Find out how to qualify your LLC to conduct business in Michigan.
If you own a company that was founded in a state other than Michigan, you must qualify or register it in Michigan in order to conduct business there. The requirements for qualifying your international (non-Michigan) limited liability corporation (LLC) to conduct business in Michigan are summarized here.
What exactly is a Foreign LLC?
If your LLC was founded in another state, it is referred to as a foreign LLC in Michigan. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. An LLC founded in North Dakota, for example, is a foreign LLC in South Dakota.
Doing Business in Michigan
If you are “transacting business” in Michigan, you must register your foreign company with the state, according to Michigan’s LLC Act. What exactly does this mean? Like other states, Michigan’s LLC Act does not specify what “transacting business” with connection to international registrations entails.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
Michigan’s LLC Act, like many others, outlines specific acts that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal business affairs such as holding member or manager meetings having a bank account in the state selling through independent contractors soliciting or obtaining orders that require acceptance outside the state before they become contracts creating or acquiring indebtedness, mortgages, or security
Check Section 450.5008 of the Michigan Consolidated Laws for the exact legal description of each of these objects. If your LLC’s only operation in Michigan is one or more of the activities mentioned above, you should not be required to register with the state.
You must submit an Application for Certificate of Authority to Transact Firm in Michigan with the Michigan Department of Licensing and Regulatory Affairs to register your international business in Michigan. The blank application (Form CSCL/CD-760) may be downloaded from the LARA website.
To complete the form, you must supply the same information that you would need to incorporate an LLC in your home state. However, since each state is different, there may be materials that Michigan requires that you did not need to submit when you initially formed your LLC. In particular, for a Michigan Certificate of Authority, you must provide:
the name of your limited liability company
If the name of your LLC is not accessible in Michigan (due to another Michigan firm already registering the name), the assumed name your LLC will use in Michigan.
the name of the state in which your LLC is formed the date your LLC was formed
the term of your LLC
the street address and, if different, mailing address of your LLC’s registered office in Michigan the street address and, if different, mailing address of your LLC’s primary office in the state where it was formed
the name and address of your LLC’s Michigan registered agent the name and address of a member or management of your LLC (if you do not have a registered agent in Michigan or cannot locate one) where the state may mail legal papers
the precise business your LLC will conduct in Michigan including a declaration that the LLC is authorized to handle such activity, and an approved signature.
To your application, you must include a certificate of good standing for your LLC provided by the state in which it is established. The certificate must be issued within thirty days of the day LARA receives your application. The application cost is $50.
What Happens If You Don’t Register?
If your LLC does business in Michigan without a Certificate of Authority, it cannot file a lawsuit. Furthermore, if your LLC transacts or conducts business in Michigan without permission, both the LLC and any LLC member and management who engages in transacting business in the state face fines of up to $10,000. However, the lack of a valid Certificate of Authority does not bar your LLC from defending claims in Michigan or render any of your LLC’s contracts null and void. Furthermore, members of your LLC are not accountable for the debts and liabilities of the LLC only because the LLC conducted business in Michigan without a legal certificate of authority.
How to Form a Foreign Corporation in Michigan
If your company is structured as a corporation rather than an LLC, the regulations and requirements for international registration in Michigan remain the same. However, you will need to fill out a second application, Application For Certificate Of Authority To Transact Business Or Conduct Affairs In Michigan. For paperwork, information, and filing requirements for registering a foreign company in Michigan, visit the LARA website.