I want exclusive rights to use the name of my business and prevent others from using it. What can I do to protect my name?

Name identification can be an asset of a business. Sole proprietorships and partnerships are required to file their assumed names with the county clerks in the counties in which they do business. If a business is owned by a corporation, limited partnership or limited liability company, the entity files its creation document with the Corporation Division of the Bureau of Commercial Services. The name standard applied by counties is that the name must not be confusingly similar to other names on file in that particular county. The name standard for true names and assumed names filed at the state is that the name must merely be spelled different than other names on file with the Bureau. Neither filing provides exclusive rights to a name or name protection.

In order for a business to have exclusive rights to a name, it must use the name and take appropriate action to prevent others from using it. Prior users may be able to prevail in a dispute with a later user. Name infringement is a business tort and a business should discuss its concerns regarding acquiring rights in a name with an attorney. Remember having a name registered at the state or county does not necessarily mean that someone else does not have a superior right to that name. Therefore, if significant value is attached to a proposed name you may be wise to pay for a name search by a firm in the business.



The business would like to reduce its tax liability and is considering forming a S corporation. What do I need to do?

S corporations are closely held corporations with a limited number of investors. The Internal Revenue Code permits shareholders to be taxed as individuals and eliminate the tax on the corporation when it is organized as an S corporation. For assistance in drafting appropriate documents, placing necessary restrictions on the stock, and identifying the procedures the business must follow to obtain and retain the S corporation tax status, the business should consult with a tax advisor or an attorney. Information may be available directly from the IRS. The Michigan Business Corporation Act contains the flexibility to form a Michigan corporation that takes advantage of the benefits of being an S corporation.


Do I have to have shares or issue stock? If so, where do I get the certificates?

The Business Corporation Actrequires profit corporations to have at least one class of stock. To capitalize the corporation, the corporation must issue stock. The purchasers of the stock will be the shareholders and the owners of the corporation. Until stock is issued, there are no owners.

Shares may be issued with or without certificates. You may create your own certificates or purchase blank stock certificates from an office or business forms supply company. When shares are issued without certificates, the corporation must send the shareholder a written statement of the information that is required on certificates. The corporation is required to maintain records regarding the ownership of its shares.

Nonprofit corporations can be stock or nonstock. A stock nonprofit corporation issues shares with stock certificates and the shareholders are the owners of the corporation.

Nonstock nonprofit corporations do not issue shares and are formed as either directorship or membership corporations. If a directorship nonprofit corporation has members, the members do not have the right to vote. For the corporations formed on a membership basis, the members have the right to vote and to elect a board of directors.


I want to start a business and I want to limit my personal liability. What are my options for a business entity?

The sole proprietorship is the easiest to form but provides no limitations on personal liability. A partnership is relatively easy to create, but requires two or more parties. Unless the partnership registers as a limited liability partnership, the general partners have no limitation on their personal liability except as may be agreed between the partners.

Limited partnerships, limited liability companies and corporations provide investors with limited liability. In a limited partnership, however, the general partners have general liability and only the limited partners have limited liability. If the business of the limited liability company or corporation involves providing a professional service, the entity may be required to be formed as a professional service limited liability company (PLC) or professional service corporation (PC). Formation as a PLC or a PC does not limit liabilities between the person furnishing the professional service and the person receiving the service or limited liabilities under the professional standards of conduct.

What is an assumed name? Is there a limit on the number of assumed names an entity may have?

An assumed name is a name which is different than the true name of the corporation, limited liability company, or limited partnership. If a corporation, limited liability company, or limited partnership desires to operate under one or more names other than the entity's true name, a Certificate of Assumed Name (form BCS/CD-541) must also be filed for each assumed name. The assumed name must be distinguishable from the names of active limited partnerships, corporations or limited liability companies. The certificate of assumed name expires on December 31 of the fifth full calendar year following the year in which it was filed. A preprinted renewal form is mailed to the registered office address or limited partnership office address 90 days prior to expiration. There is no limit on the number of assumed names an entity may file.

Is my nonprofit organization tax exempt?

Both unincorporated nonprofit organizations and nonprofit corporations may be exempt from some taxes. For example, nonprofit religious organizations organized as ecclesiastical corporations are exempted from real and personal property taxes by Article IX, section 4 of the Constitution of 1963. Nonprofit organizations may contact the Michigan Department of Treasury and the Internal Revenue Service for more information about exemption from specific taxes.


We have closed our business. What do I need to do to dissolve the corporation?

