Are you considering opening a limited liability company (LLC) in Michigan? Starting an LLC can be an exciting and rewarding venture, but it also requires careful planning and execution. In this guide, we’ll outline how to open an LLC in Michigan, including the necessary documents, costs, and things to consider when starting your business.
It’s important to consider factors such as your business plan, industry-specific requirements, and local business regulations when starting an LLC in Michigan. By taking the time to structure and form your LLC properly, you can lay the foundation for a successful and protected business venture.
Table of Contents
Steps to Create an LLC in Michigan
Creating an LLC in Michigan can be a great way to protect your personal assets while running a business. However, starting an LLC requires careful planning and attention to detail. Check this step-by-step process on how to create an LLC in Michigan.
- Choose a name: Choose a unique name for your LLC that complies with Michigan’s naming requirements.
- Appoint a registered agent: Select a registered agent who will receive legal documents on behalf of your LLC and be available during regular business hours.
- File Articles of Organization: This is the official document that creates your LLC and must be filed with the Michigan Department of Licensing and Regulatory Affairs (LARA). The following information must be included in the Articles of Organization:
- LLC name and address
- Registered agent information
- Management structure (member-managed or manager-managed)
- Purpose of LLC (optional)
- Obtain an EIN: An Employer Identification Number (EIN) is a unique identifier for your LLC that’s required for tax purposes. You can obtain an EIN from the IRS website for free.
- Draft an operating agreement: Although not required by Michigan law, an operating agreement is a recommended document that outlines how your LLC will operate, including management structure, decision-making processes, and financial matters.
- Register for taxes: Depending on your business activities, you may need to register for state and local taxes with the Michigan Department of Treasury.
Starting an LLC in Michigan requires careful planning and attention to detail, including choosing a unique name, filing Articles of Organization, obtaining an EIN, drafting an operating agreement, and registering for taxes as needed. By following these steps and consulting with legal and financial professionals as needed, you can help ensure a successful and legally compliant formation of your LLC in Michigan.
Best LLC Service Review
Costs to Open an LLC in Michigan
Creating an LLC in Michigan requires careful consideration of the costs involved. In this guide, we’ll outline the various costs associated with opening an LLC in Michigan.
- Filing fee: The cost to file Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs (LARA) is $50.
- Registered agent fee: If you choose to use a registered agent service, there will be an additional fee, usually ranging from $50 to $300 per year.
- Operating Agreement: While not required by Michigan law, creating an operating agreement can help prevent disputes among members and may be worth the cost of hiring an attorney to draft one.
- Business licenses and permits: Depending on the nature of your business, you may need to obtain additional licenses and permits, which can vary in cost.
- Taxes: LLCs in Michigan are subject to state taxes, including the Michigan Business Tax and the Michigan Income Tax.
Starting an LLC in Michigan involves several costs, including filing fees, registered agent fees, operating agreement fees (if applicable), licenses and permits, and taxes. By carefully considering these costs and consulting with legal and financial professionals as needed, you can help ensure a successful and financially viable formation of your LLC in Michigan.
Three Things To Be Aware Of When Starting Your LLC
The video below covers the following three things you must know when setting up your LLC.
- Commingling Funds
- Registered Agent
- Piercing the Corporate Veil
If you are unfamiliar with these terms, please watch the video below.
Files needed to open an LLC in Michigan
To create a limited liability company in Michigan, you’ll need to file specific documents with the state. These are the files you’ll need:
- Articles of Organization: This is the official document that establishes your LLC and must be filed with the Michigan Department of Licensing and Regulatory Affairs (LARA). The following information must be included in the Articles of Organization:
- LLC name and address
- Registered agent information
- Management structure (member-managed or manager-managed)
- Purpose of LLC (optional)
- Operating agreement: Although not required by Michigan law, an operating agreement is a recommended document that outlines how your LLC will operate, including management structure, decision-making processes, and financial matters. This document can help prevent disputes among members and provide clarity on how the LLC will operate.
- Employer Identification Number (EIN): An EIN is a unique identifier for your LLC that’s required for tax purposes. You can obtain an EIN from the IRS website for free.
- Business licenses and permits: Depending on the nature of your business, you may need to obtain additional licenses and permits, which can vary in requirements and documentation needed.
