SB-1320, As Passed Senate, November 28, 2012
SENATE BILL No. 1320
September 25,
2012, Introduced by Senators KOWALL, JONES and SCHUITMAKER and referred to the
Committee on Judiciary.
A
bill to amend 1972 PA 284, entitled
"Business
corporation act,"
by
amending sections 105, 106, 108, 109, 123, 201, 202, 211, 241,
405,
488, 528, 564b, 565, 569, 611, 631, 641, 642, 643, 703a, 753,
762,
776, 781, 784, 804, 911, 1021, 1035, and 1041 (MCL 450.1105,
450.1106,
450.1108, 450.1109, 450.1123, 450.1201, 450.1202,
450.1211,
450.1241, 450.1405, 450.1488, 450.1528, 450.1564b,
450.1565,
450.1569, 450.1611, 450.1631, 450.1641, 450.1642,
450.1643,
450.1703a, 450.1753, 450.1762, 450.1776, 450.1781,
450.1784,
450.1804, 450.1911, 450.2021, 450.2035, and 450.2041),
sections
105, 123, 405, 488, 703a, and 753 as amended by 2001 PA
57,
section 106 as amended by 2006 PA 68, sections 108, 202, 804,
and
1035 as amended by 1989 PA 121, sections 109, 565, 643, and
1021
as amended by 1993 PA 91, sections 201, 211, 241, 564b, and
762
as amended by 2008 PA 402, section 528 as amended by 2006 PA
65,
section 569 as amended by 1987 PA 1, section 611 as amended by
2006
PA 64, sections 631, 641, and 1041 as amended by 1997 PA 118,
section
642 as amended by 1982 PA 407, sections 776, 781, and 784
as
amended by 1989 PA 31, and section 911 as amended by 2007 PA
182,
and by adding section 529 and chapter 2A; and to repeal acts
and
parts of acts.
THE
PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
105. (1) "Administrator" means the chief officer of the
department
or of any other agency or department authorized by law
to
administer this act, or his or her designated representative.
(2)
"Articles of incorporation" includes any of the following:
(a)
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.
(b)
A special act or charter creating a domestic or foreign
corporation,
as amended, supplemented, or restated.
(3)
"Authorized shares" means shares of all classes that a
corporation
is authorized to issue.
(4)
"Board" means board of directors or other governing board
of
a corporation.
(5)
"Bonds" includes secured and unsecured bonds, debentures,
and
notes.
Sec.
106. (1) "Corporation" or "domestic corporation" means a
corporation
formed under this act, or existing on January 1, 1973
and
formed under any other statute of this state for a purpose for
which
a corporation may be formed under this act.
(2)
"Department" means the department of labor and economic
growth.licensing and regulatory affairs.
(3)
"Director" means a member of the board of a corporation.
(4)
"Distribution" means a direct or indirect transfer of
money
or other property, except the corporation's shares, or the
incurrence
of indebtedness by the corporation to or for the benefit
of
its shareholders in respect to the corporation's shares. A
distribution
may be in the form of a dividend, a purchase,
redemption
or other acquisition of shares, an issuance of
indebtedness,
or any other declaration or payment to or for the
benefit
of the shareholders.
(5)
"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.
108. (1) "Nonprofit corporation" or "domestic nonprofit
corporation"
means a nonprofit, corporation subject to the
nonprofit
corporation act, Act No. 162 of the Public Acts of 1982,
being
sections 450.2101 to 450.3192 of the Michigan Compiled
Laws.1982 PA 162, MCL 450.2101 to 450.3192.
(2)
"Person" means an individual, a partnership, a domestic or
foreign
corporation, a limited liability
company, or any other
association,
corporation, trust, or legal entity.
(3)
"Professional corporation" means a corporation
incorporated
under former 1962 PA 192, or a corporation
incorporated
under this act and governed by chapter 2A.
Sec.
109. (1) "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.
(2)
(1) "Shareholder" means a person holding that holds units
of
proprietary interest in a corporation and is considered to be
synonymous
with "member" in a nonstock corporation.
(3) (2)
"Shares" means the units
into which proprietary
interests
in a corporation are divided and is considered to be
synonymous
with "membership" in a nonstock corporation.
Sec.
123. (1) Unless otherwise provided in, or inconsistent
with,
the act under which a corporation is or has been formed, this
act
applies to deposit and security companies, summer resort
associations,
brine pipeline companies, telegraph companies,
telephone
companies, safety and collateral deposit companies,
canal,
river, and harbor improvement companies, cemetery, burial,
and
cremation associations, railroad, bridge, and tunnel companies,
and
agricultural and horticultural fair
societies. , and
professional
service corporations formed under the professional
service
corporation act, 1962 PA 192, MCL 450.221 to 450.235. The
entities
specified in this subsection shall not be incorporated
under
this act.
(2)
This act does not apply to insurance, surety, savings and
loan
associations, fraternal benefit societies, and banking
corporations.
Sec.
201. (1) One or more persons may be the incorporators of
a
corporation by signing and filing articles of incorporation for
the
corporation.
(2)
A corporation incorporated to provide 1 or more services
in
a learned profession must be incorporated as a professional
corporation
under chapter 2A.
(3)
A corporation incorporated to provide professional
services
other than services in a learned profession may comply
with
chapter 2A and incorporate as a professional corporation, or
may
incorporate as a corporation under chapter 2 without complying
with
chapter 2A.
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 formed. It All
of
the following apply for purposes of this subdivision:
(i) Except as otherwise provided in subparagraph
(ii) or (iii),
it
is a sufficient compliance with this
subdivision to state
substantially,
alone or with specifically enumerated purposes, that
the
corporation may engage in any activity within the purposes for
which
corporations may be formed under the business corporation
act,
and all activities shall by the statement be considered within
the
purposes of the corporation, subject to expressed limitations.
(ii) Any
corporation which that proposes to conduct educational
purposes
shall state the purposes and shall comply with all
requirements
of sections 170 to 177 of Act No. 327 of the Public
Acts
of 1931, being sections 450.170 to 450.177 of the Michigan
Compiled
Laws.1931 PA 327, MCL 450.170
to 450.177.
(iii) A professional corporation shall comply with
section
283(2)
and (3).
(c)
The aggregate number of shares which that the corporation
has
authority to issue.
(d)
If the shares are, or are to be, divided into classes, or
into
classes and series, the designation of each class and series,
the
number of shares in each class and series, and a statement of
the
relative rights, preferences and limitations of the shares of
each
class and series, to the extent that the designations,
numbers,
relative rights, preferences, and limitations have been
determined.
(e)
If any class of shares is to be divided into series, a
statement
of any authority vested in the board to divide the class
of
shares into series, and to determine or change for any series
its
designation, number of shares, relative rights, preferences and
limitations.
(f)
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.
(g)
The names and addresses of the incorporators.
(h)
The duration of the corporation if other than perpetual.
Sec.
211. The Except as
provided in chapter 2A for a
professional
corporation, the corporate name of a
domestic
corporation
shall contain the word "corporation", "company",
"incorporated",
or "limited" or shall contain 1 of the following
abbreviations:
corp., co., inc., or ltd., with or without periods.
Sec.
241. (1) Each domestic corporation and each foreign
corporation
authorized to transact business in this state shall
have
and continuously maintain in this state both of the following:
(a)
A registered office, which may be the same as its place of
business.
(b)
A resident agent. A resident agent may be either an
individual
resident in of this state; whose business office or
residence
is identical with the registered office; a domestic
corporation
or a limited liability company; or a foreign
corporation
or limited liability company authorized to transact
business
in this state. that has a business office identical with
the
registered office.
