Michigan Corporation Law & Practice

Michigan Corporation Law & Practice is the authoritative research tool covering all aspects of Michigan corporate law and practice. It provides clear, reliable guidance to the laws, legislative history, and major case holdings. This complete guide provides a thorough background to the Michigan Business Corporation Act, including discussion of the process by which the corporate entity is created, governed, and ultimately terminated. The text also discusses the closely related Michigan Limited Liability Company Act.

The 2021 revision of Michigan Corporation Law & Practice edits and updates the previous edition. Many sections are reorganized for clarity and accessibility. The text includes expanded coverage of limited liability companies.

The revised edition reflects:

• Court decisions applying Michigan law to corporations and limited liability companies relating to:
  • Shareholder oppression.
  • Fiduciary duty.
  • Derivative actions.
  • Director duties.
  • Interested director transactions.
  • Valuation.
• Delaware developments relevant to Michigan law:
  • Permitted charter and bylaw provisions.
  • Fiduciary duties of directors.
  • Fiduciary duties of limited liability company managers.
  • Inspection of books and records.
  • Appraisal rights.
  • Internal affairs doctrine.

Note: Online subscriptions are for three-month periods.

PREFACE

INTRODUCTION

ABOUT THE AUTHORS

CHAPTER 1 DEFINITIONS, APPLICATION, FILINGS

• 1.1 Scope of Book and Chapter
• 1.2 Background and General Philosophy of the Act
• 1.3 Advantages of Michigan Incorporation
• 1.4 Rules of Construction and Policies of the Act
• 1.5 Definitions—General
• 1.6 Financial Terms
• 1.7 Application of the Act—Types of Corporations
• 1.8 Existing Corporations
• 1.9 Filing Procedures
• 1.10 Notices

CHAPTER 2 INCORPORATION, NAME AND POWERS (INCLUDING CHAPTER 2A PROFESSIONAL CORPORATIONS)

• 2.1 Introduction
• 2.2 Incorporation; Commencement of Existence
• 2.3 Articles of Incorporation—Required Provisions
• 2.4 Optional Provisions
• 2.5 Corporate Name
• 2.6 Assumed Name
• 2.7 First Meeting of Board of Directors
• 2.8 Bylaws
• 2.9 Registered Office and Resident Agent; Service of Process
• 2.10 Corporate Purposes and Powers
• 2.11 Guarantees
• 2.12 Ultra Vires
• 2.13 Usury Defense
• 2.14 Chapter 2A—Professional Corporations

CHAPTER 3 CAPITAL STRUCTURE AND CORPORATE FINANCE

• 3.1 Introduction
• 3.2 Authorization of Shares
• 3.3 Issuance of Shares in Series
• 3.4 Principle of Equality of Shares within a Class
• 3.5 Convertible Shares and Bonds
• 3.6 Subscriptions for Shares
• 3.7 Redeemable Shares
• 3.8 Consideration for Shares
• 3.9 Liability of Shareholders
• 3.10 Share Certificates
• 3.11 Share Dividends
• 3.12 Share Options
• 3.13 Shareholders' Preemptive Rights
• 3.14 Corporation's Authority to Acquire Its Own Shares
• 3.15 Distributions to Shareholders—Generally
• 3.16 Distributions to Shareholders—Status of Indebtedness and Installment Repurchases of Shares
• 3.17 Liabilities of Directors and Shareholders for Illegal Distributions
• 3.18 Rights of Bondholders

CHAPTER 4 SHAREHOLDERS

• 4.1 Introduction
• 4.2 Annual and Special Meetings of Shareholders
• 4.3 Notice and Record Date
• 4.4 Quorum
• 4.5 Shareholder Action Without a Meeting
• 4.6 Shareholders List
• 4.7 Shares Held by Nominees
• 4.8 Proxies
• 4.9 Inspectors of Elections
• 4.10 Shareholder Vote—Generally
• 4.11 Class Voting
• 4.12 Voting by Corporations, Pledgees and Others
• 4.13 Cumulative Voting
• 4.14 Increased Voting (Supermajority) Requirements
• 4.15 Voting Agreements
• 4.16 Shareholder Control Agreements
• 4.17 Voting Trusts
• 4.18 Transfer of Shares; Share Transfer Restrictions
• 4.19 Corporate Books and Records
• 4.20 Financial Reports
• 4.21 Shareholder and Director Inspection Rights
• 4.21a Shareholder Agreements
• 4.22 Oppression
• 4.23 Fiduciary Obligations of Controlling Shareholders
• 4.24 Derivative Actions—Generally
• 4.25 Derivative Actions—Prerequisites
• 4.26 Derivative Actions—Stay and Dismissal on Corporation Motion
• 4.27 Derivative Suits—Discontinuance Generally
• 4.28 Derivative Suits—Payment of Expenses and Receipt of Personal Consideration by Plaintiff upon Termination

