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Foreign Qualification in Michigan
You may be operating a company in any state in the USA except Michigan. Now, you want to expand your reach or open a branch or even move your business to Michigan. This is made possible through a specific process known as a foreign qualification in Michigan. This process will help you in establishing an LLC or a corporation or other kinds of business entities in a new state without the need for re-registration or incorporation of the said entity. This guide has been created to provide information concerning the various features of a Michigan foreign business registration including state laws, requirements, the process, and understanding the essence of doing business in Michigan.
Michigan Foreign Qualification
Every state has its own set of advantages that play a key role in attracting entrepreneurs and businesses. The state of Michigan also has several advantages although its business climate is the primary reason behind the increase in Michigan LLC foreign registration. The availability of an abundant workforce is also an important reason why entrepreneurs want to shift their business to this state. There are several top industries including the core industries that have a faster and more stable growth rate like the mobility and automotive manufacturing industry and semiconductor industry. A Michigan foreign business registration will also open the doors to various state business incentives and grants that your company can benefit from.
What is a Michigan foreign qualification?
If you are thinking of expanding your operations to Michigan then you will have to follow the process of foreign qualification in Michigan, which is governed by the Michigan Compiled Laws. This qualification process doesn’t require you to form a new business or register a company all over again. When you opt for Michigan foreign business registration, you will also be able to operate your company in your home state (state of original registration) as well as the new state (Michigan).
The process of foreign LLC registration or incorporation may be different from the foreign qualification in other states or even the home state. Let’s look at an example to understand this:
Example: You have formed a domestic LLC in Colorado by filing articles of organization. Colorado will be considered as your home state. You are now thinking of expanding your business to Michigan. If you want to move your business completely then you will have to close your Colorado LLC and start a new LLC in Michigan. If you want to operate in both states then you can apply for Michigan LLC foreign registration. This process will provide you with the authority to transact business in the new state as well.
Once you have applied for a Michigan foreign business registration, you will need to maintain state compliances like obtaining necessary business licenses and permits. You will also be required to hire and maintain a Michigan registered agent like IncParadise. We can help you with all your state business formalities including annual compliances like filing annual reports.
Doing business in Michigan
When a limited-liability company or a business corporation, or any other type of entity is operating in any other state apart from its home state (state of registration) then they are considered a foreign company. Such a company can operate only when they undergo the process of foreign qualification in Michigan. Each state has its own laws when it comes to foreign qualifications, and hence before you can register your business, it is important to understand what doing business in Michigan refers to.
The general point of view of doing business refers to a company owning a warehouse in the state of Michigan or is planning to open a retail store in the state. This is considered as “doing business” in this state and will require such an entity to undergo a Michigan foreign business registration. There are several activities though that are not considered to be transacting business in the state and they are:
- If a company is defending, maintaining, or settling any legal proceeding
- If an entity has a bank account in the state
- If a business holds meetings in the state
- If a firm is selling its products or services through an independent contractor
- When a company creates or acquires indebtedness, security interests, and mortgages in personal or real property
- If a business secures or collects debts
- When an entity is transacting business in interstate commerce
Michigan Foreign Qualification Process
If you have already registered an LLC or a business corporation in another state but want to conduct business in Michigan then you will need to undergo a Michigan foreign corporation registration. It is important to note that all out-of-state businesses require authority to transact business in the state. If you operate a business without obtaining the required authority then the said business would be considered to be breaking the Michigan Compiled Laws for Foreign LLCs or Corporations. There will be consequences for transacting business without authority including severe penalties. Let us look at the process of a Michigan foreign entity search and registration for LLCs and corporations.
Michigan Foreign Corporation Registration
If you are already operating a corporation in another state and want to expand your operations to Michigan then you will need to apply for a Michigan foreign corporation registration. This is also known as the process of foreign qualification and will be governed by the 2021 Michigan Compiled Laws, Chapter 450 – Corporations, 284-1972-10 Chapter 10 Foreign Corporations. You will have to obtain the authority necessary to transact business in this state and there are certain steps to follow. The steps for a Michigan foreign entity search and registration are:
1. Business Name
The first step towards a Michigan foreign corporation registration is determining a business name and registering it. The corporate name should comply with state laws and should contain words like “corporation,” “incorporated,” or abbreviations like “Inc.,” “corp.,” and “co.” Once you have chosen a name, it is important to conduct a Michigan foreign entity search also known as a name availability search. This will ensure your chosen name is available for registration.
