To form a limited liability company (LLC) in Michigan, you must file articles of organization with the Michigan Department of Labor & Economic Growth. Although the articles of organization is a short form and requires little information, you will need to complete several other steps to ensure you have met and complied with all of the state filing and tax requirements.
Starting an LLC in Michigan
Choose a business name for your LLC. In Michigan, the name of an LLC must not be too similar to the name of any other other business already registered in the state. Michigan also restricts the use of certain words in company names. For example, only licensed attorneys may use the word "attorney" in the name of their business, and using the words "Department of Michigan" is prohibited as it implies the business is a government agency. The Michigan Department of Labor & Economic Growth (DELEG) website contains a complete list of prohibited words. Michigan requires all LLC names to contain the words "limited liability company" or the abbreviation "LLC" or "L.L.C."
Check to see whether your chosen LLC name is available. You can check whether your desired company name is available for free using the DELEG website, or you can reserve a name in advance by submitting an application for reservation of a name and paying a fee of $25, as of 2010.
Negotiate an operating agreement. The operating agreement is a set of rules and procedures governing the way your business will be run. Michigan does not require LLCs to have an operating agreement, but if your business has more than one owner (called members in an LLC), then it is a good idea to have one. An operating agreement need not have any set format, but it usually contains information such as the share of profit and losses each member is entitled to; procedures for adding new members and buying out members; and how the company will be managed.
Obtain a registered agent. Michigan requires every LLC to have a registered agent. A registered agent is appointed by the company to receive any legal documents, demands or notices that are served on the company. The registered agent must be a Michigan resident, or a Michigan corporation authorized to transact business in the state. If your LLC is physically located in Michigan, then it can act as its own agent. Companies are also available that will act as your registered agent for a fee. If your LLC is not resident in Michigan, you can choose from one of these companies.
Prepare the articles of organization. This form officially requests the registration of your company. In Michigan, the form is one page long. You will need to provide the name of the company, its purpose, its duration, and the name and address of the registered agent. Copies of the form can be downloaded from the DELEG website.
File the articles of organization. You can file through the mail, in person or online. You will also need to pay a filing fee of $50 as of 2010. The fee can be paid by check, money order, Visa or MasterCard. Instructions for filing and paying are included on the form.
Organize your tax documents. If you have an employee who is not a member, you will need to register for Michigan business taxes. You can find information on this topic through the Michigan State Department. You will also need to apply to the Internal Revenue Service for an employer identification number. In Michigan, you also need to carry workers' compensation insurance if you have three or more employees or have employed anyone for at least 35 hours per week for 13 or more weeks. All LLCs in Michigan must also pay a yearly tax of 1.8 percent of adjusted gross income.
Collect all necessary documents. Michigan law requires all LLCs registered in the state to keep certain documents on file. These include a list of the names and addresses of all members and managers; a copy of the articles of organization; copies of the company's tax returns and financial statements for the past three years; and copies of the operating agreement.
File an annual statement. Michigan requires all LLCs to file an annual statement with the DELEG every year before Feb. 15. A preprinted statement will be mailed to your business office or registered agent. The form needs to be signed and returned to the state along with a filing fee of $25, as of 2010.