Michigan Agreement Between Board Member and Close Corporation
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FAQ
If your business is a corporation, then you are required by law to have a board of directors. Depending on your particular corporate structure and your state, one or two directors may be all that's legally required.
The articles of incorporation of a close corporation may provide that the business of the corporation shall be managed by the stockholders of the corporation rather than by a board of directors.
A Close Corporation has members and a Company has shareholders and directors. The Close Corporation has its own estate seperate from its members.
ORC § 1701.591 entitled Close Corporation Agreement provides a mechanism for shareholders of a close corporation to agree in advance on issues related to the internal management and business operations of their corporation and the relations between and among themselves as shareholders.
Disadvantages to a Close CorporationClose corporations do not exist in all states.A close corporation often costs more money to organize.While shareholders have the benefit of greater control over the sale of shares, shareholders in a close corporation are also burdened with increased responsibility.More items...
A close corporation is a legal entity much like a company. A CC is run and administered by its members, who must be natural persons (i.e. not other legal entities). A close corporation's members are like a company's shareholders.
Different states have different rules for the organization of their S corporations and C corporations, but all for-profit and nonprofit corporations are required by law to have boards of directors. The rules of the state in which you incorporate determine when they must be named and how many directors are required.
The dissolution of a corporation by action of the board or shareholders requires the filing of a Certificate of Dissolution. A tax clearance must be requested from the Michigan Department of Treasury within 60 days of the filing the dissolution.
Can a close corporation or a company be a member of a close corporation? No, only a natural person or a inter vivos trust/testamentary trust can become a member.
