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Michigan LLC For Beginners: No Attorney Required 

Michigan LLC For Beginners: No Attorney Required 

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Michigan LLC For Beginners: No Attorney Required 

If you’re thinking about starting a business in Michigan, one of the first things you’ll need to do is decide what type of business structure to create. One popular option in Michigan is a Limited Liability Company (LLC), and this guide will walk you through the process of setting up an LLC in Michigan. Here, I’ll cover everything from choosing a name to filing your paperwork with the state. Let’s get started!

Related: Guide to starting a business in Michigan

What is an LLC?

The Limited Liability Company (LLC) is a popular business structure (also called a business entity) for businesses starting in Michigan. The LLC provides personal liability protection and has the potential to save money on taxes. With our guide, you can learn how to form an LLC in Michigan without an attorney.

Unlike a sole proprietorship or partnership, where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal entity that protects the business owner’s personal assets. So, if the LLC is sued, the owner’s personal assets are usually protected.

Besides liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

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Steps To Form A Michigan LLC?

Step 1: Choose an LLC Name

The first step in forming a Michigan Limited Liability Company is to make sure the name you want is available.  The name of each LLC must be distinguishable from other entity names registered in the state of Michigan, and the Michigan Department of Licensing and Regulatory Affairs Corporations Division (LARA) makes it easy to do a Michigan LLC name search, to verify if your LLC name is available. 

Additionally, the name of the LLC must include one of the following phrases or abbreviations at the end of the business name:

  • Limited Liability Company
  • L.L.C.
  • LLC
  • L.C.
  • LC

A comma may be used after the business name and before the designator.  “Great Lakes Goods LLC” and “Great Lakes Goods, LLC” are both acceptable.

If there is a name you want, but you are not ready to register the LLC, you can reserve it by filing the Application for Reservation of Name to the Michigan Department of Licensing and Regulatory Affairs.

If you plan to use a different name from the one that you register (perhaps you want to run multiple businesses under the LLC), you can use a DBA or Doing Business As name (sometimes referred to as a fictitious business name, trade name, or assumed name).  To register a DBA, file the Certificate of Assumed Name.

Before finalizing your LLC name, you may also want to see if a domain name is also available to have a matching website address. 

Step 2: Appoint a Michigan Resident Agent

In Michigan, every LLC will need to designate a resident agent (called a registered agent in many states). A resident agent is simply an individual or company with a Michigan street address who will be responsible for any legal correspondence. This commonly includes the receipt of legal documents, such as lawsuit notifications, on behalf of the business.

While many LLC owners opt to fulfill this role themselves, some owners choose to hire registered agent services like Northwest Registered Agent. Utilizing a resident agent service ensures that your LLC adheres to state requirements while offering an added layer of convenience and confidentiality since the owner’s personal address isn’t disclosed in public records.

Related: What is a Michigan resident agent?

Step 3: File the Michigan LLC Articles of Organization

The paperwork to officially create an LLC in Michigan is called the Articles of Organization. To submit the paperwork, either file online through the Michigan Department of Licensing and Regulatory Affairs website or downloading and mail the Articles of Organization (Form CSCL/CD-700)

Related: How to fill out the Michigan Articles of Organization

When filling out the Articles of Organization, there are a few sections that may be challenging to fill out, especially when seeing them for the first time. Let’s go over a few of those sections to help you get your LLC started right.

Purpose of the LLC

You are allowed to provide more information about what the LLC will do; however, you can keep the included text “The purpose or purposes for which the limited liability company is formed is to engage in any activity within the purposes for which a limited liability company may be formed under the Limited Liability Company Act of Michigan” and not add anything more.

Related: How to answer the business purpose statement 

Entity Duration

If you intend the business to exist forever, which most businesses do, leave this field blank.  If you have a specific end date in mind (typically used by investment-related businesses), choose a dissolution date.

Additional Provisions

This is an optional section and not used by most LLCs.  Here you would include additional rules for the operation of the LLC.

The most common provision would be if the LLC were Manager-Managed.  If the LLC is Manager-Managed, meaning the members hired a manager to run the LLC, similar to a CEO of a corporation, a statement would need to be included in this Article.  It’s more common for an LLC to be Member-Managed, meaning the members (owners) are actively involved in the business’s day-to-day operations.

Related: What is the difference between a Member-Managed LLC and Manager-Managed LLC?

Additional Articles

Additional articles can be added.  One common one is a delayed effective date.  By default, the LLC is effective on the date submitted.  If you prefer the LLC to start up to 90 days in the future, you would enter that date as a new article.

