1. What is a Domestic LLC?
2. What is a Professional LLC?
3. What is a Foreign LLC?
4. Characteristics of LLCs
5. Name Requirements
6. Articles of Organization

Michigan LLC Law, also referred to as the Michigan Limited Liability Company Act was passed in 1993. It created a new kind of business entity offering business owners a strong degree of personal liability protection, as they would have with a corporation, but with flexibility in management and pass-through taxation like a sole proprietorship or partnership.

Three forms of LLC were recognized: foreign, domestic, and professional. Michigan added another type in 2009, called a low-profit LLC.

What is a Domestic LLC?

A domestic LLC is created as a business entity legally separate from its owners and is formed within the state of Michigan. The articles of organization must obey the legal requirements of the state. These include:

  • Registering a name using LLC or “Limited Liability Company.”
  • Listing the company's address at its principal place of business.
  • Listing the type of business activities that will take place.
  • Providing the names and addresses of both the business organizer and the LLC's registered agent.
  • The articles of organization must be filed with Michigan's Bureau of Commercial Services, Corporation Division.

What is a Professional LLC?

A professional LLC may be formed by an individual who is required to have a license issued by a state agency to provide professional services. It must also file articles of organization with the state bureau, and explain the type of professional service the company will provide, such as engineering, medical, or legal services.

What is a Foreign LLC?

A foreign LLC is registered in another state but authorized to do business in the state of Michigan. It must comply with the section of the Michigan Limited Liability Company Act pertaining to foreign LLCs. Requirements include:

  • Submitting an Application for Certificate of Authority to Transact Business in Michigan.
  • Providing the identical information that a domestic LLC must provide, such as names and addresses, and business purpose.
  • Providing a certificate of good standing, which is issued by the state in which the LLC was formed and proves that the LLC has complied with all of that state's laws.

What is a Low-Profit LLC?

A low-profit LLC is a blend of nonprofit and for-profit business. It has been created as a new type of investment entity for foundations, which until 2009 had to use an entity called program-related investments. The problem was that PRIs were expensive, complicated, and required extensive legal costs, so they were not desirable for investments. With a low-profit LLC, charitable foundations can invest without the complications and expenses PRIs involve. Low-profit LLCs must satisfy the same requirements for formation as a domestic LLC, along with a few others.

Characteristics of LLCs

Many small businesses choose the LLC as a business entity. Like a corporation, an LLC provides business owners with limited liability. However, it can be taxed as a sole proprietorship or a partnership. No matter what type of LLC is established, there are rules it must adhere to.

Name Requirements

Michigan has several requirements for naming your LLC:

  • The business name must not be the same as another business registered in the state, or similar enough to cause confusion.
  • The business name must end with the abbreviation “LLC,” “LC,” or “Limited Liability Company. Using periods or other punctuation is acceptable.
  • The business name must not use “corporation” or any form of the term such as “Inc.”

To check your name's availability, you can search the business name database at the state website. If it is available, you may reserve it for up to six months. It's not required to do so, but it is still is a good idea to register it as a state or federal trademark.

Articles of Organization

Every LLC must file a form called Articles of Organization in order to make their LLC officially registered. It is not a complicated form; you can find it at the website of the Department of Labor and Economic Growth. It must include the name and address of the registered agent who is designated to receive and forward important correspondence on behalf of the LLC. It must also include the name and address of the LLC, and its purpose. Also, include whether the LLC will dissolve on a certain date and whether it will be run by one manager or more than one. The form may be filed by USPS mail or by email.

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