Additionally, it’s recommended to create an operating agreement to outline how your LLC will operate and obtain any necessary business licenses and permits.
Incfile is our preferred choice for LLC formation because they provide all of the services your new business needs while being transparent with pricing. They also offer a free registered agent service for the first year, even in their free package.
Check out a behind-the-scenes of what managing your LLC looks like in your dashboard in this Incfile review.
Things to consider when opening an LLC in Michigan
Starting an LLC in Michigan requires careful consideration of various factors:
- Type of business: You’ll need to consider the nature of your business and how it will operate, including management structure, ownership, and financing.
- LLC name: Choose a name that’s available for use in Michigan and complies with state requirements. You can check the availability of your desired name on the Michigan LARA website.
- Registered agent: Your LLC must have a registered agent with a physical address in Michigan to receive legal documents and official mail on behalf of the LLC.
- Operating Agreement: Although not required by Michigan law, creating an operating agreement can help prevent disputes among members and provide clarity on how the LLC will operate.
- Taxes: LLCs in Michigan are subject to state taxes, including the Michigan Business Tax and the Michigan Income Tax.
- Business licenses and permits: Depending on the nature of your business, you may need to obtain additional licenses and permits, which can vary in requirements and documentation needed.
Starting an LLC in Michigan involves carefully considering various factors, including business type, LLC name, registered agent, operating agreement, taxes, and business licenses and permits.
Conclusion
Opening an LLC in Michigan requires filing specific documents, paying necessary fees, and considering important factors such as business type, LLC name, registered agent, operating agreement, taxes, and business licenses and permits. By following the steps outlined in this guide and seeking professional advice as needed, you can start your Michigan LLC with confidence and set your business up for success.
Best LLC Service Review
For more information on starting an LLC in Michigan, be sure to visit other resources on our website. Our articles on the various steps involved in forming an LLC, as well as information on the benefits of an LLC, can provide you with the information you need to make informed decisions about your business.
Additionally, our guides on registering for taxes, obtaining an EIN, and creating an operating agreement can help you navigate the legal requirements of starting an LLC in Michigan. Whether you’re just starting out or looking to expand an existing business, forming an LLC in Michigan can be a great choice. For more information and support as you begin this process, be sure to visit our website and take advantage of our comprehensive resources.
Legal Disclaimer: This article contains general legal information, does not constitute professional legal advice for your situation, and should not be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed in your jurisdiction.
Where Do I Even Begin with Starting a Business?
This depends on where you’re at in your journey.
Step 1 is deciding what type of business you want to start.
Step 2 is filling out the BizBuddy Pathway for your business.
Step 3 is legally forming your business.
Check out the FAQs below that match up with where you’re at in your process.
What Type of Business Should I Start?
If you’re unsure of what kind of business you want to start, you need to assess your situation. Things like your skills, available time, passion(s), money, and risk tolerance all factor into your decision. This post on What Business to Start is a great place to assess your situation and find the right fit for your unique situation.
What is the BizBuddy Pathway?
Research says that 92% of people with a business idea will never start a business. There are no shortages of ideas… execution is the scarce resource. The BizBuddy Pathway is a simplified approach for you to lay out your business journey.
Think of it like writing a book. The Pathway is like coming up with the title, storyline, and chapters, so you have the outline of where to begin. This is how you become the 8%.
How Do I Legally Form a Business?
It’s not as difficult as you think. That’s because in the U.S. small businesses accounted for 62% of all new jobs created between 1995 and 2020. That’s why you hear people say small business is the backbone of the economy. Check out this Guide on How to Legally Form a Business (in the U.S.). It will give you a full understanding of what goes into forming your legal entity and the options available to you. If you’re unfamiliar with terms like “Piercing the Corporate Veil” you’ll want to check out that guide.
How Do I Grow My Business?
Congrats. You’re already in the game and looking to grow. BizBuddy was founded by Eric Worral who started his first business at 13 years old (sealing driveways). That was well over 20 years ago when he had to figure out how to get new customers. No matter what business you’re in you need paying customers. This is a Guide on How to Get More Customers for Your Business. It’s a comprehensive overview of how to think about your category of business and the marketing strategies to implement. Onward and Upward!
