Our picks for LLC formation services

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FAQs

How much does it cost to register an LLC in Michigan, including state fees and other expenses?

The cost to register an LLC in Michigan includes several factors. The filing fee to submit your Articles of Organization to the Michigan Department of Licensing and Regulatory Affairs (LARA) is $50. Depending on your specific requirements and whether you need expedited processing, you may have additional costs for name reservation, same-day processing, or other optional services.

What are the annual reporting requirements for Michigan LLCs?

All LLCs in Michigan are required to file an Annual Statement of Information with the Bureau of Corporations division of LARA. Failing to file this report can result in penalties and the potential dissolution of your LLC, so it’s essential to keep this requirement in mind.

How long does it typically take to complete the LLC formation process in Michigan?

The timeline for forming an LLC in Michigan can vary depending on factors such as the processing method you choose. Standard processing can take several weeks, while expedited options are available for a higher fee. Same-day processing, for example, can provide you with your LLC formation documents on the same day for an additional cost.

Are there any specific naming requirements or restrictions for Michigan LLCs?

Yes, Michigan has naming requirements and restrictions for LLCs. Your LLC’s name must include the phrase “Limited Liability Company” or abbreviations like “LLC” or “L.L.C.” The name should be distinguishable from other businesses registered in the state and avoid some banned phrases or misleading words.

What tax obligations does my Michigan LLC have, and how do I ensure compliance?

Michigan LLCs may have various tax obligations, including state income tax, sales tax, and possibly other business-related taxes, depending on your specific activities. To ensure compliance, you’ll need to register for relevant tax identification numbers, such as the Michigan Business Tax (MBT) or Michigan Sales Tax License.

Can I change the structure of my LLC or convert it to another business entity type in the future if needed?

Michigan law allows for the conversion of an LLC to a different entity, such as a corporation, or vice versa. However, this process involves specific legal steps and may have tax implications, so it’s essential to consult with legal and financial professionals to navigate such changes effectively.

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When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming an LLC is often the best option for a number of reasons.

An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.

The process of creating an LLC in Michigan is pretty straightforward: the state does not impose unusual requirements on LLC founders and its document filing fees are reasonable.

Starting an LLC in Michigan step-by-step

1. Select a name for your Michigan LLC

Follow naming requirements

There are two major guidelines to follow when naming your LLC in the state of Michigan:

  1. An LLC’s name must be distinguishable from the names of existing businesses on file with the Michigan Department of Licensing and Regulatory Affairs.
  2. An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “L.L.C.”, or  “LLC.”

Need help coming up with a business name? Check out our free business name generator.

Check the name’s availability

After deciding upon a name for your LLC, confirm that it’s available for use in Michigan with the Department of Licensing and Regulatory Affairs Search for a Business Entity tool.

Reserve your LLC name

Reserving your LLC name with the Michigan Department of Licensing and Regulatory Affairs is a good idea because it protects the name from being used by another business before you legally form your LLC.

File an Application for Reservation of Name with the Department of Licensing and Regulatory Affairs online or by mail in order to reserve the name for up to six months. The reservation application filing fee is $25.

2. Designate a registered agent

As in every U.S. state, forming an LLC in Michigan requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address in Michigan OR if the individual or business is based out-of-state, they must have a business office in Michigan.

Our picks of the best registered agent services

  • Northwest Registered Agent: Starting a business requires a lot of state-mandated paperwork, which can be confusing for new business owners. Northwest offers business services that can help entrepreneurs find the right documentation, fill it out, and file it on time with the right government agency. In addition to helping you set up an LLC, Northwest has a host of additional services, like registered agent services, that new owners will find useful too.
  • ZenBusiness: There’s no need to stress about filing paperwork when you work with ZenBusiness. This company offers a great variety of LLC services, the focus of which is to ensure your business is set up correctly with the proper paperwork filled out and delivered to the right branch of your state government. Of course, ZenBusiness does charge for their services, but customers say they get the most bang for their buck.
  • Harbor Compliance is a great fit for organizations that register in multiple states and for those who don’t want to pay excessive service fees. With their network and electronic document delivery, they help ensure your business never misses a legal notification.

