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Michigan Non Profit Corporations: 2018 Annual Statement Filing Deadline is October 1. Stay in Good Standing and Maintain your Corporate Formalities.

Good morning, all. I hope you are enjoying the summer. It is most definitely my favorite time to be in Michigan.

Today I received an e-mail from The Michigan Department of Licensing and Regulatory Affairs(“LARA”) reminding that all annual statements and reports for Non Profit Corporations are due October 1, 2018.

2017-09-01 18.01.03

 

At the end of last year LARA transitioned to an

electronic filing system – and disposed of the fax filing. This caused a significant delay in business filings – many of my clients experienced this headache first hand. See my post on this delay.

 

Per LARA’s announcement:

“There are a total of 62,202 Michigan nonprofit corporations and 1,582 foreign corporations that are receiving 2018 reports.”

 

 

“Annual reports must be filed no later than October 1 of each year and can be filed online at www.michigan.gov/corpfileonline. ”

For more information about LARA, please visit www.michigan.gov/lara

 

Consequences for Failing to File:

LARA also reminds that:

“Section 922 of the NPA provides that if a domestic nonprofit corporation neglects or refuses to file a report or pay a fee required by this act for two years, the nonprofit corporation will be automatically dissolved.

It also provides that if a foreign nonprofit corporation neglects or refuses to file a report or pay a fee required by this act for one year, the nonprofit corporation’s certificate of authority is subject to revocation under section 1042.

“A nonprofit corporation that has been automatically dissolved or certificate of authority revoked is not entitled to a certificate of good standing; its corporate name will be available for use by another entity, and no document will be filed on behalf of the corporation.”

Is your Corporation in Good Standing?

Occasionally I will have a business client come in and I will ask – just to make sure – “is your business still in good standing?”

The common answer is “I think so.”

And of course, after I perform a quick internet check

with the State of Michigan it is all too common that I discover that either the Company is “not in good standing” or worse, the company has been dissolved automatically for failure to file annual statements.

In Conclusion:

Business owners, if you get these annual statements from the State of Michigan, or from your attorney – do not disregard them! Ma

intain your Corporate Formalities.

Questions? Comments?

E-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

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A Lawyer’s Reflections: The Way That Appears to be Right…But In the End Leads to Disaster.

Today I  took a photo of 50 Monroe in downtown Grand Rapids – right across the street from my office.

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The transformation of 50 Monroe, where my firm’s office used to be located for almost 20 years, is pretty fun to

watch.

I look forward to seeing the finished product.

As I posted a few days ago, there is a lot of development in Grand Rapids that makes downtown a fun place to be.

 

Now on to the topic of my post.

 

 

Lawyers are an easy target for scams…

 

 

 

I get strange e-mails all the time.

Most of these are allegedly from people from foreign countries, asking for legal services, or for me to assist with certain financial transactions that would compensate me significant money for little work.

 

This morning’s email.

Early this morning I received an e-mail from what appeared to be one of the attorneys at my office asking me if I was in the office and to respond to his e-mail and assist him with an urgent matter. The tone of the e-mail seemed strange.

Looking closer at the e-mail source, it was an impostor e-mail address.

Who knows what information my “colleague”  was going to ask me to provide him with because he “didn’t have access” that morning.

Nice try.

The lawyer scams are getting more creative these days.

 

Million Dollar Check.

Several years ago I received a nice check in the mail addressed to my law firm for approximately $1 Million.

It was related to a “request” from a foreign company (very far away, too far away to meet in person) to retain me as counsel in a business transaction in Michigan.

They wanted me to deposit the approx. $1 million check into our firm trust account, then disburse the check to the other party (less my legal fees, of course)
Fake Check for big bucks.

 

My first thought when the check came in…

Do they really think I am that stupid?

I know better.
Then it got me thinking, if I know better, then why do these scam artists really think I am going to fall for their  ploys?

Honestly, I receive countless of similar emails, fortunately, most of these emails get sent to my spam folder.

The answer becomes obvious when I peruse news headlines:

Estate planning lawyer gets 6 years in $46 million scheme preying on terminally ill

How awful is this headline? It breaks my heart just reading it.

 

Unwitting lawyer is suspended for arranging client loans to secure Nigerian inheritance

 

Just perform a google search and you can find other stories of lawyers in unethical situations…

“Attorney Pleads guilty to stealing $1.3 Million from clients”

“Traverse City Lawyer to Stand Trial, Accused of Embezzling from Elderly Clients”

 

The list goes on and on.

