How to Start an LLC in Michigan: If you’re looking to start an LLC in Michigan, you’ve come to the right page. Setting up an LLC is easy and cost-effective. To form an LLC, you must follow a few steps that include naming your LLC, hiring a registered agent, filing your formation documents, doing the operating agreement, and finally obtaining the EIN. You can easily set up your LLC at a very low cost in Michigan. Though, you must pay the mandatory state filing fee. These fees and charges can be tax deductible, making the LLC formation cost almost negligible.
On this page, You’ll find all the steps that must be taken to ensure that your Michigan LLC has been correctly formed. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Michigan
- After Starting Your Michigan LLC
- Michigan Foreign LLC
- Michigan LLC Formation Review
How to Start an LLC in Michigan
An LLC (aka Limited Liability Company) is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. For an LLC, members’ personal assets are not affected by business debts. However, in some cases, if the LLC is sued for business debts, courts might pierce the corporate veil and use the owner’s personal assets to meet their corporate liabilities.
If you wish to start an LLC, you must file your Certificate of Formation with the State and pay a filing fee of $50. While it’s the most important step, it’s not the only one. There are 4 other crucial steps to follow to get your LLC formed in Michigan. Below are all 5 steps that explain everything you need to do to start a Michigan LLC in 2023. Let’s get started! You can always hire a professional LLC formation service in Michigan to set up your LLC instead of doing it alone; a Pro service will ensure everything is done properly.
Step 1: Decide a Name for Your Michigan LLC
The first step while forming a limited liability company in Michigan is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
LLC Naming Guidelines in Michigan
There are a few specific requirements all the LLCs in Michigan have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available, and no other existing business in Michigan can have the same name. ZenBusiness offers unlimited business name searches without any hassle.
- “Limited Liability Company”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Michigan State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Submit Offline Form to –|
|Michigan Business Entity Search – Online Search|
Name Reservation Form – PDF
Name Availability Standards – Guidelines
Michigan LLC Name Search – Instructions
|Michigan Department of Licensing and Regulatory Affairs|
Corporations, Securities & Commercial Licensing Bureau
P.O. Box 30054
Lansing, MI 48909.
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided on, you can reserve your LLC name for 6 months. To keep the name, you must file a name reservation application and pay $25 to reserve your name with the Michigan Secretary of State.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Michigan Secretary of State by submitting an Application to Register Assumed Name in Michigan along with the filing fee of $10.
Recommended: You can do name search, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
ZenBusiness – ($0 for LLC Formation)
Apart from LLC formation, ZenBusiness offers customized website templates and business emails at a very reasonable price. If you plan to get a website, then it is wise to have a “.com” domain for your business, but these days you can also use other TLDs like “.io”, “.company”, “.xyz,” etc. Here you can get everything you need for your business in one dashboard.
It is not legally mandatory to use the word LLC in your domain name or email. If you want, you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Resident Agent in Michigan
The second step to forming an LLC in Michigan is to appoint a Resident Agent (also known as a registered agent in most states). A Resident Agent is a person or business entity working on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Michigan. Hence, hiring a competent Michigan Resident Agent for your LLC is necessary.
Make sure your registered agent is a resident of Michigan or has a physical street address. This address will be used as the principal address of your LLC to receive any legal documents. Most LLC formation companies also provide registered agent services. Below are two great LLC formation services; even if you buy their cheapest plan (normally $0), you also get registered agent service and other services at a very reasonable price.
These two are our top recommendations for registered agent service, as they are competent and authorized to conduct business in Michigan. Some LLC formation services also offer standalone Michigan registered agent services. You can purchase only Registered Agent services without purchasing any other LLC formation services. This standalone service might become handy if you are doing it yourself and don’t want to disclose your home address or you don’t want to pierce the corporate veil.
A person above 18 years of age and has a physical address in the state of Michigan can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One is responsible for handling all the legal documents on the LLCs behalf.
Yes, you can be your own registered agent if you are a resident of the state of Michigan and you are above 18 years of age. To become a registered agent, you must have the authority to conduct any type of business in Michigan.
