Last Updated on September 13, 2020
Cost to form an LLC in Michigan - $50
Filing Time - It normally takes 10-15 business days for the LLC paperwork to be approved in Michigan. Expedited processing is also available for an additional fee.
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The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in Michigan. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, 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 structure, protecting for the business owner’s personal assets.
Related: How Does an LLC Protect You?
Besides the 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.
Forming an LLC in Michigan is something most people can do on their own, but it’s nice to have some support in case you have questions or get stuck. IncFile and Inc Authority provide LLC formation guidance for only the cost of the state fees!
To form a Limited Liability Company in Michigan, file the Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs Corporations, Securities & Commercial Licensing Bureau. The LLC filing fee is $50.
Approval for the LLC typically takes between 10-15 business days. Expedited service is available to reduce the time to file the LLC. 24-hour service is available for an additional $50, same day service is an additional $100, two-hour service is an additional $500 and one-hour service is available for $1,000. In this situation where the LLC needs to be filed quickly, it is advisable to submit in person at the Michigan Department of Licensing and Regulatory Affairs – Corporations, Securities & Commercial Licensing Bureau office located at 2501 Woodlake Circle in Okemos, MI. For more information, contact 517-241-6470
HOW TO FILE THE ARTICLES OF ORGANIZATION AND FORM A MICHIGAN LLC
To file an LLC in Michigan, begin by downloading the Articles of Organization (Form CSCL/CD-700) or filing online. This for is for most business activities, however, if this Limited Liability Company will be providing professional services such as a dentist, physician, surgeon, doctor of divinity or attorney at law, use form BCS/CD 701.
Article 1: Name the LLC
Enter the name you want for the LLC. The name of the LLC also has to differ from other entity names registered with the state of Michigan. Check on available Michigan LLC names before filing to be sure the one you want is available.
Additionally, the name of the LLC must include one of the following designators at the end of the business name:
- Limited Liability Company
A comma may be used after the business name and before the designator. “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.
Before finalizing your LLC name, you may also want to see if a domain name is also available to have a matching website address.
Article 2: Purpose of the LLC
You are allowed to provide more information about what the LLC will do however, you can just 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.
Article 3: Entity Duration
If you intend the business to exist forever, which most businesses leave this field blank. If you have a specific end date in mind (typically used for investment-related businesses) choose a dissolution date.
Article 4: Resident Agent
To have an LLC in Michigan, a Resident Agent (more commonly known as a Registered Agent) must be identified. The Registered Agent can either be a resident of Michigan or a Resident Agent service that is registered with the state. The agent must have a physical address in the state to act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC.
Even though the business owner can be the resident agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.
Article 5: 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 was 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 day-to-day operations of the business.
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 to have the LLC officially start at a later date (up to 90 days), enter that date in a new article.
The LLC organizer(s) need to sign the Articles. The organizer(s) are typically the members but can also include or be an attorney, accountant or resident agent.
Pay and File
Pay and file the Articles of Organization.
In approximately 10-15 business days with standard processing or less with expedited processing, the LLC will be approved.
Professional services like IncFile and IncAuthority help guide you to make sure it’s done right and you only pay the normal state fees.
Check out our reviews of popular LLC formation services to learn more.
Tasks After Forming Your LLC
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 an Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.
Most states 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 have a full understanding of their roles and responsibilities which could lead to costly disputes in the future
Obtain an EIN
The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.
The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more.
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.
- Driver’s licenses of the members.
- Depending on the age of the LLC, 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 a variety of business licenses and permits to register for before starting. Some common registrations include:
- Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate.
- Professional License – Certain services such as bakeries, lawn services, dog groomers and others must be licensed.
- Sales Tax License – In order to sell products and certain services, registration with the Michigan Department of Treasury will be necessary.
File Annual Reports
LLCs are required to file an annual report with the Michigan Department of Licensing and Regulatory Affairs. The annual report updates ownership information and other details.