Michigan LLC Guide | A Comprehensive Write-up for Beginners
Michigan LLC Guide – It’s quite unfortunate that a lot of people don’t do thorough research on things before starting. Making plans to start an LLC in any state needs a thorough finding because each state has its own requirements and fees.
Believe me; you can’t just wake up to start an LLC without knowing the necessary things. If I may ask; what do you know about LLC?
Do you know that forming an LLC is the simplest way of structuring your business to protect your personal assets in case your business is sued?
Now, you have an idea of why you should start an LLC in Michigan.
A limited liability company (LLC) is a business entity that offers certain legal protections and rights to its owners. An LLC is either a corporation or a sole proprietorship/partnership.
1. Michigan LLC Information
Limited liability companies (LLCs) in Michigan are affordable and easy to form. And as with other states, the State of Michigan has some unique, state-specific requirements.
Interested parties must register with the Michigan Department of Licensing and Regulatory Affairs, Bureau of Commercial Services, by filing the necessary forms, paying the necessary fees and meeting all naming and formation requirements.
The specifications required of Michigan LLC are as follows:
Registrants must file Articles of Organization with the Department of Licensing and Regulatory Affairs. The articles must include pertinent information such as:
- LLC name
- Effective date, if other than date filed
- Purpose of LLC
- Registered agent’s name and address
- Organizer’s name and dated signature
- Contact person’s name and phone number
All documents submitted must be accompanied by the payment for the filing fee.
The usual processing time for LLC documents and filings is between three to five working days. Expedited services are available.
- Naming Requirements.
LLC naming requirements can be confusing. However, the easiest way to make sure that your LLC name will be approved is to ensure that it is distinguishable from other LLCs.
Most states have a list of specific words that must be included in the name of your LLC. You may opt to have a preferred name checked for availability before filing your LLC formation documents with the Department of Licensing and Regulatory Affairs.
- Formation Requirements.
To form an LLC, a registrant must first file the Articles of Organization with the Department of Licensing and Regulatory Affairs.
An LLC with more than one member is also strongly advised to have a limited liability company operating agreement among its members.
2. Cost to Form an LLC in Michigan
LLC registrants are required to file Articles of Organization accompanied by the necessary filing fee of $50. Expedited processing services are available for the following additional fees: 24-hour processing for $50, same-day processing for $100, two-hour processing for $500 and one-hour processing for $1000.
These fees can change, check with the Bureau of Commercial Services for the most current fees.
3. How to Start LLC in Michigan
- Choose a Suitable Name for your Business
The LLC name must end with “Limited Liability Company,” “Limited Company,” “Ltd. Co.,” “LC,” “LLC” or “L.L.C.” The name cannot use words in parentheses. A name may be reserved for up to six months. You must file a name reservation application with the Department of Licensing and Regulatory Affairs. All requests must be accompanied by the $25 filing fee. Be sure to include the name to be reserved, the entity type and the applicant’s name, title, address and dated signature.
- Get an Employer Identification Number (EIN)
If there are two or more members in your LLC, your company will need to obtain an EIN from the IRS, for tax purposes.
- Allocate an Agent for Service of Process
Registered agents are individuals or corporations authorized to do business in the state and which have permanent addresses in Michigan. Registered agents accept legal documents on behalf of the LLC and make sure its members are notified.
- Create an Operating Agreement
Although LLCs in Michigan are not required to have a limited liability company operating agreement, it is wise to have one in place with other members should your LLC have more than one member.
The State of Michigan recognizes limited liability company operating agreements as governing documents.
- Understand the LLC’s Legal Obligations
Statements are filed with the Department of Licensing and Regulatory Affairs on or before February 15 every year. LLCs formed after September 30 are not required to file their initial statement until February 15 of the year following that in which the LLC was formed.
Statements may be filed online or by mail and must be accompanied by the $25 filing fee. Registered agents will receive notification in the mail from the Department of Licensing and Regulatory Affairs reminding the LLC of due statements. Failure to file a statement will place the LLC in bad standing as per state law.
Make sure that your LLC offers professional services and meets state legal requirements. Note; continuing legal obligations may vary with each state. These could be but are not limited to, state taxes, annual or biennial reports and so on.
4. Michigan LLC Annual Fee
It’s better to know the annual fee of how Michigan LLC is being charged. This alone will make you budget for everything at a time which will help reduce the stress of thinking much.
Michigan requires LLCs to file an annual report. The due date is February 15 and the filing fee is $25.
5. Where to Get Tax ID Number in Michigan
An Employer Identification Number (EIN), also called a Tax Identification Number, is a nine-digit number that identifies a business entity. It is for tax filing purposes and acts as a Social Security number for business entities.
You need one if you have employees, have a partnership or corporation, withhold taxes on income and have a Keogh plan.
You can get an EIN from the Internal Revenue Service and it is free. The IRS provides several application methods.
You can complete each in less than 20 minutes. The amount of time necessary to receive your EIN depends on the application method you select.
I believe this informative article has answered most of your frequently asked questions about Michigan LLC? If you still have any questions or contributions you can drop a comment below.