Michigan Compiled Laws

Mich. Comp. Laws § 450.1103 (2026)

Liberal construction; purposes and policies of act.

✓ current as of July 2026

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BUSINESS CORPORATION ACT

Act 284 of 1972

450.1103 Liberal construction; purposes and policies of act.

Sec. 103.

This act shall be liberally construed and applied to promote its underlying purposes and policies which include all of the following:

(a) To simplify, clarify, and modernize the law governing business corporations.

(b) To provide a general corporate form for the conduct or promotion of a lawful business or purpose with variations and modifications from the form as interested parties in any corporation may agree upon, subject only to overriding interests of this state and of third parties.

History: 1972, Act 284, Eff. Jan. 1, 1973 ;-- Am. 1989, Act 121, Eff. Oct. 1, 1989

Notes of Decisions

Cited in 9 cases, 1977–2019 · leading case: Madugula v. Taub, 853 N.W.2d 75 (Mich. 2014).

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Madugula v. Taub, 853 N.W.2d 75 (Mich. 2014). “In addition, according to MCL 450.1103(c), the BCA must be liberally construed and applied “[t]o give special recognition to the legitimate needs of close corporations.”

Baks v. Moroun, 576 N.W.2d 413 (Mich. Ct. App. 1998). · cites it 2× “§ 450.1103(c); M.S.A. § 21.200(103)(c), "[t]o give special recognition to the legitimate needs of close corporations," and the specific purpose of § 489, which is to permit suits to rectify a continuing pattern of minority oppression.”

Estes v. Idea Eng'g & Fabricating, Inc, 649 N.W.2d 84 (Mich. Ct. App. 2002). “Moreover, we note as the majority in Estes does, that MCL 450.1103 of the mbca states, in pertinent part, that the act “ ‘shall be liberally construed .”

Franchino v. Franchino, 687 N.W.2d 620 (Mich. Ct. App. 2004). “” MCL 450.1103; Estes, supra at 278 . It is generally acknowledged that, in close corporations, shareholders often work for the corporation, and corporate dividends are often paid in the form of a salary.”

Frank v. Zaret (In Re Peet Packing Co.), 231 B.R. 42 (Bankr. E.D. Mich. 1999). · cites it 6× “) And while we are mindful of the fact that the BCA is to be “liberally construed,” Mich.Comp.Laws § 450.1103, there certainly is nothing in § 122(3) which warrants the inference that the legislature meant to be that solicitous about the sanctity of distributions.”

Trs. for Michigan Carpenters Council Health & Welfare Fund v. C.J. Rogers, Inc., 933 F.2d 376 (6th Cir. 1991). “Mich. Comp.Laws § 450.1103. Moreover, Michigan has adopted the Michigan Uniform Securities Act, which became effective January 1, 1985.”

Estes v. Idea Eng'g & Fabricating, Inc, 631 N.W.2d 89 (Mich. Ct. App. 2001). “(c) [t]o give special recognition to the legitimate needs of close corporations.” Chapter 4 of the act, MCL 450.”

Donald L Harkins v. Sun Pharm. Indus. Inc (Mich. Ct. App. 2019). · cites it 2× “1763(2)(a) and are thus precluded under the plain language of that provision from asserting dissenter rights.”

Smith v. Dir., Corp. & Sec. Bureau, 261 N.W.2d 228 (Mich. Ct. App. 1977). “) *110 The defendant argues that the proposed articles failed to substantially conform to the requirements of the BCA because sections MCLA 450.1103; MSA 21.200(103) and MCLA 450.”

— Mich. Comp. Laws § 450.1103(a) — 1 case

Frank v. Zaret (In Re Peet Packing Co.), 231 B.R. 42 (Bankr. E.D. Mich. 1999). “) And while we are mindful of the fact that the BCA is to be “liberally construed,” Mich.Comp.Laws § 450.1103, there certainly is nothing in § 122(3) which warrants the inference that the legislature meant to be that solicitous about the sanctity of distributions.”

— Mich. Comp. Laws § 450.1103(c) — 2 cases

Baks v. Moroun, 576 N.W.2d 413 (Mich. Ct. App. 1998). “§ 450.1103(c); M.S.A. § 21.200(103)(c), "[t]o give special recognition to the legitimate needs of close corporations," and the specific purpose of § 489, which is to permit suits to rectify a continuing pattern of minority oppression.”

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