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How to Start an LLC in Michigan: Step-by-Step Guide

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Wondering how to start an LLC in Michigan? The Great Lakes State may just be the ideal place for your LLC because of its low cost of living and stable economic development. With its emphasis on growing the small business sector, this industrious state is the perfect place for aspiring entrepreneurs to grow their business.

Starting your business as an LLC offers you liability protection and flexibility in the way you operate and pay taxes. Starting an LLC in Michigan is easy if you follow this step-by-step guide.

Step 1: Name Your Michigan LLC

Naming your Michigan LLC is the first step in learning how to start an LLC in Michigan. Brainstorm the name for your LLC to ensure it’s best for both branding and legal purposes. Be sure to satisfy the state’s naming prerequisites by making sure your business name:

  • Contains the words “LLC,” “L.L.C.,” “limited liability company,” or “limited company”
  • Does not use a restricted word or phrase such as “bank,” “attorney,” or “university” without authorization
  • Doesn’t have the words “Corporation,” “incorporated,” “Corp,” or “inc.”
  • Can be distinguished from any other trade name or entity in the Michigan corporations search of the Department of Licensing and Regulatory Affairs (LARA)

You can reserve a name for up to 180 days before officially registering your LLC with the state.

Using a Fictitious Business Name

A Michigan DBA (“doing business as” name) is an assumed moniker that your company uses during the course of its business, which differs from the name registered with the state. Although it is not a legal entity, you must file your DBA (also referred to as a “fictitious business name”) with the state.

Step 2: Appoint a Registered Agent

Identify your legal point of contact, or ‘registered agent,’ for your business by selecting someone who has a legal address in Michigan and who is 18 years of age or older. This individual will receive legal notices and official documents on behalf of your company. In Michigan, a domestic entity (or Michigan-based entity) is also allowed to be an LLC’s registered agent for receipt purposes.

Determine if You Need a Michigan Business License

Because there is no centralized place to determine if you need to register for a Michigan business license, it may be worth your time to research both in the state and local jurisdictions where you anticipate doing business. You may also need insurance, depending on the type of business you have.

Step 3: File Your Michigan Articles of Incorporation

The most important step for learning how to start an LLC in Michigan is filing your articles of incorporation. You’ll become an official LLC when you submit your Form 700 and get approved. Apply on LARA online, by mail, or in person in Lansing. You’ll need to know the following information to complete the articles of incorporation:

  • Your LLC’s name
  • Its business purpose
  • The LLC’s duration
  • The registered agent’s name and address
  • The LLC management structure

It typically takes 24 hours to get approved online or three to five business days if done by mail, and can be rushed for an additional charge. Filing the articles of incorporation costs $50 to submit.

Foreign LLCs

Foreign LLCs are those companies that were established under the laws of another state but are ‘transacting business’ in Michigan. All foreign LLCs must obtain a Certificate of Authority from LARA to do so.

Step 4: Prepare Your Operating Agreement

An “operating agreement” is a document outlining the procedural, structural, and ownership understandings for the LLC. Although it is not required to be filed with the state, doing so can help you offset any future misunderstandings among the owners about the LLC. Creating an operating agreement:

  • Enables you to define the operating rules of your LLC
  • Defines the management structure for your LLC
  • Separates your private assets from those of the company’s more clearly
  • Helps you illustrate the rights and responsibilities for each business owner to avoid any confusion in the future

Step 5: Choose How You Want to be Taxed

Choosing how you want to be taxed is the last step to learning how to start an LLC in Michigan. Decide whether you want to be taxed as a “pass-through entity” like a sole proprietorship or a corporation. If you choose the former, you will be personally taxed for the profits and losses of your company. If you choose the latter, your company will pay the 6 percent corporate state tax annually.

Get Your Employer Identification Number (EIN)

Your EIN is like a Social Security number for your company. It is your official identification number with the IRS and is often used for business or tax purposes like opening a bank account or hiring an employee. Applying for this nine-digit number with the IRS is easy and free and can be done by mail or online.

Remember to File Your Michigan LLC Annual Reports

You must file an annual report for your LLC by the February 15 deadline, unless you created your LLC after September 30th the year prior. The filing costs $25 annually. You must include member and manager names and addresses as well as details of who is licensed and in what jurisdiction.

Need Help Learning How to Start an LLC in Michigan? Speak With a Professional Today

If you want to start an LLC in Michigan, consider speaking with a helpful expert today. They will help you determine the best plan to successfully start an LLC in Michigan.

Disclaimer

This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

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