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Limited liability corporations, or LLCs, are corporate entities that are based in a particular state. Its design separates personal and corporate funds while providing owners with tax advantages.
It’s not simple to create an LLC, and differing laws from state to state govern how such a company may operate. Everything you need to know about starting a limited liability company in the Great Lakes State of Michigan is included in this article.
>> Start your LLC in Michigan with ZenBusiness easily
What You Need to Know Before You Create an LLC in Michigan
Michigan law requires that anybody wishing to form a limited liability company file Articles of Organization with the state’s Corporations Division.You have three options for submitting your application: online, through conventional mail, or in person. An LLC in Michigan must have Articles of Organization in order to legally exist as a Limited Liability Company.
An approved resident agent must be appointed for your Michigan LLC. A resident agent is also known as a registered agent in certain states.
Prior to submitting an LLC application, there are a few crucial items to take care of. For instance, you need to confirm that the business entity name you selected is available. The basic steps that must be taken before filing your LLC application are described in the following sections.
LLC filing form: Michigan Articles of Organization
Relevant LLC Filing Authority: Michigan Corporations Division
LLC Initial State Filing Fee: $50
LLC Annual Fee: $25
Payable to: MI Dept. of LARA
Annual Forms: Annual Report
Due Date: Annual, February 15th
Michigan Limited Liability Company Act
The Michigan LLC Act of 1993, last updated in 2002, specifies how LLCs are formed and run in Michigan. If you have questions regarding running a limited liability business in Michigan, you should pay close attention to the details of this act.
Cost to Set Up an LLC in Michigan
An LLC in Michigan may be incorporated for $50. Those that need the creation of an LLC quickly may pay an additional fee ranging from $50 to $1,000 to get the process hurried up.
After setting up your LLC, you’ll have to pay annual reports, which range from $25 for a simple LLC to $75 for a more elaborate (professional) one.
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After Forming Your LLC in Michigan
Following the creation of your LLC in Michigan, more steps must be taken to ensure legal compliance.
Annual Report for Limited Liability Companies
According to Michigan law, all LLCs must produce an annual report. A report must be filed each year by February 15; but, new LLCs (domestic or international) formed after September 30 are excluded from submitting a report in the year formed.
Professional limited liability companies (LLCs) are required to have all members and management have licenses appropriate to the services they provide. This should be included in the company’s annual report.
Annual reports for normal LLCs must be filed for a fee of $25. At the same time, an LLC’s professional annual statement costs $75.
Certificate of Good Standing for LLC in Michigan
After forming an LLC, you need to perform a few things to keep it running well, such as
- Submitting a payment and annual report
- Keeping a record of a registered agent in your file
If you require evidence that your limited liability business is in good standing, you may ask for a Certificate of Good Standing. You have the option of purchasing a certificate over the phone, by email, or in the mail for only 10 dollars. If paying by cheque or money order, please make it payable to the State of Michigan. Credit card payments are accepted for online transactions.
Why Hire an LLC Service for your Michigan LLC
You may be able to figure out how to form an LLC in Michigan on your own, but doing so requires knowledge of the specifics of the legal system there. If you skip even one step, your application will be declined, which will delay your ability to do business and cost you extra time and money.
It’s important to note that almost 50% of businesses fail within the first five years of operation. Not meeting legal requirements while forming their business structure is one of the biggest reasons for that.
Professional Michigan LLC services are familiar with all the requirements for each state, so you can file quickly and effectively. As your firm expands, these services may continue to be a valuable source of information and guidance for remaining in compliance with relevant regulations. You and your team can focus on more pressing problems since you and your team won’t have to bother about these administrative matters.
However, not every service for forming an LLC in Michigan is the same. For your filing procedure, we advise selecting one of the best LLC services listed below.
Step 1 – Find a Name for Your Michigan LLC
Giving your company the appropriate name is crucial when you’re prepared to form an LLC in Michigan. It has to be both obvious and memorable since it’s probably going to be the very first thing your prospective consumers see. The same name will be used for marketing, creating company contracts, and even for dealing with legal issues.
Almost any name you choose is acceptable for your company’s name, have fun with it. Recall that clients may forget or not comprehend lengthy or intricate names, which might make it difficult for them to remember or grasp what your company does.
Though being succinct and clear often wins the day, allow your business the time to flourish. If you want to grow your company into a worldwide operation in the future, for example, don’t allow its name to force it to operate just in one location.
The name you choose has to be original, which goes without saying. When you file for an LLC in Michigan, you may be rejected if another business has already registered the name. Make sure your company name doesn’t lead customers astray either. In Michigan, you cannot claim to be a bank or a government agency if your business has no connection to any of those sectors. Only include your professional license if it really applies to you.
