[BUYING AND SELLING REAL ESTATE IN THE UNITED STATES - MICHIGAN]
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manner he or she reasonably believes to be in the best interests of the corporation. MCL 450.1541a(1). Shareholders generally do not owe a fiduciary duty to other shareholders (unless the duty is set forth in a shareholder agreement). 6. Advantages 1. Shareholders have limited liability for acts of the corporation. 2. Shareholders can generally freely transfer their stock (unless subject to a shareholder agreement stating otherwise). 3. S corporations receive pass through income tax treatment (no double taxation) 4. S corporations may lead to savings on self-employment taxes. 7. Disadvantages 1. C corporations are subject to double income taxation. 2. A C corporation cannot pass through its losses to its shareholders. IRC 172. 3. Unlike a LLC, S corporation allocations of income or loss are rigid. 4. The Michigan Business Corporation Act is more
including, amending the Articles of Incorporation (except under certain circumstances) (MCL 450.1611(3)), adopting a plan of merger or share exchange (MCL 450.1703a(1)), and selling all or substantially all of the corporation’s assets outside of the ordinary course (MCL 450.1753). Most changes require approval from the majority of shareholders and may require approval from an affected class of shareholders. Shareholder agreements may require approval from a greater percentage of shareholders for certain actions.
VII. FORM OF DEED A. The common deed in Michigan is the “warranty deed” where the seller warrants title. The “Special Warranty Deed” (sometimes called a “Covenant Deed”) is becoming more accepted and popular whereby the seller gives warranties against title defects arising dur ing seller’s period of ownership only. Most title insurers do not see this type of limited warranty deed as an impediment to issuing title insurance. Quit claim deeds are also frequently used where the seller conveys whatever interest it has and provides no warranties of title, in which case the buyer should obtain and would be relying entirely on title insurance to address title defects. VIII. CLOSING COSTS/ADJUSTMENTS A. Seller usually pays the transfer taxes due at the time of the conveyance. There is a standard county tax of $0.55 per $500 of consideration, however, a
stringent than other applicable entity statutes in terms of requirements applicable to corporations. activities require shareholder approval corporate
5. Certain
ILN Real Estate Group – Buying and Selling Real Estate Series
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