Michigan Laws 487.2055 – License fee; investigation fee; financial statements; net worth requirements
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Terms Used In Michigan Laws 487.2055
- Applicant: means a person that has applied to the commissioner to be licensed under this act. See Michigan Laws 487.2052
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Business activity: means any activity regulated by any of the financial licensing acts. See Michigan Laws 487.2052
- Commissioner: means the commissioner of the office of financial and insurance services or an authorized representative of the commissioner. See Michigan Laws 487.2052
- Contract: A legal written agreement that becomes binding when signed.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Licensee: means a person that is licensed under this act. See Michigan Laws 487.2052
- month: means a calendar month; the word "year" a calendar year; and the word "year" alone shall be equivalent to the words "year of our Lord". See Michigan Laws 8.3j
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Person: means an individual, corporation, partnership, association, limited liability company, or any other legal entity. See Michigan Laws 487.2052
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
(1) An application for a license shall be accompanied by all of the following:
(a) An annual operating fee as established by the commissioner under section 11.
(b) An application fee as provided in section 11. The application fee is not refundable.
(c) Financial statements, reasonably satisfactory to the commissioner, showing that the applicant‘s net worth exceeds $100,000.00 for an applicant for a class I license; $50,000.00 for an applicant for a class II license; $1,000,000.00 for an applicant that intends to engage in business activity governed by 1984 PA 379, MCL 493.101 to 493.114; or $100,000.00 plus an additional $25,000.00 for each location or authorized delegate, as applicable, or $1,000,000.00, whichever is less, for an applicant that intends to provide money transmission services as defined in section 2 of the money transmission services act. A licensee shall have and continue to maintain the required net worth while engaging in the business activities authorized for licensing under this act. The commissioner may by order establish a higher net worth requirement for new class I licensees to assure safe and sound operation of the activities.
(2) Net worth under subsection (1)(c) shall be determined at the conclusion of the fiscal year of the licensee immediately preceding the date an application for a license is submitted to the commissioner or, for corporations not in existence as of the previous year end, the immediately preceding month end. Net worth shall be disclosed on a form prescribed by the commissioner or on a form prepared or reviewed by a certified public accountant and shall be computed in accordance with generally accepted accounting principles. The following assets shall be excluded in the computation of net worth:
(a) That portion of an applicant’s assets pledged to secure obligations of any person other than the applicant.
(b) Receivables from officers or, in the case of a corporate applicant other than a publicly traded company, stockholders of the applicant or persons in which the applicant’s officers or stockholders have an interest, except that construction loan receivables secured by mortgages from related companies are not so excluded.
(c) An amount in excess of the lower of the cost or market value of mortgage loans in foreclosure or real property acquired through foreclosure.
(d) An investment shown on the balance sheet in joint ventures, subsidiaries, or affiliates that is greater than the market value of the investment.
(e) Goodwill or value placed on insurance renewals or property management contract renewals or other similar intangible value.
(f) Organization costs.