Detroit. The Great Lakes shorelines. The automotive industry. Michigan is known for many things including the beautiful Porcupine Mountains and also as a place where businesses can set up shop.
You’ve finally chosen to start your own business and are researching your options for creating an LLC in Michigan. Also, how much will it cost? Below, we’ve outlined everything you’ll need to know, from the first step to the last, including costs and paperwork specific to Michigan firms.
In addition to its many other advantages, a limited liability corporation (LLC) provides small enterprises with protection from legal responsibility and favorable tax treatment.
Follow the simple steps below to get your limited liability company (LLC) operating in the state of Michigan after you’ve decided that an LLC is the most suitable corporate entity for your requirements.
Note that you have the option of forming the limited liability company (LLC) yourself, or you may hire a professional company incorporation service to do all of the legwork on your behalf.
1. Give Your LLC in Michigan a Name
When creating an LLC in the state of Michigan, the initial and most crucial step is to decide on a name for the firm. Being sure to choose a name for your company that not only satisfies the regulations and standards pertaining to company names in the state of Michigan, but also is simple for prospective customers to look for.
Be sure to follow these naming rules when establishing your Michigan LLC:
- You are required to have the word “limited liability corporation” or one of its acronyms included in the name of your business (LLC or L.L.C.)
- You are not allowed to use any terms in your company’s name that might lead to confusion with a public entity (FBI, Treasury, State Department, etc.)
- Words that are restricted, such as “bank,” “attorney,” and “university,” may need extra legal documentation and the incorporation of a licensed professional as a member of your limited liability company (LLC).
You may get a comprehensive list of the regulations that govern names in the state of Michigan by visiting the website of the Michigan Department of Licensing and Regulatory Affairs.
Is the term already in use in the state of Michigan?
Conduct an online search for an LLC name using the website of the Michigan Department of Licensing and Regulatory Affairs to check whether the name you wish to use for your company has already been taken (LARA).
2. Choose a registered agent in the state of Michigan
Every limited liability company in the state of Michigan is required to establish a local agent where legal documents may be served. If the limited liability company (LLC) is taken to court, this refers to a person or company that has agreed to accept service of process on its behalf.
The Registered Agent may either be a person who resides in Michigan or a corporate entity that is permitted to conduct operations in the state. It is required that the Registered Agent have a real, live street address in the state of Michigan.
What exactly is a Registered Agent?
A Registered Agent is a person or business entity that is responsible for receiving important tax forms, legal documents, notice of lawsuits, and official correspondence from the government on behalf of your company. This can include tax forms, legal documents, notice of lawsuits, and official correspondence. Consider the role of your registered agent as that of the point of contact for your company with the state.
Who is eligible to serve as a Registered Agent?
A Registered Agent in the state of Michigan must either be a person who lives there permanently or a company that is licensed to operate inside the state’s borders, such as a company that offers Registered Agent services. You have the option of selecting anybody who works for the organization, including yourself.
3. Publish your company’s articles of incorporation.
Your limited liability company (LLC) will be formally recognized after you have a document called the Articles of Organization that lays forth fundamental information about your business. Because this form serves as the legal registration for your company with the state, it is essential that all of the details be accurate.
What should be included in a company’s Articles of Organization?
When completing the Articles of Organization for your Michigan LLC, you are required to give the following information:
- LLC’s name
- If the term of the LLC is permanent or restricted.
- Address of the main office of the limited liability company Name and mailing address of the registered agent for the limited liability company
- Location where the State Secretary should send notifications to the limited liability company (LLC) through mail.
- Name and address of at least one member or management who has direct knowledge of the activities of the limited liability company.
- How the Limited Liability Company (LLC) will be run: by its members or by its managers
- Whether or whether the limited liability company may provide professional services
- Name and address of each person who organized the limited liability company
Filing of Your Organization’s Articles of Incorporation
After you have successfully established your business’s registered office and hired a resident agent for it, it is time to submit the formation paperwork for your limited liability company (LLC). Articles of Organization are documents that are filed by domestically or locally based enterprises.
You will need to fill out a Certificate of Authority form in order to get authorization to do business in the state of Michigan if your company was established in another state.
You have the option to print the form and submit it by regular mail in addition to the online filing option that Michigan urges you to use. The filing cost is fifty dollars.
In the case of a paper filing, the filing fee must be paid by check or money order made out to the State of Michigan; in the case of an electronic filing, the price may be paid by credit card.
Speeding up the formation process
If you are ready to spend an additional $50 or $100, you may speed up the process of filing by using a format service that is available within 24 hours for just $50 or on the same day for $100.
4. Obtain a Certificate from the State Government
After the formation paperwork of the LLC has been submitted and authorized, the state will send you a certificate that proves the LLC’s official existence in response to a written request for a copy together with the appropriate amount of postage.
With this certificate, the limited liability company will be able to get an Employer Identification Number (EIN), as well as business permits and a bank account for businesses.
5. Draft an Operating Agreement for Your Company
Even while establishing an extensive operating agreement for an LLC is not a legally required stage in the process of incorporating a limited liability company in the state of Michigan, it is highly suggested for all new limited liability firms.
