How to Start an LLC in Michigan: If you’re interested in setting up an LLC in Michigan, you’ve come to the right place. Having an LLC not only protects your personal assets but also is less complicated than other business structures. Michigan laws make it easy to establish your LLC in Michigan. On this page, You’ll find all the steps that must be taken to ensure that your Michigan LLC has been correctly established. We recommend you read the whole article very carefully word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Michigan
- After Starting Your Michigan LLC
- Michigan Foreign LLC
- Michigan LLC Formation Review
How to Start an LLC in Michigan
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection.
If you wish to start an LLC in Michigan, mainly you have to file your Certificate of Formation with the State and pay a filing fee of $50. There are some more steps to follow to get your LLC established in Michigan. The following steps explain everything you need to create your LLC in Michigan in 2022. Let’s get started!
Step 1: Decide a Name for Your Michigan LLC
The very first step while forming an LLC in Michigan is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
Michigan LLC Naming Guidelines
There are a few specific requirements all the LLCs in Michigan have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in Michigan can have the same name. Perform a name search from the below-mentioned source to be sure your name isn’t taken already.
- “Limited Liability Company”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Michigan State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Submit Offline Form to –|
|Michigan Business Entity Search – Online Search|
Name Reservation Form – PDF
Name Availability Standards – Guidelines
Michigan LLC Name Search – Instructions
|Michigan Department of Licensing and Regulatory Affairs|
Corporations, Securities & Commercial Licensing Bureau
P.O. Box 30054
Lansing, MI 48909.
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided then you can reserve your LLC name for 6 months. To keep the name, you have to file a name reservation application and pay $25 to reserve your name with the Michigan Secretary of State.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Michigan Secretary of State by submitting an Application to Register Assumed Name in Michigan along with the filing fee of $10.
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Tailor Brands offer DIY website templates and incredible logo designs. If you plan to get a website then it is wise to have a “.com” domain for your business but these days you can also use other TLDs like “.company”, “.xyz” etc. With Tailor Brands, you can get everything you need at an affordable price.
It is not legally mandatory to use the word LLC in your domain name or email. If you want you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Michigan
The second step to forming a Michigan LLC is to appoint a Registered Agent. A registered agent is a person or business entity that will act or work on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Michigan. Hence, hiring a competent Michigan Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Michigan or has a physical street address. Their business address or the principal address should be in Michigan. Most LLC formation companies also provide registered agent services. Below are two great LLC setup services, even if you buy their cheapest plan (normally $49/year) you also get registered agent service and other services at a reasonable price.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Michigan. Some LLC formation services offer standalone Michigan registered agent services. You can purchase only Registered Agent services from them without purchasing any other LLC formation services.
A person who is above 18 years of age and has a physical address in the state of Michigan can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One who is responsible for handling all the legal documents.
Yes, you can be your own registered agent if you are a resident of the state of Michigan and you are above 18 years of age. To become a registered agent you must have the authority to conduct any type of business in Michigan.
Registered Agent Consent Application
In Michigan, there is no separate Consent Letter to be produced to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. The filing fee of $5 should be paid for it. For more information on the same, read our guide on Michigan Registered Agent.
Step 3: File Articles of Organization in Michigan
The third and most important step in forming a Michigan LLC is to file the Certificate of Formation. This Michigan Articles of Organization is a legal document needed to officially register your business with the Secretary of State. It costs $50 (by mail and online) to file your formation certificate in Michigan. (Read more on LLC cost in Michigan).
The Certificate of Formation includes details like the name of the LLC, registered agent’s name, address, employees’ details, and structure of the company (member-managed or manager-managed). Before hiring employees in Michigan LLC, one should know about the rules and regulations thoroughly. Also if you are expanding your existing business (an LLC) to Michigan then you need to register as a Michigan Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the online service page. You do not need any log-in or account to start filing your LLC online. You can directly start filing your LLC by clicking on the “Online Filing” button below. Read more about the Michigan Articles of Organization for online registration.
How to File by Mail
If you prefer filing real-life forms for your Michigan LLC registration, then you can download Domestic LLC Formation Form. Read the form thoroughly, fill it out, and mail it to the following address,
Michigan Department of Licensing and Regulatory Affairs
Corporations, Securities & Commercial Licensing Bureau — Corporations Division
P.O. Box 30054
Lansing, MI 48909
In-person Drop-off: Michigan Department of Licensing and Regulatory Affairs
2501 Woodlake Cir.
Okemos, MI 48864
Processing Time: It takes 24 hours to get a Michigan LLC if you file it online. For the mail filing, it takes 3 to 5 business days to get an LLC. By paying an additional fee, it can be expedited.
