Start a Michigan LLC

The first step is to name your LLC in Michigan. In addition to choosing something fits your desired brand image, you also need to make sure the name you want is allowed. That means ensuring the name isn’t already in use by another company, and adhering to Michigan naming rules.

Official Naming Requirements for Michigan LLCs

For starters, the name of your Michigan LLC cannot be the same as, or confusingly similar to, any other business name in the state. Use our Michigan Business Entity Search page to check online and see if a name is available.

Your business name must also include a designator that it is an LLC. Options for LLC designators in Michigan include:

• LLC or L.L.C. (with or without periods)
• LC or L.C. (with or without periods)
• Limited Liability Company

Your LLC name cannot contain any words or phrases that suggest it is a corporation, such as “Corporation,” “Incorporate,” “Corp.,” or “Inc.”

Reserving a Business Name in Michigan

Found the perfect name, but aren’t quite ready to form your business? In Michigan, you can reserve your name for up to 180 days. Use our business name reservation service to hold your name until you are ready to file your Articles of Organization.

Get a domain name for your business

Being available online is a big part of running a successful business. That’s why you might want to make sure your desired business name is also available as a URL. Use our domain search tool to discover what domain names are available for your LLC.

If you find the one you want to use, you can even use our domain name service to go ahead and register the domain name. We can also help you create a business website and obtain domain name privacy.

Note: You may also want to go ahead and check for available social media handles at the same time. This way, you can make sure all of your branding aligns (name, website, social media, etc.).

Filing for an Assumed Name

If you want to do business under a different moniker than your official company name, you’ll need to file for an assumed name in Michigan. This is also known as a “doing business as” or “DBA name” and a “fictitious business name” or “FBN” in other states.

Businesses often used assumed names to do things like launch new product lines or open new stores. For instance, if a company with the official name “ABC Toys, LLC” wants to sell puzzles online as “ABC Puzzles,” they’ll file for an assumed name.

Trademarks

Even if your business entity search suggests that your desired name is available, that doesn’t necessarily mean you’re clear to use it. Names can also be trademarked at both the state and federal level.

To further ensure that the name you want is available for use, you can conduct a trademark search. Check for state-level trademarks through the Michigan Department of Licensing and Regulatory Affairs. Federal trademarks can be searched for through the U.S. Patent and Trademark Office (USPTO). If you’re desired name isn’t already trademarked, you can also consider applying for a trademark of your own.

The next step is to appoint a Michigan resident agent. Commonly referred to as a “registered agent” in other states, a resident agent is an individual or business entity who receives legal and official government notices on behalf of your LLC.

If a process server or the state needs to contact your business, they need a reliable point of contact. That’s the purpose of a resident agent (also known as a registered agent).

Who can be a resident agent?

To serve as a resident agent in Michigan, an individual or business entity must have a physical street address in the state (a P.O. box will not suffice). Your resident agent and registered office must also be listed in your Articles of Organization.

Can I serve as my own resident agent?

Legally, you can serve as your business’s resident or registered agent, but there are a few reasons why this isn’t a great idea:

• Having to be available during all regular business hours to receive legal notices and service of process can be inconvenient
• Being served with subpoenas or legal notices in front of clients or investors can be embarrassing and harmful to business

Using a Registered Agent Service

Instead of serving as their own resident agent or asking a friend or family member to do so, many business owners opt to use a professional registered agent service. A Michigan registered agent service like ours enables you to:

• Stay compliant with Michigan resident agent requirements
• Ensure all legal notices will be received and passed along in a timely manner
• Avoid having to change your resident agent address when your business relocates

Next, it’s time to file your Michigan Articles of Organization. This is the filing that officially forms your LLC in Michigan.

You’ll file Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs, Corporations, Securities, and Commercial Licensing Bureau, Corporations Division. You can file these formation documents online, via mail, or in person at the Lansing location, along with your nonrefundable $50 filing fee.

