Scheme Targets New Corporations and Limited Liability Companies: Bogus $59.99 Fee for a Certificate of Good Standing
THE MICHIGAN Department of Licensing and Regulatory Affairs (LARA) Director Steve Arwood issued a warning last week to Michigan corporations about a non-governmental entity trying to collect a $59.99 fee on behalf of the State. The scheme is aimed at business owners who are offered an opportunity to obtain a certificate of good standing.
The misleading compliance solicitation implies that a certificate of good standing is required to comply with state business formation requirements and is designed to look like an official document, but it is not.
“Michigan corporations and limited liability companies are not required by law to receive a certificate of good standing from LARA’s Corporations, Securities & Commercial Licensing Bureau to comply with the State requirements for entity formation,” said Arwood. “Our customers should disregard these deceptive notices as they are not from the State of Michigan.”
Officials said they had received information that indicates new businesses formed in other jurisdictions (such as the state of Arizona) are being targeted with these solicitations once they file their Articles of Incorporation or Organization. These businesses are being sent what appears to be an official government form advising them that there is one more step necessary to comply with state requirements. At this time, there are no confirmed cases of Michigan businesses impacted by this scheme; however, Michigan business owners should continue to be vigilant, according to LARA officials.
“Unfortunately, these misleading mailings offering assistance for non-required services continue to go out and create confusion,” Arwood said. “Michigan businesses are not legally required to obtain a Certificate of Good Standing to comply with State law.”
The phony letters can look authentic. They may be addressed to the corporation or limited liability company, the resident agent, director or officers; cite a Michigan statute or a federal statute; and may appear to be issued by the Corporations Division. If such notices are received, they should be disregarded because they are neither issued by LARA nor any governmental agency.
Michigan business owners who need of a certificate of good standing, should contact Michigan’s Corporations Division directly at (517) 241-6470, Monday-Friday from 8 a.m. – 5 p.m. Requests for certificates of good standing may also be faxed to (517) 241-0538. The cost for a certificate of good standing (Corporation and Limited Liability Company) is only $10.00.
LARA officials are asking that any Michigan corporation or limited liability company that receives a notice that they need to obtain a certificate of good standing and pay a fee to avoid noncompliance with State laws do the following:
- Keep the notice, mailing envelope, and return envelope.
- Contact the United States Postal Inspections Service to report mail fraud at: (877) 876-2455, or contact the Michigan Office of the Attorney General at P.O. Box 30212, Lansing, MI 48909.
- Legitimate notices and mailings to Michigan corporations and limited liability companies are issued from the Corporations Division and are mailed to the resident agent at the registered office address on record. When receiving any official-looking document, please review carefully and read the small print. Business owners who have questions are encouraged to contact the Corporations Division at (517) 241-6470.
Business owners with questions about their corporations, limited liability companies, or limited partnerships are encouraged to use the Business Entity Search at www.michigan.gov/entitysearch.