(2)
The address of the business office or residence of a
resident
agent must be the same as the address of the registered
office.
Chapter 2A
Professional Corporations
Sec.
281. (1) A corporation must incorporate as a professional
corporation
under this chapter if it is incorporated to provide 1
or
more services in a learned profession, whether or not it is
providing
other professional services. A corporation may comply
with
this chapter and incorporate as a professional corporation if
it
is incorporated to provide 1 or more professional services, none
of
which are services in a learned profession, or may incorporate
as
a corporation that is not required to comply with this chapter.
(2)
A corporation that is incorporated as a professional
corporation
and its shareholders are subject to this chapter and
this
act. If there is a conflict between an applicable provision of
this
chapter and another provision of this act, the provision of
this
chapter takes precedence.
(3)
This chapter applies to a corporation incorporated under
former
1962 PA 192, or to a corporation that on the effective date
of
this chapter was governed by former 1962 PA 192 as if
incorporated
under that act, as if that corporation were
incorporated
under this act and pursuant to this chapter.
(4)
This chapter does not apply to a corporation organized in
this
state before the enactment of former 1962 PA 192 to provide
professional
services to the public, and that did not previously
amend
its articles of incorporation to bring itself within the
provisions
of former 1962 PA 192, unless that corporation amends
its
articles of incorporation in such a manner that it is
consistent
with all the provisions of this chapter and
affirmatively
states in its amended articles of incorporation that
the
shareholders have elected to bring the corporation within the
provisions
of this chapter and this act.
Sec.
282. As used in this chapter:
(a)
"Licensed person" means an individual who is duly licensed
or
otherwise legally authorized to practice a professional service
by
a court, department, board, commission, or agency of this state
or
another jurisdiction. The term includes an entity if all of its
owners
are licensed persons.
(b)
"Professional service" means a type of personal service to
the
public that requires that the provider obtain a license or
other
legal authorization as a condition precedent to providing
that
service. Professional service includes, but is not limited to,
services
provided by a certified or other public accountant,
chiropractor,
dentist, optometrist, veterinarian, osteopathic
physician,
physician, surgeon, podiatrist, chiropodist, physician's
assistant,
architect, professional engineer, land surveyor, or
attorney-at-law.
Sec.
283. (1) Except as provided in this section, 1 or more
licensed
persons may form a professional corporation under this
chapter.
(2)
Each shareholder of a professional corporation must be a
licensed
person in 1 or more of the professional services provided
by
the professional corporation.
(3)
Except as provided in this section or otherwise
prohibited,
the articles of incorporation of a professional
corporation
shall state that the professional corporation is formed
to
provide 1 or more professional services and shall state the
specific
professional service or services the professional
corporation
is formed to provide.
(4)
The name of a professional corporation shall contain the
words
"professional corporation" or the abbreviation "P.C." with
or
without
periods or other punctuation.
Sec.
284. (1) Except as otherwise provided in subsection (2)
or
(3), if a professional corporation provides a professional
service
that is subject to article 15 of the public health code,
1978
PA 368, MCL 333.16101 to 333.18838, each shareholder of the
professional
corporation must be licensed or legally authorized in
this
state to provide the same professional service.
(2)
One or more individuals licensed to engage in the practice
of
medicine under part 170, the practice of osteopathic medicine
and
surgery under part 175, or the practice of podiatric medicine
and
surgery under part 180 of article 15 of the public health code,
1978
PA 368, MCL 333.16101 to 333.18838, may organize a
professional
corporation under this act with 1 or more other
individuals
who are licensed to engage in the practice of medicine
under
part 170, the practice of osteopathic medicine and surgery
under
part 175, or the practice of podiatric medicine and surgery
under
part 180 of article 15 of the public health code, 1978 PA
368,
MCL 333.16101 to 333.18838.
(3)
Subject to section 17048 of the public health code, 1978
PA
368, MCL 333.17048, 1 or more individuals licensed to engage in
the
practice of medicine under part 170, the practice of
osteopathic
medicine and surgery under part 175, or the practice of
podiatric
medicine and surgery under part 180 of article 15 of the
public
health code, 1978 PA 368, MCL 333.16101 to 333.18838, may
organize
a professional corporation under this act with 1 or more
physician's
assistants licensed under article 15 of the public
health
code, 1978 PA 368, MCL 333.16101 to 333.18838. Beginning
July
19, 2010, 1 or more physician's assistants may not organize a
professional
corporation under this act that will have only
physician's
assistants as shareholders.
(4)
A licensed person of another jurisdiction may become an
officer,
agent, or employee of a professional corporation but shall
not
provide any professional service in this state until the person
is
licensed or otherwise legally authorized to provide the
professional
service in this state.
Sec.
285. (1) A professional corporation shall not provide
professional
services in this state except through its officers,
employees,
and agents who are duly licensed or otherwise legally
authorized
to provide the professional services in this state. The
term
"employee" does not include a secretary, bookkeeper,
technician,
or other assistant who is not usually and ordinarily
considered
by custom and practice to be providing a professional
service
to the public for which a license or other legal
authorization
is required.
(2)
Nothing contained in this chapter shall be interpreted to
abolish,
repeal, modify, restrict, or limit the law now in effect
in
this state applicable to the professional relationship and
liabilities
between a person furnishing a professional service and
the
person that receives the professional service and to the
standards
for professional conduct. Any officer, agent, or employee
of
a professional corporation shall remain 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 providing professional
service
on behalf of the professional corporation to the person to
which
the professional services were provided.
(3)
A professional corporation is liable up to the full value
of
its property for any negligent or wrongful acts or misconduct
committed
by any of its officers, agents, or employees while they
are
engaged on behalf of the professional corporation in providing
professional
services.
Sec.
286. If an officer, shareholder, agent, or employee of a
professional
corporation becomes legally disqualified to provide
the
professional services provided by the corporation, or accepts
employment
that under existing law restricts or limits his or her
authority
to continue providing those professional services, he or
she
shall sever within a reasonable period all employment with and
financial
interests in the professional corporation. A professional
corporation's
failure to require compliance with this section is
grounds
for the forfeiture of its articles of incorporation and its
dissolution.
If a professional corporation's failure to comply with
this
section is brought to the attention of the administrator, he
or
she shall notify the attorney general of the failure and the
attorney
general may take appropriate action to dissolve the
professional
corporation.
Sec.
287. (1) A professional corporation shall not engage in
any
business other than providing the professional service or
services
for which it was specifically incorporated.
(2)
This chapter does not prohibit a professional corporation
from
doing any of the following:
(a)
Investing its money in real estate, mortgages, stocks,
bonds,
or any other type of investments.
(b)
Owning real or personal property necessary to provide a
professional
service or services.
(c)
Becoming a partner in a partnership formed under the
uniform
partnership act, 1917 PA 72, MCL 449.1 to 449.48, if the
partnership
provides the same professional services as the
professional
corporation.
(d)
Becoming a member or manager of a professional limited
liability
company organized under or subject to chapter 9 of the
Michigan
limited liability company act, 1993 PA 23, MCL 450.4901 to
450.4910,
if the professional limited liability company provides 1
or
more of the same professional services as the professional
corporation.
(e)
Becoming a shareholder in a professional corporation
governed
by this chapter, if both professional corporations provide
1
or more of the same professional services.
Sec.
