The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., outlines the requirements for the dissolution of a nonprofit corporation. When a nonprofit corporation voluntarily dissolves, it must follow a specific process to wind up its affairs. This process involves ceasing operations, notifying creditors, and distributing assets. According to MCL 450.2541, after paying or making provision for all liabilities and obligations, the remaining assets must be distributed. For a nonprofit corporation, these remaining assets must be distributed to one or more domestic or foreign corporations or organizations described in section 501(c)(3) of the Internal Revenue Code, or to the state or any political subdivision thereof for a public purpose, or to any other person or organization to which the assets may be distributed under the corporation’s articles of incorporation or bylaws, or by a court of competent jurisdiction. The key here is that assets cannot be distributed to members, directors, or officers of the corporation, as this would violate the nonprofit status. Therefore, in the scenario presented, the remaining funds after settling all debts must be transferred to another qualified 501(c)(3) organization in Michigan to fulfill the dissolution requirements.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., outlines the requirements for the dissolution of a nonprofit corporation. When a nonprofit corporation in Michigan decides to dissolve voluntarily, a specific process must be followed to ensure legal compliance. This process typically involves the adoption of a resolution by the board of directors, followed by a vote of the members, if applicable. The Michigan Nonprofit Corporation Act mandates that a plan of dissolution be adopted. This plan must detail how the corporation’s affairs will be wound up, including the disposition of its assets. Crucially, upon dissolution, any remaining assets after the satisfaction of liabilities and obligations must be distributed to one or more qualified organizations or purposes as described in the articles of incorporation or bylaws, or if not so specified, to organizations or purposes that are engaged in activities substantially similar to those of the dissolving corporation, and which are exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. This ensures that the charitable purpose for which the nonprofit was established continues to be served. Failure to adhere to these distribution requirements can lead to legal challenges and the escheatment of assets to the state.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2531, addresses the requirements for annual reporting by nonprofit corporations. This section mandates that each nonprofit corporation shall file an annual report with the Administrator of the Corporation and Securities Bureau. The report is due within the six-month period ending on the last day of the anniversary month of the corporation’s incorporation. For a corporation incorporated on April 15, 2018, the anniversary month is April. Therefore, the six-month period for filing the annual report would conclude on the last day of April in any given year. The Act specifies that the report is due within the six-month period ending on the last day of the anniversary month. This means the filing window is the six months preceding and including the anniversary month. For a corporation incorporated in April, the anniversary month is April. The six-month period ending on the last day of April is the period from November 1st of the preceding year through April 30th of the current year. Thus, the annual report is due by April 30th each year. This requirement ensures ongoing compliance and provides the state with updated information about the corporation’s status and activities. Failure to file can lead to administrative dissolution.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., outlines the framework for nonprofit governance. A critical aspect of this framework involves the dissolution of a nonprofit corporation. When a nonprofit corporation in Michigan ceases to operate, its assets must be distributed according to the law to prevent private inurement. Section 450.2781 of the Act details the order of distribution. First, creditors are paid. Then, any remaining assets are distributed to one or more qualified organizations that are exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, or to a government unit for a public purpose. This ensures that the charitable purpose for which the nonprofit was established continues to be served, or that the assets are used for a similar public benefit. The question probes the understanding of this specific distribution requirement, differentiating it from distributions to members or shareholders, which are characteristic of for-profit entities, or distributions to founders, which would violate the public benefit principle. The correct distribution pathway is to entities with a similar charitable mission or to governmental bodies.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2531, outlines the requirements for annual reports. These reports are critical for maintaining a nonprofit corporation’s active status in Michigan. The Act mandates that each domestic nonprofit corporation shall file an annual report with the administrator (Secretary of State) within the period provided by MCL 450.2532. This period is generally the six-month period beginning on January 1st of each year. Failure to file the annual report can lead to administrative dissolution. The Michigan Nonprofit Corporation Act does not require a separate filing for amendments to articles of incorporation to be included in the annual report; amendments are typically filed as separate documents when they occur, as per MCL 450.2223. Similarly, while minutes of board meetings are essential for good governance, they are not filed with the annual report. The Act also does not mandate the inclusion of a list of all current members with the annual report, although membership information is fundamental to the corporation’s structure. The primary and legally mandated component of the annual report is to update the Secretary of State on the corporation’s basic information and to affirm its continued existence and compliance.