There are a few reasons why you shouldn’t be your own registered agent. The address of the registered agent is used to communicate with the SOS or for any legal activities. If you are your own registered agent, you might have to upload your personal address to the public forum. Besides, the registered agent must be at the address during business hours. It won’t be easy for you as you also have to take care of other things in your LLC. Hence, it is wiser to appoint a separate entity as your registered agent.
If an LLC is sued in Michigan, in some cases, courts might decide to lift the corporate veil, which means the owners of the LLC will be personally liable for their business debts. They might have to forgo their personal assets to repay their business debts. This is called piercing the corporate veil, where personal and business assets are not separated anymore. Your personal assets can be protected if you have enough capital and all your LLC documents are properly filed.
Registered Agent Consent Application
In Michigan, there is no separate Consent Letter to be produced to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. The filing fee of $5 should be paid for it.
Step 3: File Articles of Organization in Michigan
The third and most important step in forming an LLC is to file the Articles of Organization. This Michigan Articles of Organization is a legal document that is required to register your business with the Michigan Secretary of State. It costs $50 (by mail and online) to file your formation certificate in Michigan.
The Articles of Organization include details like the name of the LLC, the registered agent’s name, address, employees’ details, and the company’s structure (member-managed or manager-managed). Before hiring employees in Michigan LLC, one should know about the rules and regulations thoroughly. Also, if you are expanding your existing business (an LLC) in other states to Michigan, you must register as a Michigan Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the online service page. You do not need any login or account to start filing your LLC online. You can directly start filing your LLC by clicking on the “Online Filing” button below. Read more about the Michigan Articles of Organization for online registration.
How to File by Mail
If you prefer filing real-life forms for your LLC registration, then you can download Domestic LLC Formation Form. Read the form thoroughly, fill it out, and mail it to the following address,
Michigan Department of Licensing and Regulatory Affairs
Corporations, Securities & Commercial Licensing Bureau — Corporations Division
P.O. Box 30054
Lansing, MI 48909
In-person Drop-off: Michigan Department of Licensing and Regulatory Affairs
2501 Woodlake Cir.
Okemos, MI 48864
Processing Time: Normally, it takes around 5 business days (approx) to get your LLC formed in Michigan. The processing time for online filing might be a little faster than offline filing. With an additional cost, you can get expedited filing as well. However, the document processing time can be changed due to various factors.
Recommended: Online LLC Formation service can provide all these documents way faster than usual time with lifetime customer support and 100% accuracy. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
Every LLC owner has to pay the filing fees to register their business in Michigan. This fee is mandatory but also tax deductible. If you’re doing it yourself (filing on your own), it will not cost you any additional service fee. However, it is not feasible to do that as the DIY process might be delayed, complicated, and messy, especially if you’re a novice entrepreneur. Hence, it is recommended to get professional guidance to get your LLC formed in Michigan.
Step 4: Create Your LLC Operating Agreement in Michigan
Moving on to the fourth step, filing your operating agreement. An operating agreement is an internal document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a Michigan LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation that helps in taking future business decisions, especially if you decide to dissolve Michigan LLC later. Hence, having an operating agreement may not be necessary but it is surely ideal.
Recommended: You can get a professionally made operating agreement for very less cost with ZenBusiness. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
The operating agreement draft can be created for free if you don’t hire a professional. However, there is an advantage to appointing a proficient person/service. You will get a businesslike quality operating agreement at a very cheap fee, which will help you in the future. Hiring a professional service means you can sleep well at night 🙂
Step 5: Filing an LLC EIN in Michigan
The Employer Identification Number (aka EIN) is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Michigan LLC requires following specific rules and regulations. On the other side, EIN for Michigan foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN), one must fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally, complete the form and send it to the address given. You can also get an EIN Assistant to help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulations, you are now done with all the necessary steps to form your Limited Liability Company in Michigan. If you do it yourself, it should take you a long time to understand and do all the steps properly.
However, if you use ZenBusiness, it should be way faster. You will always have a live chat option and phone support with experts for any help you need. Their worry-free service will make things easier for you.