Well, there is, literally, my answer to my own question.

 

 

What is going on with our world?

As hard as it is for me to believe, these are real stories.

 

To answer my own question, the reason scam artists direct schemes at lawyers is because some lawyers fall for the schemes!

 

These con artists are relying on dollar signs trumping common sense and sound judgment in lawyers.

 

Proverbs 14:12 says “There is a way that appears to be right, but in the end it leads to death.”

I personally don’t believe that most people, including the people in the referenced headlines, wake up one day and decide to commit a crime, or make a serious lapse in judgment (like wiring a million dollars to a company in Nigeria) that costs them and others dearly.

I think people start with small compromises, that lead to big compromises. The proverbial “frog in the boiling water

The compromises that “appear to be right” in their own minds, but leads to devastation.
A Call to Leaders. Self-Examination.

As leaders in our families, business, non-profit, church, community, we find ourselves in positions with some varying degrees of power.

That power can easily be abused.

In small ways that lead to big ways.

This is a good call for daily self-examination: am I placing safeguard in my life to keep me from taking small steps in the wrong direction?

 

Questions? Comments? 

e-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauk

http://www.dwlawpc.com

Staring Into the Eyes of a Fatherless Generation.

There’s nothing like a Michigan summer.

Memorial Day weekend means the beginning of summer – and, consequently, the end of the school year.

 

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Today was my last day of mentoring for the school year.  Unless my student moves  (which is always possible) I hope to see him in the Fall.

Most of my interaction with my student is asking questions and just trying to encourage him.

 

One question I asked him today while shooting basketballs during recess:

 

 

 

Do you think you will see your dad this summer?

His answer: I don’t know.

I will state the obvious: The fact that this elementary school aged boy doesn’t know if he will see his father for months is heartbreaking.

This reality is simply not how the world should be.

And, unfortunately, this story is typical.

 

Fatherless Generation

I took these statistics from the Fatherless Generation

  • 63% of youth suicides are from fatherless homes (US Dept. Of Health/Census) – 5 times the average.
  • 90% of all homeless and runaway children are from fatherless homes – 32 times the average.
  • 85% of all children who show behavior disorders come from fatherless homes – 20 times the average.  (Center for Disease Control)
  • 80% of rapists with anger problems come from fatherless homes –14 times the average.  (Justice & Behavior, Vol 14, p. 403-26)
  • 71% of all high school dropouts come from fatherless homes – 9 times the average.  (National Principals Association Report)

 

I look at these statistics, and ask myself:

is it worthwhile spending one hour a week during the school year with a boy who needs a positive male role model?

The answer every time is “Yes.

I am not writing this post to: a) pat myself on the back or b) guilt anyone who is reading this.

I am just trying to illuminate a reality.

I often hear people say they cannot believe the poverty, brokenness, homelessness, addiction, that families are experiencing right in our own City. of Grand Rapids

It is true.

It is also true, that we can’t do everything, but we can do something.

What about you?

Are you working to build a better community?

E-mail: Jeshua@dwlawpc.com

www.dwlawpc.com

Twitter: @JeshuaTLauka

Real Estate Law Update: The Most Vulnerable Are Affected in an Affordable Housing Crisis.

Today, is a gray rainy cold day in Grand Rapids, Michigan.

Yesterday, like most every Thursday during the school year, I spend the noon hour with an elementary school-aged kid in one of the most economically depressed school districts in Grand Rapids, Michigan.

5.11

 

Over the last 4 or 5 years I have had 4 different students that I mentored.

Inevitably, they all move. Their families end up getting evicted, become homeless, or just leave to find new housing that they can afford.

 

Poverty in your Backyard

If you live in West Michigan, I urge you to pause and consider the poverty and vulnerability that exists in your own backyard. It is astounding to me that just a 15 minute drive from the suburbs kids are experiencing hunger and homelessness.

Right now.

It is no secret that Grand Rapids is experiencing an Affordable Housing Crisis.

 

The American Bar Association Journal reported recently that nearly 1 million U.S. households were ordered evicted in 2016. 

 

At the school where I mentor, the stories that I hear about infestations are sad.

Kids talk about roaches, bed bugs, mice.

Particularly, I hear a sense of dread about bed bugs.

I have previously blogged about some proposed Michigan legislation that would establish rights and duties concerning bed bug infestation in residential Landlord Tenant relationships.

