01: Name Your Michigan LLC
Choosing a name is the first step in forming an LLC. Michigan law requires your LLC’s name to be unique and distinguishable from other entities registered with the Michigan Department of Licensing and Regulatory Affairs (LARA). To check availability, search LARA’s business name database.
- The name must include "Limited Liability Company" or abbreviations such as "LLC" or "L.L.C."
- Certain restricted words, such as "bank," "insurance," or "trust," may require additional approvals.
- You can reserve a business name for up to six months by submitting a Name Reservation Request form and paying a $25 fee.
02: File Articles of Organization with LARA
An LLC is officially created by filing the Articles of Organization (Form CSCL/CD-700) with LARA. This document includes essential information, such as:
- The LLC’s name and purpose
- The LLC’s registered agent and their address
- The duration of the LLC, if not perpetual
The filing fee is $50, and expedited processing options are available for an additional fee.
03: Choose a Registered Agent
Michigan law requires all LLCs to appoint a registered agent to receive legal documents and official correspondence. The registered agent:
- Must have a physical address in Michigan (P.O. boxes are not allowed).
- Can be an individual (e.g., a business owner) or a professional service company.
- Must consent to their appointment before being listed in the Articles of Organization.
04: Decide on Member-Managed vs. Manager-Managed
You’ll need to determine whether your LLC will be managed by its members (owners) or designated managers. This decision should reflect the size and structure of your business:
- Member-Managed: Ideal for smaller LLCs where owners actively participate in daily operations.
- Manager-Managed: Suited for larger LLCs or when members prefer to delegate management responsibilities.
05: Draft an Operating Agreement
Although not required by Michigan law, an Operating Agreement is highly recommended. This document outlines the LLC’s governance and operational procedures, helping prevent disputes and providing clarity. Key elements include:
- Member roles and contributions
- Profit and loss distribution
- Decision-making processes
- Procedures for adding or removing members
- Dissolution guidelines
At Next Era Legal, we customize Operating Agreements to reflect your business’s unique needs.
06: File an Annual Statement
Michigan LLCs must file an Annual Statement (Form CSCL/CD-2700) with LARA to maintain good standing. This document updates LARA on the LLC’s:
- Name and address
- Registered agent information
The Annual Statement is due by February 15 each year, with a $25 filing fee. Failure to file may result in penalties or administrative dissolution.
07: Address Michigan Tax Obligations
LLCs in Michigan must meet various tax obligations, depending on their structure and activities:
- Michigan Business Tax (MBT): LLCs may need to file under the MBT if they meet specific thresholds.
- Employer Taxes: If your LLC has employees, register with the Michigan Department of Treasury and Unemployment Insurance Agency.
- Sales Tax: If selling goods or taxable services, obtain a sales tax license from the Michigan Department of Treasury.
- Federal Employer Identification Number (EIN): Required for multi-member LLCs, LLCs with employees, or those electing corporate tax status.
08: Comply with Local and Industry-Specific Regulations
Depending on your location and business type, additional licenses or permits may be required. Examples include:
- Zoning and land use permits
- Health department permits for food-related businesses
- Professional licenses for specific industries
Check with your local government and industry regulators to ensure compliance.
Frequently Asked Questions
How Much Does It Cost to Form an LLC in Michigan?
- Filing the Articles of Organization with LARA costs $50.
- Name reservation fees are $25.
- Annual Statements require a $25 filing fee.
Additional costs may include expedited processing, registered agent services, and professional assistance.
Can a Foreign LLC Operate in Michigan? Yes, foreign LLCs (those formed outside of Michigan) must register with LARA by submitting an Application for Certificate of Authority (Form CSCL/CD-760). A $50 filing fee applies, and you must designate a Michigan registered agent.
Is an Operating Agreement Required in Michigan? While not legally required, having an Operating Agreement is highly recommended. It helps:
- Protect your LLC’s limited liability status
- Clarify internal processes and member responsibilities
- Reduce reliance on Michigan’s default LLC laws
Can Two LLCs Have the Same Name? No. Michigan requires LLC names to be unique. Conduct a name search through LARA’s database to ensure availability before filing.
Are There Restrictions on the Types of Businesses That Can Form an LLC in Michigan? Yes, certain professional services, such as legal or medical practices, may be required to form a Professional Limited Liability Company (PLLC) instead. Consult Next Era Legal for guidance on entity selection.
Contact Next Era Legal for LLC Formation Assistance
Forming an LLC in Michigan can be complex, but the right guidance ensures success. At Next Era Legal, we offer personalized support to help you navigate every step of the process. From drafting tailored Operating Agreements to ensuring compliance with Michigan regulations, we’re here to set your business up for success.
Call us today at (313) 887-4788 or visit our Detroit office to schedule a consultation. Let’s work together to bring your vision to life and create a strong foundation for your Michigan LLC.
