State of the Nonprofit Regulatory Environment in MICHIGAN

1 Bifurcation of charitable regulatory body

Bifurcated Regulatory Structure

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

MI Code § 400.271

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: NO - M.C.L. 400.271 et seq.

Registration Office

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

BIFURCD-REGIOF-NS

REGULATORY BODY: Not Specific

NOTES: Michigan Dept. of the Attorney General www.mi.gov/charity

2 Notice, Filing or Review of Transactions

Sale of Assets

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

MI Code § 14.251

REGULATORY BODY: Attorney General

STATUTE TEXT:

NOTES: M.C.L. 14.251

REPORTS-ASSETS-OT

REGULATORY BODY: Other

NOTES: NO

Mergers

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

MI Code § 450.251

REGULATORY BODY: Attorney General

STATUTE TEXT:

NOTES: M.C.L. 450.251 - 450.252a

MI Code § 450.2707

REGULATORY BODY: Other

STATUTE TEXT: 450.2707 Certificate of merger; signing and filing; contents; determining effectiveness.Sec. 707. (1) After a plan of merger is approved under this act, each constituent corporation shall sign and file a certificate of merger on behalf of that corporation. The certificate shall set forth all of the following: (a) The statements required under section 701(2)(a), (b), and (d), and the manner and basis of converting the shares or memberships of each constituent corporation that is organized on a stock or membership basis as set forth in the plan of merger. (b) A statement that the boards have adopted the plan of merger under section 701. (c) A statement that the surviving corporation will furnish the plan of merger, on request and without cost, to any shareholder or member of any constituent corporation. (d) If approval of the shareholders or members of 1 or more corporations that are parties to the merger was required, a statement that the plan was approved by the shareholders or members under section 703a. (e) If section 706 applies to the merger, a statement that the merging corporation has not commenced business, has not issued any shares or memberships, and has not elected a board and that the plan of merger was approved by the unanimous consent of the incorporators. (f) A statement of any assumed names of merging corporations that are transferred to the surviving corporation under section 217(3), specifying each transferred assumed name and the name of the corporation from which it is transferred. The certificate may include a statement of corporate names or assumed names of merging corporations that are to be treated as newly filed assumed names of the surviving corporation under section 217(4). (2) Section 131 applies in determining when a certificate of merger under this section becomes effective. History: 1982, Act 162, Eff. Jan. 1, 1983 ;– Am. 2014, Act 557, Imd. Eff. Jan. 15, 2015

NOTES: M.C.L. 450.2707

Certificate of Amendments

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

MI Code § 450.251

REGULATORY BODY: Attorney General

STATUTE TEXT:

NOTES: M.C.L. 450.251 - 450.252a: Charitable Purpose Orgs must provide notice to AG

MI Code § 450.2631

REGULATORY BODY: Other

STATUTE TEXT: 450.2631 Certificate of amendment; signing and execution; filing; contents.Sec. 631. (1) If an amendment to the articles of incorporation is approved under section 611(1)(a), a majority of the incorporators shall sign and file a certificate of amendment on behalf of the corporation that sets forth the amendment and certifies that the amendment was adopted by unanimous consent of the incorporators before the first meeting of the board. (2) If an amendment to the articles of incorporation is approved under section 611(1)(a) or section 611(2), an officer of the corporation shall execute and file a certificate of amendment on behalf of the corporation that sets forth the amendment and certifies that it was adopted by the board of directors. (3) Except for an amendment to the articles of incorporation described in subsection (1) or (2) or as otherwise provided in this act, if an amendment is approved, an officer of the corporation shall execute and file a certificate of amendment on behalf of the corporation that sets forth the amendment and certifies that the amendment was adopted in the manner required under section 611(3). (4) If a corporation amends an article in its articles of incorporation that is divided into separately identified sections, the certificate of amendment may only set forth the section of the article that was amended. Otherwise, the certificate of amendment must set forth the entire article that was amended. History: 1982, Act 162, Eff. Jan. 1, 1983 ;– Am. 2014, Act 557, Imd. Eff. Jan. 15, 2015

NOTES: M.C.L. 450.2631

Does the state require annual financial reporting by charitable organizations in addition to filing a copy of the 990 with the regulator (if filing 990 is required)?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

REPORTS-FINANC-NS

REGULATORY BODY: Not Specific

NOTES: Must submit campaign financial statement as well as 990

3 Notice or Action for Dissolutions

Voluntary Dissolutions

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

MI Code § 450.252

REGULATORY BODY: Attorney General

STATUTE TEXT:

