Are you here to learn how to start an LLC in Michigan? It’s one of the best states to live in and there are other LLC owners that you’ll be able to network with. It’s the home of the Michigan Wolverines out of Ann Arbor and they are one of the states that will never run out of fresh water with all the Great Lakes around them.
Below you’ll find the best guide on how to start an LLC in Michigan. Make sure to take a look at all the services to help you setup a Michigan LLC, help with an operating agreement, your articles of organization and make sure you’re finding a registered agent service too.
So – let’s get started and make sure we have everything we need to setup a successful Michigan LLC.
Pick your Michigan LLC Business Name
The first thing you need to do when starting your LLC is to pick a name. You can’t have the same name as another business so make sure you’re doing a quick search on the state website.
We recommend picking a name that’s related to what your business does. For example, if you’re an LLC that provides bookkeeping services in Michigan, you could use the word “bookkeeping” or “accounting” in your LLC name. Get Registered with the State of Michigan. Once you have a name picked out, it’s time to get registered with the state.
This is done by filing your articles of organization with the state. The form is pretty straight-forward and you’ll just need to provide some basic information about your LLC. We’ve provided the form below for your convenience.
You can either mail in the form or hand-deliver it to the state office. The filing fee is $50 and it’s payable by check or money order. Some states like California are going to have a much higher cost but Michigan makes it easy to get a business name, setup your business structure whether it’s for a sole proprietorship or a Michigan LLC.
Picking your name is extremely important. Some organizations use their name for their actual business, meaning if I run a retail shop, I’m going to use that business entity name as the Michigan LLC name. Rather than doing that, you could setup a holding company or adding additional words to it in order to have a unique name. We’ve used Andrew C McGuire LLC as the business name that’s associated to this website. You could also add a word like ‘Venture’ or ‘Partners’, etc. By doing this, you can associate your business bank account, operating agreement, registered agent services and make sure your other LLC members are in line with your thinking about the name you want to use.
Michigan law doesn’t state that you need to have any specific type of naming convention when you’re checking whether this will work for you as you’re setting up a professional service or more of an individual or business entity. It’s really up to you to choose the business name that makes the most sense for the type of business you’re looking to start.
Assign a resident agent
All Michigan LLCs must also have registered agents known in Michigan by the acronym resident agents. This word is interchangeable between us. The position has the responsibility for preparing reports for Michigan’s licensing and regulation agencies, and receiving official tax correspondence from individuals in the state of Minnesota. This is an appointment that you can fill as a company manager or a registered agent. The Michigan Registered Agent must reside and be residing with an address within Michigan and must be present during business hours.
The LLC will list the name and address of the resident agent on all public documents.
Michigan requires that LLCs have a designated individual or business entity to serve as its registered agent in the state. The registered agent is responsible for receiving important legal documents on behalf of the LLC, such as service of process (e.g., summons and complaints), tax correspondence, and annual report reminders.
The registered agent must have a physical address in Michigan and be available during normal business hours to accept service of process and other legal documents. P.O. Boxes are not allowed.
You can act as your own registered agent, but we generally don’t recommend it because it can be inconvenient (you’ll have to be available during normal business hours to accept service of process and other legal documents) and it could expose your home address to the public.
If you decide to use a third-party registered agent service, make sure to do your research to find a reputable one with a good track record. You’ll see in the sidebar that we recommend Tailor Brands for an LLC formation and they will also provide small businesses additional services which included a resident agent service. If you’re a business owner that is going to be having business expenses or setting up a business credit card, it will be important to have this organized and tracked for any business debts you’ll incur.
The last thing you need is for your Michigan LLC to think you’re running a fictitious business or that you are your own resident agent.
File Michigan Articles of Organization
To set up an LLC you will need to file a Michigan LLC Statute with LARAC. Registration costs are $50. There will be only one fee for creating an LLC. Filing Methods: Documents may be filed on line or by mail. We’ve provided step-by-step instructions here: Michigan Chapter Organizational Guide. Our online filing system will help you get approval faster. The system has a name of Corporation Online Filing System.
After logging in, click on the LLC button. You will be able to select the Articles of Organization and fill out an online form which will generate your filing documents.
You will receive an email with instructions on how to file your Articles of Organization after your payment has been processed.
Payment may be made by credit card or check so make sure you’re using your business bank account when you’re filling this out.
The Michigan business licenses will be associated to this too so as you’re following the right process and guidelines for this, please make sure you’re keeping track of it all for your LLC formation process.
Create your LLC Operating Agreement
In Michigan, LLC operating agreements are a written contract in which the owner of the LLC decides what shares are owned. A Michigan LLC operating agreement is one of the most important pieces of this process.
Whether you’re going to have a multi member LLC, professional LLC, foreign LLC or a single member LLC the operating agreement will power how you move forward with building your business.
LLC Operating agreements can help prove your company was effectively operated by an independent legal entity based in Michigan. No state or federal agency can accept business plan from Michigan LLC. This is also non-notarial. Keep copies of the documents of the LLC for your employees. Your operation agreements are flexible.
You can change them as your LLC grows and business changes.
You will need to have a meeting of the Board of Directors, which is composed of the managers of the LLC, to discuss and vote on certain important topics related to the business.