288. (1) A professional corporation shall not issue any
of
its capital stock to anyone other than an individual who is duly
licensed
or otherwise legally authorized to provide the same
specific
professional services as those for which the professional
corporation
was incorporated. The uniform securities act, 1964 PA
265,
MCL 451.501 to 451.818, or the uniform securities act (2002),
2008
PA 551, MCL 451.2101 to 451.2703, does not apply to the
issuance
or transfer by a professional corporation of its capital
stock.
(2)
Shares of a professional corporation shall not be sold or
transferred
except to a person who is eligible to be a shareholder
of
the professional corporation; to the personal representative or
estate
of a deceased or legally incompetent shareholder; or to a
trust
or split interest trust in which the trustee and the current
income
beneficiary are each eligible to be a shareholder of the
professional
corporation. The personal representative or estate of
the
shareholder may continue to own shares for a reasonable period
but
is not authorized to participate in any decisions concerning
the
providing of professional service by the professional
corporation.
(3)
Except as permitted under subsection (2), a shareholder of
a
professional corporation shall not enter into a voting trust
agreement
or any other type agreement that vests another person
with
the authority to exercise the voting power of any or all of
his
or her stock, unless that other person is duly licensed or
otherwise
legally authorized to provide the same specific
professional
services as those for which the professional
corporation
was incorporated.
(4)
The articles of incorporation, bylaws, or a contract may
provide
specifically for additional restrictions on the transfer of
shares
and may provide for the redemption or purchase of the shares
by
the professional corporation or its shareholders at prices and
in
a manner specifically set forth in the articles, bylaws, or
contract.
Sec.
289. (1) A professional corporation that is the surviving
entity
of a merger or conversion shall only have as shareholders
licensed
persons that are permitted to be shareholders under this
chapter.
(2)
A professional corporation organized to provide services
in
a learned profession may merge with, or convert into, only other
corporations
or entities whose shareholders, members, partners, and
managers,
following the merger or conversion as applicable, are
licensed
persons permitted to be shareholders under this chapter.
Sec.
405. (1) Unless otherwise restricted by the articles of
incorporation
or bylaws, a shareholder may participate in a meeting
of
shareholders by a conference telephone or by other means of
remote
communication through which all persons participating in the
meeting
may communicate with the other participants. All
participants
shall be advised of the means of remote communication.
and
the names of the participants in the meeting shall be 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 the articles of
incorporation
or bylaws, the board of directors may hold a meeting
of
shareholders conducted solely by means of remote communication.
(4)
Subject to any guidelines and procedures adopted by the
board
of directors, shareholders and proxy holders not physically
present
at a meeting of shareholders may participate in the meeting
by
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 considered present and permitted to vote at the
meeting
by means of remote communication is a shareholder or proxy
holder.
(b)
The corporation implements reasonable measures to provide
each
shareholder and proxy holder a reasonable opportunity to
participate
in the meeting and to vote on matters submitted to the
shareholders,
including an opportunity to read or hear the
proceedings
of the meeting substantially concurrently with the
proceedings.
(c)
If any shareholder or proxy holder votes or takes other
action
at the meeting by means of remote communication, a record of
the
vote or other action is maintained by the corporation.
Sec.
488. (1) An agreement among the shareholders of a
corporation
that complies with this section is effective among the
shareholders
and the corporation even though it is inconsistent
with
this act in 1 or more of the following ways:
(a)
It eliminates the board or restricts the discretion or
powers
of the board.
(b)
It governs the authorization or making of distributions
whether
or not in proportion to ownership of shares, subject to
limitations
in sections 345 and 855a 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
shareholders
and directors or by or among any of the shareholders
or
directors, including use of weighted voting rights or director
proxies.
(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 shareholder, director, officer, or
employee
of the corporation or among the shareholders, directors,
officers,
or employees of the corporation.
(f)
It transfers to 1 or more 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
or shareholders.
(g)
It requires dissolution of the corporation at the request
of
1 or more of the shareholders or upon the occurrence of if a
specified
event or contingency occurs.
(h)
It establishes that shares of the corporation are
assessable
and includes the procedures for an assessment and the
consequences
of a failure by a shareholder to pay an assessment.
(i) (h)
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
directors,
and the corporation, or among any of the shareholders or
directors,
and is not contrary to public policy.
(2)
An agreement authorized by this section shall meet both of
the
following requirements:
(a)
Be Is set forth in a provision of the articles of
incorporation
or bylaws approved by all persons who that are
shareholders
at the time of the agreement, or in a written
agreement
that is signed by all persons who that are shareholders
at
the time of the agreement and that
is made known to the
corporation.
(b)
Be Is subject to amendment only by all persons who that
are
shareholders at the time of the amendment, unless the agreement
provides
otherwise.
(3)
The existence of an agreement authorized by under this
section
shall be noted conspicuously on the face or back of a
certificate
for shares issued by the corporation or on the
information
statement required by under
section 336. If at the time
of
the agreement the corporation has shares outstanding represented
by
certificates, the corporation shall recall the outstanding
certificates
and issue substitute certificates that comply with
this
subsection. The 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 pursuant to it. Any
purchaser
of shares who that did not have knowledge of the
existence
of the agreement at the time ownership is transferred is
entitled
to rescission of the purchase. A purchaser has knowledge
of
the existence of the agreement at the time ownership is
transferred
if the agreement's existence is noted on the
certificate
or information statement in compliance with this
subsection
and, if the shares are not represented by a certificate,
the
information statement is delivered to the purchaser at or prior
to
before the time ownership of the shares is transferred. An
action
to enforce the right of rescission authorized by under this
subsection
must be commenced within 90 days after discovery of the
existence
of the agreement or 2 years after the shares are
transferred,
whichever is earlier.
(4)
An agreement authorized by under
this section shall cease
to
be effective when shares of the corporation are listed on a
national
securities exchange or regularly traded in a market
maintained
by 1 or more members of a national or affiliated
securities
association.
(5)
If the an agreement ceases to be authorized under this
section
is no longer effective for any reason
and is contained or
referred
to in the corporation's articles of incorporation or
bylaws,
the board may without shareholder action adopt an amendment
to
the articles of incorporation or bylaws to delete the agreement
and
any references to it.
(6)
An agreement authorized by under
this section that limits
the
discretion or powers of the board shall relieve the directors
of,
and impose upon on the person or persons in whom 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 whom 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(1)(c).
(7)
The existence or performance of an agreement authorized by
under
this section is not grounds for
imposing personal liability
on
any shareholder 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)
Dissolution pursuant to an agreement authorized in
subsection
(1)(g) shall be implemented by filing a certificate of
dissolution
under section 805.
(9)
Incorporators or subscribers for shares may act as
shareholders
with respect to an agreement authorized by under this
section
if no shares have not been issued when the agreement is
made.
(10)
The failure to satisfy the unanimity requirement of
subsection
(2) with respect to an agreement authorized by under
this
section does not invalidate any agreement that would otherwise
be
considered valid.
Sec.
528. (1) A committee designated pursuant to under section
527,
to the extent provided in a resolution of the board or in the
bylaws,
may exercise all powers and authority of the board in the
management
of the business and affairs of the corporation. A
committee
does not have power or authority to do any of the
following:
(a)
Amend the articles of incorporation, except that a
committee
may prescribe the relative rights and preferences of the
shares
of a series pursuant to under
section 302(3).
(b)
Adopt an agreement of merger,
conversion, or share
exchange.
(c)
Recommend to shareholders the sale, lease, or exchange of
all
or substantially all of the corporation's property and assets.
(d)
Recommend to shareholders a dissolution of the corporation
or
a revocation of a dissolution.
