How Much Does an LLC Cost in Michigan?

Are you thinking about starting an LLC in Michigan? Let’s discuss costs. The basic fee to file your Articles of Organization is $50, plus a $25 annual report fee. Compared to other states, Michigan offers a budget-friendly setup for entrepreneurs.

But what else might you need to budget for?

Beyond the initial filing, additional costs will depend on your needs. You might consider reserving your LLC name and registering a DBA if applicable. Registered agent services are another option if you prefer not to handle it yourself. Additionally, depending on your industry and location, you may need to budget for taxes and a business license.

Knowing these costs upfront helps you plan better. Whether starting small or dreaming big, understanding what it takes financially will make your Michigan LLC journey smoother.

How Much Does an LLC Cost in Michigan?

Starting an LLC in Michigan involves several costs and requirements. The main fee to file your Articles of Organization is $50, paid to the Michigan Department of Licensing and Regulatory Affairs. If you need faster processing, you can pay an extra $50 for 4-6 day expedited service or $100 for priority service.

Once your LLC is established, there are ongoing costs. To keep your LLC compliant with state laws, you must file an annual report each year for $25.

You might also need an Employer Identification Number (EIN). While optional, having an EIN is recommended for managing taxes and business finances.

Registering a DBA (Doing Business As) will cost $25 if you plan to operate under a different name. Additionally, you may need a Certificate of Good Standing, which costs $10. This document verifies that your LLC is up-to-date with its filings and is often required for certain business transactions.

Other potential expenses include reserving your business name for $25, obtaining a business license, or hiring registered agent services, ranging from $100 to $300.

Understanding these costs and requirements helps you budget effectively as you start your LLC in Michigan.

LLC Costs in Michigan (Formation Fees)

Here’s a table that outlines the Michigan LLC key requirements and their associated fees:

Michigan LLC Requirements	Cost
LLC Business Name	$0
Michigan Articles of Organization	$50
Operating Agreement (optional)	$0 (with Northwest)
EIN Number	$0 (free from IRS)
Michigan LLC Annual Report Fee	$25/annually
LLC Name Reservation Fee (optional)	$25
Certificate of Good Standing (optional)	$10
Foreign LLC Registration (optional)	$50
Fictitious Name (DBA) (optional)	$25
Taxes	Varies
State Business License Fee	Varies by business type
Registered Agent Services	$0-$125 (Northwest)
LLC Formation Services	$39
Total LLC Costs in Michigan	$75 – $349

Total LLC costs in Michigan range from $75 to $349. If you do everything yourself and skip the optional extras, you might only spend around $75. However, if you decide to pay for additional services and requirements, your costs could go up to between $200 and $349.

The first mandatory expense is the $50 fee for filing your Articles of Organization, which is essential for officially forming your LLC. You’ll also need to budget an annual report fee of $25 to keep your LLC in good standing.

Now, let’s discuss the optional costs.

Obtaining an Employer Identification Number (EIN) is free from the IRS. While having an Operating Agreement is recommended, you can get it at no cost if you use services like Northwest. Your LLC business name costs $0; you can choose any available name without a fee.

If you want to reserve your LLC name, that will cost $25. You can also request a Certificate of Good Standing for $10, and if you plan to register a Michigan foreign LLC, that will incur a fee of $50. If you wish to operate under a different name (DBA), you must pay $25.

Regarding registered agent services, you can either act as your agent at no cost or hire a professional service, which typically ranges from $100 to $125, depending on the provider.

If you choose to use an LLC formation service, that typically costs around $39. Additionally, remember that taxes can vary based on your specific business activities, and the state business license fee can vary depending on your industry.

Keep reading to explore more about managing these expenses and making the most of your LLC formation!

Michigan LLC Business Name Cost ($0)

Choosing a name for your LLC in Michigan doesn’t have a fee. You can brainstorm and decide on a name at no cost. However, the name must be unique and not similar to existing businesses.

Before you file, check if your desired name is available. You can search the Michigan Business Entity database online. This step helps avoid issues when you submit your formation documents.

Once you find a name you like, you can reserve it for a small fee if you want to hold it. The reserve name fee is $10. This option is useful if you need more time before filing your LLC paperwork.

When picking a name, remember that it must include “Limited Liability Company” or abbreviations like “LLC” or “L.L.C.”. Make sure it meets Michigan’s naming rules to avoid any complications later.

