages
shall
be is the difference between the fair market
price value at
the time and place of tender of the shares and the unpaid contract
price.
Liquidated damages may be provided for in the subscription
agreement
in any amount which is reasonable, including the
difficulties
of proof of loss. A
subscription agreement may also
provide for liquidated damages in any reasonable amount. The
subscriber may have restitution of the amount by which the sum of
payments exceeds the corporation's damages for breach of contract,
whether fixed by agreement or judgment.
(2)
The rights and duties set forth in this section shall be
interpreted
as are cumulative so far as is consistent with
entitling the corporation to a full and single recovery of the
amount
due or its damages. The A subscription agreement may limit
the rights and remedies of the corporation set forth in this
section, and may add to them so far as is consistent with this
subsection.
Sec. 313. (1) Except as otherwise provided in the articles of
incorporation or the bylaws, corporations, foreign corporations,
business corporations, foreign business corporations, limited
liability companies, unincorporated associations, and partnerships,
and any other person without limitation, may be a shareholder or a
member of a corporation.
(2)
If a corporation, or foreign
corporation, business
corporation, or foreign business corporation is a shareholder or a
member in a corporation, its officers or directors may serve as a
director of the corporation of which it is a shareholder or member.
A
corporation, or foreign
corporation, business corporation,
foreign business corporation, limited liability company,
unincorporated association, partnership, or other person that is
also
a shareholder or member of a
corporation shall possess and
possesses and may exercise all the rights, powers, privileges, and
liabilities of individual shareholders or members.
Sec. 314. (1) All of the following apply to the issuance of
shares by a corporation that is organized on a stock basis:
(a) The board may authorize shares that are issued for no
consideration or for consideration that may consist of any tangible
or intangible property or benefit to the corporation, including,
but not limited to, cash, promissory notes, services performed,
contracts for services to be performed, or other securities of the
corporation.
(b) A determination by the board that any consideration
received or to be received for issued shares is conclusive
concerning the nature and amount of consideration for the issuance
of shares in determining whether the shares are validly issued,
fully paid, and nonassessable.
(c) When the corporation receives the consideration for which
the board authorized the issuance of shares, the shares issued are
fully paid and nonassessable and the subscriber has all the rights
and privileges of a holder of the shares.
(2) The powers granted in this section to the board may be
reserved to the shareholders in the articles of incorporation.
Sec.
317. (1) A holder of or subscriber for shares or
membership
of a corporation is under no obligation to the
corporation
or its creditors to pay for the shares or membership
other
than the obligation to pay to the corporation the unpaid
portion
of the consideration for which the shares were issued or to
be
issued or the membership was granted or to be granted.A person
that purchases shares of a corporation from the corporation or
purchases a membership in a corporation is not liable to the
corporation or its creditors with respect to the shares or
membership except to pay the consideration for the issuance of the
shares or membership.
(2)
A person holding that
holds stock or membership in a
corporation in a fiduciary or representative capacity is not
personally liable to the corporation as the holder of or subscriber
for
shares or membership, of a corporation, but the estate and or
funds
in the person's hands are so for
which the person is holding
the stock or membership are liable to the corporation as the holder
or subscriber.
(3)
A person becoming that
becomes an assignee, transferee, or
pledgee of shares or membership or of a subscription for shares or
membership in good faith and without knowledge or notice that the
full
consideration therefor has not been paid is not liable to the
corporation or its creditors for any unpaid portion of the
consideration, but the original holder or subscriber and any
assignee or transferee before an assignment or transfer to a person
taking
that takes in good faith and without knowledge or notice
remains
liable therefor.for that
amount.
(4) Unless otherwise provided in the articles of
incorporation, a person that is a shareholder or member of a
corporation is not personally liable for the acts or debts of the
corporation except that the person may become personally liable by
reason of the person's own acts or conduct.
Sec.
331. The Except as
provided in section 336, the shares of
a corporation shall be represented by certificates that are signed
by the chairperson of the board, vice-chairperson of the board,
president , or a vice-president ,
treasurer, or other officer
authorized
by the bylaws or a resolution of the board, and may be
sealed
and that also may be signed
by another officer of the
corporation. The corporation may seal the certificate with the seal
of
the corporation or a facsimile thereof. of the seal. The
signatures
of the officers may be facsimile if the certificate is
countersigned
by a transfer agent or registered by a registrar
other
than the corporation itself or its employee. In case
facsimiles. If an officer who has signed or whose facsimile
signature
has been placed upon on a certificate ceases to be an
officer
before the certificate is issued, it may be issued by the
corporation
with may issue the
certificate and his or her signature
has
the same effect as if the person he or she were an officer at
on the date of issue.
Sec.
332. (1) A certificate representing that represents
shares
issued by a corporation shall state upon on its
face all of
the following:
(a) That the corporation is a nonprofit corporation formed
under the laws of this state.
(b)
The name of the person to whom which
the certificate is
issued.
(c)
The number and class of shares which that the certificate
represents.
(d) A statement that the shares are not transferable, unless
the
articles or bylaws provide that shares shall be are
transferable. ,
in which case If the shares
are transferable, the
certificate shall state any conditions or limitations on
transferability of the shares.
(e) The act under which the corporation was formed.
(2)
A certificate representing that
represents shares issued
by
a corporation which that is authorized to issue shares of more
than 1 class shall set forth on its face or back or state on its
face or back that the corporation will furnish to a shareholder,
upon
on request and without charge, a
full statement of the
designation, relative rights, preferences, and limitations of the
shares
of each class the corporation is authorized to be
issued.issue.
Sec. 336. (1) Unless the articles of incorporation or bylaws
provide otherwise, the board of a corporation may authorize the
issuance of some or all of the shares of any or all of its classes
of shares without certificates. The authorization does not affect
shares that are already represented by certificates until they are
surrendered to the corporation.
(2) Within a reasonable time after the issuance or transfer of
shares without certificates under this section, the corporation
shall send the shareholder a written statement of the information
required on certificates under section 332 and, if applicable,
sections 472 and 488.
Sec.
338. (1) A corporation may issue certificates for
fractions
of a share where necessary to effect share transfer,
share
distributions, or a reclassification, merger, consolidation,
or
reorganization, which shall entitle the holders, fractions of a
share and may do any 1 or more of the following:
(a) Issue certificates for fractions of shares that entitle
the holders to exercise voting rights and receive distributions
permitted under section 301 in proportion to their fractional
holdings. ,
to exercise voting rights and participate in
liquidating
distributions.
(b) (2)
As an alternative, a corporation may pay Pay in cash
the
fair value of fractions of a share shares as of the time when
those entitled to receive the fractions are determined.
(c) (3)
As an alternative, a corporation may issue Issue scrip
in registered or bearer form over the manual or facsimile signature
of an officer of the corporation or of its agent, exchangeable as
therein
provided in the scrip for full shares. , but such The scrip
shall
does not entitle the holder to any right of a shareholder
except
as therein provided in the
scrip. The A corporation shall
issue
scrip shall be issued subject to
the condition that it
becomes
void if it is not exchanged for certificates representing
that represent full shares before a specified date. The scrip may
be subject to the condition that the shares for which the scrip is
exchangeable may be sold by the corporation and the proceeds of the
sale distributed to the holders of the scrip, or subject to any
other
condition which that is
established by the board. may
determine.
(2) (4)
A corporation may provide
reasonable opportunity for
persons
a person that is entitled to fractions of a share or scrip
to sell them or to purchase additional fractions of a share or
scrip
needed that the person
needs to acquire a full share.
Sec. 341a. (1) Unless the articles of incorporation provide
otherwise, a corporation may issue shares pro rata and without
consideration to the corporation's shareholders or to the
shareholders of 1 or more classes as a share dividend.
(2) A corporation may not issue shares of 1 class as a share
dividend in respect of shares of another class unless the articles
authorize the issuance, the issuance is consistent with the
limitations in section 301, and either a majority of the votes
entitled to be cast by the class to be issued approve the issue or
there are no outstanding shares of the class to be issued.
(3) As used in this section, "share dividend" means shares
issued under subsection (1).
Sec. 343. (1) The shareholders of a corporation organized on a
stock basis do not have a preemptive right to acquire the
corporation's unissued shares except to the extent provided in the
articles of incorporation or by agreement between the corporation
and 1 or more shareholders.
(2) If a statement is included in the articles of
incorporation or an agreement described in subsection (1) that the
corporation elects to have preemptive rights, or words of similar
import are included in the articles or agreement, the following
principles apply except to the extent the articles of incorporation
or agreement expressly provide otherwise:
(a) The shareholders of the corporation have a preemptive
right, granted on uniform terms and conditions prescribed by the
board, to provide a fair and reasonable opportunity to exercise the
right to acquire proportional amounts of the corporation's unissued
shares if the board decides to issue them.
(b) A shareholder may waive his or her preemptive right. A
waiver evidenced by a writing is irrevocable even though it is not
supported by consideration.
(c) There is no preemptive right with respect to any of the
following:
(i) Shares that are authorized in the articles of
incorporation and are issued within 6 months after the effective
date of incorporation.
(ii) Shares that are not issued for money.
(d) Holders of shares of any class that do not have general
voting rights but do have preferential rights to distributions or
assets do not have preemptive rights with respect to shares of any
class.
(e) Holders of shares of any class that have general voting
rights but do not have preferential rights to distributions or
assets do not have preemptive rights with respect to shares of any
class with preferential rights to distributions or assets unless
the shares with preferential rights are convertible into or carry a
right to subscribe for or acquire shares without preferential
rights.
(f) Shares that are subject to preemptive rights that are not
acquired by shareholders may be issued to any person for a period
of 1 year after the shares are offered to shareholders at a
consideration set by the board that is not lower than the
consideration set for the exercise of preemptive rights. An offer
at a lower consideration or after the expiration of 1 year is
subject to the shareholders' preemptive rights.
(3) The preemptive rights, if any, whether created by statute
or common law, of shareholders of a corporation formed before
January 1, 1973, are not affected by subsections (1) and (2). A
corporation may alter or abolish its shareholders' preemptive
rights by an amendment to its articles of incorporation.
(4) As used in this section, "shares" includes a security
convertible into or carrying a right to subscribe for or acquire
shares.
Sec. 344. (1) Subject to restrictions imposed under this act
or the articles of incorporation, a corporation that is organized
on a stock or membership basis may acquire its own shares or
memberships. Except as provided in subsection (4), those shares or
memberships constitute authorized but unissued shares or
memberships.
(2) If the articles of incorporation prohibit reissue of any
shares or memberships acquired under subsection (1), the board by
resolution shall adopt and file any necessary amendment to the
articles of incorporation to reduce the number of authorized shares
or memberships accordingly.
(3) A corporation shall not acquire its own shares or
memberships by purchase, redemption, or otherwise unless after the
acquisition there remain outstanding shares or memberships that
possess, collectively, voting rights or unless the articles of
incorporation have been amended to provide that the corporation is
organized on a directorship basis after the acquisition.
(4) A corporation that acquires its own shares or memberships
may grant a security interest in the shares or memberships as
security for the payment of the purchase price of the shares or
memberships. Any shares or memberships acquired by the corporation
in which it has granted a security interest are not canceled and do
not constitute authorized but unissued shares or memberships until
the corporation pays the purchase price. If a corporation has
granted a security interest in its own shares or memberships, the
shares or memberships shall not be voted directly or indirectly and
are not counted in determining the total number of issued shares or
members entitled to vote at any given time, except to the extent
provided by the agreement creating the security interest in the
event of default. When the purchase price is paid, the shares or
memberships are canceled and constitute authorized but unissued
shares or memberships. If the articles of incorporation prohibit
reissue of canceled shares or memberships, then the board by
resolution shall adopt and file any amendment to the articles of
incorporation required under subsection (2).
Sec. 345. (1) A board may authorize and the corporation may
make distributions to its shareholders or members that are
permitted in section 301, subject to subsection (3) and any
restriction in the articles of incorporation.
(2) If the board does not fix the record date for determining
shareholders or members entitled to a distribution, other than a
distribution involving a purchase, redemption, or acquisition of
the corporation's shares or memberships, the record date is the
date the board authorizes the distribution.
(3) A corporation shall not make a distribution if after
giving it effect the corporation would not be able to pay its debts
as the debts become due in the usual course of business, or the
corporation's total assets would be less than the sum of its total
liabilities plus, unless the articles of incorporation permit
otherwise, the amount that would be needed, if the corporation were
dissolved at the time of the distribution, to satisfy the
preferential rights on dissolution of shareholders or members whose
preferential rights are superior to those that receive the
distribution.
(4) The board may base a determination that a distribution is
not prohibited under subsection (3) on financial statements
prepared on the basis of accounting practices and principles that
are reasonable in the circumstances, on a fair valuation, or on any
other method that is reasonable.
(5) The effect of a distribution under subsection (3) is
measured at the following times:
(a) Except as provided in subsection (7), for distributions by
purchase, redemption, or other acquisition of the corporation's
shares or memberships, as of the earlier of the date money or other
property is transferred or debt incurred by the corporation, or the
date the shareholder or member ceases to be a shareholder or member
with respect to the acquired shares or ceases to be a member.
(b) For any other distribution of indebtedness, as of the date
the indebtedness is authorized if distribution occurs within 120
days after the date of authorization or the date the indebtedness
is distributed if it occurs more than 120 days after the date of
authorization.
(c) For any other purpose, as of the date the distribution is
authorized if the payment occurs within 120 days after the date of
authorization or the date the payment is made if it occurs more
than 120 days after the date of authorization.
(6) A corporation's indebtedness to a shareholder or member
that is incurred by reason of a distribution made under this
section is at parity with the corporation's indebtedness to its
general, unsecured creditors, except as otherwise agreed.
(7) If a corporation acquires its shares or memberships in
exchange for an obligation to make future payments, and
distribution of an obligation would otherwise be prohibited under
subsection (3) at the time it is made, the corporation may issue
the obligation and all of the following apply:
(a) The portion of the obligation that could have been
distribute without violating subsection (3) is treated as
indebtedness as described in subsection (6).
(b) All of the following apply to the portion of the
obligation that exceeds the amount treated as indebtedness under
subdivision (a):
(i) At any time before the due date of the obligation,
payments of principal and interest may be made as a distribution to
the extent that a distribution may then be made under this section.
(ii) At any time on or after the due date, the obligation to
pay principal and interest is considered distributed and treated as
indebtedness described in subsection (6) to the extent that a
distribution may be made at that time under this section.
(iii) Unless otherwise provided in the agreement for the
acquisition of the shares, the obligation is a liability or debt
for purposes of determining whether distributions other than
payments on the obligation may be made under this section, except
for purposes of determining whether distributions may be made with
respect to shares that have preferential rights superior to those
of shares acquired in exchange for the obligation.
(8) The enforceability of a guaranty or other undertaking by a
third party that relates to a distribution is not affected by the
prohibition of the distribution under subsection (3).
(9) If a claim is made to recover a distribution that violates
subsection (3), or if a violation of subsection (3) is raised as a
defense to a claim based on a distribution, this section does not
prevent the person that received the distribution from asserting a
right of rescission or other legal or equitable rights.
Sec. 392. This chapter does not apply to distributions made in
a dissolution under chapter 8.
Sec.
402. An A corporation
shall hold an annual meeting of its
shareholders
or members, for election of to elect directors
and for
such
conduct any other business as that may
come before the
meeting, shall
be held at a time as provided on
a date designated
in
the bylaws, unless such action is taken the shareholders or
members
act by written consent as provided
in under section 407
or
by
ballot under section 408 or 409. Failure
A failure to hold the
annual meeting at the designated time, or to elect a sufficient
number of directors at the meeting or any adjournment of the
meeting, does not affect otherwise valid corporate acts or work a
forfeiture or give cause for dissolution of the corporation, except
as provided in section 823. If the annual meeting is not held on
the
date designated therefor, for
the meeting, the board shall
cause
the meeting to be held as soon thereafter as after that date
as is convenient. If the annual meeting is not held for 90 days
after
the date designated therefor, for
the meeting, or if no date
has
been is designated for 15 months after organization formation
of the corporation or after its last annual meeting, the circuit
court for the county in which the principal place of business or
registered
office of the corporation is located, upon on
application of a shareholder or member, may summarily order that
the
corporation hold the meeting or the election, or both, to be
and
that it is held at such the time
and place, upon such after
the
notice,
and for the transaction of such the
business as may be that
is
designated in the order. At any such
meeting ordered to be
called
by the court under this section, the shareholders or members
,
that are present in person or by proxy and having that have
voting
powers , constitute
a quorum for transaction of the business
designated in the order.
Sec.
403. A The board may call
a special meeting of
shareholders
or members may be called by the board, or by or the
officers, directors, shareholders, or members may call a special
meeting
as provided in the bylaws.
Notwithstanding any such
provision in the bylaws concerning the call of a special meeting,
upon
if it receives an application of from the holders of not less
than
10% of all the shares or of from
not less than 10% of all the
members entitled to vote at a meeting, the circuit court for the
county in which the principal place of business or registered
office is located, for good cause shown, may order the call of a
special
meeting of shareholders or members to be called and that it
is
held at such the time
and place, upon such after
the notice, and
for
the transaction of such the
business as may be that is
designated
in the order. At any such meeting ordered to be called
by the court under this section, the shareholders or members that
are
present in person or by proxy and having
that have voting
powers constitute a quorum for transaction of the business
designated in the order.
Sec. 404. (1) Except as otherwise provided in this act,
written notice of the time, place, if any, and purposes of a
meeting of shareholders or members shall be given in any of the
following manners:
(a)
By written notice, given personally, Personally, by mail,
or
by electronic transmission, not less than 10 nor or more
than 60
days before the date of the meeting to each shareholder or member
of record that is entitled to vote at the meeting.
(b) By including the notice, prominently displayed, in a
newspaper or other periodical that is regularly published at least
semiannually by or in behalf of the corporation and addressed and
mailed,
postage prepaid, to a each
member or shareholder entitled
to
vote at the meeting not less than 10 nor or more than 60 days
before the meeting.
(2) A corporation may provide notice to a shareholder or
member that is not or may not be entitled to vote at a meeting of
shareholders or members in a manner provided in subsection (1),
whether or not the notice is required under this act or under other
applicable law.
(3) Notice of the purposes of a meeting shall include notice
of any proposal a shareholder or member intends to propose, if that
proposal is a proper subject for shareholder or member action and
the shareholder or member notified the corporation in writing of
the shareholder's or member's intention to present the proposal at
the meeting. The bylaws may establish reasonable procedures for the
submission of proposals to the corporation in advance of a meeting.
(4) (2)
If a meeting of the shareholders or
members is
adjourned to another time or place, it is not necessary, unless the
bylaws otherwise provide, to give notice of the adjourned meeting
if the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken. If
after
the an adjournment the board fixes a new record date for
the
adjourned
meeting, a the corporation
shall give notice of the
adjourned
meeting shall be given to each shareholder or member of
record on the new record date that is entitled to notice under
subsection (1).
(5) (3)
If a meeting of shareholders or
members is adjourned
under
subsection (2), only (4),
the shareholders or members may
only
transact business that they might
have been transacted at the
original
meeting may be transacted at the adjourned meeting if a
notice of the adjourned meeting is not given. A shareholder,
member, or proxy holder may be present and vote at the adjourned
meeting by a means of remote communication if that person was
permitted to be present and vote by that means of remote
communication in the original meeting notice.
(6) (4)
Attendance of a person at a meeting of shareholders or
members,
in person or by proxy, constitutes a waiver A
shareholder's or member's attendance at a meeting, in person or by
proxy, will result in both of the following:
(a) Waiver of objection to lack of notice or defective notice
of the meeting, unless the shareholder or member at the beginning
of the meeting objects to holding the meeting or transacting
business at the meeting.
(b) Waiver of objection to consideration of a particular
matter at the meeting that is not within the purpose or purposes
described in the meeting notice, unless the shareholder or member
objects to considering the matter when it is presented.
(7) (5)
If a shareholder, or
member, or proxy holder is
permitted to participate in and vote at a meeting by remote
communication under section 405, the notice described in subsection
(1) shall include a description of the means of remote
communication
by which a shareholder, or member, or proxy holder
may participate.
(8) This section does not prohibit a corporation from
conducting a meeting of its shareholders or members without notice
or with the notice prescribed in the articles of incorporation or
bylaws, if the meeting is for a purpose or purposes that do not
involve the election of directors or the taking of other actions
involving control or governance of the corporation for which a vote
of the shareholders or members is required under this act, the
articles of incorporation, the bylaws, or an agreement under
section 488.
Sec.
405. (1) A corporation may provide in its articles of
incorporation
or in its bylaws for a shareholder's or member's
participation
Unless otherwise restricted
by the articles of
incorporation or bylaws, a shareholder, member, or proxy holder may
participate in a meeting of shareholders or members by a conference
telephone
or other means of remote communication by which that
permits
all persons participating that participate in the meeting
may
hear each other if all to
communicate with all the other
participants.
All participants are shall be advised
of the means of
remote
communication. in use and the names of the participants in
the
meeting are divulged to all participants.
(2)
Participation in a meeting pursuant to under this section
constitutes presence in person at the meeting.
(3) Unless otherwise restricted by any provisions of the
articles of incorporation or bylaws, the board of directors may
hold a meeting of shareholders or members that is conducted solely
by means of remote communication.
(4) Subject to any guidelines and procedures adopted by the
board
of directors, shareholders, or members, and proxy holders
that are not physically present at a meeting of shareholders or
members may participate in the meeting by a means of remote
communication and are considered present in person and may vote at
the meeting if all of the following are met:
(a) The corporation implements reasonable measures to verify
that each person that is considered present and permitted to vote
at the meeting by means of remote communication is a shareholder,
or
member, or proxy holder.
(b) The corporation implements reasonable measures to provide
each
shareholder, or member, or proxy holder a
reasonable
opportunity to participate in the meeting and to vote on matters
submitted to the shareholders or members, including an opportunity
to read or hear the proceedings of the meeting substantially
concurrently with the proceedings.
(c)
If any shareholder, or member, or proxy holder votes or
takes other action at the meeting by a means of remote
communication, a record of the vote or other action is maintained
by the corporation.
(d)
A shareholder or member may be present and vote at an
adjourned
meeting of the shareholders or members by a means of
remote
communication if he or she was permitted to be present and
vote
by that means of remote communication in the original meeting
notice
given under section 404.
Sec. 406. (1) At each meeting of shareholders or members, a
chairperson shall preside. The chairperson shall be appointed as
provided in the bylaws or, in the absence of a provision in the
bylaws, by the board of directors.
(2) Unless the articles of incorporation or bylaws provide
otherwise, the chairperson that presides at a meeting of the
shareholders or members shall determine the order of business and
has the authority to establish rules for the conduct of the
meeting. Any rules adopted for, or for the conduct of, the meeting
must be fair to shareholders or members.
(3) The chairperson of a meeting shall announce at the meeting
when the polls close for each vote of the shareholders or members.
If an announcement is not made, the polls close on the final
adjournment of the meeting. After the polls close, ballots,
proxies, and votes and any revocations or changes to ballots,
proxies, or votes, shall not be accepted.
Sec. 407. (1) The articles of incorporation may provide that
any action the shareholders or members are required or permitted by
this
act to be taken take at an annual or special meeting of
shareholders
or members may be taken without a
meeting, without
prior
notice, and without a vote, if written
consents, in writing,
setting forth the action taken, are signed and dated by the holders
of
outstanding stock shares or members having or their proxies that
have
not less than the minimum number of
votes that would be is
necessary to authorize or take the action at a meeting at which all
shares or members entitled to vote on the action were present and
voted.
Prompt The corporation
shall give prompt notice of the
taking
of the any corporate action taken without a meeting by
less
than
unanimous written consent shall be given to those shareholders
or
members who have that did not consented consent to the action in
writing.
(2)
If the shareholders or members
take an action consented to
by
written consent under this section subsection (1) that would
have
required require filing of a certificate under any other
section
of this act if the action had been voted upon by
shareholders
or members taken at a meeting of the shareholders or
members, the certificate filed under that other section shall
state, in lieu of any statement required by that section concerning
a vote of shareholders or members, that both written consent and
written
notice have been given as provided in this
section.subsection (1).
(3) Any action the shareholders or members are required or
permitted
by this act to be taken take
at an annual or special
meeting
of shareholders or members may be taken without a meeting,
without prior notice, and without a vote, if before or after the
action all the shareholders or members entitled to vote on the
action or their proxies consent to the action in writing. If the
shareholders or members take an action by written consent under
this subsection that requires filing of a certificate under any
other section of this act if the action had been taken at a
meeting, the certification filed under the other section shall
state, in lieu of any statement required by that section concerning
a vote of the shareholders or members, that written consent has
been given as provided in this subsection.
(4)
An electronic transmission consenting that consents to an
action
that is transmitted by a shareholder, or
member, or proxy
holder,
or by a person authorized to act for the
shareholder, or
member, or proxy holder, is written, signed, and dated for the
purposes of this section if the electronic transmission is
delivered with information from which the corporation can determine
that the electronic transmission was transmitted by the
shareholder, or
member, or proxy holder, or by a person authorized
to
act for the shareholder, or member, or proxy holder, and the
date on which the electronic transmission was transmitted. The date
on which an electronic transmission is transmitted is the date on
which the consent was signed for purposes of this section. A
consent given by electronic transmission is not delivered until it
is reproduced in paper form and the paper form is delivered to the
corporation by delivery to its registered office in this state, its
principal office in this state, or an officer or agent of the
corporation
having that has custody of the book in which
proceedings of meetings of shareholders or members are recorded.
Delivery to a corporation's registered office shall be made by hand
or by certified or registered mail, return receipt requested.
Delivery to a corporation's principal office in this state or to an
officer
or agent of the corporation having that has custody of the
book in which proceedings of meetings of shareholders or members
are recorded shall be made by hand, by certified or registered
mail, return receipt requested, or in any other manner provided in
the articles of incorporation or bylaws or by resolution of the
board of directors of the corporation.
Sec. 408. (1) A corporation may provide in its articles of
incorporation or in bylaws that are approved by the shareholders or
members that any action the shareholders or members are required or
permitted to take at an annual or special meeting, including the
election of directors, may be taken without a meeting if the
corporation provides a ballot to each shareholder or member that is
entitled to vote on the action in the manner provided in section
404 for providing notice of meetings of shareholders or members. A
provision in the articles of incorporation or bylaws authorizing
shareholder or member action by ballot shall not preclude calling
or holding annual or special meetings of shareholders or members.
(2) The ballot provided to shareholders or members under
subsection (1) shall meet all of the following:
(a) Set forth each proposed action.
(b) Provide an opportunity for the shareholders or members to
vote for or against each proposed action.
(c) Specify a time by which the corporation must receive a
ballot in order to be counted as a vote of the shareholder or
member. The time specified shall be not less than 20 or more than
90 days after the date the corporation provides the ballot to the
shareholders or members.
(3) An action is considered approved by the shareholders or
members by ballot if the total number of shareholders or members
voting or the total number of shareholder or member votes cast in
ballots received by the corporation by the time specified in the
ballots equals or exceeds the quorum required to be present at a
meeting to take the action, and the number of favorable votes
equals or exceeds the number of votes that would be required to
approve the action at a meeting at which the number of votes cast
by shareholders or members present was the same as the number of
votes cast by ballot. Except as otherwise provided in the articles
of incorporation, an invalid ballot, an abstention, or the
submission of a ballot marked "abstain" with respect to any action
does not constitute a vote cast on that action.