Some items that may be included in an operating agreement are:
- The name and address of the LLC
- The names and addresses of the members
- The business purpose of the LLC
- The management structure of the LLC
- The voting rights of the members
- The profit sharing arrangement among the members
- The procedures for amending the operating agreement
It’s important to have this meeting and put these key items in writing so that everyone is on the same page and knows what to expect moving forward.
Get an EIN for your Michigan LLC
The following steps require the filing of an EIN Number (Federal Employer Identification Number) with your LLC.
You should wait until your LLC is approved before submitting your EIN application. If the state rejects your company, you must obtain a new EIN (or cancel an older EIN).
It’s free to obtain the Federal tax identity number. The internal revenue service (IRS) issues federal income tax ID numbers at no cost to you. Currently US citizens are able to use their EIN to obtain their tax ID number online by using a mobile app.
You can use these steps for the application of EIN online:
- Visit the IRS website and click on “Apply for an EIN Online.”
- Scroll down to the “New Users” section and click on the “Start Here” link.
- Enter your email address twice and create a password.
- Click on the “Submit” button.
- You will be taken to the “Online EIN Assistant” page.
- Enter your business information and click on the “Submit” button.
- You will be given your EIN immediately. Print out or save this page for your records.
How much does it cost to become an LLC in Michigan?
The costs of forming an LLC online are $50.00. This fee is payable when filing an LLC’s articles of organization. Please download our free Michigan LLC form guide.
In it, you will find links to the forms and filing instructions for both the state of Michigan and the IRS.
To form an LLC offline, you will need to print out the Articles of Organization and file them with the Corporation Division of the Michigan Department of Licensing and Regulatory Affairs. The filing fee for this is also $50.00.
How fast can I get an LLC in Michigan?
In 2 weeks you can create an LLC in Michigan. You can do it via email or via fax and email. Depending on how much faster you need to get your LLC, you may be paid for an immediate process.
How long does it take to process the LLC in Michigan?
It takes the state of Michigan 4-5 weeks to process your LLC.
How do I file taxes for my LLC in Michigan?
There is no corporate income tax in Michigan. The state does, however, have a 6% sales tax. You will need to register for a sales tax permit with the Michigan Department of Treasury. The sales tax license is an important piece as you’re building out your business whether it’s for a retail business, professional services or you’re just looking to run business transactions through your Michigan LLC.
You will also need to file an annual report with the state, which is due on April 15th. The report is $20.00 and is due annually.
You will need to file a federal tax return for your LLC if you have any income from outside of Michigan.
You’ll also need to keep your personal tax return and your Michigan LLC taxes separate.
What are the benefits of an LLC in Michigan?
Benefit from the establishment of Michigan LLC. This system is intended to protect the personal assets you have. Rapid and easy file and management, compliance, rules and administration. Simple tax filing with possible tax advantages. Costs for filing are less than $100.
There are several benefits to forming an LLC in Michigan:
1. Personal asset protection: LLCs help to protect your personal assets from being seized in the event that your business is sued.
2. Easy and fast formation: You can easily form an LLC online or offline in Michigan.
3. Simple tax filing: LLCs are taxed as pass-through entities, which means that the LLC itself is not taxed on its income. Instead, the LLC’s members are taxed on their share of the LLC’s income.
4. Cost-effective: The cost of forming an LLC in Michigan is relatively low, at only $50.00.
5. Flexible management structure: LLCs can be managed by their members or by a group of managers.
6. Potential tax advantages: LLCs may be eligible for certain tax advantages, such as the pass-through taxation mentioned above.
7. Perpetual existence: LLCs in Michigan have perpetual existence, meaning they will continue to exist even if a member dies or leaves the LLC.
8. Limited liability: Members of an LLC are not personally liable for the debts and liabilities of the LLC.
9. Brand protection: An LLC can help to protect your business’s brand by creating a legal barrier between your personal assets and your business assets.
10. Professionalism: Forming an LLC can give your business a more professional image.
There are many benefits to forming an LLC in Michigan. One of the main benefits is the personal asset protection that it offers. If your business is sued, your personal assets will not be at risk. Additionally, LLCs are easy and fast to form, and they have a simple tax filing structure. LLCs also offer the potential for tax advantages and perpetual existence. Finally, members of an LLC have limited liability, meaning they are not personally responsible for the debts and liabilities of the business.
What do I need to report to the Internal Revenue Service for Federal Income Taxes?
LLCs are not required to file their own taxes with the IRS. The LLC will, however, need to provide a statement to the IRS that it is an LLC for tax purposes. The LLC will also need to file an annual information return with the IRS (Form 1065). This return is used to report the LLC’s income and expenses.
What licensing and regulatory affairs do I need to worry about for my Michigan LLC?
If your LLC will be engaged in any type of business activity, you will need to obtain the proper licenses and permits from the state of Michigan. These licenses and permits can vary depending on the type of business you will be engaged in. If you’re going to be setting up a Michigan Limited Liability Company, you’ll have very similar requirements to make sure you’ve got the right business licenses, LLC operating agreement and if you have more than one member in your Michigan LLC, all of this will be extremely important.
You may also need to obtain a local business license from the city or county in which your LLC will be located. You’ll need to collect sales tax and keep your business finances separate as you’re working through the right configuration of your Michigan LLC.