how much does it cost to set up an llc in michigan [Best Info]

Last updated : Aug 11, 2022

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how to form an LLC in Michigan if you are interested in starting an LLC in the Great Lakes state you have good reason Michigan has low corporate taxes and costs of living yet provides great access to funding every state has slightly different requirements performing an LLC follow along closely to learn the required steps for creating your own limited liability company in the state of Michigan there are two ways to form an LLC in Michigan you can form on yourself or you can hire a service to do it for you let's start by looking at the five basic requirements to form an LLC in Michigan on your own 1 name your LLC every state has its own rules about what kind of names are allowed for LLC's in general you will need to observe these naming guidelines your name must include the phrase limited liability company or one of its abbreviations LLC or LLC with a period following H letter restricted words such as Bank Attorney law office etc may require additional paperwork and may also need a licensed professional to be part of the LLC your name cannot include words that could confuse your LLC with the government agency such as FBI Treasury State Department etc you cannot use a name that has already been registered to see if your name is available in your state you'll need to do a name search this free service is available on your state's Secretary of State website check out our free guide for finding the direct link to your state we also recommend that you check to see if your business name is available as a web domain even if you don't plan to make a business website today you may want to buy the URL in order to prevent others from requiring it to choose a registered agent Michigan requires that you nominate a registered agent for your LLC who is your business's point of contact with the state the registered agent can be an individual within the company including yourself or you can hire professional service authorized to do business in Michigan they will send and receive legal papers on your behalf these documents include official correspondence like legal summons and document filings which your registered agent will receive and forward to you your registered agent will help remind you to file the necessary report failure to properly maintain your LLC can result in fines and dissolution so this assistance is valuable 3 file the articles of organization to register your LLC you will need to file the articles of organization with the state of Michigan this can be done online by mail or in person your LLC will be considered member managed unless you state in article 5 that your LLC has manager managed member managed means all members of the LLC manage the company this is good for small organizations where everyone is involved in day-to-day operations the second option is manager managed where individuals are appointed to manage the LLC this is appropriate for larger organizations where not everyone is involved in the day-to-day affairs of the business 4 create an operating agreement although not every state requires it you should always create an operating agreement to establish ownership terms and member roles for your LLC this foundational document is the core of your LLC and will help you maintain your organization as well as further establish your LLC is a separate legal entity there are six main sections of an operating agreement organization outlines when and where the company was created who the members are and how the ownership is structured management and voting addresses how the company is managed as well as how the members vote capital contributions covers which members financially support the LLC and how more funds will be raced in the future distributions outlines how the company's profits and losses are shared among members membership changes describes the process for adding or removing members as well as if and when members can transfer their ownership shares and dissolution which explains the circumstances in which the LLC may be dissolved an operating agreement is an internal document it does not need to be filed with the state however it should be updated every time there is a change in membership or management at the company you can download a free sample operating agreement or create a custom one using our free operating agreement tool at how to start an LLC com 5 obtain an ein lastly you'll need to get an employer identification number or ein from the IRS also known as a federal tax identification number your EIN is like a social security number for your LLC and the IRS tracks your business for tax purposes an EIN is also necessary to open a business banking account and legally hire employees eons are free of charge and can be obtained from the IRS online or through the mail and with that you'll have formed a Michigan LLC on your own option to hire a professional service the second way to create a Michigan LLC is to hire a professional service to create your LLC for you hiring a professional service to file your forms and act as your registered agent for the LLC will cost you an additional 50 to 150 dollars however there are several benefits to working with a pro a hired registered agent helps with getting your reports filed on time helps you stay organized by keeping your business mail separate and is available at all regular business hours to accept official mail and legal papers on your LLC's behalf a final and important additional benefit of using a service is privacy a professional service will provide a level of privacy by withholding your personal name and home address from the LLC's contact information there are many reasons you might not want your personal information easily accessible and associated with your business hiring a professional LLC for mation service is an easy way to accomplish this now that you have seen the different requirements and ways you can form an LLC in michigan visit our site and take some time to research your options and establish a solid foundation for your business activities click on the links in the description below to research the top five professional formation services or get more information on how to form a Michigan LLC on your own now you know all the steps to form an LLC in your state for a more detailed guide go to how to start an LLC com you can also create an operating agreement and use our business plan tool free of charge give the video a like if you found it useful and subscribe if you'd like to see more and if you have questions or encounter any roadblocks leave a comment below good luck and starting your small business you