(4) Except as otherwise provided in the articles of
incorporation or bylaws, a shareholder or member may not revoke a
ballot received by the corporation.
(5) Subject to subsection (6), a corporation that provides in
its articles of incorporation or bylaws for shareholder or member
action by ballot may establish procedures that enable shareholders
or members or a specified number or percentage of shareholders or
members to include proposed actions in a ballot.
(6) If holders of at least 10% of all the voting shares or of
at least 10% of the member votes submit a proposal for action by
the shareholders or members, a corporation that provides in its
articles of incorporation or bylaws for membership action by ballot
shall include the proposed action in a ballot and submit that
ballot to the shareholders or members as provided in this section.
(7) If any other section of this act requires the filing of a
certificate with the department if an action is approved by vote of
the shareholders or members at a meeting, the shareholders or
members may approve that action by ballot under subsection (1) and,
in lieu of any statement required under that section concerning the
vote of the shareholders or members at a meeting, the certificate
shall state that the action was approved by ballot under this
section.
Sec. 409. (1) A corporation may provide in its articles of
incorporation or in bylaws that are approved by the shareholders or
members that any action the shareholders or members are required or
permitted take at an annual or special meeting, including the
election of directors, may be taken without a meeting if the
corporation provides a ballot to each shareholder or member that is
entitled to vote that allows the shareholder or member to vote at a
polling place or at polling places established by the corporation
that are reasonably accessible to the shareholders or members. The
corporation shall provide notice to each shareholder or member that
is entitled to cast a ballot at a shareholder or member vote held
at a polling place or at polling places under this subsection
within the same time and in the same manner provided for notice of
meetings of shareholders or members under this act. The notice
shall describe each proposed action that is included on the ballot,
the location of the polling place or places, and the times when the
polling places are open. A provision in the articles of
incorporation or bylaws that authorizes shareholder or member
action by ballot cast at a polling place or at polling places does
not preclude the calling or holding of an annual or special meeting
of shareholders or members.
(2) A ballot authorized under subsection (1) shall describe
each proposed action and provide an opportunity for a shareholder
or member to vote for or against the action.
(3) An action is considered approved by the shareholders or
members by ballot under this section if the total number of
shareholders or members that vote or the total number of votes cast
by shareholders or members at the polling place or polling places
during the period when the polls were open equals or exceeds the
quorum required to be present at a meeting to take that action, and
the number of favorable votes equals or exceeds the number of votes
that would be required to take the action at a meeting at which the
number of votes cast by shareholders or members present was the
same as the number of votes cast by ballot. Except as otherwise
provided in the articles of incorporation, an invalid ballot, an
abstention, or the submission of a ballot marked "abstain" with
respect to any action does not constitute a vote cast on that
action.
(4) Except as otherwise provided in the articles of
incorporation or bylaws, a shareholder or member may not revoke a
ballot cast at a polling place.
(5) Subject to subsection (6), a corporation that provides in
its articles of incorporation or bylaws for shareholder or member
action by ballot cast at a polling place or at polling places may
establish procedures that enable shareholders or members or a
specified number or percentage of shareholders or members to
include proposed actions in a ballot.
(6) If holders of at least 10% of all the voting shares or of
at least 10% of the member votes submit a proposed action by the
shareholders or members, a corporation that provides in its
articles of incorporation or bylaws for membership action by ballot
cast at a polling place or at polling places shall include the
proposed action in a ballot and submit such ballot to the
shareholders or members as provided in this section.
(7) If any other section of this act requires the filing of a
certificate with the department if an action is approved by vote of
the shareholders or members at a meeting, the shareholders or
members may approve that action by ballot under subsection (1) and,
in lieu of any statement required under that section concerning the
vote of the shareholders or members at a meeting, the certificate
shall state that the action was approved by ballot under this
section.
Sec. 412. (1) Except as provided in this subsection, for the
purpose of determining which shareholders or members are entitled
to notice of and to vote at a meeting of shareholders or members,
notice of an adjournment of a meeting, or notice of or to cast a
ballot at a polling place, and for the purpose of determining the
shareholders or members that are entitled to receive and to cast a
ballot under section 408, the bylaws may provide for establishing a
record date, or, in the absence of a bylaws provision, the board
shall by resolution establish a record date. If the bylaws
establish a record date, the board shall comply with the bylaws in
establishing the record date. The record date shall not precede the
date on which the resolution fixing the record date is adopted by
the board. The record date shall not be more than 60 or fewer than
10 days before the date of the meeting or the first day on which a
shareholder or member may cast a ballot at a polling place under
section 409. If the vote is by ballot under section 408, the record
date shall be not more than 60 or fewer than 20 days before the
last date on which the corporation must receive the ballots for
them to be counted. If a record date is not fixed, the record date
for determination of shareholders or members entitled to notice of
or to vote at a meeting of shareholders or members or to cast a
ballot at a polling place is the close of business on the day next
preceding the day on which notice is given, or if no notice is
given, the day next preceding the day on which the meeting is held
or the day next preceding the first day on which a shareholder or
member may cast a ballot at a polling place under section 409. If
the vote is by ballot under section 408, and a record date is not
fixed, the record date for determination of which shareholders or
members are entitled to receive and cast a ballot is the close of
business of the day next preceding the day on which the corporation
provides the ballot to the shareholders or members under section
408(1). If a determination of which shareholders or members of
record are entitled to notice of or to vote at a meeting of
shareholders or members is made under this section, the
determination applies to any adjournment of the meeting, unless the
board establishes a new record date under this section for the
adjourned meeting.
(2) For the purpose of determining which shareholders or
members are entitled to express consent to or to dissent from a
proposal without a meeting under section 407, the bylaws may
provide for establishing a record date. The record date shall not
be more than 60 days before the proposed effective date of the
shareholder or member action. If the bylaws do not establish a
record date, the board may establish a record date that does not
precede the date the board adopts the resolution establishing the
record date and is not more than 10 days after the board
resolution. If a record date is not established and prior action by
the board is required with respect to any corporate action to be
taken without a meeting under section 407, the record date is the
close of business on the day on which the resolution of the board
is adopted. If a record date is not fixed and prior action by the
board is not required, the record date is the first date on which a
signed written consent is delivered to the corporation under
section 407.
(3) For the purpose of determining shareholders or members
that are entitled to receive payment of a share dividend,
distribution, or allotment of a right or for the purpose of any
other action, the bylaws may provide for establishing a record
date, or, in the absence of a bylaws provision, the board may
establish a record date. The record date shall not precede the date
on which the resolution establishing the record date is adopted by
the board. The date shall not be more than 60 days before the
payment of the share dividend, distribution, or allotment of a
right or other action. If a record date is not established, the
record date is the close of business on the day on which the
resolution of the board relating to the corporate action is
adopted.
Sec.
413. (1) The officer or agent having charge of
responsible for the shareholder or membership records of a
corporation shall make and certify a complete list of the
shareholders
or members entitled to vote at a shareholders' or
members'
meeting or any adjourned shareholders'
or members'
meeting.
The list shall meet all of the following:meeting of the
shareholders or members. All of the following apply to the list:
(a)
Be arranged The officer or
agent shall arrange the list
alphabetically
within each class with and
include the address of
each member or shareholder and, if applicable, the number of shares
held by each shareholder.
(b)
Be produced The officer or
agent shall produce the list at
the time and place of the meeting.
(c)
Be The list is open to examination by any shareholder or
member during the entire meeting. If the meeting is held solely by
means of remote communication, then the officer or agent shall make
the
list shall be open to the examination of any shareholder or
member during the entire meeting by posting the list on a
reasonably accessible electronic network, and providing the
information
required to access the list shall be provided with the
notice of the meeting.
(d)
Be The list is prima facie evidence as to who are the of
which shareholders or members are entitled to examine the list or
to vote at the meeting.
(2)
If the requirements of this section have not been are not
complied with, and a shareholder or member that is present in
person or by proxy in good faith challenges the existence of
sufficient
votes to carry approve any action at the meeting, the
corporation
shall adjourn the meeting shall be
adjourned until the
requirements are complied with. Failure to comply with the
requirements of this section does not affect the validity of an
action
taken at the meeting before the making of a challenge under
this subsection.
Sec. 415. (1) Unless a greater or lesser quorum is provided in
the articles of incorporation, in a bylaw adopted by the
shareholders, or
members, or incorporators, or in this act, shares
or members entitled to cast a majority of the votes at a meeting
constitute
a quorum at the meeting. The If
the withdrawal of
shareholders or members leaves less than a quorum before
adjournment, the remaining shareholders or members present in
person
or by proxy at such the meeting may continue to do business
until
adjournment. , notwithstanding the withdrawal of enough
shareholders
or members to leave less than a quorum. Whether or not
a
quorum is present, the a meeting may be adjourned by a vote of
the shareholders or members present.
(2)
When If the holders of a class of shares or members of a
class are entitled to vote separately on an item of business, this
section applies in determining the presence of a quorum of the
class for transaction of the item of business.
Sec. 421. (1) Except as otherwise provided by statute, in the
articles of incorporation, or in a bylaw that is adopted by the
shareholders or members of a corporation organized on a stock or
membership basis, a shareholder or member that is entitled to vote
at a meeting of shareholders or members, to cast a ballot under
section 408 or 409, or to express consent or dissent without a
meeting may authorize other persons to act for the shareholder or
member by proxy. Except as otherwise provided by statute, in the
articles of incorporation, or in a bylaw, a director or other
person that is entitled to vote in the election of directors of a
corporation organized on a directorship basis may authorize another
person or persons to act for the director or other person with
respect to the election of directors by proxy.
(2)
A proxy shall be signed by the shareholder or member or an
authorized
agent or representative. A proxy is
not valid after the
expiration of 3 years from its date unless otherwise provided in
the proxy.
(3)
A proxy is revocable at the pleasure of the shareholder or
member
executing person that
executes it, except as otherwise
provided in this section and sections 422 and 423.
(4) The authority of the holder of a proxy to act is not
revoked
by the incompetence or death of the shareholder or member
person who executed the proxy unless, before the authority is
exercised, written notice of an adjudication of the incompetence or
death is received by the corporate officer that is responsible for
maintaining
the list of shareholders, or members, or persons that
are entitled to vote in the election of directors of a directorship
corporation.
(5)
Without limiting the manner in which a shareholder, or
member, or person that is entitled to vote in the election of
directors of a directorship corporation may authorize another
person
or persons to act for him or her as proxy for the
shareholder, member, or person under subsection (1), each of the
following methods constitute a valid means by which a shareholder,
or
member, or person entitled to vote in the election of
directors
of a directorship corporation may grant authority to another person
to act as proxy:
(a)
Delivering a writing to the person authorizing that
authorizes
that person to act for the shareholder, or
member, or
person entitled to vote in the election of directors of a
directorship
corporation as proxy , and is executed
by the
shareholder, or
member, or person entitled to
vote in the election
of directors of a directorship corporation, or by an authorized
officer,
director, employee, or agent of the shareholder, or
member, or person entitled to vote in the election of directors of
a directorship corporation, by signing the writing or causing his
or her signature to be affixed to the writing by any reasonable
means, including, but not limited to, facsimile signature.
(b) Transmitting or authorizing the transmission of a
telegram, cablegram, or other means of electronic transmission to
the
person who that will hold the proxy; or to a proxy solicitation
firm,
proxy support service organization, or similar agent fully
authorized
by the that the person who will hold the proxy
authorized to receive that transmission on the person's behalf. Any
telegram, cablegram, or other means of electronic transmission must
either
set forth or be submitted with include
with it information
from which it can be determined that the telegram, cablegram, or
other
electronic transmission was authorized by the shareholder, or
member, or person entitled to vote in the election of directors of
a directorship corporation. If a telegram, cablegram, or other
electronic transmission is determined to be valid, the inspectors
or, if there are no inspectors, the persons making the
determination
shall specify the information upon on which they
relied.
(6) A copy, facsimile telecommunication, or other reliable
reproduction of the writing or transmission created under
subsection (5) may be substituted or used in lieu of the original
writing or transmission for any purpose for which the original
writing or transmission could be used, if the copy, facsimile
telecommunication, or other reproduction is a complete reproduction
of the entire original writing or transmission.
Sec.
422. A proxy which that is entitled "irrevocable proxy",
and
which that states that it is irrevocable, is irrevocable when
it is held by any of the following or a nominee of any of the
following:
(a)
In the case of shares or memberships which that are
transferable,
a pledgee.holder of a
pledge or other security
interest in the shares or membership.
(b)
In the case of shares or memberships which that are
transferable,
a person who that has purchased or agreed to purchase
the
shares or members.membership.
(c)
A creditor of the corporation who that extends or
continues credit to the corporation in consideration of the proxy.
(d)
A person An individual who has contracted to perform
services as a director, officer, or employee of the corporation, if
a proxy is required by the contract of employment.
(e)
A holder of any other proxy coupled with an interest.A
person designated by or under an agreement under section 461.
(f)
A person designated by or under an agreement under section
461.A holder of any other proxy coupled with an
interest.
Sec. 423. (1) A proxy described in section 422 becomes
revocable,
notwithstanding a provision making that makes it
irrevocable,
after the pledge is redeemed, or the security interest
is
terminated, the debt of the corporation
is paid, or the period
of
employment provided for in the contract of employment has
terminated,
expires, or the agreement under section 461 has is
terminated.
In a case provided for A
proxy described in section
422(c)
or (d) the proxy is revocable 3 years after the date of the
proxy
or at the end of the any period
, if any, specified therein,
in the proxy, whichever period is less, unless the period of
irrevocability is renewed by execution of a new irrevocable proxy.
This subsection does not affect the duration of a proxy under
section 421(2).
(2)
A proxy is revocable, notwithstanding a provision making
that
makes it irrevocable, by a purchaser of
shares without
knowledge
that did not know at the time
of purchase of the
existence of the provision unless the existence of the proxy and
its irrevocability are noted conspicuously on the face or back of
the certificate representing the shares.
Sec. 432. (1) A corporation may establish a procedure under
which the beneficial owner of shares or memberships that are
registered in the name of a nominee is recognized by the
corporation as the shareholder or member. The procedure established
may determine the extent of this recognition.
(2) A procedure established under subsection (1) may include
any of the following:
(a) The type of nominees to which it applies.
(b) The rights or privileges that the corporation recognizes
in the beneficial owner.
(c) The manner in which the procedure is selected by the
nominee.
(d) The information that the nominee, shareholder, or member
must provide if the procedure is selected.
(e) The period for which selection of the procedure is
effective.
(f) Other aspects of the rights and duties created.
Sec. 441. (1) Each outstanding share or member is entitled to
1 vote on each matter submitted to a vote, unless otherwise
provided
pursuant to under section 303 or 304. A person may cast a
vote
may be cast at a meeting
of the shareholders or members either
orally
or in writing, unless otherwise provided in the bylaws. In
addition,
the bylaws may provide for voting by electronic
transmission.
(2)
When If an action, other than the election of directors,
is
to be taken by is submitted
for a vote of the shareholders or
members,
it shall be the action is
approved or authorized by if it
receives the affirmative vote of a majority of the votes cast by
the
holders of shares or members entitled to vote on that the
action,
unless a greater plurality higher
vote is required by in
the articles of incorporation or a higher or lower vote is required
under another section of this act. Unless otherwise provided by the
articles of incorporation, abstaining from a vote or submitting a
ballot marked "abstain" with respect to an action is not a vote
cast
on that action. Except as otherwise
provided by in the
articles of incorporation, directors shall be are elected
by a
plurality of the votes cast at an election.
Sec. 442. (1) The articles of incorporation or bylaws may
provide that a class of shares or members shall vote as a class to
authorize any action, including amendment to the articles of
incorporation. Such voting A vote as a class shall
be under this
section
is in addition to any other vote
required by under this
act.
Where If voting as a class is provided in the articles of
incorporation or bylaws, it shall be by the proportionate vote
provided in the articles of incorporation or bylaws or, if a
proportionate vote is not so provided, then for any action other
than the election of directors, by a majority of the votes cast by
the
holders of shares or members of such the class entitled to vote
thereon.on the action.
(2)
Where If voting as a class is required by under this
act
to
authorize an action, the action shall be is authorized by if it
receives the affirmative vote of a majority of the votes cast by
the
holders of shares shareholders
or members of each class
entitled
to vote thereon, on that
action, unless a greater higher
vote
is required by in the articles of incorporation or under
another
section of this act. The voting A
vote as a class shall be
under
this subsection is in addition to any
other vote required by
under this act.
(3) Unless otherwise provided in the articles of
incorporation, abstaining from a vote or submitting a ballot marked
"abstain" with respect to an action that requires authorization by
a class of shareholders or members is not a vote cast on that
action.
Sec.
444. (1) The vote of a shareholder or member which is a
Shares or memberships that are held by another domestic
corporation, or
domestic business corporation, or foreign
corporation, or foreign business corporation, whether or not the
corporation or business corporation is subject to this act, may be
cast
voted by an officer or agent, or by a proxy
that is appointed
by an officer or agent or by some other person, who by action of
its
board or pursuant to under
its bylaws shall be is appointed
to
cast
such vote the shares or membership.
(2) A shareholder whose shares are pledged is entitled to vote
the
shares until they have been are
transferred into the name of
the pledgee or a nominee of the pledgee.
Sec.
446. The vote of shares or a membership Shares or a
membership that are held by 2 or more persons as joint tenants or
as
tenants in common may be cast or voted at a meeting of
shareholders or members or by ballot under section 408 or 409 by
any
of those persons, joint
tenant or tenant in common, unless
another joint tenant or tenant in common seeks to vote the shares
or membership in person or by proxy. In the latter event, the
written
agreement, if any, which that
governs the manner in which
the
shares or membership shall be are
voted, controls if presented
at the meeting, either physically or by means of electronic
transmission or if presented to the corporation either physically
or by means of electronic transmission before the time for casting
a
ballot under section 408 or 409 expires.
If the an agreement that
governs votes is not presented at the meeting, the majority in
interest
of the joint tenants or tenants in common present shall
control
determines the manner of voting. In the case of a stock
corporation or a membership that carries more than 1 vote, if there
is no majority in interest of the joint tenants or tenants in
common present, the shares or member votes, for the purpose of
voting, shall be divided among those joint tenants or tenants in
common that are present in person in accordance with their interest
in the shares or membership.
Sec. 447a. Unless specifically otherwise provided in the
articles of incorporation or bylaws, absent an order of a court of
competent jurisdiction based on a determination that special
circumstances exist and the best interests of the corporation would
be served, the shares or memberships of a corporation shall not be
voted on any matter or considered to be outstanding shares or
memberships for any purpose related to voting if they are owned,
directly or indirectly, by another corporation, foreign
corporation, business corporation, or foreign business corporation,
and the first corporation owns, directly or indirectly, a majority
of the shares or memberships entitled to vote for directors of the
second corporation.
Sec. 451. (1) The articles of incorporation of a corporation
that is organized on a stock or membership basis may provide that a
shareholder or member that is entitled to vote at an election for
directors
may vote, in person, by proxy, or by electronic
transmission,
or by ballot as provided in
section 408 or 409, for
as
many persons individuals as there are directors to be elected
and for whose election the shareholder or member has a right to
vote, or to cumulate votes by giving 1 candidate as many votes as
the
number of those directors to
be elected multiplied by the
number
of shares votes held by the shareholder or member, or by
distributing the votes of the shareholder or member on the same
principle among any number of the candidates.
(2) The articles of incorporation of a corporation that is
organized on a directorship basis may provide that a person that is
entitled to vote at an election for directors may vote, in person,
by proxy, or by electronic transmission, for as many individuals as
there are directors to be elected and for whose election the person
has a right to vote, or to cumulate votes by giving 1 candidate as
many votes and the number of directors to be elected multiplied by
the number of votes held by the person, or by distributing the
votes of the person on the same principle among any number of the
candidates.
Sec.
455. When, with With respect to an action to be taken by
the shareholders or members, if the articles of incorporation
require the vote or concurrence of the holders of a greater
proportion of the shares or a greater proportion of members, or of
a
class thereof, of shares
or members, than required by under this
act with respect to the action, the articles of incorporation shall
control.
An amendment of the articles which of incorporation that
adds,
changes, or deletes such a that
provision shall be authorized
by
the vote requires the same
vote that is required to amend the
articles
pursuant to of
incorporation under section 611, or by
the
same
vote as that would be required to take action under such that
provision, whichever is greater. A failure to include a provision
described in this section in the articles of incorporation does not
invalidate any bylaw or agreement that would otherwise be
considered valid.
Sec. 461. An agreement between 2 or more shareholders or
members,
if it is in writing and signed by the parties, thereto,
may provide that in exercising voting rights, they shall cast their
votes
as provided in the agreement, or as they may agree, or as
determined
in accordance with under a procedure agreed upon on by
them. A voting agreement executed under this section, whether or
not proxies are executed under that agreement, is not subject to
sections 466 to 468. A voting agreement under this section is
specifically enforceable.
Sec. 466. (1) If shares or memberships of a corporation are
transferable, a shareholder or member may confer on a trustee the
right to vote or otherwise represent those shares or memberships
for a period that does not exceed 10 years, by entering into a
written voting trust agreement that includes the terms and
conditions of the voting trust, by filing an executed counterpart
of the agreement at the registered office of the corporation, and
by transferring those shares or membership to the trustee for
purposes of the agreement.
(2) If a voting rights agreement under subsection (1) is
filed, the holder of any certificates for shares or memberships
transferred shall surrender the certificates and the corporation
shall cancel the certificates and issue new certificates for the
shares or memberships to the trustee that state that they are
issued under the agreement. The corporation shall also describe the
transfer of ownership in the records of the corporation, and the
trustee may vote the transferred shares or memberships during the
term of the agreement.
(3) A trustee that holds memberships transferred under an
agreement executed under this section has the same voting and other
rights as the beneficiaries would have if the memberships were not
in trust.
(4) The filed copy of a voting trust agreement under this
section is subject to inspection at any reasonable time by a
shareholder, member, or a holder of a beneficial interest in the
voting trust, in person or by agent or attorney.
(5) Any voting trust certificates issued under subsection (2)
shall describe the beneficial interests in the voting trust.
Sec. 467. (1) A trustee that votes shares or memberships that
are subject to a voting trust under section 466 is not liable as a
shareholder, member, trustee or otherwise, except for the trustee's
malfeasance.
(2) If 2 or more persons are designated as voting trustees,
and the right and method of voting shares or memberships in their
names are not fixed in the agreement that appoints the trustees, a
majority of the trustees shall determine the right to vote and
manner of voting the shares or memberships. If the trustees are
equally divided concerning the right to vote and the manner of
voting, the votes shall be divided equally among the trustees.
Sec. 468. (1) At any time within the 12-month period before
the expiration of the original term of a voting trust agreement
under section 466 or an extension of a voting trust agreement under
this section, 1 or more beneficiaries of the voting trust, by
written agreement and with written consent of the voting trustees,
may extend the duration of the voting trust agreement with regard
to the shares or memberships subject to their beneficial interest
for an additional period that does not exceed 10 years. Before
expiration of the original term of a voting trust agreement under
section 466 or an extension of a voting trust agreement under this
section, if the voting trustees file in the registered office of
the corporation an executed counterpart of an extension agreement
and of their consent to the extension, the term of the voting trust
agreement is extended for the period described in the extension
agreement. An extension agreement does not affect the rights or
obligations of persons that are not parties to the extension
agreement.
(2) If the term of an extension agreement described in
subsection (1) or a voting trust agreement that otherwise meets the
requirements of this act is more than 10 years, the voting trust
agreement or extension agreement is valid for a period of 10 years
from the date of its commencement and becomes inoperative at the
end of that 10-year period unless extended under subsection (1).
Sec. 472. (1) The articles of incorporation, the bylaws, or an
agreement among any number of holders of bonds, shares, or
memberships, or among the holders and the corporation, may contain
a restriction on the transfer or registration of a bond, share, or
membership of a corporation that is otherwise transferable. A
restriction described in this subsection is not binding with
respect to bonds, shares, or memberships that are issued before
adoption of the restriction unless the holders are parties to an
agreement or voted in favor of the restriction.
(2) A written restriction on the transfer or registration of a
bond, share, or membership of a corporation that is otherwise
transferable, if permitted under this section or section 473 and
noted conspicuously on the face or back of the instrument or on the
information statement required under section 336, may be enforced
against the holder of the restricted instrument or a successor or
transferee of the holder of the restricted instrument including,
but not limited to, a personal representative, administrator,
trustee, guardian, or other fiduciary entrusted with similar
responsibility for the person or estate of the holder. If the
existence of the restriction is not noted conspicuously on the face
or back of the instrument or on the information statement required
under section 336, the restriction, even if permitted under this
section or section 473, is ineffective except against any person
that has actual knowledge of the restriction.
Sec. 473. Without limiting the general authority under section
472(1) to impose restrictions on the transfer or registration of
bonds, shares, or memberships of a corporation that are otherwise
transferable, a restriction on the transfer or registration of
transfer of bonds, shares, or memberships of a corporation that is
consistent with section 301 is permitted if it does any of the
following:
(a) Obligates the holders of the restricted instruments to
offer to the corporation or to any other holders of bonds, shares
or memberships of the corporation, to any other person, or to any
combination of those persons, a prior opportunity to acquire the
restricted instruments.
(b) Obligates the corporation or a holder of bonds, shares, or
memberships of the corporation, any other person, or any
combination of those persons, to purchase the instruments that are
the subject of an agreement respecting the purchase and sale of the
restricted instruments.
(c) Requires the corporation or the holders of a class of
bonds, shares, or memberships of the corporation to consent to a
proposed transfer of the restricted instruments or to approve the
proposed transferee of the restricted instruments.
(d) Prohibits the transfer of the restricted instruments to
designated persons or classes of persons, and the designation is
not contrary to public policy.
(e) Exists for the purpose of maintaining the status of the
corporation under section 115, 501, 521, 527, or 528 of the
internal revenue code of 1986, 26 USC 115, 501, 521, 527, and 528.
Sec. 485. A corporation shall keep books and records of
account and minutes of the proceedings of its shareholders or
members, board, and executive committee, if any. Unless otherwise
provided in the bylaws, the corporation may keep the books,
records,
and minutes may be kept outside this state. The
corporation shall keep at its registered office, or at the office
of
its transfer agent within or without in or outside this state,
records
containing that contain the names and addresses of all
shareholders or members, the number and class of shares held by
each shareholder or the class or classes of membership held by each
member, and
the dates when they respectively became holders
shareholders
of record thereof or members.
Any of such the books,
records, or minutes may be in written form or in any other form
capable
of being converted that is
convertible into written form
within a reasonable time. A corporation shall convert into written
form
without charge any such record that
is not in such written
form,
upon written request of if
requested by a person that is
entitled
to inspect them.the
record.
Sec.
487. (1) Upon written request of If requested in writing
by a shareholder or member, a corporation shall mail to the
shareholder or member its balance sheet as at the end of the
preceding
fiscal year; its statement of income for such that fiscal
year; and, if prepared by the corporation, its statement of source
and
application of funds for such that
fiscal year.
