How to Form an LLC in Michigan?

   Many people who form a LLC in Michigan, do so to protect assets such as their home. If their company is sued, they will not lose their car and other essential personal property. While several entrepreneurs in Michigan use an LLC when they want to start a business, others form one to hold valuable assets such as aircraft. It's not hard to create a Michigan LLC and this article how you can do that in a few easy steps.

Select a Name for your LLC

   Every LLC in Michigan must have a name and this is a requirement under the law. The name that you select should make it easy for potential clients to find you. Your name must be unique, to avoid confusion with any existing businesses. This is beneficial for you, since you never want to be mistakenly sued or accused of wrongdoing. 

   In Michigan, identifiers do not make a name unique. For example, Rob's Bakery LLC is the same as Rob's Bakery LC. Similarly, pluralization, punctuation and the order in which words appear, will not make a new name different from that of an existing company. For example, Rob's Crunchy Chocolate Pecans and Robs Chocolate Crunchy Pecan are regarded as the same name.  

   You can do a free name search by visiting the Michigan Department of Licensing and Regulatory Affairs (LARA) online. Enter a keyword from the name that you hope to use, in the search bar on their website. All of the names which are similar will be given and you can refine your search as necessary, by adding more keywords.  

   The Michigan Department of Licensing and Regulatory Affairs has a complete list of naming rules on their website. For example, your LLC's name cannot contain a word such as Treasury or FBI, that could lead to it being confused with a government agency. If you're a professional in certain fields, such as law or medicine, you or another member of your LLC must be licensed in the state before you can include "doctor" or "attorney" in your name.  

Services of a Resident Agent

   Your Michigan LLC is required to select a resident agent, who serves as a point of contact for the LLC. They will also be responsible for accepting legal documents on your behalf if your LLC gets sued. This person or business entity must agree in writing to serve in this capacity.  

   Your resident agent must have a real, physical address in Michigan and no P.O. boxes are allowed. Your resident agent can receive official government documents, important tax forms and all legal papers. A corporation can serve in this capacity but any member of your LLC can also agree to perform this function. You can even be your own resident agent but you will have reduced privacy, since you must reveal a physical address that's associated with you.  

File your Articles of Organization

   To start your LLC in Michigan, you'll need to file your Articles of Organization. This document should be sent to the Michigan Corporations Division, along with your filing fee of $50. You can file online or in person, by using form 700. You can also mail in your Articles of Organization.  

   Once the Corporations Division approves your Articles of Organization, your business will be created. Every limited liability company in Michigan must be created with this legal document. If you file online, your LLC could be created in just 24 hours but if you file by mail, it could take five business days. You can expedite these services for an additional fee.  

Create your Operating Agreement

   Although it is not a requirement under the law, your Michigan LLC should have an operating agreement. All the members of your LLC must sign this operating agreement and it is legally binding. Creating one helps you to avoid conflict in the future because it describes the role of each member and how the LLC will be run.  

   Your operating agreement gives valuable information on the number of shares that each member holds. It also states the conditions under which a member can sell their shares or transfer them to someone else. It should also state whether the business will be managed externally or by a member.  

© Clawson Chamber of Commerce
Powered by Wild Apricot. Try our all-in-one platform for easy membership management
Try it FREE