PROFESSIONAL LIMITED LIABILITY COMPANY for LICENSED PROFESSIONALS
STATE OF MICHIGAN Electronic Version
STATUTORY REFERENCES
MICHIGAN COMPILED LAWS - Chapter 450 - §§450.4101-5200 (Michigan Limited Liability C ompany Act)
Article 9: Professional Limited Liability Companies
www.michiganlegislature.org
( In left menu, go to Laws and click ‘Chapter Index’ – Chapter 450, LLC Act is at bottom.)
INTRODUCTORY NOTES AND LAW SUMMARY
In Michigan a professional limited liability company (PLLC) may be organized to engage in the
practice of a professional service and is subject to the provisions of the Michigan Limited
Liability Company Act, particularly §§ 450.4901 through 450.4910.
“Professional service” means a type of personal service to the public that requires as a condition
precedent to the rendering of the service the obtaining of a license or other legal a uthorization.
Professional service includes, but is not limited to, services rendered by a certified or ot her public
accountant, chiropractor, dentist, optometrist, veterinarian, osteopathic physician, p hysician,
surgeon, podiatrist, chiropodist, architect, professional engineer, land surveyor, and attorney- at-
law.
A “licensed person” is an individual who is licensed or otherwise legall y authorized to practice a
professional service by a court, department, board, commission, or an agency of this state or
another jurisdiction, or any PLLC all of whose members and managers are licensed persons.
In addition to the various statutory provisions applicable to a PLLC which is organized to engage
in the practice of a profession, the PLLC and the individual members of t he PLLC are subject to
the rules and regulations of the Michigan examining/governing board/agency for the profes sion.
One or more licensed persons may organize and become members of a PLLC. The Articles of
Organization must state that the company is formed to render specified professi onal services.
The name of the PLLC must contain the words “Professional Limited Liability Company”
or “Professional Limited Company”, or the designation “PLLC” or “PLC”, or the
abbreviation “P.L.L.C.” or “P.L.C.”
A PLLC may not render professional services within Michigan except t hrough its members,
managers, employees, and agents who are licensed or otherwise legally aut horized to render the
professional services within Michigan. The term "employee" does not include secretaries,
bookkeepers, technicians, and other assistants who are not usually and ordinari ly considered by
custom and practice to be rendering professional services to the public for w hich a license or
other legal authorization is required.
Practicing as a PLLC does not affect the professional relationship or liabilities between the
person furnishing the professional services and the person receiving such profes sional services,
or the standards for professional conduct. A member, manager, employee, or agent of a
professional limited liability company remains personally and fully l iable and accounta ble for
any negligent or wrongful acts or misconduct committed by him or her, or b y any person under
his or her direct supervision and control, while rendering professional servi ces on behalf of the
PLLC to the person for whom the professional services were being rendered.
A PLLC is liable up to the full value of its property for any negl igent or wrongful acts or
misconduct committed by any of its members, managers, employees, or agents while they are
engaged on behalf of the company in the rendering of professional services.
If a member, manager, employee, or agent of a PLLC becomes legally disqualified to render the
professional services rendered by the company or accepts employment that, p ursuant to existing
law, places restrictions or limitations on his or her continued rendering o f the professional
services, he or she must sever within a reasonable period all employment with and financial
interests in the company.
A PLLC may not engage in any business other than the rendering of the professional ser vices for
which it was specifically organized. A PLLC is not prohibited from i nvesting its funds in real
estate, mortgages, stocks, bonds, or any other type of investments, or owning real or personal
property necessary for the rendering of professional services. A PLLC ma y become a partner in
a partnership pursuant to §§ 449.1 to 449.43 of the Michigan Compiled Laws if the partnershi p
performs the same professional services as the PLLC or become a mem ber or manager of
another PLLC if both PLLCs perform the same professional services.
A membership interest in a PLLC may not be sold or transferred except t o a person who is
eligible to be a member of the company or to the personal representat ive or estate of a deceased
or legally incompetent member. The personal representative or estate o f the member may
continue to hold a membership interest for a reasonable period but IS NOT a uthorized to
participate in any decisions concerning the rendering of professional service.
PLEASE NOTE these recent (December 2002) changes to the Act**:
1. Articles may be signed by nonmember organizers.
2. Domestic LLC's may admit members that have not made a contribution or incurred an
obligation to make a future contribution.
3. Definition of "operating agreement" amended to allow single membe rs LLC's to have
an operating agreement.
4. Definition of "majority in interest" added and clarifies voting is by majority in
interest rather majority in number.
5. Definition of "manager" revised to clarify that a designation of mana gement by
managers must be made in the articles of organization.
6. Authorized agents permitted to sign documents required or permitted to be filed under
the Limited Liability Company Act.
7. Good standing certificates may be issued for LLC's and LLC's that a re delinquent for
two years in filing annual statements lose their good standing status and their name
becomes available for use by others.
8. The Administrator is required to provide the LLC's and PLLC's with notice of
delinquency. If the company does not file it's missing annual stateme nts or annual
reports within 60 days of the notice, the company is not in good standing.