(e)
Amend the bylaws of the corporation.
(f)
Fill vacancies in the board.
(2)
Unless a resolution of the board, the articles of
incorporation,
or the bylaws expressly provide the power or
authority,
a committee does not have the power or authority to
declare
a distribution or dividend or to authorize the issuance of
shares.
(3)
Unless otherwise provided in a resolution of the board,
the
articles of incorporation, or the bylaws, a committee may
create
1 or more subcommittees. Each subcommittee shall consist of
1
or more members of the committee. The committee may delegate all
or
part of its power or authority to a subcommittee.
Sec.
529. A corporation may agree to submit a matter to a vote
of
its shareholders even if, after initially 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.
Sec.
564b. (1) A corporation may pay or reimburse the
reasonable
expenses incurred by a director, officer, employee, or
agent
who of the corporation, or
by a person that is or was serving
at
the request of the corporation as a director, officer, partner,
trustee,
employee, or agent of another foreign or domestic
corporation,
partnership, joint venture, trust, or other profit or
nonprofit
enterprise, 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 undertaking, executed personally or on his or
her
the person's behalf, to repay the advance if it is ultimately
determined
that he or she the person did not meet the applicable
standard
of conduct, if any, required by this act for the
indemnification
of a person under the circumstances.
(2)
The An undertaking required by under subsection
(1) must
be
an unlimited general obligation of the person but may be
unsecured
and may be accepted without reference to the financial
ability
of the person to make repayment.
(3)
An A corporation shall
make an evaluation of
reasonableness
under this section shall be made in the manner
specified
in section 564a(1) for an evaluation of reasonableness of
expenses,
and shall make an authorization shall be made in the
manner
specified in section 564a(4) unless an advance is mandatory.
Authorization
A corporation may make an
authorization of advances
with
respect to a proceeding and a determination of reasonableness
of
advances or selection of a method for determining reasonableness
may
be made in a single action or
resolution covering an entire
proceeding.
However, unless the action or resolution provides
otherwise,
the authorizing or determining authority may
subsequently
terminate or amend the authorization or determination
with
respect to advances not yet made.
(4)
A provision in the articles of incorporation or bylaws, a
resolution
of the board or shareholders, or an agreement making
indemnification
mandatory shall also make the advancement of
expenses
mandatory unless the provision, resolution, or agreement
specifically
provides otherwise.
Sec.
565. (1) The indemnification or advancement of expenses
provided
under sections 561 to 564c is not exclusive of other
rights
to which a person seeking indemnification or advancement of
expenses
may be entitled under the articles of incorporation,
bylaws,
or a contractual agreement. The total amount of expenses
advanced
or indemnified from all sources combined shall not exceed
the
amount of actual expenses incurred by the person seeking
indemnification
or advancement of expenses.
(2)
The indemnification provided for in under this section and
sections
561 to 565 564c continues as to a person who that ceases
to
be a director, officer, employee, or agent and shall inure
inures
to the benefit of the heirs, personal
representatives, and
administrators
of the person if the person is an
individual.
(3)
A corporation shall not eliminate or impair a right to
indemnification
or to advancement of expenses established in a
provision
of the articles of incorporation or the bylaws by
amending
that provision after the occurrence of the act or omission
that
is the subject of the formal or informal civil, criminal,
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 that act or omission
explicitly
authorizes that elimination or impairment after that act
or
omission occurs.
Sec.
569. (1) For purposes of sections 561 to 567,
"corporation"
includes all constituent corporations absorbed in a
consolidation
or merger, any
corporation converted into another
business
organization, and the resulting or
surviving corporation
or
other business organization, so that a
person who that is or was
a
director, officer, employee, 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, or
agent
of another foreign or domestic corporation, partnership,
limited
liability company, joint venture,
trust, or other
enterprise
whether for profit or not shall stand business
organization
in the same position under the
provisions of this
section
with respect to the resulting or surviving corporation as
the
person would if he or she or
other business organization as if
that
person had served the resulting or
surviving corporation or
other
business organization in the same
capacity.
(2)
As used in this section, "business organization" means
that
term as defined in section 736(1).
Sec.
611. (1) In addition to amendment
under subsection (2) or
(3),
subject to subsection (7), either of the following may amend
the
articles of incorporation:
(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 has not yet issued shares or accepted
any
written subscription for shares, the board of directors.
(2)
Unless the articles of incorporation provide otherwise,
subject
to subsection (7), the board may adopt
1 or more of the
following
amendments to the corporation's articles of incorporation
without
shareholder 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 the initial resident agent
or
registered office, if a statement of change is on file with the
administrator.
(d)
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.
(e)
Change the corporate name by substituting the word
"corporation",
"incorporated", "company", "limited", or the
abbreviation
"corp.", "inc.", "co.", or "ltd.", for
a similar word
or
abbreviation in the corporate name, or by adding, deleting, or
changing
a geographical attribution for the corporate name.
(f)
Any other change that this act expressly permitted by this
act
to be made permits without shareholder action.
(3)
Other Subject to
subsection (7), any amendments of the
articles
of incorporation that are not
described in subsection (1)
or
(2), except as otherwise provided in
this act, shall be proposed
by
the board and approved by the shareholders as provided in this
section.
The board may condition its submission of the amendment to
the
shareholders on any basis.
(4)
Notice of a meeting setting forth the a proposed amendment
to
the articles of incorporation or a
summary of the changes to be
effected
by the proposed amendment will make shall be given to each
shareholder
of record entitled to vote on the proposed amendment
within
the time and in the manner provided in this act for giving
notice
of meetings of shareholders.
(5)
At the a meeting
described in subsection (4), a vote of
shareholders
entitled to vote shall be taken on the proposed
amendment to the articles of incorporation. The proposed amendment
shall
be is adopted upon receiving if it receives the affirmative
vote
of a majority of the outstanding shares entitled to vote on
the
proposed amendment and, in addition, if any class or series of
shares
is entitled to vote on the proposed amendment as a class,
the
affirmative vote of a majority of the outstanding shares of
that
class or series. The voting requirements of this section are
subject
to any higher voting requirements provided in this act for
specific
amendments or provided in the articles of incorporation.
(6)
Any The shareholders may
act on any number of amendments
may
be acted upon at 1 to the
articles of incorporation at a
meeting described in subsection (4).
(7)
Upon adoption of If an amendment
to the articles of
incorporation
is made, a certificate of amendment shall
must be
filed
as provided in section 631.
Sec.
631. (1) If the an amendment to
the articles of
incorporation
is made as provided in under section
611(1),
611(1)(a),
a certificate of amendment shall be signed
by the a
majority
of the incorporators and shall be filed
on behalf of the
corporation,
setting forth the amendment and certifying that the
amendment
is was adopted by unanimous consent of the incorporators
before
the first meeting of the board.
(2)
If the an amendment to
the articles of incorporation is
made
as provided in under section 611(2), 611(1)(b) or (2), a
certificate
of amendment shall must be filed on behalf of the
corporation,
setting forth the amendment and certifying that it was
adopted
by the board of directors.
(3)
In case of any other amendment, If
an amendment to the
articles
of incorporation is made under section 611(3), except as
otherwise
provided in this act, a certificate of amendment shall
must
be executed and filed on behalf of the
corporation, setting
forth
the amendment and certifying that the adoption
of the
amendment
has been adopted in accordance complied
with section
611(3).
