How to start an LLC in Michigan?
If you’re thinking of starting your own business, you might be wondering how to start an LLC in Michigan. Many individuals don’t know where to start and might spend countless hours searching the Internet for information to find themselves more confused than before. Well, now is your time to stop searching and start learning because we’re going to tell you everything that you need to know about how to form an LLC in Michigan.
To start, we must first learn what an LLC is. An LLC, or Limited Liability Company, is a business entity that provides limited liability protection to its owners. This means that the owners of an LLC are not personally liable for the debts and obligations of the company.
Benefits of starting an LLC in Michigan
There are several benefits of starting an LLC in Michigan. For one, LLCs offer personal asset protection, meaning that your assets are protected if the business goes bankrupt. Additionally, LLCs are not subject to double taxation like corporations are. They have a lot of flexibility when it comes to management. Lastly, LLCs have fewer reporting requirements than other business entities. If you’re thinking of starting a business in Michigan, an LLC is a great option.
Michigan LLC Rules & Requirements
You will have to follow a few guidelines to start an LLC in Michigan. Every state has its own rules and procedures, but the LLC requirements in Michigan are not difficult to meet. There are a few documents and information that you will need to gather. This guide will provide a step-by-step process of what you need to do to start your LLC here in Michigan.
Best Michigan LLC Formation Services
Although it’s possible and relatively easy to start your LLC independently, it might be a good idea to hire a professional service. These services will save you time and money because they will do your work at an affordable price.
We researched and reviewed many different services and have come up with our top recommendations. If you are looking for a service to help you form an LLC in Michigan, go to our LLC formation services page to determine which service is best for your business.
The following is a step-by-step guide of what you can expect when forming an LLC in Michigan:
6 Steps to Starting an LLC in Michigan
Step 1: Name Your Michigan LLC
Picking a name for your Michigan LLC is vital because it will be what your business is legally known as. A few things that you must keep in mind when choosing a name are:
- The name of the LLC must contain the words “Limited Liability Company” or “LLC.”
- Don’t use words restricted by state law: Some examples are Treasury, FBI, State Department of Treasury, etc.
- Your Michigan LLC name should not be the same as another LLC: You must check the LARA database to confirm.
- If you wanna use some restricted names such as “Bank,” “University,” or “Attorney,” you may have to provide additional information and documents.
It is also worth thinking about your website’s domain name. Although it’s not required to use your LLC name as your website name, you should register and purchase the domain name if it is available. If for some reason, the desired name is not available, you’ll have to come up with a new one.
Namecheap offers domain name registration and availability check. It also provides an excellent service to assist you in purchasing your desired name.
Step 2: Choose a Resident Agent
A resident agent is a person or a company that agrees to receive official legal documents and mail on behalf of your LLC. Your LLC must have a resident agent in the state of Michigan; therefore, you will need to choose one.
Who can be your resident agent in Michigan?
- An individual 18 years or older who has an address in Michigan. They need to be available during business hours to sign important documents.
- You can be your resident agent. If you choose to be your LLC’s resident agent, you must provide a physical address in Michigan.
- You can use a resident agent service: A professional service will likely offer the best and most reliable services.
Step 3: File the Articles of Organization
The Articles of Organization document will file with the Secretary of State to officially create your LLC. It begins with the name and address information for your LLC and includes your designated agent, as well as information about how many members are included in your LLC, whether it’s managed by a manager or if all members manage the business.
You can file your Articles of Organization online or by mail. If you choose to file by mail, sign and send the document along with a check for $50 made payable to ‘Department of Licensing and Regulatory Affairs.
- To file online, go to the LARA website and follow the instructions.
- To file by mail, mail your completed form 700(link to pdf) to this address:
Michigan Department of Licensing and Regulatory Affairs
Corporations, Securities & Commercial Licensing Bureau — Corporations Division
P.O. Box 30054
Lansing, MI 48909
Step 4: Create an Operating Agreement
An operating agreement is a document that outlines the rules and regulations for your LLC. This document helps prevent disagreements between members and provides a roadmap for the company’s operation. It is not required to have an operating agreement in Michigan, but it is highly recommended.
These are some of the items that your operating agreement should address:
- The names of all owners
- Percentages of ownership for each member
- If your company is member-managed or manager-managed
- The members’ rights and responsibilities to the LLC
Step 5: Get an EIN for your Michigan LLC
You can obtain an EIN for your business online through the IRS website. The process is simple and doesn’t take long to complete. You will need to provide some basic information about your company, such as the name, address, and type of business.
Alternatively, you can obtain an EIN by mailing form SS-4(link to pdf) to the IRS address. The process takes a bit longer because you will need to wait for the document to be processed, but it’s still free to apply. Just be sure to allow plenty of time for the application to be processed.
If you choose to mail it in, send the form to the address below:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 6: Michigan LLC Annual Report
An LLC annual report is a document that you are required to file to keep your LLC in good standing with the state of Michigan. The report is due every year, and it must include information about your LLC’s activities from the previous year.
You can file your annual report online or by mail. If you choose to file online, go to the LARA website and follow the instructions.
If you choose to file by mail, read the instructions on this page and mail the form to this address:
Michigan Department of Licensing and Regulatory Affairs
Corporations, Securities & Commercial Licensing Bureau
P.O. Box 30054
Lansing, MI 48909
Michigan LLC Processing Time
You can form an LLC in Michigan online in about 2 weeks. If you choose to file by mail, it will take about 4 weeks. If you need it done more quickly, you can expedite the process for an additional $50 fee and have it done in 24 hours.
Michigan LLC Frequently Asked Questions
How much does it cost to open an LLC in Michigan?
It costs $50 to open an LLC in Michigan. This fee covers the processing of your paperwork by the state government.
There may be additional fees charged by your bank or other service providers. Still, the state fee is the only mandatory cost of setting up an LLC. Be sure to ask about any additional potential charges before you file your paperwork so that you can budget appropriately.
How long does it take for an LLC to be approved in Michigan?
You can expect a Michigan LLC to be approved within two weeks if you file online, four weeks if you file by mail, and 24 hours for expedited approval and pay an extra $50 fee.
Does an LLC need a business license in Michigan?
There is no one-size-fits-all answer to this question because the requirements vary depending on the specific industry and municipality in which the LLC is doing business. However, most Michigan LLCs will not need a business license if they operate as a pass-through entity (sole proprietorship, partnership, or S corporation) and are not engaged in any activity requiring a permit or permits from the state or local government.
If you are unsure whether your LLC needs a business license, it’s best to contact your local municipality for guidance.
How much does an EIN cost in Michigan?
An EIN is a free service provided by the IRS. You don’t need to pay anything to get an EIN.
How to Start an LLC in Michigan
A Beginner’s Guide to Starting an LLC in Michigan