After Starting Your Michigan LLC
After forming your LLC, there are still some things that you will need. The most important thing is to separate your business and personal assets. LLCs have limited liability protection that protects your personal assets from business liability. This is called a corporate veil. However, the corporate veil can be lifted or pierced by the court if the LLC is sued. In that case, the owners of the LLC become personally liable for their corporate debts. A few things like appointing a legit registered agent, having enough capital, and filing all the major documents with the state can save the LLCs from being pierced into the corporate veil.
Apart from that, there are a few things you need to take note of,
- Get a company business bank account. Along with that, other business accounting tools such as business credit cards, business accounting software, and other business accounts are required.
- File Michigan business permits & licenses. Business owners have to get business licenses and permits. For example, Health permits, signage permits, building permits, and some other types of business permits can be obtained.
- Get general liability insurance and professional liability insurance with coverage for employees. There are different types of business insurance available. Depending on the requirement, you need to find a suitable business insurance provider. A business insurance provider guides you through which types of insurance you need for your LLC.
- File a Michigan LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings, to make sure your LLC is up-to-date.
Cost of Starting an LLC in the State of Michigan
LLCs can be formed by spending very less price. Apart from the mandatory state filing fees, you don’t have to bear additional service charges if you do it yourself. Following are the fees and taxes LLCs in Michigan must pay to register and run a business in the state. Forming an LLC is no doubt cost-effective compared to other business structures. However, the fees and charges (tax-deductible) that you must pay to the state, such as name reservation fee, name filing fee, LLC filing fee, and Franchise Tax & Sales Tax (If applicable). Here are the main fees and taxes you must pay while forming your limited liability company in Michigan,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee||$25|
|Articles of Organization Fee||$50|
|LLC Annual Fee||$25|
In Michigan, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can submit a name reservation form to get it done. Your LLC name will be reserved for 6 months without registering your LLC. It can be done by paying $25.
In Michigan, an Annual Report has to be produced every year. It costs $25. Also, the State of Michigan requires to pay a Sales Tax of 6% to the State government. Read our guide on LLC costs in Michigan for more information.
Michigan Foreign LLC
If you are interested in forming a Foreign LLC in the state of Michigan then you need to file the Certificate of Foreign LLC to the Michigan Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Michigan SOS to form your foreign LLC in the state of Michigan. To know more in detail, check out our guide on Michigan Foreign LLC.
Reasons to Start an LLC in Michigan
Michigan, which is ranked 10th in the country for providing a business environment to start-ups, has become a choice of many businesses. Having an LLC in the state of Michigan is cost-effective because of tax benefits. Other than the filing fee, there are not many annual costs to be paid. LLCs have to pay a few federal taxes. Read more on Michigan’s classification of LLC tax.
Having an LLC brings limited liability protection, which protects the business owner’s assets. Besides, starting a business in Michigan can help you earn incentives and tax benefits. For example, if you run a woman-owned business, you can get additional provisions for business funding. Not only the woman-owned business but also there are other business types that can enjoy a reduction in tax liabilities and easy business loans. In Michigan, it is quite easier to get professional liability insurance which will provide professional asset protection along with personal liability protection.
Along with a reduction in tax liabilities, there is a business funding option available in the state, especially for the woman-owned business. Having any type of business in Michigan brings potential customers. Some of the best ones are discussed below.
Michigan Development Corporation Renaissance Zone
The Michigan government has started this program. Under this program, the government will decide and give recognition to the eligible next Michigan Business. Also, the program allows businesses to receive tax exemptions for a period of 10 years. The taxes that fall under this list of exemptions are:-
- Personal property tax which individual member of an LLC has to pay
- Utility user taxes are charged by the residents of the state.
- Taxes that are charged on real property.
There is no way that an LLC gets dissolved in Michigan due to a certain event in the member’s life. According to Michigan state law, an LLC can be dissolved in only three situations:-
- If the state judge has given an order to dissolve the LLC due to misconduct of activities.
- If all the voting members of the LLC are ready to dissolve and vote for the motion unanimously.
- If the event occurred is specified in the bylaws, it will lead to the dissolution of the LLC.
Any other event than above mentioned three will not lead to the dissolution of an LLC.
