May 7, 2014, Introduced by Senators BIEDA and KOWALL and referred to the Committee on Economic Development.
A bill to amend 1993 PA 23, entitled
"Michigan limited liability company act,"
by amending section 705a (MCL 450.4705a), as amended by 2002 PA
686.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 705a. (1) As used in this section:
(a) "Business organization" means a domestic or foreign
corporation, domestic or foreign nonprofit corporation, limited
partnership, general partnership, or any other type of domestic or
foreign business enterprise, incorporated or unincorporated, except
a domestic limited liability company.
(b) "Entity" means a business organization or a domestic
limited liability company.
(c) "Nonprofit corporation" means a corporation that is
incorporated to carry out any lawful purpose or purposes that do
not involve pecuniary profit or gain for its directors, officers,
shareholders, or members, including, but not limited to, a
corporation formed under or subject to, in whole or in part, the
nonprofit corporation act, 1982 PA 162, MCL 450.2101 to 450.3192.
(d) (c)
"Obligated person" means
a general partner of a
limited partnership, a partner of a general partnership, or a
participant in or an owner of an interest in any other type of
business
enterprise who, that, under applicable law, is generally
liable for the obligations of the business enterprise.
(2) If all of the business organizations in a merger with 1 or
more domestic limited liability companies are foreign limited
liability companies, the merger shall comply with section 705 and
not this section.
(3) Except as otherwise provided in subsection (2), 1 or more
domestic limited liability companies may merge with 1 or more
business organizations if all of the following requirements are
satisfied:
(a) The merger is permitted under the law of the jurisdiction
in which each constituent business organization is organized and
each constituent business organization complies with that law in
effecting the merger.
(b) Each foreign constituent business organization transacting
business in this state complies with the applicable laws of this
state.
(c) Each domestic limited liability company complies with this
section.
(4) If 1 or more domestic limited liability companies propose
to merge with 1 or more business organizations, each domestic
limited liability company shall prepare a plan of merger that
contains all of the following:
(a) The name of each constituent entity, the name of the
surviving entity, the street address of the surviving entity's
principal place of business, and the type of organization of the
surviving entity.
(b) The terms and conditions of the proposed merger, including
the manner and basis of converting the shares, partnership
interests, membership interests, or other ownership interests of
each constituent entity into ownership interests or obligations of
the surviving entity, or into cash or other consideration, which
may include ownership interests or obligations of an entity not a
party to the merger, or into a combination thereof.
(c) If the surviving entity is to be a domestic limited
liability company, a statement of the amendments to the articles of
organization of the surviving company if the articles are changed
by the merger, a restatement of the articles of organization, or a
statement that the articles of organization of the surviving
domestic limited liability company are unchanged.
(d) Any other provision that the domestic limited liability
company considers necessary or desirable.
(5) A constituent domestic limited liability company shall
submit a plan of merger to the members for approval. A unanimous
vote by the members entitled to vote in the constituent domestic
limited liability company is required to approve a plan of merger
unless an operating agreement of the constituent domestic limited
liability company provides otherwise.
(6) If an operating agreement of a constituent domestic
limited liability company provides for approval by less than
unanimous vote of members entitled to vote and the merger is
approved,
a member who that voted against the merger may withdraw
from the domestic limited liability company and receive, within a
reasonable time, the fair value of the member's interest in the
domestic
limited liability company, based upon on the member's
share of distributions as determined under section 303.
(7) If a plan of merger is approved, a certificate of merger
shall be executed as provided in section 103 and filed on behalf of
each constituent domestic limited liability company. The
certificate of merger shall contain all of the following:
(a) The information required under subsection (4)(a) and the
statement required under subsection (4)(c).
(b) A statement that the plan of merger was approved by the
members of each constituent domestic limited liability company in
accordance with subsection (5).
(c) A statement of any assumed names of merging entities
transferred to the surviving entity in accordance with section
206(6), specifying each transferred assumed name and the name of
the entity from which it is transferred. If the surviving entity is
a domestic limited liability company or a foreign limited liability
company authorized to transact business in this state, the
certificate may include a statement of 1 or more names or assumed
names of merging entities that are to be treated as new
certificates of assumed names of the surviving company under
section 206(7).
(d) The effective date of the merger if later than the date
the certificate of merger is filed.
(8) A certificate of merger is effective in accordance with
section 104.
(9) When a merger is effective under this section, all of the
following apply:
(a) Every other constituent entity merges into the surviving
entity and the separate existence of every entity except the
surviving entity ceases.
(b) The title to all property, real, personal, and mixed, and
rights owned by each constituent entity are vested in the surviving
entity without reversion or impairment.
(c) A surviving company may use the name and the assumed names
of any merging entity if a filing required under section 206(6) or
(7) or other applicable statute is made.
(d) The surviving entity has all of the liabilities of each
constituent entity. This section does not affect liability, if any,
of
a person who that was an obligated person with respect to a
merging entity for acts or omissions that occurred before the
merger.
(e) A proceeding pending against any constituent entity may be
continued as if the merger did not occur or the surviving entity
may be substituted in the proceeding for the entity whose existence
ceased.
(f) The articles of organization of a surviving domestic
limited liability company are amended to the extent provided in the
plan of merger.
(g) The ownership interests of each constituent entity that
are to be converted into ownership interests or obligations of the
surviving entity or into cash or other property are converted.
(10) If the surviving entity is a foreign business
organization, it is subject to the laws of this state pertaining to
the transaction of business in this state by a foreign business
organization if it transacts business in this state. The surviving
entity is liable for, and is subject to service of process in a
proceeding in this state for the enforcement of, any obligation of
a constituent domestic limited liability company, including an
obligation to a member of the constituent domestic limited
liability
company who that has dissented from the merger and
withdrawn in accordance with subsection (6).
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 97th Legislature are
enacted into law:
(a) Senate Bill No. 623.
(b) Senate Bill No. 624.