Instructions on how to start a Michigan LLC
If you're thinking of starting a business or changing your sole proprietorship into an LLC, you most likely have a name for your business. If not you will want to think of one that you believe will capture what your business is about. You should note that you may not be the first person to want to name your business the name you want. So the very first step in forming your LLC in Michigan is checking to see if the name is available. The good news is that someone may have started an LLC in Wisconsin with the same name, or elsewhere, but if no one has already used the name you want in Michigan, than you can name your LLC the name you want.
There's a couple of rules though with naming your new LLC in Michigan and in most/all other states. Namely, the name must be distinguishable from the name of other corporations, limited partnerships or limited liability companies. In other words, if you want to begin an LLC, you will need to give it a name that will not confuse consumers into thinking they're doing business with another Michigan corporation.
Screen shot of the Michigan website where you can file for a new LLC
Check to see if the name you want is already used -> http://www.dleg.state.mi.us/bcs_corp/sr_corp.asp
All Limited Liability Companies, more commonly known as LLCs, want to have the words "Limited Liability Company" or "LLC" as part of the name. That puts everyone on notice that the entity they're engaging with is a separate entity and not a "natural" person.
You can also name your new LLC more than one name, or at least potentially operate your LLC under more than one name by gaining a Certficate of Assumed Name by filing the correct form. At the time of writing, you can get the form to operate under more than one name.—> Michigan_Department_of_Licensing_and_regulatory_affairs_Certficate_of_assumed_name
It's not always a good idea to have more than one name though. Actually it's not the names that present issues so much as trying to have several very different business activities under one entity. It often makes perfect sense from an accounting and tax perspective, but from an insurance point of view. Most insurance policies, especially the lower cost value packed policies you want to buy, aren't setup to exclude non-core activities and you may end up paying a lot more for an insurance policy that covers your operations in full compared to finding the right fit for what you want coverage for. Something to keep in mind before adding commercial fishing to a part-time roofing operation.
The possible Michigan entity types include:
- Domestic Limited Liability Companies – These are the typical for-profit LLCs most Michigan residents will want to create. These entities have all the powers granted to a corporation in Michigan.
- Professional Service Limited Liability Company – These are often used for lawyers, accountants, and other professional service companies.
- Foreign Limited Liability Company – These are companies formed in another jurisdiction, typically a nearby state that is transacting business within Michigan.Foreign doesn't nessissarily mean from outside of the country, and in fact, most will simply be from another state. a Certificate of Authority is required.
MICH-ELF (Michigan Electronic Filing System): First Time Users: Call (517) 241-6470, or visit our website at http://www.michigan.gov/corporations
Customer with MICH-ELF Filer Account: Send document to (517) 636-6437
Once you have your LLC, you'll want to decide how to tax it so you get to keep as much of your hard earned cash as possible. There are four primary ways to tax an LLC. Read about it here –> Income Tax Options for Your Michigan Limited Liability Company – LLC
Do I need an attorney to Form an LLC in Michigan? Generally not, and Michigan doesn't require a lawyer draft the Articles of Orginization for the LLC. That said, if you're not 100% sure about anything and everything with forming an LLC in Michigan (which is different than other states), it's a really good idea to reach out to a Michigan business attorney and get direction and clarification before making any moves. That's just good business advice in general when money is involved.
How much does it cost to form a Michigan LLC? At the time of writing, it appears the fee is $50.
What form do I fill out for a standard domestic Michigan LLC? –> MI_LLC_Filing_form_6_10_16
Does Michigan require my LLC to have a general liability or any other insurance policy? It depends. Some occupations require insurance, for example a taxi service is required to have coverage and some types of regulated industries are required. If you business doesn't require a license of any kind, then generally you don't need insurance by law. When you're not required to have insurance, sometimes it doesn't make sense to get a policy, and sometimes you're downright crazy to be without. You'll want to speak with a trusted insurance advisor to determine your potential risks and issues.
What's next? Everyone's favorite subject, Taxes….
TAX OPTIONS FOR MY LLC – Ok, first the disclaimer to keep my attorney from sending me angry emails. My business card says "insurance agent", NOT tax advisor or accountant, so consider the following link as business information I believe is correct, but is actually nothing more than suggestions to get you thinking about your tax options and how they impact your ability to save money and lower your legal tax exposure. You WILL want to contact a business accountant and/or tax advisor to see what is the best option for you. That said, here's the link with the four tax options for your LLC (as of this writing) -> Tax Options For A LLC
Robert Weinstein is a husband, dad, stock market junkie, real estate broker, and of course…Insurance agent. Interests include my family, economics, marketing, technology, real estate, finance/investing, history, and Asia.
Robert’s insurance expertise includes having the designation of Certified in Long-Term Care (CLTC) and assist in asset protection for families with members entering retirement.
Robert is also an accomplished syndicated writer whose work can be found in TheStreet, MainStreet, CNBC, Forbes, Yahoo Finance, Seeking Alpha, MSN Money, The Money Show, Stock Saints, Motley Fool, Fidelity, Minyanville, RealMoney Pro, and many national and international newspapers.