NOTES: M.C.L. 450.252

MI Code § 450.252

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Order of the Court M.C.L. 450.252; Filing with Dept. of Licensing & Regulatory Affairs M.C.L. 450.252

MI Code § 450.252

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Order of the Court M.C.L. 450.252; Filing with Dept. of Licensing & Regulatory Affairs M.C.L. 450.252

Judicial Dissolutions

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

MI Code § 450.2821

REGULATORY BODY: Attorney General

STATUTE TEXT: 450.2821 Action by attorney general for dissolution of corporation; grounds; other actions.Sec. 821. (1) The attorney general may bring an action in the circuit court for the county in which the principal place of business or registered office of a corporation is located or for Ingham county for dissolution of a corporation on the ground that the corporation has committed any of the following acts: (a) Procured its organization through fraud. (b) Repeatedly, willfully, and materially exceeded the authority conferred on it by law. (c) Repeatedly, willfully, and materially conducted its affairs in an unlawful manner. (2) The enumeration in this section of grounds for dissolution does not exclude any other statutory or common law action by the attorney general for dissolution of a corporation or revocation or forfeiture of its corporate franchises. History: 1982, Act 162, Eff. Jan. 1, 1983 ;– Am. 2014, Act 557, Imd. Eff. Jan. 15, 2015

NOTES: M.C.L. 450.2821; M.C.L. 450.2823

MI Code § 450.2823

REGULATORY BODY: Attorney General

STATUTE TEXT: 450.2823 Dissolution of corporation by judgment in action brought in court; proof; action for dissolution of charitable purpose corporation.Sec. 823. (1) A corporation that is organized on a stock or membership basis may be dissolved by a judgment entered in an action brought in the circuit court for the county in which the principal place of business or registered office of the corporation is located by 1 or more directors or by 1 or more shareholders or members that are entitled to vote in an election of directors of the corporation, if both of the following are proved: (a) The directors of the corporation, or its shareholders or members if a provision in the articles of incorporation authorized under section 488(1) is in effect, are unable to agree by the requisite vote on material matters respecting management of the corporation’s affairs, or the shareholders or members of the corporation are so divided in voting power that they have failed to elect a successor for any director whose term has expired or would have expired on the election and qualification of his or her successor. (b) As a result of a condition stated in subdivision (a), the corporation is unable to carry out its corporate purposes or function effectively in the best interests of its creditors and shareholders or members, if any, or the persons that the corporation is organized to benefit. (2) A corporation that is organized on a directorship basis may be dissolved by a judgment entered in an action brought in the circuit court for the county in which the principal place of business or registered office of the corporation is located by 1 or more directors or by 1 or more other persons that are entitled to vote in an election of 1 or more of the directors of the corporation, if both of the following are proved: (a) The directors of the corporation are unable to agree by the requisite vote on material matters respecting management of the corporation’s affairs, or the directors or other persons that are entitled to vote in the election of 1 or more of the directors of the corporation are so divided in voting power that they have failed to elect a successor for any director whose term has expired or would have expired on the election and qualification of his or her successor. (b) As a result of a condition stated in subdivision (a), the corporation is unable to carry out its corporate purposes or function effectively in the best interests of its creditors and shareholders or members, if any, or the persons that the corporation is organized to benefit. (3) A person or persons that files an action for dissolution of a charitable purpose corporation under this section shall give the attorney general written notice of the commencement of the action by mail within 30 days after filing. History: 1982, Act 162, Eff. Jan. 1, 1983 ;– Am. 2014, Act 557, Imd. Eff. Jan. 15, 2015

NOTES: M.C.L. 450.2821; M.C.L. 450.2823

MI Code § 450.252

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Filing with Dept. of Licensing & Regulatory Affairs M.C.L. 450.252

Administrative Dissolutions

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

DISSOLV-ADMINI-AG

REGULATORY BODY: Attorney General

DISSOLV-ADMINI-OT

REGULATORY BODY: Other

4 Notice, Oversight or Filing of Hospital Conversions

Has Statute

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

HOSPCON-STATUT-NS

REGULATORY BODY: Not Specific

NOTES: NO

Requires Notice or Oversight

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

HOSPCON-OVERSI-AG

REGULATORY BODY: Attorney General

HOSPCON-OVERSI-OT

REGULATORY BODY: Other

Requires Filing

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

HOSPCON-FILING-OT

REGULATORY BODY: Other

5 Audits

Requires Audit

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

MI Code § 400.273(2)(j)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: M.C.L. 400.273(2)(j)

Audit Threshold

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

MI Code § 400.273(3)(a)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: $525k; $275k - $525k independent financial statement M.C.L. 400.273(3)(a) - $25k increase every 5 years

6 Registration Law

Registration Law

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

MI Code § 400.271

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: M.C.L. 400.271 et seq.

