Learn How to Form a Michigan LLC or a Corporation

Michigan Business Facts and Environment

MI Business Facts

Michigan’s name is derived from the Ojibwa Indian words “Mishi-Gama,” which mean ‘large lake.’ It’s nicknamed The Great Lake State, as the only state that touches four of the five Great Lakes. It’s also called the Wolverine State, though there are no longer any living wolverines to be found there.

No point in Michigan is more than six miles from a body of water. The state is home to the world’s only floating post office, which delivers mail to ships as they pass under the Ambassador Bridge.

The world’s first concrete road was laid in Detroit in 1908. Michigan is home to the world’s largest cement plant, limestone quarry, Holstein dairy herd, and manufacturer of magic supplies. Detroit is known as the car capital of the world, and Michigan remains a national capital for the automotive and advanced manufacturing industries.

Major Companies

Ford Motor Company holds the top spot for large companies in Michigan. They are followed by General Motors, Lear, and Whirlpool. Other large corporations are Meijer, ZF North America, the Dow Chemical Company and Kellogg.

Startup Environment

Although Michigan’s economy took an enormous hit in the early 2000s, the state is currently experiencing a period of incredible growth, setting multiple records for the production of goods and services. This translates to a startup scene that has the potential to be quite strong for the auto and tech industries.

Step 1: Decide on a Business Structure

There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.

• A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
• A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
• An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.

Step 2: Pick a Business Name

Picking a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that, the better). In Step 3 we’ll show you how to search for the name in Michigan, but we highly recommend you do the following before searching Michigan state databases:

• Make sure you’ve covered the basics in your chosen name: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
• Do a search on Google, Bing and DuckDuckGo of your proposed name. This is a “first sweep” of any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
• Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if you’re name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use google at a fairly advanced level you can reasonably clear a name yourself. Tip: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.

Ready to start a business in Michigan?

Our Michigan filing services will help you get started as quickly as possible.

Step 3: Register the Business

Now that you’ve picked your business name, you’re ready to search the name on Michigan databases and register with the appropriate government office.

How to File a DBA in Michigan

NOTE: All businesses in Michigan are required to register alternative trade names by filing for a DBA if the business seeks to operate under a different name than what it used when it was formed.

• Check your business name by calling the County Recorder or visiting their website (search for “YOURCOUNTY county recorder” should find it).
• Obtain the forms from the county to register your DBA. Each county has its own specific filing requirements. You can find a list of counties here.
• File the forms with the County. Some counties require the form to be notarized and published.

NOTE: We can prepare and file your DBA in any county in Michigan

How to Form an LLC in Michigan

• Make sure your company name choice is available by searching the Michigan Business Entity Database and doing a name search on the State of Michigan website. Note: this can be harder than it looks, make sure you search all variations of spelling, plurals and even misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).
• Hire a professional Registered Agent. This is a requirement for every Michigan LLC. The chosen registered agent must have a physical street address in Michigan. A professional Registered Agent will provide their address and forward any important documents to you, this is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).
• File the correct paperwork with the Michigan Division of Corporations called “Articles of Organization”.
• Optional: Elect S-Corporation status with the IRS by filing IRS Form 2553. Yes, even an LLC can choose to be taxed as an S-Corporation (or even a C-Corporation). Speak to your tax advisor about this important issue because it adds complexity to your LLC most people would rather avoid.
• Do the proper post-formation tasks. Once the articles are filed and approved you will then need to properly organize the LLC (yes, even “1 person LLC’s”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more. Many people simply do steps 1 and 2 above but this leaves your company unorganized and possibly exposed to legal, tax and compliance issues. Save time and money now by properly organizing the company.

NOTE: Our LLC formation package includes not only filing the Articles of Organization (we’ll prepare and submit them to the state) but all the necessary post-formation documents completed and personalized to you “ready for signature” as well as our exclusive Startup Wizard which guides you through the complete startup process from formation to bank accounts, logos and more.

