How to Start a Michigan Corporation


Steve Goldstein
Steve Goldstein
Business Formation Expert
Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

All Posts by Steve Goldstein →
Business Formation Expert  |   Fact Checked by Editorial Staff
Last updated: 
LLCBuddy™ offers informative content for educational purposes only, not as a substitute for professional legal or tax advice. We may earn commissions if you use the services we recommend on this site.
At LLCBuddy, we don't just offer information; we provide a curated experience backed by extensive research and expertise. Led by Steve Goldstein, a seasoned expert in the LLC formation sector, our platform is built on years of hands-on experience and a deep understanding of the nuances involved in establishing and running an LLC. We've navigated the intricacies of the industry, sifted through the complexities, and packaged our knowledge into a comprehensive, user-friendly guide. Our commitment is to empower you with reliable, up-to-date, and actionable insights, ensuring you make informed decisions. With LLCBuddy, you're not just getting a tutorial; you're gaining a trustworthy partner for your entrepreneurial journey.
Start a Michigan Corporation

When you plan to start a business in Michigan, you must decide on the appropriate structure. Starting a corporation may be more complicated than creating an LLC in Michigan or a sole proprietorship. However, it is not that difficult as well. There are a few guidelines that you should be aware of when it comes to creating Michigan corporation. Starting a corporation involves a legal process, that is, the process of incorporation.

In this article, I will share a step-by-step guide to start a corporation in Michigan. I will also enlighten you on the advantages and disadvantages of having a corporation. Some people consider starting a corporation in Michigan more than other business structures since it has many advantages over other forms.

What is a Corporation in Michigan

In definition, a corporation is a formal organization established by stockholders, shareholders, or other people to make a profit. Like individuals, corporations can undertake contracts, own assets, sue and be sued, pay taxes, limit state and federal taxes, and loan funds from banking institutions.

Common Types of Corporations

Before you start with the process of forming a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

  • C-Corporation: C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.
  • S-Corporation: An S-Corporation is set up similarly to a C-corporation but has different tax implications and owner limits. S-corps have no more than 100 stockholders and are not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.
  • Non-profit Corporation: Nonprofit businesses are frequently used by religious, educational, and charity institutions to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations. Read how to start a nonprofit corp in Michigan to learn about nonprofit corporations.

If you have a small business, it is recommended that you form an LLC instead of a corporation in Michigan. LLCs have more tax benefits than other structures. Besides, LLCs protect your personal assets. However, it is wise to consult a legal expert before you start setting up your business in Michigan.

LLCBuddy Editorial Team

How to Start a Corporation in Michigan

To start a corporation in Michigan, you must follow the below steps that, include forming a corporation name, appointing a board of directors, filing for Articles of Incorporation, drafting corporate bylaws, meeting with the board of directors, issuing stocks, creating a shareholders agreement, requesting for an EIN, and getting a license and permit. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choose a Corporation Name in Michigan

Naming your business is one of the most crucial activities during the startup phase. Your corporation name serves as the foundation for your brand. Legal procedures should be taken into account when choosing your corporation name. Choose a corporation name that will enable you to develop a strong brand identity without being hampered by irrelevant factors.

If you are forming an LLC, there is a complete guide on Michigan LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your corporation in Michigan-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

Step 2: Board of Directors Initial Appointment

To form a corporation in Michigan, you must appoint an initial board of directors before making them permanent once the corporation is formed. In Michigan, you may appoint at least Three board of directors. The initial board of directors is in charge of guiding the overall strategy of your business. The structure, responsibilities, and powers given to a board of directors are determined by the bylaws of a company or organization. So, appointing your corporation’s initial board of directors in Michigan is a big step in forming a corporation.

Step 3: Filing the Articles of Incorporation in Michigan

After you appoint the initial board of directors in your Michigan corporation, the next step is to write and file a Articles of Incorporation. In writing, the Michigan Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Michigan Resident Agent contact information, and the names and addresses of incorporators and/or initial board members, should be written.

Filing a Articles of Incorporation in Michigan may be done with three ways, online, by mail and in-person. The Articles of Incorporation fee may vary from different states. However, in Michigan, it costs $60 for filing online, in person, and by mail.

