Michigan LLC Costs
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Small business owners and entrepreneurs access specific benefits when they convert to an LLC in Michigan. It provides them with liability protection, unique tax benefits, state-specific incentives, and a flexible management structure. Business owners sometimes believe that the LLC formation process is overly complicated and costly. However, it is straightforward and worth the investment for many.
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Costs to start an LLC in Michigan
1
LLC Articles of Organization ($50)
- You must file Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs (LARA).
- The cost to file Michigan Articles of Organization is $50.
- Michigan does offer expedited LLC services for an additional fee – 24-hour – $50, Same day – $100, 2-hour – $500, 1-hour -$1,000.
2
Michigan annual statement fee ($25)
- You must file an annual report with the Michigan Department of Licensing and Regulatory Affairs.
- You can file online using the LARA Corporations Online Filing System.
- Or, you can follow the directions and submit the form to Michigan LARA.
- The annual fee is $25.
- A Michigan LLC’s annual report fees are due on February 15th.
- Failure to pay your annual statement fee has a penalty of $50 and possible dissolution.
3
Michigan registered agent fee (varies between $50 to $300)
- In Michigan, you must appoint a registered agent to form an LLC in the state.
- By appointing a registered agent, you are alerting LARA that someone is physically available during business hours to accept subpoenas, tax notices, and other correspondence.
- Anyone, including yourself, can act as your LLC’s registered agent if they meet the state requirements.
- The LLC cost of a registered agent in Michigan depends on the commercial service you appoint, the needs of your LLC, and state filing fees.
4
Fees to form a foreign LLC in Michigan ($50)
- You must register as a foreign LLC if you operate an existing limited liability company in another state and are expanding into Michigan.
- You can register your foreign LLC using the LARA COFS website.
- Or, you can complete the Application for Certificate of Authority to Transact Business in Michigan (Form 760) and submit it by mail to the Michigan Commercial, Securities, and Commercial Licensing Bureau with LARA.
- The LLC cost to register as a foreign LLC is $50.
5
LLC name reservation fee ($25)
- You do not have to reserve an LLC name in Michigan before formation begins.
- However, when you reserve an LLC name, you ensure no one else can register the same one.
- An LLC name in Michigan must be unique and distinguishable from any other LLC name.
- You can reserve a Michigan LLC name for up to 6 months before formation.
- You can use the LARA Corporations Online Filing System (COFS) to reserve your company name online.
- Or, you can complete the Application for a Reserved Name (Form 540) and submit it by mail to LARA.
- The cost to reserve an LLC name in Michigan is $25.
6
DBA filing fees in Michigan ($25)
- DBA is a business acronym that stands for ‘doing business as.’ A DBA, or an assumed name, is a registered name that a person or company uses to do business under that is not the legal name.
- In Michigan, an LLC must register a DBA if you use a business name that is not the LLC’s legal name.
- A DBA name does not have to be unique in Michigan. However, it must be distinguishable from other business entities such as other LLCs and corporations.
- You can use the LARA Corporations Division Online Filing system to register a DBA in Michigan.
- Or, you can complete the Certificate of Assumed Name (Form 541) and submit it by mail to the Michigan Department of Licensing and Regulatory Affairs.
- The cost to register a Michigan DBA is $25.
7
Cost of certified document copies ($16)
- You will complete the Certification and Copies Request and submit it to LARA to order certified LLC documents in Michigan.
- The cost for Michigan LLC documents is $16 plus $1 per page.
8
Michigan Certificate of Good Standing ($10 online)
- Before opening a business bank account, financial institutions require you to submit a Michigan Certificate of Good Standing.
- You can order a Certificate of Good Standing online using the LARA COFS website.
- Or, you can read the instructions and submit a request by mail, phone, or in person.
- The filing cost for a Michigan Certificate of Good Standing is $10 online or $12.50 in person.
Steps to start an LLC in Michigan
1
Choose a business name
When narrowing down an LLC name in Michigan, you will need to consider a few things.
- A Michigan LLC must be unique and entirely distinguishable from any other LLC, corporation, etc.
- The LLC name you choose must meet all Michigan naming requirements.
- It is always a good idea to check for web domain availability to keep your branding simple.
You will use the LARA Corporations Business Entity Search to conduct a name search.
LLC name reservation fee
Michigan does not require the reservation of an LLC name before formation.
You can reserve a Michigan LLC name online or by mail for up to 6 months before formation.
The cost to reserve a company name in Michigan is $25. An LLC name is good for up to 6 months. Michigan does not require you to reserve an LLC name.
2
Appoint a Michigan registered agent
In the state of Michigan, if you form an LLC, you must appoint a registered agent.
The price for a Michigan registered agent or service varies between $50 and $100 a year. The cost depends on the state and your LLC needs.
A registered agent in Michigan is an individual or business entity that receives tax forms, legal documents, subpoenas, civil notices, service of process, and other official government correspondence on behalf of a sole proprietorship, corporation, or LLC.
The registered agent you choose must be a Michigan resident or a registered agent service authorized to conduct business in the state.
ZenBusiness
- Starter Plan – $39 a year plus State Fees
- Pro Plan – $149 a year plus State Fees
- Premium Plan – $249 a year plus State Fees
ZenBusiness has a stand-alone registered agent service for Michigan LLCs. The price is $99 per year.
Northwest
- Total Out The Door Michigan LLC Formation Service Package – $40 a month and includes:
- Michigan State Fee
- Filing Service Fee
- Registered Agent
- Tax ID
- Annual Plan – $225 plus State Fees a year
LegalZoom
- Economy – $79 plus $153 Michigan filing fees
- Standard – $329 plus $153 state filing fees
- Express Gold – $349 plus $255 state filing fees
3
File Michigan Articles of Organization
You must file your Michigan Articles of Organization with the Michigan Corporations Division.