9. A Certificate of Restoration may be filed by a LLC or PLLC, along with the missing
annual statements or annual reports, to be restored to good standing.
10. The amendments clarify that professional limited liability compani es are required to
file both the annual statement filed by all limited liabili ty companies and an annual
report listing it's members and managers and certifying to their licensure.
11. The annual statement fee is changed to $15.
12. The amendments provide that an interest in a LLC may be held by tenant s by the
entirety.
13. If the articles of organization or the act establish that the man ager or member in a
member managed LLC, lacks authority to bind the LLC a third party dealing w ith the
person has "actual knowledge" of the limitation and cannot rely on apparent authority
of the person to act on behalf of the LLC.
** Source: Michigan Consumer & Industry Services
BEFORE YOU FORM A PLLC TO ENGAGE IN THE PRACTICE OF A
PROFESSION, YOU SHOULD FIRST CONFIRM THAT YOU ARE IN
FULL COMPLIANCE WITH ALL RULES AND REGULATIONS OF THE
MICHIGAN EXAMINING/GOVERNING BOARD/AGENCY FOR YOUR
PROFESSION.
STEPS TO FORM PLLC
Step 1: SEE FORM 1 - APPLICATION FOR RESERVATION OF NAME
It is recommended that you reserve a corporate name in order to assure that your
Articles of Organization are not rejected because the name you have selected is
not available.
You may skip this step and go to Step 2, but if the PLLC name you have
selected is not available, the Articles of Organization will be rejected and
returned to you.
Download the form from our download page, below. Follow the instructions
on the form. Remember name your PLLC appropriately as discussed in the
Intro & Law Summary section, above.
Step 2: SEE FORM 2 –ARTICLES OF ORGANIZATION
Once you have reserved the limited liability company name, or if you have chosen
to proceed without reserving a name, you are ready to complete the Artic les of
Organization.
Download the form from our download page, below. Follow the instructions
on the form.
A sample cover letter to send with the Articles of is included.
SEE FORM 3 – SAMPLE TRANSMITTAL LETTER
Step 3: Upon return of the Articles of Organization complete the Operating Agreeme nt.
SEE FORM 4 – OPERATING AGREEMENT
Step 4: Apply for a Federal Tax Identification Number. This is done with form SS-4.
Mail to your regional IRS office.
SEE FORM 5 – IRS -SS -4 & IRS- SS-4-I (instructions)
Download the forms from the download page, below.
Step 5: Open a bank account and conduct business.
Step 6: Maintain Records
A limited liability company must keep at its registered office or principal place of
business in this state all of the following:
(a) A current list of the full name and last known address of each member and
manager.
(b) A copy of the articles or restated articles of organization, together with any
amendments to the articles.
(c) Copies of the limited liability company's federal, state, and local tax returns
and reports, if any, for the 3 most recent years. (d) Copie s of any financial statements of the limited liability company for the 3
most recent years.
(e) Copies of operating agreements.
(f) Copies of records that would enable a member to determine the members'
relative shares of the limited liability company's distributions and the mem bers'
relative voting rights.
* * *
Disclaimer: If you are not an attorney, you are advised to seek the advice of an attorney for all serious
legal matters. The information and forms contained herein are not legal advice and are not
to be construed as such. Although the information contained herein is believed to be correct,
no warranty of fitness or any other warranty shall apply. All use is subj ect to the U.S. Legal
Forms, Inc. Disclaimer and License located at
http://www.uslegalforms.com/disclaimer.htm
FORMS DOWNLOAD
To access the download page please do the following:
IMPORTANT NOTE : WRITE DOWN THE USERNAME AND PASSWORD SHOWN
BELOW BECAUSE YOU WILL NEED TO ENTER IT EXACTLY (case sensitive) TO
DOWNLOAD THE FORMS.
The download page you will access by using the link below contains links to download the f orms
for this package, as well as a brief description of each form. Once you reach the download page,
the easiest procedure to download the forms is to right-click on the form links and select “save
target as” to save each form to your hard drive.
To access the download page you are required to use the following login (PLEASE WRITE
THIS DOWN): USERNAME: eze983
PASSWORD: ghr256
The download link can be accessed by any of the following methods: - Copy the link below and paste into your browser URL location.
- Type the link below exactly (case sensitive) as shown into your browser.
- Click on the highlighted link below.
Download Link:
http://www.uslegalforms.com/data/corp/MI-00LLC/MI-00PLLC.htm
http://www.uslegalforms.com/data/corp/MI-00LLC/MI-00PLLC.htm
FORM 4
OPERATING AGREEMENT
This agreement is a sample operating agreement and should be modified to
meet your needs. It provides for the PLLC to be operated by one or more
managers OR by the members. You will have to decide how you want your
PLLC to operate.
INSERT THE NAME OF YOUR PROFESSION/PRACTICE
INTO THE BLANKS WHERE APPROPRIATE
Read carefully and make appropriate changes to suit your
individual needs and purposes.