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2521, outlines the requirements for the annual meeting of members. This section mandates that if a nonprofit corporation holds an annual meeting of members, it must be held at a time and place designated by the board of directors. The Act does not specify a particular date or a requirement for the meeting to be held within Michigan if the corporation is incorporated in Michigan. The board’s authority to designate the time and place is paramount, provided it is reasonable and consistent with the corporation’s bylaws and the Act. The Act also requires notice of the annual meeting to be given to members in accordance with the bylaws or the Act itself. The absence of a specific date or location requirement in the statute means that the board has discretion, subject to the corporation’s governing documents and the general principles of corporate governance. Therefore, the board of directors is responsible for setting the time and place of the annual meeting, even if the corporation is domiciled in Michigan.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., governs the formation, operation, and dissolution of nonprofit corporations in Michigan. When a nonprofit corporation intends to sell, lease, or exchange all or substantially all of its assets, the Act mandates specific procedures to ensure transparency and protect the interests of the corporation and its stakeholders. Section 450.2481 outlines these requirements. It stipulates that such a significant disposition of assets must be approved by the board of directors and then by the members, if the corporation has members. The board’s approval requires a resolution adopted by a majority of the directors then in office. Following board approval, the members must approve the transaction through a resolution adopted by a majority of the votes cast by the members entitled to vote thereon at a meeting of members, or by the written consent of all members entitled to vote thereon. Alternatively, if the articles of incorporation or bylaws specify a different voting threshold for member approval of such transactions, that specified threshold must be met. The Act also requires that notice of the proposed transaction be given to all members entitled to vote thereon, either in person or by mail, at least twenty days before the date of the meeting or the date by which the written consent must be received. This notice must include the terms of the transaction. Therefore, the most accurate description of the required approval process for substantially all asset dispositions under Michigan law involves both board and member approval, with specific notice requirements.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., governs the formation, operation, and dissolution of nonprofit corporations in Michigan. One critical aspect of this act pertains to the liability of directors and officers. Generally, directors and officers are protected from personal liability for actions taken in their official capacity, provided they act in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the director reasonably believes to be in the best interests of the corporation. This protection is often referred to as the “business judgment rule” or statutory indemnification provisions. However, this protection is not absolute. It does not extend to intentional misconduct, knowing violations of law, or transactions where the director has a conflict of interest and fails to disclose or recuse themselves appropriately. The question focuses on a situation where a director’s actions, while perhaps negligent, do not rise to the level of intentional wrongdoing or gross negligence that would pierce the statutory shield. Therefore, the director would likely be shielded from personal liability for the financial losses incurred by the organization due to their decision-making, assuming the decision was made in good faith and with reasonable care, even if it proved to be a poor business outcome. This is a fundamental principle of corporate governance designed to encourage individuals to serve on boards without undue fear of personal financial ruin for honest mistakes. The concept is rooted in the understanding that running an organization involves inherent risks, and board members should not be held personally accountable for every unfavorable outcome, as long as their conduct meets the established standards of care and loyalty.

Michigan law, specifically the Nonprofit Corporation Act (MCL 450.2101 et seq.), outlines the procedures for amending articles of incorporation. Section 450.2531 details that amendments require a resolution adopted by the board of directors and then approval by the members. The Act specifies that notice of the proposed amendment must be provided to members, and the amendment must be adopted by a vote of the members entitled to vote thereon, typically requiring a majority of those present and voting, unless the articles or bylaws specify a higher quorum or voting threshold. The amended articles must then be filed with the Michigan Department of Licensing and Regulatory Affairs (LARA). The scenario describes a situation where the board unilaterally amends the articles without member approval, which is contrary to the statutory requirements for most significant amendments affecting the corporation’s fundamental structure or purpose. Therefore, the amendment is invalid because it bypassed the necessary member ratification process mandated by Michigan law for such fundamental changes.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., outlines the framework for nonprofit governance. A critical aspect of this framework involves the process of amending the articles of incorporation. For a nonprofit corporation, amendments to the articles of incorporation typically require approval from the board of directors and, depending on the nature of the amendment and the corporation’s bylaws, may also require approval from the members. However, the Act specifies that certain fundamental changes, such as altering the purpose of the corporation or changing its name, necessitate a vote of the members. Section 450.2510 of the Act addresses amendments to articles of incorporation. It states that the board may adopt a resolution proposing an amendment, which then must be submitted to the members for a vote at a meeting or by written consent. Unless the articles of incorporation or bylaws specify a higher quorum or voting threshold, a majority of the votes cast by members entitled to vote on the amendment is generally sufficient for approval, provided a quorum is present. If the amendment affects the rights of a particular class of members, that class must also approve the amendment. The question presents a scenario where the board of directors of a Michigan nonprofit wishes to change the organization’s stated mission. A change in mission is considered a fundamental change that directly impacts the core purpose for which the nonprofit was established. Therefore, such an amendment requires not only board approval but also member ratification. The specific voting threshold for member approval, absent any contrary provisions in the articles or bylaws, is a majority of the votes cast by members entitled to vote.