(2)
A person who is a shareholder or member of record of a
corporation,
upon at least 10 days' written demand, may examine for
any
proper purpose in person or by agent or attorney, during usual
business
hours, its minutes of shareholders' or members' meetings
and
record of shareholders or members and make extracts therefrom,
at
the places where they are kept pursuant to section 485.
(3)
Upon proof by a shareholder or member of a proper purpose,
the
circuit court may compel production for examination by the
shareholder
or member of the books and records of account, minutes,
and
record of shareholders or members of a corporation, and may
allow
the shareholder or member to make extracts therefrom.
(2) Any shareholder or member of record of a corporation that
is organized on a stock or membership basis, in person or by
attorney or other agent, may during regular business hours inspect
for any proper purpose the corporation's stock ledger, a list of
its shareholders or members, and its other books and records, if
the shareholder or member gives the corporation written demand
describing with reasonable particularity the purpose of the
inspection and the records the shareholder or member desires to
inspect, and the records sought are directly connected with the
purpose. As used in this subsection, "proper purpose" means a
purpose that is reasonably related to a person's interest as a
shareholder or member. A shareholder or member must deliver a
demand under this subsection to the corporation at its registered
office in this state or at its principal place of business. If an
attorney or other agent is the person seeking to inspect the
records, the demand must include a power of attorney or other
writing that authorizes the attorney or other agent to act on
behalf of the shareholder or member.
(3) If a corporation does not permit an inspection required
under subsection (2) within 5 business days after a demand is
received under subsection (2), or imposes unreasonable conditions
on the inspection, the shareholder or member may apply to the
circuit court for the county in which the principal place of
business or registered office of the corporation is located for an
order to compel the inspection. If the shareholder or member seeks
to inspect the books and records other than its stock ledger or
list of shareholders or members, the shareholder or member must
establish that the shareholder or member has complied with this
section concerning the form and manner of making demand for
inspection of the documents, that the inspection is for a proper
purpose, and that the documents sought are directly connected with
the purpose. If the shareholder or member seeks to inspect the
corporation's stock ledger or list of shareholders or members and
establishes that the stockholder or member has complied with this
section concerning the form and manner of making demand for the
inspection of the documents, the corporation has the burden of
proof to establish that the inspection that is sought is for an
improper purpose or that the records sought are not directly
connected with the person's purpose. In its discretion, the court
may order the corporation to permit the shareholder or member to
inspect the corporation's stock ledger, a list of shareholders or
members, and its other books and records, prescribe conditions and
limitations on the inspection, and award other or further relief
that the court considers just and proper. The court may order
books, documents and records, pertinent extracts, or duly
authenticated copies to be brought to this state and kept in this
state and prescribe terms and conditions on those obligations.
(4) A director may examine any of the corporation's books and
records for a purpose reasonably related to his or her position as
a director. The director may apply to the circuit court of the
county in which the principal place of business or registered
office of the corporation is located for an order to compel the
inspection. In its discretion, the court may order the corporation
to permit the director to inspect any and all books and records,
prescribe conditions and limitations on the inspection, and award
other and further relief that the court considers just and proper.
(5) If the court orders inspection of the records demanded
under subsection (3) or (4), it shall also order the corporation to
pay the shareholder's, member's, or director's costs, including
reasonable attorney fees, incurred to obtain the order unless the
corporation proves that it failed to permit the inspection in good
faith because it had a reasonable basis to doubt the right of the
shareholder, member, or director to inspect the records demanded.
(6) A holder of a voting trust certificate representing shares
of, or membership in, the corporation is considered a shareholder
or member for purposes of this section and section 485.
(7) Notwithstanding any other provisions of this act, the
articles of incorporation, the bylaws, or a resolution of the board
of directors may provide that the shareholders or members and
attorneys or agents for shareholders or members do not have the
right to inspect the corporation's stock ledger, lists of
shareholder or members, lists of donors or donations, or its other
books and records, if the incorporators, shareholders, members, or
directors that approve a limitation under this subsection make a
good faith determination that 1 or more of the following apply:
(a) Opening the stock ledger, lists of shareholder or members,
lists of donors or donations, or its other books and records for
inspection would impair the rights of privacy or free association
of the shareholders or members.
(b) Opening the stock ledger, lists of shareholder or members,
lists of donors or donations, or its other books and records for
inspection would impair the lawful purposes of the corporation.
(c) Opening lists of donors or donations for inspection is not
in the best interests of the corporation or its donors.
(8) A corporation that limits inspection of lists of its
shareholders or members under subsection (7) shall provide a
reasonable way for shareholders or members to communicate with all
other shareholders or members concerning the election of directors
and other affairs of the corporation. A corporation described in
this subsection may require a shareholder or member that wishes to
communicate with other shareholders or members under this
subsection to pay the reasonable costs to cover the cost of labor
and materials and third-party charges incurred by the corporation
in doing so.
(9) As used in this section:
(a) "Proper purpose" means a purpose that is reasonably
related to a person's interest as a shareholder or member of a
corporation.
(b) "Right to inspect records" includes the right to copy and
make extracts from the records of a corporation and, if reasonable,
the right to require the corporation to supply copies made by
photographic, xerographic, or other means. To cover the cost of
labor and material, the corporation may require a shareholder or
member to pay a reasonable charge for copies of the documents
provided to the shareholder or member.
Sec. 488. (1) Subject to subsection (11), an agreement among
the members of a corporation that is organized on a membership
basis, among the shareholders of a corporation that is organized on
a stock basis, or among the directors of a corporation that is
organized on a directorship basis that complies with this section
is effective among the members, shareholders, or directors and the
corporation even though it is inconsistent with this act in 1 or
more of the following ways:
(a) It restricts the discretion or powers of the board.
(b) It governs the authorization or making of distributions
permitted under section 301 whether or not in proportion to the
membership interest or shares held, subject to limitations in
sections 345 and 855 pertaining to the protection of creditors.
(c) It establishes who shall be directors or officers of the
corporation, or the terms of office or manner of selection or
removal of directors or officers of the corporation.
(d) In general or in regard to specific matters, it governs
the exercise or division of voting power by or between the members
or shareholders and directors or by or among any of the members,
shareholders, or directors, including, but not limited to, use of
weighted voting rights or restrictions on the voting rights of
particular members, shareholders, or directors.
(e) It establishes the terms and conditions of any agreement
for the transfer or use of property or the provision of services
between the corporation and any member, shareholder, director,
officer, or employee of the corporation or among the members,
shareholders, directors, officers, or employees of the corporation.
(f) It transfers to 1 or more members, shareholders, or other
persons all or part of the authority to exercise the corporate
powers or to manage the business and affairs of the corporation,
including, but not limited to, the resolution of any issue about
which there exists a deadlock among directors, members, or
shareholders.
(g) It requires dissolution of the corporation at the request
of 1 or more of the members, shareholders, or directors or if a
specified event or contingency occurs.
(h) It establishes that shares or memberships may be
assessable by the corporation, including the procedures for an
assessment and the consequences of a failure by a shareholder or
member to pay an assessment.
(i) It otherwise governs the exercise of the corporate powers
or the management of the business and affairs of the corporation or
the relationship among the shareholders, the members, the
directors, and the corporation, or among any of the shareholders,
members, or directors, and is not contrary to public policy.
(2) An agreement that is authorized under this section shall
meet both of the following requirements:
(a) It is included in either of the following:
(i) A provision of the articles of incorporation or bylaws
that is approved by all members or shareholders or all directors of
a corporation that is organized on a directorship basis at the time
of the agreement.
(ii) A written agreement that is signed by all members or
shareholders or all directors of a corporation that is organized on
a directorship basis at the time of the agreement and that is
disclosed to the corporation.
(b) Is subject to amendment only by all members or
shareholders or by all directors of a corporation that is organized
on a directorship basis at the time of the amendment, unless the
agreement provides otherwise or the amendment involves a provision
of the articles of incorporation described in section 209(1)(f).
(3) A corporation shall conspicuously note the existence of an
agreement authorized under this section on the face or back of any
certificate of membership or for shares issued by the corporation
or on the information statement required under section 336. If at
the time of the agreement the corporation has memberships or shares
outstanding represented by certificates, the corporation shall
recall the outstanding certificates and issue substitute
certificates that comply with this subsection. A failure to note
the existence of the agreement on the certificate or information
statement does not affect the validity of the agreement or any
action taken under the agreement.
(4) Any person that becomes a member of a corporation
organized on a membership basis, a shareholder of a corporation
organized on a stock basis, or a director of a corporation
organized on a directorship basis and did not have knowledge of the
existence of an agreement authorized under this section at the time
the person became a member, shareholder, or director, may elect to
resign as a member, shareholder, or director, may elect to rescind
the transfer of any membership or shares, or may elect to maintain
an action to terminate the agreement. For purposes of this
subsection, a person is considered to have knowledge of an
agreement authorized under this section if at the time the person
becomes a member, shareholder, or director, the agreement is
included in the articles of incorporation or bylaws, the
agreement's existence is noted on the certificate or information
statement provided under subsection (3), or a copy or a written
summary of the agreement is furnished to the person before the
person becomes a member, shareholder, or director. A person must
commence an action to enforce a right of rescission or to terminate
the agreement within 90 days after discovery of the existence of
the agreement or 2 years after the person becomes a shareholder,
member, or director, whichever is earlier. In an action or suit to
terminate the agreement, the court in which the action is brought
shall terminate the agreement if the court determines that the
agreement is materially inconsistent with or detrimental to
carrying out the purposes of the corporation, materially impairs
rights or interests the person that brought the action or suit
would reasonably have expected to have acquired in becoming a
member, shareholder, or director, or is inconsistent with 1 or more
of the limitations under subsection (11).
(5) If an agreement authorized in this section ceases to be
effective for any reason and is contained or referred to in the
corporation's articles of incorporation or bylaws, the board may
without shareholder or member action adopt an amendment to the
articles of incorporation or bylaws to delete the agreement and any
references to it.
(6) An agreement authorized under this section that limits the
discretion or powers of the board shall relieve the directors of,
and impose on the person or persons in which the discretion or
powers are vested, liability for acts or omissions imposed by law
on directors to the extent that the discretion or powers of the
directors are limited by the agreement. The person or persons in
which the discretion or powers are vested are treated as a director
or directors for purposes of any indemnification and any limitation
on liability under section 209.
(7) The existence or performance of an agreement authorized
under this section is not grounds for imposing personal liability
on any member, shareholder, or other person for the acts or debts
of the corporation or for treating the corporation as if it were a
partnership or unincorporated entity, even if the agreement or its
performance results in failure to observe the corporate formalities
otherwise applicable to the matters governed by the agreement.
(8) Filing a certificate of dissolution under section 805 is
required to implement a dissolution under an agreement authorized
under subsection (1)(g).
(9) Incorporators or subscribers for memberships or shares may
act as members or shareholders with respect to an agreement
authorized under this section if the corporation has not issued
memberships or shares at the time the agreement is made.
(10) A failure to satisfy the unanimity requirement of
subsection (2) with respect to an agreement authorized under this
section does not invalidate any agreement or any provision of the
articles of incorporation or bylaws that would otherwise be valid.
(11) An agreement under this section is not effective to do
any of the following:
(a) To authorize distributions that are not permitted under
section 301.
(b) To allow property that is held for charitable or other
public purposes to be used for private benefit, through the payment
or excessive compensation for goods or services, or in any other
manner.
(c) To allow the use of corporate property in a manner that is
materially inconsistent with the purposes of the corporation or a
valid restriction imposed by donors.
Sec. 489. (1) A director of a corporation that is organized on
a directorship basis, a shareholder of a corporation that is
organized on a stock basis, or a member of a corporation that is
organized on a membership basis may bring an action in the circuit
court of the county in which the principal place of business or
registered office of the corporation is located to establish that
the acts of the directors, shareholders, members, or others in
control of the corporation are illegal, fraudulent, or willfully
unfair and oppressive to the corporation or to the director,
member, or shareholder. If the director, member, or shareholder
establishes grounds for relief, the circuit court may make an order
or grant relief as it considers appropriate including, but not
limited to, an order that provides for any of the following:
(a) The dissolution and liquidation of the assets and affairs
of the corporation.
(b) The cancellation or alteration of a provision contained in
the articles of incorporation, an amendment of the articles of
incorporation, or the bylaws of the corporation.
(c) The cancellation of, alteration of, or an injunction
against a resolution or other act of the corporation.
(d) The direction or prohibition of an act of the corporation
or of shareholders, members, directors, officers, or other persons
that are parties to the action.
(e) The purchase at fair value of the shares of a shareholder
or the membership of a member, either by the corporation or by the
officers, directors, or other shareholders or members responsible
for the wrongful acts. In establishing the fair value of the shares
or membership for purposes of this subsection, a shareholder or
member is not considered to have any interest in charitable or
other assets of the corporation that would not be distributable to
shareholders or members of the corporation in a dissolution under
section 855.
(f) An award of damages to the corporation or a shareholder or
member. A person must commence an action seeking an award of
damages within 3 years after the cause of action under this section
has accrued, or within 2 years after the shareholder or member
discovers or reasonably should have discovered the cause of action
under this section, whichever occurs first. In awarding damages
under this subsection to a shareholder or member, the shareholder
or member is not considered to have any interest in charitable or
other assets of the corporation that would not be distributable to
shareholders or members of the corporation in a dissolution under
section 855.
(2) As used in this section, "willfully unfair and oppressive
conduct" with respect to a member or shareholder means a continuing
course of conduct or a significant action or series of actions that
substantially interferes with the rights or interests of the member
or shareholder as a member or shareholder. The term does not
include conduct or actions that are permitted by an agreement, the
articles of incorporation, the bylaws, or a consistently applied
written corporate policy or procedure.
Sec. 491a. As used in this section and sections 492a to 497:
(a) "Derivative proceeding" means a civil suit in the right of
a domestic corporation or a foreign corporation that is authorized
to or does conduct affairs in this state.
(b) "Director" includes an individual who was serving on the
board of a corporation organized on a directorship basis at the
time of the act or omission complained of and an individual who
becomes a member of the board of that corporation after the act or
omission.
(c) "Disinterested director" means an individual who is
currently serving on the board of a corporation and is not a party
to a derivative proceeding, or an individual who is currently
serving on the board of a corporation and is a party to a
derivative proceeding if the corporation demonstrates that the
claim asserted against the director is frivolous or insubstantial.
(d) "Member" means a record or beneficial owner of a
membership in a corporation that is organized on a membership basis
and includes a beneficial owner whose membership is held in a
voting trust or held by a nominee on the owner's behalf.
(e) "Shareholder" means a record or beneficial owner of shares
of a corporation that is organized on a stock basis and includes a
beneficial owner whose shares are held in a voting trust or held by
a nominee on the owner's behalf.
Sec. 492a. A shareholder or member may not commence or
maintain a derivative proceeding unless the shareholder or member
meets all of the following criteria:
(a) The shareholder or member was a shareholder or member of
the corporation at the time of the act or omission complained of or
became a shareholder or member through a permitted transfer by
operation of law from a person that was a shareholder or member at
that time.
(b) The shareholder or member fairly and adequately represents
the interests of the corporation in enforcing the right of the
corporation.
(c) The shareholder or member continues to be a shareholder or
member until the time of judgment, unless the failure to continue
to be a shareholder or member is the result of corporate action in
which the former shareholder or member did not acquiesce and the
derivative proceeding was commenced before the termination of the
former shareholder's or member's status as a shareholder or member.
Sec. 493a. A shareholder, member, or director may not commence
a derivative proceeding until all of the following have occurred:
(a) A written demand is made on the corporation to take
suitable action.
(b) Ninety days have expired from the date the demand was made
unless the shareholder, member, or director is notified that the
corporation has rejected the demand or unless irreparable injury to
the corporation would result by waiting for the expiration of the
90-day period.
Sec. 494. If the corporation commences an investigation of the
allegations made in a demand under section 493 or a complaint in a
derivative proceeding, the court may stay the derivative proceeding
for a period that the court considers appropriate.
Sec. 495. (1) On a motion by the corporation in a derivative
proceeding, the court shall dismiss the proceeding if the court
finds that 1 of the groups specified in subsection (2) has made a
determination in good faith after conducting a reasonable
investigation on which its conclusions are based, that the
maintenance of the derivative proceeding is not in the best
interests of the corporation. If the determination is made under
subsection (2)(a) or (b), the corporation has the burden of proving
the good faith of the group making the determination and the
reasonableness of the investigation. If the determination is made
under subsection (2)(c) or (d), the plaintiff has the burden of
proving that the determination was not made in good faith or that
the investigation was not reasonable.
(2) A determination under subsection (1) may be made by any 1
of the following:
(a) By a majority vote of the disinterested directors, if the
disinterested directors constitute a quorum at a meeting of the
board.
(b) By a majority vote of a committee that consists of 2 or
more disinterested directors appointed by a majority vote of
disinterested directors present at a meeting of the board, whether
or not the disinterested directors constitute a quorum at the
meeting.
(c) By a panel of 1 or more disinterested individuals who are
appointed by the court on a motion by the corporation.
(d) By all disinterested directors.
Sec. 496. A derivative proceeding shall not be discontinued or
settled without the court's approval. If the court determines that
a proposed discontinuance or settlement will substantially affect
the interests of the corporation's shareholders or members or a
class of shareholders or members, the court shall direct that
notice be given to the shareholders or members affected and the
court may determine whether 1 or more of the parties to the action
shall bear the expense of giving the notice, in the amount as the
court determines and finds to be reasonable under the
circumstances. The court shall award the cost of the notice as
special costs of the action, recoverable in the same manner as
statutory taxable costs.
Sec. 497. If a derivative proceeding is terminated, the court
may order 1 of the following:
(a) The plaintiff to pay any of the defendant's reasonable
expenses, including reasonable attorney fees, incurred in defending
the proceeding if it finds that the proceeding was commenced or
maintained in bad faith or without reasonable cause.
(b) The corporation to pay the plaintiff's reasonable
expenses, including reasonable attorney fees, incurred in the
proceeding if it finds that the proceeding has resulted in a
substantial benefit to the corporation. The court shall direct the
plaintiff to account to the corporation for any proceeds received
by the plaintiff in excess of expenses awarded by the court, unless
the judgment is rendered for the benefit of an injured shareholder
or member only and limited to a recovery of the loss or damage
sustained by the shareholder or member.
Sec. 501. (1) The business and affairs of a corporation shall
be managed by or under the direction of its board, except as
otherwise provided in this act or in its articles of incorporation.
A
director need not is not
required to be a shareholder or member
of the corporation unless the articles of incorporation or bylaws
so require. The articles of incorporation or bylaws may prescribe
qualifications for directors.
(2) The board of a corporation that is subject to the uniform
prudent management of institutional funds act, 2009 PA 87, MCL
451.921 to 451.931, has the powers granted under both that act and
this
act. However, in 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.
Sec.
505. (1) Except as provided in subsection (5), the board
shall
consist of 3 or more directors. The
bylaws shall fix the
number of directors or establish the manner for fixing the number,
unless
the articles of incorporation fix the number, .subject to
the following:
(a) The board of a private foundation and board of a
corporation formed to provide care to a dentally underserved
population under section 16625 of the public health code, 1978 PA
368, MCL 333.16625, shall consist of 1 or more directors.
(b) The board of a corporation that is not described in
subdivision (a) shall consist of 3 or more directors.
(2) The articles of incorporation or a bylaw adopted by the
shareholders, members, or incorporators of a corporation that is
organized on a stock or membership basis may specify the term of
office and the manner of election or appointment of directors. If
the
articles of incorporation or bylaws do not so specify the term
of office or manner of election or appointment of directors, the
first board of directors shall hold office until the first annual
meeting of shareholders or members. At the first annual meeting of
shareholders or members and at each subsequent annual meeting the
shareholders or members shall elect directors to hold office until
the
succeeding annual meeting, except in case of the classification
of
directors permitted under this act.as
provided in section 506.
(3) The articles of incorporation or a bylaw of a corporation
that is organized on a directorship basis shall specify the term of
office and the manner of election or appointment of directors.
(4) A director shall hold office for the term for which he or
she is elected or appointed and until his or her successor is
elected or appointed and qualified, or until his or her resignation
or removal. A director may resign by written notice to the
corporation. A resignation of a director is effective when it is
received
by the corporation or at a later time if set forth a later
time is stated in the notice of resignation.
(5)
Beginning 180 days after the effective date of the
amendatory
act that added this subsection, the board of a
corporation
that is in existence on the effective date of the
amendatory
act that added this subsection shall consist of 3 or
more
directors.
Sec. 506. (1) The articles of incorporation or a bylaw adopted
by
the shareholders, or members, or incorporators of a
corporation
that
is organized upon on a
stock or membership basis may provide
that
in lieu of annual election of all directors the directors be
are
divided into 2 or more up to 5 classes,
to be each of which is
as nearly equal in number as possible, and elected or appointed for
such
the terms and in such the manner
as therein specified in
the
articles of incorporation or bylaws. If the articles of
incorporation
or the bylaws do not so specify the term of office
for the classes of directors, the term of office of directors in
the first class shall expire at the first annual meeting of
shareholders or members after their election, and that of each
succeeding class shall expire at the next annual meeting after
their election corresponding with the number of their class. At
each
annual meeting after such classification, classes are
established, the shareholders or members shall elect a number of
directors equal to the number of the class whose term expires at
the
time of the meeting shall be elected to hold office until the
next annual meeting corresponding with the number of their class.
(2)
A corporation having that
has more than 1 class of shares
or membership may provide in its articles of incorporation or a
bylaw adopted by each class of shareholders or members for the
election of 1 or more directors by shareholders or members of a
class, to the exclusion of other shareholders or members.
(3) The articles of incorporation or bylaws of a corporation
that
is organized upon on a
directorship basis may provide that the
directors
be are divided into 2 or more up to 5 classes,
to be
elected
or appointed for such the terms and in such the manner
as
therein
specified in the articles of incorporation or bylaws.
Sec.
511. (1) Unless otherwise provided in the articles of
incorporation
or bylaws, a director or the entire board may be
removed:The shareholders or members of a corporation that
is
organized on a stock or membership basis may remove 1 or more
directors with or without cause unless the articles of
incorporation provide that directors may be removed only for cause.
A vote of a majority of the shares or members entitled to vote at
an election of directors is required for removal, except that the
articles of incorporation may require a higher vote for removal
without cause. This subsection does not invalidate any bylaw
adopted before the effective date of the amendatory act that added
this sentence to the extent that the bylaw applies to removal
without cause.
(a)
With or without cause, by vote of the holders of a
majority
of the shares or by majority vote of members entitled to
vote
at an election of directors.
(b)
With cause, by the vote of a majority of the directors
then
in office in the case of a corporation organized upon a
directorship
basis.
(2) The directors of a corporation that is organized on a
directorship basis may remove 1 or more directors with cause. The
vote of a majority of the directors then in office is required for
a removal under this subsection. If authorized in the articles of
incorporation or bylaws, a director of a corporation that is
organized on a directorship basis who is appointed or elected by a
person or persons other than the board of directors of the
corporation may also be removed, with or without cause, by the
person or persons that appointed or elected that director.
(3) (2)
In the case of If a corporation having has cumulative
voting,
if and less than the entire board is to be removed, no 1 of
the
directors may be removed if the votes cast against the
director's
his or her removal would be are sufficient
to elect the
director
him or her if then cumulatively voted at an election of
the entire board of directors, or, if there are classes of
directors,
at an election of the class of directors of which the
director
he or she is a part.
(4) (3)
When shareholders If holders
of a class of stock or of
bonds
or members of a class are entitled by
under the articles of
incorporation
or a bylaw adopted pursuant to under section
506(2)
to elect 1 or more directors, this section applies, with respect to
removal of a director so elected, to the vote of the holders of the
outstanding
shares or of that class of
stock, the holders of those
bonds,
or the members of that class. and
not to the vote of the
outstanding
shares or membership as a whole.
Sec. 514. (1) The circuit court for the county in which the
principal place of business or registered office of a corporation
is located may remove a director of the corporation from office in
a proceeding commenced by the corporation, by its shareholders
holding at least 10% of the outstanding shares of any class, or by
10% of the members if the court finds that the director engaged in
fraudulent, illegal, or dishonest conduct or gross abuse of
authority or discretion with respect to the corporation, and
removal is in the best interest of the corporation.
(2) A court that removes a director under this section may bar
him or her from serving as a director of the corporation for a
period prescribed by the court.
(3) If shareholders or members commence a proceeding under
subsection (1), they shall make the corporation a party defendant.
Sec. 515a. (1) Unless otherwise limited in the articles of
incorporation or bylaws, if a vacancy, including a vacancy
resulting from an increase in the number of directors, occurs on a
board, the corporation may fill the vacancy in any of the following
manners:
(a) The shareholders of a corporation that is organized on a
stock basis or the members of a corporation that is organized on a
membership basis may fill the vacancy.
(b) The board may fill the vacancy.
(c) If the directors remaining in office constitute fewer than
a quorum of the board, they may fill the vacancy by the affirmative
vote of a majority of all the directors remaining in office.
(2) Unless otherwise provided in the articles of incorporation
or bylaws, if the holders of any class or classes of stock or the
members of any class or classes are entitled to elect 1 or more
directors to the exclusion of other shareholders or members,
vacancies of that class or classes may be filled only by 1 of the
following:
(a) By a majority of the directors elected by the holders of
that class or classes of stock or the members of that class or
classes then in office, whether or not those directors constitute a
quorum of the board.
(b) By the holders of shares of that class or classes of
shares or the members of that class or classes.
(3) Unless otherwise limited in the articles of incorporation
or bylaws, if a corporation's directors are divided into classes,
any director chosen to fill a vacancy shall hold office until the
next election of the class for which the director was chosen, and
until his or her successor is elected and qualified.
(4) If because of death, resignation, or other cause, a
corporation has no directors in office, an officer, a shareholder,
a member of a corporation that is organized on a membership basis,
a personal representative, administrator, trustee, or guardian of a
shareholder or member, or other fiduciary entrusted with the same
responsibility for the person or estate of a shareholder or member,
may call a special meeting of shareholders or members in accordance
with the articles or the bylaws.
(5) A corporation may fill a vacancy that will occur at a
specific date, by reason of a resignation that is effective at a
later date under section 505 or otherwise, before the vacancy
occurs, but a director who is elected or appointed under this
subsection may not take office until the vacancy occurs.
Sec.
521. (1) Regular A board
may hold regular or special
meetings
of a the board may be held either in or outside of
this
state.
(2)
A board may hold a regular meeting may be held with or
without notice as prescribed in the bylaws. A board may hold a
special
meeting shall be held upon after
giving notice as
prescribed
in the bylaws. Attendance of a director at a meeting
constitutes
a waiver of notice of the meeting, except where a
director
attends a meeting for the express purpose of objecting to
the
transaction of any business because the meeting is not lawfully
called
or convened. Neither A
director's attendance at or
participation in a meeting waives any required notice to him or her
of the meeting unless he or she at the beginning of the meeting, or
when he or she arrives, objects to the meeting or the transacting
of business at the meeting and after objecting does not vote for or
assent to any action taken at the meeting. Unless required under
the bylaws, notice or a waiver of notice of a meeting does not have
to
specify the business to be transacted at,
nor or the purpose of,
a
the regular or special meeting. need
be specified in the notice
or
waiver of notice of the meeting unless required by the bylaws.
