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It’s an exciting feeling to be ready to form a limited liability company, or LLC, in the early days of building a business. This is a big step in your business’ growth—but it may also be a moment of uncertainty and confusion. What does forming a Michigan LLC cost, and where do you even begin?
Forming an LLC has a number of benefits, like protecting you from personal legal liability as you grow and simplifying routine paperwork and procedures, like your annual taxes. If you want to learn more about the cost and logistical steps of forming an LLC in Michigan, as well as what you should do after your LLC is created, read on!
How much is an LLC in Michigan?
If you want to start an LLC in Michigan, the good news is that the upfront cost to get started is relatively low. Simply complete your Articles of Organization and pay $50 to file for your LLC. Should you need to expedite the process for any reason, you’ll need to cover additional fees. These will vary based on the specifics of your business model and the information included in your Articles of Organization, but average around $100.
Once you’re officially established as an LLC, you can expect to pay the state of Michigan a fee for annual reports once a year. For standard LLCs within the state, this is $25, while professional LLCs can expect to pay up to $75.
Depending on the type of business you own, you may also need to register for sales and use tax. If your company employs others, you will also need to pay unemployment insurance. These annual fees should be paid in full each year by February 15.
Start a Michigan LLC in 3 steps
So, you’ve decided that you want to start an LLC in Michigan. Congratulations! The hardest decision you’ll face in this entire process is officially behind you. But what steps should you take next to bring your business to life? Great question. We’ll walk through each step below:
- Reserve a business name: In order to establish a Michigan LLC, you’ll need to choose a name that sets it apart from other businesses. Brainstorm ideas, then check their eligibility by searching the Department of Licensing and Regulatory Affairs website to see if another business has claimed it yet. Be sure to include “LLC” in the name or a similarly accepted initialism. Once you determine an available name, claim it by submitting an Application for Reservation online or by mail.
- Choose your LLC’s resident agent and registered office: In the state of Michigan, LLCs are required to include both a resident agent and a registered office in their Articles of Organization. Agents accept responsibility for all legal documents on the LLC’s behalf, and the office becomes the Michigan address at which your business is registered. If you don’t live in Michigan, you’ll need to hire a local resident agent for anywhere between $50 and $150.
- File Articles of Organization: Once you have all these pieces in place, you can complete your Articles of Organization and submit them to the state of Michigan for approval. If you’re registering as an out-of-state resident, you’ll have to submit a Certificate of Authority as well. You can submit your Articles of Organization either online or by mail, although online is the fastest method. As mentioned earlier, you can expedite the process for a fee.
While the process is not particularly labor-intensive or complex, it does require you to have your documentation organized in advance if you want to save money.
What do you do after starting your LLC?
Now that your LLC has been created, there are a few steps you may want to take to be sure you start out on the right foot. Most importantly, remember that annual reports are required by the state, per the Michigan Limited Liability Company Act, so make sure you’re preparing yourself early on to provide the necessary information and payment. It’s also essential that your LLC remains in good standing—this is determined not only by providing payment and reports in a timely manner, but also by maintaining your LLC’s registered agent.
If for any reason you feel the need to go the extra mile to prove your LLC’s legitimacy, you can always request a Certificate of Good Standing for $10.
Bank with the best
There is no shortage of tips you can find online to make sure your small business is starting out on a solid foundation, but the best advice you can get is to find a bank that knows how to accommodate your unique needs as a small business owner. NorthOne is the expert in small business banking, providing customers with tailor-made tools to meet their specific needs. Reach out today to learn more!Apply for an Account