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Ready to start your Michigan LLC? Here's everything you need to know.

Starting a limited liability company (LLC) can be an exciting venture made even better with careful planning. If you’ve never formed an LLC and are looking to start a business in Michigan, you might wonder where to begin. This guide will walk you through your next steps, detail the associated costs, and help you outline your path to forming your small business. Follow these step-by-step instructions to get your Michigan LLC formed and be on your way to growing your business most efficiently.

How Do I Start an LLC in Michigan?

The 5 steps to form an LLC in Michigan:

1 Name Your Michigan LLC

2 Appoint a Registered Agent in Michigan

3 File Michigan Articles of Organization

4 Create an Operating Agreement

5 Apply for an EIN

To start an LLC in Michigan, you’ll need to file your business with the state, appoint a registered agent, and decide on an Operating Agreement. But before you contemplate the bigger decisions and get started on registering, you’ll need to knock out the easiest step of all: solidifying a name for your new business.

While some steps are more complex than others, this step-by-step guide will help simplify the process of forming an LLC in the state of Michigan. As you check off each of the five steps below, your Michigan Limited Liability Company will be closer to reality.

Form a Michigan LLC - ZenBusiness
LLC 1

Step 1: Name Your Michigan LLC

You likely have an idea of what you’d like your business name to be, but naming a business is more than just a creative way to market your services; it also has to comply with state regulations. In this case, you’ll need to register your business under a unique name with the state of Michigan. Search available LLC names in Michigan.

Your best bet is to create a list of possible names before running each through the Michigan Department of Licensing and Regulatory Affairs (LARA) name search page to find one that is not in use. It might be helpful to check a more detailed explanation of the requirements for naming your business in Michigan. Keep in mind that slight changes in spelling and punctuation or choice of suffix will not be enough to distinguish your business in the eyes of the state.

To comply with Michigan’s state law, your company’s name must end with the proper suffix. In this case, you have four options: including the entire phrase of “Limited Liability Company,” the abbreviation “LLC,” or a punctuated version of the previous as “L.L.C.” or “L.C.” Regardless of which option you choose, it must appear at the end of your company’s name.

Keep in mind that some words are prohibited. For instance, you can not include the word “corporation.” You can find more information on what can and can’t be included in your LLC name here.

Once you’ve found a name that satisfies your business goals and Michigan’s requirements, you’ll need to lock it in. To reserve the name before someone else, you’ll need to deliver an Application for Reservation of Name and a $25 filing fee to the Department of Licensing and Regulatory Affairs. If the name you’ve chosen is approved, it will be put on hold for six months — allotting plenty of time for you to finish establishing your LLC.

If the owners of a company want to do business using a name that is different from the original name used to form the business, they must also register the secondary name. Also known as “Doing Business As” (DBA), this secondary name doesn’t replace the original name, but it can serve as an additional, legal name for the business. Once you find one that is available, you’ll want to file a Certificate of Assumed Name.

Another thing to consider is whether you want to trademark anything with your Michigan LLC. You can visit the United States Patent and Trademark Office‘s site to see whether or not your business name or logo is trademarked. To trademark something for your business, you’ll want to submit your mark alongside the Application for Registration for Trademark/Service Mark, which requires a nonrefundable $50 filing fee. Note that if you plan to do business outside of Michigan, you may want to broaden your protection and file a trademark at the federal level with the USPTO.
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Bryce started forming his LLC by picking a name for his baseball company. He visited the Michigan Department of Licensing and Regulatory Affairs name search page and found that “Addicted to Glove” was an available company name. He submitted the Application for Reservation of Name, paid the $25 fee to the Department of Licensing and Regulatory Affairs, reserved the name for six months, and was able to focus on the next steps of forming his LLC.

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While you’re registering your trademark, you also want to start thinking about a website domain. Do a domain name search to verify that you’ll be able to create a good website name for your business, and allow ZenBusiness to help you register your domain name.

Locked

Step 2: Appoint a Registered Agent in Michigan

To continue with the registration process, Michigan requires that every LLC appoint a registered agent, also known as a resident agent. The person or entity appointed will be the point of contact for all legal matters — if your company is subpoenaed or sued, the state of Michigan will deliver papers to your registered agent. They will also be the point of contact for any service of process.

While the owner of the company can be the registered agent (if they reside in Michigan), this is not always the best option. Let’s face it, being served papers in front of customers is a sure way to deter business, and, with so many alternatives, it might be in your best interest to hire an outside registered agent service.

Some other benefits of hiring an outside registered agent like ZenBusiness include:

  • Flexible business hours: A registered agent service is always available during regular business hours, providing you more flexibility to work when you’re most productive.
  • Ensure compliance: Running a business requires you to follow state and federal regulations. It’s a lot to keep up with, and a registered agent service can ensure your business is compliant and in good standing.
  • A consistent address: Your registered office address will likely remain the same, which means you have more flexibility with your business location in case you have to move.