FAQs

How much does it cost to register an LLC in Michigan, including state fees and other expenses?

The cost to register an LLC in Michigan includes several factors. The filing fee to submit your Articles of Organization to the Michigan Department of Licensing and Regulatory Affairs (LARA) is $50. Depending on your specific requirements and whether you need expedited processing, you may have additional costs for name reservation, same-day processing, or other optional services.

What are the annual reporting requirements for Michigan LLCs?

All LLCs in Michigan are required to file an Annual Statement of Information with the Bureau of Corporations division of LARA. Failing to file this report can result in penalties and the potential dissolution of your LLC, so it’s essential to keep this requirement in mind.

How long does it typically take to complete the LLC formation process in Michigan?

The timeline for forming an LLC in Michigan can vary depending on factors such as the processing method you choose. Standard processing can take several weeks, while expedited options are available for a higher fee. Same-day processing, for example, can provide you with your LLC formation documents on the same day for an additional cost.

Are there any specific naming requirements or restrictions for Michigan LLCs?

Yes, Michigan has naming requirements and restrictions for LLCs. Your LLC’s name must include the phrase “Limited Liability Company” or abbreviations like “LLC” or “L.L.C.” The name should be distinguishable from other businesses registered in the state and avoid some banned phrases or misleading words.

What tax obligations does my Michigan LLC have, and how do I ensure compliance?

Michigan LLCs may have various tax obligations, including state income tax, sales tax, and possibly other business-related taxes, depending on your specific activities. To ensure compliance, you’ll need to register for relevant tax identification numbers, such as the Michigan Business Tax (MBT) or Michigan Sales Tax License.

Can I change the structure of my LLC or convert it to another business entity type in the future if needed?

Michigan law allows for the conversion of an LLC to a different entity, such as a corporation, or vice versa. However, this process involves specific legal steps and may have tax implications, so it’s essential to consult with legal and financial professionals to navigate such changes effectively.

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3. File Articles of Organization

An LLC is formed in Michigan with the filing of Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs.

Your Michigan LLC’s Articles of Organization must provide the following details:

  • LLC’s name
  • Registered agent name and address
  • LLC’s registered office
  • Articles of Organization effective filing date
  • The LLC’s general purpose
  • A statement clarifying whether the LLC is perpetual or temporary
  • LLC organizer’s signature and contact information

The articles can be filed online using the Corporations Online Filing System or by mail. The filing fee is $50, although you can pay an additional fee for expedited processing.

4. Create an operating agreement

Although not a legally mandated step for forming an LLC in Michigan, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

  1. Describe the LLC’s business structure
  2. Establish the individual responsibilities and obligations of LLC members
  3. Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs). The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File Annual Statements

Every year, LLCs active in Michigan are required to file an annual statement with the Department of Licensing and Regulatory Affairs.

The statement must be filed by February 15 the year after the LLC’s formation, unless the LLC was created after September 30. Additional reports are due each year by February 15. Failure to file an annual statement will eventually result in the loss of “good standing” status. The annual statement can be filed online or by postal mail. The filing fee is $25.

Review and obtain business licenses and permits

A Michigan LLC may be required to acquire one or more state or local business licenses or permits depending on its location and its business type. The types of licenses and permits you need can vary widely, so it’s crucial to conduct thorough research and ensure compliance.

  • Occupational licenses: The State of Michigan has a helpful State License Search that you can use to determine which licenses you’ll need to obtain and how to apply for them.
  • Local licenses: For information on local business license requirements, get in touch with a clerk or local government representative in the city or county where your LLC is based. Compliance with licensing regulations is essential to avoid potential legal issues down the road.

Understand state taxes

Another critical aspect of forming an LLC in Michigan is understanding the state’s tax obligations. Michigan has its own tax system, including income, sales, and business-related taxes. Michigan LLCs are taxed as pass-through entities, which means all income earned by your business is passed to your personal income tax return. The LLC isn’t subject to its own taxes; instead, you’re taxed on the income you make via your own taxes.