OPERATING AGREEMENT
OF
______________________________________
A MICHIGAN PROFESSIONAL LIMITED LIABILITY COMPANY
THIS OPERATING AGREEMENT ("Agreement") is entered into the ___ day of ___________,
20___, by and between the following persons: 1. _______________________________________________________________
2. _______________________________________________________________
3. _______________________________________________________________
4. _______________________________________________________________
hereinafter, ("Members" or “Parties”).
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is
hereby acknowledged, the Parties covenant, contract and agree as follows:
ARTICLE I
FORMATION OF PROFESSIONAL LIMITED LIABILITY COMPANY
1. Formation of PLLC. The Parties have formed a Michigan professional
limited liability company named _______________________________________________
("PLLC"). The operation of the PLLC shall be governed by the terms of thi s Agreement and
the applicable laws of the State of Michigan relating to the f ormation, operation and taxation
of a PLLC, including the Michigan Limited Liability Company Act. To the extent permitted
by the Act, the terms and provisions of this Agreement shall contro l if there is a conflict
between such Act and this Agreement. The Parties intend that the PLL C shal l be taxed as a
partnership. Any provisions of this Agreement, if any, that may cause the PLLC not to be
taxed as a partnership shall be inoperative.
2. Articles or Organization. The Members acting through one of its Me mbers,
_____________________________________, filed Articles of Organization, ("Articles")
for record in the office of the with the Michigan Department of Consumer and Industry
Services on _________________________, thereby creating the PLLC. 3. Purpose. The purpose of the PLLC is to engage in the practice of
______________ through persons qualified to practice ______________ in the State of
Michigan. The PLLC's activities shall be conducted in compliance with all applicable
statutes, rules and regulations.
4. Registered Office and Registered Agent. The registered office and place of
business of the PLLC shall be ________________________________________________
______________________________________ and the registered agent at such office shall
be __________________________________________________________________. The
Members may change the registered office and/or registered agent from time to time.
5. Duration. The PLLC will commence business as of the date the Members
contribute their capital investment in the PLLC and will continue in perpetuity.
6. Fiscal Year. The PLLC's fiscal and tax year shall end December 31.
ARTICLE II MEMBERS
7. Initial Members. The initial members of the PLLC, each of whom is licensed
to practice ______________ in Michigan, their initial capital contributions, and their
percentage interest in the PLLC are:
Initial Percentage Interest Capital
Members in PLLC Contribution
________________________ _________________ ___________________
________________________ _________________ ___________________
________________________ _________________ ___________________
________________________ _________________ ___________________
8. Members.
(a) Each member of the PLLC and each of the employees of the PLLC
engaged in the practice of ______________ shall be licensed to practice
______________ in Michigan.
(b) All members of the PLLC shall be licensed to practice ______________
in the State of Michigan, and shall be engaged in the practice of
______________ in Michigan.
(c) No member of the PLLC, or the PLLC itself, shall do any act which
would violate recognized standards of professional conduct.
(d) New members may be admitted only upon the consent of a majority of the
Members and upon compliance with the provisions of this agreement.
ARTICLE III
MANAGEMENT
9. Management. The Members have elected to manage the PLLC as follows:
[ ] The management of the PLLC shall be vested in the Members without an
appointed manager. The members shall elect officers who shall manage t he
company. The President and Secretary may act for and on behalf of the
PLLC and shall have the power and authority to bind the PLLC in all
transactions and business dealings of any kind except as otherwise provided
in this Agreement.
[ ] The Members hereby delegate the management of the PLLC to
Manager(s), subject to the limitations set out in this agreement. a) Each Manager shall be licensed to practice ______________ in the State
of Michigan.
b) The Members shall elect and may remove the Manager(s) by majority
vote.
c) A Manager shall serve until a successor is elected by the Members.
d) The Manager(s) shall have the authority to take all necessary and proper
actions in order to conduct the business of the PLLC.
e) Except for decisions concerning distributions, any Manager can take any ap propriate action on behalf of the PLLC, including, but not limited to
signing checks, executing leases, and signing loan documents.
f) In determining the timing and total amount of distributions to the
Members, the action of the Manager shall be based on a majority vote of
the Managers, with or without a meeting.
g) The compensation to the Manager(s) shall be in the discretion of the
majority of the Members of the PLLC.
h) There shall be _________ initial Managers.
i) The initial Managers is/are:
_________________________________________________________.
_________________________________________________________.
_________________________________________________________. 10. Officers and Relating Provisions. In the event the Members elect to manage
the PLLC, rather than appointing a manager, the Members shall appoint officers for the
PLLC and the following provisions shall apply: (a) Officers. The officers of the PLLC shall consist of a president, a t reasurer
and a secretary, or other officers or agents as may be elected and appo inted by the Members.
Members may hold more than one office. The officers shall act in the name of the PLLC
and shall supervise its operation under the direction and management of the Members, as
further described below. All officers of the PLLC shall be members and shall be licensed to
practice ______________ in Michigan.
(b) Election and Term of Office. The officers of the PLLC shall be elected
annually by the Members by a majority vote. Vacancies may be filled or new offic es created
and filled at any meeting of the Members. Each officer shall hold office until his/he r death,
until he/she shall resign, or until he/she is removed from office. Election or appointment of
an officer or agent shall not of itself create a contract right.
