February 9, 2010, Introduced by Senators HARDIMAN, PAPPAGEORGE, BIRKHOLZ and JANSEN and referred to the Committee on Health Policy.
A bill to amend 1982 PA 162, entitled
"Nonprofit corporation act,"
by amending sections 123 and 217 (MCL 450.2123 and 450.2217),
section 123 as amended by 2008 PA 482, and by adding section 746.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 123. (1) 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organized under an act other than this act and not repealed by this
act.
(2) A corporation covered by subsection (1) includes, but is
not limited to, all 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 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.
(i) A domestic corporation formed by the conversion of a
municipal health facilities corporation under section 308 of the
municipal health facilities corporations act, 1987 PA 230, MCL
331.1308.
(3) Except as provided in subsection (2)(h), this act does not
apply to insurance, surety, credit unions, savings and loan
associations, fraternal benefit societies, railroad, bridge, or
tunnel companies, union depot companies, and banking corporations.
Sec. 217. (1) Except as 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 certificate shall be 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
on December 31 of the fifth full calendar year following the year
in which it was filed. It 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 period. The administrator shall notify the
corporation of the impending expiration of the certificate of
assumed name no later than 90 days before the initial or subsequent
5-year period will expire. This section does not create substantive
rights to the use of a particular assumed name.
(2) A corporation into which 1 or more nonprofit organizations
have converted under section 746 may use as an assumed name the
name of any nonprofit organization converting into that
corporation, or use as an assumed name an assumed name of that
nonprofit 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 shall be treated as a new
certificate of assumed name.
Sec. 746. (1) A nonprofit organization may convert into a
domestic corporation if all of the following requirements are
satisfied:
(a) The conversion is permitted by the law that governs the
internal affairs of the nonprofit organization and the nonprofit
organization complies with that law in converting.
(b) The nonprofit organization proposing to convert into a
domestic corporation adopts a plan of conversion that includes all
of the following:
(i) The name of the nonprofit organization, the type of
nonprofit organization that is converting, the identification of
the statute that governs the internal affairs of the nonprofit
organization, the name of the surviving domestic corporation into
which the nonprofit 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
nonprofit organization, specifying the interests entitled to vote,
any rights 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 nonprofit organization into shares of the
surviving domestic corporation if it is organized on a stock basis
or into member or director interests if organized on a nonstock
basis; into other 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 govern the surviving domestic corporation.
(v) Any other provisions with respect to the proposed
conversion that the nonprofit organization considers necessary or
desirable.
(c) If a plan of conversion is adopted by the nonprofit
organization under subdivision (b), the plan of conversion is
submitted for approval in the manner required by the law governing
the internal affairs of that nonprofit organization.
(d) After the plan of conversion is approved under
subdivisions (b) and (c), the nonprofit 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 nonprofit organization contained in the plan of conversion.
(ii) A statement that the nonprofit organization has adopted
the plan of conversion under subdivision (c).
(iii) A statement that the surviving domestic corporation will
furnish a copy of the plan of conversion, on request and without
cost, to any owner of the nonprofit organization.
(iv) A statement specifying each assumed name of the nonprofit
organization to be used by the surviving domestic corporation and
authorized under section 217(2).
(v) Articles of incorporation for 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 conversion under this section takes effect, all of
the following apply:
(a) The nonprofit organization converts into 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 nonprofit organization. The conversion of the
nonprofit organization into a domestic corporation under this
section shall not be considered to affect any obligations or
liabilities of the nonprofit organization incurred before the
conversion or the personal liability of any person incurred before
the conversion, and the conversion shall not be considered to
affect the choice of law applicable to the nonprofit organization
with respect to matters arising before the conversion.
(c) The title to all real estate and other property and rights
owned by the nonprofit organization remain vested in the surviving
domestic corporation without reversion or impairment. The rights,
privileges, powers, and interests in property of the nonprofit
organization, as well as the debts, liabilities, and duties of the
nonprofit organization, shall not be considered, as a consequence
of the conversion, to have been transferred to the surviving
domestic corporation to which the nonprofit organization has
converted for any purpose of the laws of this state.
(d) The surviving domestic corporation may use the name and
the assumed names of the nonprofit organization if the filings
required under section 217(2) or any other applicable statute are
made and the laws regarding use and form of names are followed.
(e) A proceeding pending against the nonprofit organization
may be continued as if the conversion had not occurred, or the
surviving domestic corporation may be substituted in the proceeding
for the nonprofit organization.
(f) The surviving domestic corporation is considered to be the
same entity that existed before the conversion and is considered to
be incorporated or organized on the date that the nonprofit
organization was originally incorporated or organized.
(g) The ownership interests of the nonprofit organization that
were to be converted into shares, member or director interests, or
other obligations of the surviving domestic corporation or into
cash or other property are converted.
(h) Unless otherwise provided in a plan of conversion adopted
in accordance with this section, the nonprofit 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 nonprofit
organization.
(4) As used in this section:
(a) "Entity" means a domestic corporation or nonprofit
organization.
(b) "Nonprofit organization" means an organization or entity
organized or formed to carry out any lawful purpose or purposes
that does not involve pecuniary profit or gain for its directors,
officers, shareholders, members, partners, or owners. The term
includes, but is not limited to, a municipal health facilities
corporation incorporated under or governed by the municipal health
facilities corporations act, 1987 PA 230, MCL 331.1101 to 331.1507.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. 1115
of the 95th Legislature is enacted into law.