If you are worried about making a mistake when forming your LLC, or just don't want to deal with filling out state paperwork, an LLC formation service will help guide you through the process. My top recommended services include:

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What To Do After Forming An LLC In Michigan

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare a Michigan LLC Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, LLC member responsibilities, how profits and losses are distributed, and more.

Most states (including Michigan) do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Related: Michigan LLC operating agreement template

Obtain an EIN

If the LLC will hire employees or is owned by more than one member, an EIN is required. 

The EIN or Employer Identification Number (also referred to as a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.

How much is an EIN in Michigan?

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

Related: How to apply for an EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • State ID of the LLC members.
  • In some circumstances, a Michigan Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be various business licenses and permits needed before starting your business. Some common registrations include:

  • Business license: There isn’t a statewide license in Michigan, but some cities require businesses to obtain licensing before they can start.
  • Professional license: Certain services such as bakeries, lawn services, dog groomers, and others must be licensed. The Michigan Department of Licensing and Regulatory Affairs, Commercial Licensing Bureau provides oversight to licensed professions.
  • Sales tax license: To sell products and certain services, a sales tax license from the Michigan Department of Treasury will be necessary.

Related: What business licenses are needed in Michigan?

File the Michigan LLC Annual Statement

LLCs are required to file an annual statement (sometimes referred to as an annual report) with the Michigan Department of Licensing and Regulatory Affairs.  The annual report must be filed by February 15th, after the year of formation. If the LLC was formed after September 30th, the initial statement isn’t due until the year following. The annual statement state fee is $25.

Related: How to File a Michigan LLC Annual Statement

File the Beneficial Owner Information Report

Beginning in 2024, any individual who owns at least 25% or has “substantial control” of an LLC or corporation in Michigan or any other state must file the Beneficial Ownership Information (BOI) form with the Financial Crimes Enforcement Network (FinCEN). BOI reports are filed electronically through FinCEN’s website.

Michigan LLC FAQs

How much does it cost to start an LLC in Michigan?

The cost to form an LLC in Michigan is $50 to file the Articles of Organization.

What is the processing time to form an LLC in Michigan?

It normally takes 10-15 business days for the state to process the LLC Michigan Articles of Organization. For an additional fee, one business day processing is available.

Is there a yearly fee for an LLC in Michigan?

Each year, an annual report and a $25 state filing fee will be due for Michigan LLCs.

What is a Foreign Limited Liability Company?

A foreign LLC refers to an LLC that is physically operating in states outside of the state where it was formed. Physically operating means having a presence, such as having an office or employee in the state. The LLC would file an Application for a Certificate of Authority to Transact Business in Michigan (CSCL/CD-760)

Related: What is the difference between a domestic Michigan LLC and foreign LLC?

What is a Professional Limited Liability Company?

Businesses that require state licensing, such as dentists, physicians, attorneys, etc., can form a Professional LLC, though it’s not required. Instead of the LLC form, you would use form BCS/CD 701. Filing for a PLLC is very similar to that of an LLC.

Related: What is a Professional Limited Liability Company?

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

Michigan LLC For Beginners: No Attorney Required 

Michigan LLC For Beginners: No Attorney Required 

4 Responses

  1. I am a crafter of handmade items and sell my goods at an Antique & Artisan storefront. I pay rent for a small booth and the owners of the store charge and collect sales tax on my items that are sold. I have recently applied for a LLC in MI. I am confused as to whether I need to apply for a sales tax permit or any other licenses. Also do I need to get Fed ID #?

    1. Hi Debbie

      Even though sales tax is being collected, since your LLC is located in Michigan, a sales tax license will need to be applied for – https://startup101.com/how-to-register-for-a-sales-tax-license-in-michigan/

      The Fed ID# (or Federal Employer Identification Number) is only needed if you have employees or the LLC has multiple owners – https://startup101.com/how-to-register-for-a-michigan-ein/. If it isn’t required, you can use your social security number for the business, but many people go ahead and get one anyway.

      Hope this helps. Let me know if you have any other questions.

      Thanks!
      Greg

  2. When filing your articles of organization for an LLC in the state of Michigan where should I list that I am a single member

    1. Hi Steven – The Articles of Organization form has the minimum information required to create an LLC with the state. You can add more information in Article V, but you aren’t required to list that you are a single member in the state of Michigan.

      Hope that helps. Let me know if you have any other questions.

      Thanks!
      Greg

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