LLC in Michigan: Everything You Need to Know
This business structure combines the limited liability typically associated with corporations with the pass-through taxation of a sole proprietorship or partnership.3 min read
What Is an LLC in Michigan?
An LLC in Michigan is a private limited company. This business structure combines the limited liability typically associated with corporations with the pass-through taxation of a sole proprietorship or partnership.
Advantages of Forming an LLC in Michigan
Affordability and the lack of obstacles are the two main advantages of forming an LLC in Michigan. An individual who wants to start an LLC can finish gathering and preparing the application and forms within a few hours. The same cannot be said for those who hope to start an LLC in many other states.
The liabilities associated with a Michigan business are considered entirely separate from the personal assets of the business founder or owner under Michigan law. This includes obligations and debts. However, the income entrepreneurs earn through their LLC is still reported on their personal tax return.
Overall, business owners and founders don't face too many rules or regulations pertaining to limited liability companies in Michigan. For example, LLCs in Michigan don't need formal annual meetings, a board of directors, or complex regulations and rules. To amend or add members, all a business owner or founder needs to do is fill out some paperwork. As a result, business owners often find it very easy to manage LLCs in this state.
Turnaround Time When Starting an LLC in Michigan
Three to five business days is the average processing time for LLC applications, documents, and filings. However, if you need to have your documents and filings processed faster, you can use the expedited services.
Steps in Starting an LLC in Michigan: Name Your LLC
The most important step in the process of starting an LLC is naming the company. Michigan has requirements for naming an LLC that are state-specific and unique. For example, the name you choose for your LLC must be unique in comparison to the names of all the other businesses already listed with the Michigan Department of Licensing and Regulatory Affairs.
The vast majority of states have a list of certain words that must be used in the name of an LLC. Business founders need to prepare the correct forms, meet the requirements for formation and naming, and pay the required fees to register with the Bureau of Commercial Services and the Michigan Department of Licensing and Regulatory Affairs.
Entrepreneurs can reserve a name for an LLC for six months by preparing an application for the Reservation of Name with the Michigan Department of Licensing and Regulatory Affairs Bureau of Commercial Services. Before filing this application, you should check to make sure that the name of the LLC is still available. You should also conduct research to make sure that the name you select is appropriate for your business venture and easy to search for prospective customers and clients.
Name reservation requests need to be filed with a $25 fee. Business founders can file applications for starting an LLC in Michigan by postal mail or email.
The entity name needs to include the words "Limited Liability Company," "LLC," or "L.L.C." If you want to include restricted words in the name of the LLC, you will need to fill out more paperwork. You may also need to have a licensed individual join your LLC. For example, "bank," "university," and "attorney" are a few examples of restricted words. If you want to include "attorney" in the name of the LLC, you may need to have a licensed lawyer join your LLC.
Words that are prohibited from being used in the names of LLCs are those commonly associated with federal or state agencies. For example, you can't include the words "FBI," "Treasury," or "Secret Service" in the name of your LLC. Business founders can turn to the Michigan Department of Licensing and Regulatory Affairs for more rules and regulations when it comes to naming LLCs. You can even conduct a search on the website of the State of Michigan to confirm that the name you want for your LLC isn't already taken.
Upon choosing a name for your LLC, you should buy the domain name. That way, you won't have to worry about other people acquiring the domain name. You should also consider an email address when choosing a name for your LLC. Once you choose a name, sign up for a professional email with Google Apps.
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