Michigan — Collection Agency (Sole Proprietor Or Partnership) Bond
Use this Michigan option when the collection agency applicant is a sole proprietor or partnership. LARA's guide lists $5,000 for the first year of collection operations, with later security based on reported average monthly business. Agencies performing repossessions have a $10,000 minimum under the published rules, so confirm the activity and required amount before ordering.
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- Recorded state
- Michigan
- Bond type
- Collection Agency Bond
- Category
- Financial services
What this bond does
Michigan requires security for faithful accounting of money collected on accounts entrusted to the agency. Section 339.907 protects people harmed by wrongful taking of that money or failure to report or remit collection proceeds.
- Who needs it
- Sole proprietors and partnerships applying for or maintaining a Michigan collection agency license. Identify the legal principal, licensed office and whether the agency also repossesses property. The owner-managed licensing category concerns management; it does not mean every applicant is a sole proprietorship.
- Who it protects
- A person injured by the specified taking, reporting or remittance failure may sue on the bond. Aggregate liability to all injured people cannot exceed its amount. The statutory condition concerns entrusted collection money; it should not be described as insurance against every alleged collection-practice violation.
Your bond option
This is the option on record for this bond.
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The bond amount describes the limit of the bond obligation, not the price. A listed amount does not establish what the requesting party requires. The premium is what you pay and must be confirmed for the actual option. An E&O limit, where listed, is separate errors and omissions insurance.
Sources
- Michigan Compiled Laws 339.907 — collection agency bonds (opens in a new tab)Checked October 27, 2026
- Michigan collection agency general rules (opens in a new tab)Checked October 27, 2026
- Michigan LARA owner-managed collection agency guide, January 2026 (opens in a new tab)Checked October 27, 2026
Have these ready
- Identify the sole proprietor or partnership and the office covered by the licensing request.
- Disclose collection and repossession activities and bring LARA's required security amount.
- For renewal, have the annual business report and supporting client-fund and repossession figures.
- Confirm the accepted form, execution, delivery and replacement effective date before any existing bond ends.
Questions about this bond
Does every new agency use $5,000?
LARA's guide gives $5,000 for initial collection operations. The published rules require at least $10,000 for repossession agencies and agencies also performing repossessions. Confirm the activity and Department-required amount for your application.
Does owner managed mean sole proprietor?
No. LARA's owner-managed guide also addresses partners and corporate officers. Match the provider option to the actual legal principal, and handle the management qualifications separately.
When does the one-year bond-action period start?
Section 339.907 measures it from the effective date of bond cancellation. It is not a promise of a one-year term or a deadline measured from every underlying collection act.