The Michigan Nonprofit Corporation Act, specifically MCL § 450.2541, outlines the requirements for a nonprofit corporation to merge with another entity. When a Michigan nonprofit corporation proposes to merge with an out-of-state nonprofit corporation, the Michigan Act requires that the surviving corporation, if it is a Michigan nonprofit, must have been formed under Michigan law. Conversely, if the surviving corporation is an out-of-state entity, it must be permitted by the laws of its domiciliary state to merge with a Michigan nonprofit corporation. Furthermore, the plan of merger must be adopted by the board of directors and then approved by the members of the Michigan nonprofit corporation. For a merger to be effective, the articles of incorporation of the surviving entity must be amended to reflect the merger, or a new entity must be formed, and the plan of merger must be filed with the Michigan Department of Licensing and Regulatory Affairs. The key consideration in this scenario is that if the out-of-state nonprofit is the survivor, Michigan law requires that the out-of-state entity must be legally capable of merging under its own state’s laws. The Michigan Nonprofit Corporation Act does not mandate that the out-of-state entity must be incorporated under Michigan law if it is the surviving entity; rather, it must be legally permitted to merge. Therefore, if the out-of-state entity is properly authorized by its home state’s statutes to undertake such a merger and the plan of merger is approved by both entities’ members and filed correctly, the merger is permissible under Michigan law.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., governs the formation, operation, and dissolution of nonprofit corporations in Michigan. One critical aspect of this act pertains to the fiduciary duties owed by directors and officers. These duties are generally understood to encompass the duty of care and the duty of loyalty. The duty of care requires directors to act with the care an ordinarily prudent person in a like position would exercise under similar circumstances, including making informed decisions and exercising reasonable oversight. The duty of loyalty mandates that directors act in the best interests of the corporation and its members, avoiding self-dealing and conflicts of interest. When a director has a personal interest in a transaction with the corporation, Michigan law provides specific procedures to ensure the transaction is fair and properly disclosed. This often involves full disclosure of the director’s interest and the material facts of the transaction to the board of directors, followed by approval by a majority of the disinterested directors or, in some cases, by the members. Failure to adhere to these requirements can lead to personal liability for the director. The scenario presented involves a director of a Michigan nonprofit, “Great Lakes Environmental Advocates,” who is also a principal in a consulting firm seeking to contract with the nonprofit. This creates a potential conflict of interest. Under Michigan law, the director must disclose their interest and the material facts of the proposed contract to the board. If the board, comprised of disinterested directors, then approves the contract after considering the disclosed information, the transaction is generally considered valid, provided it is also fair to the corporation. The question probes the understanding of how such a conflict is appropriately managed under Michigan’s statutory framework for nonprofit governance.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., outlines the framework for nonprofit governance in the state. When a nonprofit corporation is formed, its initial board of directors is typically established in the articles of incorporation or by the incorporator(s). The Act also provides mechanisms for the transition of governance. For a nonprofit that has not yet commenced operations or has no members, the initial directors hold office until their successors are elected and qualified. If the articles of incorporation do not specify a duration for the initial directors’ terms, or if there’s no provision for their election, the directors named in the articles serve until the first meeting of the incorporators or until their successors are elected. In the absence of any specific provisions in the articles of incorporation or bylaws regarding the election of directors, and if the incorporators have not yet acted to elect directors, the incorporators themselves are responsible for electing the initial board of directors. This ensures continuity and proper establishment of the governing body for the newly formed entity in Michigan.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2531, addresses the dissolution of a nonprofit corporation. When a nonprofit corporation is dissolved, its assets must be distributed in accordance with its articles of incorporation or bylaws. If neither document specifies the distribution of assets upon dissolution, or if the specified plan is ineffective, the assets must be distributed to one or more organizations that are described in Section 501(c)(3) of the Internal Revenue Code and that are engaged in activities similar to those of the dissolving corporation. This ensures that the charitable purpose for which the nonprofit was established continues to be served, preventing the private inurement of assets. The statute prioritizes the original charitable intent over any other disposition.

