LLC in MI: Everything You Need to Know
Creating an LLC in MI entails filing an articles of organization and paying fees. The articles of organization contains basic information about your LLC.3 min read
2. Operating Agreement
3. Employer Identification Number
Creating an LLC in MI entails filing an articles of organization and paying the necessary fee. The articles of organization is a simple document you complete that contains basic information about your LLC. If you wish to start a company in the state, you can create your LLC without hassle.
The LLC creation process falls under the governance of Michigan authorities, and it applies to residents who wish to apply for a business in MI. The federal government does not regulate LLCs, with the exception of the IRS when it comes to taxation. Before creating your LLC in MI, you should conduct research to ensure that your LLC is suited for your business endeavors.
Under MI law, the LLC name should contain such designators as “LLC” or “Limited Liability Company.” You must also keep in mind certain restricted words:
The aforementioned words require additional paperwork and licensure to use the names. Outright prohibited words include:
- Secret Service
Your LLC name should be separate from other business entities already on file with Michigan authorities. You may check for name availabilities via the MI state database. You may also reserve your intended name on a six-month basis by submitting a reservation application to state officials.
Your reservation form can be filed via email or mail, and you must pay a filing fee of $25. You should also check your name to see if you can reserve a domain name as well. You should get a domain name even if you do not intend to establish an online presence.
LLC Creation Process
First, you must create your LLC through the filing of your articles of organization and submit it to state authorities. The articles should include the following information:
- LLC address and name
- Business purpose
- Address and name of registered agent
- LLC duration (if any)
In MI, your LLC would fall under member-managed by default, unless you note in Article V that your LLC would be manager-managed. Member-managed means that an LLC is governed directly by members, while a manager-managed LLC is operated by managers that are appointed by members.
All MI LLCs must have a registered agent. A registered agent is a business entity or individual that accepts legal paperwork on behalf of your organization. The registered agent may be the following:
- MI resident
- MI corporation
- Foreign corporation that’s authorized to conduct business in MI
- MI LLC
Moreover, the registered needs have a physical address in the state. Your LLC could be banned from doing business in MI if you do not appoint a registered agent.
An operating agreement is not mandatory in MI, but you should draft one to establish a cohesive management structure within your LLC. An operating agreement should include such parameters as:
- Rules and operating procedures of the business
- Compensation plans
- Member roles and duties
Also, operating agreements do not need to be filed with MI officials.
Employer Identification Number
An employer identification number is what the IRS uses to label your business and tax it accordingly. It is a unique nine-digit number that’s similar to a Social Security number. If you choose to get a sole-member LLC, you only need to get an EIN if you intend to hire employees. Further, you also need one if you intend to have your LLC taxed as a corporation as opposed to a sole proprietorship.
You also need an EIN for the following reason:
- To submit state and federal taxes
- To start a business bank account
You may get an EIN online from the IRS for free.
In certain cases, you may need to collect sales taxes. For instance, you may need to collect sales taxes if you are selling goods. To collect sales taxes, you must be registered via the Michigan Department of Treasury. All business transactions subject to taxation falls under the regulation of the Michigan Business Tax.
You must register for the Unemployment Insurance Tax via the Michigan Unemployment Insurance Agency. If you retain MI employees, you need to register for the Employment Withholding Tax through the online Michigan Treasury.
To know more on creating your LLC in MI, submit your legal inquiry to our UpCounsel marketplace. UpCounsel’s attorneys will give you a helping hand when creating a business in MI, including all the maintenance procedures you need to be aware of to keep your business in good-standing. In addition, they can give you sound advice on the right tax structure for your LLC.