 

Beg Bug Legislation.

One June 9th  2017 Michigan House Bill 4719 was introduced – by Representative Brandt Iden -himself a Developer and Property Manager in South West Michigan. check out the text here – the Bill would amend the Michigan statute governing landlord tenant relationships to include addressing the control of certain pests – including bed bugs.

 

Update

There has been no noticeable progress and this Bill appears to be dead. The House Fiscal Agency prepared its legislative analysis back in October 2017 – you can check it out here for details

 

What the Bill seeks to do:

Impose certain duties on landlords regarding bed bugs:

1. Mandates specifically that the Landlord is to keep the rental space free from bed bugs and provide educational literature about bed bug infestations to new tenants.

2. Prohibits Landlords from renting out space that the landlord knows is infested with bedbugs

3. Provides specific requirements for a landlord to respond to a complaint of bed bugs:

  • within 7 days of receiving a complaint, Landlord shall order an inspection for bed bugs;
  • within 7 days of confirming infestation, Landlord shall begin control and schedule inspections of adjoining rental units.

4. Limits damages against Landlord for infestations unless caused by Landlord’s Negligence.

Impose certain duties on tenants regarding bed bugs:

1. Tenant shall inspect for bed bugs when first occupying the space;

2. Tenant shall not move “infested property” into a rental unit

3. Tenant shall notify Landlord within 2 days of notice of infestation.

4. Tenant responsible for damages due to bed bugs caused by Tenant, or guest.

The bill was referred to the Committee on Law and Justice.

Something that the legislative analysis highlights –

“Notwithstanding any other provision of the Landlord-Tenant Act, the landlord and tenant could agree in writing (by hard copy) or electronic mail how responsibility would be assigned for costs resulting from an infestation, including, but not limited to, costs of
control or treatment.

This would provide some discretion among the parties to craft a resolution.

 

 

Michigan Poverty  Law Program’s Opposition

The House Law and Justice Committee met in October 2017.  The Apartment Association and Property Management Association affirmed its support of the Bill. The Michigan Poverty Law Program testified in opposition to the Bill.

You can review the Michigan Poverty Law’s written statement in opposition here

The Poverty Law Program acknowledged in its remarks that bed bugs are a serious problem in many communities, but opines that this Bill is not the answer.

Bedbug infestation is a problem. It can cause tenants problems, particularly in lower income housing. As reference, I would highly recommend reading Matthew Desmond’s book “Evicted” It is no secret that Michigan, particularly Kent County, is experiencing an Affordable Housing Crisis.  Further, unhappy tenants who withhold rent can cause landlord problems that end up in court.

 

In my opinion, this type of bill could provide clarity to landlords and tenants on their reciprocal duties and rights in such circumstances. It could also provide them flexibility to come up with a resolution to get rid of any infestations.

I am grateful for those like the Michigan Poverty Law Program who are advocating for the vulnerable in our communities – people like the kids I mentor every week.

I would also call on opponents of this Bill to propose a solution.  If the Bill proposed back in June 2017 is not good policy, then please propose one that you believe is good policy.

 

 

 

Questions? Comments?

email: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

Michigan is Back Trending Towards Social Entrepreneurship: April 24, 2018 Benefit Corporation Legislation Proposed.

April 30, 2018 3 comments

Good morning! Downtown Grand Rapids is starting to look and feel like spring. The trees are just starting to get their leaves – I can’t wait for West Michigan to become green once again.

4.30

Speaking of new life – the legislature has breathed new life in the possibility of benefit corporations (“Bcorps”) becoming a viable legal option to do business in the State of Michigan.

House Bills 5867, 5868 & 5869 were introduced last week, on April 24, 2018, that would allow BCorps to be formed under Michigan Law.

 

Back almost two years ago the legislature proposed similar legislation which died in committee. For a review of the Former BCorp Bills, the House Fiscal Agency issued a Fiscal Analysis, check it out here. The Analysis provides good background on what the legislation would do. This is helpful for those who are not overly familiar with BCorps in general.

