Reading Michigan business entity status for a credit file — active, dissolved, revoked

When you pull a Michigan business entity record, the status field is the first red light or green light you get. An LLC showing “active” versus “dissolved” is not a minor data point. It changes whether you can legally contract with that entity and whether any lien or judgment against it will stick. This post unpacks what Michigan’s actual status values mean in underwriting and why they matter before you submit a credit decision.

Active does not mean “good shape”

An active Michigan entity has not been administratively dissolved and its annual filings are current with the Department of Licensing and Regulatory Affairs (LARA). That is the entire standard. Active means the entity exists and has paid its annual report fee. It does not mean the business is profitable, the owner is honest, the equipment is paid for, or the company has never defaulted on a loan. A trucking LLC can be active and owe a $200,000 settlement judgment. A contractor LLC can be active and have three tax liens filed against it in three different counties. Active is a floor, not a ceiling.

For underwriting, active status means you can serve legal papers on the entity through its registered agent and expect the courts to recognize the business as a valid counterparty. For credit purposes, it is a pass/fail gate. Active = entity is legally in the game. Then you look everywhere else: UCC filings, judgments, tax liens, FMCSA safety record, bank references.

Good standing is not a Michigan term (and does not exist)

Michigan does not use the phrase “good standing.” Some states (Delaware, Florida, Arizona) issue a standing certificate or report that explicitly states an entity is in “good standing.” Michigan does not. You may see “good standing” on a third-party credit report or a bank’s intake form, but it is not a real Michigan status value. Do not assume a company has one just because someone wrote it on a form. Pull the actual Michigan record yourself and read the status field.

The closest Michigan equivalent is “active.” If you need proof an entity is active and in compliance with state filing requirements, run it through the Secretary of State business lookup and screenshot or print the active status. That is your artifact.

Dissolved, revoked, and administratively dissolved mean the entity is gone

If a Michigan entity shows dissolved, revoked, or administratively dissolved, the business cannot execute new contracts and cannot defend itself in court as a legal entity. You cannot take a security interest in a dissolved entity. Any UCC lien you file against it will be against a ghost, and a future creditor or judgment holder will rank ahead of you because they can argue the entity was dead when you advanced funds.

Dissolved usually means the owner filed articles of dissolution with LARA and the entity was formally wound down. Revoked means LARA yanked the registration, typically for failure to file annual reports or pay fees for two or more years. Administratively dissolved is Michigan’s formal term for that penalty.

All three have the same underwriting result: do not lend money to a dissolved or revoked entity. If the customer insists the entity is still operating, demand they file a reinstatement application with LARA, wait for approval, and then re-pull the record. Do not take their word for it.

Delinquent usually means annual report past due

Some Michigan records show a delinquent status. This typically flags that the annual report was not filed on time or the filing fee was not paid by the deadline. LARA will send notices, but the entity is not yet revoked. The owner has a window to file the late report, pay the penalty fee (if LARA assesses one), and restore active status.

From a credit perspective, delinquent is a yellow flag, not a red. It signals the owner may be disorganized or financially strapped. If the entity is delinquent when you are reviewing it, contact the owner and ask when they plan to file the annual report and become active again. If they say “oh, I forgot” or “my accountant is handling it,” check back in two weeks. If they have not filed by then and the clock is running, consider whether you want to wait or whether you want to hold credit until the entity status flips back to active.

When and how Michigan entity status changes

Michigan entity status updates when a specific filing or action occurs. Here are the main triggers:

Active to delinquent or revoked. The annual report deadline is the last day of the month in which the entity was formed or incorporated, every year thereafter. If the report is not filed and the fee is not paid by that date, LARA marks the entity delinquent. After 60 days past due, LARA may administratively dissolve the entity, moving it to revoked status.

Revoked back to active. The owner files a reinstatement application with LARA, pays the back filing fees and any penalties, and LARA approves it. The entity status flips back to active on the same day. This can happen months or years after revocation if the owner decides to restart the business.

Active to dissolved. The owner files articles of dissolution with LARA, usually signaling the decision to wind down the company. The entity moves to dissolved and cannot be reinstated (though a new LLC with the same name can be formed later).

Voluntary dissolution versus administrative. Voluntary dissolution is a choice; administrative dissolution is a penalty. Both result in a dead entity, but voluntary dissolution can sometimes be reversed by filing articles of reinstatement, depending on timing and state law. Check with a Michigan business lawyer if you encounter a voluntarily dissolved entity and the owner claims they want to restart; LARA’s website or a phone call to their licensing division will clarify the specific rules.

How to verify status when you pull the record

When you request a Michigan entity record from the Secretary of State business database, the status field appears prominently. Screengrab it or export it with a date stamp. Do not rely on the business owner’s own printout or a document they claim shows their status; pull it yourself in real time.

If the record shows anything other than active, ask the owner a direct question: “Your entity status is [dissolved / revoked / delinquent]. When do you plan to file a reinstatement, and what is blocking that from happening now?” The answer tells you whether this is a fixable gap (owner procrastinated, accountant missed a deadline, filing is in progress) or a signal of deeper trouble (owner does not care about compliance, owner is insolvent and winding down the business).

Bottom line

Michigan entity status is a yes/no gate for credit. Active means the entity exists and is current with the state; delinquent means an annual report is overdue; dissolved or revoked means the entity is legally dead and you cannot take a security interest in it. These are not shades of the same status; they are different legal positions. Before you approve a credit file for a Michigan business, confirm the status is active on the date you pull the record. Then verify everything else.