Michigan Articles of Organization fee ($50)

When you decide to form an LLC in Michigan, one crucial step is filing the Articles of Organization. The state requires this document to officially establish your LLC.

The filing fee for the Articles of Organization is $50. You will pay this fee to the Michigan Department of Licensing and Regulatory Affairs (LARA). This fee is non-refundable, so it is essential to ensure everything is correct before submitting.

You have a few options for payment. You can pay by check or by order of money to the State of Michigan. Credit card payments are accepted if you file online, which can speed up the process.

For those seeking a quicker processing time, online filing is the way to go. Michigan LLCs are typically processed within 2 weeks. If you opt for mail, expect approval in 4 weeks.

After you submit your Articles of Organization with the fee, the state will review it. Once approved, your LLC will be officially formed and recognized by Michigan law.

LLC Operating Agreement Cost in Michigan ($0 with Northwest)

When forming an LLC in Michigan, you might wonder about the cost of an operating agreement. The good news is that you can get this crucial document at no extra charge if you use Northwest Registered Agent.

An operating agreement outlines how your LLC will operate. It details members’ roles, the management structure, and the distribution of profits. While not legally required in Michigan, it is highly recommended to help avoid misunderstandings.

With Northwest, the operating agreement is included for free when you form your LLC. This can save you time and money. Many other services might charge extra or offer templates that require more work.

Michigan Registered Agent Fee ($0-$300/year)

When forming your LLC in Michigan, you need a registered agent. This agent can be you, or you can hire a service.

If you choose to act as your registered agent, there is no fee. You just need to provide your name and address.

Hiring a professional Michigan registered agent service typically costs between $100 and $300 per year. These services offer support and help keep your personal information private. For example, LegalZoom charges around $249 annually, and ZenBusiness offers services for about $199 annually.

Northwest Registered Agent is a strong contender. They offer their services for free in the first year when you hire them to form your LLC. After that, their annual fee of $125 is notably competitive.

If you look for standard registered agent fees, they usually range from $100 to $300 for a professional service. It’s wise to evaluate your needs before making a decision.

EIN Cost in Michigan ($0 from the IRS website)

When forming an LLC in Michigan, you must get an Employer Identification Number (EIN). The good news is that obtaining your EIN from the IRS is free.

To apply, you can fill out Form SS-4 online through the IRS website or call their office for assistance. If you choose to call, the IRS provides a number for international applicants, which is 267-941-1099. Make sure you have all your information ready when you call.

An EIN is essential for various tasks, like filing taxes, setting up a business bank account, and hiring employees. Since it’s free, it’s a straightforward process that can save you time and money.

Michigan LLC Annual Report Fee ($25/annually)

In Michigan, you must file an annual report for your LLC every year. The fee for this report is $25. This fee is standard and applies to all LLCs registered in the state.

You must submit your annual report by February 15 each year. Make sure to pay the fee on time to avoid penalties. If you miss this deadline, you will incur a late fee of $50.

If you formed your LLC after September 30, you won’t need to file an annual report for the following year. This provides some relief for new businesses just getting started.

For those who have served in the military, there’s good news. You can file your annual report for free. Just contact the Michigan Secretary of State to request the necessary forms.

Fictitious Name/DBA Cost in Michigan ($25)

If you want to operate your LLC under a different name, you need to file for a DBA, also known as a fictitious name. In Michigan, the fee for registering a DBA for an LLC is $25.

To start the process, you must first check if your desired name is available. This ensures that no other business uses the same name in your area.

Once you confirm that the name can be used, you must complete the necessary paperwork. You can file this at your local county clerk’s office or through the Michigan Secretary of State.

You have the option to pay the fee in several ways. Payments can be made using:

• Exact cash
• Money order
• Check
• Credit card
• Debit card

After submitting your application and payment, your DBA will be registered. This allows you to officially use the name for your business activities.

LLC Name Reservation Fee in Michigan ($25)

In Michigan, reserving a name for your LLC costs $25. This fee allows you to hold a business name for a limited time. It is important to ensure your desired name is available before you officially register your LLC.

To reserve your name, you need to submit an Application for Reservation of Name. You can obtain this form from the Michigan Department of Licensing and Regulatory Affairs (LARA).

