Bill Text: MI HB6454 | 2009-2010 | 95th Legislature | Introduced

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Bill Title: Businesses; business corporations; triple benefit and public benefit corporation; authorize. Amends secs. 106, 108, 109, 202, 211, 541a & 821 of 1972 PA 284 (MCL 450.1106 et seq.).

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Introduced - Dead) 2010-09-21 - Printed Bill Filed 09/17/2010 [HB6454 Detail]

Download: Michigan-2009-HB6454-Introduced.html

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HOUSE BILL No. 6454

 

September 16, 2010, Introduced by Reps. Barnett, Haugh, Liss, Lipton, Clemente and Griffin and referred to the Committee on New Economy and Quality of Life.

 

     A bill to amend 1972 PA 284, entitled

 

"Business corporation act,"

 

by amending sections 106, 108, 109, 202, 211, 541a, and 821 (MCL

 

450.1106, 450.1108, 450.1109, 450.1202, 450.1211, 450.1541a, and

 

450.1821), section 106 as amended by 2006 PA 68, sections 108, 202,

 

and 821 as amended and section 541a as added by 1989 PA 121,

 

section 109 as amended by 1993 PA 91, and section 211 as amended by

 

2008 PA 402.

 

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. The term includes

 

a public benefit corporation or a triple benefit corporation.

 

     (2) "Department" means the department of energy, 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. 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) "Triple benefit corporation" means a domestic corporation

 

that has included in its articles of incorporation a purpose that

 

meets, and that at all times conducts its activities to meet, all

 

of the following requirements:

 

     (a) The corporation significantly furthers the accomplishment

 

of 1 or more charitable or educational purposes described in

 

section 170(c)(2)(B) of the internal revenue code, 26 USC 170, and

 

would not have been formed except to accomplish those charitable or

 

educational purposes.

 

     (b) The production of income or appreciation of property is

 

not a significant purpose of the corporation. However, in the

 

absence of other factors, the fact that a corporation produces

 

significant income or capital appreciation is not conclusive

 

evidence of a significant purpose involving the production of

 

income or the appreciation of property.

 

     (c) The purposes of the corporation do not include

 

accomplishing 1 or more political or legislative purposes described

 

in section 170(c)(2)(D) of the internal revenue code, 26 USC 170.

 

     Sec. 109. (1) "Shareholder" means a person holding units of

 

proprietary interest in a corporation and is considered to be

 

synonymous with "member" in a nonstock corporation.

 

     (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.

 

     (3) "Triple benefit corporation" means a domestic corporation

 

that includes in its articles of incorporation a purpose that

 

meets, and that at all times conducts its activities to meet, all

 

of the following requirements:

 

     (a) The corporation must balance the interests of both people

 

and the planet while pursuing profit.

 

     (b) The corporation exists to serve equally the interests of

 

all of its stakeholders, including, but not limited to,

 

shareholders, employees, contractors, creditors, customers,

 

suppliers, society at large, and the physical world in which it

 

operates.

 

     (c) The production of income or appreciation of property is

 

considered of equal importance to serving the interests of society

 

and the directors, managers, and employees shall strive at all

 

times to balance the interests of all of the stakeholders described

 

in subdivision (b) in connection with pursuing profit or

 

appreciation of the corporation's property.

 

     (d) The corporation is permitted to engage in any political or

 

legislative activities allowed by law if the objectives of those

 

activities further the interests of all of the stakeholders

 

described in subdivision (b) equally and not just the interests of

 

the corporation or its industry.

 

     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. All of

 

the following apply for purposes of this subdivision:

 

     (i) 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) If the corporation is a public benefit corporation, it is

 

sufficient compliance with this subdivision to refer to section

 

108(3) and to adopt by reference the requirements described in that

 

section as the purpose for which the corporation is formed.

 

     (iv) If the corporation is a triple benefit corporation, it is

 

sufficient compliance with this subdivision to refer to section

 

109(3) and to adopt by reference the requirements described in that

 

section as the purpose for which the corporation is formed.

 

     (c) The aggregate number of shares which 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. (1) The Except as provided in subsections (2) and

 

(3), 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.

 

     (2) The name of a public benefit corporation shall contain the

 

words "public benefit corporation", or the abbreviation "P.B.C." or

 

"p.b.c.", with or without periods or other punctuation.