7 Exemptions from Registering for Specific Organization Types

Religious Organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

MI Code § 400.272(a)(i)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: M.C.L. 400.272(a)(i)

Educational Institutions

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

MI Code § 400.283(d)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: M.C.L. 400.283(d)

Governmental Organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

ORGTYPE-GOVMNT-NS

REGULATORY BODY: Not Specific

NOTES: Exempt from Registration

Hospitals

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

MI Code § 400.283(g)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: “A licensed hospital, hospital-based foundation, or hospital auxiliary that solicits funds solely for 1 or more licensed hospitals.” M.C.L. 400.283(g)

Veterans organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

MI Code § 400.283(e

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: M.C.L. 400.283(e )

Foundations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-FNDYES-NS

REGULATORY BODY: Not Specific

NOTES: NO

Charitable Trusts

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-CTRUST-NS

REGULATORY BODY: Not Specific

NOTES: NO

Parent-Teacher Organizations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-PTOEDU-NS

REGULATORY BODY: Not Specific

NOTES: NO

Reports to congress

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-CONGRE-NS

REGULATORY BODY: Not Specific

NOTES: NO

Non-soliciting

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

MI Code § 400.273(1)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: M.C.L. 400.273(1)

Fraternal/ Membership

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

MI Code § 400.283(c

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: M.C.L. 400.283(c )

Political Orgs

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

MI Code § 400.272(a)(ii)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: M.C.L. 400.272(a)(ii) and (iii)

Other

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

MI Code § 400.283(i)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Orgs caring for aged / ill, children, and families (M.C.L. 400.283(i) and (j)

8 Defined remedies

Dissolution

Regulatory Action: REMEDY

YES: A regulation is defined in the state

MI Code § 450.2821

REGULATORY BODY: Not Specific

NOTES: M.C.L. 450.2821; M.C.L. 450.2823

MI Code § 450.2823

REGULATORY BODY: Not Specific

NOTES: M.C.L. 450.2821; M.C.L. 450.2823

Removal of Board Members

Regulatory Action: REMEDY

A regulation is NOT defined in the state

REMEDYT-BRDRMV-NS

REGULATORY BODY: Not Specific

NOTES: NO

9 Oversight of professional fundraisers

Does the state require registration by commercial fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

MI Code § 400.287

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Mich. Comp. Laws § 400.287 Public Safety Solicitations: Mich. Comp. Laws § 14.304

MI Code § 14.304

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Mich. Comp. Laws § 400.287 Public Safety Solicitations: Mich. Comp. Laws § 14.304

Does the state require registration by fundraising counsel?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

FNDRAZE-COUNSL-NS

REGULATORY BODY: Not Specific

Does the state oversee commercial-coventuring (e.g. by requiring that the co-venture be registered or by requiring that the charitable organization files the co-venture contract)?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

FNDRAZE-VENTUR-NS

REGULATORY BODY: Not Specific

Does the state require the fundraisers to provide notice to the regulator before any solicitation campaign (in addition to annual registration and/or filing the contract)?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

FNDRAZE-NOTICE-NS

REGULATORY BODY: Not Specific

NOTES: Must submit each fundraising contract before each campaign.

Does the state require specified disclosures to donors?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

FNDRAZE-DDONOR-NS

REGULATORY BODY: Not Specific

Does the state require a copy of any contract between a charitable organization and a commercial fundraiser or fundraising counsel be filed with the regulator?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

MI Code § 400.274

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Contracts must be kept for 6 years by charitable organization and professional fund raiser. Mich. Comp. Laws § 400.274

Does the state require annual financial reporting by commercial fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

FNDRAZE-ANNUAL-NS

REGULATORY BODY: Not Specific

NOTES: Must submit campaign financial statement within 90 days after end of solicitation campaign.

Does the state require bonding of professional fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

MI Code § 400.287

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: “The applicant when making application, shall file with and have approved by the attorney general a bond in which the applicant shall be the principal obligor, in the sum of $10,000.00.” Mich. Comp. Laws § 400.287 Public Safety Solicitation: The registration [of a professional fundraiser] shall be accompanied by a surety bond in a form satisfactory to the attorney general. The bond shall be in the amount of twenty-five thousand dollars ($25,000.00). The registration shall also be accompanied by a fee in the amount of two hundred dollars ($200.00). MI ST 14.304