(3)
Unless otherwise restricted by in
the articles of
incorporation or bylaws, a member of the board or of a committee
designated by the board may participate in a meeting by means of
conference
telephone or other means of remote communication by
which
if all persons individuals who are participating
in the
meeting
can communicate with each other. the other participants.
Participation
in a meeting pursuant to under
this subsection
constitutes
presence attendance in person at the meeting.
Sec.
523. (1) A majority of the members of the a board
who are
then
in office, or of the members of a committee thereof, of the
board, constitutes a quorum for the transaction of business,
provided
that the articles of incorporation or bylaws may provide
for
a larger number, and provided further that in any corporation
where
there are more than 7 directors, the articles of
incorporation
or bylaws may provide that less than a majority, but
in
no event less than 1/3 of the directors, may constitute a quorum
of
the board. unless the
articles of incorporation or bylaws, or in
the case of a committee, the board resolution that establishes the
committee, provide for a larger or smaller number. However, a
quorum of the board may not be less than 1/3 of the members of the
board who are then in office and a quorum of an executive committee
acting on behalf of the board under section 527 may not be less
than 1/3 of members of the executive committee. The vote of the
majority of members present at a meeting at which a quorum is
present constitutes the action of the board or of the committee,
unless
the vote of a larger number is required by under this
act,
the articles of incorporation, or the bylaws, or in the case of a
committee, the board resolution that establishes the committee.
(2) Amendment of the bylaws by the a board
requires the vote
of not less than a majority of the members of the board then in
office, unless the articles of incorporation or bylaws provide for
a larger number.
Sec. 527. (1) Unless otherwise provided in the articles of
incorporation or bylaws, the board may designate 1 or more
executive committees, each executive committee to consist of 1 or
more of the directors of the corporation. The board may designate 1
or
more directors as alternate members of a an executive committee,
who may replace an absent or disqualified member at a meeting of
the executive committee. The bylaws may provide that in the absence
or
disqualification of a member of a an executive committee, the
members
thereof present at a meeting and not disqualified from
voting, whether or not they constitute a quorum, may unanimously
appoint another member of the board to act at the meeting in place
of
such an the absent or disqualified member.
(2)
A An executive committee designated pursuant to under
subsection
(1) , and
each member thereof, shall serve of an
executive committee serves at the pleasure of the board.
(3) The articles of incorporation or bylaws may provide for
the
election or appointment of 1 or more executive
committees to
that
consist of 1 or more shareholders or
members, or 1 or more
directors, or a combination of shareholders or members and
directors.
(4) Unless otherwise prohibited in the articles of
incorporation or bylaws, the board or an individual or individuals
designated in the bylaws or by the board may appoint 1 or more
committees that are not executive committees to assist in the
conduct of its affairs and may provide of the creation of 1 or more
subcommittees of any committee appointed under this subsection. The
bylaws, or a resolution that establishes the committee and is
approved by the board in the absence of a bylaw provision, shall
state the purposes of the committees appointed under this
subsection, the terms and qualifications of committee members, and
the ways in which members of the committees are selected and
removed. The board or authorized individuals may designate 1 or
more individuals as alternate members of a committee appointed
under this subsection who may replace an absent or disqualified
committee member in a meeting of the committee. Some or all of the
members of a committee appointed under this subsection may be
individuals who are directors, officers, members, or shareholders
of the corporation and some or all of the members of a committee
appointed under this subsection may be individuals who are not
directors, officers, members, or shareholders of the corporation,
as provided in the bylaws or in the action or resolution or
resolutions of the board that establish the committee. A committee
that is appointed under this subsection is not an executive
committee and may not execute the power or authority of the board
in the management of the business and affairs of the corporation,
but may perform under the direction of the board those functions
described in the bylaws or determined from time to time by the
board.
Sec.
528. (1) A An
executive committee that is designated
pursuant
to under section 527, 527(1) or (3), to the extent
provided
in the resolution of the board, in the case of a committee
designated
in section 527(1), or to the extent provided in the
articles
of incorporation, or in the bylaws, in the case of a
committee
designated in section 527(3), may
exercise any or all
powers and authority of the board in management of the business and
affairs
of the corporation. However, such a An executive committee
does not have power or authority to do any of the following:
(a) Amend the articles of incorporation.
(b)
Adopt an agreement of merger or consolidation.conversion.
(c) Recommend to shareholders or members the sale, lease, or
exchange of all or substantially all of the corporation's property
and assets.
(d) Recommend to shareholders or members a dissolution of the
corporation or a revocation of a dissolution.
(e) Amend the bylaws of the corporation.
(f) Fill vacancies in the board.
(g) Fix compensation of the directors for serving on the board
or on a committee.
(h)
Cancel stock shares or terminate membership.memberships.
(2) Unless the resolution, articles of incorporation, or
bylaws expressly provide the power or authority, an executive
committee does not have power or authority to declare a
distribution authorized under section 301 or to authorize the
issuance of shares or memberships.
(3) Unless otherwise provided in the resolution, articles of
incorporation, or bylaws, an executive committee may create 1 or
more subcommittees. Each subcommittee shall consist of 1 or more
members of the committee. An executive committee or the board may
delegate to a subcommittee any or all of the powers and authority
of the committee.
Sec. 529. A corporation may agree to submit a matter to a vote
of its shareholders or members even if, after approving the matter,
the board of directors later determines that it no longer
recommends the matter or recommends against approval of the matter
by the shareholders or members.
Sec. 531. (1) The officers of a corporation shall consist of a
president, secretary, treasurer, and, if desired, a chairperson of
the
board, 1 or more vice-presidents, vice presidents, and such
any
other
officers as may be prescribed by in the bylaws or determined
by the board. Unless otherwise provided in the articles of
incorporation
or bylaws, the officer shall be elected or appointed
by
the board shall elect or appoint the officers.
(2)
Two One individual may
hold 2 or more offices, may
be held
by
the same person, but an officer
shall not execute, acknowledge,
or verify an instrument in more than 1 capacity if the instrument
is required by law or the articles of incorporation or bylaws to be
executed, acknowledged, or verified by 2 or more officers.
(3)
An officer elected or appointed as herein provided shall
hold
office for the term for which the officer he or she is elected
or
appointed and until a his
or her successor is elected or
appointed
and qualified, or until the his
or her resignation or
removal. of
the officer.
(4)
An officer, as between that officer, himself or herself,
other
officers, and the corporation, has such the authority and
shall
perform such the duties in the management of the corporation
as
may be provided in the bylaws, or as
may be determined by in
accordance with a resolution or resolutions of the board that is
not inconsistent with the bylaws.
Sec.
541. (1) A director or an officer shall discharge the
duties
of that position in good faith and with the degree of
diligence,
care, and skill that an ordinarily prudent person would
exercise
under similar circumstances in a like position. In
discharging
the duties, a director or an officer, when acting in
good
faith, may rely upon the opinion of counsel for the
corporation,
upon the report of an independent appraiser selected
with
reasonable care by the board, or upon financial statements of
the
corporation represented to the director or officer as correct
by
the president or the officer of the corporation who has charge
of
its books or account, or as stated in a written report by an
independent
public or certified public accountant or firm of
accountants
fairly to reflect the financial condition of the
corporation.A director or officer shall discharge his or
her duties
as a director or officer including his or her duties as a member of
a committee in the following manner:
(a) In good faith.
(b) With the care an ordinarily prudent person in a like
position would exercise under similar circumstances.
(c) In a manner he or she reasonably believes is in the best
interests of the corporation.
(2) In discharging his or her duties, a director or officer is
entitled to rely on information, opinions, reports, or statements,
including financial statements and other financial data, if
prepared or presented by any of the following:
(a) One or more directors, officers, or employees of the
corporation, or of a domestic or foreign corporation or a business
organization under joint control or common control, whom the
director or officer reasonably believes to be reliable and
competent in the matters presented.
(b) Legal counsel, public accountants, engineers, or other
persons as to matters the director or officer reasonably believes
are within the person's professional or expert competence.
(c) A committee of the board of which he or she is not a
member if the director or officer reasonably believes that the
committee merits confidence.
(3) A director or officer is not entitled to rely on the
information described in subsection (2) if he or she has knowledge
concerning the matter in question that makes reliance otherwise
permitted under subsection (2) unwarranted.
(4) (2)
A director or officer of a
corporation that is subject
to
the uniform prudent management of institutional funds act, shall
be
2009 PA 87, MCL 451.921 to
451.931, is considered to be in
compliance
with this section if the director or officer he or she
complies with the uniform prudent management of institutional funds
act, 2009 PA 87, MCL 451.921 to 451.931, in the administration of
the powers specified in that act.
(5) (3)
If the corporation's articles of
incorporation contain
a
provision authorized under section 209(c), 209(1)(c), a volunteer
director of the corporation is only personally liable for monetary
damages for a breach of fiduciary duty as a director to the
corporation, its shareholders, or its members to the extent set
forth in the provision.
(6) (4)
If the corporation's articles of
incorporation contain
a
provision authorized under section 209(d), 209(1)(d), a claim for
monetary damages for a breach of a volunteer director's duty to any
person other than the corporation, its shareholders, or its members
shall not be brought or maintained against the volunteer director.
The
claim shall However, that
claim may be brought or maintained
instead
against the corporation, which
shall be and the corporation
is liable for any breach of the volunteer director's duty.
(7) (5)
An action against a director or
officer for failure to
perform
the duties imposed by under
this section shall be commenced
within 3 years after the cause of action has accrued, or within 2
years
after the time when the cause of action is discovered , or
should reasonably have been discovered, by the complainant,
whichever occurs first.
Sec. 545a. (1) A transaction in which a director or officer is
determined to have an interest shall not be enjoined, set aside, or
give rise to an award of damages or other sanctions because of the
interest, in a proceeding by a shareholder, a member, or a director
of a corporation that is organized on a directorship basis or by or
in the right of the corporation, if the person interested in the
transaction establishes any of the following:
(a) The transaction was fair to the corporation at the time it
was entered into.
(b) The material facts of the transaction and the director's
or officer's interest were disclosed or known to the board or an
executive committee of the board and the board or executive
committee authorized, approved, or ratified the transaction.
(c) The material facts of the transaction and the director's
or officer's interest were disclosed or known to the shareholders
or members who are entitled to vote and they authorized, approved,
or ratified the transaction.
(2) For purposes of subsection (1)(b), a transaction is
authorized, approved, or ratified if it received the affirmative
vote of the majority of the directors on the board or the executive
committee who did not have an interest in the transaction, though
less than a quorum. The presence of, or a vote cast by, a director
with an interest in the transaction does not affect the validity of
an action taken under subsection (1)(b).
(3) For purposes of subsection (1)(c), a transaction is
authorized, approved, or ratified if it received the majority of
votes that were cast by the holders of shares or members that did
not have an interest in the transaction. A majority of the votes
held by shareholders or members that did not have an interest in
the transaction constitutes a quorum for the purpose of taking
action under subsection (1)(c).
(4) Satisfying the requirements of subsection (1) does not
preclude other claims relating to a transaction in which a director
or officer is determined to have an interest. Those claims shall be
evaluated under principles applicable to a transaction in which a
director or officer does not have an interest.
(5) Unless the compensation is prohibited by the articles of
incorporation or the bylaws, the board, by affirmative vote of a
majority of directors in office and irrespective of any personal
interest of any of them, may, subject to any limitations in the
articles of incorporation or bylaws, establish reasonable
compensation of directors for services to the corporation as
directors or officers, but approval of the shareholders or members
is required if the articles of incorporation, bylaws, or other
provisions of this act require that approval. Transactions
pertaining to the compensation of directors for services to the
corporation as directors or officers shall not be enjoined, set
aside, or give rise to an award of damages or other sanctions in a
proceeding by a shareholder or member or by or in the right of the
corporation unless it is shown that the compensation was
unreasonable at the time it was established or exceeded amounts
permitted under the articles of incorporation or bylaws.
Sec.
548. (1) Except as provided in subsection (4) and unless
Unless otherwise prohibited by law or prohibited in the articles of
incorporation
or bylaws, a corporation may lend money
to, or
guarantee an obligation of, or otherwise assist an officer or
employee of the corporation or a subsidiary, including an officer
or employee who is a director of the corporation or subsidiary, if
in the judgment of the board, the loan, guaranty, or assistance is
reasonably expected to benefit the corporation, or the loan,
guaranty, or assistance is provided under a plan authorizing loans,
guaranties, or assistance that the board has reasonably determined
will benefit the corporation.
(2) A loan, guaranty, or assistance described in subsection
(1) may be with or without interest, and may be unsecured, or
secured in a manner that the board approves, including a pledge of
shares of stock of a corporation that is organized on a stock basis
or pledge of a membership in a corporation that is organized on a
membership basis.
(3) This section does not deny, limit, or restrict the powers
of guaranty or warranty of a corporation at common law or under any
statute.
(4)
If a corporation is a charitable purpose corporation, the
corporation
shall not provide loans to or guarantee an obligation
of
an officer or director of the corporation or a subsidiary of a
corporation,
unless the officer or director is also a client of the
corporation
and the loan or guaranty is necessary to carry out the
corporation's
charitable purposes.
Sec.
551. (1) In addition to any other liability imposed by
this
act or other law upon directors of a corporation, directors
Directors
who vote for , or concur in
, any of the following
corporate actions are jointly and severally liable to the
corporation for its benefit or for the benefit of its creditors,
shareholders,
or members, to the extent of for
any legally
recoverable
injury suffered by such persons the
corporation or
those creditors, shareholders, or members as a result of the action
but
not to exceed the amount unlawfully in an amount that does not
exceed the difference between the amount paid or distributed and
the amount that lawfully could have been paid or distributed:
(a)
Distribution of assets Declaring
a share dividend or
distribution to shareholders or members that is contrary to this
act or contrary to any restriction in the articles of incorporation
or bylaws.
(b)
Purchase of shares or memberships of the corporation
contrary
to this act or contrary to any restriction in the articles
or
bylaws.
(b) (c)
Distribution of assets Making
a distribution to
shareholders or members during or after dissolution of the
corporation
without paying , or adequately
providing for , all
known
debts, obligations, and liabilities
of the corporation as
required under section 855.
(c) (d)
Making of a loan to an a director, officer, director,
or
employee of the corporation or of a subsidiary thereof of the
corporation that is contrary to this act.
(2)
A director is not liable under this section if the
director
has complied he or she
complies with section 541.
(3)
A shareholder or member who that
accepts or receives a
share
dividend or distribution with knowledge
of facts indicating
that
indicate that it is not authorized
by contrary to this act,
or
any restriction in the articles of incorporation or bylaws, is
liable
to the corporation in the amount accepted or received by the
shareholder
or member.in excess of the
shareholder's or member's
share of the amount that the corporation could lawfully distribute.
Sec. 552. (1) A director against whom a claim is successfully
asserted under section 551 is entitled to contribution from the
other
directors who voted for, or concurred in, the action upon on
which the claim is asserted.
(2) A director against whom a claim is successfully asserted
under section 551 is entitled, to the extent of the amounts paid by
the
director him or her to the corporation as a result of such the
claims, to all of the following:
(a)
Upon payment to If the
director pays the corporation of
any amount of an improper share dividend or distribution, to be
subrogated to the rights of the corporation against shareholders or
members
who that received the share dividend or distribution
in
proportion
to the amounts received by them. respectively.
(b)
Upon payment to If the
director pays the corporation of
any amount of the purchase price of an improper purchase of shares
or
memberships, : (i) to have the corporation rescind the purchase
and
recover for the director's his
or her benefit, but at the
director's
his or her expense, the amount of the purchase price
from
any seller who that sold such the shares or memberships
with
knowledge
of facts indicating that such the
purchase of shares or
memberships
by the corporation was not authorized by this act, ; or
(ii) or
to have the corporation assign to such
the director any
claim against the seller and, if consistent with its articles of
incorporation
and bylaws, such the shares or memberships.
(c)
Upon payment to If the
director pays the corporation of
the claim of a creditor because of a violation of section
551(1)(c),
551(1)(b), to be subrogated to the rights of the
corporation
against shareholders or members who that received an
improper distribution of assets.
(d)
Upon payment to If the
director pays the corporation of
the
amount of a loan made improperly to an a director, officer,
director,
or employee, to be subrogated to
the rights of the
corporation
against an the director, officer, director, or employee
who received the improper loan.
Sec.
553. (1) A If
a director who is present at a
meeting of
the
board, or a an executive committee thereof of which the
director
he or she is a member, at which and action
on a corporate
matter
referred to described in section 551 is taken , at that
meeting,
the director is presumed to have
concurred concur in that
action
unless a his or her dissent is entered in the minutes of the
meeting
or unless the director he
or she files a his or her written
dissent
to the action with the person individual
who is acting as
secretary of the meeting before or promptly after the adjournment
thereof.
of the meeting. The right to dissent does not apply to a
director
who voted in favor of the action. A
(2) If a director who is absent from a meeting of the board,
or
a an executive committee thereof of which the director he or she
is
a member, at which any such action is taken and action on a
corporate matter described in section 551 is taken at that meeting,
the
director is presumed to have
concurred concur in the action
unless
the director he or she files a his or her dissent with the
secretary of the corporation within a reasonable time after
obtaining
he or she has knowledge of the action.
Sec.
561. Unless otherwise provided by law or its the articles
of incorporation or bylaws of the corporation, a corporation has
the
power to indemnify a person who that
was or is a party or is
threatened
to be made a party to any a
threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal,
other than an action by or in the right of the corporation, by
reason of the fact that the person is or was a director, officer,
employee, nondirector volunteer, or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, nondirector volunteer, or
agent of another foreign or domestic corporation, business
corporation, partnership, joint venture, trust, or other
enterprise,
whether for profit or not, for profit, against for
expenses, including attorneys' fees, judgments, penalties, fines,
and amounts paid in settlement actually and reasonably incurred by
the person in connection with the action, suit, or proceeding if
the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests
of the corporation or its shareholders or members, and with respect
to
any a criminal action or proceeding, if the person had no
reasonable cause to believe that the conduct was unlawful. The
termination
of any an action, suit, or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or
its
equivalent, shall does not, of
itself, create a presumption
that
the person did not act in good faith and in a manner which
that the person reasonably believed to be in or not opposed to the
best interests of the corporation or its shareholders or members
and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the conduct was unlawful.
Sec.
562. Unless otherwise provided by law or its in the
articles of incorporation or bylaws of the corporation, a
corporation
has the power to indemnify a person who that was or is
a
party to or is threatened to be made a party to a threatened,
pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director, officer, employee,
nondirector volunteer, or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
partner, trustee, employee, nondirector volunteer, or agent of
another foreign or domestic corporation, business corporation,
partnership, joint venture, trust, or other enterprise, whether for
profit
or not, against for expenses, including actual
and
reasonable
attorneys' fees , and amounts paid in settlement
actually and reasonably incurred by the person in connection with
the action or suit if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to
the best interests of the corporation or its shareholders or
members.
However, indemnification shall not be made A corporation
shall not indemnify a person for a claim, issue, or matter in which
the
person has been is found liable to the corporation unless and
only
to the extent that the court in which the action or suit was
brought
has determined upon application that, despite the
adjudication
of liability but in view of all circumstances of the
case,
the person is fairly and reasonably entitled to
indemnification
for expenses which the court considers
proper.except to the extent authorized under section
564c.
Sec.
563. (1) Unless otherwise provided by law or its under
the articles of incorporation or bylaws of the corporation, to the
extent
that a director, officer, employee, or nondirector volunteer
,
or agent of a corporation has
been is successful on the merits or
otherwise in defense of an action, suit, or proceeding referred to
in section 561 or 562, or in defense of a claim, issue, or matter
in
the action, suit, or proceeding, the successful party shall be
indemnified
against or has established
that the corporation is
required to assume the person's liabilities under section 209(1)(d)
or (e), the corporation shall indemnify the person for actual and
reasonable
expenses, including actual and
reasonable attorneys'
fees, incurred in connection with the action, suit, or proceeding
and
in any an action, suit, or proceeding brought to enforce the
mandatory
indemnification provided in this subsection.section.
(2)
An indemnification under section 561 or 562, unless
ordered
by a court, shall be made by the corporation only as
authorized
in the specific case upon a determination that
indemnification
of the director, officer, employee, nondirector
volunteer,
or agent is proper in the circumstances because the
person
has met the applicable standard of conduct set forth in
sections
561 and 562. This determination shall be made in any of
the
following ways:
(a)
By a majority vote of a quorum of the board consisting of
directors
who were not parties to the action, suit, or proceeding.
(b)
If the quorum described in subdivision (a) is not
obtainable,
then by a majority vote of a committee of directors who
are
not parties to the action. The committee shall consist of not
less
than 2 disinterested directors.
(c)
By independent legal counsel in a written opinion.
(d)
By the shareholders or members.
(3)
If a person is entitled to indemnification under section
561
or 562 for a portion of expenses including attorneys' fees,
judgments,
penalties, fines, and amounts paid in settlement but not
for
the total amount thereof, the corporation may indemnify the
person
for the portion of the expenses, judgments, penalties,
fines,
or amounts paid in settlement for which the person is
entitled
to be indemnified.
Sec. 564a. (1) Except as otherwise provided in subsection (5),
unless ordered by the court, a corporation shall indemnify a
director, officer, employee, nondirector volunteer, or agent under
section 561 or 562, only if authorized in the specific case based
on a determination that indemnification of the director, officer,
employee, nondirector volunteer, or agent is proper in the
circumstances because that person has met the applicable standard
of conduct set forth in sections 561 and 562 and based on an
evaluation that the expenses and amounts paid in settlement are
reasonable. A corporation shall make a determination and evaluation
under this subsection in 1 of the following ways:
(a) By a majority vote of a quorum of the board that consists
of directors who are not parties or threatened to be made parties
to the action, suit, or proceeding.
(b) If the board is unable to obtain a quorum under
subdivision (a), by majority vote of a committee that is duly
designated by the board and that consists solely of 2 or more
directors who are not at the time parties or threatened to be made
parties to the action, suit, or proceeding.
(c) By independent legal counsel in a written opinion. The
corporation must select counsel to prepare the opinion in 1 of the
following ways:
(i) By the board or a committee of directors in the manner
described in subdivision (a) or (b).
(ii) If the board is unable to obtain a quorum under
subdivision (a) and the board is unable to designate a committee
under subdivision (b), by the board.
(d) By the shareholders or members, but shares or memberships
held by directors, officers, employees, nondirector volunteers, or
agents that are parties or threatened to be made parties to the
action, suit, or proceeding may not be voted.
(2) All directors may participate in designating a committee
under subsection (1)(b) or in selecting independent legal counsel
under subsection (1)(c)(ii).
(3) If a person is entitled to indemnification under section
561 or 562 for a portion of expenses, including reasonable
attorneys' fees, judgments, penalties, fines, and amounts paid in
settlement, but not for the total amount, the corporation may
indemnify the person for the portion of the expenses, judgments,
penalties, fines, or amounts paid in settlement for which the
person is entitled to be indemnified.
(4) A corporation shall authorize payment of indemnification
under this section in any of the following ways:
(a) By the board in 1 of the following ways:
(i) If there are 2 or more directors who are not parties or
threatened to be made parties to the action, suit, or proceeding,
by a majority vote of all directors who are not parties or
threatened to be made parties, a majority of whom shall constitute
a quorum for this purpose.
(ii) By a majority of the members of a committee of 2 or more
directors who are not parties or threatened to be made parties to
the action, suit, or proceeding.
(iii) If there are fewer than 2 directors who are not parties
or threatened to be made parties to the action, suit, or
proceeding, by the vote necessary for action by the board under
section 523. All directors may participate in authorization under
this subparagraph.
(b) By the shareholders or members, but shares or memberships
held by directors, officers, employees, nondirector volunteers, or
agents that are parties or threatened to be made parties to the
action, suit, or proceeding may not be voted on the authorization.
(5) To the extent that the articles of incorporation eliminate
or limit the liability of a director under section 209(1)(c), a
corporation may indemnify a director for the expenses and
liabilities described in this subsection without a determination
that the director has met the standard of conduct set forth in
sections 561 and 562, but shall not indemnify the director for
obligations imposed under section 497(a) or, except to the extent
authorized in section 564c, if the director received a financial
benefit to which he or she was not entitled, intentionally
inflicted harm on the corporation or its shareholders or members,
violated section 551, or intentionally committed a criminal act. In
connection with an action or suit by or in the right of the
corporation described in section 562, indemnification under this
subsection may be for expenses, including attorneys' fees, actually
and reasonably incurred. In connection with an action, suit, or
proceeding other than an action, suit, or proceeding by or in the
right of the corporation, described in section 561, a corporation
may indemnify a director under this subsection for expenses,
including attorneys' fees, actually and reasonably incurred, and
for judgments, penalties, fines, and amounts paid in settlement
that are actually and reasonably incurred.
Sec. 564b. (1) A corporation may pay or reimburse the
reasonable expenses incurred by a director, officer, employee,
nondirector volunteer, or agent of the corporation or a person that
is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another domestic
corporation, foreign corporation, domestic business corporation,
foreign business corporation, partnership, limited liability
company, joint venture, trust, or other enterprise, whether for
profit or not, that is a party or threatened to be made a party to
an action, suit, or proceeding in advance of final disposition of
the proceeding if the person furnishes the corporation a written
agreement, executed personally or on the person's behalf, to repay
the advance if it is ultimately determined that the person did not
meet the standard of conduct, if any, required by this act for the
indemnification of a person under the circumstances.
(2) An agreement required under subsection (1) must be an
unlimited general obligation of the director, officer, employee,
nondirector volunteer, or agent, but may be unsecured. A
corporation may accept an agreement that is required under
subsection (1) without reference to the financial ability of the
person to make repayment.
(3) A corporation shall evaluate the reasonableness of
advances under this section in the manner described in section
564a(1) for evaluating the reasonableness of expenses, and make an
authorization in the manner described in section 564a(4) unless an
advance is mandatory. A corporation may authorize advances with
respect to a proceeding and determine the reasonableness of
advances or approve a method for determining the reasonableness of
advances in a single resolution covering the entire proceeding.
However, unless the action or resolution provides otherwise, an
authorizing or determining authority of the corporation may
subsequently terminate or amend the authorization or determination
with respect to advances that are not yet made.
(4) A provision in the articles of incorporation or bylaws, a
resolution of the board or shareholders or members, or an agreement
that makes indemnification mandatory shall also make the
advancement of expenses mandatory unless the provision, resolution,
or agreement specifically provides otherwise.
Sec. 564c. A director, officer, employee, nondirector
volunteer, or agent of the corporation that is a party or
threatened to be made a party to an action, suit, or proceeding may
apply for indemnification to the court that is conducting the
proceeding or to another court of competent jurisdiction. After
receiving an application, the court after giving any notice it
considers necessary may order indemnification if it determines that
all of the following are met:
(a) Indemnification is not prohibited under section 497(a) and
is consistent with other applicable law and with any restrictions
in the articles of incorporation or the bylaws.
(b) The person is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether
or not the person met the applicable standard of conduct set forth
in section 561 or 562 or was adjudged liable as described in
section 562. However, if the person is found liable,
indemnification is limited to reasonable expenses incurred by the
person.
Sec.
