Changes to the Limited Liability Company Act

In December 2002, Michigan amended the Michigan Limited Liability Company Act. Key provisions of the amendments include:

• Articles may be signed by nonmenber organizers
• Domestic LLC's may admit members that have not made a contribution or incurred an obligation to make a future contribution.
• Definition of "operating agreement" amended to allow single members LLC's to have an operating agreement.
• Definition of "majority in interest" added and clarifies voting is by majority in interest rather majority in number.
• Definition of "manager" revised to clarify that a designation of management by managers must be made in the articles of organization.
• Authorized agents permitted to sign documents required or permitted to be filed under the Limited Liability Company Act.
• Good standing certificates may be issued for LLC's and LLC's that are delinquent for two years in filing annual statements lose their good standing status and their name becomes available for use by others.
• The Administrator is required to provide the LLC's and PLLC's with notice of delinquency. If the company does not file it's missing annual statements or annual reports within 60 days of the notice, the company is not in good standing.
• A Certificate of Restoration may be filed by a LLC or PLLC, along with the missing annual statements or annual reports, to be restored to good standing.
• The amendments clarify that professional limited liablity companies are required to file both the annual statement filed by all limited liability companies and an annual report listing it's members and managers and certifying to their licensure.
• The annual statement fee is changed to $25 per Act.
• The amendments provide that an interest in a LLC may be held by tenants by the entirety.
• If the articles of organization or the act establish that the manager or member in a member managed LLC, lacks authority to bind the LLC a third party dealing with the person has "actual knowledge" of the limitation and cannot rely on apparent authority of the person to act on behalf of the LLC.

The Act and the legislative analysis of the bill are available on the Legislature's website.