The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5581 October 12, 1979 STATE BOARD OF EDUCATION: Approval of foreign educational corporation DEPARTMENT OF TREASURY: Issuance of certificate of authority to a foreign educational corporation A foreign educational corporation may not secure a certificate of authority to do business in Michigan unless it first obtains a statement of adequacy from the State Board of Education in accordance with 1931 PA 327, Sec. 171. The State Board of Education may request the Attorney General to bring an appropriate legal action to enjoin a foreign educational corporation, which has not secured a statement of adequacy, from doing business in Michigan. Dr. Eugene T. Paslov Interim Superintendent of Public Instruction Michigan National Tower Lansing, Michigan 48933 Your predecessor requested my opinion, on behalf of the State Board of Education, on two questions which may be phrased as follows: 1. Does the State Board of Education have the power to authorize a non-profit foreign educational corporation to conduct educational programs in Michigan where the State Board of Education has not issued a statement of adequacy as to such corporation and such corporation has not received a certificate of authority to do business in Michigan? 2. Where a non-profit foreign educational corporation has not received a statement of adequacy from the State Board of Education and such corporation has not received a certificate of authority to do business in Michigan, but it nevertheless does conduct business in Michigan, what action may the State Board of Education take to prevent such corporation from doing business in Michigan? A foreign non-profit educational corporation is not authorized to do business in Michigan until it has acquired a certificate of authority from the Department of Treasury. 1931 PA 327; Sec. 93; MCLA 450.93; MSA 21.94; 1954 PA 380, Sec. 90; MCLA 16.190; MSA 3.29(90); 1972 PA 284; MCLA 450.1101 et seq; MSA 21.200(101) et seq, Secs. 1011 and 1014. To obtain a certificate of authority to transact business in Michigan, a foreign corporation must file an application which includes its articles of incorporation. 1972 PA 284, supra, Secs. 1015 and 1016. In 1972 PA 284, supra, Sec. 1014(2), the legislature has provided that: '(2) A foreign corporation or other foreign entity described in subsection (1)(c) organized not for pecuniary profit may be admitted to carry on its lawful business within this state upon the same terms and under the same restrictions as apply to similar nonprofit corporations organized under the laws of this state, and upon paying the same filing, privilege, and other fees as are prescribed by law for similar domestic corporations.' Thus, a non-profit foreign corporation must comply with the same statutory restrictions as a non-profit domestic corporation in order for such foreign corporation to be authorized to carry on its business in this state. In 1931 PA 327, Sec. 171; MCLA 450.171; MSA 21.172, the legislature has provided in pertinent part: '. . . Every educational corporation, before being authorized to file its articles, shall be required to present a statement to the Michigan corporation and securities commission in writing from the state board of education that (1) the housing space and administration facilities which it possesses or proposes to provide for its declared field or fields of education are adequate, (2) its proposed educational program leading to the diplomas or degrees which it proposes to offer is adequate, (3) its laboratory, library, and other teaching facilities which it possesses or proposes to provide are adequate, (4) it has or proposes to employ an adequate staff, fully trained, for the instruction proposed, and (5) at least 50% of its capital, whether of stock or in gifts, devices, legacies, bequests or other contributions of money or property, has been paid in or reduced to possession.' Thus, the State Board of Education must issue a statement of adequacy as to the requirements mandated by the legislature in Sec. 171, quoted above, as a condition precedent to issuance of a certificate of authority to do business in Michigan to a non-profit foreign educational corporation. See letter opinion of the Attorney General of May 10, 1971, to Dr. John W. Porter and authorities cited therein. Based upon the foregoing statutory provisions, it is my opinion that the State Board of Education does not have the authority to authorize a non-profit foreign educational corporation to conduct educational programs in Michigan where the State Board of Education has not issued a statement of adequacy as to such corporation and such corporation has not received a certificate of authority to do business in Michigan. Such foreign corporation may not grant degrees for such courses until it complies with these requirements. In answer to your second question, it is my opinion that, where a non-profit foreign educational corporation has not received a statement of adequacy from the State Board of Education and such corporation has not received a certificate of authority to do business in Michigan, but it nevertheless does transact business in Michigan, the State Board of Education may request the Attorney General to bring an appropriate legal action on its behalf to enjoin such foreign corporation from doing business in Michigan. 1964 PA 287, Sec. 7; MCLA 388.1007; MSA 15.1023(7). Frank J. Kelley Attorney General