(4)
A certificate of amendment to the
articles of
incorporation
shall set forth the entire article
being amended. ;
however,
However, if the article being amended is divided into
separately
identified sections, the certificate of amendment need
only
set forth the section of the article being amended.
Sec.
641. (1) A corporation may integrate into a single
instrument
the provisions of its articles of incorporation that are
then
in effect and operative, as 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 Any of the following
may adopt restated
articles
of incorporation for a corporation, as applicable:
(a)
Before the first meeting of the board, all of the
incorporators,
by complying with the provisions of
sections
611(1)(a),
642, and 643(1).
(3)
Other restated articles of incorporation shall be approved
by
the directors or shareholders as provided in subsection (4).
(b) (4)
If the restated articles of
incorporation merely
restate
and integrate, but do not further amend the articles as
amended,
the restated articles of incorporation may be adopted by
the
board without a vote of the shareholders. , or by the
shareholders,
in which case the procedure and vote required by
section
611(3) is applicable. If the restated articles of
incorporation
restate and integrate and also further amend in any
material
respect the articles of incorporation, as amended, the
restated
articles of incorporation shall be adopted by the
shareholders
pursuant to section 611(3).
(c)
If the restated articles of incorporation restate,
integrate,
and also further amend the articles of incorporation,
but
the 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.
(d)
If the restated articles of incorporation restate,
integrate,
and amend the articles of incorporation and subdivisions
(a),
(b), and (c) do not apply, the shareholders must adopt the
restated
articles of incorporation under section 611.
(3) (5)
An amendment effected made to the articles of
incorporation
in connection with the restatement and
integration 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 that
amendment.
Sec.
642. (1) Restated articles of incorporation shall be
specifically
designated as such in the heading thereof. They shall
state,
either in must meet all of
the following, as applicable:
(a)
Include the designation "restated articles of
incorporation"
in the heading.
(b)
In the heading or in an introductory
paragraph, state 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.
Restated
articles shall state that they were duly adopted by the
incorporators,
the directors, or the shareholders in accordance
with
this section.
(c)
If adopted by the incorporators, the
restated articles
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,
the restated articles shall state that both of the
following:
(i) That they
only restate and integrate and do not further
amend
the articles as theretofore amended; , and that there or that
the
restated articles only restate and integrate the articles and
include
only amendments adopted under section 611(1)(b) or (2).
(ii) There is
no material discrepancy between those the
provisions
of the articles of incorporation
as amended and the
provisions
of the restated articles.
(d) If adopted by the shareholders, state that
they were duly
adopted
by the shareholders under section 611(3).
(2) Restated articles of incorporation may omit such
any
provisions
of the original articles which that
named the
incorporators,
the initial board, or original subscribers for
shares,
and the omission shall not be considered a further
amendment to the articles of incorporation.
Sec.
643. (1) Restated articles of incorporation adopted as
provided
in under section 641(2) 641(2)(a) shall be signed by
the
majority
of incorporators and filed in accordance with section 131.
(2)
Other restated Restated articles of incorporation adopted
under
section 641(2)(b), (c), or (d) shall be
executed on behalf of
the
corporation and filed in accordance with section 131.
(3)
When that the filing of
restated articles of incorporation
becomes
effective, the corporation's original articles of
incorporation,
as amended, are superseded; and thenceforth the
restated
articles, including any further amendments made thereby,
shall
be by the restatement of the
articles, are the articles of
incorporation
of the corporation.
Sec.
703a. (1) A plan of merger or share exchange adopted by
the
board of each constituent corporation shall, except as provided
in
subsection (2)(e) and (f), be submitted for approval at a
meeting
of the shareholders.
(2)
For All of the following
apply to the approval of a plan
of
merger or share exchange to be approved all of the following
shall
apply:under this section:
(a)
The board must recommend the plan of merger or share
exchange
to the shareholders, unless section
529 applies or the
board
determines that because of conflict of interest, events
occurring
after the board adopts the plan, contractual obligations,
or
other special circumstances it should make no recommendation.
and
communicates the basis for its determination to the
shareholders
with the plan.If
the board does not recommend the plan
of merger or share exchange to the shareholders, or
recommends against
the plan of merger or share exchange, in either case because
1 or more
of the exceptions described in this subdivision
apply, the board must
communicate to the shareholders the basis for its
decision.
(b)
The board may condition its submission of the proposed
merger
or share exchange on any basis.
(c)
Notice of the shareholder meeting shall be given to each
shareholder
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. The notice shall include
or
be accompanied by all of the following:
(i) A copy or summary of the plan of merger or share
exchange.
If
a summary of the plan is given, the notice shall state that a
copy
of the plan is available upon on
request.
(ii) A statement informing shareholders who that are
entitled
to
dissent under section 762 that they have the right to dissent
and
to be paid the fair value of their shares by complying with the
procedures
set forth in sections 764 to 772.
(d)
At the meeting, a vote of the shareholders shall be taken
vote
on the proposed plan of merger or share
exchange. The plan is
approved
if it receives the affirmative vote of the holders of a
majority
of the outstanding shares of the corporation entitled to
vote
on the plan, and if a class or series is entitled to vote on
the
plan as a class, the affirmative vote of the holders of a
majority
of the outstanding shares of the class or series. A class
or
series of shares 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 or series of shares to vote as a class, or,
in
the case of a share exchange, if the class or series is included
in
the exchange. A class or series of shares is not entitled to
vote
as a class in the case of a merger or share exchange, if the
board
of directors determines on a reasonable basis that the class
or
series is to receive consideration under the plan of merger or
share
exchange that has a fair value that is not less than the fair
value
of the shares of the class or series on the date of adoption
of
the plan.
(e)
Except as provided in section 754 or unless required by
the
articles of incorporation, action by the shareholders of the
surviving
corporation on a plan of merger 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,
preferences, limitations, and relative rights,
immediately
after the merger.
(f)
Except as provided in section 754, action by the
shareholders
of the acquiring corporation on a plan of share
exchange
is not required.
(g)
A plan of merger or share exchange may provide for
differing
forms of consideration for holders of shares within in
the
same class based upon on the election of the holders, the
amount
of shares held, or another reasonable basis.
Sec.
753. (1) 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,
if not in the usual and regular course of its business as
conducted
by the corporation, upon on
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, domestic or foreign, as authorized as provided
in
under this section. A corporation has not disposed of all
or
substantially
all of its property and assets 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
retains a business activity that represented at least
25%
of total assets at the end of the most recently completed
fiscal
year, and 25% of either income from continuing operations
before
taxes or revenues from continuing operations for that fiscal
year,
in each case of the corporation and its subsidiaries on a
consolidated
basis.
(2)
The board must recommend the proposed a transaction
described
in subsection (1) to the shareholders
unless section 529
applies
or the board determines that because of
conflict of
interest,
events occurring after the board adopts the plan,
contractual
obligations, or other special circumstances it should
make
no recommendation. and communicates the basis for its
determination
to the shareholders with the submission of the
proposed
transaction.If the board does
not recommend the
transaction
described in subsection (1) to the shareholders, or
recommends
against the transaction, in either case because 1 or
more
of the exceptions described in this subsection apply, the
board
must communicate to the shareholders the basis for its
decision.
(3)
The board may condition its submission of the proposed a
transaction
described in subsection (1) on any basis.
(4)
The proposed A transaction described
in subsection (1)
shall
be submitted for approval at a meeting of shareholders.
Notice
of the meeting shall be given to each shareholder 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.
The notice shall include or be accompanied by both of
the
following:
(a)
A statement summarizing the principal terms of the
proposed
transaction or a copy of any
documents containing the
principal
terms.
