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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)



Opinion No. 6093

August 23, 1982


Use of term 'cooperative' in corporate name

A cooperative corporation must include the term 'cooperative' within its corporate name.

Honorable Gilbert DiNello

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion whether a cooperative profit corporation may assume a name other than its own pursuant to the provisions of the Business Corporation Act, 1972 PA 284, Sec. 217, as amended; MCLA 450.1217; MSA 21.200(217).

A cooperative corporation is formed and governed under the provisions of the Michigan General Corporation Act, 1931 PA 327; MCLA 450.1 et seq; MSA 21.1 et seq, portions of which were repealed by the adoption of the Business Corporation Act, 1972 PA 284, supra. The cooperative corporation provisions were not among those repealed and are currently found at MCLA 450.98-450.109; MSA 21.99-211.110.

Among the cooperative corporation provisions is one which requires that a cooperative corporation include in its corporate name the term 'cooperative.' 1931 PA 327, supra, Sec. 99. See also, OAG, 1945-1946, No 2897, p 129 (November 28, 1944); Allied Supermarkets Inc v Grocer's Dairy Co, 45 Mich App 310, 316-317; 206 NW2d 490, aff'd on other grounds, 391 Mich 729; 219 NW2d 55 (1973).

The rationale for this requirement includes the fact that a cooperative corporation adopts a mode of operation whereby the corporation conducts business with its shareholders or members and distributes earnings in proportion to the value of property bought from and sold to such shareholders or members. In addition, the shareholders or members share in the earnings, if any, as a result of corporate dealings with persons or entities other than shareholders and members. But the use of the term 'cooperative' in a corporate name, creditors and others are placed on notice as to the nature and purpose of the corporation.

The Business Corporation Act, supra, authorizes business corporations, other than cooperative corporations, to conduct business under an assumed name other than the corporation's name. 1972 PA 284, Sec. 217, supra. However, the name chosen may not contain a word or phrase which implies that the corporation has a purpose other than that for which it is authorized to do business, may not be confusingly similar to another corporate name, and may not contain a word, phrase or abbreviation which is prohibited or restricted by any other statute. 1972 PA 284, supra, Sec. 212.

While the court, in Allied Supermarkets Inc v Grocer's Dairy Co, supra, 45 Mich App 310, 317, concluded that a cooperative corporation must, under the General Corporation Act, supra, include the term 'cooperative' in its name, it did not decide whether the assumed name provisions of the Business Corporation Act, supra, permit a cooperative corporation to assume a name which does not include the term 'cooperative.'

Although the Business Corporation Act, 1972 PA 284, supra, Sec. 1098, repealed many sections of the Michigan General Corporation Act, 1931 PA 327, supra, in its wisdom, the Legislature did not repeal 1931 PA 327, Sec. 99, supra. Nor is there any basis to contend that the Legislature intended to make cooperative corporations subject to the Business Corporation Act, 1972 PA 284, Sec. 212, supra, to permit the adoption of another name, since any resultant amendment by implication would violate the reenact and publish clause of Const 1963, art 4, Sec. 25. Alan v Wayne County, 388 Mich 210; 200 NW2d 628 (1972).

It is my opinion, therefore, that the provisions of the Business Corporation Act, supra, with respect to the use of names by corporations, have no applicability to cooperative corporations. The opinion expressed in OAG, 1945-1946, No 2897, supra, continues to apply; i.e., a cooperative corporation must include within its name the term 'cooperative.'

Frank J. Kelley

Attorney General

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