There are several ways to dissolve a corporation. 1) A corporation may provide in its articles of incorporation a period of duration. When the fixed date is reached, the corporation is dissolved. 2) A corporation may dissolve by preparing a filing with the Corporation Division a Certificate of Dissolution. The corporation must request a tax clearance from the Michigan Department of Treasury within 60 days of filing the Certification of Dissolution. 3) A corporation may be dissolved by judgment of the circuit court. 4) A corporation may automatically be dissolved on July 15, three years after the last annual report is filed. After dissolution occurs, the corporation may notify its creditors and wind up its corporate affairs. Before assets are distributed to shareholders, the corporation must pay or make provisions for its debts, obligations and liabilities.


Is there a difference between a limited partnership, limited liability partnership, limited liability company and general partnership?

A limited partnership consists of one or more general partners and one or more limited partners. Only the limited partners in the limited partnership have limited liability. The limited partnership is created by filing a Certificate of Limited Partnershipwith the Corporation Division. The partnership agreement controls the relationship between the partners and is maintained at the office of the limited partnership. The name and contribution of each partner is contained in the Certificate of Limited Partnership and an amended certificate is filed if the information changes. The term of duration of the limited partnership is included in the Certificate of Limited Partnership and the entity files a Certificate of Cancellation upon dissolution and commencement of winding up the partnership.

A limited liability partnership is a partnership which has registered with the Corporation Division under the Uniform Partnership Act to limit liability of the general partners. General partnerships and limited partnerships may register as limited liability partnerships. The registration must be renewed each year. General partnerships, including copartnerships, file an assumed name certificate with the county in which they do business. After registration as a limited liability partnership, the partnership will include "limited liability partnership" or the abbreviation "L.L.P." or "LLP" as the last words or letters in its name. The partnership agreement establishes the rights and responsibilities between the partners.

A limited liability company has characteristics of both corporations and partnerships. Limited liability companies have limited liability for its members or managers but may be taxed as partnerships or as a disregarded entity. The limited liability company is formed by filing articles of organizationwith the Corporation Division and may have a period of duration as stated in the articles.

Details about the relationship between the members or members and managers are set forth in the operating agreement which is retained in the records of the limited liability company.

Limited partnerships, limited liability partnerships and limited liability companies provide many of the advantages of a general partnership, including copartnerships, but have some limitations on liability not available to general partnerships.


If a limited liability company indicates a duration/term of 99 years, will the IRS take the position the LLC is adopting a corporate characteristic of perpetuity?

Since the passage of the limited liability company actin 1993, there have been significant changes regarding classification and tax treatment of LLCs. The recently adopted IRS check a box proposal permits an entity to chose whether it wants to be taxed as a corporation or as a partnership. The IRS check a box method eliminates the concerns about adopting too many corporate characteristics.


Is it true a balance sheet is no longer required on the Michigan profit annual reports filed on May 15 by all domestic profit corporations and foreign profit corporations with a certificate of authority to transact business in Michigan?

Yes. Public Act No. 197 of 1996, effective May 17, 1996, amended section 911 of the Business Corporation Actand significantly simplified the profit annual report. Preprinted reports will be mailed prior to the May 15 due date to each corporation that contains the corporation's name, resident agent and registered office address. If there is no change from the information provided in the last filed annual report, the corporation may simply check a box on the form, sign the form and return with the filing fee. Space is provided on the form to report changes in names and addresses of officers and directors and of the general nature and kind of business in which the corporation is engaged. For foreign corporations there is space to report information for calculating the number of shares apportioned to Michigan.


If there has been no change in the information on the Corporate Information Update form from last year, why do I need to pay a filing fee?

Business owners are free to select the type of business entity they prefer, ie sole proprietor, partnership, limited liability partnership, limited liability company, or corporation. Corporations and limited liability companies are artificial persons and afford the business owners the greatest protection against personal liability. Sole proprietors and general partners have full personal liability. However, by incorporating or forming a limited liability company a Michigan business owner is insulated from personal liability for debts and other liabilities that may occur in operating a business.

In exchange for greater protection against personal liability, the limited liability companies and corporations are required to report the name and address of their resident agent and registered office to the agency each year. Partnerships wishing to limit the liability between partners must register the limited liability partnership each year with this agency.

In addition, corporations have centralized management and are required to report the names of officers and directors each year. The agency prepares and mails annual report forms containing the name of the entity, resident agent and registered office to profit corporations in January each year. If nothing has changed since the last report, the corporation may complete its reporting requirement by checking a box on the preprinted bar coded form and returning the signed report the required filing fee. The form contains spaces to complete when reporting changes. The public frequently requests information about corporations and the agency responds to over 7200 inquiries a week for the most current information.


How do I get information about a particular business?

