There are a number of advantages to forming a Limited Liability Company (LLC) in Michigan. Michigan changed its laws related to LLCs in 1997 to create a more favorable business climate in the state, and in doing so adopted a series of rules that make forming how to get an LLC in Michigan easier and more profitable for more types of business.

Dissolution

In some states, a corporation is automatically dissolved upon the occurrence of a specific event such as the death, retirement, or expulsion of a member. Michigan law states that an LLC will only dissolve in one of four situations: when the members have specified in their articles of incorporation that the LLC will be dissolved under certain circumstances, when an event specified in the operating agreement or articles of incorporation is it produces and there is a vote of the members, when there is a unanimous vote to dissolve by all the eligible members, or when a judge orders the dissolution.

Duration and association

In some states, corporations that are formed with the intent to last in perpetuity are considered a corporation for tax purposes and not an LLC. One of the advantages of Michigan law is that LLCs are allowed to persist in perpetuity, so they don't risk losing their tax status. In Michigan, conversion from a partnership-type business to an LLC can be accomplished by filing a Certificate of Conversion with the state. This process is tax-free and automatically transfers all assets, liabilities, and rights of the partnership to an LLC.

Management

Michigan law has some provisions regarding managers that can help prevent future disputes and lawsuits. In an LLC, the members can run the business, or they can hire an outside manager to run the business, while the members share in the profits. In Michigan, LLCs can require that all managers also be members. This prevents one member from hiring a manager that others do not approve of. Michigan law also provides that the decisions of managers whose powers have been specified in the articles of organization of the LLC may bind the LLC. This provides protection for anyone who enters into a contract with an LLC. In the event that a member objects to the contract, it will remain binding.

Member rights

Michigan law has a provision designed to protect members of minorities. The provision allows members of an LLC to bring legal action against the LLC and its members for any act that is "illegal, fraudulent, or willfully unfair and oppressive." This protects the LLC members who have a minority interest in the business and therefore cannot stop any unfair or illegal acts by the majority members. Michigan also allows members to join a new LLC without making a financial contribution.