Key Takeaways

  • The cost to form an LLC in Michigan starts at $50 for filing the Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs (LARA).
  • Additional costs may include name reservation ($25), registered agent services, and annual statement fees ($25 per year).
  • Michigan does not charge franchise taxes but does require annual report filings to maintain good standing.
  • Optional expenses include operating agreement preparation, expedited filing, and business licenses or permits.
  • While Michigan’s base LLC costs are low compared to many states, failing to file annual statements or maintain a registered agent can lead to administrative dissolution.

LLC fees by state can range from $50 to $500. These fees are subject to change at any time.

A limited liability company, or “LLC,” is one of the most popular types of business structures available to an entrepreneur starting up a business. It can be thought of as a combination of a partnership and a corporation, and generally has the best attributes of the two.

The Initial Costs of Forming a Limited Liability Company

Starting a business often means incurring certain start-up costs. Since LLCs are regulated by the state, the start-up costs of forming an LLC depends on state and service fees. Each state sets their own start-up fees, and these fees can be changed at any given time, especially if the state is looking to boost revenues.

Initial start-up fees for an LLC can include but are not limited to:

• Registering your company’s name

• Filing Articles of Organization

• Forming an Operating Agreement

• Establishing an Employer Identification Number

Understanding Michigan LLC Cost Breakdown

When starting an LLC in Michigan, understanding the full breakdown of state and optional costs can help you plan more effectively. The Michigan LLC cost primarily includes the $50 filing fee for the Articles of Organization submitted to the Department of Licensing and Regulatory Affairs (LARA). This is a one-time state fee that officially registers your business.

Other potential initial costs include:

  • Name reservation: $25 (optional, valid for six months if you want to hold your LLC name before filing).
  • Registered agent service: Free if you serve as your own agent, or typically $100–$300 per year if you hire a professional service.
  • Operating Agreement: Not required by the state but strongly recommended to outline member responsibilities; cost varies if prepared professionally.
  • EIN (Employer Identification Number): Free through the IRS, but some filing services may charge a processing fee.

You can file your LLC online or by mail through the Michigan Business Entity Division. Online filings are usually processed within two business days, while mail filings can take up to two weeks. Expedited services are available for an additional fee—$50 for same-day processing, $100 for two-hour service, and $1,000 for one-hour service.

Different Types of LLC Fees

As mentioned above, there are fees that a business must pay when it files certain required documents, such as the Articles of Organization. Filing fees for an LLC can cost anywhere between $50 (Arizona, Arkansas, Colorado) to $500 (Massachusetts). The average cost of filing an LLC is $127. This is a one-time payment that the state requires when you first form the business.

There are also costs associated with annual reports that a business is required to file. Depending on the state, an LLC is required to submit these reports every year or every two years. These “annual” fees are what keep your LLC in compliance each year and must be paid regardless of the LLC’s income or activity. The average cost of filing an annual report is about $100 and is paid to the state(s) where you are registered. If you fail to pay the annual fees, the state will essentially cancel your business registration,and you will not be able to keep your LLC running.

Ongoing Michigan LLC Fees and Maintenance Requirements

Once your Michigan LLC is formed, you’ll need to maintain it with annual filings and compliance obligations. The annual statement fee is $25, due each year by February 15, starting the year after formation. Failure to file by this deadline can result in a $50 late fee and eventual administrative dissolution if the delinquency continues.

Michigan does not impose a franchise or privilege tax on LLCs. However, businesses may owe Michigan Business Tax (MBT) or Corporate Income Tax (CIT) depending on their revenue and structure. Most single-member and multi-member LLCs are treated as pass-through entities for federal and state income tax purposes, meaning profits are reported on members’ personal tax returns.

Additional ongoing expenses may include:

  • Registered agent renewal fees (if you use a professional service)
  • Business license renewals, depending on your industry or locality
  • Amendment filings ($25 fee) if you update ownership, address, or business activities

What State(s) Should You Form an LLC In?