565. (1) The An indemnification or advancement advance of
expenses
provided under sections 561 to 564 564c is not exclusive
of other rights to which a person seeking indemnification or
advancement
advance of expenses may be entitled under the articles
of
incorporation, bylaws, or a contractual agreement. However, the
The total amount of expenses advanced or indemnified from all
sources combined shall not exceed the amount of actual expenses
incurred by the person that is seeking indemnification or
advancement
advance of expenses.
(2)
The indemnification provided in Indemnification
under
sections
561 to 564 and this section 565
continues as to for a
person
who that ceases to be a director, officer, employee,
nondirector
volunteer, or agent and shall inure inures to the
benefit
of the heirs, executors, personal
representatives, and
administrators of the person.
(3) A right of indemnification or to advancement of expenses
under a provision of the articles of incorporation or the bylaws is
not eliminated or impaired by an amendment to the provision after
the occurrence of the act or omission that is the subject of the
formal or informal, administrative or investigative action, suit,
or proceeding for which indemnification or advancement of expenses
is sought unless the provision in effect at the time of the act or
omission explicitly authorizes that elimination or impairment after
the action or omission has occurred.
Sec.
567. (1) A corporation shall have power to may purchase
and
maintain insurance on behalf of any person who that is
or was a
director, officer, employee, nondirector volunteer, or agent of the
corporation, or that is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee,
nondirector volunteer, or agent of another foreign or domestic
corporation, foreign or domestic business corporation, limited
liability company, partnership, joint venture, trust, or other
enterprise for profit or nonprofit against any liability asserted
against
the person and incurred by the person in any such that
capacity or arising out of the person's status as such, whether or
not
the corporation would have has
the power to indemnify the
person
against such liability under sections 561 to 565.
(2) If the articles of incorporation include a provision that
eliminates or limits the liability of a director under section
209(1)(c), the corporation may purchase insurance on behalf of a
director under subsection (1) from an insurer owned by the
corporation, but insurance purchased from that insurer may insure a
director against monetary liability to the corporation or its
shareholders or members only to the extent to which the corporation
could indemnify the director under section 564a(5).
Sec. 569. For purposes of sections 561 to 567, "corporation"
includes all constituent corporations absorbed in a consolidation
or merger, any corporation converted into another business entity,
and
the resulting or surviving foreign
or domestic corporation, or
foreign or domestic business corporation or other business entity,
so
that a person who that is or was a director, officer, employee,
nondirector volunteer, or agent of the constituent corporation or
is or was serving at the request of the constituent corporation as
a director, officer, partner, trustee, employee, nondirector
volunteer, or agent of another foreign or domestic corporation,
foreign or domestic business corporation, partnership, limited
liability company, joint venture, trust, or other profit or
nonprofit
enterprise whether for profit or not
shall stand in the
same position under the provisions of this section with respect to
the resulting or surviving corporation or business corporation as
the person would if the person had served the resulting or
surviving
corporation, or business corporation, or other business
entity in the same capacity.
Sec. 571. As used in sections 561 to 567:
(a) "Fines" includes any excise taxes assessed on a person
with respect to an employee benefit plan.
(b) "Other enterprises" includes employee benefit plans.
(c) "Serving at the request of the corporation" includes any
service as a director, officer, employee, nondirector volunteer, or
agent of the corporation that imposes duties on, or involves
services by, the director, officer, employee, nondirector
volunteer, or agent with respect to an employee benefit plan, its
participants, or its beneficiaries.
(d) A person that acted in good faith and in a manner the
person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan is
considered to have acted in a manner "not opposed to the best
interests of the corporation or its shareholders or members" as
referred to in sections 561 and 562.
Sec. 601. (1) A corporation may amend its articles of
incorporation
if the amendment contains only such provisions as
might
lawfully be contained in that
original articles of
incorporation
filed at the time of making the amendment is made
might lawfully contain.
(2)
Subject to section 301(5), 301(6),
a corporation may amend
its articles of incorporation to become a business corporation by
adopting
restated articles of incorporation in accordance with
under
section 641 which shall so amend the
articles that they shall
if
the restated articles of incorporation contain
only such those
provisions
as might be lawfully contained in that original articles
of
incorporation of a business corporation organized formed under
Act
No. 284 of the Public Acts of 1972, as amended, being sections
450.1101
to 450.2099 of the Michigan Compiled Laws.the business
corporation act might contain. The adoption and filing of restated
articles of incorporation under this subsection does not constitute
a dissolution of the corporation.
(3) Subject to section 301(6), a corporation may amend its
articles of incorporation to become a professional corporation by
adopting restated articles of incorporation under section 641 if
the restated articles of incorporation contain only those
provisions that original articles of incorporation of a
professional corporation formed under chapter 2A of the business
corporation act, MCL 450.1281 to 450.1289, might contain. The
adoption and filing of restated articles of incorporation under
this subsection does not constitute a dissolution of the
corporation.
Sec.
602. Without limitation upon limiting
the general power
of
amendment granted by under
section 601, a corporation may amend
its articles of incorporation to do any of the following:
(a)
To change Change its corporate name.
(b)
To enlarge, Enlarge, limit, or otherwise change its
corporate purposes or powers.
(c)
To change Change the duration of the corporation.
(d)
To increase Increase or decrease the aggregate number of
shares,
or shares of any class which that
the corporation has
authority to issue.
(e)
To exchange, Exchange, classify, reclassify, or cancel any
of its issued or unissued shares.
(f)
To change Change the designation of any of its issued or
unissued
shares, and to or change the qualifications, preferences,
limitations,
and relative rights in respect of any of its issued or
unissued shares or of its members.
(g)
To change Change the issued or unissued shares of any
class into a different number of shares of the same class or into
the same or a different number of shares of other classes.
(h)
To create Create new classes of shares or members having
that
have rights and preferences superior or
to, inferior to, or
equal
with, the issued or unissued shares or the members
memberships of any class then authorized.
(i) Cancel or otherwise affect the right of the holders of the
shares or memberships of any class to receive distributions which
have accrued but have not been declared.
(j) Limit, deny, or grant to shareholders or members of a
class the preemptive right to acquire shares or memberships of the
corporation.
(k) (i)
To change Change its registered office or change its
resident agent.
(l) (j)
To strike Strike out, change, or add any provision for
management
of the business and conduct of the affairs of the
corporation, or creating, defining, limiting, and regulating the
powers
of the corporation, its director and directors,
shareholders, or
members, or any class of shareholders or members,
including
any provision which that under this act is required or
permitted to be set forth in the bylaws.
(m) (k)
To change Change its basis form of organization to a
stock
corporation or a nonstock corporation that
is organized upon
on
a membership or directorship basis. ,
in which event the
amendment
shall An amendment under this
subsection must comply with
section 202(c) and (d) or section 202(e) and (f), as applicable.
Sec. 611. (1) The articles of incorporation may be amended by
either of the following:
(a) Before the first meeting of the board, the incorporators
may
amend the articles of incorporation by
complying with section
631(1).
(b) If the corporation is organized on a stock or membership
basis and has not yet issued shares or memberships or accepted any
written subscription for shares or memberships, the board of
directors by complying with section 631(2).
(2) Unless the articles of incorporation provide otherwise,
the board of a corporation that is organized on a stock or
membership basis may adopt 1 or more of the following amendments to
its articles of incorporation without shareholder or member action:
(a) Extend the duration of the corporation if it was
incorporated at a time when limited duration was required by law.
(b) Delete the names and addresses of the initial directors.
(c) Delete the name and address of a prior resident agent, if
a statement of change is on file with the administrator.
(d) Delete descriptions of the property of the corporation or
its value.
(e) Change each issued and unissued authorized share of an
outstanding class into a greater number of whole shares if the
corporation has only shares of that class outstanding.
(f) Change the corporate name by adding, deleting, or changing
the word "corporation", "incorporated", "company", "limited",
"association", or "society" or the abbreviation "corp.", "inc.",
"co.", "ltd.", or "assn.", or a similar word or abbreviation in the
corporate name, or by adding deleting or changing a geographical
attribution for the corporate name.
(g) Any other change that is expressly permitted under this
act to be made without shareholder or member approval.
(3) (2)
Except for an amendment described
in subsection
subsections (1) and (2) and except as otherwise provided in this
act, a corporation must adopt any amendment to the articles of
incorporation
in 1 of the following manners: as provided in this
section:
(a) If the corporation is organized on a membership basis, by
a vote of the members that are entitled to vote on the amendment.
(b) If the corporation is organized on a stock basis, by a
vote of the shareholders that are entitled to vote on the
amendment.
(c) If the corporation is organized on a directorship basis,
unless the articles of incorporation specify a different manner, by
a vote of the directors.
(4) (3)
A corporation or a member, shareholder, or director
that proposes an amendment to the articles of incorporation shall
give notice of a meeting to consider an amendment to the articles
of incorporation to each member, shareholder, or director that is
entitled to vote on the amendment, as applicable. The notice shall
contain the proposed amendment or a summary of the changes that
will occur if the amendment is adopted. The corporation or a
member, shareholder, or director that proposes an amendment to the
articles of incorporation shall provide the notice within the time
and in the manner provided in this act for giving notice of
meetings
of shareholders, members, or directors, except that, the
in
the case of a corporation shall give
that is organized on a
directorship basis, the notice of the meeting shall be given to
each
director who is then in office not less than at least 10
days
before the meeting.
(5) (4)
At a meeting to consider an
amendment to the articles
of incorporation, a vote of shareholders, members, or directors
entitled to vote shall be taken on the proposed amendment. The
proposed
amendment is adopted approved
if it receives the
affirmative
vote of a majority of the outstanding
shares votes that
are held by shareholders or members entitled to vote on the
proposed amendment are cast in favor of the amendment or, in the
case of a corporation that is organized on a directorship basis, if
it receives the affirmative vote of a majority of the directors
then in office. If any class of shares or members is entitled to
vote
on the proposed amendment as a class, the affirmative vote of
a
majority of the outstanding shares votes that are held by
shareholders
or members of that class is also
required must also be
cast
in favor of the amendment to adopt
the amendment. approve it.
The voting requirements of this section are subject to any greater
requirements
as prescribed by under this act for specific
amendments, or as provided in the articles of incorporation or
bylaws. In addition, unless a greater vote is required in the
articles of incorporation, or in a bylaw adopted by the
shareholders, members, or directors of a corporation that is
organized on a directorship basis, the proposed amendment is
adopted
approved if it receives an affirmative vote of a
majority
of
the votes cast by members or shares of shareholders present in
person, by proxy, or by electronic transmission at the meeting are
cast in favor of the amendment and, if any class of shares or
members is entitled to vote on the proposed amendment as a class, a
majority of the votes held by shareholders or members of each of
those classes that are present in person, by proxy, or by
electronic transmission at the meeting are cast in favor of the
amendment, or a majority of a quorum of the board of directors of a
corporation that is organized on a directorship basis vote in favor
of the amendment, if due notice of the time, place, and object of
the meeting was given by mail, at the last known address, to each
shareholder, member, or director entitled to vote at least 20 days
before the date of the meeting or by publication in a publication
distributed by the corporation to its shareholders or members at
least 20 days before the date of the meeting.
(6) (5)
The shareholders, members, or
directors may act on any
number of amendments at 1 meeting.
(7) (6)
If an amendment to the articles of
incorporation is
adopted, the corporation shall file a certificate of amendment as
provided in section 631.
Sec.
615. (1) The holders of
a class of the outstanding
shares
of
a corporation that is organized on a stock basis or the member
members of a class of a corporation that is organized on a
membership
basis may vote as a class upon on a
proposed amendment,
whether
or not entitled to vote thereon by on the amendment under
the articles of incorporation, if the amendment would increase or
decrease the aggregate number of authorized shares of the class or
alter or change the powers, preferences, or special rights of the
shares or members of the class or other classes so as to affect the
class adversely.
(2) This section does not confer voting rights on members of a
corporation that is organized on a directorship basis.
Sec.
631. (1) If the an amendment to
the articles of
incorporation
is made as provided in approved under section 611(1),
611(1)(a), a majority of the incorporators shall sign and file a
certificate
of amendment shall be signed by all the incorporators
and
filed on behalf of the corporation ,
setting that sets forth
the
amendment and certifying certifies
that the amendment is was
adopted by unanimous consent of the incorporators before the first
meeting of the board.
(2) If an amendment to the articles of incorporation is
approved under section 611(1)(a) or section 611(2), an officer of
the corporation shall execute and file a certificate of amendment
on behalf of the corporation that sets forth the amendment and
certifies that it was adopted by the board of directors.
(3) (2)
In case of any other amendment, except Except for an
amendment to the articles of incorporation described in subsection
(1) or (2) or as otherwise provided in this act, if an amendment is
approved, an officer of the corporation shall execute and file a
certificate
of amendment shall be executed and filed on behalf of
the
corporation setting that
sets forth the amendment and
certifying
certifies that the amendment has been was adopted
in
accordance
with in the manner required
under section 611(2).611(3).
(4) If a corporation amends an article in its articles of
incorporation that is divided into separately identified sections,
the certificate of amendment may only set forth the section of the
article that was amended. Otherwise, the certificate of amendment
must set forth the entire article that was amended.
Sec. 641. (1) A corporation may integrate into a single
instrument
the provisions of its articles of incorporation which
that
are then in effect and operative, as theretofore
amended, and
at the same time may also further amend its articles of
incorporation by adopting restated articles of incorporation.
(2) All of the incorporators may adopt restated articles of
incorporation before the first meeting of the board by complying
with sections 611(1)(a), 642, and 643(1).
(3) (2)
Other restated articles of
incorporation shall be
approved as follows:
(a) If the restated articles of incorporation merely restate
and integrate, but do not further amend the articles of
incorporation
as theretofore previously amended, they may be
adopted
by the board the board may
adopt the restated articles of
incorporation
without a vote of the shareholders or
members, or by
the shareholders or members may adopt them, in which case the
procedure
and vote required by under
section 611(2) is 611(3) are
applicable.
(b) If the restated articles of incorporation restate,
integrate, and also further amend the articles of incorporation,
but those amendments include only amendments adopted under section
611(1)(b) or (2), the board may adopt the restated articles of
incorporation without a vote of the shareholders or members.
(c) If the restated articles of incorporation restate and
integrate and also further amend in any material respect the
articles
of incorporation, as theretofore previously amended, they
shall
be adopted by in a way that
is not previously addressed under
this section, a vote of the shareholders, members, or directors
pursuant
to under section 611(2).611(3) is required to adopt
restated articles of incorporation.
(4) (3)
An amendment effected that is adopted in connection
with
the reinstatement and integration restatement of the articles
of incorporation is subject to any other provision of this act, not
inconsistent
with this section, which that
would apply if a
certificate
of amendment were filed to effect such that amendment.
Sec.
642. (1) Restated The heading of restated articles
of
incorporation
shall be specifically designated designate them as
such. in
the heading thereof. They shall state, either in the
heading or in an introductory paragraph, the corporation's present
name, and, if it has been changed, all of its former names and the
date of filing of its original articles of incorporation. Restated
articles of incorporation shall state that they were duly adopted
by
the incorporators, directors, shareholders, or members in
accordance
with this under section
641.
(2) If adopted by the incorporators under section 641(2),
restated articles of incorporation shall state that they were duly
adopted by unanimous consent of the incorporators before the first
meeting of the board under section 611(1)(a). If adopted by the
board
without a vote of the shareholders
, or members ,
or
directors
according to the procedure and vote
required by under
section
641(2), they 641(3), the
restated articles of incorporation
shall
state that all of the
following:
(a) That they only restate and integrate and do not further
amend
the existing articles as theretofore previously amended, and
that
or that the restated articles
of incorporation only restate
and integrate the articles and include only amendments adopted
under section 611(1) or section 611(2).
(b) That there is no material discrepancy between those
provisions and the provisions of the restated articles of
incorporation.
(3)
Restated articles of incorporation may
omit such any
provisions of the original, amended, or previously restated
articles
which of incorporation
that named the incorporators, the
initial board, or original subscribers for shares or original
members or describe or value corporate property, and the omission
is
not deemed considered a further amendment.
Sec.
643. (1) Restated A majority of incorporators shall sign
and file restated articles of incorporation adopted under section
641(3) as provided in section 131.
(2) Except as provided in subsection (1), a corporation shall
execute
and file restated articles of
incorporation shall be
executed
and filed in accordance with as
provided in section 131.
(3)
When such a filing
of restated articles of
incorporation
becomes effective, the corporation's original articles of
incorporation ,
as amended, and previous
amendments are superseded,
;
and thenceforth the restated
articles of incorporation, including
any
further amendments made thereby, shall be that are included in
the restated articles of incorporation, are the articles of
incorporation of the corporation.
Sec. 701. (1) Two or more domestic corporations may merge into
1
of the corporations or consolidate into a new corporation
pursuant
to a plan of merger or consolidation approved in the
manner provided in this act.
(2)
The board of each corporation proposing that proposes to
participate
in a merger or consolidation shall adopt a plan of
merger
or consolidation, setting forth:that
contains all of the
following:
(a) The name of each constituent corporation and the name of
the
constituent corporation that will
be the surviving or
consolidated
corporation.
(b)
As to For each constituent corporation which that is
a
stock corporation, the designation and number of outstanding shares
of each class, specifying the classes that are entitled to vote;
and
each class ,
if any, that is entitled to vote as a class; and,
if
the number of any such shares is subject to change before the
effective
date of the merger, or consolidation, the manner in which
the change may occur.
(c)
As to For each constituent corporation which that is
a
nonstock
membership corporation, a description of the members, in
the
case of a membership corporation, including
the number,
classification,
and voting rights of members. , or
(d) For each constituent corporation that is a directorship
corporation,
a description of the organization of
the board, in the
case
of a directorship corporation, including
the number,
classification, and voting rights of directors.
(e) (d)
The terms and conditions of the
proposed merger, or
consolidation,
including the manner and basis of
converting the
shares of or membership or other interest in each constituent
corporation
into shares, bonds, obligations,
or other securities of
or
membership or other interest in the surviving or consolidated
corporation,
or into cash or other consideration, which if any,
that may include shares, bonds, rights, or other property or
securities of or membership or other interests in a corporation
whether or not a party to the merger, or into a combination
thereof.of those securities, interests, and property.
(f) (e)
In a merger, a A statement of an any amendment
to the
articles
of incorporation of the surviving corporation to be
effected
by result from the merger or a any restatement
of the
articles
of incorporation as provided in under
section 641(1),
which
shall be in the form of for restated
articles of
incorporation
as provided in required
under section 642. ;
and in a
consolidation,
all statements required to be included in articles
of
incorporation formed under this act.
(g) (f)
Other provisions with respect to
the proposed merger
or
consolidation as that the board considers necessary or
desirable.
(3) Notwithstanding the provisions of this section and other
provisions of this act, a corporation shall make distributions to
shareholders or members of any corporation or to any other person
in connection with a merger only in conformity with section 301 and
with limitations on distributions in the articles of incorporation
of that corporation.
Sec. 703a. (1) Except as provided in subsection (2)(e) and
(f), a plan of merger adopted by the board of each constituent
corporation that is organized on a stock or membership basis shall,
except as provided in subsection (2)(e) and (f), be submitted for
approval at a meeting of the shareholders or members.
(2) For approval of a plan of merger under subsection (1), all
of the following apply:
(a) The board must recommend the plan of merger to the
shareholders or members, unless section 529 applies or the board
determines that because of conflict of interest, events that occur
after the board adopts the plan, contractual obligations, or other
special circumstances it should make no recommendation. If 1 or
more of the exceptions described in this subdivision apply, the
board must communicate the basis for not making a recommendation to
the shareholders or members.
(b) The board may condition its submission of the proposed
merger on any basis.
(c) Except as provided in subdivision (h), the corporation
shall give notice of the shareholder or membership meeting to each
shareholder or member of record, whether or not entitled to vote at
the meeting, within the time and in the manner provided in this act
for giving notice of meetings of shareholders or members. The
notice shall include or be accompanied by a copy or summary of the
plan of merger. If a summary of the plan is given, the notice shall
state that a copy of the plan is available on request.
(d) At the meeting of the shareholders or members, the
shareholders or members shall vote on the proposed plan of merger.
Subject to subdivision (e), the plan is approved if all of the
following are met:
(i) A majority of the votes held by shareholders or members of
the corporation that are entitled to vote on the plan are cast in
favor of the plan.
(ii) If a class of members or shareholders is entitled to vote
on the plan as a class, a majority of the votes held by
shareholders or members of the class are cast in favor of the plan.
A class of shares or of members is entitled to vote as a class in
the case of a merger if the plan of merger contains a provision
that, if contained in a proposed amendment to the articles of
incorporation, would entitle the class of shares or members to vote
as a class.
(e) Notwithstanding subdivision (d), unless a greater vote is
required in the articles of incorporation or in a bylaw adopted by
the shareholders or members, if there are more than 20 shareholders
or members that are entitled to vote at the meeting, the plan of
merger is adopted if a majority of the votes held by shareholders
or the members present in person or by proxy at the meeting are
cast in favor of the plan and, if a class of shareholders or
members is entitled to vote on the proposed merger as a class, a
majority of the votes held by shareholders or members of that class
present in person or by proxy at the meeting are cast in favor of
the plan.
(f) Except as provided in section 754 or unless required in
the articles of incorporation or bylaws, action on a plan of merger
by the shareholders or members of a surviving corporation that is
organized on a stock or membership basis is not required if all of
the following apply:
(i) The articles of incorporation of the surviving corporation
will not differ from its articles of incorporation before the
merger.
(ii) Each shareholder of the surviving corporation whose
shares were outstanding immediately before the effective date of
the merger will hold the same number of shares, with identical
designations, voting rights, preferences, limitations, and relative
rights, immediately after the merger or each member of the
surviving corporation whose membership was outstanding immediately
before the effective date of the merger will be a member with
identical designations, voting rights, preferences, limitations,
and relative rights, immediately after the merger.
(g) A plan of merger may provide for differing forms of
consideration for holders of shares or memberships within the same
class based on the election of the holders or members, the amount
of shares or memberships held, or another reasonable basis.
(h) A corporation that has more than 20 shareholders or
members is not required to give notice under subdivision (c) to any
shareholder or member, and is not required to allow the shareholder
or member to vote on a proposed plan of merger or conversion, if
both of the following apply:
(i) The shareholder or member is not entitled to vote on the
proposed plan of merger or conversion under the articles of
incorporation or bylaws of the corporation.
(ii) The shareholder or member is not entitled to receive any
distributions from the corporation on dissolution under the
articles of incorporation or bylaws of the corporation, under this
act, or under other applicable law.
(3) If any merging corporation is organized on a directorship
basis, the board shall approve a plan of merger by an affirmative
vote of a majority of the directors who are then in office or a
higher number of directors if specified in the articles of
incorporation or bylaws. The corporation shall give notice of the
meeting to authorize the merger to each director who is then in
office at least 20 days before the meeting. The notice shall
include or be accompanied by a copy or a summary of the plan of
merger.
(4) If a person solicits proxies in connection with the
approval of a plan of merger under this section from more than 25
shareholders or members, the person soliciting the proxies must
provide a form of proxy to each voting shareholder or member
solicited that contains all of the following:
(a) A blank space for the date and the signature of a
shareholder or member that is voting by proxy.
(b) Clear identification of each matter or group of related
matters on which the shareholders or members are voting.
(c) The phrase "revocable proxy".
(d) An acknowledgment that the shareholder or member received
the notice of meeting and the plan or a summary of the plan of
merger.
(e) The date, time, and place of the meeting of the
shareholders or members.
(f) A place for the shareholder or member to indicate on the
proxy whether the shareholder or member votes for, votes against,
or abstains from voting on the merger.
(g) A statement that the person designated as the proxy holder
will vote the proxy in accordance with the instructions of the
shareholder or member.
(h) A statement indicating how the proxy holder will vote the
proxy if the shareholder or member does not specify a choice for a
matter.
(i) A statement that if the proxy is not returned by the
shareholder or member, the proxy holder may vote any valid proxy
previously executed by the shareholder or member.
Sec. 706. (1) If a domestic corporation has not commenced
business, has not issued any shares or memberships, and has not
elected a board, the corporation may merge with any domestic or
foreign corporation by unanimous consent of its incorporators.
(2) If incorporators unanimously consent to a merger under
subsection (1), a majority of incorporators shall execute a
certificate of merger under section 707.
(3) The other domestic or foreign corporations that
participate in the merger with a domestic corporation under
subsection (1) shall comply with the provisions of this act dealing
with mergers that are applicable to them.
Sec.
707. (1) After approval of a plan of merger or
consolidation,
is approved under this act,
each constituent
corporation
shall sign and file a certificate of merger or a
certificate
of consolidation shall be executed and filed on behalf
of
each that corporation. The certificate shall set forth the
plan
of
merger or the plan of consolidation and either all of
the
following:
(a)
A statement that the plan of merger or consolidation has
been
adopted by the board and approved by the shareholders or
members
in accordance with sections 701 to 703(1) and (2).The
statements required under section 701(2)(a), (b), and (d), and the
manner and basis of converting the shares or memberships of each
constituent corporation that is organized on a stock or membership
basis as set forth in the plan of merger.
(b)
A statement that the plan of merger or consolidation has
been
adopted by the board in accordance with section 703(3).A
statement that the boards have adopted the plan of merger under
section 701.
(c) A statement that the surviving corporation will furnish
the plan of merger, on request and without cost, to any shareholder
or member of any constituent corporation.
(d) If approval of the shareholders or members of 1 or more
corporations that are parties to the merger was required, a
statement that the plan was approved by the shareholders or members
under section 703a.
(e) If section 706 applies to the merger, a statement that the
merging corporation has not commenced business, has not issued any
shares or memberships, and has not elected a board and that the
plan of merger was approved by the unanimous consent of the
incorporators.
(f) A statement of any assumed names of merging corporations
that are transferred to the surviving corporation under section
217(3), specifying each transferred assumed name and the name of
the corporation from which it is transferred. The certificate may
include a statement of corporate names or assumed names of merging
corporations that are to be treated as newly filed assumed names of
the surviving corporation under section 217(4).
(2)
The Section 131 applies in
determining when a certificate
of
merger or consolidation shall become under this section becomes
effective. in
accordance with section 131.
Sec. 711. (1) A domestic corporation may merge 1 or more
subsidiary corporations into itself, or may merge itself, or itself
and any 1 or more subsidiary corporations, into any other
subsidiary corporation, without approval of the shareholders or
members of any of the corporations, except as provided in section
713. The board of the parent corporation shall approve a plan of
merger that sets forth those matters required to be set forth in a
plan of merger under section 701. Approval by the board of a
subsidiary corporation described in this subsection is not
required.
(2) If the parent corporation owns less than 100% of the
outstanding shares or memberships of any subsidiary corporation
that is a constituent corporation, the parent corporation shall
promptly after the filing of the certificate of merger mail a copy
or summary of the plan of merger to each minority shareholder or
member of record of each subsidiary corporation, unless the
shareholder or member waives the requirement in writing or unless
the subsidiary corporation is required to obtain the approval of
its shareholders or members under section 713.
(3) The authority of a corporation to merge under this section
does not prevent the corporation from using other provisions of
this act to complete a merger.
(4) As used in this section and in sections 712 and 713:
(a) "Constituent corporation" means a corporation that is a
party to the merger described in subsection (1).