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Tailor Brands – ($49 + State Fees) Online LLC Setup
Step 4: Create Your Michigan LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a Michigan LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation. Like Michigan, there are other states that do not have a mandatory rule to file operating agreements. But, this document would be useful if you decide to dissolve Michigan LLC later. Hence, having an operating agreement may not be necessary but it is definitely ideal.
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Step 5: Filing a Michigan LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Michigan LLC requires following specific rules and regulations. On the other side, EIN for Michigan foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally complete the form and send it to the address given. You can also get an EIN Assistant who can help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
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Tailor Brands – ($49 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulation, you are now done with all the necessary steps to form your Michigan LLC. If you do it yourself it should take you a long time to properly understand and do all the steps.
However, if you use TailorBrands it should take fewer hours and you always have live chat with expert support for any help you need.
After Starting Your Michigan LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Michigan business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- File a Michigan LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Cost of Michigan LLC
Forming an LLC in Michigan is no doubt more cost-effective than other structures of a business. There are some fees and charges one has to bear to form a Michigan LLC. LLCs have pass-through taxation. Hence, your Michigan LLC won’t bring you a massive tax burden. Here are some of the fees and taxes are needed to be paid while forming an LLC in Michigan,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee||$25|
|Articles of Organization Fee||$50|
|LLC Annual Fee||$25|
In Michigan, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can submit a name reservation form to get it done. Your LLC name will be reserved for 6 months without registering your LLC. It can be done by paying $25.
In Michigan, an Annual Report has to be produced every year. It costs $25. Also, the State of Michigan requires to pay a Sales Tax of 6% to the State government. Read our guide on LLC costs in Michigan for more information.
Michigan Foreign LLC
If you are interested in forming a Foreign LLC in Michigan then you need to file the Certificate of Foreign LLC to the Michigan Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Michigan SOS to form your foreign LLC in Michigan. To know more in detail, check out our guide on Michigan Foreign LLC.
Reasons to Start an LLC in Michigan
Michigan, which is ranked 10th in the country for providing a business environment to start-ups, has become a choice of many businesses. Having an LLC in Michigan is cost-effective because of tax benefits. Other than the filing fee, there are not many annual costs to be paid. LLCs have to pay a few federal taxes. Read more on Michigan’s classification of LLC tax.
Along with a reduction in tax liabilities, there is a business funding option available in the state, especially for the woman-owned business. Having any type of business in Michigan brings potential customers. Some of the best ones are discussed below.
Michigan Development Corporation Renaissance Zone
The Michigan government has started this program. Under this program, the government will decide and give recognition to the eligible next Michigan Business. Also, the program allows businesses to receive tax exemptions for a period of 10 years. The taxes that fall under this list of exemptions are:-
- Personal property tax which individual member of an LLC has to pay
- Utility user taxes are charged by the residents of the state.
- Taxes that are charged on real property.
There is no way that an LLC in Michigan gets dissolved due to a certain event of the member’s life. According to the Michigan state law, an LLC can be dissolved in only three situations:-
- If the state judge has given an order to dissolve the LLC due to misconduct of activities.
- If all the voting members of the LLC are ready to dissolve and vote for the motion unanimously.
- If the event occurred is specified in the bylaws, it will lead to the dissolution of the LLC.
Any other event than above mentioned three will not lead to the dissolution of an LLC.
Duration of the LLC with partnership rules
In the states, when a firm wants to ensure that the business they have started should stay for a longer period of time, then they are considered to be taxed as a corporation. But in the case of Michigan LLC, there is no such issue. The LLC can also remain for an infinite time, also, one can change their partnership business to an LLC for reserving their tax rights. The whole process will be tax-free, and the transfer of all the assets will be done by filling out a simple transfer form.
Freedom of contract
According to the LLC laws in Michigan, the member has the complete right to adopt their cash flow and withdraw their name from the LLC if they notice that any further management decision can cause loss. In the same way, any person can join the LLC without making any financial contribution.
Businesses Contributing to Michigan’s Economy
Many businesses are established and running successfully in the state of Michigan. But not every business is a part of the top industries of the state. Knowing Michigan’s leading sectors is very important for new entrepreneurs when forming an LLC in Michigan.