If the chosen name is available then you need to file the Application for Registration of Corporate Name pursuant to MI Comp L § 450.2056 (2019). The name registration application has to be submitted to the Michigan Department of Licensing And Regulatory Affairs, Corporations, and Securities & Commercial Licensing Bureau along with a non-refundable fee of $50. You will also need to submit a Certificate of Good Standing along with the name registration application. The name registration expires each year on December 31, but you can renew it before the expiration date.
2. Registered Agent
Whether you are forming a new business or incorporating a foreign entity, there are certain state guidelines you have to follow. A Michigan foreign business registration will be possible only if you continuously maintain a registered agent in the state pursuant to MI Comp L § 450.1241 (2021). We at IncParadise are one of the top Michigan registered agents and have helped several domestic and foreign entities to incorporate in this state.
3. Certificate of Authority
The most important step towards a Michigan foreign corporation registration is to get the necessary authorization to transact business in the state. You will need to file the Application for a Certificate of Authority pursuant to MI Comp L § 450.2002 (2019). This application has to be submitted to the Michigan Department of Licensing And Regulatory Affairs, Corporations, and Securities & Commercial Licensing Bureau along with a fee of $60. The fee includes 2 components, which are a non-refundable fee of $10 and an initial franchise fee of $50. You can submit the application using the COFS (Corporations Online Filing System) as well as by mail or in person.
You can also opt for an expedited service, which varies from 24-hours to one-hour services. There will be an additional fee for these services.
Do you want to register a foreign Corporation in Michigan?
Michigan foreign LLC registration
If you are already operating a limited liability company in another state and want to expand your business to the state of Michigan then one of the best options is foreign qualification. This process is also known as Michigan LLC foreign registration and will help you to transact business in the state without the need to register a new LLC. A Michigan foreign entity search and registration will be governed by the 2021 Michigan Compiled Laws, Chapter 450 – Corporations, Act 23 of 1993 Michigan Limited Liability Company Act (450.4101 – 450.5200) – Article 10. The process for foreign qualification is as follows:
1. Business Name
One of the first requirements for a Michigan LLC foreign registration is a business name. You have to select a name in accordance with the naming regulations of the state. A Michigan LLC name should contain words like “limited liability Company”, “limited company” or abbreviations like L.L.C or LLC. The chosen name should also be available and you can guarantee this is possible by conducting a name availability search also known as a Michigan foreign entity search.
If the chosen name is not available then the foreign LLC can register an assumed name. If you are using an assumed name also known as a trade name or a DBA, then it is important to conduct a search for trademark names using the Trademark Electronic Search System (TESS). The assumed name or trade name can be registered using the Certificate of Assumed Name for Corporations, Limited Partnerships, and Limited Liability Companies. The fee for the assumed name certificate for a limited liability company is $25.
2. Registered Agent
One of the important aspects of any new business formation including a Michigan LLC foreign registration is the service of process, which is executed by a registered agent in the state. According to MI Comp L § 450.4207 (2019), a foreign limited liability company has to continuously maintain a registered agent in the state. A registered agent services offered by IncParadise will not only help fulfill state requirements like service of process but also assist with other annual compliances like filing of annual reports. IncParadise is one of the top Michigan registered agents and has helped with several foreign business registration in this state.
3. Certificate of Authority
A foreign limited liability company that wishes to transact business in this state will need to go through the process of a Michigan foreign business registration or foreign qualification. You will need to apply for and obtain a certificate of authority pursuant to MI Comp L § 450.5002 (2021). The document to be submitted is known as an Application for Certificate of Authority to Transact Business in Michigan and it has to be submitted to the Michigan Department of Licensing and Regulatory Affairs, Corporations, Securities & Commercial Licensing Bureau, Corporations Division. The filing fee is $50 (non-refundable) and you can utilize the expedited service by paying an additional fee. The Michigan LLC foreign registration will require you to submit a Certificate of Good Standing acquired from the home jurisdiction or the state of formation.
Want to form a foreign LLC in Michigan?
Need Any Assistance in Applying for Michigan Foreign Qualification?
Michigan is one of the top states when it comes to the business climate, an experienced workforce, and low cost of operations. Whether you form a domestic entity or apply for a foreign qualification in Michigan there are numerous state benefits including business incentive programs and grants. As one of the leading registered agents in Michigan, IncParadise can assist you with the process of foreign corporation registration or foreign LLC formation.
We can also help you to acquire a Certificate of Good Standing or Certificate of Existence from your home state. We provide several other business-oriented additional services in Michigan that will help in fulfilling annual compliances of your business like filing annual reports or getting an EIN tax ID. We also provide foreign qualification services in all 50 states.