Want to learn how to form an LLC in Michigan? Then you’ve come to the right place. Whether you’ve been thinking of forming a company in the Great Lakes State for a while or have already started dozens of other companies, we’ll explain the tips and tricks to make the process as easy as possible.
Choose a Name for Your Michigan LLC
Choosing a name for your business is the first step in forming your Michigan LLC. You can pick almost any name you like, but just make sure that it is memorable, easy to pronounce and write, and complies with Michigan’s naming laws and regulations.
Those rules include the following:
- The name of your Michigan LLC must be unique
- Your Michigan LLC must have the words “LLC”, “L.L.C.”, or “Limited Liability Company” in its name, usually at the end
- The chosen word must not confuse your Michigan LLC with other business names or government agencies
- The name of your Michigan LLC may have other general restrictions. For example, some LLCs may require additional paperwork or a licensed individual, such as a lawyer, to be part of your Michigan LLC
For a complete list of Michigan LLC naming rules and guidelines, you can read the Michigan LLC naming rules.
Once you have chosen a name for your Michigan LLC, you will need to do a Michigan LLC search to make sure another company doesn’t have the name already. This is easily done by searching the state’s online filing system.
Secure a URL for your LLC
It is vital to secure a URL that reflects your brand to help your business build an online presence. Therefore, you should check if the name of your LLC is available as a web domain. Even if you have no plans of creating a website for your business, you may want to purchase the URL. This helps prevent other entrepreneurs from acquiring it and opening a rival business in a different state.
Hire a Registered Agent
When forming your LLC in Michigan, you will be required to appoint or hire a registered agent. All businesses and LLCs in Michigan must have a local registered agent to receive and forward legal and state documents on behalf of your company.
The registered agent in Michigan must have a street address — a P.O. Box isn’t enough. They must also be available during regular working hours to accept and forward legal documents and notices.
You can choose yourself or another member of your LLC to act as a registered agent. However, we recommend hiring a professional registered agent service provider in Michigan. Why? Because they do all of the hard work for you, allowing you to focus on running and growing your business.
Here are some of the top companies:
Northwest is our top recommendation for an LLC registered agent in Michigan. They offer the following registered agent services:
- Mail forwarding
- Compliance alerts
- Document storage
- Pre-filled state forms
- Scanned documents
- Annual report reminders
You will also get access to their compliance calendar to help you stay on top of deadlines. While the annual cost of Northwest registered agent services is $125, you can get a discounted cost of $100 if you get the registered agent for four or more states.
Another great feature of Northwest is its outstanding Corporate Guides, which can help you with almost any business issue.
ZenBusiness is another excellent choice for a registered agent. The company is rated #1 by Forbes and Investopedia and offers the full range of services, including:
- Mail forwarding
- Email notifications
- Document scanning
- Fast turnaround
- Access to a personalized dashboard
- Expert handling of all business and legal documents
ZenBusiness charges $199 for its registered agent service, but you can also upgrade the registered agent package to include two free filing changes every year and annual support alerts.
Another top registered agent recommendation for your Michigan LLC is IncFile. They will help your business remain compliant and meet all deadlines with the help of the following tools:
- Automatic mail forwarding
- Access to all your legal and business documents on a personal dashboard
- Tailored text and email notifications
You get all these features for only $119 per year. On top of that, you can get your first year of IncFile registered agent services free if you use its LLC formation service.
File Articles of Organization
After choosing your ideal LLC name and hiring a registered agent, the next step in forming your LLC in Michigan is filing an Article of Organization.
Michigan’s Articles of Organization officially and legally registers your business, making it a separate legal entity.
You will need to include the following details in your Article of Organization:
- Name of your LLC
- Name and street address of your registered agent
- The purpose of your LLC
- The physical addresses and names of the initial members and managers
- The physical address of your business
- The effective date of the LLC
- The physical address, names, and signatures of the LLC organizers.
Filing an Article of Organization with the Michigan Secretary of State can be done online, via mail, or in person. You will need to pay a filing fee of $60 for mail filing or $50 for online filing.
Create an Operating Agreement
Creating an Operating Agreement for your LLC should be next on your agenda. An operating agreement outlines the company’s management structure and the responsibilities and roles of all members of your Michigan LLC.
Although you are not required by Michigan state law to draft an Operating Agreement, having one will set clear expectations and keep all business owners on the same page. If you have one or more co-founders, creating one is a good idea.