The records of the Corporation Division of the Bureau of Commercial Services are open to the public. The records include the organization documents for limited partnerships, limited liability companies and corporations. Information can be obtained by using our Business Entity Searchsite, visiting the office at 2501 Woodlake Circle in Okemos, Michigan; calling 517-241-6470; by writing the Bureau at P.O. Box 30054, Lansing, Michigan 48909-7554 or by faxing your request to 517-241-0538. The information includes the name of the entity, date of formation, whether it has been dissolved, current resident agent and registered office, date of last annual report filed. Copies of documents are available, as well as certificates verifying the existence of the entity. The records do not include business performance or reliability; phone numbers; value of stock; or the owner's name.


My business has several products that it markets to the general public. Each product is sold under a unique name, but I would like to protect these names from use by competitors. I have incorporated my business but I am not sure whether this will also protect my products. What should I do?

Read the General Overview of Trademarks and Service Markson our website. A trademark is a word, name, symbol, or device adopted and used by a person to identify goods. A service mark is similarly defined except that it relates to use in the sale or advertising of services to identify a person's services and distinguish them from similar services of others. If certain requirements are met, a mark may be registered in Michigan. A trademark serves primarily to distinguish one producer's goods from similar goods provided by another. Trademarks reflect the goodwill or integrity of a business.

To register a trademark or service mark, submit an Application for Registration of Trademark/Service mark form BCS/CD-600with the $50.00 fee.

In contrast, a trade name functions to identify a business entity and to distinguish it from other business entities regardless of what goods or services are provided. Trade names may include sole proprietorships using assumed names and general partnerships filing at the county level, corporations, limited liability companies, limited liability partnerships and limited partnerships.


What type of business should I file?

There are several types of entities that you can form, depending on your individualized needs. The Entrepreneur's Guideprovides general information about different entities and contains a comparison chart. You should seek advice from your attorney or CPA in selecting the appropriate entity for your business.


Can I use a post office box for my registered office?

The registered office address must be a physical location in the state of Michigan. The mailing address for the registered office, however, can be a post office box in the state of Michigan.

How can I tell the ownership of a corporation?

The corporation is owned by its' shareholders. The list of shareholders is not filed with the Bureau except for professional service corporations. The corporation maintains a list of shareholders.


Where would I get a Certificate of Good Standing?

A Certificate of Good Standing can be obtained from our Business Services Section by calling (517) 241-6470, fax your request to (517) 241-0538 or mail your request to Bureau of Commercial Services, Corporation Division, P.O. Box 30054, Lansing, MI 48909-7554. There is a fee of $10.00 for each good standing.


Do we have to qualify to do business in Michigan as a foreign corporation?

You might want to review the Business Corporation Act , Chapter 10, section 1012 which is titled "Activities not constituting transaction of business; applicability of section." If your activities in the state constitute transacting business in the state a Certificate of Authoritywill be required. Our office does not make a determination whether particular activities constitute transacting business in the state. Section 1012, as amended by 1993 PA 91, is based on section 15.01 of the Model Act.

Does the Corporation Division issue an Employer Identification Number (EIN) for my entity?

No. The EIN(also known as federal tax identification number) is issued by the IRS. Contact the IRS at 1-800-829-4933 or you can apply online for an EIN at www.irs.gov. Note that you should create your entity before requesting an EIN number.

The six-digit number assigned by this Bureau (as would appear on your creation document such as Articles ) is the file number assigned by the Corporation Division to identify the entity in the Corporation Division's records.

How do I report changes to the certificate of authority for a nonprofit corporation since the Nonprofit Corporation Act (Act 162, P.A. 1982) does not have any provisions for an amended application for certificate of authority?
To obtain a Certificate of Authority to conduct affairs in Michigan, foreign nonprofit corporations submit an Application for a Certificate of Authority. The act does not provide for any amendments to the Application for Certificate of Authority. However, section 1021 of the Nonprofit Corporation Act, MCL 450.3021, requires that if the articles of a foreign corporation authorized to transact business in Michigan are amended the corporation must submit a certified copy of the amendment within 60 days after the amendment is effective along with a $10.00 fee. To obtain a certified copy of an amendment, contact your state or jurisdiction of incorporation.

For changes to the Certificate of Authority, other than amendments to the articles of incorporation or mergers, submit a letter describing the change and include the corporation's name and six-digit ID number as assigned by this office. There is no fee for reporting changes by letter.

Send the certified copy of amendment or the letter of change to:

Department of Labor & Economic Growth
Bureau of Commercial Services - Corporation Division
P.O. Box 30054
Lansing, MI 48909-7554

How do I convert a corporation into a limited liability company (LLC) or an LLC into a corporation?
Currently, neither the Business Corporation Act (Act 284, PA 1972) nor the Michigan Limited Liability Company Act (Act 23, PA 1993) provide for conversions of corporations into limited liability companies or for conversions of limited liability companies into corporations.

There are other indirect methods available to change entity type. However, to avoid unforseen tax consequences, please consult with your attorney or tax advisor before proceeding.

If your question is not answered here, send your question to corpsmail@michigan.gov.