As long as they are a resident of the state of Michigan or a business entity authorized to do business in Michigan, and have a physical street address within the state, hiring an outside registered agent is an affordable way to save you possible troubles later on.

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Bryce considered being his own registered agent, but when he found ZenBusiness, he decided to outsource this role to use their professional services. By choosing this service, he was guaranteed a physical location to send and receive state compliance documents and reassured that he wouldn’t have to pay any additional filing fees if he chose to move his company in the future. He also received expert help with organizing key compliance events and filing annual reports, preventing him from missing vital deadlines.

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Step 3: File Michigan Articles of Organization

Once you’ve secured a name and registered agent, it’s time to certify your LLC in the state of Michigan. To do so, you’ll need to complete your Articles of Organization and file it with the Michigan Department of Licensing and Regulatory Affairs’ Corporations, Securities, and Commercial Licensing Bureau, Corporations Division. Before you begin filling in the form, ensure you have all of the necessary information. 

You’ll need the following information to fill out the form accurately:

  • The name of your LLC
  • The purpose of its formation
  • The duration of your company (if not perpetual)
  • The name and address of your Registered Agent

Whether you prefer to go in-person, send your paperwork through the mail, or utilize the online system, you will need to include a nonrefundable fee of $50 when filing your Articles of Organization. If you’d like the service expedited, you can pay an additional $50 for a 24-hour turnaround, $100 for the same day, $500 for a two-hour service, or $1,000 for it to be completed in one hour.
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To get “Addicted to Glove” up and running, Bryce filed his Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs. To speed up the process, he filed using their online portal and chose to pay an additional $50 for 24-hour turnaround. For $100, his Articles of Organization were completed and filed in one day.

Agreement

Step 4: Create an Operating Agreement

Operating Agreements are not always required — and not mandatory in Michigan — but help create governance for an LLC. An LLC Operating Agreement covers the rules your company will follow, lists LLC members and their percentage ownership, discusses how finances will be handled, how decisions will be made (including partner voting structure), and details any additional necessary regulations.

If you’re starting your LLC alone, you may feel an Operating Agreement is unnecessary, especially since one is not required to proceed in the state of Michigan. However, Operating Agreements can also outline what happens to your company in the event of your demise and can help protect you and your assets in case of dissolution or bankruptcy. If, in fact, you are starting your LLC with partners or other managers, each party will need to agree to the terms and sign the document.
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Despite the state of Michigan not requiring an Operating Agreement, Bryce decided he wanted to craft one to ensure he and his company were legally considered separate entities. Because he chose to work with ZenBusiness, they provided an Operating Agreement template he was able to tailor to his needs in order to cover the company should he ever leave or no longer be able to run it.

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To ensure your Operating Agreement is filled out and filed properly, you may want to consider getting the help of a trusted source. ZenBusiness offers an easy-to-follow Operating Agreement template for just $35 that helps many small businesses arrive at the Operating Agreement they need.

EIN

Step 5: Apply for an EIN

To finalize your LLC, you’ll need a Federal Employer Identification Number (FEIN), also known as an EIN or tax ID. Unless you are a single-member LLC with no employees, this nine-digit number is required for tax purposes, including filing taxes, hiring new employees, and opening business bank accounts. Fortunately, obtaining one through the Internal Revenue Service (IRS) is instant and straightforward. To apply, you can either call the IRS Business and Specialty Tax Line at (800) 829-4933 or visit the IRS FEIN Application Page online. Once you submit the short application, you’ll immediately receive your EIN — at no cost to you.
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The final step in getting “Addicted to Glove” started was applying for an EIN. Bryce chose to take advantage of the IRS’s online application and received his EIN right away. To keep it safe, he entered the number into Michigan’s Business One Stop system and checked Michigan’s State License Search to see if batting cages required a license or permit.

How much does it cost to start an LLC in Michigan?

Starting an LLC in Michigan is relatively affordable. Filing your Articles of Organization will only cost you $50 — unless you prefer to expedite the process. 

However, if you choose to reserve your desired name ($25) and partner with ZenBusiness to file an Operating Agreement ($35), forming an LLC in Michigan will cost you $110.

Of course, if you prefer to get your LLC up and running as quickly as possible, expedited costs could turn an affordable process into a wallet-thinning one. Total costs for starting an LLC, with name reservation, an Operating Agreement, and a one-hour expedited service, would be $1,110. Add in the cost of hiring a registered agent, and your costs will rise yet again.

Compare Ways to File

ZenBusiness can help you form your Michigan LLC by completing and submitting all of the necessary paperwork, acting as your registered agent, and providing a template for your Operating Agreement. For a bit more per year, you can also get more comprehensive benefits, including expedited services, obtaining your EIN, and an automatically generated webpage. Whichever plan you choose, partnering with ZenBusiness means peace of mind for you at every step of your LLC’s formation.

