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Oct 26 2017

Forming an LLC in Michigan #michigan #llc #formation


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Forming an LLC in Michigan

Here is an outline of the steps you need to follow in order to form an LLC in Michigan. You should also read the general section on forming an LLC for information that is applicable in any state.

1. Choose a business name for the LLC and check for availability.

  • Please see our section on choosing and checking the availability of a name for your small business. as well as our section on the trademark law aspects of choosing a name .
  • Michigan law requires that an LLC name contain the words limited liability company or the abbreviation L.L.C. or L.C., with or without periods or other punctuation. Additionally, your business name may not include the words corporation or incorporated or the abbreviation corp. or inc., and must be distinguishable from other names on file with the state.
  • Although you are not required to do so, consider registering your business name as a federal and/or state trademark.

2. Prepare and file articles of organization with the Department of Labor Economic Growth, Bureau of Commercial Services, Corporation Division.

  • The filing fee is $50. The Department of Labor Economic Growth website provides a simple, fill-in-the-blank form for the articles of organization .
  • If the LLC will be managed by one or more managers, rather than all the members together, then you should put a clause saying that in your articles of organization (in Article V of the fill-in-the-blank form). For general information on articles of organization, see the Articles of Organization page.

3. Negotiate and execute an operating agreement.

  • Michigan does not require an operating agreement in order to form an LLC, but executing one is highly advisable. There is no set criteria for the content of an operating agreement, but it typically includes topics such as how meetings are conducted, how the company will be managed, what capital contributions are required from each member, and how profits and losses will be allocated. The operating agreement does not need to be filed with the state. Please see the Operating Agreement page for details.

4. Obtain any required local licenses.

5. Determine what tax and other regulatory obligations the LLC has, and take care of any necessary registrations.

  • Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.
  • If you have an employee or employees in Michigan, you need to register for Michigan business taxes using the Business Tax e-Registration website. There, you will find forms and instructions for all business taxes. You can find more information on this process in the Michigan Business Taxes Registration Booklet .
  • Whenever you hire an employee in Michigan, you must inform both the IRS and the State of Michigan. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information on reporting new hires at the Michigan New Hires Operating Center website .
  • If you have three or more employees in Michigan or have employed anyone for at least thirty-five hours per week for thirteen or more weeks, you must carry workers’ compensation insurance. If you are not required to have workers’ compensation and you choose not to do so, you must get a certificate of exemption from the Insurance Division. More information is available in An Overview of Workers’ Compensation in Michigan .
  • As a business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns .
  • As of January 1, 2008, a new business tax regime — called the Michigan Business Tax — takes effect in Michigan, and it applies to LLCs. Under the new law, qualifying small businesses in Michigan will pay a tax equal to 1.8% of adjusted business income. Probably all small online publishing businesses will qualify — the law requires that officers/employees not be paid more than $160,000, gross receipts not exceed $18 million, and business income not exceed $1.3 million. For more information on the Michigan Business Tax, see the Michigan Business Tax FAQ on the Michigan Department of Treasury website.

6. Open a bank account for your business.

  • It is a good idea to keep your business’s finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your business. You will probably need a Tax ID number (EIN), a copy of the articles of organization, and a resolution identifying authorized signers if those names are not listed in the articles. Here is one example of the documentation that banks ask for.

Other Notable Requirements for Maintaining an LLC in Michigan

  • Michigan LLCs must file an Annual Statement with the Department of Labor Economic Growth every year before February 15. The filing fee is $25, and you can file the form online via the FILEonline Service. If the LLC is formed after September 30 in a particular year, the Annual Statement is not required on the first February 15 following formation.
  • Michigan requires certain documents to be kept at an LLC’s principal place of business. A list of the required documents is located in Mich. Comp. Laws § 450.4213.


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