Starting an LLC in Michigan
Michigan LLCs (limited liability companies) are legal entities, formed at the state level, that offer flexible management, pass-through taxation, and personal asset protection. Before you start ringing your LLC's cash register, you’ll need to do three things: appoint a registered agent, choose a name for your business, and file Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs (LARA). You can file the document online, by mail, or in person. The articles cost $50 to file. Follow our step-by-step guide to starting an LLC in Michigan and your business will be ready to roll in no time.
Ready to Start an LLC in Michigan?
Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Articles of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your LLC
An LLC needs a name, but not just any name will do. Michigan Compiled Law § 450.4204 states that your LLC name:
- Must include “limited liability company,” “limited company,” “LLC,” or “LC.”
- Not include words or abbreviations to make it sound like the LLC is another kind of entity, like “corp” or “limited partnership.”
- Be unique among approved business names in Michigan.
Already have a business name? Check to see if it’s available.
Can I reserve a business name in Michigan?
Thought up the perfect name for a business but aren’t ready to pull the trigger? You can reserve a business name for up to six months. You’ll need to file an Application for Reservation of Name with Michigan’s Corporations Division. It only costs $25 to reserve a name.
What’s the difference between my LLC’s name and a DBA?
Your LLC’s name is the name you filed with the state in your Articles of Organization. A DBA (sometimes called an assumed business name in Michigan) is essentially a registered nickname for your already established business. It’s any name your LLC uses to do business with that’s not the LLC’s legal name.
A DBA or “doing business as” name is also sometimes called a trade name or fictitious business name. LLCs that are looking to diversify their brand or create separate business identities often use a DBA because it saves the LLC owners the hassle of having to file and pay for separate LLCs every time they want to use a new name.
To get a DBA in Michigan you’ll need to register it with the state by paying $25 and filing a Certificate of Assumed Name.
Thinking about using a trade name? Learn How to Get a DBA.
2. Designate a Registered Agent
Michigan uses the term “resident agent” instead of registered agent, but rest assured, the terms are interchangeable. A Michigan registered agent is a person or company designated to receive legal correspondence and official paperwork on behalf of your LLC. Michigan law requires LLCs to have a registered agent. You can act as your own registered agent or you can hire a professional service like us. You’ll need your registered agent’s information to successfully file your state formation documents and form your LLC.
Learn why the pros use a registered agent service.
What does a registered agent do?
Michigan registered agent requirements are outlined in Michigan Compiled Law § 450.4207. At a minimum, your registered agent must:
- Have a physical address (no PO boxes or virtual offices) in the state of Michigan.
- Keep regular business hours (9am to 5pm) at that address.
- Accept legal mail and correspondence from the Michigan Division of Business Filings on behalf of your business and get it to you fast.
Can you be your own registered agent in Michigan?
You betcha. But you might want to give it some thought. Registered agents need to be available during regular business hours, and list their name and address on public record. If you’re someone who values a flexible business schedule or wants to keep your private information on lock down, being your own registered agent may not be the right move.
Can I change my registered agent after I start an LLC?
Yes, you can change your Michigan registered agent. You’ll need to complete and file a Certificate of Change of Registered Agent form with the Michigan Department of Licensing and Regulatory Affairs (LARA). The Michigan Certificate of Change must be submitted by mail or in person and costs $5 to file.
3. Submit LLC Articles of Organization
Now that your LLC has a name and a registered agent, it’s time to fill out and file your Articles of Organization. Registering your articles with the state is what makes your LLC legal, and what gives your personal assets liability protection.
Note: All of the information on this form will become part of the public record.
You’ll need to provide the following information about your LLC in order to successfully fill out the articles:
- Company name. Write your legal company name and include an indicator like “LLC.”
- Purpose (optional). You can specify the purpose of your business, but most LLCs skip this section.
- Duration (optional). You can skip this section unless you plan to add an expiration date for your LLC.
- Resident agent. The person or service that will accept legal mail on behalf of your LLC.
- Registered office. Must be a physical address in Michigan.
- Additional provisions (optional). Include additional information about your LLC, like if will it be manager-managed or member-managed.
- Effective date (optional). To delay your LLC’s formation for up to 90 days in the future, add a start date here.
- Organizer signature. The person who signs and submits the articles must sign.
- Submitter. The name and contact information of the person submitting the articles.
- Expedite. Want to get your LLC fast? Expediting ranges from $50 for 24-hour service to $1,000 for 1-hour service.
How can I keep my personal information off the public record?
We’re not just blowing smoke. Hiring a registered agent is the only way to keep your personal information off the public record. Whoever fills out and files your Michigan Articles of Organization gets their name and information plastered all over public records online. If you hire a professional registered agent, they’ll supply their information for you to put on your public filing documents and your information will stay private.
What’s the difference between a member-managed and manager-managed LLC?
Owners of LLCs are called members. If a member or members deal with the daily goings on of the LLC, then the LLC is member-managed. However, maybe the members have a lot going on, and would rather hire a manager to deal with customers, vendors, and everything else that comes with running a business. In this case the LLC would be manager-managed.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
How do I file the Michigan Articles of Organization?
