Michigan Corporation Law
The law governing Michigan corporations is set forth in the Michigan Corporations Act. The Act specifies how a corporation may be formed in Michigan, what rules it must follow during its existence and how a Michigan corporation may be dissolved.
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Definition
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The Michigan Department of Labor, Energy, and Economic Growth (DELEG) defines a "corporation" as " an association of persons, created by law and existing as an entity with powers and liabilities independent of those of its members." A corporation is usually governed by a board of directors, which makes decisions in accordance with a corporation's bylaws.
Formation
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One or more persons may form a corporation in Michigan by filing a copy of the corporation's Articles of Incorporation with DELEG. A corporation's Articles of Incorporation must include the name of the corporation, including the word "corporation," "incorporated," "company," or "limited," or the abbreviation "Corp.," "Ltd.," "Inc.," or "Co."; the name and address of the corporation's resident agent; the name and business address of the incorporator or incorporators; a general statement describing the corporation's business; how long the corporation plans to exist; the total number of shares to be issued, a description of each class of shares to be issued and the number of shares in each class to be issued.
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Annual Filings
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Each year after its formation, a corporation is required to file an Information Update with DELEG. Usually, DELEG sends an update form to the corporation's registered address in Michigan. The corporation should note any changes on the form, such as a change of address or resident agent, and mail the form back to DELEG. Under the Michigan Corporations Act, a corporation that does not return its Information Update may be automatically dissolved. The Act requires DELEG to send notice to the corporation's resident agent before the corporation may be dissolved.
Powers
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Under the Michigan Corporations Act, a corporation has the power to exist perpetually; to sue and be sued in court; to create and use a corporate seal; to adopt and amend bylaws; to elect or appoint directors and officers; to buy, sell, and own real and personal property, including shares of stock and other financial instruments; to make contracts; to borrow, donate, and lend money; to pay its employees, officers, and/or directors; to dissolve itself; to transact business, including partnering with other individuals or corporations in order to transact business and to join a mutual insurance company.
Dissolution
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A corporation in Michigan may be dissolved by its incorporators, directors, shareholders, by the expiration of its term of existence, or by failing to file annual reports with DELEG for at least two years. Specific methods by which the corporation can be dissolved are usually included in the corporation's bylaws.
To dissolve a corporation in Michigan, the corporation must file a Notice of Dissolution with DELEG. It must also file a tax clearance with the Michigan Department of Treasury within 60 days after its dissolution.
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References
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