Have you decided to stop transacting business with your Michigan limited liability company? The state of Michigan legally requires all business entities to go through a formal dissolution process.
What does this process entail, and how does it differ for domestic and foreign entities? In this guide, we’ll answer all the tough questions about dissolving an LLC in the state of Michigan.
Rocket Tip: If you'd like help dissolving an LLC, the same services that form an LLC can also take care of the dissolution logistics and paperwork with the state.
What Does It Mean to Dissolve an LLC?
Dissolving a company is an official means of permanently closing your business. While filing the dissolution documentation with the state of Michigan is certainly an important part of the process, it’s not the only step. You should also liquidate your business assets, settle any liabilities, and send legal notifications to anyone that had an interest in your company.
Keep in mind that if you fail to complete these steps, you as a business owner could be held personally liable for any outstanding debts or liabilities of your limited liability company. Now that we’ve discussed what exactly dissolving an LLC is, let’s dive into the details of how this process is carried out in the state of Michigan.
How to Dissolve a Domestic Michigan LLC
Any LLC that was formed in the state of Michigan will need to file the Certificate of Dissolution with the Department of Licensing and Regulatory Affairs (LARA) in order to dissolve. The Certificate of Dissolution can be filed online using the LARA portal. Additionally, you can print off the standard form or draft your own document to file by mail. In either case, you will need to provide the following information:
- Name and address of the applicant
- Contact information
- LLC name
- Business ID number (assigned by LARA)
- Reason for dissolution
- Effective date of dissolution (optional)
- Signature of member, manager, or authorized agent
If filing by mail, you will need to include a check for $10 made payable to the “State of Michigan.” You will also need to include the name of the LLC and the state ID number on the check. Once you have the form and payment ready, you can mail both to the following address:
Michigan Department of Licensing and Regulatory Affairs
Corporations, Securities & Commercial Licensing Bureau
Corporations Division
P.O. Box 30054
Lansing, MI 48909
Additionally, you will need to receive clearance from the Michigan Department of Treasury. To do this, you must file the Request for Tax Clearance Application with the Department of Treasury no more than 60 days after filing for dissolution. This form can be mailed to the following address:
Michigan Department of Treasury
Tax Clearance Section
P.O. Box 30778
Lansing, MI 48909-8278
Generally, the standard dissolution process takes 3-5 business days, while getting clearance from the Department of Treasury can take between 6-12 weeks. However, you are not required to submit your Tax Clearance Certificate to LARA, so the length of this process will not affect your dissolution.
How to Dissolve a Foreign LLC in Michigan
Do you need to dissolve a limited liability company based outside of Michigan, but qualified to transact business within this state?
Any LLC that was formed outside of Michigan will need to file the Application for Certificate of Withdrawal with LARA. This form can be printed off and mailed, or filed online via the LARA portal. Either way, it requires the following:
- Name and address of the applicant
- Contact information
- LLC name
- State ID number
- State/jurisdiction of formation
- Affirmation that the LLC is no longer conducting business in Michigan
- Affirmation that the LLC surrenders its authority to conduct business in Michigan
- Affirmation that the LLC revokes the authority of its resident agent to receive service of process
- Mailing address (for service of process)
- Signature of authorized representative
The Application for Certificate of Withdrawal also requires payment of the $10 processing fee, with checks made payable to the “State of Michigan” (including LLC name and ID number). If you are filing by mail, you can send the form and check to the following address:
Michigan Department of Licensing and Regulatory Affairs
Corporations, Securities & Commercial Licensing Bureau
Corporations Division
P.O. Box 30054 Lansing, MI 48909
Also, just like domestic LLCs, you will need to file the Request for Tax Clearance Application with the Department of Treasury no more than 60 days after filing for dissolution. This form can be sent to the same address:
Michigan Department of Treasury
Tax Clearance Section
P.O. Box 30778
Lansing, MI 48909-8278
LARA will take 3-5 business days to process the Application for Certificate of Withdrawal, while the Department of Treasury will take up to 12 weeks to issue a Tax Clearance Certificate. You do not need to submit your Tax Clearance Certificate to LARA as part of the dissolution process.
What Else Do I Need to Know About LLC Dissolutions in Michigan?
First off, it’s important to note that the Tax Clearance Certificate is by far the most complex aspect of the dissolution process. It is a technical requirement for dissolving an LLC in Michigan, though there is no regulatory oversight for LLCs that do not receive it.
Nonetheless, in order to avoid any issues down the road, you will need to request a Tax Clearance Certificate within 60 days of filing for dissolution. You will only get clearance from the Department of Treasury if your business does not owe any taxes in the state.
As soon as your dissolution is processed, you lose claim to your business name. This is why you should be certain that you wish to dissolve your business before filing the paperwork.
While Michigan does not typically initiate administrative dissolutions, it is possible for businesses to lose their good standing. Every LLC is required to file an annual statement (also known as an annual report) with LARA. If you fail to file the annual report for 2 years in a row, LARA will send notice that you have 60 days to file all delinquent reports and pay the required fees.
If you still do not file the reports, your business will lose its good standing, which means that it will lose its name protection and the state will not accept any filed documents (though you will still be able to conduct business). In order to restore your LLC’s good standing, you must file any delinquent reports, pay all of the associated fees, and file the Certificate of Restoration with LARA.
Conclusion
Whether you’re dissolving a domestic or foreign limited liability company, the process isn’t complicated.
Whether your LLC is domestic or foreign to Michigan, the process for dissolving your business is pretty simple. However, the rules for obtaining a Tax Clearance Certificate are more complex and much more time-consuming. Thankfully, LARA does not require submission of any documents from the Department of Treasury. So, while you are technically required to request tax clearance, this part of the process will not impede your dissolution.
Our final note in this guide is that you should make certain each step of the process outlined in this guide is followed closely, to avoid any unforeseen snags with your dissolution. We hope this article helped you to better understand the dissolution process for a Michigan LLC!