(b) A domestic corporation is a "subsidiary corporation" if
another domestic corporation holds at least 90% of its shareholder
or member votes.
Sec. 712. (1) After a plan of merger is adopted under section
711, the parent corporation shall execute and file a certificate of
merger that sets forth all of the following:
(a) The statements required under section 701(2)(a) and (d),
and the manner and basis of converting shares or memberships of
each constituent corporation as set forth in the plan of merger.
(b) The number of outstanding shares or memberships of each
class of each subsidiary corporation that is a party to the merger
and the number of shares or memberships of each class owned by the
parent corporation.
(c) A statement of any assumed names of merging corporations
transferred to the surviving corporation as under section 217(3),
specifying each transferred assumed name and the name of the
corporation from which it is transferred. The certificate may
include a statement of corporate names or assumed names of merging
corporations that are to be treated as newly filed assumed names of
the surviving corporation under section 217(4).
(2) Section 131 applies in determining when a certificate of
merger becomes effective under this section.
Sec. 713. (1) A subsidiary corporation that is a constituent
corporation in a merger under section 711 shall obtain the approval
of its shareholders or members in accordance with the applicable
provisions of section 703a.
(2) A parent corporation shall obtain approval of its
shareholders or members for a merger under section 711 if either of
the following applies:
(a) Its articles of incorporation require shareholder or
member approval of the merger.
(b) Pursuant to section 703a, the plan of merger contains a
provision that would amend any part of the articles of
incorporation of the parent corporation into which a subsidiary
corporation is being merged, or a subsidiary corporation is to be
the surviving corporation of the merger.
Sec. 724. All of the following apply when a merger, other than
a merger under section 736a, takes effect:
(a) Every other corporation that is a party to the merger
merges into the surviving corporation and the separate existence of
every corporation that is a party to the merger except the
surviving corporation ceases. A merger in which a domestic
corporation is the surviving corporation is not considered a
dissolution of any constituent domestic corporation or domestic
business corporation.
(b) The title to all real estate and other property and rights
owned by each corporation that is a party to the merger is vested
in the surviving corporation without reversion or impairment.
(c) The surviving corporation may use the corporate name and
the assumed names of any merging corporation, if the filings
required under section 217(3) and (4) are made.
(d) The surviving corporation has all of the liabilities of
each corporation that is a party to the merger.
(e) A person may continue any proceeding that is pending
against any corporation that is a party to the merger as if the
merger did not occur or the surviving corporation may be
substituted in the proceeding for the corporation whose existence
ceased.
(f) The articles of incorporation of the surviving corporation
are amended to the extent provided in the plan of merger.
(g) The shares or memberships of each corporation party to the
merger that are to be converted into shares, obligations, or other
securities of or membership or other interests in the surviving or
any other corporation or into cash or other property are converted.
Sec. 735. (1) One or more domestic business corporations,
foreign corporations, or foreign business corporations may merge
with 1 or more domestic corporations if all of the following are
met:
(a) In a merger involving a foreign corporation or a foreign
business corporation, the merger is permitted under the law of the
state or country under whose law each foreign corporation and each
foreign business corporation is incorporated and each foreign
corporation or foreign business corporation complies with that law
in effecting the merger. If the parent corporation in a merger
conducted under section 711 is a foreign corporation or a foreign
business corporation, it shall comply with all of the following,
notwithstanding the provisions of the laws of its jurisdiction of
incorporation:
(i) Section 711(2) with respect to notice to shareholders or
members of a domestic subsidiary corporation that is a party to the
merger.
(ii) Section 712 with respect to the certificate of merger.
(b) If a foreign corporation that is authorized to conduct
affairs or transact business in this state is a party to the
merger, it shall comply with the applicable provision of sections
1021 and 1035.
(c) In a merger involving 1 or more domestic business
corporations, the merger is permitted under the business
corporation act, and each domestic business corporation complies
with that law in effecting the merger. However, if the parent
corporation in a merger that is conducted under section 711 is a
domestic business corporation, it shall also comply with all of the
following:
(i) Section 711(2) with respect to notice to shareholders or
members of a domestic subsidiary corporation that is a party to the
merger.
(ii) Section 712 with respect to the certificate of merger.
(d) Each domestic corporation complies with the applicable
provisions of sections 701 to 713.
(2) If the surviving corporation of a merger is a foreign
corporation to be governed by the laws of a jurisdiction other than
this state, it shall comply with the provisions of this act with
respect to foreign corporations if it is to conduct affairs in this
state. If the surviving corporation in a merger is a foreign
business corporation to be governed by the laws of a jurisdiction
other than this state, it shall comply with the provisions of the
business corporation act with respect to foreign business
corporations if it is to transact business in this state.
(3) The surviving corporation in a merger is liable, and is
subject to service of process in a proceeding in this state, for
the enforcement of an obligation of a domestic corporation that is
party to the merger.
(4) This section does not limit the power of a domestic
business corporation, foreign corporation, or foreign business
corporation to acquire all or part of the shares or memberships of
1 or more classes of a domestic corporation through a voluntary
exchange or otherwise.
(5) Notwithstanding this section or any other provisions of
this act, a corporation shall make distributions to its
shareholders or members or to any other person in connection with a
merger with a domestic business corporation, foreign corporation,
or foreign business corporation under this section only in
conformity with section 301 and with any limitations on
distributions in the articles of the corporation.
Sec. 736a. (1) Except as provided in subsection (2) and
subject to subsection (8), 1 or more domestic corporations may
merge with 1 or more business organizations if all of the following
requirements are met:
(a) The merger is permitted under the law of the jurisdiction
in which each constituent business organization is organized and
each constituent business organization complies with that law in
effecting the merger, and each foreign constituent business
organization transacting business in this state complies with the
applicable laws of this state.
(b) The board of each domestic corporation that is
participating in the merger adopts a plan of merger that sets forth
all of the following:
(i) The name of each constituent entity, the name of the
constituent entity that will be the surviving entity, the street
address of the surviving entity's principal place of business, and
the type of organization of the surviving entity.
(ii) If a domestic corporation that is a party to the merger
is a stock corporation, the designation and number of outstanding
shares of each class, specifying the classes entitled to vote, each
class entitled to vote as a class, and, if the number of shares is
subject to change before the effective date of the merger, the
manner in which the change may occur.
(iii) If a domestic corporation that is a party to the merger
is a membership corporation, a description of the members,
including the number, classification, and voting rights of members.
(iv) If a domestic corporation that is a party to a merger is
a directorship corporation, a description of the organization of
the board, including the number, classification, and voting rights
of directors.
(v) The terms and conditions of the proposed merger, including
the manner and basis of converting the shares, partnership
interests, membership interests, or other ownership interests of
each constituent entity into ownership interests, obligations, or
other securities of or membership or other interests in the
surviving entity, or into cash or other consideration, if any, that
may include ownership interests, obligations, or other securities
of or membership or other interests in an entity that is not a
party to the merger, or into a combination of those securities,
interests, or property.
(vi) If the surviving entity is to be a domestic corporation,
a statement of any amendment to the articles of incorporation of
the surviving corporation that will result from the merger or any
restatement of the articles under section 641(1), in the form for
restated articles required under section 642.
(vii) Any other provisions with respect to the proposed merger
that the board considers necessary or desirable.
(c) A plan of merger adopted by the board of each constituent
domestic corporation shall be submitted for approval at a meeting
of the shareholders or members under section 703a(1) or, if the
corporation is organized on a directorship basis, for approval by
the board of directors under section 703a(3).
(2) If a domestic corporation has not commenced business, has
not issued any shares, and has not elected a board, the corporation
may merge with any domestic or foreign entity by unanimous consent
of its incorporators. If the incorporators unanimously consent to a
merger under this subsection, a majority of the incorporators must
execute and file a certificate of merger under subsection (3).
(3) After a plan of merger is approved under subsection (1) or
the merger is approved under subsection (2), each domestic
corporation that is a party to the merger shall execute and file a
certificate of merger. The certificate shall set forth all of the
following:
(a) A statement of the applicable requirements set forth in
subsection (1)(b)(i), (ii), (iii), (iv), (v), (vi), and (vii), and
the manner and basis of converting the ownership, membership, or
other interests of each constituent entity included in the plan of
merger.
(b) A statement that the plan of merger has been adopted by
the board under subsection (1)(b).
(c) A statement that the surviving entity will furnish the
plan of merger, on request and without cost, to any shareholder or
member of the domestic corporation.
(d) If approval of the shareholders or members of the domestic
corporation is required, a statement that the plan was approved by
the shareholders or members under subsection (1)(c) or, if the
corporation is organized on a directorship basis, a statement that
the plan was approved by the board of directors under subsection
(1)(c).
(e) If subsection (2) applies to the merger, a statement that
the corporation has not commenced business, has not issued any
shares or memberships, and has not elected a board, and that the
merger was approved by the unanimous consent of the incorporators.
(f) A statement of any assumed names of merging entities that
are transferred to the surviving entity under section 217(3),
specifying each transferred assumed name and the name of the entity
from which it is transferred. If the surviving entity is a domestic
corporation or a foreign corporation authorized to conduct affairs
in this state, the certificate may include a statement of the names
or assumed names of merging entities that are to be treated as
newly filed assumed names of the surviving corporation under
section 217(4).
(4) Section 131 applies in determining when a certificate of
merger under subsection (3) becomes effective.
(5) When a merger under this section takes effect, all of the
following apply:
(a) Every other entity that is a party to the merger merges
into the surviving entity and the separate existence of every
entity that is a party to the merger except the surviving entity
ceases.
(b) The title to all real estate and other property and rights
owned by each entity that is a party to the merger is vested in the
surviving entity without reversion or impairment.
(c) The surviving entity may use the name and the assumed
names of any entity that is a party to the merger, if the filings
required under section 217(3) or (4) or any other applicable
statute are made.
(d) The surviving entity has all of the liabilities of each
entity that is a party to the merger. This subdivision does not
affect the liability, if any, of a person that was an obligated
person with respect to an entity that is a party to the merger for
acts or omissions that occurred before the merger.
(e) A person may continue any proceeding that is pending
against any entity that was a party to the merger as if the merger
did not occur, or the surviving entity may be substituted in the
proceeding for the entity whose existence ceased.
(f) The articles of incorporation of a surviving domestic
corporation are amended to the extent provided in the plan of
merger.
(g) The ownership interests, shares, or memberships of each
entity that is a party to the merger that are to be converted into
ownership interests or obligations of or membership or other
interests in the surviving entity or into cash or other property
are converted.
(6) If the surviving entity in a merger under this section is
a foreign business organization, it is subject to the laws of this
state pertaining to the transaction of business in this state if it
transacts business in this state. The surviving entity is liable,
and is subject to service of process in a proceeding in this state,
for the enforcement of an obligation of a domestic corporation that
is a party to the merger.
(7) Notwithstanding this section or any other provisions of
this act, a corporation shall make distributions to its
shareholders or members or to any other person in connection with a
merger with a business organization under this section only in
conformity with section 301 and with any limitations on
distributions in its articles of incorporation.
(8) Section 735, and not this section, applies to a merger if
all of the business organizations merging with 1 or more domestic
corporations are foreign corporations, domestic business
corporations, or foreign business corporations.
(9) As used in this section:
(a) "Business organization" means a domestic or foreign
limited liability company, limited partnership, general
partnership, or any other type of domestic or foreign business
enterprise, incorporated or unincorporated, except a domestic
business corporation, foreign corporation, or foreign business
corporation.
(b) "Entity" means a business organization, domestic
corporation, foreign corporation, or foreign business corporation.
(c) "Obligated person" means a general partner of a limited
partnership, a partner of a general partnership, or a participant
in or an owner of an interest in any other type of business
enterprise that, under applicable law, is generally liable for the
obligations of the business enterprise.
Sec.
741. At any time before the effective date of a the
certificate
of merger, or consolidation, the merger or
consolidation
may be abandoned pursuant to provisions therefor, if
any,
subject to any contractual
rights, a corporation may abandon a
merger without further shareholder or member action, under a
procedure set
forth in the plan of merger or consolidation. or, if
the plan of merger does not include an abandonment procedure, in
the
manner determined by the board. If a certificate of merger or
consolidation
has been was filed by a corporation that abandons a
merger, it shall file a certificate of abandonment within 10 days
after the abandonment, but not later than the proposed effective
day.date.
Sec. 745. (1) A domestic corporation may convert into a
business organization if all of the following requirements are
satisfied:
(a) The conversion is permitted under the law that will govern
the internal affairs of the business organization after conversion
and the surviving business organization complies with that law in
converting.
(b) Unless subdivision (d) applies, the board of the domestic
corporation that is proposing to convert adopts a plan of
conversion that includes all of the following:
(i) The name of the domestic corporation, the name of the
business organization into which the domestic corporation is
converting, the type of business organization into which the
domestic corporation is converting, identification of the statute
that will govern the internal affairs of the surviving business
organization, the street address of the surviving business
organization, the street address of the domestic corporation if it
is different from the street address of the surviving business
organization, and the principal place of business of the surviving
business organization.
(ii) For a domestic corporation that is organized on a stock
basis, the designation and number of outstanding shares of each
class, specifying the classes that are entitled to vote, each class
that is entitled to vote as a class, and, if the number of shares
is subject to change before the effective date of the conversion,
the manner in which the change may occur.
(iii) For a domestic corporation that is organized on a
membership basis, a description of the members, including the
number, classification, and voting rights of members.
(iv) For a domestic corporation that is organized on a
directorship basis, a description of the organization of the board,
including the number, classification, and voting rights of
directors.
(v) The terms and conditions of the proposed conversion,
including the manner and basis of converting the shares or
memberships into ownership interests, or obligations of the
surviving business organization, into cash, into other
consideration that may include ownership interests or obligations
of an entity that is not a party to the conversion, or into a
combination of cash and other consideration.
(vi) The terms and conditions of the organizational documents
that are to govern the surviving business organization.
(vii) Any other provisions with respect to the proposed
conversion that the board considers necessary or desirable.
(c) If the board adopts the plan of conversion under
subdivision (b), the plan of conversion is submitted for approval
in the manner required for a merger under section 703a(2).
(d) If the domestic corporation has not commenced business,
has not issued any shares or memberships, and has not elected a
board, subdivisions (b) and (c) do not apply and the incorporators
may approve the conversion of the corporation into a business
organization by unanimous consent. To effect the conversion, a
majority of the incorporators must execute and file a certificate
of conversion under subdivision (e).
(e) After the plan of conversion is approved under
subdivisions (b) and (c) or the conversion is approved under
subdivision (d), the domestic corporation files any formation
documents required to be filed under the laws that govern the
internal affairs of the surviving business organization, in the
manner required by those laws, and files a certificate of
conversion with the administrator. The certificate of conversion
shall include all of the following:
(i) Unless subdivision (d) applies, all of the information
described in subdivision (b)(i), (ii), (iii), and (iv) and the
manner and basis for converting the shares or memberships, if any,
of the domestic corporation included in the plan of conversion.
(ii) Unless subdivision (d) applies, a statement that the
board has adopted the plan of conversion under subdivision (c), or
if subdivision (d) applies to the conversion, a statement that the
domestic corporation has not commenced business, has not issued any
shares or memberships, and has not elected a board and that the
conversion was approved by the unanimous consent of the
incorporators.
(iii) A statement that the surviving business organization
will furnish a copy of the plan of conversion, on request and
without cost, to any shareholder or member of the domestic
corporation.
(iv) If approval of the shareholders or members of the
domestic corporation is required, a statement that the plan was
approved by the shareholders or members under subdivision (c).
(v) A statement specifying each assumed name of the domestic
corporation to be used by the surviving business organization and
authorized under section 217(5).
(2) Section 131 applies in determining when a certificate of
conversion under this section becomes effective.
(3) When a conversion under this section takes effect, all of
the following apply:
(a) The domestic corporation converts into the surviving
business organization, and the articles of incorporation of the
domestic corporation are canceled. Except as otherwise provided in
this section, the surviving business organization is organized
under and subject to the organizational laws of the jurisdiction of
the surviving business organization as stated in the certificate of
conversion.
(b) The surviving business organization has all of the
liabilities of the domestic corporation. The conversion of the
domestic corporation into a business organization under this
section does not affect any obligations or liabilities of the
domestic corporation before conversion or the personal liability of
any person that is incurred before the conversion, and the
conversion shall not be considered to affect the choice of law
applicable to the domestic corporation with respect to matters that
arise before the conversion.
(c) The title to all real estate and other property and rights
owned by the domestic corporation is vested in the surviving
business organization without reversion or impairment. The rights,
privileges, powers, and interests in property of the domestic
corporation, and the debts, liabilities, and duties of the domestic
corporation, shall not be considered, as a consequence of the
conversion, as transferred to the surviving business corporation to
which the domestic corporation has converted for any purposes of
the laws of this state.
(d) The surviving business organization may use the name and
assumed names of the domestic corporation if the filings required
under section 217(5) or any other applicable statute are made and
the laws regarding use and form of names are followed.
(e) A person may continue any proceeding that is pending
against the domestic corporation as if the conversion had not
occurred, or the surviving business organization may be substituted
in the proceeding for the domestic corporation.
(f) The surviving business organization is considered to be
the same entity that existed before the conversion and is
considered to be organized on the date that the domestic
corporation was originally incorporated.
(g) The shares or memberships of the domestic corporation that
are to be converted into ownership interests or obligations of the
surviving business organization or into cash or other property are
converted.
(h) Unless otherwise provided in the plan of conversion, the
domestic corporation is not required to wind up its affairs or pay
its liabilities and distribute its assets on account of the
conversion, and the conversion does not constitute a dissolution of
the domestic corporation.
(4) If the surviving business organization of a conversion
under this section is a foreign business organization, it is
subject to the laws of this state pertaining to the transaction of
business and the conduct of affairs in this state if it transacts
business or conducts affairs in this state. The surviving business
organization is liable, and is subject to service of process in a
proceeding in this state, for the enforcement of an obligation of
the domestic corporation.
(5) Notwithstanding this section and other provisions of this
act, a corporation shall make distributions to shareholders or
members of any corporation or to any other person in connection
with a conversion under this section only in conformity with
section 301 and with limitations on distributions in its articles
of incorporation.
(6) As used in this section and section 746, "business
organization" and "entity" mean those terms as defined in section
736a(9).
Sec. 746. (1) A business organization may convert into a
domestic corporation if all of the following requirements are
satisfied:
(a) The conversion is permitted under the law that governs the
internal affairs of the business organization and the business
organization complies with that law in converting.
(b) The business organization that is proposing to convert
into a domestic corporation adopts a plan of conversion that
includes all of the following:
(i) The name of the business organization, the type of
business organization that is converting, identification of the
statute that governs the internal affairs of the business
organization, the name of the surviving domestic corporation into
which the business organization is converting, the street address
of the surviving domestic corporation, and the principal place of
business of the surviving domestic corporation.
(ii) A description of all of the ownership interests in the
business organization, specifying the interests that are entitled
to vote, any right those interests have to vote collectively or as
a class, and, if the ownership interests are subject to change
before the effective date of the conversion, the manner in which
the change may occur.
(iii) The terms and conditions of the proposed conversion,
including the manner and basis of converting the ownership
interests of the business organization into shares, memberships, or
obligations of the surviving domestic corporation, into cash, into
other consideration that may include ownership interests or
obligations of an entity that is not a party to the conversion, or
into a combination of cash and other consideration.
(iv) The terms and conditions of the articles and bylaws that
are to the govern the surviving domestic corporation.
(v) Any other provisions with respect to the proposed
conversion that the business organization considers necessary or
desirable.
(c) If the plan of conversion is adopted by the business
organization under subdivision (b), the plan of conversion is
submitted for approval in the manner required under the law
governing the internal affairs of that business organization.
(d) After the plan of conversion is approved under
subdivisions (b) and (c), the business organization files a
certificate of conversion with the administrator. The certificate
of conversion shall include all of the following:
(i) All of the information described in subdivision (b)(i) and
(ii) and the manner and basis of converting the ownership interests
of the business organization included in the plan of conversion.
(ii) A statement that the business organization has adopted
the plan of conversion under subdivision (c).
(iii) A statement that the surviving corporation will furnish
a copy of the plan of conversion, on request and without cost, to
any owner of the business organization.
(iv) A statement specifying each assumed name of the business
organization to be used by the surviving domestic corporation and
authorized under section 217(6).
(v) Articles of incorporation of the surviving domestic
corporation that meet all of the requirements of this act
applicable to articles of incorporation.
(2) Section 131 applies in determining when a certificate of
conversion under this section becomes effective.
(3) When a business organization converts into a surviving
domestic corporation under this section, all of the following
apply:
(a) The business organization converts to the surviving
domestic corporation. Except as otherwise provided in this section,
the surviving domestic corporation is organized under and subject
to this act.
(b) The surviving domestic corporation has all of the
liabilities of the business organization. The conversion of the
business organization into a domestic corporation under this
section does not affect any obligations or liabilities of the
business organization that are incurred before the conversion or
the personal liability of any person that is incurred before the
conversion and the conversion shall not be considered to affect the
choice of law applicable to the business organization with respect
to matters that arise before conversion.
(c) The title to all real estate and other property and rights
owned by the business organization is vested in the surviving
domestic corporation without reversion or impairment. The rights,
privileges, powers, and interests in property of the business
organization, and the debts, liabilities, and duties of the
business organization, shall not be considered, as a consequence of
the conversion, as transferred to the surviving domestic
corporation to which the business organization has converted for
any purpose under the laws of this state.
(d) The surviving domestic corporation may use the name and
the assumed names of the business organization if the filings
required under section 217(6) or any other applicable statute are
made and the laws regarding the use and form of names are followed.
(e) A person may continue any proceeding that is pending
against the business organization as if the conversion had not
occurred, or the surviving domestic corporation may be substituted
in the proceeding for the business organization.
(f) The surviving domestic corporation is considered to be the
same entity that existed before the conversion and is considered to
be organized on the date that the business organization was
originally organized.
(g) The ownership interests of the business organization that
were converted into shares, memberships, or obligations of the
surviving domestic corporation or into cash or other property are
converted.
(h) Unless otherwise provided in the plan of conversion, the
business organization is not required to wind up its affairs or pay
its liabilities and distribute its assets on account of the
conversion, and the conversion does not constitute a dissolution of
the business organization.
Sec. 751. (1) A corporation may take any of the following
actions on the terms and conditions and for a consideration
authorized by its board of directors:
(a) Sell, lease, exchange, or otherwise dispose of all, or
substantially all, of its property and assets in the usual and
regular course of its business.
(b) Sell, lease, exchange, or otherwise dispose of all, or
substantially all, of its property and assets following approval of
a dissolution under section 804.
(c) Transfer any or all of its property and assets to another
corporation of which it owns all of the shares, or to another
entity that it controls or wholly owns, whether or not in the usual
and regular course of business.
(d) Mortgage or pledge any or all of its property and assets,
whether or not in the usual and regular course of business.
(2) Unless otherwise provided in the articles of
incorporation, approval by the shareholders or members of a
transaction described in subsection (1) is not required.
(3) As used in subsection (1), "consideration" may consist in
whole or in part of cash or other property, including shares,
bonds, or other securities of any other domestic corporation,
domestic business corporation, foreign corporation, or foreign
business corporation.
Sec.
753. (1) A sale, lease, exchange, or other disposition of
all,
or substantially all, the property and assets, with or without
the
goodwill, of a corporation, may be made upon such terms and
conditions
and for a consideration, which may consist in whole or
in
part of cash or other property, including shares, bonds, or
other
securities of any other corporation or business corporation,
domestic
or foreign, as authorized as provided in this
section.Except as provided in section 751, a
corporation may sell,
lease, exchange, or otherwise dispose of all, or substantially all,
of its property and assets, with or without the goodwill, in a
transaction that is not in the usual and regular course of its
business, on any terms and conditions and for any consideration
that is authorized under this section. A corporation has not
disposed of all or substantially all of its property and assets
under this subsection if it retains a significant continuing
business activity. For purposes of this subsection, it is
conclusively presumed that a corporation has retained a significant
continuing business activity if the corporation and its
subsidiaries reported on a consolidated basis continue to conduct
an activity that represented at least 25% of total revenues or 25%
of total assets at the end of the most recently completed fiscal
year or at least 25% of total program expenditures for that fiscal
year. As used in this subsection, "consideration" may consist in
whole or in part of cash or other property, including shares,
bonds, or other securities of any other domestic corporation,
domestic business corporation, foreign corporation, or foreign
business corporation.
(2)
The board shall approve a proposal for the sale, lease,
exchange,
or other disposition.The board of a stock or membership
corporation must recommend a proposed transaction described in
subsection (1) to the shareholders or members, unless any of the
following apply:
(a) The board determines that because of a conflict of
interest, events that occur after the board adopts the plan,
contractual obligations, or other special circumstances it should
make no recommendation.
(b) The power to initiate the transaction is reserved to the
shareholders or members without action of the board in the articles
of incorporation or in an agreement under section 488.
(c) Section 529 applies.
(3) If 1 or more of the exceptions in subsection (2) apply,
the board must communicate the basis for not making a
recommendation to the shareholders or members.
(4) The board may condition its submission to shareholders or
members under subsection (2) on any basis.
(5) (3)
In the case of If a
corporation is organized on a
stock
or membership corporation, basis,
the corporation must submit
a
proposed transaction shall be
submitted described in
subsection
(1)
for approval at a meeting of
shareholders or members. Notice
The
corporation shall give notice of the
meeting shall be given to
each shareholder or member of record, whether or not that person is
entitled
to vote at the meeting, not less than 20 days before the
meeting,
within the time and in the manner provided in under this
act for the giving of notice of meetings of shareholders or
members. The notice shall include or be accompanied by a statement
summarizing
that summarizes the principal terms of the proposed
transaction
or a copy of any documents containing that contain the
principal terms.
(6) (4)
At the a meeting
described in subsection (5), the
shareholders or members may authorize the sale, lease, exchange, or
other disposition and may fix, or may authorize the board to fix,
any
term or condition thereof and the consideration to be received
by
the corporation therefor. The authorization requires the
affirmative
vote of the holders of for
that transaction. Subject to
subsections (8) and (9), the transaction is approved if a majority
of
the outstanding shares votes
held by shareholders or members of
the
corporation entitled to vote thereon, and if a class is
entitled
to vote thereon as a class, the affirmative vote of a
majority
of the outstanding shares or members of each such
class.are cast in favor of the sale, lease,
exchange, or other
disposition.
(7) Notwithstanding subsection (6), unless a greater vote is
required in the articles of incorporation or in a bylaw adopted by
the shareholders or members, if there are more than 20 shareholders
or members that are entitled to vote at the meeting, the sale,
lease, exchange, or other disposition is approved if a majority of
the votes held by shareholders or members that are present in
person or by proxy at the meeting are cast in favor of the sale,
lease, exchange, or other disposition.
(8) (5)
Notwithstanding authorization by
the shareholders or
members under subsection (5) or (6), unless the power to initiate
the transaction is reserved to the shareholders or members without
action of the board in the articles of incorporation or in an
agreement
under section 488, the board may
abandon the a sale,
lease, exchange, or other disposition under subsection (1), subject
to
the rights of third parties under any contracts relating thereto
that relate to the sale, lease, exchange, or other disposition,
without further action or approval by shareholders or members.
