Frequently asked questions about starting and running an LLC, or limited liability company.
A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Under Michigan law, an LLC name must contain the words "Limited Liability Company" or the abbreviations "L.L.C." or "LLC."
Your LLC’s name must be distinguishable from the names of other business entities already on file with the Michigan Department of Licensing and Regulatory Affairs. Names may be checked for availability by searching the Michigan business database. You may reserve a name for six months by filing an Application for Reservation of Name with the Michigan Department of Licensing and Regulatory Affairs. The application may be mailed in or you can file online. The filing fee is $25.
Every Michigan LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. A registered agent may be a Michigan resident, a Michigan corporation, a foreign corporation with a certificate of authority to transact business in Michigan, a Michigan LLC, or a foreign LLC authorized to transact business in Michigan. The registered agent must have a physical street address in Michigan.
A Michigan LLC is created by filing Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs. The articles must include:
The articles may be filed by mail or online. The filing fee is $50.
An LLC operating agreement is not required by the state of Michigan (or any state), but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
Additional tax and regulatory requirements may apply to your LLC. These may include the following:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For local licenses, check with the clerk for the city or town where the LLC's primary place of business is located (or county if it is in an unincorporated area). For state license information, check State License Search at the State of Michigan website. For more information, see Nolo's article How to Get a Small Business License In Michigan.
Department of Treasury: In some cases, for example if you have employees or will be selling goods and collecting sales tax, you’ll need to register with the Michigan Department of Treasury (DOT).You can register online using the DOT’s e-Registration application or by mail.For more information on state LLC tax registration, check Nolo's article, Michigan LLC Annual Filing Requirements.
All LLCs doing business in Michigan must file an annual statement with the Department of Licensing and Regulatory Affairs. The report must be filed by February 15 after the year of formation or qualification; however, if the LLC is organized or qualified after September 30, it need not file a statement on the February 15 immediately after its formation or qualification. A pre-printed annual statement, BCS/CD-2700, is mailed to the LLC’s resident agent at the registered office approximately three months prior to the due date. The report can be filed online or by mail. The filing fee is $25.