Your company structure must be declared to the state when you register your Michigan LLC. Michigan requires any of the following naming standards for limited liability companies:
- LLC
- LC
- L.L.C
- L.C.
- Ltd. Liability Co
- Limited Company
- Limited Liability Company
Check out the LLC name standards provided by the Michigan Department of Licensing and Regulatory Affairs for any extra naming requirements that may be necessary when establishing a limited liability company in the state of Michigan.
Check if the Name is Available in Michigan
Since your company name must be unique in order to form an LLC in Michigan, the Great Lake State offers a list of names that are currently unavailable that you should avoid. Any of the aforementioned Michigan LLC providers may search the database to see if a certain name will work in advance. Don’t wait much longer than necessary before submitting your LLC application in Michigan since it is still feasible for another individual to get the name.
>> Start your Michigan LLC with ZenBusiness easily
Purchase Your Business Domain Name
Keep in mind the extra clients the internet may attract when you choose the name that best fits your company’s personality. Verify if the perfect name is already taken in Michigan, then buy the domain name as well.
By doing this, you can be certain that your company will operate online using the same name, preventing consumer confusion and ensuring a smooth experience. Some of the most affordable domain names for developing your online presence are available at NameCheap.
Step 2 – Get a Michigan Registered Agent
You must choose a registered agent while you work out the specifics of creating an LLC in Michigan. For all governmental and legal issues, your company’s registered agent acts as its official representative. A court order, a notice to complete paperwork, or a request from the Secretary of State of Michigan all fall under this category. A registered agent is required for LLC firms to act as a point of contact.
There aren’t many limitations on who may act as the registered agent for your business. Individuals generally are required to be at least 18 years old, have a name and address in the state of Michigan, and be capable of working during normal business hours in order to qualify.
As long as you satisfy the aforementioned requirements, you may decide to act as your own registered agent, however it’s often not recommended to do so. First, as a registered agent, you’re expected to be accessible at the office throughout all normal working hours. The repercussions for your business might be dire if you fail to make a delivery that has to be made right away.
Additionally, a service may act as the registered agent for your business. The finest organizations have physical locations in each of the 50 states, but they must be authorized to function in Michigan. Among the greatest alternatives at this time are
If you like, these firms may also finish off the Michigan LLC creation procedure entirely for you.
Hiring a reliable registered agent allows you to focus on running your business instead of filling out paperwork. Having your legal matters handled will provide you peace of mind and the freedom to work around your schedule.
>> Start your Michigan LLC with ZenBusiness easily
Step 3 – File the Michigan LLC Articles of Organization
Making the appropriate documentation is the next step in understanding how to register an LLC in Michigan. Whether it’s called a certificate of formation, articles of incorporation, or something else entirely, it will include the documents the government needs to officially recognize your firm.
The Articles of Organization requirements for a Michigan Limited Liability Company are posted on the state’s website and should be reviewed before submitting your application. The form may be filled out digitally or downloaded and printed to be completed offline.
You must have the following details about your company on hand in order to complete the form. Your certificate will probably be turned down by the state of Michigan if any of these pieces of data is missing.
Company Name
When selecting a name for your company, be sure to take into account all the considerations discussed previously in this article. The state of Michigan will reject names that don’t fit its rules.
Business Address
A genuine street address is required in Michigan for your LLC. P.O. boxes and out-of-state addresses are not acceptable.
Registered Agent
At the time of Michigan LLC creation, you must specify the person or company serving as your registered agent. You will also need to validate the actual address of your registered agent with the state.
Company Purpose
In Michigan, an LLC is able to do almost any business as long as it’s legal. The state could require you to specify a certain professional objective, like a shoe store or medical facility.
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Names of Owners
Anyone who is regarded as the proprietor of your company must provide their identities to Michigan. Make sure to include such information in your papers, even if your Michigan LLC just has one member.
Duration of Business
When forming an LLC, Michigan wants to know how long it will last. An LLC may be established with no time restriction or with a specific dissolution date.
Your articles of incorporation are complete when you respond to the questionnaire. Currently, Michigan requires a first filing fee to be turned in with your paperwork. In order to register a limited liability company (LLC) in the state of Michigan, you will first need to submit the Michigan Articles of Organization to the Michigan Corporations Division.
Step 4 – Receive your Michigan LLC Registration Certificate
When you have submitted your articles of incorporation to the state of Michigan, they will analyze the data provided to determine whether or not to approve your application. The procedure typically takes 2 to 6 weeks to complete when forming an LLC in Michigan, depending on the season. However, if there is a problem with the LLC name or any aspect of your form, delays may happen.