Thanks for your comment Fidel Hobbins, have a nice day.
- Donny Cerrano, Staff Member

hey my name is eric in today's video we're talking about how to start an llc in michigan and what i want to do up front is just kind of set the table a little bit on what we're going to be talking about so really there are three methods you can go to set up an llc in michigan the first is going through your state website which is a little clunky at times but is a good resource the second is you can hire an attorney if you have a complex situation i want to show you how you can do this and also get a free consultation so you're not just running up the meter immediately and then the third is using free online tools which we're also going to address in this video so some key takeaways that we're going to be discussing in this video are what an llc actually does because sometimes people are a little bit confused they think there may be a tax advantage with an llc when there's not so we're going to break that down really quickly a very key term is piercing the corporate veil if you've never heard that term you absolutely want to stay on for that term and understand what that means for your llc we're going to be talking about what registered agent does and then also we're going to be providing you with learning center resources so the first resource i want to share with you is actually from inc file which is an online tool where you can set up your entities and they have a learning center over here and it's really great and one of the things i've found helpful is start a business checklist it's overwhelming starting a business so this is going to walk you through step by step everything you need to do very easy drop down boxes really quick blurbs and what you need to consider with each of these items so this link will be in the description below along with all the other links that i'm going to share with you so the next resource i want to share with you is the irs website unlimited liability companies obviously a very official website probably what you would use this for is if you go to employer id numbers and ein if you are setting up a business there's a good chance you'll need an eim this will walk you through whether or not you need it and then how to apply for it this is helpful because if you go through another service or an attorney there's going to be a fee on top of this where you could do this yourself if you want set up with an ein and i'll talk about that later in the video as well so the next resource here is right from your michigan.gov website uh this is a limited liability company and this kind of just gives you some information on here not a bad design on the michigan website but the really disappointing part is as of making this video in october 2020 uh the way that you actually file this is by downloading this form filling it all out and then mailing it to their address in lansing michigan and then also making sure that you send your check for 50 bucks as part of your filing fee now that's an important thing to mention no matter what process you go through if you go through an online tool if you go direct through this form right here or you go through an attorney there will be a 50 filing fee as of 2020 for setting up your llc in michigan now i know that this video is kind of heavy and there's a lot of things to talk about and i want to talk about a registered agent one of the things that they mentioned on here is a resident agent at the registered office so this is important because you want to make sure you have a legit registered agent and sometimes people will get cute and they'll make it their brother or their sister or friend or something like that because they want to save a few bucks and the reason you don't want to do that is you don't want to create cracks in your llc so i think this would be a good time to explain exactly what an llc does and how there might be cracks in it so what an llc really is is it's not set up for tax purposes it is set up so that it creates a division between your business assets and your personal assets so in the unfortunate case if you were to be sued that the person that is suing you cannot go after your personal assets the llc is that division between your personal and business assets but what the person suing you that attorney that is suing you is going to try to do is find cracks in your llc and what they're trying to do is a term called piercing the corporate veil things that they might be looking for are did you properly set up with the state did you pay your renewal fees do you have a proper registered agent on file did you fill out all your paperwork have you been keeping up on all of your necessary annual reports so again going back to ink file here this page is helpful again from the learning center on about registered agents what a registered agent does is it helps to make sure that you're crossing your tees and dotting your eyes they're going to make sure you're getting your important documents from the state and also the federal level and they're also going to be serving you a process notice so in the unfortunate case that you are sued they're going to make sure that you're getting that documentation and they're also going to make sure you're compliant with requests to complete permits company filings or reports tax forms and requests for payment so a registered agent is an important part of your business and that's what i kind of find disappointing about the michigan state website here is it's just like what's your registered agent who are they and a lot of times i think people might get kind of just like confused by this i'm not sure what they're doing and they just kind of throw somebody's name in there not really thinking about the importance of a registered agent so a second option that i want to talk about is a service called avo i'm not affiliated with them in any way i have just used them in the past and they have a lawyer directory and what you can do with this service is when you're searching for an llc i'll give you this specific link right here that you see on screen because this is already marking michigan attorneys that are open to a free consultation and then also have an avo rating of 8 and above so this is kind of cool because it's a short list but these are attorneys that are on avo that offer a free consultation probably like a 15 minute phone call so your meter's not going to be running right away and they also focus on llcs in your state uh going this route very important if you have a complex business situation maybe you're doing business outside of your state and within your state uh if you have a lot of moving parts you're making good money already in your business and you probably should have incorporated a while ago you probably want to consult with an attorney and not go the diy route so i just wanted to make you aware of this again not affiliated with them i just think it's a great service so i will include a link to this in the description below this is also a good opportunity to tell you that i'm not an attorney or a cpa so the advice that i'm giving you is really just for informational purposes but i have set up my own llc and went through

Thanks Bruce your participation is very much appreciated
- Donny Cerrano

About the author

Donny Cerrano

I've studied business administration at Southwestern Adventist University in Keene and I am an expert in agricultural education. I usually feel weird. My previous job was retail sales department supervisor I held this position for 27 years, I love talking about rock painting and scrapbooking. Huge fan of Hunter Hayes I practice olympic sports and collect match-related items.