Michigan House Bill HB5472

Michigan 2023-2024 Regular Session

• Introduced: 2/22/24
• Refer: 2/22/24

Caption

Businesses: business corporations; business corporation act; amend to reflect amendments to the public health code. Amends sec. 213 of 1972 PA 284 (MCL 450.1213). TIE BAR WITH: HB 5477'24

Impact

The proposed amendments are expected to reinforce the integrity of corporate names and protect consumers from potential confusions regarding the type of services being offered. By preventing corporations from using names that could suggest they are financial institutions or trust companies when they are not, the bill seeks to promote transparency in business practices. This amendment may also affect the way new businesses strategize their branding decisions, as specific terms could be off-limits to them if they don't fall under the applicable regulations.

Summary

House Bill 5472 aims to amend the 1972 PA 284, known as the Business Corporation Act, primarily focusing on the naming conventions that corporations must adhere to within the state of Michigan. The bill restricts corporations from assuming names that imply they operate as banks, insurance companies, or trust companies unless they meet specific criteria that clarify the nature of their business conduct. This means that certain terms associated with banking activities, such as 'bank', 'trust', or 'surety', will be strictly regulated to avoid misleading consumers or clients about the services being offered by these corporations.

Contention

One notable point of contention surrounding HB 5472 would likely arise from how these naming restrictions could potentially restrict businesses, particularly in sectors that may wish to incorporate 'health' or 'care' into their names to indicate services. The bill allows for licensed nursing homes to use terms like 'health center' or 'rehabilitation center', but such allowances are carefully delineated to prevent overlaps with prohibited terminology from the public health code. Some advocates may argue that the bill could be overly restrictive, limiting creative naming opportunities for new enterprises in the health sector and other related fields.