Michigan law, specifically the Michigan Nonprofit Corporation Act (MCL 450.2101 et seq.), governs the formation and operation of nonprofit corporations. When a nonprofit corporation in Michigan seeks to amend its articles of incorporation to change its purpose, it must follow a prescribed statutory process. This process generally involves a resolution by the board of directors and approval by the members. The specific threshold for member approval for such a fundamental change is typically a supermajority, often two-thirds of the votes cast by members entitled to vote thereon, unless the articles or bylaws specify a different, but not lesser, requirement. The articles of incorporation serve as the foundational document, and alterations to its core provisions require a more robust consensus than routine operational decisions. Failure to adhere to these statutory requirements can render the amendment invalid and expose the corporation and its directors to legal challenges. The amendment must be filed with the Michigan Department of Licensing and Regulatory Affairs (LARA) to be effective. The Act outlines that amendments affecting the corporation’s purpose are considered significant and require careful consideration and adherence to member voting rights.

Michigan law, specifically the Nonprofit Corporation Act (MCL 450.2101 et seq.), outlines the requirements for amending articles of incorporation. For a nonprofit corporation, an amendment to the articles generally requires a resolution adopted by the board of directors, followed by a vote of the members. The Act specifies that the board may adopt a resolution setting forth the proposed amendment and directing that it be submitted to a vote of the members. Unless the articles or bylaws require a greater proportion, a majority of the votes cast by the members entitled to vote thereon at a meeting duly called for that purpose, or by written consent of all members entitled to vote, is typically sufficient for adoption. The amended articles must then be filed with the Michigan Department of Licensing and Regulatory Affairs. The scenario describes a situation where the board unanimously approved an amendment, but the bylaws require a two-thirds vote of the entire membership for such changes. Therefore, the board’s action alone, without member approval meeting the bylaw threshold, is insufficient to effect the amendment under Michigan law. The governing document (bylaws) supersedes a board resolution if it imposes a higher standard for amendment.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2541, outlines the requirements for amending articles of incorporation. For a nonprofit corporation, an amendment to the articles of incorporation generally requires a resolution adopted by the board of directors and, if the amendment would affect the rights of members, a majority vote of the members entitled to vote on the amendment. However, the Act also provides for situations where amendments can be made solely by the board. A common scenario involves amendments that do not alter the rights of members, such as changing the name of the corporation or correcting a clerical error. In such cases, a resolution of the board of directors is sufficient. The provided scenario details an amendment to change the registered office address, which is a administrative change that does not impact member rights. Therefore, the board of directors has the authority to approve this amendment without requiring member approval. The process involves adopting a board resolution, filing the amendment with the Michigan Department of Licensing and Regulatory Affairs (LARA), and paying any associated fees.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., governs the formation, operation, and dissolution of nonprofit corporations in Michigan. A critical aspect of this act pertains to the duties of directors. Directors owe a fiduciary duty to the corporation, which encompasses the duty of care and the duty of loyalty. The duty of care requires directors to act in good faith, with the ordinary care that a reasonably prudent person in a like position would exercise under similar circumstances, and in a manner the director reasonably believes to be in the best interests of the corporation. The duty of loyalty requires directors to act in the best interests of the corporation and to avoid conflicts of interest. When a director has a personal interest in a transaction, the director must disclose that interest and abstain from voting on the matter. If the transaction is fair to the corporation, it may still be approved. However, a director cannot usurp a corporate opportunity for personal gain. A corporate opportunity is defined as any business opportunity that the corporation is financially able to pursue and that is in its line of business, or of present or potential advantage to it, and that is discovered by a director in his or her capacity as a director. In the scenario presented, Ms. Anya Sharma, a director of “Great Lakes Environmental Alliance,” a Michigan nonprofit, learned of a grant opportunity that directly aligned with the organization’s mission and for which the organization was eligible. Instead of bringing this opportunity to the board, she applied for it personally and secured it for her newly formed for-profit entity. This action constitutes a breach of her fiduciary duty, specifically the duty of loyalty and the duty to not usurp a corporate opportunity. The opportunity was within the nonprofit’s mission, the nonprofit was capable of pursuing it, and it was discovered by Ms. Sharma in her capacity as a director. Therefore, the most appropriate legal recourse for the nonprofit would be to seek remedies for the breach of fiduciary duty, which could include demanding an accounting of profits derived from the misappropriated opportunity and potentially seeking damages.