General Guide to Company Incorporation in Michigan
Updated on Tuesday 31st December 2019
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Michigan is the state formed of two peninsulas, it is the 10th most populated in USA and it is known as the Great Lakes State due to its location in the eastern part of Mississippi River and to the lakes that border this state. Among the economic facts of Michigan, the state is placed on the 13th position regarding the GDP (gross domestic product) and it is representative in the technology and the automotive sectors in USA. We have prepared a general guide to company incorporation in Michigan and we invite local and foreign entrepreneurs to discover a few important aspects on how a company can be registered in this state. Likewise, our company formation agents in USA are at your disposal with assistance and information when registering any kind of business in Michigan, but also in other American states.
How to set up an LLC in Michigan
Known as a state which registered a multitude of developments in a wide range of industries, Michigan is seen as a suitable business destination for foreign investors. In this sense, the limited liability company might be a proper solution when registering a business, but entrepreneurs can also set up partnerships or perform activities as sole proprietorships.
Starting a business in USA, and particularly in Michigan, is subject to incorporation formalities with the business division of the Secretary of the State of Michigan and a name verification as a first stage. Once the approvals on the name have been made (the name must contain LLC, L.L.C., or Limited Liability Company at the end of it), a registered agent must be appointed. This can be whether an individual or a company, in charge of conducting the activities in legal forms, but bearing in mind that the residency must be in the state of Michigan. You can set up a company in Michigan and appoint our specialists in company formation in USA as registered agents for your firm. Moreover, our team can help you with drafting and submitting the Articles of Association which must comprise information about the name of the company, the shareholders, the business address, the registered agent, and the board of directors. Please bear in mind that our team can help you register a company in USA without having to relocate to Michigan or in any state.
Legal Obligations for LLCs in Michigan
Company owners in Michigan must observe the annual legal obligations, for example, the annual statements which need to be submitted until February the 15th every year. The Department of Licensing and Regulatory Affairs is in charge of receiving the above-mentioned documents, whether online or offline, taking into consideration specific fees for this service. If you need help in this matter, we remind that our company formation agents in Michigan can give proper support and assistance.
Short steps for opening a company in Michigan
Even if the incorporation process is not that complicated, it is advisable to have support from an experienced team of company formation agents in Michigan and to observe the main steps in forming a business in this state:
- File the Articles of Association with the Department of Licensing and Regulatory Affairs in Michigan.
- Apply and obtain the EIN which is the tax identification number for your company.
- Open a business bank account linked to your company in Michigan.
- Register the company with the State of Michigan Department of Treasury if you intend to hire staff.
- Apply for local licenses before starting the operations in Michigan.
- The city zoning might issue specific approvals, depending on the business you wish to develop.
- Consider signing a contract with an insurance company and protect your business in Michigan.
- Hire the services of an accounting firm in Michigan, if you do not want such a department in your company.
- Have in mind the support of a website connected to the business you want to develop in Michigan.
These simple steps show how a foreign or a local investor can start a company in Michigan, mentioning that our experts can give proper support from the beginning.
Can I buy virtual office packages in Michigan?
Yes, if you are interested in virtual office packages in Michigan, you are invited to address your inquiries to our team and let us provide you the necessary support. A prestigious business address, fax and phone forwarding, mail and correspondence collection, a local phone number, collection of bank statements and a virtual assistant are among the services comprised by a virtual office package. Let us tell you that virtual office packages in Michigan are at a fraction of costs compared to a traditional business office. Do not hesitate to get in touch with us and solicit virtual office services in Michigan.
S corporations in Michigan
An S corporation is not a business entity, but a way in which a company is taxed, in respect to the Internal Revenue Code in Michigan. As an example, some LLC proprietors in Michigan can save money by choosing the S corporations in matters of taxation and pay less for self-employment taxes. However, not all types of businesses qualify for this kind of taxation, for instance, the LLC with more than 100 registered members. In terms of taxation, things might be complicated, but you can ask for advice and information from our team of consultants in Michigan.
Advantages of LLCs in Michigan
Sole proprietors forming LLCs in Michigan are directly involved in the company’s benefits and also debts. As for LLCs with more partners, the personal assets are separated from the ones of the firm, so the liabilities and debts are strictly connected to the company assets. Compared to other business structures, limited liability companies are not subject to annual meetings, and therefore, no expenses in this matter. Another LLC benefit refers to the owners who can run the activities in the company by enjoying complete flexibility in terms of management and other important aspects. This is an easy-going and straightforward business form chosen by many young or not that experienced entrepreneurs who want to start and develop their activities in Michigan. Those wanting to know more about the company formation process in Michigan can solicit the support and assistance of our company formation agents in USA.
An operating agreement for your business in Michigan
Even though it is not a mandatory request, it is though suggested to create and sign an operating agreement for your company in Michigan. This represents a legal document which comprises information about the owners, their liabilities, the voting rights, the financial status, the working relations among the members, and details about the dissolution.
Apply for the Employer Identification Number in Michigan
The EIN or the Employer Identification Number is issued for tax purposes by the IRS (Internal Revenue Service) which is why is also named the Federal Tax Identification Number. This is the legal proof that you have been registered for tax purposes in Michigan and that you will conform with the tax structure of the state. Even more, an EIN is necessary when opening a bank account in Michigan.
Taxes in Michigan
The sales tax in Michigan is set at 6% and it is applicable to any trading activities of your company. Also, Michigan imposes the following:
- rental tax;
- consumer use tax;
- lodgings tax.
It is good to know that there is no county sale tax or a city sale tax for Michigan’s cities. A proper understanding of the taxes in this state can be offered by an accounting firm which is also necessary for the overall financial activities in your firm.
Applying for licenses and permits in Michigan
Depending on the type of activities you wish to establish in Michigan, particular licenses and permits might be necessary. You can apply for the needed license with the Chamber of Commerce in Michigan through the representative offices.
Company formation services we can offer in Michigan
If you are interested in the steps of the company formation in USA and particularly in Michigan, you can rely on the complete support offered by our team of company incorporation consultants in USA. Our advisors can provide you with the following company formation services:
- support in documents preparation and submission to the related authorities;
- financial consulting;
- tax advice;
- accounting services;
- virtual office services;
- wealth management.
Economy facts about Michigan
Michigan is among states with economic stability, well-developed industries and high living standards. The state is recognized as an important financial center and home to varied corporations in the automotive sector among many others. The engines of the economy in Michigan are strongly related to the agriculture field, mining, IT and engineering, energy, and tourism. Lansing is the capital of Michigan and a reliable financial hub recognized by many investors at an international level. Detroit, Ann Arbor, Kalamazoo, Flint, Dearborn are a few of the representative cities on Michigan which can be selected for future operations by both local and foreign investors.
Below are some interesting facts and information about the economy of USA, provided by the Bureau of Economic Analysis:
- in 2018, the GDP grew in 2,375 counties in USA, according to recent statistics;
- the GDP for Q3 was up by 2.1% compared to the same period last year;
- for the GDP growth for Q2 of 2019, the main contributors where the mining sector (23.5%), alongside real estate field;
- Texas registered the fastest GDP growth in the second quarter of this year.
For complete support when setting up a company in USA, and especially in Michigan, we kindly invite you to contact us.