(b)
A statement informing shareholders who that are entitled
to
dissent under section 762 that they have the right to dissent
and
to be paid the fair value of their shares by complying with the
procedures
set forth in sections 762 to 772.
(5)
At the meeting described in
subsection (4), the
shareholders
may authorize the sale, lease, exchange, or other
disposition
transaction described in
subsection (1) and may fix, or
may
authorize the board to fix, any term or condition and the
consideration
to be received by the corporation. The authorization
requires
the affirmative vote of the holders of a majority of the
outstanding
shares of the corporation entitled to vote on the sale,
lease,
exchange, or other disposition.transaction.
(6)
Notwithstanding authorization by the shareholders, the
board
may abandon the sale, lease, exchange, or other disposition,
a
transaction described in subsection (1), subject
to the rights of
third
parties under any contracts relating to the sale, lease,
exchange,
or other disposition, without further action or approval
by
shareholders.
(7)
A sale, lease, exchange, or other disposition of all, or
substantially
all, of the property and assets of a corporation or
other
entity a majority of the shares or beneficial interests of
which
are owned by a second corporation, including a change in
shares
of the corporation or beneficial interest in another entity
held
by the second corporation because of a merger or share
exchange,
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.
(8)
A transaction that is a distribution is governed by
section
345 and not by this section or section 751.
Sec.
762. (1) A shareholder is entitled to dissent from, and
obtain
payment of the fair value of his, or her, or its shares in
the
event of, any of the following corporate actions:
(a)
Consummation of a plan of merger to which the corporation
is
a party if shareholder approval is required for the merger under
section
703a or 736(5) or the articles of incorporation and the
shareholder
is entitled to vote on the merger, or the corporation
is
a subsidiary that is merged with its parent under section 711.
(b)
Consummation of a plan of share exchange to which the
corporation
is a party as the corporation whose shares will be
acquired,
if the shareholder is entitled to vote on the plan.
(c)
Consummation of a sale or exchange of all, or
substantially
all, of the property of the corporation other than in
the
usual and regular course of business, if the shareholder is
entitled
to vote on the sale or exchange, including a sale in
dissolution
but not including a sale pursuant to court order.
(d)
Consummation of a plan of conversion to which the
corporation
is a party as the corporation that is being converted,
if
the shareholder is entitled to vote on the plan. However, any
rights
provided under this section are not available if that
corporation
is converted into a foreign corporation and the
shareholder
receives shares that have terms as favorable to the
shareholder
in all material respects, and represent at least the
same
percentage interest of the total voting rights of the
outstanding
shares of the corporation, as the shares held by the
shareholder
before the conversion.
(e)
An amendment of the articles of incorporation giving rise
to
a right to dissent under section 621.
(f)
A transaction giving rise to a right to dissent under
section
754.
(g)
Any corporate action taken pursuant to a shareholder vote
to
the extent the articles of incorporation, bylaws, or a
resolution
of the board provides that voting or nonvoting
shareholders
are entitled to dissent and obtain payment for their
shares.
(2)
Unless otherwise provided in the articles of
incorporation,
bylaws, or a resolution of the board, a shareholder
may
not dissent from any of the following:
(a)
Any corporate action set forth in subsection (1)(a) to (e)
(f)
as to shares that are listed on a
national securities exchange
or
designated as a national market system security on an
interdealer
quotation system by the national association of
securities
dealers, on the record date fixed to vote on the
corporate
action or on the date the resolution of the parent
corporation's
board is adopted in the case of a merger under
section
711 that does not require a shareholder vote under section
713.
(b)
A transaction described in subsection (1)(a) in which
shareholders
receive cash, shares that satisfy the requirements of
subdivision
(a) on the effective date of the merger, or any
combination
of cash and those shares.
(c)
A transaction described in subsection (1)(b) in which
shareholders
receive cash, shares that satisfy the requirements of
subdivision
(a) on the effective date of the share exchange, or any
combination
of cash and those shares.
(d)
A transaction described in subsection (1)(c) that is
conducted
pursuant to a plan of dissolution providing for
distribution
of substantially all of the corporation's net assets
to
shareholders in accordance with their respective interests
within
1 year after the date of closing of the transaction, if the
transaction
is for cash, shares that satisfy the requirements of
subdivision
(a) on the date of closing, or any combination of cash
and
those shares.
(e)
A transaction described in subsection (1)(d) in which
shareholders
receive cash, shares that satisfy the requirements of
subdivision
(a) on the effective date of the conversion, or any
combination
of cash and those shares.
(3)
A shareholder entitled to dissent and obtain payment for
his
or her shares under subsection
(1)(a) to (f) may not challenge
the
corporate action creating his or her that entitlement unless
the
action is unlawful or fraudulent with respect to the
shareholder
or the corporation.
(4)
A shareholder who that exercises his or her a right
to
dissent
and seek payment for his or her shares under subsection
(1)(g)
may not challenge the corporate action creating his or her
that
entitlement unless the action is
unlawful or fraudulent with
respect
to the shareholder or the corporation.
Sec.
776. (1) "Affiliate" or "affiliated person" means a
person
who that directly, or indirectly through 1 or more
intermediaries,
controls, is controlled by, or is under common
control
with a specified person.
(2)
"Announcement date" means the first general public
announcement
or the first communication generally to shareholders
of
the a corporation, whichever is earlier, of the proposal
or
intention
to make a proposal concerning a business combination.
(3)
"Associate", when used to indicate a relationship with any
person,
means any 1 of the following:
(a)
Any corporation or organization, other than the
corporation
or a subsidiary of the corporation, in which the person
is
an officer, director, or partner, or is, directly or indirectly,
the
beneficial owner of 10% or more of any class of equity
securities.
(b)
Any trust or other estate in which the person has a
beneficial
interest of 10% or more or as to which the person serves
as
trustee or in a similar fiduciary capacity in connection with
the
trust or estate.
(c)
Any relative or spouse of the person, or any relative of
the
spouse, who has the same home as the person or who is a
director
or officer of the corporation or any of its affiliates.
(4)
"Beneficial owner", when used with respect to any voting
stock,
means a person who:that
meets any of the following:
(a)
Individually or with any of its affiliates or associates,
beneficially
owns voting stock, directly or indirectly.
(b)
Individually or with any of its affiliates or associates,
has
any 1 of the following:
(i) The right to acquire voting shares, whether the
right is
exercisable
immediately or only after the passage of time, pursuant
to
any agreement, arrangement, or understanding or upon the
exercise
of conversion rights, exchange rights, warrants or
options,
or otherwise. A person shall is
not be considered the
beneficial
owner of voting shares which that
are tendered pursuant
to
a tender or exchange offer made by the person, or an affiliate
or
associate of the person, until the tendered voting shares are
accepted
for purchase or exchange.
(ii) The right to vote voting shares pursuant to any
agreement,
arrangement,
or understanding. A person shall is not be considered
the
beneficial owner of voting shares if the person's right to vote
the
shares pursuant to under this subparagraph arises solely from a
revocable
proxy or consent given in response to a proxy or consent
solicitation
to 10 or more persons.
(iii) Except as provided in subparagraph (ii), any agreement,
arrangement,
or understanding for the purpose of acquiring,
holding,
voting, or disposing of voting shares with any other
person
who that beneficially owns, or whose affiliates or
associates
beneficially own, directly or indirectly, the voting
shares.
