The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)


STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6845

April 26, 1995

MICHIGAN LIMITED LIABILITY COMPANY ACT:

Limited liability company formed solely to provide the professional service of architecture

A person who is not licensed as an architect may not be a member of a limited liability company formed solely to provide the professional service of architecture.

Honorable Michael J. Bouchard

State Senator

The Capitol

Lansing, Michigan

You have asked if a person who is not licensed as an architect may be a member of a limited liability company formed solely to provide the professional service of architecture.

The goal of statutory construction is to discover and effectuate the intent of the Legislature. This goal may be achieved by examining both the language of a statute and its legislative history, including legislative bill analyses. In re Forfeiture of $5,264, 432 Mich 242, 248-258; 439 NW2d 246 (1989).

Limited liability companies are authorized under the Michigan Limited Liability Company Act (MLLCA), 1993 PA 23, MCL 450.4101 et seq; MSA 21.198(4101) et seq. In section 102 of that statute, the Legislature has provided the following definitions:

(2) As used in this act:

(i) "Limited liability company" or "domestic limited liability company" means an entity that is an unincorporated association having 2 or more members and is formed under this act.

(1) "Member" means a person with an ownership interest in a limited liability company with the rights and obligations specified under this act.

The Legislature provided in section 201 of the MLLCA that:

A limited liability company may be formed under this act for any lawful purpose for which a domestic corporation or a domestic partnership could be formed, except as otherwise provided in article 9 or other law.

Section 202(1) of the MLLCA states:

(1) Two or more of the persons who will be members may form a limited liability company by filing executed articles of organization.

Article 9, section 901 of the MLLCA provides:

(1) A limited liability company may be formed under this act for the purpose of rendering 1 or more professional services, as defined in section 902.

(2) A limited liability company formed for the purpose of rendering professional services, and its members and managers, are subject to the provisions of this article in addition to the other provisions of This act, and the provisions of this article shall take precedence over any other provision of this act in the event of conflict. [Emphasis added.]

Section 902 of the MLLCA defines licensed person and professional service as follows:

(a) "Licensed person" means an individual who is licensed or otherwise legally authorized to practice a professional service by a court, department, board, commission, or an agency of this state or another jurisdiction, any corporation all of whose shareholders are licensed persons, or any limited liability company all of whose members and managers are licensed persons.

(b) "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 authorization. Professional service includes, but is not limited to, services rendered by certified or other public accountants, chiropractors, dentists, optometrists, veterinarians, osteopaths, physicians and surgeons, doctors of medicine, doctors of dentistry, podiatrists, chiropodists, architects, professional engineers, land surveyors, and attorneys-at-law.

Based upon these statutory definitions and the language set forth in section 901(2), if a limited liability company is formed for the purpose of rendering professional services for which a license is required, the company and its members and managers are subject to the provisions of Article 9 in addition to the other provisions of the MLLCA.

Section 904, as part of Article 9 of the MLLCA provides, in part, as follows:

(1) Except as otherwise provided in subsection (2) or otherwise prohibited by law, a professional limited liability company may render 1 or more professional services, and each member and manager must be a licensed person in 1 or more of the professional services rendered by the company. [Emphasis added.]

This language requires that each member and manager be a licensed person, as defined in section 902 (a), if the limited liability company is formed for the purpose of providing professional services, including services provided by an architect.

This conclusion is supported by the legislative analysis done on the bill that became the MLLCA. Specifically, this analysis said:

As for professional services, there is no valid reason to deny limited liability companies from offering these as all members of an LLC [limited liability company] would have to be qualified to provide the particular professional service in question.

House Legislative Analysis, HB 4023, May 26, 1993.

It should be noted that architects are licensed under the Occupational Code, 1980 PA 299, MCL 339.101 et seq; MSA 18.425(101) et seq. Section 2010(l) of that statute states:

(1) A firm may engage in the practice of architecture, professional engineering, or professional surveying in this state, if not less than 2/3 of the principals of the firm are licensees.

Firm is defined in section 2001(b) of the Occupational Code to mean "a sole proprietorship, partnership, or corporation through which a person licensed under this article offers or provides a service to the public." Based upon this language, two licensed architects and one non-licensed individual could form a partnership, or corporation to provide professional architectural services to the public. A limited liability company, under the definition set forth in section 102 of the MLLCA, is an unincorporated association rather than a partnership or corporation; thus, the language found in section 2010 of the Occupational Code precludes non-licensed individuals from being members of a limited liability company. As a result, there is no conflict in the language found in section 2010 and the language found in the MLLCA previously cited.

OAG, 1967-1968, No 4627, p 264 (June 26, 1968), addressed whether architects, subsequent to the effective date of the Professional Service Corporation Act, 1962 PA 192, MCL 450.221 et seq; MSA 21.315(1) et seq, could continue to incorporate under the general corporation act, 1931 PA 327. Under the Professional Service Corporation Act, all shareholders must be licensed to render the professional service offered by the corporation. That opinion stated, at p 266:

There is no requirement in the professional service corporation act that all professional service corporations be incorporated under that act to the exclusion of the general corporation act, and therefore architects, engineers and land surveyors continue to have the privilege of incorporating under the general corporation act or the professional service corporation act.

Thus, licensed architects and non-licensed individuals may both be members of a corporation formed under 1972 PA 284, the Business Corporation Act, MCL 450.1101 et seq; MSA 21.200(101) et seq, which repealed and replaced 1931 PA 327.

The Professional Service Corporation Act does not require all professional service corporations to be incorporated under that statute. Architects and non-licensed persons may both be members of a corporation formed under the Business Corporation Act. However, section 901 of the MLLCA has specific language that any professional services limited liability company must comply with the provisions of Article 9. Section 904(1) of Article 9 of the MLLCA expressly requires that all members of a professional limited liability company be licensed to perform one or more of the professional services rendered by the company.

It is my opinion, therefore, that a person who is not licensed as an architect may not be a member of a limited liability company formed solely to provide the professional service of architecture.

Frank J. Kelley

Attorney General