The following items should be included in the operating agreement:
- Describe the business structure of the limited liability company.
- Determine the specific duties and commitments that each member of the limited liability company (LLC) has
- Map out the operational structure of the LLC.
Significant legal and logistical challenges might await a limited liability company (LLC) in the absence of an operating agreement that defines the precise responsibilities of its members.
6. Obtain a number that identifies you as an employer (EIN)
A number of limited liability companies (LLCs) will be required to get a Federal Employer Identification Number (EIN), often known as a tax ID number. An Employer Identification Number (EIN) is a nine-digit number that identifies your company to the Internal Revenue Service.
On the website of the Internal Revenue Service (IRS), which is accessible without charge, you may check to see whether you need an EIN and submit an application for one online.
Single-member limited liability companies, which are an exemption to the rule that most firms are required to acquire an EIN, may instead use the owner’s Social Security number.
Depending on the nature of their operations and where they are located, some limited liability companies (LLCs) doing business in the state of Michigan may be needed to get one or more business licenses or permits from the state or from their respective municipal governments.
Check with the clerk of the city or municipality where the LLC’s principal place of business is situated to see what kinds of local licenses are required (or county if it’s in an unincorporated area). You may get information on state licenses by using the State License Search tool on the State of Michigan website.
Contact a municipal or county clerk in the city or county where your limited liability company (LLC) is based to get information on the local licensing requirements.
7. Logging your Annual Renewals
In order to do business in the state of Michigan, limited liability companies (LLCs) are required to submit an annual statement to the Department of Licensing and Regulatory Affairs.
The report is to be submitted no later than February 15 of the year following the year in which the organization was formed or qualified.
On the other hand, if you incorporate your limited liability company (LLC) after September 30, you will not be required to submit a statement in February of the following year. For instance, if you choose to establish your company on November 1st, 2020, the date by which your first annual statement must be submitted is February 15th, 2022.
About three months before the annual statement is due, the state will send a pre-printed version of the BCS/CD-2700 form, which is the annual statement, to the registered office of the resident agent of the LLC. You have the option of filing the report online or in the mail. The charge to submit paperwork is $25.
Fees and next steps
The first filing cost for your articles of organization to incorporate a limited liability company (LLC) is fifty dollars ($50 USD). You can also be required to pay extra costs, such as $25 to reserve a name with the Corporations Division in the state of Michigan. To hold a name in reservation will only cost you $25.
Consider the following additional fees that may be incurred by an LLC:
- Annual renewals
- $25 per year is the charge for the renewal of the LLC name reservation.
- Copy of certified documents with the DBA (Doing Business As) name
- Certificate of Existence
When you register a limited liability company (LLC), you establish a legal basis upon which to operate your firm. Companies should make it a priority to maintain their limited liability company in compliance with state regulations and in an active position on the state’s website.
In addition, having a registered limited liability company enables you to perform the following:
- Register your company with the department of revenue in your state.
- Establishment of a bank account for your business
- Create a credit card account for your company.
- Invest in insurance coverage for your company.
- Obtain any permissions or licenses that are required to run your business, such as those issued by the health department, the zoning department, the department of home occupations, the department of professional licensing, and so on. Some states need a seller’s permission to conduct sales
- Create a trademark to protect both your company’s name and its logo.
Who should set up my LLC?
To establish a limited liability company (LLC), you are not required by law to consult a lawyer. The majority of states enable the establishment of LLCs via the process of registering the business entity on the website of the secretary of state and with the Internal Revenue Service (IRS).
If you are not acquainted with the process of forming an LLC, your best bet may be to enroll the services of a company creation provider so that you can be certain that the creation will go smoothly and quickly.
When entrepreneurs start a new firm, they may save startup costs and save valuable time by using a professional agency that specializes in company forms. They can take care of the things that you may not have time to think about for a price ranging from $50 to over $500, and some examples of such things are as follows:
- Developing an operating agreement for an LLC that details your company’s who, what, when, where, why, and how, and putting it into writing (required in some states).
- putting together articles of incorporation that identify the management of the LLC, the registration agent, and the date the company was formed.
- Taking up the role of registered agent for your firm.
- Keeping careful records in the event that there are investigations or litigation.
- Payment of filing fees and registration with the appropriate parties.
- Registering the name of your firm and ensuring that the name you choose for your limited liability company is accessible.
- Finishing up and turning in all of the necessary legal and formation documentation.
How much does it cost to have an LLC set up in Michigan?
The filing of your Michigan Articles of Organization will set you back $50, while the cost to reserve a name will be $25, and the yearly renewal charge will also be $25.
What are the advantages of forming a limited liability company in Michigan?
It is beneficial for the owner of a Michigan LLC to keep their personal and corporate responsibilities and debts separate in order to safeguard their assets. They will also be eligible for possible tax benefits, files that are simplified, minimal initial expenses, management, compliance, and administration, and administrative responsibilities.
How can I get started with a limited liability company in the state of Michigan?
You will need a registration fee, a name for your limited liability company (LLC), a Registered Agent, Articles of Organization, an Operating Agreement, and an EIN number from the Internal Revenue Service in order to create an LLC in the state of Michigan.
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