The first step in forming an LLC in Michigan is to select and register your business name. Although this is technically accomplished via the articles of organization, Michigan provides a form that will allow you to reserve your desired business name before you form your company. Form BCS/CD-540, “Application for Reservation of Name,” simply requires you to fill in your desired name and the form of organization you will use — in this case, LLC. LLCs require the highest filing fee for name reservation -- $25 in 2010.
Articles of Organization
The articles of organization serve as the formal registration document for your LLC. The state of Michigan provides an online template, Form BCS/CD-700, the articles. Articles of organization set forth your business name and purpose, as well as contact information for your registered agent. You must submit the articles of organization through the mail or in person, along with the filing fee set forth in the instructions attached to the template.
Operating agreements go quite a bit more in-depth than the articles of organization, setting forth members' rights and responsibilities as well as procedural guidelines for top management. Michigan does not provide an operating agreement template; you can create the agreement from scratch or download a ready-made, multi-state template online. Operating agreements stipulate the initial members of the company, as well as their relative percentages of ownership, the capital contributions of each and the distribution of profits. The agreement covers the managerial hierarchy of the members, and provisions for members' selling their ownership stakes. As of 2010, Michigan does not require an operating agreement to form an LLC, but executing one is highly advisable.
LLCs are required to file an annual statement, or annual report, similar to traditional corporations. Unlike corporations, however, LLCs submit their statement to the state rather than the Securities and Exchange Commission. Towards the end of your first year of business, the Bureau of Commercial Services will mail you a copy of Form BCS/CD-2700, the annual statement template, for you to complete and submit. Annual statements include a balance sheet, income statement and statement of cash flows; they also include a section for management to discuss the progress or challenges faced in the year in question and explain any extraneous financial statement items.