Michigan Foreign Registration · Monthly penalty
The monthly penalty in Michigan, and who can be charged
Doing Michigan business without a certificate of authority costs a foreign LLC $100 to $1,000 for every calendar month, reaching back no further than 5 years and ending at $10,000. The individuals who steer the Michigan work face their own charge of up to $10,000 apiece, and a court can enjoin the business until all of it is paid.
The consequences at a glance
| Effect | Where it comes from |
|---|---|
| Monthly civil penalty | $100 to $1,000 per calendar month, cap $10,000 |
| Personal penalty | Up to $10,000 each for the individuals who direct the Michigan work |
| Back fees | What authorization would have cost |
| Injunction | Lifted only after payment in full and a certificate of authority |
| Courts | The LLC cannot sue until it holds a certificate |
| Contracts | Not made invalid |
| Members | Not answerable for LLC debts on that ground alone |
How the monthly penalty is counted
The penalty applies for each calendar month in which the LLC transacted business without the certificate, and counts back no more than 5 years before the penalty is imposed. Each month carries $100 at the least and $1,000 at the most, and the total may not exceed $10,000. Six months at the minimum comes to $600. Ten months at the maximum would already reach the cap.
The people behind the LLC
A second penalty falls on individuals. A manager, member or authorized person who approves, directs or joins in the Michigan business of an LLC that lacks a certificate can be penalized personally, up to $10,000 each. An ownership interest alone does not make a member answerable for the LLC's debts, but the individual civil penalty is a separate matter.
Who collects, and how
The attorney general brings the action for these amounts. Once a court finds a violation, it adds an injunction against further business, and the injunction holds until the penalties, interest and court costs have been settled and a certificate of authority obtained. Separately, the attorney general may sue to restrain any violation of the act, whether or not the LLC holds a certificate.
Back fees
The LLC is also charged for each year or part of a year of unauthorized business, in an amount equal to what authorization would have cost, counting the filings the act requires and the penalties it imposes. For an LLC that should have filed $25 statements, that means a bill for each year it missed.
No suing until it has a certificate
The LLC may not maintain an action, suit or proceeding in a Michigan court until it obtains a certificate, and the bar binds a successor in interest and an assignee, except a receiver, a bankruptcy trustee or an assignee for value without knowledge. A suit already filed survives if the certificate arrives before dismissal, and any dismissal is without prejudice.
What the lack of a certificate does not undo
Having no certificate does not void the LLC's contracts or acts, and it does not stop the LLC defending a suit in a Michigan court. Operating without one also makes the administrator the LLC's agent for service on claims that grow out of the Michigan work.
Corporations
A foreign corporation faces the same monthly range of $100 to $1,000, the same $10,000 cap, and the same bar on suing. See the corporation page.
After you have the certificate
An authorized LLC faces a different risk. The annual statement is due February 15, and a statement and fee still missing two years later cost the LLC its good standing by operation of law. A late statement adds $50. The annual statement page has the detail.
Getting right with the state
Obtain the certificate, since the injunction runs until the LLC has one. File the statements that came due in the meantime. Then ask a Michigan lawyer about the penalties for the earlier months, which a court, not the Bureau, assesses.
Penalty questions
How big is the Michigan penalty?
$100 to $1,000 for each calendar month, capped at $10,000.
Can I be personally charged?
A manager, member or authorized person who directs the business faces up to $10,000.
Can the LLC still be sued?
Yes. The LLC may answer a case, and service on it can be made through the administrator.
Our fee and LARA's
Get my Michigan certificate
+ $50 LARA fee
- Form CSCL/CD 760 completed from your answers, in the order the form uses
- Your home-state good standing certificate checked against Michigan's 30-day limit
- A Michigan resident agent and registered office, either ours or the one you name
- The package delivered to the Corporations Division and the certificate returned to you
- Renewal: after the first year, the agent service renews at $149 a year
$199
Michigan
Get my Michigan certificateLARA's $50 and any expedite fee are itemized separately at checkout. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
Sources
- Michigan LARA filing fees, limited liability companies
- Michigan LARA limited liability company filing information
- Michigan Form CSCL/CD 760, application for certificate of authority (foreign LLC)
- Michigan LARA filing fees, foreign profit and nonprofit corporations
- Michigan Limited Liability Company Act, MCL 450.5007
- MCL 450.5010, attorney general action to restrain
- MCL 450.2055, penalty for a foreign corporation
- MCL 450.2051, suits by a foreign corporation without a certificate
- Michigan LARA, annual reports and annual statements
- MCL 450.4207, registered office, resident agent and annual statement
Doing business in Michigan?
Tell us about the LLC and Form 760 is ours to prepare.