The limited liability company (LLC) formation process is similar across the United States but there are key differences from state to state. Learn how to start an LLC in Michigan with our simple guide. We’ll walk you through the process step by step and highlight important considerations.
Before You Create an LLC in Michigan
Before you immediately move to file an LLC, there are some crucial details to handle beforehand. For example, you’ll need to make sure the name you want for your business entity is available for registration. The sections below detail steps to take before going forward with your LLC filing.
Michigan Limited Liability Company Act
The Michigan Limited Liability Company Act of 1993, amended in 2002, describes the way LLCs are formed and operate. If you have questions regarding how your LLC should function in Michigan, you should be mindful of the details in this law.
Cost to Set Up an LLC in Michigan
The filing fee to create an LLC in Michigan is $50. Should you wish to expedite the process, there are additional fees ranging from $50 up to $1,000 depending on how quickly you need your LLC formed. After setting up your LLC you will be required to pay for annual reports, which costs $25 for a standard LLC or $75 for a professional LLC.
Setting Up Your LLC in Michigan
Reserving Your Business Name
In Michigan, your LLC name must be distinguishable from corporations, LLCs and limited partnerships already established within the state. You can determine availability through the Department of Licensing and Regulatory Affairs’ search engine.
Once you confirm your desired name’s availability, you can fill out an Application for Reservation of Name to reserve the name for six months. You can submit the documents:
- Online
- By mail to PO Box 30054, Lansing, MI 48909
- In person at 2407 N. Grand River Ave., Lansing, MI 48906
There’s a $25 fee, payable as a check or money order made payable to the State of Michigan. If submitting a form in person or online, you can also make a payment using a credit card. If you need additional information about this process, please call (517) 241-6470.
Rules for Naming Your LLC
When naming your Michigan business, be sure to include “limited liability company” or any of the abbreviations “LLC,” “L.L.C.,” “LC” or “L.C.” For a professional limited liability company, you must include that exact term or one of the appropriate abbreviations: “P.L.L.C.,” “PLLC,” “P.L.C.” or “PLC.”
Certificate of Assumed Name
Does your company have a nickname or alternate name you want to be associated with your LLC? If the name or names are available within Michigan, you can obtain them by submitting a Certificate of Assumed Name.
Obtain a Resident Agent and Registered Office
Michigan requires LLCs to include both a resident agent and a registered office in their articles of organization. The agent accepts legal documents, demands or notices on behalf of the LLC and must have a physical address within Michigan to do so. It is possible to act as one’s own resident agent within Michigan if you are 18 or older and have a physical address within the state.
If you do not live in Michigan or want to delegate services to someone outside the company, hiring a resident agent is ideal. The price can go as low as $50 per year, but the average cost is between $100 and $150. You should make careful note of the services offered and decide if the price fits your expected budget.
File Your Articles of Organization or Certificate of Authority
Once you successfully hire a resident agent and establish your business’s registered office, it is time to submit your LLC formation documents. Domestic or locally based businesses file Articles of Organization. If your company was formed out of state and seeks permission to do business within Michigan, you must complete a Certificate of Authority form.
Michigan encourages you to fill out and file your document online, but you can also print and mail it. The filing fee is $50. If you file by mail, pay the fee by check or money order made payable to the State of Michigan; you have the added option of a credit card when paying online or in person.
Expediting the Process
If you are willing to pay a bit extra, you can expedite the filing process:
- 24-hour service for formation documents (or a Certificate of Authority): $50
- Same-day for formation documents (or a Certificate of Authority): $100
- Documents reviewed within two hours if received by 3 p.m. Eastern time: $500
- Documents reviewed within one hour if received by 4 p.m. ET: $1,000
Please note that the Corporations Division will expedite according to the date of receipt when submitting by mail. You must file a separate CSCL/CD-272 Form for expedited service for every document submitted.
After Forming Your LLC in Michigan
Once you successfully establish your Michigan LLC, there are additional steps you need to take.
LLC Annual Report
Per the Michigan Limited Liability Company Act, all LLC owners must file a yearly report. The form is due no later than February 15 of each year, but LLCs, including foreign LLCs, formed after September 30 do not have to file a report in the year following their formation.