 

     (3) The name of a triple benefit corporation shall contain the

 

words "triple benefit corporation" or "people planet profit

 

corporation", or contain the abbreviation "T.B.C.", "t.b.c.",

 

"3.B.C.", "3.b.c.", "3.P.C.", or "3.p.c.", with or without periods

 

or other punctuation.

 

     Sec. 541a. (1) A director or officer shall discharge his or

 

her duties as a director or officer including his or her duties as

 

a member of a committee in the following manner:

 

     (a) In good faith.

 

     (b) With the care an ordinarily prudent person in a like

 

position would exercise under similar circumstances.

 

     (c) In a manner he or she reasonably believes to be in the

 

best interests of the corporation.

 

     (2) In discharging his or her duties, a director or officer is

 

entitled to rely on information, opinions, reports, or statements,

 

including financial statements and other financial data, if

 

prepared or presented by any of the following:

 

     (a) One or more directors, officers, or employees of the

 

corporation, or of a business organization under joint control or

 

common control, whom the director or officer reasonably believes to

 

be reliable and competent in the matters presented.

 

     (b) Legal counsel, public accountants, engineers, or other

 

persons as to matters the director or officer reasonably believes

 

are within the person's professional or expert competence.

 

     (c) A committee of the board of which he or she is not a

 

member if the director or officer reasonably believes the committee

 

merits confidence.

 

     (3) A director or officer is not entitled to rely on the

 

information set forth in subsection (2) if he or she has knowledge

 

concerning the matter in question that makes reliance otherwise

 

permitted by subsection (2) unwarranted.

 

     (4) For purposes of determining if a director or officer of a

 

public benefit corporation has complied with subsection (1) in the

 

discharge of his or her duties as a director or officer, there is a

 

rebuttable presumption that he or she acted in good faith, on an

 

informed basis, and with a view to the best interests of the

 

corporation. If a director or officer of a public benefit

 

corporation acts in good faith to advance the purpose or meet any

 

of the requirements described in section 108(3) in discharging his

 

or her duties, that action does not create or authorize any cause

 

of action against the corporation or its directors or officers.

 

     (5) For purposes of determining if a director or officer of a

 

triple benefit corporation has complied with subsection (1) in the

 

discharge of his or her duties as a director or officer, there is a

 

rebuttable presumption that he or she acted in good faith, on an

 

informed basis, and with a view to the best interests of the

 

corporation. If a director or officer of a triple benefit

 

corporation acts in good faith to advance the purpose or meet any

 

of the requirements described in section 109(3) in discharging his

 

or her duties, that action does not create or authorize any cause

 

of action against the corporation or its directors or officers.

 

     (6) (4) An action against a director or officer for failure to

 

perform the duties imposed by this section shall be commenced

 

within 3 years after the cause of action has accrued, or within 2

 

years after the time when the cause of action is discovered or

 

should reasonably have been discovered, by the complainant,

 

whichever occurs first.

 

     Sec. 821. (1) The attorney general may bring an action in the

 

circuit court of the county in which the principal place of

 

business or registered office of the a corporation is located for

 

dissolution of a the corporation upon on the ground that the

 

corporation has committed any of the following acts:

 

     (a) Procured its organization through fraud.

 

     (b) Repeatedly and willfully exceeded the authority conferred

 

upon on it by law.

 

     (c) Repeatedly and willfully conducted its business in an

 

unlawful manner.

 

     (d) If the corporation is a public benefit corporation, ceased

 

to meet any of the requirements described in section 108(3) and for

 

60 days after it ceased to meet those requirements failed to file a

 

certificate of amendment amending its name to conform with the

 

requirements of sections 211 and 212.

 

     (e) If the corporation is a triple benefit corporation, ceased

 

to meet any of the requirements described in section 109(3) and for

 

60 days after it ceased to meet those requirements failed to file a

 

certificate of amendment amending its name to conform with the

 

requirements of sections 211 and 212.

 

     (2) The enumeration in this section of grounds for dissolution

 

does not exclude any other statutory or common law action by the

 

attorney general for dissolution of a corporation or revocation or

 

forfeiture of its corporate franchises.