What are the benefits of an LLC in Michigan?

When starting a business, there are various forms it can take. Ninety percent of ZenBusiness customers, along with the majority of entrepreneurs, choose to form an LLC. Compared to corporations, limited partnerships, and other forms of entities, LLCs come with enticing benefits.

Forming a Michigan LLC means you’ll reap the following benefits:

  • Personal asset protection: Your personal liability will be separate from your business liability and debts.
  • Avoid double taxation: You’ll only pay personal taxes rather than personal and corporate taxes.
  • Flexible management: You’re not required to have a board of directors or annual meetings.
  • Less reporting: Compared to corporations, LLCs have fewer required meetings and reports.

For a more in-depth look at why an LLC might be a better option for you, see our breakdown of what an LLC is and how it compares to a corporation.

How is an LLC taxed in Michigan?

LLCs are typically considered “pass-through entities,” meaning they are not subject to corporate taxes. Instead, the profits and losses are passed through to the owner’s personal income, and the responsibility to pay taxes falls on the individual. This holds for all Michigan LLCs — unless you choose to file as a corporation, you will not be required to pay Michigan’s corporate income tax. However, your LLC might be subject to other taxes, including:

  • State employer taxes, if you have employees
  • State unemployment insurance taxes, if you have employees
  • Sales tax, if you sell goods

For more information on specific taxes that you could be required to file for your Michigan LLC, visit the Business Tax Guide from the Michigan Department of Treasury.

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Michigan LLC FAQs

What is the processing time to form my Michigan LLC?

In three to five business days, your Articles of Organization will be processed with the Michigan Department of Licensing and Regulatory Affairs if you choose to mail in your paperwork. If you file online, the turnaround time can be as quick as 24 hours from when the state begins processing your submission. For an extra fee, you can have your documents expedited and processed in as little as an hour.

Do I need to file an Operating Agreement with the state of Michigan?

No. The Operating Agreement is an internal document that you should keep on file for future reference. While some states legally require LLCs to have an Operating Agreement, Michigan is not one of them.

What tax structure should I choose for my Michigan LLC?

When you get an EIN, you will be informed of the available tax classification options. Most LLCs elect the default tax status, which is to be taxed as a sole proprietorship (for a single-member LLC) or a partnership (for a multi-member LLC). For either of these options, the LLC is not taxed, but the LLC members pay taxes on their portion of the profits on their individual tax returns.

You can also elect to have your LLC taxed as a C corporation or an S corporation. Although most new LLCs don’t choose these options, they do have advantages for certain companies. Be sure to review each option’s details to determine the best one for your business.

Does Michigan allow a Series LLC?

A Series LLC is a group of limited liability companies operating under one “parent” entity. While each entity under the parent is considered independent, entrepreneurs are often attracted to the structure if they wish to create numerous companies to explore different avenues but not risk one’s success due to the liabilities of another. However, only a few states have adopted Series LLC laws — none of which are Michigan.

Which licenses and insurance are required for an LLC in Michigan?

Although Michigan doesn’t require a general business license to operate, certain industries require specific licenses and permits. To find out if you’re required to apply for a business license and how to apply, visit Michigan’s State License and Permit Search.

Your LLC might be required to obtain an insurance policy, depending on the type of business and whether you have employees. The types of insurance range from professional liability insurance to unemployment and workers’ compensation insurance. You can find a complete list and industry requirements on the Michigan Department of Insurance and Financial Services website.

In both instances, we recommend hiring a professional service like ZenBusiness who will provide you with a comprehensive package of all the licenses and insurance required for your Michigan LLC.

How do I change my LLC name in Michigan?

To change the name of your LLC in Michigan, you need to file a Certificate of Amendment that includes the reason you’re changing your Articles of Organization (in this case, you want to change the name of your LLC). You submit this form to the Michigan Department of Licensing and Regulatory Affairs’ Corporations, Securities, and Commercial Licensing Bureau. There is a $25 filing fee to amend your Michigan LLC Articles of Organization.

How do I pay my annual LLC fees in Michigan?

In Michigan, an annual report or annual statement is a regular filing that your LLC must complete every year. This annual statement costs $25 and should be filed with the Michigan Secretary of State by Feb. 15.

We hope this guide has provided a clearer picture of what it takes to start a business in Michigan. But don’t fret — you don’t have to do all of these steps alone. From filing legal paperwork and acting as your registered agent to offering streamlined technology and automation for quick support, ZenBusiness is here to help you start and grow your business every step of the way. To learn more about starting a business in Michigan, contact us today!

Already a Michigan small business owner? Learn how ZenBusiness can help you run or grow your Michigan small business today.

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