Annual statements from professional LLCs, in addition to including member and manager names and addresses, must also confirm that each member or manager is licensed in whatever industry they offer services.
Annual reports for standard LLCs must include a $25 fee. Meanwhile, professional LLC annual statements cost $75.
Certificate of Good Standing
Once you set up your LLC, it is crucial to keep it in good standing by performing key actions, which include:
- Submitting your annual report and associated fee
- Maintaining a registered agent
If you wish to prove your LLC is legitimate, you should request a Certificate of Good Standing. The certificate costs $10, and you can order one online, via phone or by mail. Checks and money orders should be made payable to the State of Michigan; if ordering online, the state does accept credit card payments.
Restore Your LLC to Good Standing
If your LLC is in bad standing, don’t worry; improving its status is often as simple as filing a Certificate of Restoration of Good Standing, along with any past due annual statements and annual fees. There are two separate forms for domestic and foreign LLCs, so be sure to send in the applicable documents and the $50 filing fee. You can pay between $100 to $1,000 to expedite things.
Additional LLC Considerations
In addition to the above, you will want to take additional actions to help your LLC thrive.
- Draft an operating agreement: This legal document, while not mandatory, is a great way to ensure that your LLC runs in a correct and agreed-upon manner from the beginning.
- Obtain an employer identification number (EIN): Multimember LLCs and LLCs with employees must have an EIN. You can get one today through the IRS website.
- Check for online name availability: Whether you want a website or social media presence, you should double-check to see if your business name is available for use, as this will be key for branding purposes.
LLC State Guides
Frequently Asked Questions
What Is an LLC?
An LLC balances the relative ease and flexibility of a partnership or sole proprietorship structure with the increased risk protection of a corporate structure. Like corporate shareholders, LLC owners (known as “members”) enjoy limited liability, meaning personal liability to the company includes only what members have invested and does not extend beyond it to cover corporate losses or debts.
By default, members of an LLC pay taxes as a share of personal income just as owners of a sole proprietorship or general partnership would—this is often referred to as a “pass-through” tax structure. An LLC can elect to be taxed as a C corporation C-corp or S corporation (S-corp) if it meets certain requirements. Many small business owners choose LLCs for their simplicity and flexibility.
How much does it cost to set up an LLC in Michigan?
Setting up an LLC in Michigan costs $50 for domestic and foreign business entities and usually takes ten to 15 business days.
Can my Michigan LLC operate under a different business name?
You can operate your LLC in Michigan using multiple trade names, provided you fill out a Certificate of Assumed Name for the additional pseudonyms.
Can I act as my own resident agent in Michigan?
Michigan will allow you to act as your own LLC’s resident agent as long as you are 18 years of age or older and have a physical residence in the state.
How much does it cost to register an LLC?
Cost changes by state. In Michigan, the filing fee is $50, but LLCs cost $500 to establish in Massachusetts. It is essential to do your research and budget accordingly.
What are the different types of LLCs to set up?
When determining how to start an LLC, there are several types of LLCs to choose from. Knowing the LLC structures available is essential for selecting a business model that most closely aligns with the nature of your company and how you intend for it to operate. These LLC structures include:
- Single-member LLC: This LLC is owned and operated by a single person. While similar to a sole proprietorship, this LLC provides additional tax benefits and liability shielding.
- Multimember LLC: Standard LLCs with more than one member, often divided into manager-managed or member-managed entities.
- L3C: These entities, also known as “low-profit liability companies,” act as a bridge between nonprofit LLCs and for-profit LLCs where the business cause remains the primary focus rather than earnings.
- Series LLC: Series LLCs are tiered business structures where the topmost LLC owns a series of lower-tiered LLCs through limitless segregation. Each LLC in the series operates mostly independently of one another; their assets are also primarily separated.
- PLLC: A specialized LLC, this business formation type is only available to certain licensed professionals.
- Restricted LLC: Restricted LLCs are not taxed during the first 10 years of formation. Likewise, they cannot make distributions to members. It must be stated in the articles of organization that the LLC will be restricted.
