Many small business owners in Michigan choose to operate as a limited liability company, or LLC, rather than a sole proprietorship. LLC status helps shield their personal finances from business risk. As of late 2024, the state had more than 840,000 limited liability companies in good standing.
Taking the steps below can help business owners stay on top of the documents, requirements, and fees they’ll face when creating an LLC in Michigan.
Key Points
• Choose a unique name for your Michigan LLC and reserve it for 180 days by paying a $25 fee.
• Designate a resident agent (aka registered agent) at a registered street address to receive legal documents on behalf of your LLC.
• File articles of organization with the state’s Corporations Division; there are options for expedited processing.
• Draft an operating agreement to outline the management and financial structure of your LLC.
• Obtain necessary licenses and permits specific to your business type in Michigan.
1) Choose a Name for Your Michigan LLC
Your LLC’s name must be unique among businesses in the state. If you’ve already got some possible names in mind, you can check online to see if they’re taken: Michigan’s Department of Licensing and Regulatory Affairs (LARA) maintains a database of existing business entities.
Once you’ve chosen a name, you can reserve it for 180 days (much longer than other states’ 30-, 90-, or 120-day holding periods). The reservation fee is $25.
There are a few rules for your LLC’s name:
• It must be distinguishable from other business entities’ names.
• It may not contain a word or phrase indicating purposes other than the ones stated in the articles of organization.
• It may not include the words corporation or incorporated or their abbreviations.
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2) Designate a Registered Agent
In order to file your LLC formation documents, you must select a resident agent, known in other states as a registered agent. In Michigan, your LLC’s resident agent is responsible for receiving documents, notices, or other demands on behalf of the company.
Eligible resident agents include any of the following:
• A Michigan resident
• A Michigan corporation
• A foreign corporation that has a certificate of authority to do business in Michigan
• A Michigan LLC or authorized foreign LLC
That means you can either act as your LLC’s own resident agent or hire a third party for the role. You also need to include the address of a registered office that’s associated with your resident agent.
3) File Articles of Organization
One difference between operating an LLC vs. a sole proprietorship in Michigan is that an LLC requires you to file articles of organization with the state. Michigan’s brief LLC form includes the following information:
• Name
• Purpose of the LLC
• Duration (if it’s not perpetual)
• Name of resident agent
• Mailing address of registered office
• Any additional provisions
• Your signature
The fee is $50. For an additional $50, you can get 24-hour service; for $100, there’s same-day service if you submit the form before 1pm.
LARA recommends waiting to purchase any business marketing materials until your articles of organization are filed and approved. You may want to take out a small business loan at this stage to pay for those marketing materials and your other startup needs.
Be aware that an LLC designed to provide certain services (dentistry, for example) would take the form of a professional limited liability company (PLLC). PLLCs’ articles of organization use a different form.
4) Create an Operating Agreement
Getting an LLC in Michigan up and running doesn’t require an operating agreement, but it’s smart to draw one up during your formation process. This document provides details on how you (and any of your LLC partners or members) will run the company, and may be useful later when approaching lenders for a startup loan.
Some points you may choose to include are:
• Ownership percentages
• Voting rights and procedures
• Responsibilities and duties of LLC members
• Profit and loss distribution plans
• Buyout rules
Having an operating agreement in place can also help protect LLC partners and members from potential liability stemming from the business’s activities. For example, the company — not individual members — is obligated to pay back an LLC business loan.
Also, the separation between members and the LLC comes into play if, say, you decide to loan money to your LLC. The loan would involve a binding contract for repayment. You may want the LLC’s operating agreement to contain rules or conditions governing such transactions.
5) Obtain Necessary Licenses and Permits
Many types of businesses are subject to additional licensing and permit requirements in Michigan. The state website divides them into the following categories:
• Adult and child care
• Health professionals
• Occupational professionals
• Commercial licenses
• Cannabis licenses
• Skilled trades
• Fire safety
• Unarmed combat professionals
• Liquor control
The site also lists various types of permits your business may need, such as those for wastewater construction, building in high-erosion areas, campground construction, and many more.
It’s important to get the proper licenses and keep them current as your business grows. If you later need to secure a business line of credit, lenders are likely to insist that all licenses be in order so that the company can continue to generate income.
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6) Review Michigan Tax and Regulatory Requirements
In order to file, pay, and manage your business’s state taxes, create an online account with Michigan Treasury Online (MTO). Registration will be quicker if you already have a federal employer identification number from the IRS. MTO can then process this online registration application within 48 hours.
LLCs can choose one of several different tax filing statuses. It’s helpful to consult with an experienced accountant to select the filing status that will maximize your LLC’s tax benefits.
In addition to submitting your LLC’s annual tax return, you must file and pay quarterly tax estimates if you expect to owe at least $800.
The Takeaway
Once you’ve chosen a name and a resident agent, creating an LLC in Michigan calls for just a few forms and fees. Your LLC application can be handled within 24 hours if you pay for expedited processing. Having an operating agreement in place, plus the needed permits, should help your business run smoothly.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
FAQ
What steps are required to form an LLC in Michigan?
In order to form an LLC in Michigan, you must choose a name that’s distinguishable from existing businesses, select a resident agent and registered office, and submit the appropriate articles of organization to the state’s Department of Licensing and Regulatory Affairs. Once your LLC has been approved, you can register with the Michigan Department of Treasury in order to file and pay your business taxes. That process is likely to be faster if you already have an EIN from the IRS.
How much does it cost to form an LLC in Michigan?
The cost for LLCs to submit articles of organization in Michigan is $50. If you need expedited processing for your new business, you can pay an extra $50 for 24-hour service or $100 for same-day service. You just need to submit your articles of organization and service request by 1 pm to qualify.
How do I choose a registered agent for my LLC in Michigan?
After brainstorming some ideas, check to see if they’re taken already. You can do this using LARA’s online business entity search. Your LLC name can’t reference industries or services your company doesn’t provide and you can’t use words like corporation or incorporated.
Do I need to file an operating agreement when forming an LLC in Michigan?
When you’re forming an LLC in Michigan, you’re not legally required to submit an operating agreement to LARA. Your agreement, should you create one, is considered an internal document and a binding contract within your LLC.
What are the annual reporting requirements for an LLC in Michigan?
You must file an annual report — known in Michigan as an annual statement — within 90 days of the due date; there’s also a yearly $25 fee. In the statement, you can update any information from your LLC’s original articles of organization, such as changes in ownership, the resident agent, or the registered office.
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