Read our guide to successfully open an LLC in Michigan
- Step 1: Choose a name for your LLC
- Step 2: Select a registered agent
- Step 3: File the Michigan LLC articles of organization
- Step 4: Create an LLC Operating Agreement
- Step 5: Acquire an EIN from the IRS
- Costs to set up an LLC in Michigan
- Last steps
Step 1: Choose a name for your LLC
First things first, your newly minted business will need to go by a legal name.
Michigan state authorities urge you to choose a distinguishable business name. Otherwise, they may deny your registration. A business name is deemed unique when it doesn’t sound too close to another company registered in the state. To verify the above, use Michigan’s Business Entity Search feature.
Apart from the brand bit, your MI LLC’s business name must also include one of the following designations (or abbreviations) at the end:
- Limited Liability Company
- LLC
- L.C.
- LC
- L.L.C.
Reserve your LLC business name
If your preferred business name for your LLC in MI is available, then you can file for a name reservation to claim dibs on it. Doing so prevents others from taking it for six months. You can make the name reservation by mail or online. The state fee is $25.
Assumed name (optional)
Suppose you prefer to use a different name from your officially registered business name when your LLC conducts business. In that case, you can apply for an assumed name, also called fictitious name, doing business as (DBA).
You must register the assumed name with the Michigan commercial licensing bureau by filing a form and paying a $25 filing fee. You can submit it online or by mail.
Step 2: Select a registered agent
All Michigan LLCs must have a registered agent. This person will have an office location listed and will receive official LLC communications.
The registered agent requirements are straightforward:
- A company or person 18 years of age or older
- Located in the state of Michigan
- At a physical street address (no P.O. boxes are permitted)
- Are available during regular business hours.
Some LLC owners choose to act as their own registered agents. It’s allowed so long as they will be present at a physical street address in MI and available to receive mail during business hours (9 am – 5 pm).
The registered agent will receive all legal mail — this is also referred to as Service of Process for your LLC. The registered agent and office location are listed in the LLC articles of the organization filed with MI.
Commercial Registered Agent Service: If you want to save time or are not based in Michigan, you may choose to hire a registered agent service in Michgan —The cost of such services in Michigan averages around $100/yr but can range between $99-$300 per year.
Step 3: File your LLC documents (Articles of Organization)
The LLC articles of organization filing with the Michigan Corporation Division are the cornerstone of forming your LLC. You can either submit an online form or print it out and mail it.
The standard filing fee is $50.
On top, you can choose to pay extra for expedited service. The current expedited LLC filing fees in Michigan are as follows:
- $100 — same-day formation documents processing
- $500 — two-hour formation documents processing (if filed before 3 pm)
- $1,000 — one-hour formation documents processing (if filed before 4 pm)
Requirements of information to include
The Articles of Organization for your LLC must include:
- The LLC business name
- The purpose of the LLC
- For a professional LLC, list the professional services your LLC will provide
- Duration for the LLC (if not perpetual)
- Registered agent’s name
- Registered office address
- Signature(s) and name(s) of the LLC’s organizers
Special considerations
Note that for professional LLCs in Michigan, the following requirement must be included in the Articles of Organization:
For LLCs that are not professional LLCs, the Michigan Corporations Division clarifies:
Processing Time
Once the Articles of Organization form is received, the processing time for your LLC's approval is about 5-10 business days. However, this can vary on other factors, such as if the office is experiencing a backlog or has any questions. Also, expect a faster turnaround if you file online instead of by mail.
If the above is too long, you can pay extra for expedited company formation — same day, in two hours, in one hour.
Step 4: Create an LLC operating agreement
Michigan has no formal requirement that a new business LLC file a copy of an operating agreement with their office. Nor is there a requirement by Michigan that LLCs must have this agreement at all. Yet, it still makes sense to draft one if you have more than one LLC member (owner).
An operating agreement stipulates the baseline provisions in regards to how different decisions are made in your company. Specifically:
- Ownership share of each business member
- LLC’s standard operating procedures,
- Responsibilities for each member and their roles in the LLC
- Each member’s rights (such as with profit distributions),
- Capital contributions
- Provisions on personal liability and personal assets
- LLC management practices
Plus, any other provisions as deemed necessary for your type of business and by the LLC’s members.
This legal document can protect each owner’s interest in the LLC should a dispute arise. Hopefully, it will prevent such conflicts in the first place by laying out clear expectations for everyone.
If an LLC doesn’t have an operating agreement, then Michigan state law will guide the roles and responsibilities of the members and the operations of the LLC.
How to prepare an operating agreement?
There are many operating agreement templates available online. So you may want to grab and customize one for your needs. However, if your LLC ownership structure is more complicated, you may seek professional legal help to prepare your operating agreement.
Step 5: Acquire an EIN from the IRS
The next step is to obtain an Employer Identification Number (EIN) from the IRS for your LLC. It is a unique 9-digit number primarily used to identify your LLC on tax filings. Single-member LLCs without any employees may choose to use the business owner's social security number instead.
In other cases, here’s when you would need an EIN:
- Your LLC has more than one business owner
- To use your LLC's tax ID on federal, state, and local income tax filings
- If you hire employees, it’s a required tax ID for IRS and state tax filings
- To obtain a business bank account
- If your LLC must register to pay sales tax
Remember, obtaining an EIN is simple and done online via the IRS's free filing service. You also receive your number immediately.
Costs to set up an LLC in Michigan
Starting an LLC in Michigan is relatively affordable compared to other states. The primary cost is the $50 fee for filing your articles of organization. Additional optional expenses include reserving an LLC name ($25), using an assumed/fictitious name ($25), and enlisting a third-party registered agent service (approximately $100). If you require assistance in drafting your operating agreement or structuring your business, additional charges would apply for hiring legal and tax professionals. Certain businesses in Michigan are obligated to obtain a business license in addition to completing the business registration.
Each Michigan LLC is required to submit an annual report, with filing costs ranging from $25 to $75, contingent on the business's nature. Starting an LLC in Michigan could be as economical as $50, assuming no further additional or optional services are necessary.
Last Steps
Open a bank account
Setting up a business bank account for your LLC isn’t a legal MI requirement. But it’s a must-do to prevent any legal mishaps down the operating road.
Your LLC assets must be separate from the members’ personal assets (or business owners) to ensure personal liability protection. Why? Because financial comingling can result in a “piercing of corporate veil” — an event that effectively nullifies the limited liability your company extends towards your personal assets.
Business permits and licenses
Business permits and licenses are required for LLCs based on the type of business it operates. You need to comply with federal, state, and local (county/city) requirements.
Federal requirements
The U.S. Small Business Administration website lists the types of businesses and resources on requirements, plus state and federal agencies to file with.
If you operate in agriculture, finance, healthcare, or law, you’ll likely need to obtain a specific license.
State and local requirements
Also, you’ll need to check the state level and local level for additional business permits and licenses that may be required based on your LLC’s location and the type of industry. For Michigan, there’s an alphabetical state list of business permits and licenses to help you locate what the requirements may be for your LLC.
LLC owners should also check with the local county clerk’s office to determine if additional permits or licenses are required to operate their LLC in that location.
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Last updated: Sep 2023