Guide to Getting a Michigan LLC

Want to launch your business as a limited liability company (LLC)? Michigan might be the perfect place for you. With its low cost of living, steady economic growth, and ever-increasing focus on small businesses, the Great Lakes State offers a ton of opportunity to ambitious entrepreneurs. 

An LLC also offers benefits to new business owners. Advantages include liability protection (by separating your personal assets and liabilities from those of your business), and flexibility in how your business is run and taxed. To create an LLC in Michigan, you’ll need to follow certain steps. And if you want to reap the aforementioned benefits, you’ll need to complete those steps carefully. You can read more about what does LLC mean & what does it stand for here.

Trying to follow all the rules for creating an LLC can seem trickier than navigating Ann Arbor traffic during a Michigan home game, but fear not. Our step-by-step guide will walk you through the entire formation process. Along the way, we’ll even explore how our services can help you cut through the red tape so you can focus on running your business. 

How to Start an LLC in Michigan

LLC requirements vary state by state so it’s important that you are well-versed in Michigan laws before proceeding. Generally, it comes down to these steps:

1. Name your Michigan limited liability company
2. Appoint a Michigan resident agent
3. File Michigan Articles of Organization
4. Create an operating agreement
5. Apply for an EIN
6. File a Michigan BOI report

Michigan LLC in 6 Steps

Below, we’ll show you how to start an LLC in Michigan with six key steps. We’ll also cover some helpful information to help you start your business off on the right foot. 

Note: These guidelines are for forming a domestic LLC. A domestic LLC is a limited liability company formed in the same state in which you reside. If you need to start an LLC outside of your own state, you’ll form a foreign LLC. Michigan foreign LLC formation involves obtaining a Certificate of Authority to transact business in the state and following a different process. 

Step 1: Name your Michigan limited liability company

The first step is to name your LLC in Michigan. In addition to choosing something that 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 MI LLCs

For starters, the name of your Michigan limited liability company can’t 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 indicating that it’s 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 can’t contain any words or phrases that suggest it’s a corporation, such as “Corporation,” “Incorporate,” “Corp.,” or “Inc.”

Reserving a Business Name

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.

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 use 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 levels.

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.

Step 2: Appoint a Michigan resident agent

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?

Anyone serving as a resident agent in Michigan must have a physical street address within the state. This is essential because the resident agent’s address ensures the state and other interested parties have a reliable location for delivering legal documents. It’s important to note that a P.O. box or similar mail service does not qualify as a valid address for this purpose.

Address Requirements for a Resident Agent

1. Physical Street Address: The resident agent must have a physical address in Michigan, not a P.O. box. This address is where legal notices, such as service of process, tax notices, and other government correspondence, will be sent.
2. Consistency in Documentation: The address of your resident agent must be consistently used and should be the same as the one listed in your LLC’s Articles of Organization.
3. Public Record: Remember, the resident agent’s address is part of the public record. This means it’s accessible to anyone who searches your LLC’s public documents.

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

Benefits of 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

What if the state can’t find my resident agent? 

If the Michigan Department of Licensing and Regulatory Affairs is unable to make contact with your resident agent office, you could find yourself out of compliance with the state. Being out of compliance can lead to penalties as severe as administrative dissolution of your LLC.

Furthermore, you could miss receiving notification that your business is being sued or has had legal action taken against it. This can all happen pretty easily if your registered agent office moves and you forget to update your paperwork with the state.

Our registered agent services will keep you organized and in compliance with Michigan’s resident agent requirements.

Step 3: File Michigan Articles of Organization

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.

Mail or Submit the Articles of Organization

For mailing the Articles of Organization for a Michigan LLC, you can send the form and the payment to the following address:

Michigan Department of Licensing and Regulatory Affairs
Corporations, Securities & Commercial Licensing Bureau – Corporations Division
P.O. Box 30054
Lansing, MI 48909

If you prefer to submit the documents in person, you can do so at this address:

2501 Woodlake Circle
Okemos, MI 48864​​

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)

Member-Managed vs. Manager-Managed

One of the options you have when starting an LLC is whether your business will be member-managed or manager-managed.

