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SB 1087

Businesses: limited liability companies; power of limited liability companies to spend in elections or ballot issues; revoke. Amends secs. 105, 210, 211 & 1008 of 1993 PA 23 (MCL 450.4105 et seq.) & adds sec. 210a. TIE BAR WITH: SB 1085'26, SB 1086'26

2025-2026 Regular Session Introduced by Rosemary Bayer and 8 co-sponsors

Michigan LLCs cannot spend funds to support or oppose candidates, parties, or ballot questions, with limited exceptions and possible dissolution or revocation for violations.

SENATE CO-SPONSOR(S) NAMED: MALLORY MCMORROW
#businesses:limitedliabilitycompanies
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WeVote Research Nonpartisan
Bill Summary · SB 1087

Overview

Senate Bill 1087 (SB 1087), introduced in the 2025-2026 session of Michigan, would amend the Michigan Limited Liability Company Act to restrict or prohibit limited liability companies (LLCs) from paying, contributing, or expending money or anything of value in support of or opposition to candidates, political parties, political committees, or ballot questions. It adds new provisions (including a new section 210a) that largely bar both domestic and foreign LLCs from engaging in political spending in Michigan, with limited exceptions. The bill ties its effective date to the passage of two companion bills (SB 1085 and SB 1086).

Purpose and Intent

  • To prevent LLCs from using company funds to influence elections or ballot issues within Michigan.
  • To align LLC spending practices with campaign finance restrictions, deterring in-state political expenditures by LLCs.
  • To provide mechanisms for disgorgement, dissolution, or revocation if an LLC violates the new restrictions.
  • To create a framework for judicial review and enforcement through the attorney general or administrator.

Key Provisions and Changes

  • Section 210a (new):
    • Domestic LLCs: May not pay, contribute, or expend 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 LLCs: Same prohibition on spending, with disgorgement possible for violations.
    • Exceptions:
    • Pre-existing contracts, debts, securities, or other legal obligations validly entered before the effective date of the act.
    • Bona fide news stories, editorials, or commentary distributed through media platforms, unless the outlet is owned/controlled by a candidate, party, or committee.
    • Sanctions for violations:
    • Domestic LLCs engaging in prohibited spending can be dissolved.
    • Foreign LLCs can have their authority to transact business in Michigan revoked.
  • Section 210 (General powers):
    • LLCs have powers necessary or convenient to their purposes, including those granted to corporations under the Michigan Business Corporation Act.
  • Section 105 (Administrative filing and review):
    • If an administrator fails to file a document promptly, notice of refusal must be provided within 10 days, with possible judicial review under the Administrative Procedures Act.
    • Violations or revocation of authority for foreign LLCs can be subject to judicial review.
  • Section 211 (Authority to act despite capacity concerns):
    • Clarifies that acts or transfers by an LLC are not automatically void due to lack of capacity, but capacity issues can be raised in specific types of actions.
  • Section 1008 (Activities not constituting transacting business for foreign LLCs):
    • Lists activities considered not to constitute transacting business in the state (e.g., internal meetings, maintaining offices, certain interstate activities), consistent with existing law, and confirms limitations on interpreting “transacting business” for purposes of the bill.
  • Enacting clause:
    • The bill’s effectiveness is contingent on the enactment of SB 1085 and SB 1086, i.e., it takes effect only if all three bills are enacted.

Who Is Affected

  • Domestic (Michigan-based) LLCs: Prohibited from spending money or resources in support of or opposition to candidates, parties, committees, or ballot questions in Michigan.
  • Foreign (out-of-state) LLCs: Prohibited from spending money or resources in Michigan on political purposes as described above.
  • Political actors and entities: Candidates, political parties, political committees, ballot questions, and related entities would be the subject of enforcement actions if spending occurs.
  • Media/News outlets: Covered in the exception for bona fide news reporting or editorial content not controlled by political interests.

Procedural and Timeline Aspects

  • Introduction Date: July 2, 2026.
  • Referral: Committee on Elections and Ethics.
  • Enactment Condition: The act’s amendatory provisions do not take effect unless SB 1085 and SB 1086 are enacted into law as part of the same legislative package.
  • Enforcement Mechanisms:
    • Disgorgement of funds for prohibited spending.
    • Potential dissolution of a domestic LLC or revocation of a foreign LLC’s authority to transact business in Michigan.
    • Administrative and judicial review pathways exist under the Administrative Procedures Act.
  • Ongoing oversight: Provisions reference the Michigan campaign finance act for definitions of “candidate,” “ballot question,” and related terms, ensuring alignment with existing election law.

Potential Impact and Considerations

  • Strengthens Michigan’s position against political spending by LLCs operating in the state.
  • Introduces serious sanctions (disgorgement, dissolution, revocation) for violations, which could deter noncompliance.
  • Creates potential ambiguity for existing contracts and legitimate business activities that intersect with political processes, though exemptions aim to mitigate this.
  • Requires coordination with SB 1085 and SB 1086 to become effective, indicating a broader package addressing related corporate and political spending issues.

If you’d like, I can provide a side-by-side comparison with current law and summarize anticipated enforcement procedures in practical scenarios.

Compiled from official sources — confirm details with the bill’s official record.

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