Happy Tuesday, all. Well, we are in February now, which, if you live in the Midwest means you are hoping for a glimpse of sun and looking for brighter and warmer days. I am reminded of my trip 6 months back to Amsterdam and the beautiful canals.
A client recently inquired about whether or not he needed to file his LLC’s annual statement in order to stay in good standing with the State of Michigan.
The answer is “Yes.”
The Michigan Department of Licensing and Regulatory Affairs (“LARA”) reminds us that annual statement are due by February 15 of each year.
Consequences for Failing to File:
LARA also reminds that:
“Section 909(2) of the Michigan Limited Liability Company Act, 1993 PA 23, provides that if a domestic or foreign professional limited liability company does not file the annual report by February 15, then in addition to its liability for the fee, a $50.00 penalty is added to the fee.”
“Penalties will be assessed for 2018 annual reports received after March 1, 2018.”
Further LARA reports that, an LLC that “fails to file its annual statement/report or the filing fee is not paid for two years, the limited liability company will not be in good standing. The status of the limited liability company will be “active, but not in good standing.”
“A limited liability company that is not in good standing is not entitled to a certificate of good standing; its company name will be available for use by another entity, and no document will be filed on behalf of the company other than a certificate of restoration.”
Is your LLC in Good Standing?
Occasionally I will have a business client come in and I will ask – just to make sure – “is your business still in good standing?”
The common answer is “I think so.”
And of course, after I perform a quick internet check with the State of Michigan it is all too common that I discover that either the LLC is “not in good standing” or worse, the company has been dissolved automatically for failure to file annual statements.
A Word on Resident Agents:
My law firm is happy to provide our business clients with resident agent services. One of the benefits of an LLC is that it provides its owners a level of privacy protection.
You can check out a recent ABAJournal Article on how a Court is making Jared Kushner’s real estate partners disclose their identity.
Michigan law requires Limited Liability Companies to have appointed a Resident Agent.
MCL 450.4207(1)(b) requires an LLC to have a resident agent. A person, or business with a physical presence in the State of Michigan.
Michigan law does not require that an “owner” of the LLC be the resident agent.
“The resident agent appointed by a limited liability company is an agent of the company upon whom any process, notice, or demand required or permitted by law to be served upon the company may be served.” MCL 450.4207(1)(b).
Many of my real estate investment clients will utilize my law firm as resident agent when filing their articles of organization with the State of Michigan.
In Conclusion:
Business owners, if you get these annual statements from the State of Michigan, or from your attorney – do not disregard them! Maintain your Corporate Formalities.
Questions? Comments?
E-mail: Jeshua@dwlawpc.com
Twitter: @JeshuaTLauka
Purpose Driven General Counsel 