In 2024, the flat tax rate in Michigan is 4.25%.

Some LLCs doing business in Michigan must register with the Michigan Department of Treasury to satisfy various state tax obligations, such as LLCs that have employees and those that collect sales tax. You can register with the Michigan Department of Treasury online with the e-Registration tool or register through the mail.

Understand BOI Reporting

Michigan requires LLCs to file an Annual Statement of Information with the Bureau of Corporations, Securities & Commercial Licensing, which falls under the Department of Licensing and Regulatory Affairs. This statement, often referred to as BOI reporting, includes crucial details about your LLC’s structure, ownership, and contact information. Failing to file this annual report can result in penalties and even dissolution of your LLC.

A new law requires all LLCs to file a new Beneficial Ownership Information report through FinCEN.

  • If your LLC was formed before January 1, 2024, this is due by the end of 2024.
  • Any business formation in 2024 or later has to file 90 days after receiving confirmation of registration or formation.

Learn more about BOI reporting.

LegalZoom can help you file a compliant and stress-free BOI Report for only $149.

FAQs

How much does it cost to register an LLC in Michigan, including state fees and other expenses?

The cost to register an LLC in Michigan includes several factors. The filing fee to submit your Articles of Organization to the Michigan Department of Licensing and Regulatory Affairs (LARA) is $50. Depending on your specific requirements and whether you need expedited processing, you may have additional costs for name reservation, same-day processing, or other optional services.

What are the annual reporting requirements for Michigan LLCs?

All LLCs in Michigan are required to file an Annual Statement of Information with the Bureau of Corporations division of LARA. Failing to file this report can result in penalties and the potential dissolution of your LLC, so it’s essential to keep this requirement in mind.

How long does it typically take to complete the LLC formation process in Michigan?

The timeline for forming an LLC in Michigan can vary depending on factors such as the processing method you choose. Standard processing can take several weeks, while expedited options are available for a higher fee. Same-day processing, for example, can provide you with your LLC formation documents on the same day for an additional cost.

Are there any specific naming requirements or restrictions for Michigan LLCs?

Yes, Michigan has naming requirements and restrictions for LLCs. Your LLC’s name must include the phrase “Limited Liability Company” or abbreviations like “LLC” or “L.L.C.” The name should be distinguishable from other businesses registered in the state and avoid some banned phrases or misleading words.

What tax obligations does my Michigan LLC have, and how do I ensure compliance?

Michigan LLCs may have various tax obligations, including state income tax, sales tax, and possibly other business-related taxes, depending on your specific activities. To ensure compliance, you’ll need to register for relevant tax identification numbers, such as the Michigan Business Tax (MBT) or Michigan Sales Tax License.

Can I change the structure of my LLC or convert it to another business entity type in the future if needed?

Michigan law allows for the conversion of an LLC to a different entity, such as a corporation, or vice versa. However, this process involves specific legal steps and may have tax implications, so it’s essential to consult with legal and financial professionals to navigate such changes effectively.

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how to start an llc step by step infographic

Post LLC tasks

Set up business bank accounts

To maintain financial transparency and protect personal assets, setting up a dedicated business bank account for your Michigan LLC is advisable. Separating your business finances from personal ones is a good practice and a legal requirement for LLCs. This account will help you manage income, expenses, and tax obligations more efficiently.

Be sure to shop around for a bank that offers favorable terms and services tailored to your business needs, and other options like business credit cards for the future. For startup businesses and LLCs, you can start with options like Found, Relay, and Mercury.

Obtain a Certificate of Good Standing

A Certificate of Good Standing, also known as a Certificate of Existence, is a crucial document that attests to your Michigan LLC’s active and compliant status. It can be essential when conducting business transactions, securing loans, or even expanding into other states.

To obtain this certificate, you must ensure that your LLC is current on all necessary filings, including annual reports and tax obligations. The Michigan Department of Licensing and Regulatory Affairs (LARA) can provide you with this certificate upon request.

Build a website

In today’s digital age, having an online presence is vital for businesses of all sizes. Building a professional website for your Michigan LLC can help you reach a broader audience, establish credibility, and provide a platform for marketing your products or services.

