It can be difficult to decide how to organize a business: Should yours be an LLC,

Advantages of Michigan LLCs

There are a number of reasons why business owners in Michigan decide to create LLCs, such as:

• Michigan law allows LLCs to exist in perpetuity, which helps companies avoid losing their tax status. To take advantage of this perk, some business owners even decide to convert partnerships to LLCs.
• Michigan law has some provisions relating to LLC management practices that can help to prevent conflicts and lawsuits. An LLC’s members are permitted to either manage the business or hire an outside manager to do so.
• Michigan law allows members of an LLC to initiate a legal action against an LLC and its members for any acts that are illegal, fraudulent, or willfully unfair and oppressive. This law protects members of an LLC who hold a minority interest in a business.

Disadvantages of Michigan LLCs

There are a number of limitations and disadvantages that parties realize in creating LLCs, such as:

• While corporations have to potential to exist forever, there are a number of situations, including the death or bankruptcy of a member, which can lead to the dissolution of an LLC. For this reason, there are more resilient business structures than LLCs.
• Business owners who have plans to eventually make a company public or to issue shares to workers are often better off selecting a corporation or other type of business structure.
• Running a partnership is generally less complex and requires less paperwork running an LLC, which can involve complex tax issues.

Speak with an Experienced Corporate Law Attorney

If you are interested in creating a Michigan LLC, the process begins with writing an abstract that details your purpose. To successfully navigate the process and ensure that your business structure is setting you up for success, get help from an experienced attorney. Contact Resnick Law today to schedule your initial free case evaluation.  

(image courtesy of Drew Beamer)

Deciding to end a limited liability company (LLC) in Michigan involves a number of challenging tasks. Because the dissolution process is often complex, many business owners decide to obtain the assistance of an experienced business attorney to ensure everything wraps up smoothly. The following are some of the basic steps through which your Michigan business attorney can guide you.

Examine Your LLC’S Articles of Formation

LLCs are registered with the state of Michigan. While the state has the power to dissolve an LLC through a court order, business owners can also decide on their own to end an LLC. For many companies, the guidelines for dissolving the business will be in the articles of formation. The articles of formation may require the LLC members to vote on whether to dissolve the company. There are also many other steps that might be required to dissolve an LLC, including establishing a specific meeting time to discuss these matters, and providing all members with sufficient notice.

This is not the only way a business owners can voluntarily dissolve an LLC, however. The state’s LLC ACT allows the voluntary dissolution of an LLC through a unanimous vote by all LLC members.

Understand the Importance of a Certificate of Dissolution

After an LLC’s members vote on whether to dissolve the structure, the parties must file a document with the Michigan Department of Licensing and Regulatory Affairs called a certificate of dissolution. Your LLC must be in good standing with the state of Michigan before you file the certificate.

Certificates of dissolution contain an array of important information about your LLC, including the company’s name, the reason for the dissolution, and the date on which the dissolution occurred. These certificates must be signed by an authorized individual.

Notify Creditors

As part of the dissolution of an LLC, it is important to provide adequate notice to creditors as well as other people who might have an interest in the company. While not required, providing notice helps to limit the liability that you ultimately end up facing.

One of the ways to provide notice is by sending written communication to each creditor after the date of dissolution. Some LLC owners decide to provide notice by publishing information about the LLC’s dissolution in the newspaper.

Submit a Tax Clearance Request

The state of Michigan requires LLC owners to submit a tax clearance request to the Michigan Department of Treasury within 60 days of filing a certificate of dissolution. These forms are available online. While the exact penalties that a person ends up facing due to failure to submit this form is uncertain, it is still a wise idea to do so.

Speak with an Experienced Business Law Attorney

Dissolving an LLC in Michigan is just one of the many complicated legal aspects of ending your business. Business owners who are interested in ending their LLCs should contact an experienced attorney. Do not hesitate to speak with a knowledgeable attorney at Resnick Law today. No matter if you are beginning or ending your LLC, we can help you navigate even the most complicated business law issues.

(image courtesy of Evan Wise)