Your firm is now legally recognized as a limited liability corporation once you have a certificate of authorized Michigan LLC registration in your possession. From this point forward, you will be able to begin doing businesses in your state but also acquire an EIN so that you may begin paying taxes.
Step 5 – Create a Michigan LLC Operating Agreement
An internal contract called an operating agreement serves as a foundation for your LLC’s operational, legal, and financial components. As a guide for the company’s operations, it establishes the standards that all LLC members must abide by.
Although it is not legally necessary to create an Operating Agreement in Michigan, it is a good idea to do so. By doing this right away after forming your LLC, your company structure is established, and there are less chances for disagreements later on.
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The following details have to be included in your company’s operating agreement as a starting point.
- Basic Company Information: In this section, you should provide the name of your company, your address, and any other names under which you do business. Recording the details of your organization’s mission, the term of your Michigan LLC, and your registered agent is also beneficial. As a general guideline, be sure to note everything that is in your organization’s articles of incorporation.
- Member Information: If you have a group of people working at the highest level, you should keep a record of their names and addresses. You must decide on ownership percentages and each member’s distinct duties since each has a different function. This section is essential for describing how members may join or leave the firm and any consequences they could experience.Additionally, select who is eligible to vote and how much influence each vote has. A member’s contributions of money, property, or services to the LLC should also be noted in the operating agreement.
- Tax Treatment: Regarding taxes and LLCs, there is a lot of freedom. LLCs often do not pay taxes on company revenue since they are considered pass-through businesses under federal law. Instead, the taxes paid by its members are determined by their respective profits. Your operating agreement should include information on your LLC’s tax structure to clear up any confusion.
- Accounting: The beginning and conclusion of your fiscal year, as well as how your business intends to maintain financial records, should be included in accounting-related information. There must be no uncertainty regarding where the money from your growing profits goes inside the company.
- Making Changes: Although the operational agreement is a living document, repeated revisions may lead to confusion and disarray. List the procedure for making modifications and who has the power to do so inside the document itself.
- Dissolution: You may specify the steps to be taken in the event of a dissolution of your LLC, whether it’s voluntary or involuntary. List the conditions for termination as well as what happens to the organization’s resources, donations, and members when that time arrives.
A defined set of principles to follow gives life meaning, direction, and clarity in every aspect. An operational agreement establishes ground rules for your team and ensures everyone is on the same page.
You must abide by Michigan’s default restrictions, which are often too broad for an appropriate LLC, if you don’t have an operating agreement. By creating important business practices that your team can adhere to, you boost your chances of success.
Step 6 – Get an EIN for Your LLC in Michigan
The federal tax identification number (EIN) for your business will be used while forming an LLC in Michigan. Any Michigan LLC that has more than one member must have this nine-digit number. An EIN is often required by your business in order to pay federal income taxes, submit applications for different business permits, or create business bank accounts.
It is advisable to get an EIN even if you are currently the lone employee of your company. You may segregate your personal and corporate funds this way, which is beneficial for effective money management. In the absence of any other option, you will be obliged to provide your Social Security number, putting you at danger of having your identity stolen. You will be ahead of the game when it comes to hiring your first employee when you have this advantage.
Having a tax identification number for your company might boost credibility when you start out. An EIN helps in establishing corporate credibility with suppliers.
You may submit an EIN application as soon as you have your company’s registration certificate. Your EIN will be created for free by the IRS. You may submit an online request for a quick issue via the IRS website. If an applicant chooses to submit their information via fax or mail, they should be prepared to wait anywhere from a few days to several weeks before receiving their EIN.
>> Start your Michigan LLC with ZenBusiness easily
Step 7 – Keep Your Michigan Limited Liability Company Compliant
The procedure is not complete once you follow these instructions for forming an LLC in Michigan. Some states have yearly fees that you must pay in order to keep your records current and to retain your company. Since these laws are subject to frequent modification, it is important to confirm with the appropriate state agencies what exactly must be done to comply with the law after an LLC application has been submitted in Michigan.
Maintaining an LLC may be difficult, particularly if your business operates in many states. If your company doesn’t maintain good status with the state of Michigan, then you might be hit with expensive fines and penalties and risk losing your ability to operate.
Thankfully, LLC services are knowledgeable about state requirements and will handle the required papers for you. You may concentrate on expanding your company rather than worrying about missing a compliance deadline.
Best LLC Services to Register your LLC in Michigan
You may form an LLC in Michigan by using one of the many LLC services available. These are some of our favorites:
ZenBusiness – Best Overall
One of the most affordable LLC providers is ZenBusiness, with prices beginning from $49 before state costs. The filing procedure is quite quick, allowing you to get started right away. With a straightforward setup procedure that eliminates filing uncertainty, the organization cuts through the bureaucracy.
