Section 450.2301 - Payment or distribution of assets, income, or profit; conferring benefits on shareholders or members; compensation; distribution of assets upon dissolution; providing for payment of - Michigan Statutes

NONPROFIT CORPORATION ACT (EXCERPT)
Act 162 of 1982

450.2301 Payment or distribution of assets, income, or profit; conferring benefits on shareholders or members; compensation; distribution of assets upon dissolution; providing for payment of dividends or distribution of income or profit in articles or bylaws; application or distribution of profits; use, conveyance, or distribution of assets held by corporation for charitable purposes.

Sec. 301.

(1) A payment or distribution of any part of the assets, income, or profit of a corporation shall be in conformity with the purposes of the corporation.

(2) A corporation may confer benefits on its shareholders or members in conformity with the purposes of the corporation.

(3) A corporation shall not pay dividends or distribute any part of its assets, income, or profit to its shareholders, members, directors, or officers, except as follows:

(a) A corporation may pay compensation in a reasonable amount to shareholders, members, directors, or officers for services rendered to the corporation.

(b) Upon dissolution as permitted by this act, a corporation may make distributions of assets, other than assets held for charitable purposes, to shareholders or members.

(c) The articles of incorporation or bylaws of a corporation whose purposes include providing a benefit to its member or shareholder corporation may provide that the corporation may pay dividends or distribute its income or profit to its member or shareholder corporation.

(d) As permitted in subsection (4).

(e) If provision for redemption of shares is made pursuant to sections 361 to 365.

(4) A corporation whose lawful activities include the charging of fees or prices for its services or products may receive the income and may make a profit as a result of its receipt. All such resulting profit shall be applied to the maintenance, expansion, or operation of the lawful activities of the corporation and shall not be distributed to the shareholders, members, directors, or officers of the corporation. However, profit derived solely from the charging of fees or prices by a corporation to its shareholders or members for its services or products may be distributed to the shareholders or members on the basis of, or in proportion to, the fees or prices paid by shareholders or members to the corporation for its services or products.

(5) This act shall not be deemed to permit assets held by a corporation for charitable purposes to be used, conveyed or distributed for noncharitable purposes.

History: 1982, Act 162, Eff. Jan. 1, 1983