SB-1319, As Passed Senate, November 28, 2012

SENATE BILL No. 1319

September 25, 2012, Introduced by Senators JONES and SCHUITMAKER and referred to the Committee on Judiciary.

     A bill to amend 1993 PA 23, entitled

"Michigan limited liability company act,"

by amending sections 102 and 902 (MCL 450.4102 and 450.4902),

section 102 as amended by 2010 PA 290 and section 902 as amended by

2010 PA 126.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 102. (1) Unless the context requires otherwise, the

definitions in this section control the interpretation of this act.

     (2) As used in this act:

     (a) "Administrator" means the director of the department or

his or her designated representative.

     (b) "Articles of organization" means the original documents

filed to organize a limited liability company, as amended or

restated by certificates of correction, amendment, or merger, by

restated articles, or by other instruments filed or issued under

any statute.

     (c) "Constituent" means a party to a plan of merger, including

the survivor.

     (d) "Contribution" means anything of value that a person

contributes to the limited liability company as a prerequisite for,

or in connection with, membership, including cash, property,

services performed, or a promissory note or other binding

obligation to contribute cash or property, or to perform services.

     (e) "Corporation" or "domestic corporation" means any of the

following:

     (i) A corporation formed under the business corporation act,

1972 PA 284, MCL 450.1101 to 450.2098.

     (ii) A corporation existing on January 1, 1973 and formed under

another statute of this state for a purpose for which a corporation

may be formed under the business corporation act, 1972 PA 284, MCL

450.1101 to 450.2098.

     (iii) A corporation formed under the professional service

corporation act, former 1962 PA 192. , MCL 450.221 to 450.235.

     (f) "Department" means the department of energy, labor, and

economic growth.licensing and regulatory affairs.

     (g) "Distribution" means a direct or indirect transfer of

money or other property or the incurrence of indebtedness by a

limited liability company to or for the benefit of its members or

assignees of its members in respect of the members' membership

interests.

     (h) "Electronic transmission" or "electronically transmitted"

means any form of communication that meets all of the following:

     (i) It does not directly involve the physical transmission of

paper.

     (ii) It creates a record that may be retained and retrieved by

the recipient.

     (iii) It may be directly reproduced in paper form by the

recipient through an automated process.

     (i) "Foreign limited liability company" means a limited

liability company formed under laws other than the laws of this

state.

     (j) "Foreign limited partnership" means a limited partnership

formed under laws other than the laws of this state.

     (k) "Limited liability company" or "domestic limited liability

company" means an entity that is an unincorporated membership

organization formed under this act.

     (l) "Limited partnership" or "domestic limited partnership"

means a limited partnership formed under the Michigan revised

uniform limited partnership act, 1982 PA 213, MCL 449.1101 to

449.2108.

     (m) "Low-profit limited liability company" means a limited

liability company that has included in its articles of organization

a purpose that meets, and that at all times conducts its activities

to meet, all of the following requirements:

     (i) The limited liability company 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.

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

not a significant purpose of the limited liability company.

However, in the absence of other factors, the fact that a limited

liability company produces significant income or capital

appreciation is not conclusive evidence of a significant purpose

involving the production of income or the appreciation of property.

     (iii) The purposes of the limited liability company 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.

     (n) "Majority in interest" means a majority of votes as

allocated by an operating agreement, or by the statute in the

absence of an allocation by operating agreement, and held by

members entitled to vote on a matter submitted for a vote by

members.

     (o) "Manager" or "managers" means a person or persons

designated to manage the limited liability company pursuant to a

provision in the articles of organization stating that the business

is to be managed by or under the authority of managers.

     (p) "Member" means a person who has been admitted to a limited

liability company as provided in section 501, or, in the case of a

foreign limited liability company, a person that is a member of the

foreign limited liability company in accordance with the laws under

which the foreign limited liability company is organized.

     (q) "Membership interest" or "interest" means a member's

rights in the limited liability company, including, but not limited

to, any right to receive distributions of the limited liability

company's assets and any right to vote or participate in

management.

     (r) "Operating agreement" means a written agreement by the

member of a limited liability company that has 1 member, or between

all of the members of a limited liability company that has more

than 1 member, pertaining to the affairs of the limited liability

company and the conduct of its business. The term includes any

provision in the articles of organization pertaining to the affairs

of the limited liability company and the conduct of its business.

     (s) "Person" means an individual, partnership, limited

liability company, trust, custodian, estate, association,

corporation, governmental entity, or any other legal entity.

     (t) "Services in a learned profession" means services rendered

by a dentist, an osteopathic physician, a physician, a surgeon, a

doctor of divinity or other clergy, or an attorney-at-law.

     (u) "Surviving company", "surviving entity", or "survivor"

means the constituent that survives a merger, as identified in the

certificate of merger.

     (v) "Vote" means an affirmative vote, approval, or consent.

     Sec. 902. As used in this article:

     (a) "Licensed person" means an individual who is licensed or

otherwise legally authorized to practice a professional service by

a court, department, board, commission, or an agency of this state

or another jurisdiction, any corporation or professional services

corporation all of whose shareholders are licensed persons, any

partnership all of whose partners are licensed persons, or any

limited liability company all of whose members and managers are

licensed persons.

     (b) "Professional service" means a type of personal service to

the public that requires as a condition precedent to the rendering

of the service the obtaining of a license or other legal

authorization. Professional service includes, but is not limited

to, services rendered by a certified or other public accountant,

chiropractor, dentist, optometrist, veterinarian, osteopathic

physician, physician, surgeon, podiatrist, chiropodist, physician's

assistant, architect, professional engineer, land surveyor, or

attorney-at-law.

     (c) "Professional services corporation" means a corporation

formed under the professional service corporation act, former 1962

PA 192 , MCL 450.221 to 450.235.or a corporation incorporated under

and governed by chapter 2A of the business corporation act, 1972 PA

284, MCL 450.1101 to 450.2098.

     Enacting section 1. This amendatory act does not take effect

unless Senate Bill No. 1320                                   

          of the 96th Legislature is enacted into law.