 

 

The latest proposed Bcorp Legislation

The current Bcorp legislation has some different language than the 2016 proposed language. One difference is the definition of “general public benefit” to “specific public benefit” which would be defined under the new Bcorp law as:

 

“SPECIFIC PUBLIC BENEFIT” INCLUDES, BUT IS NOT LIMITED TO,
ANY OF THE FOLLOWING:
(i) PROVIDING LOW-INCOME OR UNDERSERVED INDIVIDUALS OR
COMMUNITIES WITH BENEFICIAL PRODUCTS OR SERVICES.
(ii) PROMOTING ECONOMIC OPPORTUNITY FOR INDIVIDUALS OR
COMMUNITIES BEYOND THE CREATION OF JOBS IN THE NORMAL COURSE OF
BUSINESS.

(iii) PRESERVING THE ENVIRONMENT.
(iv) IMPROVING HUMAN HEALTH.
(v) PROMOTING THE ARTS, SCIENCES, OR ADVANCEMENT OF KNOWLEDGE.
(vi) INCREASING THE FLOW OF CAPITAL TO ENTITIES THAT HAVE A
PUBLIC BENEFIT PURPOSE

 

I still need to perform a more detailed review of the legislation to see how it differs from the prior iteration; and also how it compares to what other states are doing.

 

 

Education on the “why” for BCorps.

Interested groups and local politicians have been educating the public on why BCorp laws would be a good thing for our state.

State Rep Hank Vaupe gave a discussion to a local chamber group on B-Corps two Septembers ago:

As Rep. Vaupe indicated “benefit corporations provide an opportunity for businesses to use the markets, rather than traditional charity giving, to advance their philanthropic missions.”

 

BCorp Certification is Trending in Michigan…

Over the last several years more and more local businesses have becoming Certified B Corps through BLabs. West Michigan has the most concentration of BCorp businesses in the State.

Check out a March article from Rapid Growth Media on the strong presence of Bcorps in West Michigan.

Headlines in Grand Rapids have brought attention to the need for businesses to ask the question: Am I working to build a better community?

 

B-Corp certification is one way (certainly not the only way) for businesses to hold themselves accountable to being a good community partner.

 

Why has it taken so long to get here?

 

Over the last several years Michigan legislators have introduced BCorp legislation – to no avail.

Check out this handout from Rep Barnett several years ago in support of the BCorp legislation he proposed in September 2010.

I found particularly interesting the very last section – it provides some comment on why some Michigan businesses may have been averse to the introduction of BCorp legislation. Feel free to read it and reach your own conclusions.

Trending Towards Social Entrepreneurship.

The trends all show that millennials and our up and coming workforce want to to be part of business as a force for good in our local community.

Questions? Comments?

Jeshua@dwlawpc.com

http://www.dwlawpc.com

Connect with me on Twitter: @JeshuaTLauka

Business Law Update: When Can a Business Sue Another Business over its Corporate Status?

March 29, 2018 Leave a comment

I (like much of West Michigan) am headed out the office and on vacation for my kids’ Spring Break. But before I go I wanted to share an interesting business law case that came out a few days ago.

2016-01-09 12.56.14

Check out the March 27, 2018  case:

Michigan Radiology Society v OMIC, LLC et al

The first sentence of the opinion sums up the dispute:

This case arises from plaintiff’s effort to prevent defendants from continuing the
operation of their business.

 

 

 

 

Facts:

 

  • Plaintiff is a non-profit corp. Its owners are radiologists licensed to practice medicine in Michigan.
  • Defendant OMIC, LLC,  is a for-profit LLC.
  • OMIC  provides diagnostic imaging to the public and is solely owned and managed by defendant SusanSwider.
  • Defendant Susan Swider is not a licensed physician.
  • Plaintiff sued, claiming that defendants were in violation of:
    • the Michigan Limited Liability Company Act (LLCA)
    • the Business Corporation Act (BCA),  and
    • the Public Health Code (PHC)

 

Plaintiff sued asking for declaratory and injunctive relief.

Basically, Plaintiff claimed “You can’t do that! You need to be properly licensed!”

The case was dismissed by the Trial Court.

A reasonable question to ask is: Why?  

 

Why was the case dismissed by the Trial Court?

Answer: Plaintiff was not a proper party to enforce a claimed violation under the statutes.

Plaintiff did not have “standing”.

 

Who has Standing to Bring a Claim?

The Court of Appeals cited the long standing law of our constitution:

Our constitution requires that a plaintiff possess standing before a court
can exercise jurisdiction over that plaintiff’s claim. This constitutional standing
doctrine is longstanding and stems from the separation of powers in our
constitution. Because the constitution limits the judiciary to the exercise of
“judicial power,” Const 1963, art 6, § 1, the Legislature encroaches on the
separation of powers when it attempts to grant standing to litigants who do not
meet constitutional standing requirements.” Id page 3.

