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Business Law Update: Michigan LLCs Filing with LARA: Pardon the Delays and Thank you for your Patience.

February 22, 2018 Leave a comment

Happy Thursday, all! I took this photo earlier today – the sun is out in downtown Grand Rapids, Michigan and people are enjoying  the ice rink at Rosa Parks Circle.

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Last week I posted about an update I received from the Michigan Department of Licensing and Regulatory Affairs (“LARA”) extending the deadline to file annual statements and reports for LLCs and PLLCs to March 1, 2018.

Annual Statements are Due on February 15th each year, “however, due to increased demand for pre-assigned Customer ID Number (CID) and PIN information, an automatic 14-day extension will be granted.

 

In my post I also mentioned that I wasn’t surprised at the filing extension, given the fact that my experience with LARA lately has been frustrating to say the least. My clients have been experiencing serious delays in returned filings from LARA.

 

Today, I received an update from LARA’s Director Julia Dale, thanking me, and other system users for our patience in the delays that we have been experiencing.

In part, Director Dale acknowledged that:

“The Corporations Division serves more than 800,000 customers doing business in Michigan and reviews more than 240,000 documents and 640,000 annual reports each year…For the last two years…LARA worked diligently to bring the agency’s aging Corporations database into the modem era by completely replacing the outdated server-based technology with a new web-based system… The database was unstable, utilized unsupported technology and the fax-based filing system had become a burden for customers and staff.”

 

I am glad that my reasonable frustrations are being acknowledged by LARA. Thank you, Director Dale.

 

Many of my clients, (real estate investors, small business owners, entrepreneurs, etc..) rely on quick turn around for corporate filings. The fact that LARA’s e-filing system has not been reliable has been troubling for my clients – and therefore troubling to me.

 

I forewarn all clients who are looking for new entity filings that they should expect to experience delays.

If the particular filing is time sensitive, you have a deal closing soon and need an entity prepared ASAP, then you may want to consider paying extra to the State for expedited processing.

 

Questions? Comments?

E-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

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Michigan Entrepreneurs and Small Businesses: Crowdfunding Law Update.

Last year  Representative Tom Barrett introduced House resolution2015-11-26-13-04-02 235 (HR 235)

“to support the (SEC)’s recent adoption of rules…to facilitate small and start-up companies’ access to capital raised through crowdfunding.”

The resolution supports crowdfunding as viable tools for start-up businesses.

The resolution acknowledges:

Businesses in Michigan have greatly benefited from the opportunities created by the…Michigan Invests Locally Exemption (MILE) program. MILE has allowed everyday Michiganders, referred to as unaccredited investors, the ability to play a larger role in growing Michigan’s creative business ventures through Michigan-based crowdfunding platforms while still enjoying investor protections and security in their investments” (Emphasis added.)

 

Is Crowdfunding a Viable Option in Michigan?

Fast forward to today,  MIBiz recently reported that Michigan’s crowdfunding law hasn’t gained much traction

However, it may remain a viable tool for cash-strapped startups and the Michigan legislature has not given up on it.

 

Yesterday the Michigan House passed HB 4035 that amended the Michigan Invests Locally Exemption to Intrastate Crowdfunding.

 

According to yesterday’s announcement from the Michigan House Republican Website:

The amendments contained in HB 4035 “will expand the program so people can also invest in small businesses primarily doing business in the state and allows Michigan’s law to remain active under new Federal regulations

You can check out the House Fiscal Agency’s Analysis Here

The HB now moves to the Senate Commerce Committee for consideration.

 

Entrepreneurs and Start-ups:

 

Proponents of Crowdfunding: access to capital.

A while back Candace Klein Chief Strategy Officer at DealStruck was Interviewed by CrowdfundInsider and talked about how small business might benefit from crowdfunding. She had this to say, in part:

“Most businesses are community-based, and have an immediate impact for those in their community, whether geographic or industry-based.  Crowdfunding brings these companies together with the everyday investors in their communities.”

 

Crowdfunding for Social Enterprise?

I agree. As I’ve previously written about, crowdfunding appears to be a viable tool for community based businesses.

People are willing to invest in projects that will enhance their local community.

This is what makes local equity-based crowdfunding attractive for social entrepreneurs.

This is what makes local equity-based crowdfunding attractive for social entrepreneurs.

 

Questions? Comments?

e-mail: Jeshua@dwlawpc.com

Twitter: @JeshuaTLauka

www.dwlawpc.com