While every LLC owner knows a website is necessary, you might not know where to start. Follow these steps to get started:

  1. Search for and purchase a domain name.
  2. Sign up for web hosting.
  3. Pick a web builder like Domain.com or GoDaddy to create a site with no coding experience necessary.
  4. Tailor your site to your customers, adding appropriate pages, content, and images.
  5. If you’re selling goods, add an e-commerce section to your site.
  6. Review, test, and publish your site.

Costs to set up an LLC in Michigan 

Average cost to set up an LLC in Michigan: $75-$275

You’ll manage a few expenses upfront as a business owner. Here’s a look at the setup costs you’ll need to pay:

  • Incorporation fees: The filing fee for a Michigan LLC is $50, which everyone will need to pay in order to establish an LLC in Michigan. If you’re in a hurry and need same-business-day processing, it can be obtained for a fee of $100.
  • Annual Statement filing fees: Each year, LLCs in Michigan must file an Annual Statement with LARA, which has a filing fee of $25. The filing fee is submitted along with the report.
  • Registered agent service fees (optional): Every Michigan LLC must list a registered agent on its formation documents. While some owners choose to serve in this role, some elect to hire a professional service. Hiring a registered agent service, which generally costs between $50 to $200 a year, gives owners peace of mind, knowing all confidential documents are received and accounted for.

Foreign LLCs doing business in Michigan

LLCs formed outside of Michigan intending to do business in the state must first register with the Michigan Department of Licensing and Regulatory Affairs.

Follow these steps to do business in Michigan as a foreign LLC:

  1. Comply with Michigan LLC naming guidelines and confirm that the LLC’s name is available for use in the state by searching the Michigan business name database.
  2. Appoint a Michigan registered agent to handle service of process in the state.
  3. File an Application for Certificate of Authority to Transact Business in Michigan and pay the $50 filing fee. The certificate can be filed online using the Corporations Online Filing System or by mail.
    • Along with the application, you must provide a Certificate of Good Standing or Certificate of Existence from the LLC’s home state. The certificate must be dated from 30 days or less of its filing with the Department of Licensing and Regulatory Affairs.

FAQs

How much does it cost to register an LLC in Michigan, including state fees and other expenses?

The cost to register an LLC in Michigan includes several factors. The filing fee to submit your Articles of Organization to the Michigan Department of Licensing and Regulatory Affairs (LARA) is $50. Depending on your specific requirements and whether you need expedited processing, you may have additional costs for name reservation, same-day processing, or other optional services.

What are the annual reporting requirements for Michigan LLCs?

All LLCs in Michigan are required to file an Annual Statement of Information with the Bureau of Corporations division of LARA. Failing to file this report can result in penalties and the potential dissolution of your LLC, so it’s essential to keep this requirement in mind.

How long does it typically take to complete the LLC formation process in Michigan?

The timeline for forming an LLC in Michigan can vary depending on factors such as the processing method you choose. Standard processing can take several weeks, while expedited options are available for a higher fee. Same-day processing, for example, can provide you with your LLC formation documents on the same day for an additional cost.

Are there any specific naming requirements or restrictions for Michigan LLCs?

Yes, Michigan has naming requirements and restrictions for LLCs. Your LLC’s name must include the phrase “Limited Liability Company” or abbreviations like “LLC” or “L.L.C.” The name should be distinguishable from other businesses registered in the state and avoid some banned phrases or misleading words.

What tax obligations does my Michigan LLC have, and how do I ensure compliance?

Michigan LLCs may have various tax obligations, including state income tax, sales tax, and possibly other business-related taxes, depending on your specific activities. To ensure compliance, you’ll need to register for relevant tax identification numbers, such as the Michigan Business Tax (MBT) or Michigan Sales Tax License.

Can I change the structure of my LLC or convert it to another business entity type in the future if needed?

Michigan law allows for the conversion of an LLC to a different entity, such as a corporation, or vice versa. However, this process involves specific legal steps and may have tax implications, so it’s essential to consult with legal and financial professionals to navigate such changes effectively.

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