Duration of the LLC with partnership rules
In the states, when a firm wants to ensure that the business they have started should stay for a longer period of time, then they are considered to be taxed as a corporation. But in the case of LLCs in this state, there is no such issue. The LLC can also remain for an infinite time. Also, one can change their partnership business to an LLC to reserve their tax rights. The whole process will be tax-free, and the transfer of all the assets will be done by filling out a simple transfer form.
Freedom of contract
According to the LLC laws in Michigan, the member has the complete right to adopt their cash flow and withdraw their name from the LLC if they notice that any further management decision can cause loss. In the same way, any person can join the LLC without making any financial contribution.
Businesses Contributing to Michigan’s Economy
Many businesses are established and running successfully in the state of Michigan. But not every business is a part of the top industries of the state. Knowing Michigan’s leading sectors is very important for new entrepreneurs when forming an LLC in the state of Michigan.
Michigan produces more than 19% of the total automobile generated by the state. The total contribution of the automobile industry to the state GDP is $188 billion. Out of this value, $134 billion comes directly, and $53 billion comes from the contribution through indirect automobile production purposes like its transport. The reason behind such an enormous contribution is the talented labor pool that is present in the state.
The agriculture sector has a whooping contribution of around $104.7 billion in a year to the state and provides 17% of the total jobs in the state. The state is very well known for producing Christmas trees by contributing 1.55 million fresh trees every year.
The tourism sector is the largest tax-paying sector of Michigan, giving around $3.6 billion to direct tax to the state. The total contribution of this sector to the GDP of the state is $22.4 billion. The tourism sector mainly comprises summer activities and hunting and skiing and skating in the winter season.
The state is ranked 5th among the states of the USA in terms of advanced manufacturing. The significant insights of the industry are:-
- The state is known for making 37% of total military vehicles.
- The rank of state in terms of aerospace production is 4th nationwide.
- More than 3000 businesses are serving the defense industry by making potent weapons for them.
The contribution of advanced manufacturing to the state GDP is around 19% and employs 629,000 people approximately.
Some small businesses in the state are mentioned below.
- Online currency trading
- Christmas trees business
- Hunting equipment renting
Michigan LLC Formation Review
Time needed: 5 minutes
Just to recap, here are the easy steps again when forming an LLC in Michigan. Click on the steps in this list to read the full detail.
- Name your Michigan LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Michigan, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming a Limited Liability Company in Michigan. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Michigan but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity, like a social security number, but for a company.
Things to Consider While Starting an LLC in The State of Michigan
In this step guide, I have already shared the basic steps to starting your LLC. However, there are some additional steps that one has to think about. The first thing is a business plan. A proper business plan is a must, no matter what type of business you’re going to start. As you get your plan done, the next thing would be to check on the funding and other business accounts, including business tax accounts.
After that, the next big thing is LLC names. You can use it as your business website domain name. If you hire a formation service, they will provide a business name reservation service with their formation package. They might help you with the business website domain name as well.
Once the LLC is formed, now it is time for some filings. There will be tax filings, amendment filings, and other government filings. If you hire a formation service, then they might provide an amendment filing service. You must be aware of the upcoming filing deadlines to avoid late filing fees Tax filings are extremely important to be done on time. Make sure to add tax amounts and fees to your estimated business expenses while making your plan.
A single-member LLC is taxed as a sole proprietorship, no matter if it is a simple business structure or a complicated one. A multi-member LLC is taxed as a corporation. But, there is no double taxation in LLC. LLC owners can only pay federal income taxes on the basis of their personal income, not on the basis of business income or business level.
Depending on the business type, you can apply for lines of credit. Also, your business credit score will help you get more options in lines of credit. As I mentioned, you need to get business credit cards. It also helps you update your business credit score. Apart from that, your business bank accounts, personal assets, social security number, and some other things should be there to run your business with ease.
At the time of obtaining licenses, details of business licenses before you explore the business insurance companies. Also, check the business profiles and fees for business licenses. It is mandatory to know the details of business insurance for legitimate businesses. The same applies to types of business insurance you’re getting. Depending on types of business entities, you can get insurance.
Apart from the points above, you need to have compliance checklists, tax classification options, and ways to get more potential customers. However, this document is not mandatory but is one of the critical documents such as formation documents. It not only defines the ownership percentage but is also helpful for future business partners. You can check the operating agreement guide for future reference.
