If you are in business, there are plenty of good reasons to set up a corporation or a limited liability company. High on that list is the ability to prevent a competitor from stealing your business name. So long as your corporation or limited liability company (LLC) is “in good standing” with the state, no other Michigan company can take your name.
In Michigan, a company stays in good standing by annually filing a statement or report with the Department of Licensing and Regulatory Affairs. The filing is simple, and the filing fee is modest. Still, submitting these annual filings seems to be a challenge for many folks. I just acquired a client who wisely set up an LLC when he started his business, but he did it without the assistance of an attorney. As a result, he was not aware of the need to file annual statements, and his company quickly fell out of good standing.
My client’s LLC remained out of good standing for only a few months, but during that time a competitor formed an LLC with the same name as my client’s – and there was nothing my client could do about it. (My client had not trademarked his company name, so he could not rely on trademark protection.)
Neither party has been willing to change its name, so the two unrelated LLCs continue to operate in roughly the same market. Their peaceful coexistence will hopefully continue, but my client runs the risk of real harm to his business reputation if his competitor’s reputation becomes damaged in any way.
If you need help with your annual filings or simply want to ensure that no one has taken your company name while you weren’t looking, please give us a call at (248) 477-6300.