October 18, 2005, Introduced by Reps. Tobocman and Huizenga and referred to the Committee on Commerce.
A bill to amend 1972 PA 284, entitled
"Business corporation act,"
by amending sections 106, 261, and 489 (MCL 450.1106, 450.1261, and
450.1489), sections 106 and 489 as amended by 2001 PA 57 and
section 261 as amended by 1993 PA 91.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
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 consumer and
industry
services labor and economic
growth.
(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. 261. A corporation, subject to any limitation provided in
this act, in any other statute of this state, or in its articles of
incorporation, shall have power in furtherance of its corporate
purposes to do all 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 natural persons.
(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 business of the corporation, the conduct of
its affairs, its rights and powers and the rights and powers of its
shareholders, 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, employ,
use and otherwise deal in and with, real or personal property, or
an interest in real or personal property, wherever situated.
(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 its 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 issued by others, whether engaged in
similar or different business, governmental, or other activities,
including banking corporations or trust companies. A corporation
organized or transacting business in this state under this act
shall not guarantee or become surety upon a bond or other
undertaking securing the deposit of public money.
(i) Make contracts, give guarantees and incur liabilities,
borrow money at rates of interest as the corporation may determine,
issue its notes, bonds, and other obligations, and secure any of
its obligations by mortgage or pledge of any of its property or an
interest in its property, wherever situated. This power shall
include
the power to give guarantees which that
are necessary or
convenient to the conduct, promotion, or attainment of the business
of any of the following corporations, whether or not subject to
this
act, which and
domestic or foreign limited liability
companies, and those guarantees shall be considered to be in
furtherance of the corporate purposes of the contracting
corporation:
(i) All of the outstanding shares or interests of which are
owned, directly or indirectly, by the contracting corporation.
(ii) A corporation which or limited liability company that
owns, directly or indirectly, all of the outstanding shares of the
contracting corporation.
(iii) All of the outstanding shares or interests of which are
owned, directly or indirectly, by a corporation, whether or not
subject
to this act, which or
a limited liability company that
owns, directly or indirectly, all of the outstanding shares of the
contracting corporation.
(j) Lend money, invest and reinvest its funds, and take and
hold real and personal property as security for the payment of
funds so loaned or invested.
(k) Make donations for any of the following: The public
welfare; community fund or hospital; or a charitable, educational,
scientific, civic, or similar purpose. A corporation also has the
power to provide aid in time of war or other national emergency.
(l) Pay pensions, establish and carry out pension, profit
sharing, share bonus, share purchase, share option, 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 corporation, partnership,
limited partnership, joint venture, or other association of any
kind, or in any transaction, undertaking, or agreement which 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) Transact business, carry on its operations, and have
offices and exercise the powers granted by this act in any
jurisdiction in or outside the United States.
(q) Have and exercise all powers necessary or convenient to
effect any purpose for which the corporation is formed.
(r) Participate as a member of any mutual insurance company
for purposes of insuring property or activities relative to nuclear
facilities owned, operated, constructed, or being constructed by
the corporation.
Sec. 489. (1) A shareholder 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 or those in control of the corporation
are illegal, fraudulent, or willfully unfair and oppressive to the
corporation or to the shareholder. If the shareholder establishes
grounds for relief, the circuit court may make an order or grant
relief as it considers appropriate, including, without limitation,
an order providing for any of the following:
(a) The dissolution and liquidation of the assets and business
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, alteration, or injunction against a
resolution or other act of the corporation.
(d) The direction or prohibition of an act of the corporation
or of shareholders, directors, officers, or other persons party to
the action.
(e) The purchase at fair value of the shares of a shareholder,
either by the corporation or by the officers, directors, or other
shareholders responsible for the wrongful acts.
(f) An award of damages to the corporation or a shareholder.
An action seeking an award of damages must be commenced within 3
years after the cause of action under this section has accrued, or
within 2 years after the shareholder discovers or reasonably should
have discovered the cause of action under this section, whichever
occurs first.
(2) No action under this section shall be brought by a
shareholder whose shares 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.
(3) As used in this section, "willfully unfair and oppressive
conduct" means a continuing course of conduct or a significant
action or series of actions that substantially interferes with the
interests of the shareholder as a shareholder. Willfully unfair and
oppressive conduct may include the termination of employment or
limitations on employment benefits to the extent that the actions
interfere with distributions or other shareholder interests
disproportionately as to the affected 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.