LLC formation service providers offer various business formation plans. You can select your business kit depending on your need. They might help you with various business challenges, making business strategies, filing business taxes, and providing business accountants and business license report services. If you hire employees in your LLC, you must follow the business law. For all LLCs with employees, it is important to get proper insurance and coverage.
If you are a resident of Michigan, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $50 (domestic LLC) and $50 (foreign LLC), LLC costs in Michigan include $25 for Annual Reports every year. LLCs are liable to pay sales tax of 6% every year.
It takes 24 hours to get a Michigan LLC if you file it online. For the mail filing, it takes 3 to 5 business days to get an LLC. If you hire a professional LLC service, then it might take less than that. We recommend TailorBrands, which has an impeccable turnaround time.
Every year all the LLCs have to submit an Annual Report and pay $25 to the Michigan Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for LLCs, it is a default tax structure. Once you obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Michigan Classification of LLC Tax.
How Fast Can I Form an LLC in Michigan
In case you are filing for Michigan LLC via mail, it may take up to 3-5 business days. If you have filed online, the processing time will be 24 hours. Expedition filing options are also available.
Forming an LLC in Michigan: Time is of the Essence
Forming a Limited Liability Company (LLC) is a crucial step for entrepreneurs and small business owners in Michigan. An LLC provides a multitude of benefits including liability protection, flexible tax options, and simplified record-keeping. Despite its advantages, the question often arises: how fast can I form an LLC in Michigan?
Gone are the days when starting a business required months of bureaucratic red tape. Michigan’s business-friendly environment has taken significant strides to streamline the LLC formation process, making it significantly faster and more efficient for aspiring business owners.
First and foremost, potential LLC owners must have a clear understanding of the necessary steps to set up their business. While it may seem like an arduous task, the process is relatively straightforward. Business owners must ensure these key elements are in place before initiating the filing process: a unique business name, registered agent details, articles of organization, operating agreement, and an Employer Identification Number (EIN) issued by the IRS.
Notably, Michigan entrepreneurs have the incredible advantage of online filing options, significantly expediting the formation process. Through the assistance of the Michigan Department of Licensing and Regulatory Affairs (LARA) website, business owners can now electronically file their articles of organization. This method saves valuable time, allowing 24/7 access and eliminating the need for manual paperwork, thus making the entire process more efficient.
Another noteworthy development in Michigan’s LLC formation process is the implementation of expedited filing services. Individuals who have an urgent need or prefer a quicker turnaround can opt for expedited processing by paying an additional fee. This feature further highlights Michigan’s commitment to promoting a conducive and timely business environment.
In terms of processing time, Michigan is known for its swiftness compared to many other states. The usual processing times can differ depending on several factors, including the volume of filings at any given time. However, in most cases, the process is completed within a reliable timeframe—often estimated to be around 5-10 business days. When undertaking expedited filing, processing times can be as short as 24 hours. These timelines indicate that entrepreneurs can kick-start their business endeavors relatively swiftly in Michigan.
It’s also crucial to mention that forming an LLC efficiently requires careful attention to detail and accuracy during the filing process. Ensuring all legal requirements are met prior to submission reduces the chances of rejection or delay. Carefully reviewing the documents for any errors or missing information can drastically hasten the approval process.
Time is undoubtedly a critical factor when establishing a business, and Michigan recognizes this need. By providing user-friendly online tools, expedited filing options, and maintaining streamlined procedures, the state aims to facilitate the swift formation of LLCs. These advancements reflect Michigan’s commitment to fostering an environment in which entrepreneurs can thrive and contribute to the state’s economic growth.
Entrepreneurs dreaming of launching a business must take advantage of Michigan’s expedited filing services and online resources. By capitalizing on these assets and putting careful thought into the necessary information, entrepreneurs are well-positioned to form an LLC efficiently. If you’re ready to start your entrepreneurial journey, look no further than the great state of Michigan!
These above-mentioned broad steps are pretty much the essential step instructions for forming an LLC in the state of Michigan. LLCs are easier to establish than other business structures. Small businesses, especially start-ups, can easily start an LLC in the state of Michigan at a bare minimum cost. These business types have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes.