A contractor forms an LLC in Michigan for construction work. What additional business requirement must be met for licensing?
Correct Answer
D) Designated licensed individual
Michigan requires business entities to designate a licensed individual who meets experience and examination requirements to act for the entity in licensed activities.
Why This Is the Correct Answer
Michigan Act 299 requires that any business entity — including an LLC — applying for a contractor license must designate a qualifying licensed individual. This individual must hold the appropriate license class, meet the experience requirements, and pass the required exams. They are legally responsible for the entity's licensed activities and must remain actively associated with the business.
Why the Other Options Are Wrong
Option A: Registered agent in Michigan
Having a registered agent in Michigan is a corporate/LLC formation requirement under the Michigan Business Corporation Act or LLC Act, but it is not the additional licensing requirement specific to Act 299 contractor licensing. The registered agent handles legal service of process — it does not qualify the entity for contracting work.
Option B: Minimum $50,000 capitalization
Michigan Act 299 does not impose a minimum capitalization requirement of $50,000 or any other specific dollar amount on LLCs seeking contractor licenses. Capitalization rules apply in some industries (like securities) but not Michigan contractor licensing.
Option C: Board of directors
LLCs are managed by members or managers — not boards of directors. Requiring a board of directors is a corporate governance concept that does not apply to LLCs. Michigan contractor licensing imposes no board of directors requirement on an LLC.
Memory Technique
The LLC needs a 'license holder inside' — the designated licensed individual is the human face behind the entity's license. Without that person, the LLC cannot legally perform licensed contracting work regardless of its formation status.
More Michigan Questions
A Michigan contractor forms an S-Corporation. What is the maximum number of shareholders allowed?
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What is the minimum general liability insurance coverage amount required for Michigan residential builders?
Under Michigan Act 299, what is the consequence for a contractor who performs work outside the scope of their license classification?
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Under Michigan Act 299, what happens if a contractor continues to work without a valid license after it expires?
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A Michigan contractor is forming an LLC. What is the minimum general liability insurance coverage required for residential builders under Michigan law?
Under Michigan Act 299, a contractor's license must be renewed every:
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