You can file the Articles of Organization online using the LARA COFS website.
Or, you can complete the Articles of Organization form (Form 700) and submit it by mail or in person.
The LLC cost to file your Michigan Articles of Organization is $50.
The state of Michigan does offer expedited LLC services for an additional cost – 24-hour – $50, Same day – $100, 2-hour – $500, 1-hour -$1,000.
Mailing address:
Michigan LARA
Corporations Division
PO Box 30054
Lansing, MI 48909
Physical address:
Michigan LARA
2501 Woodlake Cir.
Okemos, MI 48864
Form 700 will ask for specific information about an Michigan LLC.
- LLC name
- Purpose of LLC formation
- Duration of the LLC
- Registered agent information
The fee in Michigan for filing your LLC Articles of Organization is $50.
4
Get a Michigan LLC EIN
An Employer Identification Number, or EIN, can also be referred to as a Federal Employer Identification Number (FEIN) or Federal Tax ID Number (FTIN).
The IRS issues the 9-digit EIN for no additional cost. It acts like a Social Security Number for income tax purposes.
In Michigan, you must apply for an EIN when you convert a sole proprietorship into an LCC.
Applying for an EIN is a simple process online through the IRS website.
Business banking for a Michigan LLC
When opening a business bank account, keeping it separate from your personal account is always good. It protects the owner’s personal assets and credit scores.
In Michigan, money lenders and banks will request a copy of your Articles of Organization, an operating agreement, and your EIN before letting you do any business banking.
Business banking accounts are generally free, and do not have additional charges or fees.
Business attorney fees in Michigan
A business attorney understands the ins and outs of LLC formation. And by retaining an expert, you also have someone available to handle any business-related issues that may arise.
In most cases, a business attorney in Michigan will offer a consultation to a first-time client.
Professional services such as LegalZoom and Rocket Lawyer offer LLC formation packages that include comprehensive legal services.
On average, a business lawyer in Michigan will cost $300 per hour.
LLC taxes in Michigan
- As an LLC in Michigan, the state considers you a pass-through entity, meaning you file your personal tax returns rather than the LLCs.
- You must register for a seller’s permit if you sell physical products in Michigan.
- The Michigan state tax rate is 6.00%, and there is no max to the local and county rates.
- You must register for Unemployment Insurance Tax through the Michigan Unemployment Insurance Agency if you hire employees in Michigan.
- You must also enroll in Employee Withholding Tax with the Michigan Department of Treasury.
- When you hire a tax expert, you help to ensure that you do not miss deadlines, accrue penalties, and avoid possible dissolution.
Business licenses and permits in Michigan
The overall cost for business licenses and permits in Michigan will vary depending on where the LLC is located and what type of business it is.
You will use the Michigan.gov State License Search to locate the necessary licenses and permits.
A business licence in Michigan averages varies between $15 to $1,000. The total cost of permits and licences will depend on where your LLC is, and the type of LLC.
Local government agencies in Michigan will have different processes and rules for licenses. You will want to contact the office to inquire about the process, price, and office hours.
Notary public
You may come across some LLC documents that require a notarization from a notary public.
Government agencies typically have a notary public in the office if you cannot locate one.
According to Michigan state law, a notary public can only charge a max of $10 per notorial act.
Employer obligations in Michigan
- You have specific obligations when you hire employees in Michigan.
- You must verify that all LLC employees are eligible to work legally in the United States using Form I-9 from the USCIS Website.
- You must enroll in worker’s compensation insurance.
- You will report all new hires to the Michigan Department of Health and Human Services.
- You can find a complete list of Michigan Employer obligations.
Benefits of a Michigan LLC
- By forming an LLC in Michigan, you are making business banking easier. Lenders and banks will require you to open a separate business and personal bank account. It reduces your future liability.
- An LLC has different compliance requirements than other business structures. When making critical business decisions, incorporations answer to shareholders and stock owners.
- LLCs are pass-through entities in Michigan. LLC owners file personal tax returns rather than the LLC’s tax returns.
- The formation of an LLC helps to avoid double-taxation. C-corporations are naturally double-taxed while LLCs are not.
- The cost of forming an LLC in Michigan is highly affordable. The cost to submit your Articles of Organization is $50, and the state does not have a franchise tax.
- Michigan has incentives that are available to LLCs. Michigan Development Corporation Renaissance Zone and New Personal Property Tax Exemption are incentives for an LLC in the state.
FAQs
How long does it take to register an LLC in Michigan?
It will take Michigan 2 weeks to process an LLC online registration. If you file by mail, it will take up to 4 weeks.
Michigan offers expedited LLC services. 24-hour – $50, Same day – $100, 2-hour – $500, 1-hour -$1,000.
How do I dissolve my Michigan LLC?
An LLC will want to file Articles of Dissolution to avoid ongoing costs and state fees. You can file your Articles of Dissolution online or by mail with the Michigan LARA Securities. Commercial Licensing Bureau Corporations Division.
The LLC filing fee for cancellation is $10 in Michigan.
Are there publishing requirements for Michigan LLCs?
Unlike Arizona and New York, Michigan has no further publishing requirements.
Does Michigan have a franchise tax?
Michigan does not have a biennial or annual franchise tax. It makes forming an LLC in Michigan affordable and accessible to many business owners.
Do I need a business operating agreement for my LLC in Michigan?
In Michigan, an LLC is not required to submit an operating agreement to LARA. However, having one on file will help reduce the chances of future internal misunderstandings.
An operating agreement can be written or oral as long as it is in the company’s files.
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