How to Incorporate in Michigan (Form a Corporation)

• Make sure your company name choice is available by searching the Michigan Business Entity Database and doing a name search on the State of Michigan website. Note: this can be harder than it looks, make sure you search all variations of spelling, plurals and even misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).
• Hire a professional Registered Agent. This is a requirement for every Michigan LLC. The chosen registered agent must have a physical street address in Michigan. A professional Registered Agent will provide their address and forward any important documents to you, this is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).
• File the correct paperwork with the Michigan Division of Corporations called “Articles of Incorporation.”
• Optional: Elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
• Do the proper post-incorporation tasks. Once the articles are filed and approved you will then need to properly organize the corporation (yes, even “1 person Corporations”) by holding an “Organizational Meeting” which takes contributions from the shareholders, elects directors and officers, issues stock, adopts the Corporate Bylaws and more. Many people simply do steps 1 and 2 above but this leaves your company unorganized and possibly exposed to legal, tax and compliance issues. Save time and money now by properly organizing the company.

NOTE: Our Corporation formation package includes not only filing the Articles of Organization (we’ll prepare and submit them to the state) but all the necessary post-formation documents completed and personalized to you “ready for signature” as well as our exclusive Startup Wizard which guides you through the complete startup process from formation to bank accounts, logos and more.

Ready to Start Now? Let Us Do The Work

Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.

• Learn more about our business formation service
• Read our verified reviews and 100% Satisfaction Guarantee
• Contact our friendly support team if you have any questions

Step 4: Obtain Your Federal Employer Identification Number

Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

TIP: We will obtain your EIN for you if you we form your company.

Step 5: Open Company Bank and Credit Accounts

To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork b) your EIN c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).

Top Business Banks in Michigan

• Bank of America
• Chemical Bank
• Citizens Bank
• Comerica Bank
• Fifth Third Bank
• JPMorgan Chase Bank

Click here to view a list of our recommended banks in our Vendor Network.

TIP: Our business formation service includes a free banking resolution for your use.

Step 6: Set-up An Accounting System

Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.

Review our list of Accountants, Accounting Software and Bookkeepers in our Vendor Network.

Step 7: Obtain Licenses and Permits

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

Tip: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.

Step 8: Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.

Review our list of recommended Payroll Providers in our Vendor Network.

Step 9: Obtain Business Insurance

There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection.

Click here to view our list of insurance providers in our Vendor Network.

Step 10: Systemize and Organize

Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.

Step 11: Branding and Marketing

Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.

Step 12: Annual and Ongoing Requirements

DBA: In Michigan, your Fictitious Business Name should be valid for 5 years (unless you change company name or other information listed on the FBN) at which point you’ll need to renew it with the county.

LLC: By February 15 of each year, each Michigan LLC is required to file an annual report with the government. Companies formed after September 30 on the year of filing and Foreign LLCs are exempt from this rule.

Corporation: Your business must keep corporate records at its principal place of business. By May 15 of each year, an officer of your corporation must file an annual report. LLCs and Corporations will pay a filing cost of $25. This can be filed online here.

Franchise Taxes: There is no franchise tax in Michigan. Michigan corporations are taxed annually at a flat 6% rate.

Click here to view our MyCompanyWorks Premium™ service which can automate most or your ongoing compliance tasks.

Ready to start a business in Michigan?

Our Michigan filing services will help you get started as quickly as possible.

Important Michigan Contacts

Michigan Secretary of State

Michigan State Taxation Departments

Michigan State Treasury

Michigan Department of Licensing and Regulatory Affairs

Michigan State Labor and Employment Departments

Michigan Department of Labor and Economic Opportunity

Michigan State Startup Resources

1. Michigan Small Business Administration

Small Business Administration (SBA) Michigan State District Office

• US Small Business Administration

2. SCORE Mentors

SCORE Michigan

SCORE is made up of active and retired business people who volunteer their time to support startup businesses. From coaching to funding resources, finding a local SCORE mentor can save precious time and money.

• Michigan Business Portal
• Michigan Small Business Development Center
• Michigan Job Link Employer Portal
• Tax Information For Michigan Businesses

3. Michigan State Legal Statutes:

• Michigan Business Corporation Act
• Michigan State Limited Liability Companies – the specific act that applies to Michigan State LLCs.
• Michigan State Businesses and Professions – includes regulations on topics such as business and professions codes.

4. Michigan State Chambers of Commerce

5. Michigan Angel Investors

• List of Angel Investors in Michigan

6. Michigan Business News

• MiBiz
• MLive Michigan
• Detroit Free Press

7. Michigan State Small Business Development Center

• Michigan Small Business Development Center

8. West Michigan Sustainable Business Forum

• Connect with West Michigan Sustainable Business Forum (WMSBF) for resources and more information.