New Law Amends LLC Act
While attempting to form a limited liability company (LLC) the word “person” has created a challenge for some nonprofits. Michigan Senate Bill 926, signed into law recently by Governor Gretchen Whitmer, amends the Limited Liability Company Act to modify the definition of “person” to include nonprofit corporations.
What is the Limited Liability Company Act?
The LLC Act provides regulations regarding the organization of limited liability companies, the rights of these companies, and the rights of regulatory agents. It authorizes a person to form or enter a limited liability company that is subject to oversight and regulation by the Department of Licensing and Regulatory Affairs (LARA).
The problem with the word “person”
Currently, the definition of a “person” under the LLC Act includes a variety of entities, including various types of for-profit corporations. This has created challenges for nonprofits that have attempted to form an LLC.
What does the new law provide?
The new law amends the Michigan LLC Act to include nonprofit corporations in the definition of “person” for the Act. The new law now defines a “person” as an individual, partnership, limited liability company, trust, custodian, estate, association, corporation, governmental entity, or other legal entity, and nonprofit organization.
Help is available
The business attorneys at O’Reilly Rancilio assist in the formation, restructuring, reorganization, and maintenance of corporations, professional corporations, partnerships, and nonprofit corporations. To speak with an attorney, please call 586-726-1000 or visit our website.