(9) (6)
In the case of If a corporation is organized upon on a
directorship basis, a sale, lease, exchange, or other disposition
of all, or substantially all, of the property and assets, with or
without
goodwill, of a corporation, shall be in a transaction that
is not in the usual and regular course of its business, is
authorized
upon receiving if it
receives the affirmative vote of a
majority
of the directors who are then in office. Notice A
corporation
shall give notice of the meeting to
authorize the a
sale,
lease, exchange, or other disposition shall be given under
this
subsection to each director who is then
in office not less
than
at least 20 days before the meeting, and the notice shall
include
a statement summarizing that
summarizes the principal terms
of
the proposed transaction or a copy of any documents containing
that contain the principal terms.
(10) A sale, lease, exchange, or other disposition of all, or
substantially all, of the property and assets of a corporation or
other entity of which a second corporation owns a majority of the
shares or beneficial interests, including a change in shares of the
corporation or beneficial interest in another entity held by the
second corporation because of a merger, is a disposition by the
second corporation of its pro rata share of the property and assets
of the corporation or other entity on a consolidated basis for
purposes of this section.
(11) A transaction that is a distribution permitted under
section 301 is governed by section 545, and this section and
section 751 do not apply to that transaction.
Sec. 754. Shareholders or members of a corporation that
proposes to issue, directly or through a subsidiary, its shares,
memberships, obligations, or securities in the course of a merger,
acquisition of some or all of the outstanding shares of another
corporation or interests in or memberships of another entity, or
acquisition of some or all of the assets other than cash of a
corporation or other entity have the rights to receive notice and
to vote on the proposed merger or acquisition provided under
section 703a(2) if both of the following apply:
(a) The securities or other interests to be issued or
delivered in the acquisition are or may be converted into shares or
memberships of the acquiring corporation.
(b) The number of the acquiring corporation's voting shares or
member votes to be issued or delivered, plus those initially
issuable on the conversion or exchange of any other securities to
be issued or delivered, will exceed 100% of the number of its
voting shares or member votes outstanding immediately before the
acquisition plus the number of its common shares or memberships, if
any, initially issuable on the conversion or exchange of any other
securities that are then outstanding.
Sec. 801. (1) A corporation may be dissolved in any of the
following ways:
(a) Automatically by expiration of a period of duration to
which
the corporation is limited by in
its articles of
incorporation.
(b)
By action of the incorporators or directors pursuant to
under section 803.
(c) By action of the shareholders, members, or the board
pursuant
to under section 804.
(d)
By action of a shareholder or member pursuant to section
805.Pursuant to an agreement under section 488. A
dissolution under
this subdivision becomes effective by filing a certificate under
section 805.
(e) By a judgment of the circuit court in an action that is
brought
pursuant to under this act or otherwise.
(f)
Automatically, pursuant to under
section 922, for failure
to
file an annual report or pay the an annual filing fee. or
a
penalty
added to the fee.
(2) A corporation whose assets have been wholly disposed of
under court order in receivership or bankruptcy proceedings may be
summarily
dissolved by order of the court having that has
jurisdiction
of the proceedings. A The
clerk of the court shall
file
a copy of the order shall be filed with
the administrator. by
the
clerk of the court.
Sec. 804. (1) A corporation may be dissolved by action of its
board
and its shareholders , or members,
or board if any, as
provided in this section.
(2)
The board shall adopt a resolution that the corporation be
dissolved
and that a plan of distribution of assets complying with
section
855 be implemented.The board
of a corporation that is
organized on a stock or membership basis may propose dissolution
for action by the shareholders or members.
(3) The board of a corporation that is organized on a stock or
membership basis must recommend a dissolution under this section to
the shareholders or members unless any of the following apply:
(a) The board determines that because of a conflict of
interest or other special circumstances it should make no
recommendation.
(b) The power to dissolve the corporation is reserved to the
shareholders or members without action of the board in the articles
of incorporation or in an agreement under section 488.
(c) Section 529 applies.
(4) If 1 or more of the exceptions described in subsection (3)
apply, the board must communicate to the shareholders or members
the basis for not making a recommendation.
(5) The board may condition its submission of a proposal for
dissolution to shareholders or members under subsection (3) on any
basis.
(6) (3)
If the a corporation
is organized upon on a stock or
membership basis, the board shall submit a proposed dissolution
shall
be submitted for approval at a
meeting of shareholders or
members.
Notice shall be given The
corporation shall give notice to
each shareholder or member of record, whether or not that person is
entitled
to vote at the meeting, as within
the time and in the
manner
provided in under this
act for the giving of notice of
meetings
of shareholders or members. , and The
notice shall state
that a purpose of the meeting is to vote on dissolution of the
corporation.
The notice shall include a copy or summary of the plan
of
distribution of assets.
(7) (4)
At the meeting a vote of At a
meeting described in
subsection
(6), the shareholders or members shall be
taken vote on
the
proposed dissolution. and plan of distribution of assets. The
Except
as provided in this subsection, a dissolution
shall be is
approved
upon receiving the affirmative vote of the holders of if a
majority
of the outstanding shares or a majority of the votes held
by shareholders or members of the corporation that are entitled to
vote
thereon, and if a class is entitled to vote thereon as a
class,
the affirmative vote of a majority of the outstanding shares
or
members of each such class.on
the proposed dissolution are cast
in favor of dissolution. Unless a greater vote is required in the
articles of incorporation or in a bylaw adopted by the shareholders
or members, if there are more than 20 members or shareholders that
are entitled to vote at the meeting, dissolution is approved if a
majority of the votes held by shareholders or members that are
entitled to vote on the proposed dissolution present in person or
by proxy at the meeting are cast in favor of dissolution.
(8) (5)
If the a corporation
is organized upon on a
directorship
basis, the a dissolution shall be authorized by is
approved if it receives the affirmative vote of a majority of
directors
who are then in office. Notice The corporation shall give
notice
of the meeting to authorize the
dissolution shall be given
to
each director who is then in office not less than at least 10
days before the meeting, and the notice shall state that a purpose
of
the meeting is to vote on dissolution of the corporation. The
notice
shall include a copy or summary of the plan of distribution
of
assets.
(9) (6)
If the dissolution is approved, a
certificate of
dissolution
shall be executed and filed submitted
on behalf of the
corporation, setting forth:
(a) The name of the corporation.
(b) The date and place of the meeting of shareholders,
members,
or directors approving at
which the dissolution was
approved.
(c) A statement that dissolution was proposed and approved by
the
requisite vote of directors and the
shareholders ,
directors
and
or members
under subsection (7), or the directors under
subsection (8).
Sec.
805. (1) The articles of incorporation may contain a
provision
that a shareholder, a member, or a director, or the
holders
of any specified number or proportion of shares or any
specified
number or proportion of members or directors, or of any
specified
number or proportion of shares or members of a class, may
require
dissolution of the corporation at will or upon the
occurrence
of a specified event, if all the incorporators have
authorized
the provision in the articles or the holders of record
of
all outstanding shares or all the members or all the directors
authorize
the provision in an amendment to the articles. Said
provision
shall also specify a plan of distribution of assets of
the
corporation which complies with section 855.Dissolution under
an agreement under section 488 becomes effective by executing and
filing a certificate of dissolution on behalf of the corporation
that states the name of the corporation and that the corporation is
dissolved under an agreement under section 488.
(2)
If the articles contain this provision, dissolution may be
effected
by the execution and filing of a certificate of
dissolution
on behalf of the corporation when authorized by a
holder
or holders of the number or proportion of shares or by the
number
or proportion of members or directors specified in the
provision,
obtained in such manner as may be specified therein, or
if
no manner is specified therein, when authorized on written
consent
signed by such holder or holders, member or members, or
director
or directors. The certificate of dissolution shall state
the
name of the corporation and that the corporation is dissolved
pursuant
to a designated provision in the articles.
(3)
If the articles contain a provision authorized by
subsection
(1), the existence of the provision shall be noted
conspicuously
on the face of every certificate for shares issued by
the
corporation or on the face of a membership certificate
delivered
to every member of the corporation, and a holder or
recipient
of such certificate is conclusively deemed to have taken
delivery
or assumed membership with notice of the provision.
Sec.
811. (1) Dissolution A
corporation may revoke dissolution
proceedings
commenced pursuant to under
section 804 or 805 may be
revoked
488 or 804 before complete distribution of assets, if a
proceeding
pursuant to under section 851 is not pending, by filing
a certificate of revocation that is executed, in person or by
proxy, by all the shareholders, members, or directors that are
entitled
to vote on dissolution, stating and
states that the
revocation
is effective pursuant to under
this section and that all
the shareholders, members, or directors of the corporation that are
entitled to vote on dissolution have executed the certificate in
person or by proxy.
(2)
Dissolution In addition to
revoking a dissolution under
subsection (1), a corporation may also revoke dissolution
proceedings
commenced pursuant to under
section 804 may also be
revoked
before complete distribution of
assets, if a proceeding
pursuant
to under section 851 is not pending, in the following
manner:
(a)
The Unless the power to
dissolve the corporation is
reserved to the shareholders or members without action of the board
in the articles of incorporation or in an agreement under section
488,
the board of directors shall adopt a
resolution that the
revoking
dissolution. be
revoked. The corporation
shall submit the
proposed
revocation shall be submitted for approval at a meeting of
shareholders , or members. ,
or directors, and The
corporation
shall
give the shareholders , or members ,
or directors shall be
given
the same notice of the meeting and
the revocation shall must
be
approved by the same vote as that is required by under section
804 for the approval of dissolution.
(b) If the power to dissolve the corporation is reserved to
the shareholders or members without action of the board in the
articles of incorporation or in an agreement under section 488, the
shareholders or members may approve revocation of dissolution in
the manner provided in the articles of incorporation or in the
agreement under section 488 for approval of dissolution. The
corporation shall give the shareholders or members the same notice
of the meeting that is required under section 804 for the approval
of dissolution and the revocation of dissolution must be approved
by the same vote that is required under section 804 or in the
applicable provisions of the articles of incorporation or in the
agreement under section 488 for the approval of dissolution.
(c) If the corporation is organized on a directorship basis, a
dissolution may be revoked by the affirmative vote of a majority of
the directors who are then in office. The corporation shall give
the directors the same notice of the meeting that is required in
section 804 for dissolution.
(d) (b)
A certificate of revocation, stating
that states that
dissolution
is revoked pursuant to under
this section, and giving
includes
the information required by under section
804(6), 804(8),
shall be executed and filed on behalf of the corporation.
Sec. 815. A corporation whose term has expired may renew its
corporate
existence, if a proceeding pursuant to under section 851
is not pending, in the following manner:
(a)
The board shall adopt adopts
a resolution that to renew
the
corporation's corporate existence. be renewed.
(b)
If the corporation is organized upon on a stock or
membership basis, the corporation submits the proposed renewal
shall
be submitted for approval at a
meeting of shareholders or
members.
Notice shall be given The
corporation shall give notice to
each shareholder or member of record that is entitled to vote at
the
meeting within the time and in the manner provided in under
this act for the giving of notice of meetings of shareholders or
members. ,
and The notice shall state that a purpose of the meeting
is
to vote on the renewal of corporate existence. At the meeting, a
vote
of shareholders or members that are entitled
to vote thereat
shall
be taken on the renewal shall
vote on the proposed renewal
which
shall be and the renewal is adopted upon receiving the
affirmative
vote of holders of if a majority of the outstanding
shares
or a majority of the votes
held by shareholders or members
of
the corporation that are entitled to vote thereon, and if a
class
of shareholders or members is entitled to vote thereon as a
class,
the affirmative vote of a majority of the outstanding shares
or
the members of each such class. on
the renewal are cast in favor
of the renewal. Unless a greater vote is required in the articles
of incorporation or in a bylaw adopted by the shareholders or
members,
the a proposed renewal shall is also
be adopted upon
receiving
an affirmative vote of if a majority of votes that are
held
by shareholders or members or shares
of shareholders present
in
person or by proxy at such the
meeting if are cast in favor of
the renewal and due notice of the time, place, and object of the
meeting
was is given by mail, at the last known address, to
each
shareholder
or member that is entitled to vote thereon on the
renewal
at least 20 days prior to before the
date of the meeting or
by publication in a publication distributed to its shareholders or
members
at least 20 days prior to before
the date of the meeting.
(c)
If the corporation is organized upon on a directorship
basis,
renewal shall be is authorized by the if it receives the
affirmative vote of a majority of directors who are then in office.
(d) If renewal of the corporate existence of a corporation is
approved, a certificate of renewal shall be executed and filed on
behalf
of the corporation , setting forth:that includes all of the
following:
(i) The name of the corporation.
(ii) The date and place of the meeting of shareholders or
members
approving at which the renewal of existence was approved,
if any.
(iii) A statement that renewal was approved by the requisite
vote
of the directors and the shareholders ,
directors and or
members under subdivision (b), or of the directors under
subdivision (c).
(iv) The duration of the corporation, if other than perpetual.
Sec.
817. (1) Upon filing of the When
a certificate of
revocation
of dissolution or is filed
under section 811 or a
certificate of renewal of existence is filed under section 815, the
revocation of the dissolution proceedings or the renewal of the
corporate existence becomes effective, and the corporation may
again conduct affairs.
(2) Revocation of dissolution under section 811 or renewal of
corporate
existence under section 815 does not relieve the a
corporation of any penalty or liability accrued against it under
any law of this state.
(3)
If during the period of dissolution or expiration of term
the
corporate name or a confusingly similar name has been assigned
to
another corporation, the administrator may require that the
corporation
adopt a different name upon filing of a certificate of
revocation
of dissolution or of renewal of existence.The
administrator may require a corporation that files a certificate of
revocation of dissolution under section 811 or a certificate of
renewal of corporate existence under section 815 to adopt a
corporate name that conforms to the requirements of section 212.
(4) The rights of a corporation that complies with this
section are the same as though a dissolution or expiration of term
has not occurred, and all contracts entered into and other rights
acquired during the interval are valid and enforceable.
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 the a corporation
is located or
for
Ingham county for dissolution of a
corporation upon on the
ground that the corporation has committed any of the following
acts:
(a) Procured its organization through fraud.
(b)
Repeatedly, and wilfully willfully, and materially
exceeded
the authority conferred upon on
it by law.
(c)
Repeatedly, and wilfully willfully, and materially
conducted its affairs in an unlawful manner.
(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. 823. (1) A corporation that is organized on a stock or
membership basis may be dissolved by a judgment entered in an
action brought in the circuit court for the county in which the
principal place of business or registered office of the corporation
is located by 1 or more directors or by 1 or more shareholders or
members that are entitled to vote in an election of directors of
the
corporation, upon proof of if
both of the following are proved:
(a) The directors of the corporation, or its shareholders or
members if a provision in the articles of incorporation authorized
under section 488(1) is in effect, are unable to agree by the
requisite vote on material matters respecting management of the
corporation's affairs, or the shareholders or members of the
corporation are so divided in voting power that they have failed to
elect
successors to a successor for
any director whose term has
expired
or would have expired upon on
the election and
qualification
of the director's his or
her successor.
(b) As a result of a condition stated in subdivision (a), the
corporation is unable to carry out its corporate purposes or
function effectively in the best interests of its creditors and
shareholders or members, if any, or the persons that the
corporation is organized to benefit.
(2) A corporation that is organized on a directorship basis
may be dissolved by a judgment entered in an action brought in the
circuit court for the county in which the principal place of
business or registered office of the corporation is located by 1 or
more directors or by 1 or more other persons that are entitled to
vote in an election of 1 or more of the directors of the
corporation, if both of the following are proved:
(a) The directors of the corporation are unable to agree by
the requisite vote on material matters respecting management of the
corporation's affairs, or the directors or other persons that are
entitled to vote in the election of 1 or more of the directors of
the corporation are so divided in voting power that they have
failed to elect a successor for to any director whose term has
expired or would have expired on the election and qualification of
his or her successor.
(b) As a result of a condition stated in subdivision (a), the
corporation is unable to carry out its corporate purposes or
function effectively in the best interests of its creditors and
shareholders or members, if any, or the persons that the
corporation is organized to benefit.
(3) A person or persons that files an action for dissolution
of a charitable purpose corporation under this section shall give
the attorney general written notice of the commencement of the
action by mail within 30 days after filing.
Sec. 841a. (1) A dissolved corporation may notify its existing
claimants in writing of the dissolution of the corporation at any
time after the effective date of the dissolution. The written
notice shall include all of the following:
(a) A description of the information that must be included in
a claim. The corporation may demand sufficient information to
permit it to make a reasonable judgment whether the claim should be
accepted or rejected.
(b) A mailing address where a claim may be sent.
(c) The deadline by which the dissolved corporation must
receive the claim. The deadline must be at least 6 months after the
effective date of the written notice.
(d) A statement that a claim that is not received by the
deadline is barred.
(2) Providing a notice under subsection (1) does not
constitute recognition that a person to which the notice is
directed has a valid claim against the corporation.
(3) A claim against a dissolved corporation is barred if
either of the following applies:
(a) If a claimant that was given written notice under
subsection (1) does not deliver the claim to the dissolved
corporation by the deadline.
(b) If a claimant whose claim is rejected by a written notice
of rejection by the dissolved corporation does not commence a
proceeding to enforce the claim within 90 days after the effective
date of the written notice of rejection.
(4) As used in this section and section 842a:
(a) The "effective date" of a written notice is the earliest
of the following:
(i) The date it is received.
(ii) Five days after its deposit in the United States mail, as
evidenced by the postmark, if it is mailed postpaid and correctly
addressed.
(iii) The date shown on the return receipt, if the notice is
sent by registered or certified mail, return receipt requested, and
the receipt is signed by or on behalf of the addressee.
(b) "Existing claim" means any claim or right against a
corporation, liquidated or unliquidated. The term does not mean a
contingent liability or a claim that is based on an event that
occurs after the effective date of dissolution of the corporation.
Sec. 842a. (1) In addition to providing notice under section
841a, a dissolved corporation may also publish notice of
dissolution at any time after the effective date of dissolution and
request that persons with claims against the corporation present
them in the manner described in the notice.
(2) A notice described in subsection (1) must meet both of the
following:
(a) Be published 1 time in a newspaper of general circulation
in the county where the dissolved corporation's principal office,
or if there is no principal office in this state, its registered
office, is or was last located.
(b) State that a claim against the corporation is barred
unless a proceeding to enforce the claim is commenced within 1 year
after the publication date of the newspaper notice.
(3) Subject to subsection (4), if a dissolved corporation
publishes a newspaper notice under subsection (2), the claim of
each of the following claimants is barred unless the claimant
commences a proceeding to enforce the claim against the dissolved
corporation within 1 year after the publication date of the
newspaper notice:
(a) A claimant that did not receive written notice under
section 841a.
(b) A claimant that sent a timely claim to the dissolved
corporation but the corporation did not act on the claim.
(c) A claimant whose claim is contingent or based on an event
that occurs after the effective date of dissolution.
(4) Notwithstanding subsection (3), a claimant that has an
existing claim that is known to the corporation at the time of
publication under subsection (2) and that did not receive written
notice under section 841a is not barred from commencing a
proceeding until 6 months after the claimant has actual notice of
the dissolution.
Sec.
851. (1) After a corporation has been is dissolved in any
manner, the corporation, a creditor, a shareholder, member, or a
director
may apply at any time to the circuit court for in the
county in which the principal place of business or registered
office of the corporation is located for a judgment that the
affairs of the corporation and the liquidation of its assets
continue
under supervision of the court. The court shall make such
any
orders and judgments as may be that are required,
including,
but not limited to, continuance of the liquidation of the
corporation's assets by its officers and directors under
supervision of the court, or the appointment of a receiver of the
corporation
to be that is vested with powers as that the
court
designates to liquidate the affairs of the corporation.
(2)
For good cause shown, and so long as if a corporation has
not
made complete distribution of its assets, the court ,
in an
action
pending under this section or otherwise, may permit a
creditor
who that has a claim
against the corporation and has not
filed
a delivered that claim to
the corporation or commenced a
proceeding
to enforce the claim within the time limited
by section
841,
limits under sections 841a
and 842a, or who has not commenced
an
action on a rejected claim within the time limited by section
842,
limits under sections 841a
and 842a, to file such the claim
or
to
commence such action a
proceeding within such the time
as that
the court directs.
Sec.
855. (1) Upon dissolution, the assets of All of the
following
apply if a corporation shall be
applied and distributed
as
follows:is dissolved:
(a)
All liabilities and obligations of the corporation shall
be
paid and discharged, or adequate provision shall be made
therefor.The
corporation shall pay or make provision for its debts,
obligations, and liabilities. Compliance with this subdivision
requires that, to the extent that a reasonable estimate is
possible, provision is made for those debts, obligations, and
liabilities that are anticipated to arise after the effective date
of dissolution. A corporation is not required to make provision for
any debt, obligation, or liability that is or is reasonably
anticipated to be barred under section 841a or 842a. The fact that
corporate assets are insufficient to satisfy claims that arise
after a dissolution does not create a presumption that the
corporation has failed to comply with this subdivision. A
corporation is considered to have made adequate provision for any
debt, obligation, or liability of the corporation if payment is
assumed or guaranteed in good faith by 1 or more financially
responsible corporations, other persons, or the United States
government or an agency of the United States government and the
provision, including the financial responsibility of the
corporations or other persons, was determined in good faith and
with reasonable care by the board to be adequate.
(b)
Assets held by the If the corporation upon holds any
assets
subject to a condition requiring that requires return,
transfer,
or conveyance, which and
the condition occurs by reason
of
the dissolution, shall be returned, transferred, or conveyed in
accordance
with such requirements.the
corporation shall return,
transfer, or convey those assets in compliance with those
conditions.
(c)
Assets received and held by the corporation If the
corporation received and holds any assets that are subject to
limitations
permitting that permit their use only for charitable,
religious, eleemosynary, benevolent, educational, or similar
purposes,
but that are not held upon subject to a condition
requiring
that requires return, transfer, or conveyance by reason
of
the dissolution under subdivision
(b), shall be transferred or
conveyed
in accordance the corporative
shall transfer or convey
those assets in a manner that complies with any provisions in the
articles
of incorporation or bylaws which that designate 1 or more
recipients or establish a mechanism for determining 1 or more
recipients
which that are domestic or foreign corporations,
societies, or organizations, including governmental agencies, that
are
engaged in activities furthering
such that further those
purposes. If the articles of incorporation or bylaws do not contain
such
provisions, such assets shall be transferred or conveyed a
provision described in this subdivision, the corporation shall
transfer or convey those assets to 1 or more domestic or foreign
corporations, societies, or organizations, including governmental
agencies, that are engaged in activities that are substantially
similar to or consistent with those of the dissolving corporation.
(d)
Other assets, if any, shall be distributed in accordance
with
The corporation shall
distribute any other assets in a manner
that complies with any provisions of the articles of incorporation
or
the bylaws which that determine the distributive rights of
shareholders or members, or any class or classes of shareholders or
members, or provide for distribution to others. Except as otherwise
provided in this section, the corporation may distribute assets
that are subject to this subdivision in cash, in kind, or both in
cash and in kind, to shareholders, members, or others according to
their respective rights and interests.
(e)
Any The corporation
distributes any remaining assets may
be
distributed to such any persons ,
societies, organizations,
domestic
or foreign corporations, or domestic or foreign business
corporations,
as may be specified in a plan of
distribution adopted
by the corporation.
(2) (f)
When there is no If any
assets of a dissolved
corporation are not subject to any provision for the distribution
of
assets described in subsection
(1), the assets remaining after
implementation
of the provisions of this section shall those
remaining escheat to the state.
Sec.
901. (1) Each A domestic corporation at least once in
each
calendar year shall cause prepare or have prepared a report of
the
corporation for the preceding fiscal year to be made and
distributed
distribute that report to each shareholder or member
thereof
or presented present the report at the annual meeting of
shareholders
or members , or, if
the corporation is organized upon
on a directorship basis, at the annual meeting of the board. The
report
shall include the corporation's year-end statement of assets
and
liabilities, including trust funds, and the principal change in
assets
and liabilities during the year preceding the date of the
report
and, if prepared by the corporation, its source and
application
of funds and any other information required by this
act.all of the following for the corporation's
preceding fiscal
year:
(a) Its income statement.
(b) Its year-end balance sheet, including trust funds and
funds restricted by donors or the board.
(c) Its statement of source and application of funds, if the
corporation prepares that statement.
(d) Any other information required under this act.
(2) A corporation may distribute the financial report required
under subsection (1) electronically, either by electronic
transmission of the report or by making the report available for
electronic transmission. If the report is distributed
electronically under this subsection, the corporation shall provide
the report in written form to a shareholder, member, or director on
request.
Sec.
911. (1) A Each domestic or corporation and each foreign
corporation authorized to conduct affairs in this state shall file
a
report with the administrator no not later than October 1 of
each
year.
The report , shall
be on a form approved by the
administrator,
shall signed by
an authorized officer or agent of
the corporation, and contain all of the following information:
(a) The name of the corporation.
(b) The name of its resident agent and address of its
registered office in this state.
(c) The names and business or residence addresses of its
officers
president, secretary, treasurer,
and directors.
(d)
Purposes The purposes of the corporation.
(e)
Nature The general nature and kind of business in which
the
corporation has is engaged. during the year covered by the
report.
(2)
The A corporation is not
required to file a report
required
under this section is not required to be filed in the year
of
incorporation or authorization by corporations that were if the
corporation was formed or authorized to do business on or after
January 1 and before October 1 of that year.
(3)
If there are not no changes in the information provided in
the last filed report required under subsection (1), the
corporation
shall certify may file a
report that certifies to the
administrator that no changes in the required information have
occurred
since the last filed report. The certification A report
filed
under this subsection shall be on a report
provided form
approved
by the administrator and filed no not later
than the date
required in subsection (1).
Sec.
913. The A county clerk may destroy the copies of the any
corporate
documents of a domestic or
foreign corporation which that
were
forwarded to the office of the county clerk in accordance with
Act
No. 327 of the Public Acts of 1931, as amended, being sections
450.62
to 450.192 of the Michigan Compiled Laws, and his or her
office under 1931 PA 327, MCL 450.98 to 450.192, any repealed
provisions of 1931 PA 327, or its predecessor act. The clerk may
destroy
these records or dispose of these records in accordance
with
them under section 5 of Act No. 271 of the Public Acts of
1913,
as amended, being section 399.5 of the Michigan Compiled
Laws.1913 PA 271, MCL 399.5.
Sec. 922. (1) If a domestic corporation neglects or refuses
for
2 consecutive years to file the its annual
reports report under
section
911 or pay the any annual
filing fee or a penalty added to
the fee required by law, and the neglect or refusal continues for a
period of 2 years from the date on which the annual report or
filing
fee was due, the corporation shall
be is automatically
dissolved 60 days after the expiration of the 2-year period. The
administrator shall notify the corporation of the impending
dissolution
not later than at least 90 days before the 2 years has
expired.
2-year period expires. Until a corporation has been is
dissolved under this subsection, it is entitled to issuance by the
administrator,
upon on request, of a certificate of good standing
setting
forth that it has been states that the corporation was
validly incorporated as a domestic corporation and that it is
validly in existence under the laws of this state.
