March 31, 2009, Introduced by Senator KUIPERS and referred to the Committee on Judiciary.
A bill to amend 1982 PA 162, entitled
"Nonprofit corporation act,"
by amending sections 124, 261, 501, and 541 (MCL 450.2124,
450.2261, 450.2501, and 450.2541), section 124 as amended by 2002
PA 33 and section 541 as amended by 1987 PA 170.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 124. (1) This act does not modify the requirements of the
(a) The supervision of trustees for charitable purposes act,
1961 PA 101, MCL 14.251 to 14.266.
(b) 1965 PA 169, MCL 450.251 to 450.253.
(c) The charitable organizations and solicitations act, 1975
PA 169, MCL 400.271 to 400.294.
(d) The uniform prudent management of institutional funds act.
1976 PA 157, MCL 450.1201 to 450.1210.
(e) The career development and distance learning act, 2002 PA
36, MCL 390.1571 to 390.1579.
A corporation subject to
any 1 or more of the acts listed
in subsection (1) shall comply with those acts and shall comply
with this act. If there is any inconsistency between those acts and
this act, those acts shall control.
Sec. 261. (1) A corporation, subject to any limitation
provided in this act, in any other statute of this state, in its
of incorporation, or otherwise by law,
shall have power
furtherance of its corporate purposes
to do any of the
(a) Have perpetual duration.
(b) Sue and be sued in all courts and participate in actions
and proceedings judicial, administrative, arbitrative, or
like cases as the same
manner as a 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 purposes of the corporation, the conduct of
its affairs, its rights and powers, and the rights and powers of
its shareholders, members, 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
or an interest
therein in real
or personal property,
wherever situated, either absolutely or in trust and without
limitation as to amount or value.
(g) Sell, convey, lease, exchange, transfer, or otherwise
dispose of, or mortgage or pledge, or create a security interest
any of its property, or an interest
therein in the property,
(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 or memberships issued by others,
whether engaged in similar or different business, governmental, or
other activities, including banking corporations or trust
companies. A corporation organized or conducting affairs in this
under this act
may 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 such 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
or an interest
the property, wherever situated.
(j) Lend money, invest and reinvest its funds, and take and
hold real and personal property as security for the payment of
funds loaned or invested.
(k) Make donations for public welfare or for community fund,
hospital, charitable, educational, scientific, civic, or similar
purposes, and in time of war or other national emergency in aid
of war or other national
(l) Pay pensions, establish and carry out pension, 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
(n) Participate with others in any corporation, business
corporation, partnership, limited partnership, joint venture, or
other association of any kind, or participate with others in any
undertaking, or agreement
which that the participating
corporation would have power to conduct by itself, whether or not
the participation involves sharing or delegation of control with or
(o) Cease its corporate activities and dissolve.
(p) Conduct its affairs, carry on its operations, and have
offices and exercise the powers granted by this act in any
jurisdiction within or without the United States, and, in the case
of a corporation the purpose or purposes of which require the
transaction of business, the receipt and payment of money, the care
and custody of property, and other incidental business matters,
transact such business, receive, collect, and disburse such money,
and engage in such other incidental business matters as are
naturally or properly within the scope of its articles.
(q) Have and exercise all powers necessary or convenient to
effect any purpose for which the corporation is formed.
A corporation subject to
Act No. 157 of the Public Acts of 1976,
being sections 451.1201 to 451.1210 of the Michigan Compiled Laws,
shall have the uniform prudent
management of institutional
act has all powers granted under both this
Act No. 157
of the Public Acts of 1976 that
act. However, in the event of
this act and Act No. 157 of the Public Acts
of 1976, Act No. 157 shall control the
2 acts, the uniform
prudent management of institutional funds act controls.
(3) The corporate existence of all corporations incorporated
the effective date of this act January 1, 1983, without
capital stock, for religious, benevolent, social, or fraternal
to be in perpetuity. A
limitation or term fixed in the articles or in the law under which
corporation originally incorporated
shall not be is not
unless the corporation
has affirmatively waived its right
subsequent to after September 18, 1931,
fixing a definite term of existence by amendment to its articles.
Any nonprofit power corporation
which that is authorized
to furnish electric service may construct, maintain, and operate
its lines along, over, across, or under any public places, streets,
and highways, and across or under the waters in this state, with
all necessary erections and fixtures. A nonprofit power corporation
may exercise the power of eminent domain, in the manner provided by
No. 87 of the Public Acts of 1980, as amended, being sections 213.51
to 213.77 of the Michigan Compiled Laws the uniform
condemnation procedures act, 1980 PA 87, MCL 213.51 to 213.75. As a
condition to the exercise of any of these powers, nonprofit
shall be are subject to the jurisdiction of the
Michigan public service commission pursuant to
106 of the Public
Acts of 1909, as amended, being sections 460.551 to 460.559 of
the Michigan Compiled Laws 1909 PA 106, MCL 460.551 to 460.559,
No. 419 of the Public Acts of 1919, as amended, being sections 460.51
to 460.62 of the Michigan Compiled Laws 1919 PA 419, MCL
to 460.62, and
Act No. 3 of the
Public Acts of 1939, as amended,
being sections 460.1 to 460.8 of the Michigan Compiled Laws
1939 PA 3, MCL
460.1 to 460.11.
Sec. 501. (1) The business and affairs of a corporation shall
be managed by its board, except as otherwise provided in this act.
A director need not be a shareholder or member of the corporation
unless the articles or bylaws so require. The articles or bylaws
may prescribe qualifications for directors.
The board of a corporation
which that is subject to Act No.
157 of the Public Acts of 1976, being sections 451.1201 to 451.1210
of the Michigan Compiled Laws, shall have the uniform
prudent management of institutional funds act has the powers
Act No. 157 of the Public Acts of 1976 both that act
and this act. However, in the event of an inconsistency between
act and Act No. 157 of the Public Acts of 1976, Act No. 157 shall
control the 2 acts, the
uniform prudent management of
institutional funds act controls.
Sec. 541. (1) A director or an officer shall discharge the
of that position in good faith and with
care, and skill
which that an ordinarily prudent person
would exercise under similar circumstances in a like position. In
discharging the duties, a director or an officer, when acting in
good faith, may rely upon the opinion of counsel for the
corporation, upon the report of an independent appraiser selected
with reasonable care by the board, or upon financial statements of
the corporation represented to the director or officer as correct
the president or the officer of the corporation
having who has
charge of its books or account, or as stated in a written report by
an independent public or certified public accountant or firm of
accountants fairly to reflect the financial condition of the
(2) A director or officer of a corporation subject to the
prudent management of institutional funds act,
the Public Acts of 1976, being sections 451.1201 to 451.1210 of the
Michigan Compiled Laws, shall be
considered to be in compliance
when if the director or officer complies with
7 of Act No. 157 of the Public Acts of 1976 the uniform
prudent management of institutional funds act in the administration
the powers specified in that
(3) If the corporation's articles of incorporation contain a
authorized under section 209(c),
then a volunteer
of the corporation
only be personally liable for
monetary damages for a breach of fiduciary duty as a director to
the corporation, its shareholders, or its members to the extent set
forth in the provision.
(4) If the corporation's articles of incorporation contain a
authorized under section 209(d),
then a claim for
monetary damages for a breach of a volunteer director's duty to any
person other than the corporation, its shareholders, or its members
not be brought or maintained against
a the volunteer
Such a The claim shall be brought or maintained instead
the corporation, which
corporation shall be liable for the
any breach of the volunteer director's duty.
(5) 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.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. 411
of the 95th Legislature is enacted into law.