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., outlines the framework for corporate governance, including the responsibilities of directors. Directors have a fiduciary duty to the corporation, which encompasses the duty of care and the duty of loyalty. The duty of care requires directors to act with the care that an ordinarily prudent person in a like position would exercise under similar circumstances. This includes making informed decisions, conducting due diligence, and actively participating in board oversight. The duty of loyalty mandates that directors must act in the best interests of the corporation and its members, avoiding self-dealing and conflicts of interest. When a director is absent from board meetings, their ability to fulfill the duty of care is significantly impaired, as they are not present to participate in deliberations, vote on resolutions, or stay informed about the corporation’s affairs. While the Act does not prescribe a specific number of absences that automatically constitutes a breach, consistent and unexcused absences can lead to a presumption of a failure to exercise due care, potentially opening the director and the corporation to liability. The Act emphasizes that directors must act in good faith and in a manner they reasonably believe to be in the best interests of the corporation. Continuous absence without a valid reason or proper communication can be interpreted as a failure to meet this standard. Therefore, a director who is consistently absent from meetings, even if they receive minutes, is not adequately fulfilling their oversight responsibilities as required by Michigan law. The governance of a nonprofit requires active engagement from its board members to ensure proper stewardship of resources and adherence to its mission.

In Michigan, when a nonprofit corporation is dissolved, the distribution of its assets is governed by specific statutory provisions, primarily found within the Michigan Nonprofit Corporation Act. The Act mandates that after the payment or provision for payment of all liabilities and obligations of the corporation, any remaining assets shall be distributed in accordance with the corporation’s articles of incorporation or bylaws. If neither the articles nor the bylaws specify a method for asset distribution upon dissolution, the assets must be distributed to one or more domestic or foreign corporations or not-for-profit corporations, foundations, or enterprises whose purposes are similar to those of the dissolving corporation. Alternatively, if such a distribution is not possible or practicable, the assets may be distributed to the state of Michigan for deposit into its general fund. The key principle is that assets must be used for purposes that align with the nonprofit’s mission or charitable intent, preventing private inurement. Therefore, the correct approach involves identifying a recipient organization with a congruent mission or adhering to any specific provisions outlined in the nonprofit’s foundational documents.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., governs the formation, operation, and dissolution of nonprofit corporations in Michigan. A critical aspect of this act pertains to the fiduciary duties owed by directors and officers to the corporation. These duties are generally understood to encompass the duty of care and the duty of loyalty. The duty of care requires directors and officers to act with the care an ordinarily prudent person in a like position would exercise under similar circumstances, including reasonable inquiry. The duty of loyalty mandates that directors and officers act in good faith and in a manner they reasonably believe to be in the best interests of the corporation, avoiding self-dealing and conflicts of interest. When a director has a personal interest in a transaction with the nonprofit, the transaction must be scrutinized. Michigan law, like many other states, provides mechanisms for validating such transactions if they are fair to the corporation or if they are approved by disinterested directors or members after full disclosure. The Business Judgment Rule, while applicable, does not shield directors from liability for breaches of loyalty or for actions taken without reasonable care. In this scenario, the director’s failure to disclose a personal financial interest in a contract awarded by the nonprofit, and subsequently profiting from it without proper board approval or a fairness determination, constitutes a clear breach of the duty of loyalty. This breach undermines the trust placed in the director and jeopardizes the nonprofit’s assets and mission. The remedies available would typically involve restitution for any profits gained by the director, potential voiding of the contract, and possibly damages to the corporation.