(c) Removal. Any officer or agent may be removed by a majority of the
Members whenever they decide that the best interests of the Company would be served
thereby. Such removal shall be without prejudice to the contract rights, if any, of the person
so removed.
(d) Vacancies. A vacancy is any office because of death, resignation,
removal, disqualification or otherwise may be filled by the Members for the unexpired
portion of the term.
(e) President. The President shall be the chief executive officer of the PLLC
and shall preside at all meetings of the Members. The President shall have such other powers
and perform such duties as are specified in this Agreement and as may from time to t ime be
assigned by the Members of the PLLC.
(f) The Treasurer. The Treasurer shall be the chief financial officer of the
PLLC. The Treasurer shall not be required to give a bond for the faithful discharge of his/her
duties. The Treasurer shall: (i) have charge and custody of and be responsible for all funds
and securities of the PLLC; (ii) in the absence of the President, preside at meeti ngs of the
Members; (iii) receive and give receipts for moneys due and payable to the PLLC from a ny
source whatsoever, and deposit all such moneys in the name of the PLLC in such banks,
trust companies or other depositaries as shall be selected by the Members of the PL LC; and
(iv) in general perform all the duties incident to the office of treasurer and such other dutie s
as from time to time may be assigned by the President or by the Members of the PLLC.
(g) Secretary. The secretary shall: (i) keep the minutes of the Members
meetings in one or more books provided for that purpose; (ii) see that all notices are duly
given in accordance with the provisions of this Agreement or as required by law; (iii) be
custodian of PLLC records; (iv) keep a register of the post office address of each Member;
(v) certify the Member’s resolutions; and other documents to the PLLC as true and correct;
(vi) in the absence of the President and Treasurer, preside at meetings of the Members and
(vii) in general perform all duties incident to the office of secretary and such other dutie s as
from time as may be assigned by the President or the Members.
11. Member Only Powers. Notwithstanding any other provision of this
Agreement, only a majority of the Members may: (a) sell or encumber (but not lease) any
real estate owned by the PLLC, or (b) incur debt, expend funds, or otherwise obligate the
PLLC if the debt, expenditure, or other obligation exceeds $_____________________.
ARTICLE IV
CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS
12. Interest of Members. Each Member shall own a percentage interest
(sometimes referred to as a share) in the PLLC. The Member’s percentage interest shall be
based on the amount of cash or other property that the Member has contributed to the PLLC
and that percentage interest shall control the Member’s share of the profits, losses, and
distributions of the PLLC.
13. Contributions. The initial contributions and initial percentage interest of the
Members are as set out in this Agreement.
14. Additional Contributions. Only a majority of the Members of the PLLC may
call on the Members to make additional cash contributions as may be necessary to carry on
the PLLC's business. The amount of any additional cash contribution shall be based on the
Member's then existing percentage interest. To the extent a Member is unable to me et a cash
call, the other Members can contribute the unmet call on a pro rata basis based on the
Members' percentage interests at that time, and the percentage interest of each Member will
be adjusted accordingly.
15. Record of Contributions/Percentage Interests. This Agreement, any
amendment(s) to this Agreement, and all Resolutions of the Members of the PLLC shal l
constitute the record of the Members of the PLLC and of their respective interest therei n.
16. Profits and Losses. The profits and losses and all other tax attributes of the
PLLC shall be allocated among the Members on the basis of the Members' percentage
interests in the PLLC.
17. Distributions. Distributions of cash or other assets of the PLLC (other than
in dissolution of the PLLC) shall be made in the total amounts and at the times as dete rmined
by a majority of the Members. Any such distributions shall be allocated among the
Members on the basis of the Members' percentage interests in the PLLC.
18. Change in Interests. If during any year there is a change in a Member's
percentage interest, the Member's share of profits and losses and distributions in that yea r
shall be determined under a method which takes into account the varying interests during the
year.
ARTICLE V
VOTING; CONSENT TO ACTION
19. Voting by Members. Members shall be entitled to vote on all matters which
provide for a vote of the Members in accordance with each Member’s percentage interest.
20. Majority Required. Except as otherwise required, a majority of the
Members, based upon their percentage ownership, is required for any action. 21. Meetings - Written Consent. Action of the Members may be accomplished
with or without a meeting. If a meeting is held, evidence of the action shall be by Minutes or
Resolution reflecting the action of the Meeting, signed by a majority of the Membe rs.
Action without a meeting may be evidenced by a written consent signed by a majorit y of the
Members.
22. Meetings. Meetings of the Members may be called by any Member owning
10% or more of the PLLC, or, if Managers were selected, by any Manager of the PLLC.
23. Majority Defined. As used throughout this agreement the term “Majority” of
the Members shall mean a majority of the ownership interest of the PLLC as determined by
the records of the PLLC on the date of the action.
