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Bill Summary · SB 667

SB 667 — Summary (Benefit Corporations; amendments to Michigan Business Corporation Act)

Status: Introduced (11/9/2023); referred to Committee on Finance, Insurance, & Consumer Protection. (Committee reports tie‑bar SB 667 with SB 666.)
Statutory changes: Amends sections of 1972 PA 284 (MCL 450.1105 et seq.) and adds new Chapter 9A to the Business Corporation Act.

Main purpose

Create a statutory framework for "benefit corporations" in Michigan — for‑profit corporations that pursue a stated public benefit (either a broad "general public benefit" or one or more "specific public benefits") in addition to profit. The law protects directors who consider broader stakeholder and environmental interests and establishes reporting and limited enforcement rules tailored to benefit corporations.

Key provisions

  • Definition and formation

    • Adds Chapter 9A defining a “benefit corporation” and allows incorporation or designation of a corporation as a benefit corporation under that chapter.
    • Requires corporate names to include “benefit corporation,” “benefit company,” or the initials “B.C.” (with or without periods).
    • Prevents a benefit corporation from converting to a regular business or domestic corporation while maintaining benefit status.

  • Purpose, duties, and director standards

    • Permits (and requires for benefit corporations) directors to consider the corporation’s effects on its workforce, the community, the environment (local and global), and the corporation’s ability to achieve its stated public benefit(s).
    • States that corporate actions taken to advance the stated public benefit(s) are presumed to be in the best interests of the benefit corporation.
    • Provides a safe harbor: directors are not liable for monetary damages to the corporation, shareholders, or alleged beneficiaries for failure to create or pursue the stated public benefit under Chapter 9A (subject to the chapter’s enforcement framework).

  • Reporting and transparency

    • Requires an annual benefit report filed with the Department of Licensing and Regulatory Affairs (LARA) that:
    • Describes work toward the general/specific public benefit(s) during the year.
    • Identifies and explains the third‑party standard used to measure the benefit (the standard must meet specified requirements).
    • Includes an assessment of social and environmental performance, disclosure of any connection between the third‑party standard developer and the corporation, and compensation information for directors (some items may be omitted from public website posting).
    • Timing: the benefit report must be distributed to shareholders (within 120 days after fiscal year end or with other annual materials) and posted on the company website (if any), with limited exceptions for proprietary information.

  • Enforcement and remedies

    • Creates a limited “benefit enforcement proceeding” (claims for failure to pursue benefits or for breach of Chapter 9A duties). Standing to bring such proceedings is limited to the benefit corporation itself (direct actions), directors, and certain shareholders or owners meeting specified thresholds (and derivative actions as permitted).
    • Imposes time limits for actions against directors/officers under Chapter 9A (commencement within specified years after accrual or discovery — see bill text for exact periods).

  • Shareholder dissent rights

    • Expands dissent (appraisal) rights so shareholders may demand fair value in certain corporate actions (e.g., amendments, mergers, or share exchanges) that give rise to dissenter rights under Chapter 9A.

Who is affected

  • New and existing Michigan corporations that choose to incorporate as or convert to benefit corporations (and their boards and shareholders).
  • Directors and officers (different fiduciary framing and liability protections for benefit corporations).
  • LARA (receives and maintains benefit reports).
  • Investors and third parties relying on benefit reports and third‑party standards.

Fiscal and procedural notes

  • Committee analyses indicate no fiscal impact on state or local governments.
  • SB 667 has been reported out of committee and was tie‑barred to SB 666 (related reporting provisions). Committee reports generally state the bills would take effect one year after enactment (some earlier summaries referenced a 90‑day effective period — consult final enrolled bill for the operative effective date).
  • For precise statutory language, thresholds for shareholder standing, the required content of third‑party standards, and the enforcement timelines, consult the bill text (Chapter 9A) as introduced or subsequent substitute/amendments.

If you want, I can extract and list the bill’s exact definitions, the third‑party standard requirements, and the precise statutes added to MCL for quick reference.

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

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