The Michigan Nonprofit Corporation Act, specifically MCL § 450.2541, addresses the dissolution of a nonprofit corporation. Voluntary dissolution can be initiated by the corporation’s members or directors. For a nonprofit corporation that has members entitled to vote on dissolution, the act requires that the dissolution be authorized by a majority vote of the members present at a meeting, provided a quorum is present, and that the meeting notice specified dissolution as a purpose. If the corporation has no members or no members entitled to vote on dissolution, the act requires that the dissolution be authorized by a majority vote of the directors. In the scenario presented, the board of directors of “Oak Haven Conservancy,” a Michigan nonprofit, decided to dissolve the organization. Since the corporation has no members entitled to vote on dissolution, the authority to authorize dissolution rests solely with the board of directors. Therefore, a majority vote of the directors present at a meeting, assuming a quorum was present, is sufficient to legally authorize the dissolution. The Michigan Nonprofit Corporation Act does not mandate a supermajority vote for directors in this specific scenario of voluntary dissolution without member involvement.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., outlines the requirements for the formation and governance of nonprofit corporations in Michigan. When a nonprofit corporation in Michigan wishes to amend its articles of incorporation, the process generally involves board approval and then member approval, if the articles permit member voting on such matters. However, the Act also provides for situations where a vote of the members is not required for certain amendments, particularly those that do not affect the rights of members. According to MCL 450.2232, amendments to articles of incorporation typically require a resolution adopted by the board of directors and then approval by the members entitled to vote thereon. However, if an amendment does not materially alter the rights or preferences of any class of members, or if the articles of incorporation specify a different procedure, the board may adopt the amendment without member approval, provided the articles do not prohibit this. For amendments that do affect member rights or are not otherwise exempted, a vote of two-thirds of the members present and voting at a meeting where a quorum is present is generally required, or a higher percentage if specified in the articles or bylaws. In this scenario, the amendment concerns the registered office and agent, which is typically a administrative change that does not alter the fundamental rights or preferences of the members. Therefore, the board of directors has the authority to approve such an amendment without a member vote, as long as the articles of incorporation do not mandate member approval for this specific type of amendment. The Act provides flexibility for administrative changes to be handled at the board level to streamline operations.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., governs the formation, operation, and dissolution of nonprofit corporations in the state. When a nonprofit corporation in Michigan undergoes a fundamental change, such as a merger or sale of substantially all of its assets, the Act requires specific procedures to be followed to protect the interests of members, creditors, and the public. A sale of substantially all of the assets of a nonprofit corporation, as defined by the Act, typically requires approval by the board of directors and, in many cases, by the members. The Act outlines that such a transaction is not in the usual or regular course of the corporation’s activities and necessitates a resolution adopted by a majority of the directors then in office. Subsequently, this resolution must be submitted to the members for their approval. The Act further specifies that member approval requires an affirmative vote of a majority of the members present at a meeting where a quorum is present, or by written consent of a majority of all members, unless the articles of incorporation or bylaws prescribe a higher standard. This process ensures that significant corporate actions are subject to appropriate oversight and member consent, aligning with the fiduciary duties of directors and the principles of nonprofit governance. The absence of member approval for such a transaction would render it invalid and subject to challenge.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., governs the formation, operation, and dissolution of nonprofit corporations in Michigan. A key aspect of this act relates to the governance and fiduciary duties of directors and officers. When a nonprofit corporation is dissolved, the Act outlines the process for winding up its affairs. This process involves ceasing to carry on the business except as necessary for winding up, notifying creditors, and marshaling assets. The distribution of remaining assets after satisfying liabilities is a critical step. MCL 450.2765 addresses the distribution of assets upon dissolution. It mandates that assets not lawfully distributed shall be distributed to one or more domestic or foreign corporations or other organizations engaged in activities substantially similar to those of the dissolving corporation, or for charitable purposes. This ensures that the assets continue to serve public benefit purposes consistent with the original mission of the dissolved nonprofit. Therefore, if the articles of incorporation or bylaws do not specify a recipient for remaining assets, the board of directors, acting in accordance with their fiduciary duties, must select a qualified recipient that aligns with the nonprofit’s charitable or public benefit mission.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2541, outlines the requirements for amending articles of incorporation. For a nonprofit corporation, an amendment to the articles of incorporation generally requires a resolution adopted by the board of directors, followed by a vote of the members. The Act specifies that if the articles of incorporation provide for voting by members, the amendment must be adopted by the members. Unless the articles or bylaws specify a greater proportion, a majority of the votes cast by members present at a meeting where a quorum is present is sufficient for adoption. The question implies a scenario where the board of directors has already approved the amendment, and the subsequent step involves member approval. Therefore, the correct procedure hinges on the members’ vote, assuming the articles or bylaws do not dictate a different voting threshold or process for this specific amendment. The critical element is the member vote, as it is the governing body for significant changes to the foundational documents of a Michigan nonprofit corporation.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., governs the formation, operation, and dissolution of nonprofit corporations in Michigan. A key aspect of this act relates to the fiduciary duties of directors and officers. Directors owe a duty of care and a duty of loyalty to the corporation. The duty of care requires directors to act in good faith, with the ordinary care and prudence that a reasonably prudent person in a like position would exercise under similar circumstances, and in a manner the director reasonably believes to be in the best interests of the corporation. The duty of loyalty requires directors to act in the best interests of the corporation and to avoid self-dealing or conflicts of interest. When a director has a personal interest in a transaction, the Michigan Nonprofit Corporation Act, particularly through the application of common law principles incorporated by reference and impliedly through the duty of loyalty, requires disclosure and adherence to specific procedures to ensure the transaction is fair to the corporation. If a director’s personal interest in a contract or transaction with the corporation is not disclosed, and the transaction is not demonstrably fair to the corporation, it can be voided or the director may be held liable for damages. The Business Corporation Act (MCL 450.1101 et seq.), which shares many common principles with the Nonprofit Corporation Act regarding director duties, often serves as a guide for interpreting these duties in the nonprofit context. The concept of a “fair transaction” is central, meaning the terms of the contract are comparable to those that could be obtained in an arm’s-length transaction with an unrelated party. Without such fairness and disclosure, the transaction is vulnerable to challenge.