Once your application is approved, your chosen name is held for up to 180 days. This means you have six months to file your Articles of Organization without worrying that someone else might use your name.

Michigan Certificate of Good Standing ($10)

In Michigan, a Certificate of Good Standing is an important document for your LLC. It shows that your business is legally registered and compliant with state requirements.

You can obtain this certificate for a fee of $10. It’s often needed for various business purposes, like applying for a loan or entering into contracts. This certificate provides assurance to partners and lenders that your business is in good standing.

There are a few ways to request this certificate. You can do it online, by mail, or in person. If you choose to go in person, you might pay a slightly higher fee.

Michigan Foreign LLC Registration Fee ($50)

If you plan to operate an out-of-state LLC in Michigan, you’ll need to register as a foreign LLC. The registration fee for this process is $50. This fee goes to the Michigan Department of Licensing and Regulatory Affairs.

When registering, you will submit your LLC’s Certificate of Good Standing from your home state. This document shows that your business is legally established in its original state.

You can pay the $50 fee by check or money order made out to the State of Michigan. If you file online, you can use a credit card for payment.

Registering a foreign LLC allows you to operate legally within the state and can open up new business opportunities. Make sure you have all the necessary documents ready to complete the process smoothly.

Michigan State Business License Fee (varies)

In Michigan, there is no single state business license. This means your costs for licenses and permits will depend on what type of business you plan to operate.

Many businesses will still require specific licenses or permits based on their industry. For example, if you offer professional services, you may need a professional certification. If you run a retail shop, you might need a city business license or a zoning permit.

Common Types of Licenses and Permits:

• Professional Licenses: Required for various professions like doctors, lawyers, and contractors.
• Building Permits: Needed for construction or renovations to ensure compliance with local codes.
• Zoning Permits: Ensure your business complies with local zoning regulations.

By understanding the specific licenses required for your business type, you can better budget for these expenses. Always remember that failing to secure the right licenses can lead to fines or even the shutdown of your business.

Michigan LLC Taxes (varies)

In Michigan, the cost of taxes for your LLC can vary significantly. Here are some of the main taxes you might encounter:

• Federal Income Tax: LLC members report income or losses on their personal tax returns using Form 1040.
• State Income Tax: Your LLC’s profits also contribute to state taxes.
• Local Income Tax: Depending on your location, you might owe local taxes.
• Business Taxes: LLCs may be subject to various business-related taxes.
• Self-Employment Taxes: As a member, you may need to pay self-employment tax on your earnings.
• Sales Tax: If you sell goods or services, sales tax applies to those transactions.
• Payroll Tax: If your LLC has employees, you will also be responsible for payroll taxes.
• Property Tax: Your LLC will pay property tax if it owns property.

By default, your LLC doesn’t pay taxes on its profits. Instead, profits pass through to you, the members. This is known as pass-through taxation.

Michigan LLC Reinstatement Fee ($50)

If your LLC is not in good standing in Michigan, you may need to pay a reinstatement fee to get it back on track. The cost to restore your LLC’s good standing is $50.

To complete the reinstatement, you must also submit any missed annual reports. Each of these reports has a fee of $125. If you submit your current year’s annual report with the restoration request, the cost is $75 if filed by February 15. If filed later, the current year fee increases to $125.

When you apply for restoration, rest assured that the process is straightforward. Make sure you fill out the Certificate of Restoration of Good Standing form. You can also submit your own documentation that contains the same required information.

Michigan LLC dissolution fee ($10)

Dissolving your LLC in Michigan is a straightforward process designed to be simple and manageable. The state charges a nominal fee of $10 to file the Certificate of Dissolution, a requirement by the Department of Licensing and Regulatory Affairs (LARA).

When you’re ready to dissolve your LLC, complete the necessary forms. You can submit these by mail or in person at their office.

Include your LLC’s name. Attach a payment. This can be made by check or money order and should be payable to the “State of Michigan.”

If you want to speed up the process, expedited options are available. While the basic dissolution fee is $10, expedited services will incur additional charges.

Michigan LLC Change of Registered Agent fee ($5)

Changing your registered agent in Michigan is straightforward. The fee for this change is $5. This small amount is payable to the Michigan Secretary of State.

To initiate the process, you need to complete a form. This form can typically be downloaded from the state’s website. Once filled out, you can submit it in person or by mail.