How to Expedite Michigan Articles of Organization

It can take approximately three to five business days for Articles of Organization to be processed in Michigan. However, you can also pay additional fees for 1-hour, 2-hour, same-day, or 24-hour expedited service.

Another way to accelerate the filing process is to purchase our faster filing speeds service.

Information Needed for Articles of Organization

Your Articles of Organization will need to include information such as:

• The name of your Michigan LLC
• Your LLC’s business purpose
• The duration of your LLC (if other than perpetual)
• The name and address of your resident agent
• Other provisions
• Organizer name(s) and signature(s)
• Your LLC’s effective date (this will default to the date filed, unless an effective date within 90 days after the received date is specified)

Filing a Certificate of Amendment

You only need to file your Articles of Organization once. However, if you make significant changes down the road (such as changing your resident agent), you’ll need to file a Michigan Certificate of Amendment with LARA, along with the corresponding filing fee.

If you do need to file an amendment, our amendment filing service can handle it for you. Furthermore, our Worry-Free Compliance service even includes two yearly amendment filings.

Store all your LLC documents in one digital dashboard

If you have us file your Articles of Organization, your paperwork will be available in the ZenBusiness dashboard once the state approves your LLC. This is where you can keep all of your important documents organized.

Professional LLCs (PLLCs)

Depending on your profession, you may need to form a Professional LLC (PLLC), rather than a standard LLC. Michigan law says that those in certain licensed professions (think doctors, lawyers, and accountants) who want to offer their services under an LLC may do so only as a professional LLC.

If you’re in such an industry, check with the agency or board that licenses your profession to see if it requires you to form a PLLC. Note: we at ZenBusiness do not offer PLLC formation services at this time.

Stay organized

Once you get your physical paperwork back from the state approving your new LLC, you’ll want to keep it in a safe place, along with your other important legal documents (like your operating agreement, contracts, compliance checklists, etc.). We offer a customized business kit to help you keep these crucial documents organized and looking professional.

Next, you’ll need to create an operating agreement. Your Michigan LLC operating agreement lays out how your business will be run and managed.

Operating Agreement Benefits

While operating agreements aren’t required by Michigan law, this legal document is quite beneficial to your LLC. Just a few of the benefits of having an operating agreement include:

• They can help you avoid disputes between members about things like responsibilities, powers, privileges, and asset allocation.
• They enable you to customize the rules and policies of your business.
• They define your business’s management structure.
• They further separate your business and personal assets in the eyes of the courts, further sheltering your savings from legal liability.
• A well-drafted operating agreement lays out the process for adding or removing members, succession plans for when a members leaves or dies, and how other extenuating circumstances will be handled.

What to Include in an Operating Agreement

Your operating agreement should include all pertinent details about how your LLC will be run and managed, such as:

• Member responsibilities, privileges, and allocations
• Management structure (member-managed, or manager-managed)
  • Note: Your LLC will default to member-managed if not specified.
• Succession plans for when/if a member passes away or leaves the business
• Rules for adding new members or removing existing members
• Day-to-day operational details
• All policies and protocols for your LLC (terms and conditions, etc.)
• Any other information regarding your business’s rules and procedures

Trying to think of every little thing you need to include in an operating agreement can be daunting. That’s why we offer an operating agreement template to help you get started.

Finally, you’ll need to obtain an Employer Identification Number (EIN). This number is also commonly referred to as a Federal Employer Identification Number (FEIN) or Federal Taxpayer Identification Number (FTIN).

Much like a Social Security Number (SSN) does for individuals and sole proprietors, your EIN identifies you to the Internal Revenue Service (IRS). You’ll typically need this number to pay business taxes, open a business bank account, and hire employees.

Michigan LLC Taxes

When it comes to taxes, most LLCs are treated as “pass-through entities.” That means federal income taxes are not paid by the LLC itself, but by each of its members.