When creating an Operating Agreement for your Michigan LLC, you should include the following details:
- The responsibilities and rights of managers and members
- Provisions for dissolving the LLC
- Provisions for resolving disputes
- Provisions for removing and adding members
- The management structure of your Michigan LLC
Obtain all Licenses and Permits
To operate and run your LLC lawfully in Michigan, you must comply with state, federal, and local government regulations by obtaining certain licenses and permits.
The requirements and fees for Michigan LLC permits and licenses will vary depending on the location and type of business license and permit you require. For example, you will need a liquor license if you want to serve alcohol and a food license if you want to open a restaurant.
Most of these Michigan LLC licenses and permits are renewed annually. So, you should take note of the renewal dates to prevent interruption of your business operation. Check out the Michigan Department of Treasury website to learn more about the license and permit you need for your business.
Acquire Federal and State Tax IDs
Federal and State Tax ID is a 9-digit Employer Identification Number (EIN). You will need a Federal and State Tax ID for the following reasons:
- To identify your LLC for federal and state tax purposes
- Open a bank account under your Michigan LLC’s name
- To hire employees for your LLC
Acquiring a Federal and State Tax ID in Michigan is straightforward and free. You only need to visit the Internal Revenue Service (IRS) website and apply for your Federal and State Tax ID.
Open Business Bank and Credit Accounts
When running your Michigan LLC, you won’t want to mix your business and personal finances, as this may cause misappropriation of business funds. Therefore, it is vital to open a separate bank account for your business.
A separate bank and credit account will make filing your taxes, deducting business expenses, and managing your finances easier. It will also help you keep track of your business performance and conduct proper business accounting.
To open a business bank account in Michigan, you must have the following documents:
- The Operating Agreement of your LLC
- Your LLC’s Federal and State Tax ID
- An LLC Resolution to open a Michigan bank and credit account if your business has two or more members.
There are several excellent business banks in Michigan, including:
Purchase Michigan Business Insurance
Before your Michigan business starts operating, you will require relevant business insurance policies. Experienced entrepreneurs understand that many things, such as injuries and fires, can go wrong while running your business. That is why you need to purchase Michigan business insurance to protect your LLC assets.
Insurance policies you may wish to purchase for your company include:
- Commercial property insurance for repairing and replacing stolen, damaged, or lost business properties.
- General liability insurance to protect your Michigan business from common business risks, such as customer injury, customer property damage, and the high cost of lawsuits.
- Workers’ compensation insurance to protect employees from work-related injuries and illnesses.
Get a competitive quote for all your business insurance needs by visiting a comparison site like Insureon.
Buy an LLC Formation Package to Speed Up the Process
If you don’t have enough time to go through the steps of forming an LLC in Michigan, purchasing an LLC formation package can be a great way to speed up the process.
Many companies provide LLC formation services in Michigan. Some companies, such as IncFile, will help you form your Michigan LLC without charging you a penny. You will only need to pay for the state fees. In return, you will get a free year of registered agent services.
You can also consider LegalZoom, as they have both premium and free LLC formation packages. With the free package, you will only need to cover the state fees. However, you can get additional perks with LegalZoom’s Pro and Premium packages that cost $249 and $299 per year, respectively.
FAQs About Forming an LLC in Michigan
How Long Will It Take to Form My Michigan LLC?
You can form your Michigan LLC in 2 weeks if you file the Article of Organization online. If you file via mail, it will take up to 4 weeks.
How Much Does It Cost to Set Up an LLC in Michigan?
Setting up an LLC in Michigan will cost you $50. This is the state fee for filing the Article of Organization for your Michigan LLC. You will also be required to pay an annual report fee of $25 to keep your Michigan LLC active.
Can I Act as my Own Registered Agent in Michigan?
You can appoint yourself to act as a registered agent for your Michigan LLC. However, you must be a Michigan resident with a permanent street address. You must also be over 18 years old. Moreover, you should be available in your office during regular working hours in Michigan to accept legal and business compliance documents.
Can I Form a Single-Member LLC in Michigan?
Yes. You can form a single-member LLC under Michigan state laws, provided you follow all the requirements of forming an LLC. The process of forming a single-member LLC in Michigan is similar to what we have discussed in this article.
Get Your Michigan Business Started
Forming your LLC in Michigan is a fairly simple process that can be completed using the steps outlined in this article. However, if you do not want to go through the process on your own or do not have enough time to form your Michigan LLC, consider purchasing an LLC formation package to streamline the process. Best of luck!