If you choose to handle this in person, make sure to visit the proper office. The address for the Department of Licensing and Regulatory Affairs is:

State of Michigan
Corporations Division
2501 Woodlake Cir
Okemos, MI 48864

If you prefer to submit by mail, include your payment along with the completed form. It’s essential to follow all instructions carefully to avoid delays.

After you submit your paperwork, expect processing within three to five business days. If you use a professional registered agent service, they may assist you with this process, making it easier for you.

What is the Cheapest Way to Start Michigan LLC?

Starting an LLC in Michigan can be done in several ways. The main methods include doing it yourself, hiring a service, or consulting a lawyer. Each has its own cost and benefits.

If you decide to form your LLC yourself, you’ll pay a filing fee of $50 to the Michigan Department of Licensing and Regulatory Affairs. This is the least expensive route. You can file online or by mail, which allows you to save on additional service fees.

Using a formation service is another option. These services typically charge a fee in addition to the state filing costs. Prices vary, but they often start around $39 plus the state fee. While this method is more expensive than doing it yourself, it can save you time and provide some guidance.

Consulting a lawyer is the most expensive option. Legal fees can range from a few hundred to over a thousand dollars. This method provides personalized help, but it’s not the best choice if budget is a concern.

The cheapest way is the DIY method.

You save money by avoiding service and legal fees. However, handling all the paperwork can be challenging if you’re unfamiliar with the process. It requires careful attention to detail to ensure everything is filed correctly.

Should You Use an LLC Formation Service in Michigan? (here’s why)

You may consider using a formation service when starting an LLC in Michigan. Here are some reasons why this could be a good choice for you.

Using a service like Northwest Registered Agent can take a lot of stress off your shoulders.

• Paperwork and Compliance: They help you with the paperwork and ensure you stay compliant with state laws, reducing worries about deadlines and requirements.
• Privacy: LLC formation services can help shield your personal information from the public, providing peace of mind if you prefer to keep your business dealings private.
• Expert Access: Many services offer free consultations with LLC formation experts and attorneys, providing invaluable guidance as you navigate the setup process and understand your responsibilities.

On the flip side, these services are expensive. While the state fee for filing an LLC is $50, formation services may charge additional fees. It’s important to weigh whether the benefits of expert assistance and convenience are worth the extra expense for your situation.

Frequently Asked Questions

Do I need a business license if I have an LLC in Michigan?

In Michigan, having an LLC does not automatically grant you a business license. You may need additional licenses or permits depending on your business type or location. Check with local governments for specific requirements.

How long does it take to get my LLC approved in Michigan?

The approval time for your LLC in Michigan can vary. The Michigan Department of Licensing and Regulatory Affairs usually approves online LLC applications in 2 weeks. If you file by mail, it generally takes about four weeks.

Do I need to hire an attorney to form an LLC in Michigan?

You do not need to hire an attorney to form an LLC in Michigan, as the process can be completed independently. However, consulting an attorney can be beneficial if you have complex legal questions or need help with specific regulations.

How much does it cost to dissolve an LLC in Michigan?

You must file the Articles of Dissolution to dissolve an LLC in Michigan. The filing fee for this is $10. Ensure that all debts and obligations of the LLC are cleared before dissolution.

What Are The Ongoing LLC Operational Costs in Michigan?

Depending on your business activities, ongoing costs for an LLC in Michigan include the $25 annual report fee, potential registered agent fees, and business license fees. Additionally, taxes and other compliance requirements may be charged.

Should I hire an LLC formation service in Michigan?

Hiring an LLC formation service can simplify the process and help ensure all paperwork is filed correctly. While it is not mandatory, these services can save you time and reduce the risk of mistakes.

Are there penalties for paying my fees late in Michigan?

Yes, you may incur late fees or penalties if you pay your LLC fees late in Michigan. To avoid additional costs, it is essential to keep track of deadlines and keep current on all filings.

Is Michigan an excellent state in which to start an LLC?

Michigan offers a favorable business climate with a relatively low cost to start an LLC. The state has resources to support small businesses and a workforce that can meet various industry needs, making it an attractive location for new businesses.

What happens if I do not file my Michigan LLC Annual Report?

Failure to file your LLC’s annual report in Michigan may result in penalties and ultimately lead to the dissolution of your LLC. Submitting this report on time is essential to remain in good standing with the state.