CHAPTER 5 DIRECTORS AND OFFICERS

• 5.1 Introduction
• 5.2 Board of Directors—Size and Term
• 5.3 The Independent Director
• 5.4 Removal, Vacancies
• 5.5 Meetings
• 5.6 Quorum and Vote
• 5.7 Committees
• 5.8 Officers: Appointment, Removal and Resignation
• 5.9 Duties of Directors and Officers
• 5.10 Limitation on Liability of Directors
• 5.11 Duties of Directors in Corporate Takeovers and Other Change of Control Transactions
• 5.12 Duties of Directors and Officers: The Corporate Opportunity Doctrine
• 5.13 Transactions with Interested Directors
• 5.14 Compensation of Directors
• 5.15 Loans or Guarantees for Officers or Employees
• 5.16 Director and Shareholder Liabilities for Distributions and Loans
• 5.17 Indemnification and Insurance for Directors and Officers

CHAPTER 6 AMENDMENTS TO ARTICLES OF INCORPORATION

• 6.1 Introduction
• 6.2 Permissible Amendments
• 6.3 Vested Rights Doctrine
• 6.4 Procedure for Amendment
• 6.5 Class Voting on Amendments
• 6.6 Appraisal Rights
• 6.7 Restated Articles of Incorporation

CHAPTER 7 CORPORATE COMBINATIONS AND DISPOSITIONS

• 7.1 Introduction
• 7.2 Corporate Combinations—In General
• 7.3 Mergers—Procedures
• 7.4 Triangular Variations on Merger
• 7.5 Short-Form Mergers
• 7.6 Effect of Merger
• 7.7 Share Exchange
• 7.8 Effect of Share Exchange
• 7.9 Mergers and Share Exchanges of Domestic and Foreign Corporations
• 7.9a Cross-Entity Mergers
• 7.10 Abandonment of Merger or Share Exchange
• 7.10a Conversion
• 7.11 Sales of Assets
• 7.12 Rights of Creditors in Asset Sales
• 7.13 Freezeouts and the Problems of Fairness
• 7.14 Fairness in Mergers and Acquisitions Generally
• 7.15 Upside-Down Acquisitions
• 7.16 Shareholders' Right to Dissent—General
• 7.17 Dissent Procedure
• 7.18 Exclusivity of Appraisal

CHAPTER 7A/7B/7C ANTITAKEOVER PROVISIONS

7A/7B/7C.1 Introduction

PART I: CHAPTER 7A BUSINESS COMBINATIONS

• 7A.1 Overview
• 7A.2 Coverage Generally
• 7A.3 Definitions
• 7A.4 Vote Required for Business Combinations
• 7A.5 Fair Price, Five Years and Other Conditions
• 7A.6 Existing Interested Shareholder (Grandfather Clause)
• 7A.7 Opt Out Provisions
• 7A.8 General Exemptions
• 7A.9 Planning
• PART II: CHAPTER 7B CONTROL SHARE ACQUISITIONS
• 7B.1 Repealed
• PART III: CHAPTER 7C MISCELLANEOUS TAKEOVER PROVISIONS
• 7C.1 General
• 7C.2 Other Defensive Considerations
• 7C.3 Planning

CHAPTER 8 DISSOLUTION

• 8.1 Introduction
• 8.2 Voluntary Dissolution
• 8.3 Involuntary Dissolution–Deadlock
• 8.4 Action by Attorney General
• 8.5 “Automatic” Dissolution
• 8.6 Liquidation
• 8.7 Claims of Creditors and Distributions to Shareholders
• 8.8 Judicial Reorganizations

CHAPTER 9 REPORTS

• 9.1 Introduction
• 9.2 Annual Report to Shareholders
• 9.3 Annual Report to Administrator
• 9.4 Failure to File Annual Report—Financial Penalties
• 9.5 Automatic Dissolution, Revocation of Certificate of Authority
• 9.6 False Statements in Reports and Filings

CHAPTER 10 FOREIGN CORPORATIONS; FEES; MISCELLANEOUS PROVISIONS

• 10 .1 Introduction
• 10.2 Foreign Corporations Authorized to Do Business in Michigan
• 10.3 Foreign Corporations—What Constitutes Transacting Business
• 10.4 Application for Certificate of Authority
• 10.5 Other Filings
• 10.6 Withdrawal, Dissolution and Termination
• 10.7 Revocation of Certificate of Authority
• 10.8 Transacting Business Without Certificate of Authority
• 10.9 Application of Act to Certain Entities
• 10.10 Fees—Filing and Copying of Documents
• 10.11 Organization and Admission Fee

CHAPTER 11 MICHIGAN LIMITED LIABILITY COMPANY ACT

• 11.1 Introduction
• 11.2 Formation and Filings
• 11.3 Members
• 11.4 Operating Agreements
• 11.5 Transfer of Membership Interests
• 11.6 Management
• 11.7 Dissolution
• 11.8 Other Provisions
• 11.9 General

TABLE OF FORMS

STATUTES: MICHIGAN BUSINESS CORPORATION ACT

MICHIGAN LIMITED LIABILITY COMPANY ACT

TABLE OF CASES

TABLE OF CITATIONS TO MICHIGAN ACT

INDEX