To officially form your Michigan LLC, you’ll need to file Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs (LARA). You can file the document online, by mail, or in person. The total cost to file is $50. The state’s processing time for online filings is around two weeks. Their processing time for mailed filings is one month after receipt. Pay $50 extra and you can have your LLC ready to go within 24 hours of being received. If you have deep pockets and the patience of a toddler, you can get your LLC formed the same hour it’s received for $1,000.
Mail:
Michigan Department of Licensing and Regulatory Affairs
Corporations, Securities & Commercial Licensing Bureau
Corporations Division
P.O. Box 30054
Lansing, MI 48909
In Person:
Corporations Division
2501 Woodlake Circle
Okemos, MI
4. Write an LLC Operating Agreement
Next, you need an operating agreement. Now is no time to slack off. Your LLC’s operating agreement outlines the ins and outs of how you’ll hold meetings, the duties of members, how you’ll distribute profits (and losses), and other routine issues. The operating agreement can be tailored for the specific needs of the members. It’s an internal document, so you don’t need to file it—but not taking the time to write one could come back to bite you.
Check out our attorney-drafted Michigan LLC Operating Agreement.
Does Michigan require an LLC to have an operating agreement?
Like a lot of states, Michigan doesn’t legally require an operating agreement for LLCs. This doesn’t mean you shouldn’t write one. Your operating agreement is an internal document, which means you aren’t required to file it with the state. It should be noted that without an operating agreement, your LLC will be subject to the state’s default LLC statutes. Trust us, you don’t want Michigan telling the LLC members how to resolve a dispute or how to divide profits. This is why you want to take care to get the operating agreement in writing.
What should be included in an operating agreement?
Operating agreements are flexible documents, but the basic components are as follows:
- initial funding of the LLC
- distribution of profits and losses
- voting rights, decision-making powers, and management
- transfer of membership interest
- dissolving the business
Does a single-member LLC need an operating agreement?
You might think that a single-member LLC can’t disagree with itself, and you’d be right. However, an operating agreement is necessary for opening a business bank account. Having a business bank account separates your personal assets from business assets, which in turn helps maintain your LLC’s limited liability protections. An operating agreement can also help lend your single-member LLC legitimacy.
5. Get an EIN
Your Employer Identification Number, or EIN, is a nine-digit number assigned by the IRS and used for tax filing and reporting purposes. Basically, your EIN is like a Social Security number for your business. You can obtain an EIN by applying directly with the IRS. Just fill out the application online, pass the validity check, and you’ll have your LLC’s EIN in a matter of minutes.
Do I need an EIN for my Michigan LLC?
Technically, if your LLC doesn’t have any employees, you aren’t required to have an EIN. But let’s get real. For starters, obtaining an EIN is really easy, and free. An EIN helps you maintain a separation between personal finances and business finances. An EIN is also usually required when applying for a dedicated business bank account. Keeping personal finances and business finances separate is one of the keys to your LLC maintaining liability. You’d be crazy not to get an EIN for your LLC.
What To Do After Forming Your Michigan LLC
6. Open a Bank Account
Opening a bank account for your LLC is the next step. Creating separation between your personal and business finances helps bolster your LLC’s liability protections by building a wall between your personal assets and those of your business. Beyond that, having a business bank account makes it easier to accept and make payments, keep your accounting organized, and identify potential tax write-offs.
To open a bank account for your Michigan LLC, you’ll need to bring the following to the bank:
- Michigan LLC Articles of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.
7. Fund the LLC
You’ve got your LLC, and you’ve got a bank account for your LLC—now it’s time to fund it. If you are the only member of your LLC, this step is pretty simple. Just write a check or set up a bank transfer from your personal account to your business account. Multi-member LLCs are funded in the exact same way, just with more people writing checks to the LLC’s bank account. Your initial contribution is how you pay for membership interest. Members can also fund the LLC with property or services, though both of these often trigger IRS scrutiny.
What is LLC membership interest?
Membership interest is kind of like slices of pie. The more money you put into the LLC, the bigger the your slice. The size of the slice represents not only each member’s share of the profits, but also their potential voting rights (unless another arrangement is spelled out in the operating agreement). For example, if a member’s financial contributions to the LLC equal 35% of the LLC’s total funding, that member would typically have a 35% stake in the LLC and receive 35% of the LLC’s profits. However, an LLC’s operating agreement can spell out exactly how membership interest works with regards to each member.
8. File State Reports & Taxes
You’re almost ready to hit the ground running with your shiny new LLC, but you need to keep an eye on these final formalities. Michigan requires an annual statement (sometimes called an annual report). The fee for the statement is $25. Your LLC will be administratively dissolved if you don’t file an annual statement for two years.
Worried you’ll forget? Let us file your annual report for you.
When is the Michigan Annual Report due?
The annual statement is due by February 15th every year. LLCs formed after September 30th don’t have to file until the following year. This means that if you form your LLC in October of 2022, you won’t be required to file a statement until February 15th of 2024.
How are Michigan LLCs taxed?
LLCs are classified as “pass-through” entities for tax reasons, meaning the business profits and losses will flow through to the personal tax return of each member. LLC members are responsible for paying the entire 15.3% (12.4% for Social Security and 2.9% for Medicare) of federal self-employment tax. An LLC can also elect to be taxed as an S-corp or a C-corp.
Learn more about S-Corp Vs LLC tax designation.
