HOUSE BILL No. 5679

 

February 15, 2006, Introduced by Reps. Gaffney and Lemmons, III and referred to the Committee on Commerce.

 

     A bill to amend 1972 PA 284, entitled

 

"Business corporation act,"

 

by amending sections 231, 441, and 505 (MCL 450.1231, 450.1441, and

 

450.1505), sections 231 and 441 as amended by 1989 PA 121 and

 

section 505 as amended by 1993 PA 91.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 231. The initial bylaws of a corporation shall be adopted

 

by its incorporators, its shareholders, or its board under section

 

223.  The shareholders or the board may amend or repeal the bylaws

 

or adopt new bylaws unless the articles of incorporation or bylaws

 

provide that the power to  After adoption of the initial bylaws,

 

the power to amend or repeal the bylaws or adopt new bylaws is

 

reserved exclusively to the shareholders.  or that the bylaws or

 


any particular bylaw shall not be altered or repealed by the board.  

 

The bylaws may contain any provision for the regulation and

 

management of the affairs of the corporation not inconsistent with

 

law or the articles of incorporation.

 

     Sec. 441. (1) Except as provided in sections 794 and 798, each

 

outstanding share is entitled to 1 vote on each matter submitted to

 

a vote, unless otherwise provided in the articles of incorporation.

 

A vote may be cast either orally or in writing, unless otherwise

 

provided in the bylaws.

 

     (2)  If an action, other than the election of directors,  

 

Except as provided in subsection (3) or (4), an action that is to

 

be taken by vote of the shareholders  , it  shall be authorized by

 

a majority of the votes cast by the holders of shares entitled to

 

vote on the action, unless a greater vote is required by the

 

articles or another section of this act.

 

     (3) Except as otherwise provided by the articles, directors

 

shall be elected by a plurality of the votes cast at an election.

 

     (4) The amendment or repeal of the bylaws or the adoption of

 

new bylaws shall be authorized by a majority of the votes cast by

 

the holders of shares entitled to vote on that action.

 

     Sec. 505. (1) The board shall consist of 1 or more members.

 

The number of directors shall be fixed by, or in the manner

 

provided in, the bylaws, unless the articles of incorporation fix

 

the number.

 

     (2) The term of office of a director is 3 years. A different

 

term of office specified in the articles of incorporation or bylaws

 

is not enforceable. The first board of directors shall hold office

 


until the  first  third annual meeting of shareholders after the

 

formation of the corporation. At the  first  third annual meeting

 

of shareholders after the formation of the corporation and at each

 

third succeeding annual meeting thereafter, the shareholders shall

 

elect directors to hold office  until the succeeding annual

 

meeting, except in case of the classification of directors as

 

permitted by this act  for 3-year terms.

 

     (3) A director shall hold office for the 3-year term for which

 

he or she is elected and until his or her successor is elected and

 

qualified  ,  or until his or her resignation or removal. A

 

director may resign by written notice to the corporation. The

 

resignation is effective upon its receipt by the corporation or a

 

later time as set forth in the notice of resignation.

 

     (4)  (3)  The shareholders or board may designate 1 or more

 

directors as an independent director. Any director  so  designated

 

shall be  as an independent director is entitled to reasonable

 

compensation in addition to compensation paid to directors

 

generally, as determined by the board or shareholders, and

 

reimbursement for expenses reasonably related to service as an

 

independent director. An independent director may communicate with

 

shareholders at the corporation's expense, as part of a

 

communication or report sent by the corporation to shareholders. An

 

independent director shall not have any greater duties or

 

liabilities than any other director.