(2) A charitable purpose corporation that is dissolved under
subsection
(1) shall provide notice of the dissolution to the
attorney
general within 60 90 days
after the date of the
dissolution
and shall not dispose of any of its assets without
written
approval of the attorney general.comply
with the
dissolution of charitable purpose corporation act, 1965 PA 169, MCL
450.251 to 450.253, or renew its corporate existence under section
925. This subsection does not prevent a corporation that is
dissolved under subsection (1) from renewing its corporate
existence under section 925 at any time.
(3) If a foreign corporation neglects or refuses for 1 year to
file
the its annual report under section 911 or pay the
annual
filing fee required by law, its certificate of authority is subject
to
revocation in accordance with under
section 1042. Until
revocation of its certificate of authority, or its withdrawal from
this state or termination of its existence, the foreign corporation
is
entitled to issuance by the administrator, upon on request,
of a
certificate
of good standing setting forth that it has been that
states
that it was validly authorized to transact
business conduct
affairs in this state and that it holds a valid certificate of
authority
to transact business conduct
affairs in this state.
(4) The administrator may electronically transmit a
notification of pending dissolution described in subsection (1) to
the resident agent of the corporation in the manner authorized by
the corporation.
Sec.
923. (1) The administrator for If
good cause is shown,
the
administrator may extend the time for
filing of a report under
section
911 for not more than 1 year from after the
due date of the
filing.
(2) The administrator may report promptly to the attorney
general
any failure or neglect under sections 922, 931, and or 932,
and
the attorney general may commence bring an action for
imposition
of to impose the prescribed penalties. When If a
domestic or foreign corporation neglects or refuses to file its
report
under section 911 within 90 days after the time prescribed
by
required under this act, the administrator shall notify the
corporation
of that fact by mail directed sent
to its registered
office within 90 days after the due date of the
filing. The
administrator's
certificate of mailing of the notice is prima facie
evidence
in all courts and places of that fact, and that the notice
was
received by the corporation.
(3) The administrator may electronically transmit a
notification described in subsection (2) to the resident agent of
the corporation in the manner authorized by the corporation.
Sec.
925. (1) A domestic corporation which has been that is
dissolved
pursuant to under section 922(1), or a foreign
corporation
whose certificate of authority has been is revoked
pursuant
to under section 922(2) or section 1042, may renew its
corporate existence or its certificate of authority by filing the
annual reports under section 911 for the last 5 years or any lesser
number of years in which the reports were not filed and paying the
annual filing fees for all the years for which they were not paid,
together
with a penalty of $5.00 for each delinquent report. Upon
filing
When the reports are
filed and payment of the fees
and
penalties are paid, the corporate existence or the certificate of
authority
is renewed. If during the intervening period the
corporate
name or a confusingly similar name has been assigned to
another
corporation, the The administrator may require that the
corporation
adopt or use within in this state a different corporate
name that conforms to the requirements of section 212.
(2)
Upon compliance with the provisions of this section, the
The
rights of the a corporation
shall be that complies
with this
section
are the same as though if a
dissolution or revocation had
has not taken place, and all contracts entered into and other
rights
acquired during the interval shall be are valid and
enforceable.
Sec.
932. (1) A person who shall
not knowingly makes make or
files
file or a person who knowingly assists assist in
the making
or filing of a false or fraudulent report, certificate, or other
statement
that a domestic or foreign
corporation is required by
this
act to be filed by a corporation to
file under this act with a
public
officer of this state, or and
a person knowing the same to
be
that knows that a report,
certificate or statement is false or
fraudulent,
who procures, counsels, or advises shall not procure,
counsel
or advise the making or filing of such
a that report,
certificate,
or statement. , A
person that violates this subsection
is
guilty of a misdemeanor and is subject to punishable by a fine
of
not to exceed more than $1,000.00 for each such
offense.violation of this subsection.
(2)
An officer or agent of a corporation who shall not
knowingly
falsifies falsify or wrongfully alters alter the
books,
records, or accounts of a corporation. An officer or agent that
violates
this subsection is guilty of a
misdemeanor and is subject
to
punishable by a fine of not to exceed more than $1,000.00 for
each
such offense.violation of
this subsection.
Sec.
1001. A foreign corporation which is that was authorized
to
conduct affairs in this state on the effective date of this act,
January 1, 1983, for a purpose for which a corporation might secure
such
authority to conduct affairs in this state under this act, has
the
rights and privileges applicable to a foreign corporation which
that
receives a certificate of authority to transact
business
conduct
affairs in this state under this act. From
the effective
date
of this act Beginning on
January 1, 1983, the corporation is
subject to the duties, restrictions, penalties, and liabilities
prescribed
herein for under this act
that are applicable to a
foreign
corporation which that receives a certificate of authority
to
transact business conduct
affairs in this state under this act.
Sec.
1002. (1) A foreign corporation which that receives
a
certificate of authority under this act, until a certificate of
revocation
or of withdrawal is issued as provided in under this
act, has the same rights and privileges as a domestic corporation
organized
for the purposes set forth contained
in the application
pursuant
to under which the certificate of authority is issued.
Except as otherwise provided in this act, the corporation is
subject to the same duties, restrictions, penalties, and
liabilities
now or hereafter imposed upon of
a similar domestic
corporation. of
like character.
(2) This act does not authorize this state to regulate the
organization or internal affairs of a foreign corporation
authorized to transact business in this state.
Sec.
1012. (1) Without excluding other activities which 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, or defending, an action or suit or an
administrative
or arbitrative proceeding, or effecting the
settlement
thereof or the settlement of a claim or dispute.or
settling any proceeding.
(b)
Holding meetings of its the
board of directors,
shareholders,
or members or carrying on any other activities
concerning
its internal corporate affairs.
(c)
Maintaining a bank account.accounts.
(d)
Effecting sales through an independent
contractor.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) (e)
Soliciting or procuring obtaining orders, whether by
mail
or through employees or agents or otherwise, where such if the
orders
require acceptance without outside
this state before
becoming
binding they become contracts.
(f)
Borrowing money, with or without security.
(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) (g)
Securing or collecting debts or
enforcing any right in
property
securing the same.mortgages
and security interests in
property that secures those debts.
(h)
Transacting any business in interstate commerce.
(j) Owning, without more, real or personal property.
(k)
(i) Conducting an isolated transaction that is completed
within
30 days and that is not 1 transaction in the course of a
number
of repeated transactions of like
a similar nature.
(l) Transacting business in interstate commerce.
(2) This section does not apply in determining the contracts
or
activities which that may subject a foreign corporation to
service of process or taxation in this state or to regulation under
any
other act statute of this state.
Sec. 1013. (1) A foreign corporation may acquire, or through
another person entitled to conduct affairs or transact business in
this state may make, a loan that is insured or guaranteed in whole
or in part by the federal department of housing and urban
development, department of veteran's affairs, or a successor or
other agency of the federal government and that is secured in whole
or in part by 1 or more mortgages of real property that is located
in this state, and a foreign corporation may purchase a loan that
is secured in whole or in part by a mortgage of real property that
is located in this state, without maintaining authority to conduct
affairs in this state under this act or any other law of this state
that relates to qualification or maintaining authority to conduct
affairs in this state and without paying a fee to qualify or
maintain that authority to conduct affairs in this state.
(2) A failure of a foreign corporation described in subsection
(1) to qualify or maintain authority to conduct affairs in this
state under this act or a failure to pay fees to qualify or
maintain authority to conduct affairs in this state does not affect
or impair its ownership of a loan or its right to collect and
service the loan through another person that is entitled to conduct
affairs or transact business in this state, or its right to enforce
a loan or to acquire, hold, protect, convey, lease, or otherwise
contract and deal with respect to any property mortgaged as
security for the loan.
(3) As used in this section, "loan" includes an interest or
participation in a loan.
Sec. 1015. To procure a certificate of authority to conduct
affairs in this state, a foreign corporation shall file with the
administrator
an application setting forth:that
contains all of the
following:
(a) The name of the corporation and the jurisdiction of its
incorporation.
(b) The date of incorporation and the period of duration of
the corporation.
(c) The street address, and the mailing address if it is
different from the street address, of its main business or
headquarters office.
(d) The street address of its registered office in this state,
the mailing address if it is different from the street address, and
the
name of its resident agent in this state at such that address,
together with a statement that the resident agent is an agent of
the
corporation upon whom on
which process against the corporation
may be served.
(e)
The character of the affairs it is to transact conduct in
this state, together with a statement that it is authorized to
conduct
such those affairs in the jurisdiction of its
incorporation.
(f)
Such Any additional information as that the
administrator
may
require reasonably requires in order to determine whether the
corporation is entitled to a certificate of authority to conduct
affairs in this state and to determine the fees and taxes
prescribed by law.
Sec.
1016. (1) A copy of the articles of incorporation and all
amendments
thereto, certified by the proper officer of the
jurisdiction
of its incorporation shall be attached to the
application
of a foreign corporation. A foreign corporation shall
attach
a certificate setting forth to an application for authority
to conduct affairs in this state under section 1015 that states
that the corporation is in good standing under the laws of the
jurisdiction of its incorporation, is executed by the official of
the
jurisdiction who has custody of the records pertaining that
pertain
to corporations, and is dated
not earlier more than 30 days
before
filing of the the date the
application ,
shall also be
attached
to the application. is filed.
If such the certificate
is
in a foreign language, the foreign corporation shall attach a
translation
thereof of the certificate
under oath of the translator
shall
be attached thereto.to the
certificate.
(2)
Upon filing of the If a
foreign corporation files an
application described in subsection (1), accompanied by the filing
and franchise fees prescribed by law, the administrator shall issue
to the foreign corporation a certificate of authority to conduct
affairs
in this state. Thereupon When
a certificate of authority is
issued, the foreign corporation is authorized to conduct in this
state any affairs of the character set forth in its application
that a domestic corporation formed under this act may lawfully
transact. The authority granted under this subsection continues so
long as the foreign corporation retains its authority to conduct
such
its affairs in the jurisdiction of its incorporation and
its
authority
to conduct affairs in this state has not been is not
surrendered, suspended, or revoked.
Sec.
1021. (1) When the articles of incorporation of Except as
otherwise provided in this section, a foreign corporation
authorized
to conduct affairs in this state are amended, the
foreign
corporation, within 60 days after the amendment is
effective,
shall file with the administrator a copy of the
amendment
certified by the proper officers of the jurisdiction of
its
incorporation.that changes its corporate name, or enlarges,
limits, or otherwise changes the affairs that the foreign
corporation proposes to conduct in this state, or makes any other
change that affects the information included in its application for
certificate of authority to conduct affairs in this state, shall
file an amended application with the administrator within 30 days
after the time a change becomes effective. A foreign corporation
may make a change in its registered office or resident agent under
section 242. An amended application under this subsection shall
state all of the following:
(a) The name of the foreign corporation as it appears on the
records of the administrator and the jurisdiction of its
incorporation.
(b) The date the foreign corporation was authorized to conduct
affairs in this state.
(c) If the name of the foreign corporation has changed, a
statement of the name relinquished, a statement of the new name,
and a statement that the name was properly changed under the laws
of the jurisdiction of its incorporation and the date the name was
changed.
(d) If the affairs that the foreign corporation proposes to
conduct in this state enlarge, limit, or otherwise change the
affairs the foreign corporation is authorized to conduct, a
statement reflecting the change and a statement that the foreign
corporation is authorized to conduct in the jurisdiction of its
incorporation the affairs that it proposes to conduct in this
state.
(e) Any additional information as the administrator may
require.
(2)
When If a foreign corporation that is authorized to
conduct
affairs in this state is a party to a merger,
consolidation,
or similar corporate action taken in accordance with
the
laws of the jurisdiction of its incorporation, the foreign
corporation,
within 60 days after the effective date thereof, shall
file
with the administrator a copy of the certificate of merger,
consolidation,
or similar corporate action, certified by the proper
officers
of the jurisdiction of its incorporation.is the survivor
of a merger permitted by the laws of the jurisdiction in which the
foreign corporation is incorporated, within 30 days after the
merger becomes effective, the foreign corporation shall file a
certificate that is issued by the proper officer of the
jurisdiction of its incorporation and attests to the occurrence of
the merger. If the merger has changed the corporate name of the
foreign corporation, or has enlarged, limited, or changed the
affairs that the foreign corporation proposes to conduct in this
state, or changed any of the information included in the
application, the foreign corporation shall comply with subsection
(1).
(3) If a foreign corporation that is authorized to conduct
affairs in this state is the survivor of a conversion under the
laws of the jurisdiction in which the foreign corporation is
incorporated, the foreign corporation shall, within 30 days after
the conversion becomes effective, file a certificate that is issued
by the proper officers of the jurisdiction of its incorporation and
attests to the occurrence of the conversion. If the conversion has
changed the corporate name of the foreign corporation, or has
enlarged, limited, or changed the affairs the foreign corporation
that proposes to conduct in this state or has affected the
information included in the application, the foreign corporation
shall comply with subsection (1).
Sec.
1032. Upon filing the If a
foreign corporation files an
application
for withdrawal and payment of pays
the filing fees
prescribed by law, the administrator shall issue to the foreign
corporation
a certificate of withdrawal, whereupon:and both of the
following shall occur:
(a) The authority of the foreign corporation to conduct
affairs
in this state shall cease.is
terminated.
(b) The authority of its resident agent in this state to
accept
service of process against the
foreign corporation is deemed
revoked.
Sec.
1035. (1) When If a foreign corporation that is
authorized to conduct affairs in this state is dissolved, or its
authority or existence is otherwise terminated or canceled in the
jurisdiction of its incorporation, or it is merged into, converted
into, or consolidated with another corporation, there
shall be
filed
or business organization, the
foreign corporation or business
organization
shall file with the administrator such
any information
as
may be that is required by the administrator to determine and
assess
any unpaid fees payable by such the
foreign corporation as
required by law and either of the following:
(a) A certificate of the official of the jurisdiction of
incorporation of the foreign corporation who has custody of the
records pertaining to corporations, evidencing the occurrence of
any
such the event.
(b) A certified copy of an order or judgment of a court of
competent jurisdiction directing dissolution of the foreign
corporation, the termination of its existence, or the cancellation
of its authority.
(2)
Upon filing of the If a
foreign corporation files a
certificate,
order, or judgment under
subsection (1) and payment of
pays
the filing fees fee prescribed
by law, the administrator shall
issue
a certificate of withdrawal with like that has the same
effect
as provided in a
certificate of withdrawal under section
1032.
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, upon
the conditions prescribed in
the manner described in
section
1042, upon on any of the following
grounds:
(a) The corporation fails to maintain a resident agent in this
state
as required by under this act.
(b)
The corporation, after change of changing its registered
office
or resident agent, fails to file a statement of such the
change
as required by under this act.
(c)
The corporation , after amending its articles of
incorporation,
fails to file a copy of the
amendment as an amended
application
if required by under this
act.
(d)
The corporation, after becoming a party to the survivor in
a
merger, consolidation, or similar corporation action, conversion,
fails
to file a copy of the certificate that attests to the
occurrence of the
merger, consolidation, or similar
corporate
action
conversion as required by under this act.
(e) The corporation fails to file its annual report within the
time
required by under this act,
or fails to pay an annual fee
required under this act.
Sec. 1042. (1) The administrator shall revoke a certificate of
authority
of a foreign corporation only when the administrator has
given
if he or she gives the foreign
corporation not less than at
least 90 days' notice, by mail or by electronic transmission under
subsection
(2), that a default under section 922
1041 exists and
that
he or she will revoke its certificate of authority will be
revoked
unless the default is cured within
90 days after mailing of
the notice is mailed or electronically transmitted, and the
corporation
fails before revocation within
the 90-day period to
cure the default.
(2)
The notice shall be sent by first class mail administrator
may electronically transmit a notice described in subsection (1) to
the
resident agent of the corporation at its registered office in
this
state and at its main business or headquarters office as these
offices
are on record in the office of the administrator. in the
manner authorized by the corporation.
(3)
Upon revoking such If he
or she revokes a certificate of
authority under this section, the administrator shall issue a
certificate
of revocation and shall mail, a copy to the or if
authorized by the corporation, may electronically transmit, a copy
of the certificate of revocation to the resident agent of the
corporation. at
each of the addresses designated in subsection (2).
(4)
The issuance of the Issuing
a certificate of revocation
under
this section has the same force and
effect as issuance of
issuing a certificate of withdrawal under section 1031.
Sec.
1051. (1) A foreign corporation conducting that conducts
affairs in this state without a certificate of authority shall not
maintain an action or proceeding in any court of this state until
the
corporation has obtained obtains
a certificate of authority. An
action
commenced by a foreign corporation having no that does not
have a certificate of authority shall not be dismissed if the
foreign
corporation obtains a certificate of
authority has been
obtained
before the order of dismissal. If an action or proceeding
is dismissed because a foreign corporation does not have a
certificate of authority, the order of dismissal shall be without
prejudice to the recommencement of the action or proceeding by the
foreign corporation after it obtains a certificate of authority.
This
prohibition subsection applies to
the foreign corporation and
to any of the following:
(a) A successor in interest of the foreign corporation, except
a receiver, trustee in bankruptcy, or other representative of
creditors of the corporation.
(b) An assignee of the foreign corporation, except an assignee
for
value who that accepts an assignment without knowledge that the
foreign
corporation should have but has did
not obtained obtain a
certificate of authority in this state.
(2) Failure of a foreign corporation to obtain a certificate
of authority to conduct affairs in this state does not impair the
validity of a contract or act of the corporation, and does not
prevent the corporation from defending an action or proceeding in a
court of this state.
Sec.
1060. (1) The fees a person shall pay to the
administrator
for the purposes described in this section are as
follows:When delivering a document described in this
subsection to
the administrator for filing, the person shall pay the
administrator whichever of the following fees apply to that
document:
(a)
Examining, filing, and copying of articles Articles of
incorporation of a domestic corporation, $10.00.
(b)
Examining and filing articles or certificate of
incorporation,
and other papers connected with the application An
application
of a foreign corporation for admission
a certificate of
authority to conduct affairs in this state, $10.00.
(c)
Examining, filing, and copying an amendment An amendment
to the articles of incorporation of a domestic corporation, $10.00.
(d)
Examining and filing an amendment to the articles of a
foreign
corporation, An amended
application for certificate of
authority to conduct affairs in this state, $10.00.
(e)
Examining, filing, and copying a certificate A certificate
of
merger or consolidation conversion
under chapter 7, $50.00.
(f)
Examining and filing a certificate of A certificate
attesting
to the occurrence of a merger or
consolidation of a
foreign
corporation , under
section 1021, $10.00.
(g)
Examining, filing, and copying a certificate A certificate
of dissolution, $10.00.
(h)
Examining and filing an application An application for
withdrawal and issuance of a certificate of withdrawal of a foreign
corporation, $10.00.
(i)
Examining, filing, and copying an application An
application for reservation of corporate name, $10.00.
(j)
Examining, filing, and copying a certificate A certificate
of assumed name or certificate of termination of assumed name,
$10.00.
(k)
Examining, filing, and copying a statement A statement of
change of registered office or resident agent, $5.00.
(l) Examining, filing, and copying restated Restated articles
of
incorporation of a domestic
corporation, corporations,
$10.00.
(m)
Examining, filing, and copying a certificate A certificate
of abandonment, $10.00.
(n)
Examining, filing, and copying a certificate A certificate
of correction, $10.00.
(o)
Examining, filing, and copying a certificate A certificate
of revocation of dissolution proceedings, $10.00.
(p)
Examining, filing, and copying a certificate A certificate
of renewal of corporate existence, $10.00.
(q)
Filing and examination of a For
examining a special report
required by law, $2.00.
(r)
Examining and filing a certificate of election, $10.00.A
certificate of registration of corporate name of a foreign
corporation, $50.00.
(s) A certificate of renewal of registration of corporate name
of a foreign corporation, $50.00.
(t) A certificate of termination of registration of corporate
name of a foreign corporation, $10.00.
(u) (s)
Filing For filing a report required under section 911,
$10.00 if paid before October 1, 2003 or after September 30, 2015.
After September 30, 2003 and before October 1, 2015, the fee is
Senate Bill No. 623 (H-1)* as amended December 16, 2014
$20.00.
(2)
A corporation shall pay the applicable fee described in
this
section to the administrator at the time of filing or when the
service
is rendered by the administrator. The
fees described in
this
section subsection (1) are in addition to any franchise fees
prescribed
in under this act.
The administrator shall not refund
all or any part of a fee described in this section.
(3) Except as provided in subsection [(8)], the administrator
shall deposit all fees received and collected under this section in
the state treasury to the credit of the administrator, who may only
use the money credited pursuant to legislative appropriation and
only in carrying out those duties of the department required by
law.
(4) (3)
A person shall pay a minimum charge
of $1.00 for each
certificate and 50 cents per folio to the administrator for
certifying a part of a file or record pertaining to a corporation
if a fee for that service is not described in subsection (1). The
administrator may furnish copies of documents, reports, and papers
required or permitted by law to be filed with the administrator,
and shall charge for those copies the fee established in a schedule
of fees adopted by the administrator with the approval of the state
administrative board. The administrator shall retain the revenue
collected under this subsection, and the department shall use it to
defray the costs for its copying and certifying services.
(4)
The administrator shall not refund all or any part of a
fee
described in this section. The administrator shall deposit all
fees
received and collected under this section in the state
Senate Bill No. 623 (H-1)* as amended December 16, 2014
treasury
to the credit of the administrator, who may only use the
money
credited pursuant to legislative appropriation and only in
carrying
out those duties of the department required by law.
[(5) The administrator
shall waive any the fee for filing initial
articles of incorporation, otherwise required under this section
subsection (1), if a majority of the initial members or directors of the
corporation responsible for paying the
fee are, and the corporation
provides proof satisfactory to the
administrator that a majority of the
members or directors are, honorably
discharged veterans of the armed
forces of the United States.of a membership corporation,
initial directors of a directorship corporation, or initial shareholders of a
stock corporation, as applicable, are, or if applicable the initial members,
initial directors, or initial shareholders will be, individuals who served in
the armed forces and were separated from that service with an honorable
character of service or under honorable conditions (general) character of
service.
(6) To request a fee waiver under subsection (5), the person that is submitting the document for filing shall submit both of the following to the administrator with the document:
(a) A signed affidavit requesting the fee waiver and certifying that a majority of the initial members of the membership corporation, initial directors of the directorship corporation, or initial shareholders of the stock corporation, as applicable, are, or if applicable the initial members, initial directors, or initial shareholders will be, individuals who served in the armed forces and were separated from that service with an honorable character of service or under honorable conditions (general) character of service.
(b) Copies of form DD214 or form DD215, or any other form that is satisfactory to the department, for each individual described in subsection (5) who is or will be an initial member of the corporation, initial director of the corporation, or initial shareholder of the corporation, as applicable.
[(7)] If a person pays a fee or penalty on behalf of a domestic
or foreign corporation by check and the check is dishonored, the
fee is unpaid and the administrator shall rescind the filing of all
related documents.
[(8)] The administrator may accept a credit card in lieu of cash
or check as payment of a fee under this act. The administrator
shall determine which credit cards he or she shall accept for
payment.
[(9)] The administrator may charge a nonrefundable fee of up to
$50.00 for any document submitted or certificate sent by facsimile
or electronic transmission. The administrator shall retain the
revenue collected under this subsection and the department shall
use it in carrying out its duties required by law.
[(10) As used in this section, "armed forces" means that term as defined in section 2 of the veteran right to employment services act, 1994 PA 39, MCL 35.1092.]
Sec. 1104. As used in this chapter:
(a) "Insolvent" means being unable to pay debts as they become
due in the usual course of a debtor's business.
(b)
(1) "Member capital" means the assets which
that a member
must provide by payment, transfer, or allocation of net savings to
a cooperative as a condition of admission to or retention of
membership and with respect to which the member has rights to
dividends,
redemption, or distributions on dissolution pursuant to
under this chapter.
(c) (2)
"Membership fee" means a
nonredeemable fee which that
a member must pay to a cooperative as a condition of admission to
or
retention of membership in the cooperative which that is
not
member capital or a fee for goods, services, or facilities.
(d) (3)
"Patron" means a person
whose economic exchange is a
regular part of the business of a cooperative or foreign
cooperative,
which if the economic exchange is the same type of
regular economic exchange engaged in by any class of members.
(e) (4)
"Patronage" means the
selling or providing of goods,
services, or facilities to, or the buying of goods, services, or
facilities
from members or other persons, or the providing of labor
or services to or by a cooperative.
(f) (5)
"Redemption" means any
method by which a cooperative
exchanges cash or debt instruments for member capital, including,
but not limited to, repurchase, redemption, refund, or repayment.
(g) (6)
"Referendum" means a
method of member voting that
utilizes secret ballot and established polling places as provided
in the cooperative's bylaws or under section 409.
(h) (7)
"Unincorporated
cooperative" means either of the
following:
(i) (a)
An association of 2 or more persons
that is organized
on
a cooperative basis which and
that is not a corporation.
(ii) (b)
An association of 2 or more persons
that is organized
under
the laws of another state operating and operates on either a
cooperative
basis or a similar basis provided in another that state
as
the criterion for being a cooperative, which and that is
not a
corporation.
Sec.
1107. To the extent that sections 301(3) 301(4) and (4),
301(5), 855, and 901 are inconsistent with this chapter, they shall
not apply to cooperatives.
Sec.
1145. Notwithstanding section 611(4), 703(2), 703a(2)(d),
753(4),
or 804(4), 804(6), unless the articles of incorporation
provide for a higher vote for passage, amendment of the articles of
incorporation,
amendment of the bylaws which that
alters member
voting
rights or member capital, merger, consolidation, disposition
of all or substantially all of the assets of the corporation, or
dissolution
shall be adopted require
approval by the affirmative
vote of a majority of the votes cast by members that are eligible
to
vote thereon, on that
matter, and if a class is eligible to
vote
thereon
on that matter as a class, the affirmative vote of a
majority
of the votes cast by members of each that class. Such An
action
may only described in this
section shall be taken at a
meeting called according to the notice provisions of section 404.
Sec. 1162. In the event of an amendment to the articles of
incorporation
or bylaws, merger, consolidation, or
disposition of
substantially
all of the assets of the a
cooperative, or a
dissolution,
which that results in a distribution of all or
substantially all of the assets of the corporation to members, the
corporation
shall make that distribution shall
be in the manner and
order provided in section 1183.
Enacting section 1. Sections 312, 315, 361, 363, 365, 371,
411, 447, 481, 491, 492, 493, 515, 545, 546, 564, 703, 721, 722,
723, 731, 732, 736, 737, 825, 841, 842, 843, and 935 of the
nonprofit corporation act, 1982 PA 162, MCL 450.2312, 450.2315,
450.2361, 450.2363, 450.2365, 450.2371, 450.2411, 450.2447,
450.2481, 450.2491, 450.2492, 450.2493, 450.2515, 450.2545,
450.2546, 450.2564, 450.2703, 450.2721, 450.2722, 450.2723,
450.2731, 450.2732, 450.2736, 450.2737, 450.2825, 450.2841,
450.2842, 450.2843, and 450.2935, are repealed.
Enacting section 2. This amendatory act does not take effect
unless all of the following bills of the 97th Legislature are
enacted into law:
(a) Senate Bill No. 624.
(b) Senate Bill No. 929.