Under a member-managed structure, an LLC’s day-to-day management is handled by its members. When you opt for a manager-managed structure, you’ll either appoint one or more members to manage your LLC or hire an outside manager.

If not specified in your operating agreement, your LLC will default to member-managed. This is the option many LLC owners choose, but which one is best for you depends on preference and availability.

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 the Michigan Department of Licensing and Regulatory Affairs (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.

How to Expedite 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.

Why would I delay my filing date? 

Some entrepreneurs, especially if it’s near the end of the calendar year, will wait to file their LLC until after January 1 of the coming year. This is commonly done to avoid the hassle and cost of having to pay taxes on an LLC in the current year, especially if the LLC owners don’t need to establish an LLC immediately.

When you file your Michigan Articles of Organization, you also have the option to specify an effective date of up to 90 days out.

Step 4: Create an operating agreement

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 member 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.

Do I need an operating agreement if I’m the only owner?

If you’re starting a single-member LLC, you may wonder if you need an operating agreement. The simple answer is that operating agreements are still a good idea.

For starters, some banks won’t let you open a business bank account without an operating agreement. Potential investors may want to see this document, as well.

Additionally, if your business is sued or has legal action taken against it, having an operating agreement helps to further separate your personal and business liability. It does this by showing the court that you’ve taken the time to create an official legal document for your business. Otherwise, your LLC may wind up looking more like a sole proprietorship to a judge.

Step 5: Apply for an EIN

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.

Can filing as an S corp lower my taxes?

The LLC business structure is meant to be flexible, and one of those flexibilities comes in how you can choose to have your LLC taxed.

By default, an LLC is taxed as a sole proprietorship if it has only one member or a partnership if it has multiple members. This appeals to most owners of LLCs because it avoids “double taxation,” in which a business pays taxes at both the business level and again when the income is paid to the individual owners. But some LLCs opt to be taxed as a C corporation or an S corporation because it works to their advantage.

Being taxed as a C corporation does mean you get double taxation, but, for certain LLCs, the pros can sometimes outweigh the cons. C corporations have the widest range of tax deductions, which could be an advantage in some scenarios. For example, insurance premiums can be written off as a business expense.

S corp is short for “Subchapter S Corporation” and is geared toward small businesses. Having your LLC taxed as an S corp has pass-through taxation like a standard LLC, but there’s another potential advantage: It could save you money on self-employment taxes.

It does this by allowing you to be an “employee-owner” and split your income into your salary and your share of the company’s profits. In this way, you pay self-employment taxes on your salary, but not your profits.

The drawback is that the Internal Revenue Service scrutinizes S corps very closely, meaning you’re more likely to get audited. S corps are also harder to qualify for.

While it’s possible that one of the above options could work better for your LLC, we don’t need to tell you that taxes are very complicated. They’re also very specific to your situation. That’s why you really need to consult a tax professional to see which taxing method works best for your Michigan business.

Step 6: File the beneficial ownership information report

The start of 2024 brought with it a new filing requirement for LLCs and other small businesses: the beneficial ownership information report. This report, required under the terms of the Corporate Transparency Act, discloses information about your LLC’s beneficial owners. Your beneficial owners are individuals who hold 25% or more of the LLC’s ownership interest, exercise substantial control over the business, or receive a substantial economic benefit from the LLC’s assets. 

By requiring businesses to provide this information, the Financial Crimes Enforcement Network hopes to combat financial crimes like money laundering by making it more difficult to hide funds in shell corporations. 

You can submit your BOI report online or by uploading a PDF version of the form. There is no filing fee. 

For LLCs created during 2024, the BOI is due within 90 days of receiving approval of your Articles of Organization from the Department of Licensing and Regulatory Affairs. LLCs created before 2024 have to file by January 1, 2025. Any LLCs formed in 2025 or later will have just 30 days after formation to file. 

For additional info, see FinCEN’s website. Need help with this new form?
Our BOI report filing service can help.

