Think of all the people you communicate with regularly to run your LLC. Business partners, employees, banks, lawyers, and financial advisors all probably come to mind. But what about the state? It may not be at the top of your list, but running a successful LLC in Michigan requires consistent interaction with the state.
Formation documents, business information changes, lawsuits, professional licenses, and Annual Statement – all of these (and more) require you to work with state agencies. The good news is that you don’t need to do it yourself.
Introducing the resident agent. A Michigan resident agent is an intermediary for your LLC, a person or company that handles your communication with the state. They’re a vital part of any LLC’s success. Before you file your Articles of Organization, you’ll need to have a designated resident agent. How? Why? Who? Read on to find out.
What is a Michigan Resident Agent & is it Necessary?
An LLC cannot be formed or do business in Michigan without first having a resident agent on file with the Department of Licensing and Regulatory Affairs. This is required by law and the penalties can be serious. Maintaining a resident agent doesn’t just keep you in good standing. It also provides an important service.
Think of your resident agent as your ambassador to the state, handling all your LLC’s important legal, tax, and compliance information. This can either be an individual, company or resident agent service, as long as they meet the state’s requirements (see below) and agree to take on the responsibilities.
As soon as they’re appointed, your resident agent must be consistently available in Michigan to receive and act on mailed documents and service of process. Here’s what the Department of Licensing and Regulatory Affairs website specifically says:
And make sure you have a valid resident agent on file at all times. If your agent leaves and you haven’t appointed a new one by the time you file your next Annual Statement, the state won’t hesitate to administratively dissolve your LLC.
What are the Requirements of a Resident Agent?
The state isn’t particularly strict about who you can appoint as your resident agent. In fact, they only impose a few requirements, but these requirements are non-negotiable, so make sure that your agent:
- Is an individual Michigan resident or a business entity authorized to do business in Michigan.
- Has a physical address in Michigan (cannot be a P.O. box)
- Has a mailing address in Michigan (can be the same as the physical address)
As long as your resident agent meets these conditions, you’re good to go. Your LLC members and managers can serve as the agent, and you can even appoint yourself. However, an LLC may not be its own resident agent.
The Articles of Organization requires you to include your resident agent’s information, and your filing won’t be complete without it. Here’s a screenshot from the document:
When you’ve got potential options for your resident agent, review each one to make sure that they meet these requirements. If they do, you’re good to go! If not, you’ll need to keep looking.
Who can be a Resident Agent in Michigan?
Michigan’s resident agent requirements are pretty broad, so you’ll have no shortage of options. On top of that, your agent can be either an individual or a professional service. But think carefully before choosing, because each option has its own pros and cons. Let’s take a closer look.
You may choose to appoint a single person as your resident agent. Some LLC owners take on resident agent duties themselves. Others appoint one of their partners or managers. Some will even appoint a family member. As long as the proposed agent fulfills the state’s requirements, they’re a valid option.
In addition to being a Michigan resident, your agent must not currently be establishing residency or receiving benefits in another state, even if that residency is still forthcoming.
Some smart resident agent choices include attorneys, accountants, or other LLC partners, people who understand the ins and outs of business operations.
- Convenience – Having familiarity and mutual trust with your resident agent is extremely beneficial, and appointing an acquaintance can provide both. Plus, you’ll always know how to contact them.
- Cost – Hiring someone you know often won’t cost a dime. It’s certainly cheaper than a professional service.
- Scheduling – Part of a resident agent’s duty is being consistently available to receive mailed documents and service of process. If your agent goes on vacation or moves out of state, it will throw a wrench in your plans.
- Punctuality Risks – Some state communications and filings are very time-sensitive. If your agent is unavailable when documents are delivered, it could slow down the entire process and put you at risk for late fees and penalties. Even worse, a friend or family member could lose or misplace a document. So if you’d rather not interrogate Aunt Louise about the location of a particular tax form, you might consider using a resident agent service instead.
Resident Agent Service
If safety and reliability is your goal, hire a resident agent service. A business acting as your resident agent must be either a domestic entity in Michigan or a foreign entity that has foreign qualified in Michigan.
- Privacy – Some documents delivered to your resident agent will contain sensitive information. Do you want details about your lawsuit or taxes lost out there in the world? Definitely not. A friend or family member might misplace these documents, but a professional service will not. Plus, in Michigan, all resident agent names and addresses are available to the public. This might make an individual uncomfortable, but hiring a company will keep this personal information off the record.
- Reliability – Handling and processing time-sensitive documents is a resident agent service’s specialty, its area of expertise, its main game. Hire a professional service and you can be sure that your filings will be submitted properly and punctually, so you’ll never have to deal with late fees or other penalties.
- Location – Many resident agent companies offer service in most or all 50 states, so if business is booming and you decide to expand outside Michigan, you won’t need to find a new agent for each state.
- Cost – There’s no getting around it – hiring a service costs more than appointing an individual who’s willing to do it for free. However, for a reasonable price (roughly $100/year), you’ll receive premium services. Taking your car to a mechanic costs more than letting your neighbor try to fix it, but the mechanic gives you peace of mind that the job will get done right, and that may very well be worth the cost.
All of the other steps in the LLC formation process will keep you busy, but take some time to ensure you find a resident agent that fits with your business model, goals, and values. Do this, and your LLC will reap the benefits for years to come.
How to get a Free Resident Agent in Michigan
Here’s a pro tip: you can get the reliability of a resident agent service and the cost-effectiveness of an individual. The best of both worlds. When you hire certain LLC services to start your business, they’ll throw in free resident agent service.
How it Works
Hire a company like IncFile or Northwest Registered Agent to form your Michigan LLC. In addition to taking care of your Articles of Organization and other formation requirements, they will automatically include a resident agent. It’s a great two-for-one deal.
And an LLC service is pretty affordable – $50 for the Michigan LLC formation fee, plus a $49 or $79 service fee. That’s great value for the number of benefits you receive. Some services will even cover and consolidate your LLC formation costs.
Take this route and you’ll sweep all formation paperwork and resident agent duties off your plate. Plus, to keep track of everything, these services provide user-friendly online dashboards, so you can follow everything they’re doing to keep your LLC in good standing.
Resident Agent Changes and Resignation
You may have a wonderful resident agent, someone who takes care of everything efficiently and who you trust completely. But you know what they say: all good things must come to an end. At some point in the life of your LLC, you may need to change your Michigan resident agent.
To make this change happen, you must complete and mail or hand-deliver a Certificate of Change of Registered Office and/or Change of Resident Agent and pay a $5 fee. Or, you can include new agent information on your Annual Statement.
The most common reason you might need to change your agent is if your current agent resigns.
Your agent’s departure might be an anxiety-inducing thought, but rest assured knowing that you’ll never be blindsided. Michigan law requires resigning agents to notify their LLCs before officially resigning. Then, the agent must retain his or her duties for 30 days after the resignation is processed, so you’ll have ample time to find a replacement.
But even with this 30-day cushion, don’t put it off! If your LLC has not appointed a new agent by the time of its next Annual Statement, it can be administratively dissolved.
Have Questions or Concerns?
This guide contains almost everything there is to know about Michigan resident agents. However, you might have a unique situation that requires additional information. Reaching out to the Michigan Department of Licensing and Regulatory Affairs is easy, and they’ll have the answers you need. Here’s how to go about it:
Visit Their Website
Michigan’s Department of Licensing and Regulatory Affairs website has plenty more information on the entire LLC formation process, so you’ll likely find the answer to your question there.
Give Them a Call
Or, if you’d prefer to call, reach out to their Lansing office at (517) 241-6470.