Mich. Comp. Laws » Michigan Compiled Laws / Chapter 450 / Act 284 of 1972
Michigan Compiled Laws

Mich. Comp. Laws § 450.1275 (2026)

Agreement to pay interest in excess of legal rate; defense of usury prohibited.

✓ current as of July 2026
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BUSINESS CORPORATION ACT


Act 284 of 1972


450.1275 Agreement to pay interest in excess of legal rate; defense of usury prohibited.

Sec. 275.

    A domestic or foreign corporation, whether or not formed at the request of a lender or in furtherance of a business enterprise, may by agreement in writing, and not otherwise, agree to pay a rate of interest in excess of the legal rate and the defense of usury shall be prohibited.

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

Notes of Decisions
Cited in 20 cases (5 in the last 5 years), 1976–2026 · leading case: In Re Dow Corning Corp., 237 B.R. 380 (Bankr. E.D. Mich. 1999).
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In Re Dow Corning Corp., 237 B.R. 380 (Bankr. E.D. Mich. 1999). · cites it 2× “1854(2) (pursuant to credit reform act, "[a] depository institution may charge, collect, and receive any rate of interest or finance charge for a credit card arrangement”); Mich.Comp.Laws § 450.1275 (corporation may agree to pay any rate of interest); Mich.”
Allan v. M & S Mortg. Co., 359 N.W.2d 238 (Mich. Ct. App. 1984). · cites it 3× “"The statute [MCL 450.1275; MSA 21.200(275)] itself *35 involved here under incorporation that was, in effect, at the time permitted the incorporation for such business purposes.”
Grigg v. Michigan Nat'l Bank, 274 N.W.2d 752 (Mich. 1979). · cites it 2× “78 (repealed by 1972 PA 284 , now MCL 450.1275; MSA 21.200[275]) and MCL 438.”
Bob v. Holmes, 259 N.W.2d 427 (Mich. Ct. App. 1977). “While we have the power to do so, we feel the more appropriate remedy for defendants is to allow the trial court to decide the question first. Therefore, on remand, we suggest defendants once again present this problem to the trial court for resolution.”
Paul v. U.S. Mut. Fin. Corp., 389 N.W.2d 487 (Mich. Ct. App. 1986). “We note that this statutory provision is similiar to the provision enacted to regulate corporate interest agreements, MCL 450.1275; MSA 21.200(275), in that it requires a written agreement in order to exceed the legal interest rate.”
Grigg v. Michigan Nat'l Bank, 249 N.W.2d 701 (Mich. Ct. App. 1976). “11 Repealed by 1972 PA 284 ; now MCLA 450.1275; MSA 21.200(275).”
Selman v. Manor Mortg. Co., 551 F. Supp. 345 (E.D. Mich. 1982). · cites it 2× “Codified at Mich.Comp.Laws § 450.1275, and in various locations within Titles 438 and 450, as well as common law.”
Coachmen Indus., Inc. v. Charay Indus., Inc. (In Re Charay Indus., Inc.), 23 B.R. 988 (Bankr. E.D. Mich. 1982). · cites it 3× “§ 450.1275], That subsection of the Michigan Business Corporation’s Act provides in pertinent part as follows: A domestic or foreign corporation, whether or not formed at the request of the lender, may by agreement in writing and not otherwise, agree to pay a rate of interest in…”
Brasco, Inc. v. Int'l Graphic Servs., Inc., 602 F. Supp. 129 (N.D. Ill. 1984). · cites it 2× “Mich.Comp.Laws § 450.1275. Here the correspondence between the parties, including IGS’ actual payments of over $10,-000 in interest at the 18% rate, clearly reflects such an agreement unless: 1.”
Rutter v. Troy Mortg. Servicing Co, 377 N.W.2d 846 (Mich. Ct. App. 1985). “1 MCL 450.1275; MSA 21.200(275) provides: "A domestic or foreign corporation, whether or not formed at the request of a lender, may by agreement in writing, and not otherwise, agree to pay a rate of interest in excess of the legal rate and in such case the defense of usury is…”
Holland v. Michigan Nat'l Bank-West, 420 N.W.2d 173 (Mich. Ct. App. 1988). “5 See Allan, supra, which considered the use of the corporate form as a sham to avoid usury ceilings on second mortgages by use of MCL 450.1275; MSA 21.200(275), which provides that a corporation may agree to pay a rate of interest in excess of the legal rate and not raise the…”
Heritage Collegiate Apparel, Inc. v. Elemental Capital, Inc. & Redstone Advance, Inc. (Bankr. E.D. Mich. 2026). · cites it 5× “48 The Defendants argue, among other things, that the Plaintiff’s alternative claim of usury under Michigan law in Count VIII is barred by Mich. Comp. Laws § 450.1275 , which states, in relevant part: A domestic or foreign corporation, .”
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