Under Michigan law, a “Corporation” or “domestic corporation” means a corporation formed under the Michigan Business Corporation Act, or a corporation already existing on January 1, 1973 and formed under any other Michigan statute. The Michigan Business Corporation Act applies to all domestic as well as foreign corporations that are authorized to carry out business in the state of Michigan. However, the act does not apply to insurance, surety, savings and loan associations, fraternal benefit societies, and banking corporations.
The corporate existence of a corporation begins with the filing of its articles of incorporation. One or more persons may be the incorporators of a corporation. The corporate name of a domestic corporation shall contain the word “corporation”, “company”, “incorporated”, or “limited” or shall contain one of the following abbreviations: corp., co., inc., or ltd., with or without periods. The articles of incorporation shall contain the following:
(a) The name of the corporation;
(b) The purposes for which the corporation is formed;
(c) The number of shares which the corporation has authority to issue;
(d) The classes and series of shares issues, and details concerning such shares, if any;
(e) The street address and mailing address of the corporation’s initial registered office and the name of the corporation’s initial resident agent at that address;
(f) The names and addresses of the incorporators; and
(g) The duration of the corporation if other than perpetual.
Before or after filing the articles of incorporation a majority of the incorporators shall select a board of directors. A majority of the directors constitutes a quorum for the meeting of the board. At the first meeting, the board may adopt bylaws and elect officers. Bylaws regulate the governance of the corporation and can be amended from time to time by the board of directors of a corporation.
Every domestic and foreign corporation authorized to transact business in Michigan should have a registered office as well as a resident agent.
A corporation may issue as much as the number of shares it is authorized to so in its articles of incorporation. The shares may be either of one class or may be divided into two or more classes. If the shares are of two or more classes, the shares of each class shall be designated to distinguish them from the shares of the other classes. The articles of incorporation may deny, limit, or otherwise prescribe the voting rights and may limit or prescribe the distribution, dividend, or liquidation rights of shares of any class.
Share certificates shall be issues to the share holders of a corporation. A share certificate shall state upon its face all of the following:
(a) That the corporation is formed under the laws of the state of Michigan;
(b) The name of the person to whom issued; and
(c) The number and class of shares, and the designation of the series, if any, which the certificate represents.
Meetings of shareholders may be held at a place provided in the bylaws; or at the registered office; or at such other place as may be determined by the board of directors. The annual meeting of shareholders shall be held at a time as provided in the bylaws for election of directors and for such other business as may come before the meeting.
The business of a corporation shall be managed by the direction of its board of directors. The board shall consist of one or more members. The number of directors shall be fixed by the articles of incorporation or the bylaws of the corporation. The first board of directors shall hold office until the first annual meeting of shareholders of the corporation. At the first annual meeting of shareholders and at each subsequent annual meeting, the shareholders shall elect directors to hold office until the succeeding annual meeting.
Each corporation shall annually prepare and distribute a financial report of the corporation for the preceding fiscal year to each shareholder of the corporation within four months after the end of the fiscal year. The report shall include the corporation’s statement of income, its year end balance sheet, its statement of source and application of funds if prepared by the corporation and any other information as required by the Michigan Business Corporation Act.
All domestic and foreign corporations shall file a report with the administrator no later than May 15 of each year. The report is not required to be filed in the year of incorporation. The report shall contain all of the following information:
(a) The name of the corporation.
(b) The name of its resident agent and address of its registered office in Michigan.
(c) The names and addresses of its president, secretary, treasurer, and directors.
(d) General nature and kind of business in which the corporation is engaged.
(e) For each foreign corporation, the total number of authorized shares and the most recent percentage used in computation of the tax.
If in the subsequent years there are no changes in the information provided in the last filed report, the corporation may file a report that certifies to the administrator that no changes in the required information have occurred since the last filed report.
A corporation may amend its articles of incorporation to do any of the following:
(a) Change its corporate name;
(b) Change its corporate purposes or powers;
(c) Change the duration of the corporation;
(d) Increase or decrease the number of shares;
(e) Exchange, classify, reclassify, or cancel any of its issued or unissued shares;
(f) Change the designation, preferences, limitations, and relative rights in respect of any of its issued or unissued shares;
(g) Create new classes or series of shares;
(h) Cancel or change the right of share holders to receive dividends;
(i) Authorize the board to fix or change the designation, number of, preferences, limitations, or relative rights of shares of a series.
(j) Revoke, diminish, or enlarge the authority of the board of directors.
(k) Limit, deny, or grant to shareholders of a class the preemptive right to acquire shares of the corporation.
(l) Change its registered office or change its resident agent.
(m) Strike out, change, or add any provision for management of the corporation
A corporation may be dissolved in any of the following ways:
(a) Automatically by expiration of a period of duration to which the corporation is limited by its articles of incorporation;
(b) By action of the incorporators or directors;
(c) By action of the board and the shareholders;
(d) By a judgment of the circuit court; and
(e) For failure to file an annual report or pay the filing fee.
To learn more about Michigan corporations, please visit the Michigan Department of Labor and Economic Growth Corporation Division website.