(5)
"Business combination" means any 1 or more of the
following:
(a)
Any merger, conversion, consolidation, or share exchange
of
the corporation or any subsidiary which that alters the contract
rights
of the shares as expressly set forth in the articles of
incorporation
or which that changes or converts, in whole or in
part,
the outstanding shares of the corporation with either:
(i) Any interested shareholder.
(ii) Any other corporation, whether or not itself an
interested
shareholder,
which that is, or after the merger, conversion,
consolidation,
or share exchange would be, an affiliate of an
interested
shareholder that was an interested shareholder prior to
before
the transaction.
(b)
Any sale, lease, transfer, or other disposition, except in
the
usual and regular course of business, in 1 transaction or a
series
of transactions in any 12-month period, to any interested
shareholder
or any affiliate of any interested shareholder, other
than
the corporation or any of its subsidiaries, of any assets of
the
corporation or any subsidiary having, measured at the time the
transaction
or transactions are approved by the board of directors
of
the corporation, an aggregate book value as of the end of the
corporation's
most recently ended fiscal quarter of 10% or more of
its
net worth.
(c)
The issuance or transfer by the corporation, or any
subsidiary,
in 1 transaction or a series of transactions, of any
equity
securities of the corporation or any subsidiary which that
have
an aggregate market value of 5% or more of the total market
value
of the outstanding shares of the corporation to any
interested
shareholder or any affiliate of any interested
shareholder,
other than the corporation or any of its subsidiaries,
except
pursuant to the exercise of warrants or rights to purchase
securities
offered pro rata to all holders of the corporation's
voting
shares or any other method affording substantially
proportionate
treatment to the holders of voting shares.
(d)
The adoption of any plan or proposal for the liquidation
or
dissolution of the corporation in which anything other than cash
will
be received by an interested shareholder or any affiliate of
any
interested shareholder.
(e)
Any reclassification of securities, including any reverse
stock
split, or recapitalization of the corporation, or any merger,
conversion,
consolidation, or share exchange of the
corporation
with
any of its subsidiaries which that
has the effect, directly or
indirectly,
in 1 transaction or a series of transactions, of
increasing
by 5% or more of the total number of outstanding shares,
the
proportionate amount of the outstanding shares of any class of
equity
securities of the corporation or any subsidiary which that
is
directly or indirectly owned by any interested shareholder or
any
affiliate of any interested shareholder.
Sec.
781. (1) The vote required by section 780 shall not apply
to
a business combination if each of the following conditions are
met:
(a)
The aggregate amount of the cash and the market value as
of
the valuation date of consideration other than cash to be
received
per share by holders of common stock in the business
combination
is at least equal to the highest of the following:
(i) The highest per share price, including any
brokerage
commissions,
transfer taxes, and soliciting dealers' fees, and
appropriately
adjusted to account for any stock dividend, stock
split,
combination, or similar recapitalization affecting the
shares,
paid by the interested shareholder for
any shares of common
stock
of the same class or series acquired by the interested
shareholder
within the 2-year period immediately prior to before
the
announcement date of the proposal of the business combination,
or
in the transaction in which the shareholder became an interested
shareholder,
whichever is higher.
(ii) The market value per share of common stock of the
same
class
or series on the announcement date or on the determination
date,
whichever is higher.
(b)
The aggregate amount of the cash and the market value as
of
the valuation date for consideration other than cash to be
received
per share by holders of shares of any class or series of
outstanding
stock other than common stock shall be is at least
equal
to the highest of the following, whether or not the
interested
shareholder has previously acquired any shares of a
particular
class or series of stock:
(i) The highest per share price, including any
brokerage
commissions,
transfer taxes, and soliciting dealers' fees, and
appropriately
adjusted to account for any stock dividend, stock
split,
combination, or similar recapitalization affecting the
shares,
paid by the interested shareholder for
any shares of the
class
of stock acquired by it within the 2-year period immediately
prior
to preceding the announcement date of the proposal of the
business
combination, or in the transaction in which it became an
interested
shareholder, whichever is higher.
(ii) The highest preferential amount per share to which
the
holders
of shares of the class of stock are entitled in the event
of
any voluntary or involuntary liquidation, dissolution, or
winding
up of the corporation.
(iii) The market value per share of the class of stock
on the
announcement
date or on the determination date, whichever is
higher.
(c)
The consideration to be received by holders of any class
or
series of outstanding stock shall be in cash or in the same form
as
the interested shareholder has previously paid for shares of the
same
class or series of stock. If the interested shareholder has
paid
for shares of any class of stock with varying forms of
consideration,
the form of consideration for the class of stock
shall
be either cash or the form used to acquire the largest number
of
shares of the class or series of stock previously acquired by
the
interested shareholder.
(d)
After the interested shareholder has become an interested
shareholder
and prior to before the consummation of a business
combination,
all of the following conditions have been are met:
(i) Any full periodic dividends, whether or not
cumulative, on
any
outstanding preferred stock of the corporation shall have been
are
declared and paid at the regular date therefor.for those
payments.
(ii) The annual rate of dividends paid on any class or
series
of
stock of the corporation that is not preferred stock, except as
necessary
to reflect any subdivision of the stock, shall not have
been
is not reduced, and the annual rate of dividends shall
have is
increased
as necessary to reflect any reclassification, including
any
reverse stock split, recapitalization, reorganization, or any
similar
transaction which has the effect of reducing the number of
outstanding
shares of the stock.
(iii) After the interested shareholder has become becomes an
interested
shareholder, the interested shareholder may not have
received
does not receive the benefit, directly or indirectly,
except
proportionately as a shareholder, of any loans, advances,
guarantees,
pledges, or other financial assistance or any tax
credits
or other tax advantages provided by the corporation or any
of
its subsidiaries, whether in anticipation of or in connection
with
the business combination or otherwise.
(iv) The interested shareholder did does not
become the
beneficial
owner of any additional shares of the corporation except
as
part of the transaction which that
resulted in the interested
shareholder
becoming an interested shareholder or by virtue of
proportionate
stock splits or stock dividends.
(v) There has been at least 5 years between the
date of
becoming
an interested shareholder and the date the business
combination
is consummated.
(2)
The provisions of subsection (1)(d)(i) and (ii) shall
Subparagraphs
(i) and (ii)
of subsection (1)(d) do not apply if an
interested
shareholder or an affiliate or associate of the
interested
shareholder did not vote as a director of the
corporation
in a manner inconsistent with those
subparagraphs (i)
and
(ii) and the interested shareholder, within 10 days after
any
act
or failure to act inconsistent with those
subparagraphs, (i) and
(ii), notifies
the board of directors of the corporation in writing
that
the interested shareholder disapproves thereof of the act or
failure
to act and requests in good faith that
the board of
directors
rectify the act or failure to act.
Sec.
784. (1) Unless a corporation's articles of incorporation
provide
otherwise, the requirements of section 780 shall do not
apply
to any business combination of any of the following:
(a)
A corporation having fewer than 100 beneficial owners of
its
stock. that
does not have a class of voting stock registered
with
the securities and exchange commission pursuant to section 12
of
the securities exchange act of 1934, 15 USC 78l.
(b)
A corporation whose original articles of incorporation
contain
a provision or whose shareholders adopt an amendment to the
articles
of the corporation after the effective date of this
chapter
May 29, 1984 by a vote of not less than 90% of the votes of
each
class of stock entitled to be cast by the shareholders of the
corporation
and not less than 2/3 of the votes of each class of
stock
entitled to be cast by the shareholders of the corporation
other
than voting shares beneficially owned by interested
shareholders
of the corporation, that expressly electing elects not
to
be governed by this chapter.
