Summary of SB 1085 (2025-2026) – Michigan
Purpose and intent
- SB 1085 proposes to amend the Michigan Business Corporation Act (1972 PA 284) to limit or revoke a corporation’s power to spend money or provide support in elections or on ballot questions, with additional related corporate governance provisions.
- The bill also adds a new section (261a) that broadly bars domestic and foreign corporations from paying or expending money in support of or opposition to candidates, political parties, political committees, or ballot questions, with narrow exceptions described below.
- Enactment is contingent on the concurrent passage of SB 1086 and SB 1087.
Key provisions and changes
1) Expanded corporate powers (Sec. 261)
- The bill enumerates standard corporate powers for Michigan corporations, including perpetual existence, ability to sue/be sued, adopt bylaws, acquire and manage property, borrow and guarantees, enter contracts, issue stock, lend/invest, contribute to charities, pay employee benefits, participate in partnerships, dissolve, and operate in other jurisdictions.
- Importantly, the language clarifies these powers are subject to the act’s limits (including the new 261a provisions).
2) New restriction on political spending (Sec. 261a)
- Domestic corporations: Generally prohibited from paying, contributing, or expending money or anything of value to support or oppose a candidate, political party, political committee, or ballot question. Violations are invalid and subject to disgorgement.
- Foreign corporations: The same prohibition and consequences apply.
- Exceptions:
- Pre-existing contracts, debts, securities, or other obligations entered into before the effective date of the amendment remain allowed.
- Bona fide news stories, editorials, or commentary distributed via broadcasting stations or print/online publications are exempt, unless the outlet is owned or controlled by a candidate, party, or committee.
- Consequences for violations:
- Domestic corporations performing an act under Sec. 261a(1) are subject to dissolution (Sec. 821).
- Foreign corporations performing an act under Sec. 261a(2) face revocation of authority to transact business in Michigan (Sec. 1041).
- The attorney general or administrator may bring actions for declaration, disgorgement, or injunction (Sec. 261a(5)).
3) Corporate capacity and enforcement (Secs. 271, 821, 1012, 1041)
- Sec. 271: Clarifies that acts or transfers by a corporation may still be valid despite lack of capacity, but capacity defenses can be raised in specific actions (e.g., by shareholders, against officers/directors, or by AG to dissolve/enjoin unauthorized activity).
- Sec. 821: Authorizes the attorney general to seek dissolution for fraud, repeated unlawful conduct, or acts described in 261a(1).
- Sec. 1012: Specifies activities that do not, by themselves, constitute “transacting business” by a foreign corporation in the state (e.g., incidental proceedings, board meetings, maintaining offices, certain banking activities), while noting this does not override other statutes.
- Sec. 1041: Provides grounds for revocation of a foreign corporation’s certificate of authority to transact business (e.g., failure to maintain a resident agent, file required statements or reports, or perform acts described in 261a(2)).
4) Definitions and scope (Sec. 261a(6))
- Defines “ballot question,” “candidate,” “domestic/foreign corporation,” and “political committee” with references to existing Michigan campaign finance law.
Enacting and operational timeline
- The bill includes a condition that it will take effect only if Senate Bills 1086 and 1087 are enacted into law. This creates a tri-bill linkage requiring all three to become law for SB 1085 to take effect.
Who is affected
- Domestic (Michigan-based) corporations: Subject to new prohibitions on spending in elections/ballot questions and potential dissolution for violations.
- Foreign corporations: Subject to similar prohibitions and possible revocation of authority to transact business in Michigan for violations.
- Political actors: Candidates, political parties, political committees, and ballot questions would be indirectly affected through reduced corporate funding or independent corporate activity in elections.
- General public: The reform aims to increase transparency and limit corporate influence in election-related activities.
Significant procedural/timeline notes
- Introduced July 2, 2026, and referred to the Senate Committee on Elections and Ethics.
- Requires concurrent passage of SB 1086 and SB 1087 to become effective.
Overall impact
- SB 1085 represents a tightening of corporate political spending authority in Michigan, aligning corporate activity more closely with limitations found in other jurisdictions and adding enforceable remedies (dissolution or revocation) for violations. It strengthens regulatory tools for the attorney general and clarifies the consequences of noncompliance, while providing narrowly defined exceptions for pre-existing obligations and certain informational publications.