  • Online Filing: Get the online form from Secretary of State, fill it up, and submit. Don’t refresh the page during the process. It will erase everything.
  • Offline filing: Send the form by mail to Michigan Department of Licensing and Regulatory Affairs, Corporations, Securities & Commercial Licensing Bureau — Corporations Division, P.O. Box 30054, Lansing, MI 48909. Drop it off in person at 2501 Woodlake Circle, Okemos, MI

Step 4: Draft Corporate Bylaws

Now you are done filing a Articles of Incorporation in Michigan, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

In creating corporate bylaws, you should include the following on how the decisions will be made-

  • The responsibilities are given to each officer.
  • How will judgments in business be made?
  • Where and when are the annual shareholder meetings?
  • The minimum number of shareholders required for decision-making.
  • Location and timing of dividend payments.

Step 5: Hold the First Board of Directors’ Meeting

After drafting the corporate bylaws, gather all the board of directors for the first meeting. This meeting will be finalized by appointing directors to manage the company’s daily operations, approve the bylaws, choose the corporation’s accounting year, and approve the stock issue. All board meetings should have minutes taken and stored with the company’s records.

Step 6: Issuing Stock in a Corporation

After starting your Michigan corporation, one of the first official corporate actions is issuing stock to the shareholders. Keep track of the number of shares issued to each shareholder and the purchase price. A corporation in Michigan is managed by its shareholders, who contribute to the business in exchange for ownership shares.

Step 7: Draft and Finalize a Shareholders Agreement

Even though drafting and finalizing a shareholders agreement is unnecessary, I suggest you still comply since it will benefit your corporation and its shareholders. A small business’s shareholders enter into a shareholder agreement contract. It establishes how ownership will be handled in unexpected situations, like a shareholder passes away, retires, becomes disabled, or quits the corporation. Early on in the life of your Michigan corporation, signing a shareholders’ agreement can help maintain corporate continuity and prevent future disputes.

Step 8: Request an EIN in Michigan

After everything is in place, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your Michigan corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Michigan can be through the following:

  • Apply Online- The EIN online application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in a number of ways. It will give your corporation the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 9: Get Licenses and Permits for your Corporation in Michigan

Before your corporation operates in Michigan, you must have a business license. A business license is a document issued by a government agency that permits you to operate your business in the geographic region that that agency governs. To legally operate your corporation, you’ll need a business license. Numerous corporate licenses need to be filed and renewed regularly. Check out how to get business licenses and permits in Michigan to know more.

You must also register a DBA name if you intend to conduct business using a name other than your corporation’s legal name. The DBA name is sometimes known as “doing business as” or a “fictitious business name.” Depending on your location, you may need to register the DBA with your state, city, and county. You can skip this step if your business solely uses your legal company name.

Important Information

Paying your Taxes in Michigan

Even if you have established your corporation in Michigan, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Michigan has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Michigan are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Michigan

A filing and annual fee must be paid to form a corporation in Michigan. Without it, your corporation won’t operate. The initial filing fee for a corporation may vary depending on the state. However, in Michigan, it costs $60 for filing online, in person, and by mail. The corporation in Michigan also has to file an annual report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly. If, in the future, you make any changes to your corporation, you must file the Michigan Amendment. It costs $25 to file an amendment in Michigan.

Advantages of Starting a Corporation in Michigan

  1. Limited Liability: The biggest advantage of setting up a Michigan corporation is that the shareholders are not personally responsible for the debts of the company. As a result, when you incorporate as a corporation, personal assets like homes, vehicles, and other possessions are prohibited. One of the main benefits of setting up a corporation over a general partnership or sole proprietorship business structure is that neither the business nor the owners are held legally responsible for the obligations of the business, even if it means giving up their personal assets.
  1. Limitless Corporation: The fact that a corporation’s existence is independent of its owners is another significant benefit of incorporation. In other words, a corporation has an endless life and will continue operating normally even if the owner dies or decides to sell their ownership.
  1. Advantages in Tax: The deduction of health insurance premium payments made on behalf of an owner-employee is one of the many financial benefits to which corporations are entitled. Corporations also save on self-employment taxes since their revenue is not subject to workers’ compensation, Social Security, or medical taxes. Tax rates on corporate profits are lower than those on individual income.