The Michigan Nonprofit Corporation Act, specifically MCL § 450.2101 et seq., outlines the requirements for the dissolution of nonprofit corporations. When a nonprofit corporation decides to dissolve voluntarily, the process involves several key steps to ensure proper winding up of affairs and distribution of assets. The Act mandates that a plan of dissolution must be adopted by the board of directors and then submitted to the members for approval. For corporations without members, the board’s resolution is typically sufficient. Following member approval, the corporation must file Articles of Dissolution with the Michigan Department of Licensing and Regulatory Affairs (LARA). This filing officially terminates the corporation’s legal existence. Crucially, during the winding-up period, the corporation must cease conducting its usual business and focus on settling its debts and distributing its remaining assets. According to MCL § 450.2755, after paying or making provision for all liabilities, any remaining assets must be distributed to one or more domestic or foreign corporations or foundations that are qualified to receive them and that are organized and operated exclusively for charitable, religious, or similar purposes, as specified in the corporation’s articles of incorporation or bylaws. This ensures that the assets continue to serve the public good in accordance with the nonprofit’s original mission. The specific wording of the articles of incorporation or bylaws is paramount in determining the eligible recipients of the residual assets.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., governs the formation, operation, and dissolution of nonprofit corporations in Michigan. One critical aspect of this act pertains to the authority of the board of directors and the procedures for amending the articles of incorporation. Article VII of the Michigan Nonprofit Corporation Act outlines the process for amendment, requiring a resolution by the board of directors followed by a vote of the members. However, the articles themselves may specify a different procedure, provided it is not less restrictive than the statutory requirements. In this scenario, the articles of incorporation of “Great Lakes Conservation Alliance” stipulate that any amendment requires approval by two-thirds of the members present at a meeting where a quorum is met, in addition to board approval. The board, acting unilaterally, amends the articles to change the organization’s mission. This action bypasses the member approval process mandated by the organization’s own governing documents, which are subordinate to the Act but can impose stricter internal requirements. Therefore, the board’s action is invalid because it failed to adhere to the amendment procedure outlined in the articles of incorporation, which is a binding internal governance document. The Michigan Nonprofit Corporation Act requires that amendments be made in accordance with the articles of incorporation, unless the articles provide for a less stringent procedure than the Act. Since the articles required member approval, and this was not obtained, the amendment is procedurally flawed and thus invalid.

The Michigan Nonprofit Corporation Act, specifically MCL 450.2101 et seq., outlines the requirements for the dissolution of a nonprofit corporation. When a nonprofit corporation voluntarily dissolves, the process involves several steps to ensure that assets are distributed properly and liabilities are settled. The Act mandates that after paying or making provision for all known liabilities, remaining assets must be distributed to one or more qualified organizations engaged in activities substantially similar to those of the dissolving corporation. This is a fundamental principle of nonprofit law, ensuring that assets dedicated to charitable purposes continue to serve those purposes. The dissolution plan must be approved by the members or directors, depending on the corporation’s bylaws, and filed with the Michigan Department of Licensing and Regulatory Affairs. The distribution to other 501(c)(3) organizations is a key step in preventing private inurement and ensuring that the public benefit purpose for which the nonprofit was established is maintained.