Next Steps After Forming Your LLC

Forming an LLC is just the beginning of your Michigan business adventure. To navigate the waters ahead, consider these crucial steps:

1. 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.

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.

2. Get necessary licenses and permits

When launching your LLC in Michigan, it’s essential to understand the various licenses and permits your business may require to operate legally and in compliance with state and local regulations. The specific licenses and permits you need can vary based on your industry, location, and the nature of your business activities. Here are some common licenses and permits that a Michigan LLC might need:

Business License: Depending on your locality and the type of business you operate, you may need a general business license issued by your city or county. Check with your local government to determine if this license is necessary.

Professional Licenses: Certain professions, such as doctors, lawyers, accountants, and real estate agents, require state-issued professional licenses to practice in Michigan. Ensure that your LLC and its members hold the necessary professional licenses if your business falls into one of these categories.

Sales Tax Permit: If your LLC sells tangible goods or certain services, you may need a Michigan Sales Tax Permit. This allows you to collect and remit sales tax to the state. You can apply for this permit through the Michigan Department of Treasury.

Health Department Permits: If your business involves food service, childcare, or other activities regulated by health codes, you may need permits or inspections from your local health department to ensure compliance with safety and sanitation standards.

Alcohol License: If your LLC plans to sell alcoholic beverages, you’ll need an appropriate license from the Michigan Liquor Control Commission. The type of license required can vary depending on your establishment’s type and location.

Zoning Permits: Check with your local zoning department to determine if your business location complies with zoning regulations. Depending on your area, you may need zoning permits or variances to operate your business legally.

Home Occupation Permit: If you’re operating your LLC from your home in a residential area, you may need a home occupation permit to ensure that your business activities are in compliance with local zoning rules.

Federal Permits: Some businesses, such as those involved in agriculture, transportation, or manufacturing, may require federal permits or licenses issued by agencies like the Environmental Protection Agency (EPA) or the Department of Transportation (DOT).

It’s crucial to research and identify the specific licenses and permits applicable to your Michigan LLC. Failing to obtain the necessary permits and licenses can lead to legal issues, fines, or business disruptions. To ensure compliance, consider consulting with your local government offices, the Michigan Small Business Development Center, or a business attorney who can provide guidance tailored to your business’s needs and location.

3. Register for sales tax in MI  

If you’re in the business of selling goods, Michigan expects you to collect sales tax. Register for a Michigan Sales Tax License, ensuring you’re in line with the state’s tax regulations and can legally collect sales tax.

4. Invest in business insurance

Consider getting insurance to protect your LLC’s assets. Some common types include:

• General Liability Insurance: Mistakes happen. General liability insurance acts as a safeguard, protecting your LLC from potential legal claims stemming from accidents, injuries, or negligence.
• Commercial Property Insurance: Michigan’s diverse climate can be unpredictable. Safeguard your physical assets, like stores or offices, from potential risks — be it a Detroit snowstorm or an unexpected fire.
• Workers’ Compensation: If your LLC hires employees, Michigan mandates worker’s compensation insurance, providing a safety net for workplace-related injuries or illnesses.

5. Michigan Annual Statement Filing Requirements

In Michigan, the annual statement, or annual report, is an essential requirement for LLCs, serving to update the state with accurate contact and ownership details. Michigan LLCs must file this report annually by February 15. At the time of this writing, the fee for filing the annual statement is $25. Timely filing is crucial to avoid penalties, administrative dissolution, or the loss of limited liability protection. LLCs can file online through the Michigan Department of Licensing and Regulatory Affairs (LARA) website, and it’s essential to verify the current fee and deadline information on the LARA website due to potential changes.

Navigating Taxes for Your LLC

When you start an LLC in Michigan, it’s essential to understand the various taxes your business may be responsible for, including those that require registration with the state. Here’s a breakdown of the key taxes applicable to Michigan LLCs:

Michigan Business Tax (MBT): The MBT was replaced by the Corporate Income Tax (CIT) for most businesses, but some LLCs may still be subject to the MBT. It’s essential to determine your LLC’s eligibility and tax liability, as this tax is gradually phased out.