Furthermore, LLCs are not considered a tax entity by the IRS. Instead, LLCs are taxed by default as either a sole proprietorship (for single-member LLCs) or a general partnership (for multi-member LLCs). This means LLC members avoid the double-taxation faced by corporations.

However, some LLCs opt to be taxed as corporations. If you choose for your LLC to be taxed as a corporation in Michigan, you will pay the state’s 6% corporate income tax.

Open a business bank account

One of the main benefits of forming an LLC is the separation of personal and business assets. To further avoid commingling your funds, you’ll want to open a business bank account. This enables you to keep your business expenses totally separate from your personal finances. You may also want to consider applying for a business credit card to further differentiate your funds.

We offer a discounted bank account for your new business. And when you want to authorize others to use your account, you can use our banking resolution template.

For further help managing your business’s finances, try ZenBusiness Money. It can help you send invoices, receive payments, track tax-deductible expenses, and more.

The state fees for forming an LLC start at $50 to file your Articles of Organization. You may also pay additional fees, depending on whether you choose to reserve your business name or expedite the filing process. Note that filing fees change over time, so you should check the most recent fee schedule on the website of the Michigan Department of Licensing and Regulatory Affairs Corporations, Securities, and Commercial Licensing Bureau, Corporations Division.

Many new entrepreneurs choose LLC as their business entity. Compared to corporations, limited partnerships, and other formation types, LLCs offer enticing benefits, such as:

• Personal asset protection: Your personal liability will be separate from your business liability and debts.
• Avoid double taxation: You’ll only pay personal federal income taxes rather than personal and corporate federal income taxes (when taxed as sole proprietor or general partnership).
• 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.

LLCs are typically considered “pass-through entities,” meaning they are not subject to corporate federal income taxes. Instead, the profits are passed through to the owners’ personal income, and the responsibility to pay federal income taxes falls only on each individual member (as opposed to being taxed on both levels, as is the case with corporations). This holds for all Michigan LLCs — unless you choose to file as a corporation (in which case, you will be required to pay Michigan’s corporate income tax). However, your limited liability company 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.

Those who purchase any of our business formation plans get a free accounting consultation and tax assessment from our specialists to receive helpful resources and no-obligation recommendations around your bookkeeping, accounting, and tax needs.

Your Articles of Organization will typically be processed by the Michigan Department of Licensing and Regulatory Affairs within three to five business days if you file by mail. For an extra fee, however, you can have your documents expedited and processed in as little as an hour.

While an operating agreement is not required by Michigan state law, it is an internal document that you should keep on file for future reference.

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 on federal income, but the LLC members pay income 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.

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 business 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.

Although Michigan doesn’t require a general business license to operate, certain industries require specific licenses and permits. You’ll need to make sure your LLC has all the licenses and permits it’s required to have by law. Unfortunately, because licensing varies by industry and location and can occur on the federal, state, and local levels, there’s no central place to check to see if you have all the licenses and permits you need. You’ll have to do some research.

If you don’t have the time or inclination to do all this research, or if you just want the peace of mind to know that your business has all the licenses and permits it’s legally required to have, our business license report service can do the work for you.

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 list, along with industry requirements on the Michigan Department of Insurance and Financial Services website.

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 filing fee to amend your Michigan LLC Articles of Organization.

In Michigan, an annual statement or (known as an annual report in other states) is a regular filing that your LLC must complete every year. This annual statement should be filed with the Michigan Secretary of State by Feb. 15.

We can help you with your annual statement in a couple of ways. Our annual report service will help you file your annual statement, and our Worry Free Compliance service not only helps with filing your annual statement, but also sends you other important compliance reminders and helps you with two amendment filings each year.

Before starting the dissolution process, the members of an LLC should vote to dissolve it. When you’re ready to dissolve, you should follow the protocols laid out in your operating agreement. You will also need to file a Michigan Certificate of Dissolution with LARA. For the subsequent steps, please refer to our Michigan business dissolution guide.