When forming an LLC in Michigan, one of the crucial initial steps is learning how much it will cost to establish this business entity.
Without this information, you run the danger of underestimating your LLC registration budget and other ongoing costs for running this business structure.
To help you avoid costly mistakes, we sought expert advice from our team of licensed LLC experts and spent weeks developing this cost guide.
Here's what you need to know.
- An LLC in Michigan costs $50 to submit the Michigan Articles of Organization to the Licensing and Regulatory Affairs.
- All LLCs in Michigan must file an annual report statement to update the Secretary of State on the company information.
- Any domestic and foreign LLC in Michigan is subject to a 4.95 percent Michigan Business Tax.
How Much Does an LLC Cost in Michigan?
An LLC in Michigan costs $50 to file online. This amount is for filing the Articles of Organization to the Secretary of State.
However, the total filing amount could be more because of other fees, including the registered agent service fee, annual reports, name reservation, and business licenses.
Michigan LLC Filing Fee
The filing fee for a Michigan LLC is $50 to file the Articles of Organization .
Before the Michigan department approves your Michigan LLC to transact business, you must file your Articles of Organization and submit the correct documents to the Michigan Department of Licensing and Regulatory Affairs Corporations (LARA), Securities and Commercial Licensing Bureau.
In Michigan, you can apply for your LLC registration online, in person, or by mail. Note that the standard processing time for online submissions is 14 business days, and for mail-ins is 28 business days.
However, it's good that the Michigan department offers the following expedited processing options at an additional fee.
- $50 for 24-hour delivery
- $100 for same-day delivery
- $500 for 2-hour delivery
- $1000 for one-hour delivery.
Michigan Registered Agent Service Fee
Per Michigan law, a resident/registered agent must be named for each Michigan LLC.
In Michigan, an LLC cannot act as its own resident agent service; instead, the business owner or any individual member of the LLC may serve as the registered agent for that specific business entity.
But given the critical responsibilities, a resident agent holds in Michigan, it would be wise to choose a professional to do the heavy lifting for you and your LLC.
If you hire a professional registered agent service in Michigan, expect to pay between $50-$300 per year.
Michigan Business Tax
According to the proposed policy, business earnings will now be subject to taxation at a rate of 4.95 percent, with state-taxable income from company operations serving as the tax base .
You may be eligible for a four-month company extension, giving you an extra four months after the completion of your fiscal year. By submitting Form 4 before your initial deadline, you can apply for this.
Even if given an extension, LLC owners must still pay their tax bill on schedule, or they will be penalized. All unpaid taxes must be included with your Form 4 application if any are due.
Other LLC Filing Costs
Here's a rundown of the additional costs to start an LLC in Michigan.
1. Business Name Reservation
The first step in order to reserve your name is to look up an LLC in Michigan and see if your desired business name is available.
Business name reservation is a good idea if you want to safeguard your name before starting the Michigan LLC formation process.
By submitting an Application for Reservation of Name with the Corporations Division and paying $25, you can secure your name for 180 days.
Your business name is unavailable for other business entities to claim during this time.
Before making name reservations online, by mail, or in person, ensure the name is available and meets all Michigan LLC naming guidelines.
You can verify this by checking the Online Filing System.
2. Michigan Certificate of Assumed Name
An assumed name refers to any title a Michigan-based organization transacts business under that isn't its official title.
An assumed name application must be submitted to the Michigan Secretary of State website, costing $25.
Check the Michigan Secretary of State's website to see that your business name is available and has not already been registered by someone else.
After verifying that your name is available and meets all the Michigan LLC naming regulations, the SOS will issue you a certificate of assumed name.
3. Michigan Annual Statement
Michigan LLCs must submit an annual report or an annual statement and a nominal $25 charge.
The annual report certifies that the state has all accurate information about your company, and you must file it to keep your LLC in full compliance.
Michigan Department offers online and mail-in filing for annual reports.
If you file your annual report online, you can use the LARA Corporations Division Online Filings System to submit it.
Alternatively, you can mail the annual report, which is quite different. The Michigan Corporations Division sends a pre-filled document of the annual statement to your registered agent 90 days before the due date.
The deadline for annual report filing in Michigan is 15th February.
4. Michigan Certificate of Good Standing
A Michigan Certificate of Good Standing from the SOS is available online for a $50 filing fee.
The LARA Online Filing System is the quickest way to get a Certificate of Good Standing. After receipt, the online processing time for your Michigan LLC typically takes 3 working days.
This business document is crucial because it demonstrates that your Michigan limited liability company complies with all applicable state regulations and that all tax filings have been made on time.
It’s also important for opening a business bank account and registering a Michigan foreign LLC.
5. Certified Document Copies
In Michigan, it costs $16 to get LLC-certified document copies. Note that for documents with more than 6 pages, there's a $1 filing fee for each extra page.
The Licensing and Regulatory Affairs can provide these certified copies, which support setting up your foreign LLC and locating investment capital.
6. Michigan LLC Operating Agreements
An operating agreement is a legally enforceable contract between members that outlines the rules and regulations your business will follow, including voting processes, profit and loss sharing, and partnership interest.
As it is an internal document, you can construct your operating agreement for free ($0) or pay a professional LLC provider between $100 and $250.
7. Michigan Professional Business Licenses
Whether you're a chiropractor, therapist, or food delivery service enterprise, if your company requires training to operate appropriately, you'll need a professional business license from the regulatory affairs body that oversees your field in Michigan.
Visit the MI Bureau of Professional Licensing website to learn how to apply for a professional business license in your field and the applicable costs.
8. Business Insurance Premiums
Business insurance premiums help pay for missed income, medical expenses, and rehabilitation programs.
Employers have two options for purchasing workers' compensation insurance in Michigan: self-insure or use a state-approved private insurance provider.
Also, note that high-risk job opportunities have a higher workers' compensation rate and vice versa for low-risk jobs.
Typically, workers' compensation rates in Michigan range from $0.16 per $100 of income at the lower end of the spectrum to $11.04 per $100 of payroll at the upper end.
9. Employer Identification Number
Any LLC doing business in the United States has to have its own unique Employer Identification Number (EIN), which the Federal Revenue Service should issue.
Michigan LLC owners must obtain an EIN when filing federal and state taxes or opening a company bank account.
A service provider for an LLC can obtain one for you for somewhere between $50 and $100, or you can register one for free on the IRS website.
How Much Does It Cost To Register a Business in Michigan?
It costs $50 to register a business in Michigan. This amount covers the submission of the Articles of Organization to the Michigan department.
How Much Does an LLC Cost Per Year in Michigan?
An LLC costs $25 per year in Michigan for filing the annual report. However, if you hire a registered agent service, you may also have to pay their yearly fees.
Do You Need Professional Help with Your Michigan LLC?
Creating a Michigan LLC gives you several advantages, improved business independence, easy management, and access to limited liability protections.
If you're thinking of creating a Michigan LLC, consult the best Michigan LLC service providers if you want a straightforward and affordable formation procedure.
These Michigan LLC formation services will guide you through the procedures of business name registration and designing your articles of organization, enabling you to comply with regulations as a business without difficulty.