(c)
An investment company registered under the investment
company
act of 1940, 15 U.S.C. USC
80a-1 to 80a-64.
(2)
For purposes of subsection (1)(a), all shareholders of a
corporation
who that have executed an agreement to which the
corporation
is an executing party governing that
governs the
purchase
and sale of shares of the corporation or a voting trust
agreement
governing that governs shares of the corporation shall be
are
considered a single beneficial owner of
the stock shares
covered
by the agreement.
Sec.
804. (1) A corporation may be dissolved by action of its
board
and shareholders as provided in this section.
(2)
A corporation's board may propose dissolution of a
corporation
for action by the shareholders.
(3)
The If it proposes a
dissolution, the board must recommend
the
dissolution to the shareholders unless section 529 applies or
the
board determines that because of conflict of interest or other
special
circumstances it should make no recommendation. and
communicates
the basis for its determination to the shareholders.If
the
board does not recommend the dissolution to the shareholders,
or
recommends against the dissolution, in either case because 1 or
more
of the exceptions described in this subsection apply, the
board
must communicate to the shareholders the basis for its
decision.
(4)
The A board may condition its submission of the proposal
for
dissolution of a corporation to
the shareholders on any basis.
(5)
The A proposed dissolution of a corporation shall be
submitted
for approval at a meeting of shareholders. Notice shall
be
given to each shareholder of record whether or not entitled to
vote
at the meeting within the time and in the manner as provided
in
this act for the giving of notice of meetings of shareholders,
and
shall state that a purpose of the meeting is to vote on
dissolution
of the corporation.
(6)
At the meeting a vote of described
in subsection (5), the
shareholders
shall be taken vote on the proposed dissolution. The
dissolution
shall be is approved upon receiving if it receives the
affirmative
vote of the holders of a majority of the outstanding
shares
of the corporation entitled to vote thereon.on the
dissolution.
(7)
If the dissolution of a
corporation is approved, it shall
be
effected by the execution and filing of a certificate of
dissolution
on behalf of the corporation , setting forth that
states
all of the following:
(a)
The name of the corporation.
(b)
The date and place of the meeting of shareholders
approving
at which the dissolution was approved.
(c)
A statement that dissolution was proposed and approved by
the
requisite vote of the board and shareholders.
Sec.
911. (1) A domestic corporation and each foreign
corporation
subject to chapter 10 shall file a report with the
administrator
no later than May 15 of each year. The report shall
be
on a form approved by the administrator, 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 addresses of its president, secretary,
treasurer,
and directors.
(d)
General nature and kind of business in which the
corporation
is engaged.
(e)
For each foreign corporation authorized to transact
business
in this state, the total number of authorized shares and
the
most recent percentage used in computation of the tax required
by
the single business tax act, 1975 PA 228, MCL 208.1 to 208.145,
or
the Michigan business tax act, 2007
PA 36, MCL 208.1101 to
208.1601.
(f)
For each professional corporation, the names and addresses
of
its shareholders and a certification that both of the following
are
met:
(i) Each shareholder is a licensed person in 1
or more of the
professional
services provided by the professional corporation.
(ii) The corporation meets the other requirements
of chapter
2A.
(2)
The report is not required to be filed in the year of
incorporation
or authorization by a A corporation formed or
authorized
to do business on or after January 1 and before May 16
of
that a calendar year
is not required to file the report
described
in subsection (1) for that calendar year.
(3)
If there are no changes in the information provided in the
last
filed report required under subsection (1), the corporation
may
file a report that certifies to the administrator that no
changes
in the required information have occurred since the last
filed
report. The A report filed under this subsection shall be on
a
form approved by the administrator and filed no later than the
date
required under section 911.
Sec.
1021. (1) Except as otherwise provided in this section,
if
a foreign corporation authorized to
transact business in this
state
which changes its corporate name, or enlarges, limits, or
otherwise
changes the business which that
the foreign corporation
proposes
to do in this state, or otherwise affects the information
set
forth in its application for certificate of authority to
transact
business in this state, the
corporation shall file an
amended
application with the administrator not later than 30 days
after
the time a that change becomes effective. A foreign
corporation
may make a change in the registered
office or resident
agent
may be made pursuant to under
section 242. The An amended
application
under this subsection shall set forth 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 do
business
in this state.
(c)
If the name of the foreign corporation has been changed, a
statement
of the name relinquished, a statement of the new name,
and
a statement that the change of name has been effected under the
laws
of the jurisdiction of its incorporation and the date the
change
was effected.
(d)
If the business the foreign corporation proposes to do in
this
state is to be enlarged, limited, or otherwise changed, a
statement
reflecting the change and a statement that the foreign
corporation
is authorized to do in the jurisdiction of its
incorporation
the business which that it proposes to do in this
state.
(e)
Any additional information as required
by the
administrator. may
require.
(2)
If a foreign corporation that is authorized to transact
business
in this jurisdiction state
is the survivor of a merger
permitted
by under the laws of the jurisdiction in which the
foreign
corporation is incorporated, not later than 30 days after
the
merger becomes effective, the foreign corporation shall file a
certificate
issued by the proper officer of the jurisdiction of its
incorporation
attesting 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 business the foreign
corporation
proposes to do in this state, or has affected the
information
set forth in the application, the foreign corporation
shall
also comply with subsection (1).
(3)
If a foreign corporation that is authorized to transact
business
in this state is the survivor of a conversion permitted
under
the laws of the jurisdiction in which the foreign corporation
is
incorporated, not later than 30 days after the conversion
becomes
effective, the foreign corporation shall file a certificate
issued
by the proper officer of the jurisdiction of its
incorporation
attesting to the occurrence of the conversion. If the
conversion
changed the corporate name of the foreign corporation,
enlarged,
limited, or changed the business the foreign corporation
proposes
to do in this state, or affected the information set forth
in
the application, the foreign corporation shall also comply with
subsection
(1).
(4) (3)
A foreign corporation which that has
been authorized
to
transact business in this state and which, that, after
its
authorization,
increases the number of authorized shares
attributable
to this state shall file an amended application giving
a
detailed account of the amount of the increase, and shall pay an
additional
franchise fee on account of the increase attributable to
this
state as prescribed by law. The amended application shall be
filed
within 30 days after the end of the corporation's fiscal
year.
The number of shares attributable to this state shall be
determined
pursuant to under section 1062.
Sec.
1035. (1) When If a foreign corporation authorized to
transact
business 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 or
business organization,
there
shall be filed it shall file with the administrator any
information
as may be required by the administrator requires to
determine
and assess any unpaid fees payable by 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
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 certificate, order, or judgment
and
payment of described in
subsection (1) is filed and the filing
fee
prescribed by law is paid, the administrator shall issue a
certificate
of withdrawal with that
has the same effect as provided
in
under section 1032.
(3)
As used in this section, "business organization" means
that
term as defined in section 736(1).
Sec.
1041. In Subject to
section 1042, in addition to any
other
ground for revocation provided by law, the administrator may
revoke
the certificate of authority of a foreign corporation to
transact
business in this state upon the conditions prescribed 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 changing its registered office or
resident
agent, fails to file a statement of the change as required
by
under this act.
(c)
The corporation fails to file an amended application as
required
by under this act.
(d)
The corporation, after becoming the survivor to a merger
or
conversion, fails to file the
certificate attesting to the
occurrence
of the merger or 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 filing
fee
required by under this act.
Enacting
section 1. The professional service corporation act,
1962
PA 192, MCL 450.221 to 450.235, is repealed.