What is required for a Michigan contractor to form a Professional Limited Liability Company (PLLC)?
Correct Answer
D) Professional license and state registration
A PLLC in Michigan requires both a professional license (contractor license) and proper state registration with the Department of Licensing and Regulatory Affairs.
Why This Is the Correct Answer
A PLLC in Michigan requires both a valid professional license (i.e., a contractor license issued under Act 299) and proper state registration with the Department of Licensing and Regulatory Affairs (LARA). The 'professional' designation specifically ties the business entity to a licensed profession, so both elements are mandatory — neither alone is sufficient.
Why the Other Options Are Wrong
Option A: Only business registration
Merely registering a business does not qualify a company as a PLLC. A standard LLC requires only business registration, but a PLLC is reserved for licensed professionals and mandates proof of licensure in addition to registration.
Option B: Minimum capital investment of $50,000
Michigan law imposes no minimum capital investment requirement of $50,000 (or any fixed dollar amount) to form a PLLC. Capital requirements are not a statutory condition for PLLC formation in Michigan.
Option C: Partnership with existing PLLC
A PLLC can be formed by a solo licensed professional; partnering with an existing PLLC is not required. Michigan statutes do not mandate any pre-existing PLLC affiliation as a condition of formation.
Memory Technique
Think of PLLC as 'Licensed + Registered.' The two legs of the PLLC stool are (1) your professional LICENSE and (2) state REGISTRATION — remove either leg and the stool falls.
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