Coming up with a great business idea is exciting, but entrepreneurs who are looking to launch a business in Michigan need to ensure that they understand the processes to make it legal. As in other states, you’ll be required to file LLC formation paperwork in Michigan in order to ensure your venture is legal. This is true whether you’re planning to form a corporation, partnership, or limited liability company (LLC).
No doubt, it’s exciting to think about starting a new business. But it’s vital that you know the steps necessary to keep everything legit. For example, you’ll need to select a registered agent when you file your LLC formation paperwork. A registered agent is either a person or company who will be charged with accepting important paperwork on behalf of your business.
If you’re not clear about how to choose a registered agent in the Wolverine State, read these frequently asked questions and answers.
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How is an LLC formed in Michigan?
So, you’re ready to legally structure your LLC in Michigan? To get started, you’ll need to take the following steps:
1. Name the company
You’ve thought of a great name for your company but be forewarned that there’s a chance the name is already taken. How can you avoid duplicating the name? Consider the following when creating a business in Michigan:
- Under Michigan law, your limited liability company will need to include the abbreviation “L.L.C.” or “LLC” or the phrase “Limited Liability Company” in the name.
- Your LLC’s name needs to be distinguishable from those other businesses have on file with the Michigan Department of Licensing and Regulatory Affairs. You can check for available names by looking in the Michigan business database. Any name reservation you make is good for six months. Just file an Application for Reservation of Name online or by mail and pay the $25 fee.
- If the legal name of your business feels too formal for everyday use, you have the option to use a fictitious name. Sometimes called a “DBA,” (which stands for “doing business as”), this fictitious business name must be registered with the Michigan Department of Licensing and Regulatory Affairs. Just fill out the form and pay a $25 filing fee. You can either drop it off in person at the Okemos address listed or mail it with the payment to the Lansing address shown on the form.
2. Pick a registered agent
It’s required for every Michigan LLC to appoint a registered agent (also known as an agent for service of process). This agent can be a person or a business entity; their primary role will be to accept legal documents on behalf of your business.
3. File Articles of Organization with the State of Michigan
As with most other states, Michigan requires you to create and file the Articles of Organization. You can file online or by mail using form 701, but either way, you’ll have to pay the $50 filing fee.
4. Create a company operating agreement
Although you won’t be required by the State of Michigan to create an operating agreement, it’s highly recommended because it’s so useful. This primarily internal document now only shows how it will be managed (which includes the rights and responsibilities of your LLC’s members and managers), but also helps demonstrate that your LLC is truly a separate business entity. If you choose not to create one, Michigan LLC law will determine the operations of your business if a disputable situation comes up.
There are plenty of sample LLC operating agreements online. Just do a quick Google search to get examples and/or templates.
5. Obtain an EIN
Even if you have no employees other than yourself, your LLC will be required to have an Employer Identification Number (EIN). You can obtain this number by completing an application on the IRS website. There is no fee to get an EIN.
The IRS makes this process easy by providing an interview-style application. You’ll be asked questions as you go and there are hyperlinked keywords and definitions rather than separate instructions. The application also includes embedded help topics to make it very user-friendly. As soon as you complete your application and all the information is validated, you’ll get your EIN.
6. File an annual report
The Michigan Department of Licensing and Regulatory Affairs will require you to file an annual statement on your LLC. This report is due on February 15 each year if your LLC was organized or qualified before September 30. (If your LLC was organized or qualified after September 30, you can skip that first annual report.)
You’ll get a pre-printed annual statement mailed to your registered agent about three months before it’s due. You can file it online or by mail, but either way, it will run you $25.
What is a Michigan registered agent?
A registered agent is the individual or business entity that has agreed to accept important documents on your LLC’s behalf.
Do I really need a registered agent in Michigan?
Yes, every LLC in the state of Michigan is required to list a registered agent on certain forms.
Can I be my own registered agent in Michigan?
It’s actually common for a business owner to serve as their own registered agent in Michigan.
Who can be a registered agent in Michigan?
Just like in other states, Michigan has certain criteria you’ll need to meet in order to be a registered agent. The criteria are as follows:
- You (or your registered agent) must be at least 18 years old.
- That person or entity must have a physical address in Michigan. (Post office boxes are not allowed.)
- The registered agent must always be available during regular business hours in order to receive important paperwork.
Why would a company choose to work with a registered agent service?
Sure, representing yourself instead of paying a registered agent can save you a little money. But before you make that decision, consider the following advantages to hiring a registered agent:
- Local options. If you’re starting a new business in Michigan but don’t have a business, office or residential street address yet, you won’t be able to fulfill the requirements to be your own registered agent. Luckily, there are lots of affordable options in Michigan when it comes to registered agents.
- Availability. Money might be tight, but time is often even tighter when you’re the owner of a start-up. Be realistic in considering how busy you might be in terms of running errands, attending meetings and traveling to meet investors, contractors of vendors. Can you really commit to being in one place Monday through Friday from 9 a.m. to 5 p.m. just to be available to accept delivery of paperwork?
- Privacy. If you’re a first-time business owner, you may not know that law enforcement is sometimes used to deliver important documents. Even if your paperwork isn’t a lawsuit, but rather, something “innocent,” your employees, neighbors, and customers won’t know the difference. If you choose to pay a registered agent instead of representing yourself, you’ll be assured privacy.
- Experience. How knowledgeable are you on Michigan’s state and federal regulations and deadlines? If you’re new to starting or running a business in the state, it’s probably safe to assume that a registered agent service knows more than you do about keeping your limited liability company compliant.
- Time savings. Even if you have the knowledge and/or experience to fill out confusing forms, do you really want to commit that kind of time?
List of Michigan registered agent services
You should have no problem finding a registered agent for your LLC in Michigan, but here are a few choices to get you started:
- Incfile.com: Incfile.com can help entrepreneurs file their LLC formation paperwork and serve as the company’s registered agent. The online company offers a host of beneficial business services that includes filing reports and other necessary documents with the state. The first year is free. After that, it’s $119 a year.
- Northwest Registered Agent: For $125 a year, Northwest Registered Agent offers an online portal, real-time updates when mail is received, and pricing that remains the same each year. The company offers its services in several states and has years of experience in the field. Additional business services are also offered.
- Swyft Filings: Swyft Filings offers registered agent services that start at $149 a year. Users get an online dashboard, report and filing reminders, and secure document storage for this fee. In addition, the company has a buffet of other business services available when you have a need.
How much does a registered agent service cost in Michigan?
Registered agent services in Michigan range from $49 to $125. The cost will vary based on the features offered by the service. Companies that simply forward mail and alert owners to new documents are cheaper than services that offer online portals, document scans, and assistance with compliance reports and documents.
How does an owner select a registered agent in Michigan?
The registered agent’s name and address are listed on the LLC formation paperwork.
If you plan to select a registered agent service, do a quick search online to turn up options in the state of Michigan. Just compare their rates, offerings, and reviews before paying one to represent your LLC. You’ll be required to list it on some of the forms for the State of Michigan.
Can a company change its registered agent?
To change your registered agent in Michigan, simply fill out a change form and pay the $5 fee.
What’s a resident agent?
In Michigan, you may hear the term “resident agent” used interchangeably with “registered agent.” The name varies by state. In some states, like Arizona, the commonly used title is statutory agent.
What’s a commercial registered agent?
If you’re asked, on a form, whether your registered agent is commercial or non-commercial, heed this general guideline: If you’re paying a business or individual to serve as your registered agent, choose commercial. If you’re representing yourself, choose non-commercial.