Michigan produces more than 19% of the total automobile generated by the state. The total contribution of the automobile industry to the state GDP is $188 billion. Out of this value, $134 billion comes directly, and $53 billion comes from the contribution through indirect automobile production purposes like its transport. The reason behind such an enormous contribution is the talented labor pool that is present in the state.
The agriculture sector has a whooping contribution of around $104.7 billion in a year to the state and provides 17% of the total jobs in the state. The state is very well known for producing Christmas trees by contributing 1.55 million fresh trees every year.
The tourism sector is the largest tax-paying sector of Michigan, giving around $3.6 billion to direct tax to the state. The total contribution of this sector to the GDP of the state is $22.4 billion. The tourism sector mainly comprises summer activities and hunting and skiing and skating in the winter season.
The state is ranked 5th among the states of the USA in terms of advanced manufacturing. The significant insights of the industry are:-
- The state is known for making 37% of total military vehicles.
- The rank of state in terms of aerospace production is 4th nationwide.
- More than 3000 businesses are serving the defense industry by making potent weapons for them.
The contribution of advanced manufacturing to the state GDP is around 19% and is employing 629,000 people approximately.
Some small businesses in the state are mentioned below.
- Online currency trading
- Christmas trees business
- Hunting equipment renting
Michigan LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Michigan. Click on the steps in this list to read the full detail.
- Name your Michigan LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Michigan, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services like NorthWest Registered Agent to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in Michigan. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Michigan but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in Michigan
In case you are filing for Michigan LLC via mail, it may take up to 3-5 business days. If you have filed online, the processing time will be 24 hours. Expedition filing options are also available.
If you plan to start a retail business in Michigan, you will need to register with the state Department of Treasury (DOR). The DOR will require your business to collect sales tax from customers and remit it to the state on a monthly, quarterly, or yearly basis. The DOR also requires you to file articles of organization (also known as LLC articles) with the state. These articles authorize your business to operate in Michigan and must be filed online or by mail. A $50 filing fee must be paid to file your articles. You can also file articles of organization with the state’s Department of Revenue (DOR) if you’re forming a PLLC.
It can take some time to form an LLC in Michigan. If you’re wondering how long it takes, contact a professional service to help you get started. Make sure you have your operating agreement and a copy of your business license in hand before filing. A properly prepared Operating Agreement will make the process go much faster. A properly prepared Operating Agreement will help your business get started and will make it easier to open a bank account in Michigan.
The first thing to do is choose a name for your business. Most states have a list of required LLC names. You can also use an assumed name if you want to avoid being sued by another company. In addition to the name, you need to register an address in the state. You can also register your LLC in Michigan with the State Corporations Board. There are many online resources that will help you register your business.
The time it takes to form an LLC in Michigan depends on a few factors. Some states can take up to ten business days to process articles of organization. In other states, however, the processing time may be as little as three business days. Some times of the year, filing for a limited liability company can take longer than usual. However, heavy filing volume usually occurs at the beginning and end of the year.
After completing all the legal steps, you can submit your articles of organization. These documents are often called articles of organization, and outline the structure of your LLC. They detail your members’ ownership percentages, capital contributions, and how profits and losses will be divided among the members. Although not legally required in Michigan, the articles of organization should be kept as a business record. If you don’t have one, you can still form an LLC in Michigan by following these guidelines.
The filing fee for articles of organization is $50, and you can also submit the forms by mail. However, you must pay an additional $50 for expedited processing. The filing fee depends on how urgent you need your LLC to be. The processing time will vary from 48 to 72 hours depending on whether you file online or by mail. If you file online, your articles of organization will be approved within 24 hours. If you file by mail, however, it will take two weeks before you can start selling products. If you have the time and money, you can be up and running within a few days.
If you are a resident of Michigan, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $50 (domestic LLC) and $50 (foreign LLC), LLC costs in Michigan include $25 for Annual Reports every year. LLCs are liable to pay sales tax of 6% every year.
It takes 24 hours to get a Michigan LLC if you file it online. For the mail filing, it takes 3 to 5 business days to get an LLC. If you hire a professional LLC service, then it might take less than that. We recommend Tailor Brands which has impeccable turnaround time.
Every year all the LLCs have to submit an Annual Report and pay $25 to the Michigan Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Michigan Classification of LLC Tax.
These above-mentioned broad steps are pretty much the essential step instructions for forming an LLC in Michigan. LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start an LLC in Michigan at a bare minimum cost. These business types have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes.