Major Changes to Michigan Nonprofit Laws

The laws governing Michigan nonprofit corporations recently got a major facelift, with changes that affect everything from director liability to dissolution to member voting. The revisions are quite extensive — and apparently caught many practitioners off guard.

Public Acts 557, 558 and 559 amended the Nonprofit Corporation Act. The Legislature approved the amendments at the very end of 2014, during a two-week lame-duck session. The laws went into effect earlier this year.

Practitioners told Michigan Lawyers Weekly they were startled by the expansive changes, noting the legislation unfortunately did not get much attention among the bar before being enacted.

“It was a shock to me,” said Lansing lawyer Michael F. Matheson. “All of a sudden, I found out about it. I’m a little surprised there wasn’t more PR or notice.”

Kalamazoo attorney Sara A. Nicholson said she began following the legislation in mid-2013, but acknowledged it did not get a lot of play. “I think there could have been more outreach because it was percolating for a while,” she said. “But at the same time, it all happened so suddenly during the lame-duck session, which is why I think lawyers didn’t know about it.”

Edward J. Castellani, a Lansing practitioner, also admitted the proposal did not get a lot of publicity. “It’s not exactly the hottest issue to be considered by the Legislature,” he noted.

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The above article is an excerpt from “A Corporate Makeover”, written by Traci R. Gentilozzi and published by Michigan Lawyers Weekly on April 6, 2015. Read the full article HERE.

For detailed insight on changes to the Nonprofit Corporation Act, read Ed Castellani’s full blog post.

Edward J. Castellani is a business and tax attorney at Fraser Trebilcock. In addition to having practiced law for more than 30 years, Ed is a certified public accountant. This dual background and experience provides his clients a unique insight into business transactions, such as business entity formations, mergers, acquisitions, tax audits and appeals, and general business and tax planning for both profit and non-profit corporations.

For more information on this or another legal issue, please contact Fraser Trebilcock at 517.482.5800.