Michigan LLC
How To Start an LLC in Michigan
Many Michigan business owners choose to form LLCs because of the tax advantages. LLCs have the limited liability of a corporation with the flexibility of a partnership. Owners who want to start an LLC should follow a step-by-step process to ensure their paperwork goes through. Here is everything you need to know about starting an LLC in Michigan.
Step 1
Select a Name for Your LLC
Are you starting an LLC in Michigan? All Michigan LLCs must contain the words “Limited Liability Company” or the acronym LLC. Your name must be distinct from the businesses already registered with the Michigan Department of Licensing and Regulatory Affairs. The state of Michigan maintains a database that allows you to search for the uniqueness of your LLC’s name. You can reserve a name before filing your formation paperwork by submitting an application to the state. The filing fee is $25. You can mail the application or submit it online.
Some LLCs choose to conduct business under an assumed name. An assumed name is also referred to as a fictitious name or a DBA. You must file a Certificate of Assumed Name with the Michigan Department of Licensing and Regulatory Affairs if you want to use a DBA. The registration fee is $25. You must renew your paperwork every five years.
Step 2
Designate a Registered Agent
Every LLC in Michigan must have a registered agent to legally conduct business. A registered agent is an entity or person that agrees to accept legal paperwork on behalf of the LLC. A Michigan agent must be a Michigan resident or a business registered to do business in the state. Some foreign corporations can act as registered agents, but the agent must have a physical street address in Michigan. A P.O. box does not qualify.
Step 3
Submit Articles of Organization
All Michigan LLCs must submit articles of organization with the Michigan Department of Licensing and Regulatory Affairs. You can use the template on the state’s website, or you can use your own template. Your articles should include the following information:
- The name of your Michigan LLC
- The purpose of your LLC
- The products or services your LLC offers
- The name and address of your registered agent
- The effective date of your articles of organization
- Signature and contact information of the LLC’s owner
You can file your articles of organization online or by mail. The filing fee is $50. Expedited options are available for an additional fee.
Step 4
Create an Operating Agreement
Michigan does not require LLC owners to submit operating agreements with their formation documents. However, you should create an operating agreement for your own records. An operating agreement establishes the ownership of your LLC and how it functions on a day-to-day basis. Michigan state law dictates how your LLC runs if you do not create an operating agreement. Creating a legalized document can also help establish your LLC as a separate business entity.
Step 5
Obtain an EIN
Are you wondering how to get an LLC in Michigan and how to get an EIN? You must get an employer identification number from the IRS if your LLC has more than one member. If your LLC only has one member, you must get an EIN only if you plan to hire workers. You also need an EIN if you elect to have it taxed as a corporation. You can get an EIN by submitting an online application on the IRS website. There is no filing fee.
Step 6
Obtain a Business License
Your LLC may need a business license to conduct certain activities. For local licenses, check with the clerk for the town in which your business has an office. Certain professions require a specialized professional license to legally conduct business in Michigan. If you are a lawyer, accountant, medical professional, or architect, you may need to have a license. You should check with your profession’s regulatory board for more information.
Businesses that have workers or sell taxable goods or services need to register with the Michigan Department of Treasury. You can register with it online or by mail. You should file annual tax returns to account for the business tax collected. You may want to consult with an attorney who specializes in business law to make sure you are in compliance with all tax regulations.
Step 7
File Annual Statements
All LLCs conducting business in the state of Michigan must file an annual report by February 15. The report must go to the Department of Licensing and Regulatory Affairs. However, LLCs organized after September 30 on any given year do not need to file a report the next February 15. A template statement goes out to the address on file at the end of each calendar year. You can file the report online or by mail. The fee is $25.
You must file all annual reports and fees by the deadline, or you may get a late fee. Your LLC is also subject to cancellation if you do not follow the requirements by the deadlines.
Frequently Asked Questions About Starting an LLC in Michigan
Are you wondering how to get an LLC in Michigan? If you are like most people, you have questions about the LLC formation process. Here are some answers to frequently asked questions about LLCs in Michigan.
An LLC is a good option if you are a sole proprietor or if you want to limit your tax liability. LLC owners do not have any personal liability for business debts and lawsuits. Thus, owners have a lot of protection. LLCs also offer flexibility when it comes to taxation, management, and ownership rights. An LLC is a good option for new owners starting a small business in Michigan. However, there are certain circumstances when it may be better to start a corporation or another business entity. You should consult with an attorney if your company structure is complex or you have multiple owners.
There is a fee to form an LLC in the state of Michigan. Filing yourself is the most economical option, but completing all of the forms by yourself can become a burden. You may wish to have a lawyer assist you with the paperwork. Hiring an attorney will increase your upfront costs but ensure the process is completed correctly. The Michigan Department of Regulatory Affairs charged $50 to file your articles of organization. There is a $100 fee for expedited filing. There is also a fee of $25 to reserve your LLC name before submitting your articles.
Michigan does not require LLC owners to submit an operating agreement. However, most business experts recommend having one. An operating agreement can help protect your limited liability status. It is also crucial to establish the ownership and day-to-day functions of your business. If you choose not to create this document, your LLC will be subject to Michigan law.
Michigan allows the formation of single-member LLCs. In fact, the majority of LLCs only have one member. Further, single-member LLCs are the same as multi-member LLCs for tax purposes.
All LLCs in Michigan must have a unique name. Your name must be distinguishable from all other businesses registered with the Michigan Department of Regulatory Affairs. The Department offers a tool that allows you to check the uniqueness of your name. You can even reserve the name for a $25 fee while you fill out your formation paperwork.
An LLC can be member-managed or manager-managed. In an LLC that is member-managed, the owners have control over company decisions. The owners have the ability to elect new members, make hiring decisions, and introduce new products or services. This choice impacts the day-to-day operations of your business and is an important business decision.
In a manager-managed LLC, the owners select a manager to handle the day-to-day business decisions of the business. However, members still have the authority to handle some business, such as terminating business operations.
Are you wondering how to get an LLC in Michigan that is managed properly? A manager-managed is a good choice if you have members who do not want to participate in the day-to-day operations of the business. However, a manager-managed LLC may be a good option if you want to streamline business operations.
LLCs formed in another state must register with the Michigan Department of Licensing and Regulatory Affairs. LLCs must appoint a registered agent with an address in Michigan and pay a filing fee of $50. To register, you need to submit an Application for Certificate of Authority to Transact Business in Michigan. You should file the form as soon as you know you want to conduct business in Michigan. Your application should include a Certificate of Good Standing from your company’s home state.
There are times when an LLC may want to dissolve business operations. When you want to close your LLCs, you must dissolve your LLC to limit your liability for lawsuits and other fees. You may want to consult with an attorney experienced in business law to help you properly cease operations and dissolve your business.
All Michigan LLCs must designate a registered agent. Any person or entity can serve as an agent as long as certain circumstances are met. A member or manager can serve as your LLC’s agent as long as they are over 18 and have a physical address in Michigan.
Where To Get Help With Filing Your LLC Michigan Documents
At GovDocFiling, we make it our mission to help people begin a business and grow it to its full potential. We work to simplify the process of starting an LLC in Michigan, so you can get on with the business of your business. File your articles for free with our partners at Inc Authority, you only pay required state fees.