ARTICLE VI
DUTIES AND LIMITATION OF LIABILITY MEMBERS, OFFICERS AND
PERSONS SERVING ON ADVISORY COMMITTEES; INDEMNIFICATION
24. Duties of Members: Limitation of Liability. The Members, Managers and
officers shall perform their duties in good faith, in a manner they reasonably believe to be in
the best interests of the PLLC, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances. No Member or officer shall have any
liability to the PLLC or any other Member by reason of being or having been a Member or
officer. No Member or officer shall not be liable to the PLLC or to any other Member or
officer for any loss or damage sustained by the PLLC or any other Member or officer unless
the loss or damage shall have been the result of fraud, deceit, gross negligence, will ful
misconduct, or a wrongful taking by that Member or officer.
25. Members Have No Exclusive Duty to PLLC. The Members shall not be
required to participate in the PLLC as their sole and exclusive business. Members may have
other business interests and may participate in other investments or activitie s in addition to
those relating to the PLLC. Neither the PLLC nor any other Member shall have any right, by
virtue of this Agreement, to share or pa rticipate in another member’s business interests,
investments or activities or the income or proceeds derived therefrom. No Member shall
incur liability to the PLLC or to any other Member by reason of participating in any such
other business, investment or activity.
26. Protection of Members and Officers.
(a) As used herein, the term “Protected Party” refers to the Members and
officers of the Company.
(b) To the extent that, at law or in equity, a Protected Party has duties
(including fiduciary duties) and liabilities relating thereto to the PLLC
or to any other Protected Party, a Protected Party acting under this
Agreement shall not be liable to the PLLC or to any other Protected
Party for good faith reliance on:
(i) the provisions of this Agreement;
(ii) the records of the PLLC; and/or
(iii) such information, opinions, reports or statements presented to
the PLLC by any person as to matters the Protected Party
reasonably believes are within such other person’s professional
or expert competence and who has been selected with
reasonable care by or on behalf of the PLLC, including
information, opinions, reports or statements as to the value and
amount of the assets, liabilities, profits or losses of the PLLC
or any other fact pertinent to the existence and amount of
assets from which distributions to Members might properly be
paid.
c) The provisions of this Agreement, to the extent that they restrict the
duties and liabilities of a Protected Party to the PLLC or to any other
Protected Party otherwise existing at law or in equity, are agreed by
the parties hereto to replace such other duties and liabilities of such
Protected Party.
d) Whenever this Agreement permits or requires a Protected Party to
make a decision in its “discretion” or under a grant of similar
authority or latitude, the Protected Party shall be entitled to consider
only such interests and factors as it desires, including its own interests,
and shall have no duty or obligation to give any consideration to any
interest of or factors affecting the PLLC or any other Person.
e) Whenever this Agreement permits or requires a Protected Party to
make a decision using a “good faith” or under another express
standard, the Protected Party shall act under such express standard and
shall not be subject to any other or different standard imposed by this
Agreement or other applicable law.
27. Indemnification and Insurance.
(a) Right to Indemnification.
(i) Any person who is or was a member or officer of the PLLC
and who is or may be a party to any civil action because of
his/her participation in or with the PLLC, and who acted in
good faith and in a manner which he/she reasonably believed
to be in, or not opposed to, the best interests of the PLLC, shall
be indemnified and held harmless by the PLLC.
(ii) Any person who is or was a member or officer of the PLLC
and who is or may be a party to any criminal action because of
his/her participation in or with the PLLC, and who acted in
good faith and had reasonable cause to believe that the act or
omission was lawful, shall be indemnified and held harmless
by the PLLC.
(b) Advancement of Expenses . Expenses (including attorney’s fees)
incurred by an indemnified person in defending any proceeding shall
be paid in advance of the proceeding’s final disposition. S hould the
indemnified member or officer ultimately be determined to not be
entitled to indemnification, that member or officer agrees to
immediately repay to PLLC all funds expended by the PLLC on
behalf of the member or officer.
(c) Non-Exclusivity of Rights. The right to indemnification and the
advancement of expenses conferred in this section shall not be
exclusive of any right which any person may have or hereafter acquire
under any statute, provision of this Agreement, contract, agreement,
vote of Members or otherwise. The Members and officers are
expressly authorized to adopt and enter into indemnification
agreements for Members, officers and advisory committee members.
(d) Insurance. The Members may cause the PLLC to purchase and
maintain insurance for the PLLC, for its Members and officers, and/or
on behalf of any third party or parties whom the members might
determine should be entitled to such insurance coverage.
(e) Effect of Amendment. No amendment, repeal or modification of this
Article shall adversely affect any rights hereunder with respect to any
action or omission occurring prior to the date when such amendment,
repeal or modification became effective.
28. Duties of Persons Serving on Advisory Committees; Limitation of Liability ;
Indemnification. The Members shall have the right to form advisory committees. Persons
serving on an advisory committee, whether or not a Member or officer, shall perform their
duties in good faith, in a manner they reasonably believe to be in the best interests of the
PLLC, and with such care as an ordinarily prudent person in a like position would use under
similar circumstances. A person serving on an advisory committee shall not ha ve any
liability to the PLLC or to any Member or officer for any loss or damage sustained by the
PLLC or any Member or officer unless the loss or damage was the result of fraud, deceit,
gross negligence, willful misconduct, or a wrongful taking by such person.
ARTICLE VII
MEMBERS INTEREST TERMINATED
29. Termination of Membership . A Member’s interest in the PLLC shall cease
upon the occurrence of one or more of the following events:
(a) A Member provided notice of withdrawal to the PLLC thirty (30) days in
advance of the withdrawal date. Withdrawal by a Member is not a breach of this Agreement
(b) A Member assigns all of his/her interest to a third party.
(c) A Member dies or is disqualified from practicing ________________.
(d) There is an entry of an order by a court of competent jurisdiction adjudicating the Member incompetent to manage his/her person or his/her estate.
(e) In the case of an estate that is a Member, the distribution by the fiduciary
of the estate's entire interest in the PLLC.
(f) A Member, without the consent of a majority of the Members: (1) makes
an assignment for the benefit of creditors; (2) files a voluntary petition in bankruptcy; (3) is
adjudicated a bankrupt or insolvent; (4) files a petition or answer seeking for himself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any statute, law or regulation; (5) files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against him in any proceeding of
the nature described in this paragraph; (6) seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator of the Member or of all or any substantial
part of his properties; or (7) if any creditor permitted by law to do so should commence
foreclosure or take any other action to seize or sell any Member's interest in the PLLC.
(g) If within one hundred twenty (120) days after the commencement of any
action against a Member seeking reorganization, arrangement, composition, readjust ment,
liq uidation, dissolution, or similar relief under any statute, law, or regulation, the action has
not been dismissed and/or has not been consented to by a majority of the members.
(h) If within ninety (90) days after the appointment, without a member’s
consent or acquiescence, of a trustee, receiver, or liquidator of the Member or of all or any
substantial part of the member’s properties, said appointment is not vacated or within ninety
(90) days after the expiration of any stay, the appointment is not vacated and/or has not been
consented to by a majority of the members.
(i) Any of the events provided in applicable code provisions that are not
inconsistent with the dissociation events identified above.
30. Effect of Dissociation. Any dissociated Member shall not be entitled to
receive the fair value of his PLLC interest solely by virtue of his dissociation. A di ssociated
Member that still owns an interest in the PLLC shall be entitled to continue to re ceive such
profits and losses, to receive such distribution or distributions, and to receive such
allocations of income, gain, loss, deduction, credit or similar items to which he would hav e
been entitled if still a Member. For all other purposes, a dissociated Member shall no long er
be considered a Member and shall have no rights of a Member.
ARTICLE VIII
RESTRICTIONS ON TRANSFERABILITY OF PLLC INTEREST; SET PRICE FOR PLLC INTEREST
31. PLLC Interest. The PLLC interest is personal property. A Member has no
interest in property owned by the PLLC.
32. Encumbrance. A Member can encumber his PLLC interest by a security
interest or other form of collateral only with the consent of a majority of the other Members.
Such consent shall only be given if the proceeds of the encumbrance are contributed to t he
PLLC to respond to a cash call of the PLLC.
33. Sale of Interest. A Member can sell his PLLC interest only to a person
licensed to practice ______________ in Michigan and only as follows:
a) If a Member desires to sell his/her interest, in whole or in part, he/she
shall give written notice to the PLLC of his desire to sell all or part of his/her intere st and
must first offer the interest to the PLLC. The PLLC shall have the option to buy the offered
interest at the then existing Set Price as provided in this Agreement. The PLL C shall have
thirty (30) days from the receipt of the assigning Member's notice to give the assignin g
Member written notice of its intention to buy all, some, or none of the offered interest. The
decision to buy shall be made by a majority of the other Members. Closing on the sale shall
occur within sixty (60) days from the date that the PLLC gives written notice of its i ntention
to buy. The purchase price shall be paid in cash at closing unless the total purchase price is
in excess of $_______________ in which event the purchase price shall be paid in twelve
(12) equal quarterly installments beginning with the date of closing. The installment
amounts shall be computed by applying the following interest factor to the princi pal amount:
interest compounded quarterly at the Quarterly Federal Short-Term Rate existing a t closing
under the Applicable Federal Rates used for purposes of Internal Revenue Code § 1 274(d),
or any successor provision.
(b) To the extent the PLLC does not buy the offered interest of a Member,
the other Members shall have the option to buy the offered interest at the Set Price on a pro
rata basis based on the Members' percentage interests at that time. If Member does not
desire to buy up to his/her proportional part, the other Members can buy the remaining
interest on the same pro rata basis. Members shall have fifteen (15) days from the date the
PLLC gives its written notice to the selling Member to give the selling Me mber notice in
writing of their intention to buy all, some, or none of the offered interest. Closing on the
sales shall occur within sixty (60) days from the date that the Members give written not ice of
their intention to buy. The purchase price from each purchasing Member shall be paid in
cash at closing.
(c) To the extent the PLLC or the Members do not buy the offered interest,
the selling Member can then assign the interest to a non-member, provided that the non -
member is licensed to practice ______________ in the State of Michigan. The selling
Member must close on the assignment within ninety (90) days of the date that he gave notice
to the PLLC. If he does not close by that time, he must again give the notice and options to
the PLLC and the PLLC Members before he sells the interest.
(d) A non- member purchaser of a member’s interest cannot exercise any
rights of a Member unless a majority of the non-selling Members consent to him becomi ng a
Member. The non-member purchaser will be entitled, however, to share in such profits and
losses, to receive such distributions, and to receive such allocation of income, gain, los s,
deduction, credit or similar items to which the selling member would be entitled, to the
extent of the interest assigned, and will be subject to calls for contributions under t he terms
of this Agreement. The purchaser, by purchasing the selling member’s interest, agrees to be
subject to all the terms of this Agreement as if he were a Member.
34. Set Price. The Set Price for purposes of this Agreement shall be the price
fixed by consent of a majority of the Members. The Set Price shall be memorialized and
made a part of the PLLC records. The initial Set Price for each Member's interest is the
amount of the Member's contribution(s) to the PLLC as provided above, as updated in
accordance with the terms hereof. Any future changes in the Set Price by the Members sha ll
be based upon net equity in the assets of the PLLC (fair market value of the assets less
outstanding indebtedness), considering the most recent appraisal obtained by the PLLC for
its assets, as may be adjusted by the Members in their discretion. The initial Set P rice shall
be adjusted no later than ________________. This basis for determining the Set Price shall
remain in effect until changed by consent of a majority of the Members. The Mem bers will
consider revising the basis for determining the Set Price at least annually.
35. When a member of a limited liability company which is organized to engage
in the practice of ______________ dies or becomes disqualified, that member's interest may
be transferred as set out above. If there is no such transfer, then the limited liability
company SHALL purchase or redeem that interest.
ARTICLE IX
OBLIGATION TO SELL ON A DISSOCIATION EVENT CONCERNING A MEMBER
35. Dissociation. Except as otherwise provided, upon the occurrence of a
dissociation event with respect to a Member, the PLLC and the remaining Members shal l
have the option to purchase the dissociated Member's interest at the Set Price in the same
manner as provided in ARTICLE VIII and as if the dissociated Member had notified the
PLLC of his desire to sell all of his PLLC interest. The date the PLLC received the not ice as
provided in ARTICLE VIII triggering the options shall be deemed to be the date that the
PLLC receives actual notice of the dissociation event.
ARTICLE X
DISSOLUTION
36. Termination of PLLC. The PLLC will be dissolved and its affairs must be
wound up only upon the written consent of a majority of the Members.
37. Final Distributions. Upon the winding up of the PLLC, the assets must be
distributed as follows: (a) to the PLLC creditors; (b) to Members in satisfaction of li abilities
for distributions; and (c) to Members first for the return of their contributions and secondly
respecting their PLLC interest, in the proportions in which the Members share in profits and
losses.
ARTICLE XI
TAX MATTERS
38. Capital Accounts. Capital accounts shall be maintained consistent with
Internal Revenue Code § 704 and the regulations thereunder.
39. Tax Matters Partner. The Members hereby designate ___________________
as the "tax matters partner" for purposes of representing the PLLC before the Internal
Revenue Service if necessary.
40. Partnership Election. The Members elect that the PLLC be taxed as a
partnership and not as an association taxable as a corporation. ARTICLE XII
RECORDS AND INFORMATION
41. Records and Inspection. The PLLC shall maintain at its place of business the
Articles of Organization, any amendments thereto, this Agreement, and all other PLL C
records required to be kept by the Act, and the same shall be subject to inspection and
copying at the reasonable request, and the expense, of any Member.
42. Obtaining Additional Information. Subject to reasonable standards, each
Member may obtain from the PLLC from time to time upon reasonable demand for any
purpose reasonably related to the Member's interest as a Member in the PLLC: (1)
information regarding the state of the business and financial condition of the PLLC; (2)
promptly after becoming available, a copy of the PLLC's federal, state, and local income tax
returns for each year; and (3) other information regarding the affairs of the PLLC as is just
and reasonable.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
43. Amendment. Except as otherwise provided in this Agreement, any
amendment to this Agreement may be proposed by a Member. Unless waived by the
Members, the proposing Member shall submit to the Members any such proposed
amendment together with an opinion of counsel as to the legality of such amendment and the
recommendation of the Member as to its adoption. A proposed amendment shall become
effective at such time as it has been approved in writing by a majority of the Membe rs. This
Agreement may not be amended nor may any rights hereunder be waived except by an
instrument in writing signed by the party sought to be charged with such amendment or
waiver, except as otherwise provided in this Agreement.
44. Applicable Law. To the extent permitted by law, this Agreement shall be
construed in accordance with and governed by the laws of the State of Michigan.
45. Pronouns, Etc. References to a Member or Manager, including by use of a
pronoun, shall be deemed to include masculine, feminine, singular, plural, individuals,
partnerships or corporations where applicable.
46. Counterparts. This instrument may be executed in any number of
counterparts each of which shall be considered an original.