Its customer care staff is available 24 hours a day and is well-versed in the process of forming an LLC in Michigan. In addition to assisting with LLC creation, ZenBusiness can also assist with company administration and help you streamline your tax preparation.
Inc Authority
Inc Authority comes into the picture with more than 30 years of experience in setting up businesses. And best of all, there is no cost to you whatsoever for the firm to form your LLC in Michigan. You just need to be concerned with early setup expenses that are mandated by the state.
To sweeten the deal even more, Inc Authority throws in a free company name check, a free year of service from a registered agent, and free tax preparation as well. As your company expands, they plan to be there to help you stay in compliance while staying inside your budget. Your transactions are final since Inc Authority doesn’t provide refunds.
Incfile
Incfile provides a range of starting services. A few carefully developed strategies are required to get new LLCs off to the appropriate start. The free plan includes the very minimum to get your business up and running: filing your articles of incorporation, checking your company name, and using a registered agent for a year.
If you value having access to tax advice, a business bank account, an Employer Identification Number (EIN), and other perks, you may pay extra for a higher tier. At the top tier, you’ll also get a custom domain name and corporate email address to put your best foot forward right away.
MyCompanyWorks
Depending on your demands, MyCompanyWorks offers three service packages from which to choose when creating your LLC. For a minimum of $59, you may register an LLC in Michigan and acquire a few smart business tools. A registered agent, report services, and compliance checks are all available for $279.
The MyCompanyWorks launch wizard, available with all service levels, allows you to customise and modify your company formation. It’s simple to keep organized at every stage of the process thanks to this special feature. You have 3 months from the moment you join up (regardless of the payment plan) to ask for a complete refund if you’re unhappy.
Northwest Registered Agent
Naturally, Northwest Registered Agent’s registered agent service is its most well-known offering, but the business’s services go beyond that. When you join up, you may choose to pay everything at once or in a series of affordable monthly payments. Northwest may provide a free EIN and registered agent service if you create an LLC via them.
Another one of Northwest’s bright spots is the customer service department, which offers great and approachable help. When compared to other services that help you create an LLC, this one stands out for its emphasis on privacy and the robust security measures it employs to keep your data secure.
LegalZoom
With services for every kind of company entity under the sun, LegalZoom offers in-depth understanding of business creation. Aside from your LLC, LegalZoom may be used for anything from living wills to property title transfers.
If you’re only forming an LLC, the service will cost you $79 (not including state costs), but the total may increase somewhat if you choose for other features. The 60-day money-back guarantee means you may try out LegalZoom without any commitment.
>> Start your Michigan LLC with ZenBusiness easily
How to Start an LLC in Michigan – Frequently Asked Questions
In Michigan, creating an LLC might be difficult. The responses provided here help to clarify a few often misunderstood points.
What is an LLC?
Creating a limited liability corporation (LLC) is a legal option for doing business in your state. Anyone suing an LLC as a private corporation cannot lawfully pursue the personal assets of the firm owner. Due to their organizational form, LLCs also have tax advantages over partnerships or sole proprietorships.
Do I Require an EIN to Run an LLC in Michigan?
If a Michigan LLC has more than one employee, it has to get an EIN. You must get an EIN from the IRS or a company creation agency before employing any employees. An EIN is useful for separating personal and corporate money and adding credibility, so even a Michigan LLC with only one member should apply for one.
Can I create an LLC for free in Michigan?
In Michigan, the sole cost associated with forming a limited liability company is the one-time filing fee due at the time the articles of incorporation are submitted. Some LLC formation services don’t charge you anything in exchange for assisting you in starting your company.
What is the best state to open an LLC?
A lot of people think Delaware is the ideal state for forming an LLC because of its quick procedure and business-friendly legislative framework. Due to the absence of individual income taxes, Nevada and Wyoming are also excellent options.
To be on the safe side, however, always try to register your LLC in the state where you reside. You have to be more knowledgeable about state legislation and continue to serve as the center of your company.
Do I Need a Registered Agent to Run an LLC in Michigan?
Having a registered agent is necessary to form an LLC in Michigan. It is possible to serve as your own registered agent; however, in most cases, it is preferable to outsource this function to a professional organization.
Can I be my own registered agent in Michigan?
It is feasible for you to act as a registered agent in the state of Michigan provided that you are at least 18 years old, have a name and address there, and are available to operate during all of the state’s normal business hours. It is often a wise decision to delegate the responsibility to a registered agent service so as to lessen the amount of personal stress involved and increase the amount of flexibility available.
>> Start your Michigan LLC with ZenBusiness easily