Because each state sets its own rules and regulations for forming an LLC, you should definitely do your research into what state or states to register your LLC and what would be the most beneficial to the business. While there is some flexibility in choosing what states to register in, there are some baseline requirements to keep in mind. For instance, you have to register your LLC in any state where you will be conducting business. “Conducting business” is somewhat subjective, but if you have an office in a state or employees working in a state, that is considered conducting business for purposes of paying fees. If you are a more local business that will only be doing business in your home state, it would make sense for you to register your LLC in that state, even if the fees are a bit higher.

There are some benefits to registering your business in more than one state, and it is not as complicated as it might sound. Some states have more appealing tax laws and are generally more business-friendly. As long as your LLC has a registered agent in the second state, the ability to maintain your LLC status in that state should be relatively simple.

Why Forming an LLC in Michigan May Be Best for Local Entrepreneurs

For Michigan-based entrepreneurs, forming an LLC in your home state is usually the most practical and cost-effective choice. While states like Delaware and Nevada are popular for business incorporation, Michigan offers straightforward regulations, low filing fees, and no hidden franchise taxes, which makes it attractive for small to mid-sized businesses.

Forming your LLC in another state means you’ll need to register as a foreign LLC in Michigan if you operate there—which means paying both states’ filing and reporting fees. For most business owners operating primarily in Michigan, filing locally ensures lower ongoing costs, simpler compliance, and local legal protections under the Michigan Limited Liability Company Act (Act 23 of 1993).

Forming an LLC in Delaware

Delaware is probably the most common state that comes to mind when a person is deciding where to form their business. Historically, they have been business-friendly and were considered the pioneer for corporations in the 1800s. They have reduced tax burdens and loosened restrictions for businesses. What is unique about Delaware is that they have an entirely separate court who handles business matters. The “Chancery Court” has established hundreds of years of case law.

Forming an LLC in Michigan

Forming an LLC in Michigan involves a straightforward process handled by the Michigan Department of Licensing and Regulatory Affairs (LARA). Here are the key steps:

  1. Choose a Business Name – Ensure it’s unique and includes “Limited Liability Company” or “LLC.” You can verify availability using the Michigan Business Entity Search and optionally reserve it for $25.
  2. Appoint a Registered Agent – Every Michigan LLC must have a registered agent with a physical address in the state.
  3. File the Articles of Organization (Form 700) – Submit this form online or by mail with the $50 filing fee to LARA.
  4. Create an Operating Agreement – Though not required by law, it’s vital for outlining management and ownership terms.
  5. Obtain an EIN – Apply through the IRS for free if you plan to hire employees or open a business bank account.
  6. File Annual Statements – Pay $25 each year by February 15 to maintain your LLC in good standing.

This process is simple, cost-effective, and provides the liability protection and flexibility Michigan entrepreneurs need to grow their businesses.

Forming an LLC in Nevada

Known as the “small business capital of the world,” Nevada is one of the fastest growing states in the U.S. and, as such, has morphed into a very business-friendly atmosphere. The state does not tax any business income, franchise fees, or state corporation tax, due in large part to the huge gaming industry.

Forming an LLC in Wyoming

Similar to Nevada, Wyoming does not tax business income or have franchise fees. The state government is actively working to increase Wyoming’s reputation for being business-friendly. On top of that, the state allows a “lifetime proxy,” which means a designated person can vote on your behalf forever and you do not have to ever travel to the state if you so choose.

Frequently Asked Questions

  1. How much does it cost to start an LLC in Michigan?
    The cost to start an LLC in Michigan is $50 to file the Articles of Organization with LARA. Optional costs include $25 for name reservation and registered agent fees.
  2. How much is the annual fee for a Michigan LLC?
    Michigan LLCs must pay a $25 annual statement fee each year by February 15. Late filings incur a $50 penalty.
  3. Are there any franchise or business privilege taxes for Michigan LLCs?
    No, Michigan does not charge franchise taxes for LLCs. However, depending on income, you may owe Michigan Business or Corporate Income Tax.
  4. How long does it take to form an LLC in Michigan?
    Online filings are typically processed within 1–2 business days, while mailed applications may take up to two weeks. Expedited options are available for additional fees.
  5. Do I need an operating agreement for my Michigan LLC?
    It’s not legally required, but an operating agreement is highly recommended to define ownership structure, management responsibilities, and voting rights.

If you need help with understanding Fees By State, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.