Corporate Income Tax (CIT): Michigan’s CIT applies to certain LLCs, particularly those classified as C corporations for federal tax purposes. LLCs with C corporation taxation must file CIT returns and pay taxes on their net income.

Sales Tax: If your Michigan LLC sells tangible goods or specific services, you may be required to collect and remit sales tax. You’ll need to register for a Sales Tax License with the Michigan Department of Treasury and comply with state and local sales tax regulations.

Use Tax: Use tax is applicable when your LLC purchases taxable goods or services from out-of-state vendors that do not collect Michigan sales tax. Your business may be responsible for reporting and paying use tax on these transactions.

Withholding Tax: If your LLC has employees, you must register for and pay state withholding tax. This tax is deducted from employee wages and includes income tax, city income tax, and payroll deductions.

Unemployment Tax: Michigan requires employers, including LLCs with employees, to pay unemployment taxes. You’ll need to register with the Michigan Unemployment Insurance Agency (UIA) and report wages and pay the associated tax.

Property Tax: Depending on your LLC’s assets and property holdings, you may be subject to property taxes levied by local taxing authorities. Property tax rates and regulations vary by location.

Federal Income Tax: LLCs are generally pass-through entities for federal tax purposes. This means that the LLC itself does not pay federal income tax. Instead, the LLC’s profits and losses pass through to the members, who report them on their individual tax returns.

Estimated Taxes: If your LLC has income that is not subject to withholding, you may need to make quarterly estimated tax payments to the IRS and the Michigan Department of Treasury to cover income tax liabilities.

To ensure compliance with Michigan’s tax regulations, it’s advisable to consult with a certified public accountant (CPA) or tax professional familiar with the state’s tax laws. They can help you determine which taxes apply to your specific Michigan LLC, assist with registrations, and provide guidance on tax planning and reporting to meet your obligations and avoid potential penalties.

Benefits of an LLC in Michigan

Why is Michigan such a hotspot for LLCs? The Wolverine State, with its supportive business environment and flexible regulatory structure, offers numerous advantages for budding entrepreneurs.

1. Personal Asset Protection

The primary benefit of an LLC is in its name: limited liability. This ensures that there’s a clear boundary between your personal assets and your business’s liabilities. So, your dream lakeside house in Traverse City is usually safe, even if your business encounters rough waters.

2. Simplified Taxation  

Michigan LLCs provide a conduit for profits and losses, meaning they flow through to the owners without being taxed at the company level. This prevents double taxation and can offer significant financial benefits.

3. Boosted Credibility  

Adding “LLC” to your business name isn’t just a formality. It signals commitment and professionalism to potential clients, partners, and investors.

4. Flexibility and Simplicity  

With less bureaucratic red tape and more management freedom than corporations, Michigan’s LLC structure helps entrepreneurs focus on innovation and growth.

Types of LLCs in Michigan

In the Wolverine State, with its legacy of industry and innovation, there’s an array of LLC structures catering to various business needs. As you venture into Michigan’s dynamic business landscape, it’s essential to select the LLC type that aligns with your goals and requirements.

Single-Member LLCs

Tailored for solo entrepreneurs, a single-member LLC strikes a balance between granting you the protection of limited liability and streamlining your tax procedures. Imagine steering your business ship single-handedly, but with the assurance that your personal treasures remain shielded from potential business turmoil.

Multi-Member LLCs

Collaborative ventures shine under this model. A multi-member LLC paves the way for several individuals to jointly helm a business. By sharing roles, responsibilities, and the ebb and flow of profits and losses, it champions teamwork and mutual decision-making, ensuring every member’s voice is acknowledged.

Professional LLCs

A professional limited liability company (PLLC) is a business entity tailored for licensed professionals, such as doctors and lawyers. Its primary purpose is to provide liability protection, similar to a regular LLC, while also meeting professional licensing requirements. Note that a PLLC does not shield its members from personal malpractice claims. It can, however, protect the members from malpractice claims against the other members.