2006 Michigan Compiled Laws - Mich. Comp. Laws § 472.5 Capital stock, common and preferred; directors, powers, election; insolvency, application of assets.

Sec. 5.

The amount of the capital stock in every such corporation shall be fixed and limited by the stockholders in their articles of association, and shall in no case be less than 10,000 dollars, and shall be divided into shares of 100 dollars each; but the capital stock and the number of shares thereof may be increased at any lawful meeting of the stockholders; and whenever any such increase shall be made, a certificate showing the amount of such increase, signed by the president and secretary of the company, and sealed with its corporate seal, shall be filed in the office of the secretary of state. Any such company by its articles of association, or by amendment thereto, approved at any lawful meeting of the stockholders by vote of 3/4 in interest of its capital stock, shall have power to create and issue certificates for 2 kinds of stock, namely: General or common stock and preferred stock of 1 or more classes; which preferred stock shall at no time exceed 80 per centum of the actual capital paid in, and shall be subject to redemption at not less than par at a certain time to be fixed by the by-laws of said corporation, and to be expressed in the certificates therefor. And the holder of such preferred stock shall be entitled to a fixed dividend, payable quarterly, half yearly, or yearly, which said dividend shall be cumulative, payable at the time expressed in said certificate, not to exceed 8 per cent per annum, before any dividends shall be set apart or paid on the common stock. Said corporation shall be controlled by a board of directors elected by the preferred and common stockholders, excepting when otherwise provided in the articles of association or amendments thereto: Provided always, If at any time upon a fair valuation of the assets of the corporation the common stock shall be impaired in an amount equal to 20 per cent thereof, or any annual dividend or accrued dividends for 1 year due on the preferred stock shall remain unpaid for 60 days, then holders of the preferred stock shall have an equal right with the common stock, share and share alike, to participate in the election of directors and control of said corporation. If for any reason said corporation shall cease business or become insolvent, then after the payment of all liabilities and debts, the remainder of the assets of such corporation shall be applied first to the payment in full of all preferred stock and then unpaid dividends due thereon, and the balance divided pro rata, share and share alike, among the holders of the common stock. Every corporation organized or existing under the provisions of this act may, by its articles of association, or by an amendment thereto approved at any lawful meeting of stockholders by a vote of 3/4 in interest of its capital stock, provide for an issue of common stock of non-par value, in accordance with subdivision 2 (being sections 6 to 9 both inclusive) of part 2, chapter 2 of Act No. 84 of the Public Acts of 1921. Nothing in this section shall be construed as relieving or excepting any such corporation or any person or persons from complying with the provisions of Act No. 144 of the Public Acts of 1909, as amended by Act No. 177 of the Public Acts of 1911, Act No. 259 of the Public Acts of 1915, and Act No. 381 of the Public Acts of 1919.

History: 1867, Act 35, Imd. Eff. Mar. 5, 1867 ;-- CL 1871, 2506 ;-- How. 3540 ;-- CL 1897, 6438 ;-- CL 1915, 8536 ;-- Am. 1917, Act 313, Imd. Eff. May 10, 1917 ;-- Am. 1923, Act 214, Eff. Aug. 30, 1923 ;-- CL 1929, 11296 ;-- CL 1948, 472.5
Compiler's Notes: As to repeal of Act 84 of 1921, referred to in this section, see § 450.191 and note thereto. For provisions of Act 144 of 1909, referred to in this section, see § 460.301 et seq.