Michigan Limited Liability Company Act

By Joe Stone

The Michigan Limited Liability Company Act was enacted in 1993 to provide a new type of business structure that gives business owners protection from personal liability -- like a corporation -- with the management flexibility and tax advantages of a partnership or sole proprietorship. As originally enacted, the act recognized three types of limited liability companies: domestic, professional and foreign. In 2009, Michigan became one of the few states to amend its laws to recognize a fourth type – a low-profit limited liability company.

Domestic LLC

The act provides Michigan business owners with the ability to establish a limited liability company as a separate legal entity, called a domestic limited liability company, or LLC. Article 2 of the act provides that a limited liability company comes into existence when articles of organization are filed that comply with the requirements of section 450.4203. The requirements include: choosing a name that includes the words “limited liability company” or abbreviation LLC; listing the principal address for the company; listing the business activity for the company; and identifying the name address of the organizer and registered agent for service of process for the company. The articles of organization are filed with the Bureau of Commercial Services, Corporation Division of the Michigan Department of Energy, Labor & Economic Growth. The Bureau provides an optional form for use with instructions (see Resources).

Professional LLC

Any person required under Michigan law to provide professional services under license from any state agency can form a professional limited liability company. Article 9 Sections 450.4901 to 450.4910 of the act specify the requirement for this type of limited liability company, which also include filing articles of organization with the Bureau. In addition to the information provided in the articles for a domestic LLC, the articles for a professional LLC must state the professional service to be engaged by the company, such a legal, medical or engineering. The Bureau provides an optional form for professional LLCs to use with instructions (see Resources).

Ready to start your LLC? Start an LLC Online Now

Foreign LLC

A limited liability company formed in another state -- a foreign LLC -- is authorized under the act to engage in business in Michigan by complying with the provisions of Article 10 Sections 450.5001 to 450.5010 of the act. Prior to engaging in business, the foreign LLC must submit an Application for Certificate of Authority to Transact Business in Michigan with the Bureau. The application requires the same information required of a domestic LLC, with the added requirement that a certificate of good standing be included with the application. This certificate is issued by the foreign LLC’s state of formation and indicates that the foreign LLC is in compliance with the laws of that state. The Bureau provides an optional application form for use with instructions (see Resources).

Low-Profit LLC

In January 2009, Michigan amended the act to provide for a new type of limited liability company called a low-profit LLC or L3C. This type of limited liability company is a hybrid between a nonprofit and for-profit business. According to the Council of Michigan Foundations, a low-profit LLC is designed as an alternative investment structure for foundations that previously could only use an investment structure called program-related investments, or PRIs. The Council described PRIs as requiring legal fees and organizational costs that are so expensive and complex as to make a PRI an undesirable investment structure. However, with a low-profit LLC becoming a statutory authorized entity under Michigan law, foundations can use this type of entity to make investments without the expense and complexity of PRIs. Article 1, Section 450.4102(m)(i) to (iii) of the act specifies the requirements for forming a low-profit LLC which are in addition to those required for forming a domestic LLC.

Ready to start your LLC? Start an LLC Online Now
Texas LLC Laws



Related articles

New Jersey LLC Requirements

New Jersey LLC requirements are primarily set forth in the New Jersey Limited Liability Company Act, which specifies how an LLC is formed, operated and dissolved. As with all other business entities, such as corporations and partnerships, New Jersey law includes certain licensing, taxation and insurance requirements, which also apply to LLCs. The Division of Revenue provides a comprehensive package of information and forms to facilitate compliance with these requirements.

Washington State LLC Laws

Washington State enacted its LLC laws in 1995, called the Washington Limited Liability Company Act. The LLC laws authorize the creation of new LLCs in Washington State and permit LLCs formed in other states to conduct business in Washington State. The corporations division of the secretary of state’s office oversees implementation of the LLC laws. Additionally, the Washington Administrative Code sets forth rules and regulations established by the secretary of state regarding the practices and procedures of the corporations division pertaining to limited liability companies.

How to Change the Address on a Texas PLLC Incorporation

A professional limited liability company in Texas is a limited liability company that engages in a professional activity, such as a law firm. To form an LLC in Texas, the organizers must file articles of organization with the Texas Secretary of State’s office. The articles of organization include the guidelines that govern a company and contain basic information about the organization of the company, such as the registered agent and the registered office located within Texas. (Ref 2, 4)

LLCs, Corporations, Patents, Attorney Help LLCs

Related articles

Florida LLC Laws

Florida enacted its first LLC laws in 1982 and they were restated in new legislation passed in 1999, known as the ...

Requirements to Have a Raffle in Pennsylvania

Raffles are considered a form of gambling in Pennsylvania. This classification applies to all games that require a fee ...

How to Get an Article of Incorporation in Tennessee

In Tennessee, a new corporation's organizing document is called a "charter." It contains the company’s articles of ...

LLC Statutes in Illinois

In 1997, the Illinois Limited Liability Company Act was enacted and established the governing LLC statutes in Illinois, ...

Browse by category
Ready to Begin? GET STARTED