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 As originally enacted, the act recognized three types of limited liability companies: domestic, professional and foreign.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

LLC Statutes in Illinois

In 1997, the Illinois Limited Liability Company Act was enacted and established the governing LLC statutes in Illinois, cited as 85 Illinois Compiled Statutes (ILCS) 180. The act authorized the formation of LLCs as new business structures that are designed to give business owners the advantages of a corporation -- limited liability -- and a partnership -- flexibility in management and pass-through taxation. In August 2005, the act was amended to authorize a new type of LLC called a "series LLC" and amended again in 2010 to provide for a new type of LLC called a "low-profit LLC.”

Non-Profit Fundraising in the State of Florida

The life of a nonprofit hinges on its ability to collect donations. In Florida, most nonprofits are subject to specific reporting and filing requirements. Further, additional reporting and tax implications come into play if the organization has been deemed exempt from federal income taxes. Knowing which organizations are subject to the reporting laws, as well as understanding what activities constitute solicitation, will help ensure the success of your nonprofit.

Laws for Charitable Events in Michigan

Hosting an event can be an effective way to raise money for a charitable purpose in Michigan. The event might be to support the operating budget of a nonprofit organization or to solicit donations for a member of the community in need. Receiving contributions as part of all charitable events is governed by state law, which has specific requirements regarding registration and the manner in which donations may be requested.

LLCs, Corporations, Patents, Attorney Help

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 ...

How to Create an LLC in Texas

Creating a Texas LLC, or limited liability company, is accomplished by meeting the requirements of the Texas Business ...

Nevada LLC Filing Requirements

The Nevada Limited Liability Company Act -- Nevada Revised Statutes, Chapter 86 -- provides the filing requirements for ...

How to Set Up an LLC in Illinois

In Illinois, forming a limited liability company (LLC) requires submitting forms to the secretary of state's Department ...

Browse by category
Ready to Begin? GET STARTED