47. Specific Performance. Each Member agrees with the other Members
that the other Members would be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that monetary
damages would not provide an adequate remedy in such event. Accordingly, it is agreed that,
in addition to any other remedy to which the nonbreaching Members may be entitled, at law
or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent
breaches of this Agreement and, specifically, to enforce the terms and provisions of this
Agreement in any action instituted in any court of the United States or any state the reof
having subject matter jurisdiction thereof.
48. Further Action. Each Member, upon the request of the PLLC, agrees to
perform all further acts and to execute, acknowledge and deliver any documents which may
be necessary, appropriate, or desirable to carry out the provisions of this Agreement.
49. Method of Notices. All written notices required or permitted by this
Agreement shall be hand delivered or sent by registered or certified mail, postage prepai d,
addressed to the PLLC at its place of business or to a Member as set forth on the Member's
signature page of this Agreement (except that any Member may from time to t ime give
notice changing his address for that purpose), and shall be effective when personally
delivered or, if mailed, on the date set forth on the receipt of registered or certified mai l.
50. Facsimiles. For purposes of this Agreement, any copy, facsimile,
telecommunication or other reliable reproduction of a writing, transmission or signature ma y
be substituted or used in lieu of the original writing, transmission or signature for any and all
purposes for which the original writing, transmission or signature could be used, provided
that such copy, facsimile telecommunication or other reproduction shall have been
confirmed received by the sending Party.
51. Computation of Time. In computing any period of time under this
Agreement, the day of the act, event or default from which the designated period of time
begins to run shall not be included. The last day of the period so computed shall be
included, unless it is a Saturday, Sunday or legal holiday, in which event the period shall run
until the end of the next day which is not a Saturday, Sunday or legal holiday.
WHEREFORE, the Parties have executed this Agreement on the dates stated be low
their signatures on the attached signature page for each individual Party.
NOTICE: EACH MEMBER HEREBY CERTIFIES THAT HE OR SHE HAS RECEIVED
A COPY OF THIS OPERATING AGREEMENT AND FORMATION DOCUMEN T OF
________________________________________________________________________, A
MICHIGAN PROFESSIONAL LIMITED LIABILITY COMPANY. EACH MEMBER
REALIZES THAT AN INVESTMENT IN THIS COMPANY IS SPECULATIVE A ND
INVOLVES SUBSTANTIAL RISK. EACH MEMBER IS AWARE AND CON SENTS TO
THE FACT THAT THE INTERESTS IN THE COMPANY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR SECURITIES ACT OF
THE STATE OF MICHIGAN. EACH MEMBER AGREES TO BE BOUND BY ALL OF
THE TERMS AND CONDITIONS OF THIS AGREEMENT AND THE FORMATIO N
CERTIFICATE OR ARTICLES.
Members:
__________________________________
Name
__________________________________
Name
__________________________________
Name
__________________________________
Name
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
professional limited liability company Agreement and Articles of Or ganization of
___________________________________________________, a Michigan professional limited
liability company. I realize that an investment in this Company is speculative and involves
substantial risk. I agree to be bound by all of the terms and conditions of the Articles of
Organization and professional limited liability company Agreement of
___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
professional limited liability company Agreement and Articles of Or ganization of
___________________________________________________, a Michigan professional limited
liability company. I realize that an investment in this Company is speculative and involves
substantial risk. I agree to be bound by all of the terms and conditions of the Articles of
Organization and professional limited liability company Agreement of
___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
professional limited liability company Agreement and Articles of Or ganization of
___________________________________________________, a Michigan professional limited
liability company. I realize that an investment in this Company is speculative and involves
substantial risk. I agree to be bound by all of the terms and conditions of the Articles of
Organization and professional limited liability company Agreement of
___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
professional limited liability company Agreement and Articles of Or ganization of
___________________________________________________, a Michigan professional limited
liability company. I realize that an investment in this Company is speculative and involves
substantial risk. I agree to be bound by all of the terms and conditions of the Articles of
Organization and professional limited liability company Agreement of
___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
professional limited liability company Agreement and Articles of Or ganization of
___________________________________________________, a Michigan professional limited
liability company. I realize that an investment in this Company is speculative and involves
substantial risk. I agree to be bound by all of the terms and conditions of the Articles of
Organization and professional limited liability company Agreement of
___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
Ownership Ledger
Name and Residence
Address of PLLC Member Date of
Transfer % Ownership Amount Paid Subsequent
Transfer
Show on
separate line
Accessories
U. S. Legal Forms, Inc. offers the following accessories: See
http://www.uslegalbookstore.com/officeproducts/
Membership Certificate
No. ____ PROFESSIONAL LIMITED LIABILITY COMPANY- STATE OF MICHIGAN Percentage: ___
This Certificate, certifies that _____________________________, is a true and
lawful owner of ____ percent ownership of ____________________________,
a Michigan Professional Limited Liability Company. Such ownership interest is only
transferable in accordance with the Operating Agreement between the Members.
This certificate is issued by the Professional limited liability company by its
duly authorized officers on this the ____ day of _________, 20___.
_________________________ ____________________________