 

So in this case, Plaintiff sued Defendants saying they violated 3 statutes. The question presented was, did the Plaintiff have standing to sue Defendants under those statutes?

“Statutory standing…necessitates an inquiry into whether a statute
authorizes a plaintiff to sue at all.” Id. Page 3.

Basically, the Court held that the statutes above that the Plaintiff sued under (LLCA, BCA PHC), only allowed the Attorney General to sue to enforce a violation.

“[T]he Attorney General alone has the authority to challenge corporate status.” Id. Page 3,  citing  Miller v Allstate Ins Co, 481 Mich 601, 606-608; 751 NW2d 463 (2008)

 

Lesson:

If you are a business and believe another business is operating “illegally” it doesn’t mean you are the proper party to sue them.

Think about this another way: You are business and know of a business that is gouging a client of yours – does that give you the right to sue that business? Do you have standing to sue that business.

Something you should talk with your lawyer about…

For all of those traveling on Spring Break – safe travels!

 

e-mail: Jeshua@dwlawpc.com

Twitter: @JeshuaTLauka

Calling the Next Generation of Leaders.

March 22, 2018 Leave a comment

Good morning and Happy Thursday! It is a beautiful morning in downtown Grand Rapids!

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Yesterday was the annual meeting of the Trustees of Mel Trotter Ministries. It was one year ago that my term ended as Board Chair.

Last year I shared my reflections on this experience.

One of my great joys during this time was seeing the launch of Mel Trotter Ministries 2020 Strategic Plan.  Check it out to see some exciting things we see in the near future for MTM.

 

 

Detroit Nonprofit Day

Today,  I was reading about an upcoming event called Detroit Non-Profit Day

This is a one day conference on Saturday April 14th devoted to preparing non-profits for financial and sustainable growth.

Social entrepreneurs and those in the non-profit community should consider this workshop. You can sign up here.

Reflecting on Detroit NonProfit Day and  my experience at Mel Trotter as well as serving other nonprofits, got me thinking on nonprofit sustainability and prompted me to write this post.

This is an issue that all non-profits need to address:

how are non-profits going to stay viable in the future?

 

However, the issue I wanted to address in this post is sustainability in leadership.

 

My Call to Next Generation Leaders. We Need You.

I can appreciate the anxieties that many service-minded folks can experience when faced with volunteer/board service. Particularly the next generation/millennials.

Many feel inadequate and inexperienced.

I had a conversation recently with a friend – we serve on a committee together where the rest of the people around the table are successful influencers and leaders in the business community. My friend made the comment to me that “one of these things is not like the other.” He was pointing out the obvious – we, in both our minds,  stuck out like a sore thumb because our relative young age.

Simply put, when you are younger and sitting around a table full of gray-haired folks who have achieved much more than you, it is easy to let insecurity or doubt slip in.

This insecurity can be a road block for many in putting themselves out there for service.

If that’s you – here’s my call to you:

What you are experiencing is normal.

But get over it.

Fight through the temptation to be passive. Be bold and reach out to the organization that fits your passions.

Don’t do it for yourself – do it for the cause that you care about.

Because whether the organization acknowledges it or not – they need you.

They need your perspective, and they need you to get involved to gain experience and develop institutional knowledge in how their nonprofit works.

You only learn the strengths and the gaps of an organization by spending time in that organization in active service.

 

Here’s a selfish plug for Mel Trotter Ministries – interested in learning more about ways to serve or connect with the leadership? Join me for lunch.

At Mel Trotter Ministries, we are always looking for volunteers. We need people who have a heart for the hungry, homeless and hurting in West Michigan.  As we seek to end homelessness in West Michigan, one life at a time, it is a large task and we cannot do it alone.

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This is my call to everyone, but particularly our next generation of leaders – millennials and beyond.

Ask yourself:

 

How can I serve?

 

 

 

Millennials – I’m reminded of the Bible – 1 Timothy 4:12 –

Don’t let anyone look down on you because you are young, but set an example for the believers

The fact remains – the millennial and younger generations are our future leaders.

Now is the perfect time to get plugged into one of the many opportunities to serve and lead.

Please take this as your personal invitation from me –

Take the initiative.

Get engaged.

Just show up.

 

e-mail: Jeshua@dwlawpc.com

Twitter: @JeshuaTLauka