FAQs

What is the process for starting a corporation in Michigan?
To start a corporation in Michigan, you must complete several steps. These steps include selecting a business name, filing articles of incorporation with the state, appointing a registered agent, creating corporate bylaws, issuing stock certificates, filing the annual report with the state, and obtaining any necessary licenses and permits.
Who oversees the filing of corporations in Michigan?
The Michigan Department of Licensing and Regulatory Affairs (LARA) is responsible for the filing of corporations in Michigan.
What is the fee for filing Articles of Incorporation in Michigan?
The fee for filing Articles of Incorporation in Michigan is $50.
What is a registered agent in Michigan?
A registered agent in Michigan is an individual or business that agrees to accept legal documents on behalf of the corporation.
What are the requirements for corporate bylaws in Michigan?
The requirements for corporate bylaws in Michigan vary depending on the type of corporation. Generally, the bylaws should outline the operating procedures of the corporation, including the rights and responsibilities of officers and directors, voting procedures, and other relevant information.
Who can issue stock certificates in Michigan?
The board of directors of the corporation is typically responsible for issuing stock certificates in Michigan.
What is the filing fee for the annual report in Michigan?
The filing fee for the annual report in Michigan is $25.
What type of licenses and permits may be required in Michigan?
Depending on the type of business, some corporations in Michigan may be required to obtain additional licenses and permits. These may include a sales tax license, liquor license, or health department permit.
Is there a fee for amending articles of incorporation in Michigan?
Yes, there is a fee of $35 for amending articles of incorporation in Michigan.
What are the requirements for starting a corporation in Michigan?
To form a corporation in Michigan, you must file a Certificate of Incorporation with the Michigan Department of Licensing and Regulatory Affairs. The document must include the business name, its purpose, the address of its registered office, the name and address of its initial registered agent, and other required information.
How much does it cost to start a corporation in Michigan?
The filing fee for the Certificate of Incorporation in Michigan is $50.
How long does it take to start a corporation in Michigan?
The processing time for the Certificate of Incorporation in Michigan is typically 1 to 2 business days.
What are the tax obligations of a corporation in Michigan?
Corporations in Michigan must pay corporate income tax, franchise tax, and may be subject to certain other taxes.
Are there any ongoing filing requirements for corporations in Michigan?
Yes, corporations in Michigan must file an annual report with the Michigan Department of Licensing and Regulatory Affairs.
What is the legal status of a corporation in Michigan?
Corporations in Michigan are legal entities that are separate from their owners, and are subject to the laws of the state.
What are the benefits of forming a corporation in Michigan?
Forming a corporation in Michigan can provide limited liability protection for the owners, tax advantages, and help attract investors.
What type of businesses can form a corporation in Michigan?
Any type of business can form a corporation in Michigan.
How do I dissolve a corporation in Michigan?
To dissolve a corporation in Michigan, you must file Articles of Dissolution with the Michigan Department of Licensing and Regulatory Affairs.
Are there any special rules for foreign corporations doing business in Michigan?
Yes, foreign corporations doing business in Michigan must register with the Michigan Department of Licensing and Regulatory Affairs and may be subject to additional filing requirements.
What is the Michigan Limited Liability Company (LLC) Act?
The Michigan Limited Liability Company (LLC) Act is a set of laws that governs the formation and operation of LLCs in Michigan.
What are the benefits of forming an LLC in Michigan?
Forming an LLC in Michigan can provide limited liability protection for the owners and help them avoid the corporate income tax.
How do I form an LLC in Michigan?
To form an LLC in Michigan, you must file Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs.
What are the filing requirements for LLCs in Michigan?
LLCs in Michigan must file an annual report with the Michigan Department of Licensing and Regulatory Affairs.
Is there a tax on LLCs in Michigan?
Yes, LLCs in Michigan are subject to the corporate income tax.
How much does it cost to form an LLC in Michigan?
The filing fee for the Articles of Organization in Michigan is $50.
How long does it take to form an LLC in Michigan?
The processing time for the Articles of Organization in Michigan is typically 1 to 2 business days.
What is an S Corporation in Michigan?
An S Corporation in Michigan is a corporation that has elected to be treated as a pass-through entity for federal tax purposes.
What are the benefits of forming an S Corporation in Michigan?
Forming an S Corporation in Michigan can provide limited liability protection for the owners, help them avoid the corporate income tax, and provide certain other tax advantages.
How do I form an S Corporation in Michigan?
To form an S Corporation in Michigan, you must file a Certificate of Formation with the Michigan Department of Licensing and Regulatory Affairs and make a valid S Corporation election with the IRS.
What is an LLC operating agreement in Michigan?
An LLC operating agreement in Michigan is a written document that outlines the rights and duties of the members of the LLC.
Are LLCs in Michigan subject to any annual taxes?
Yes, LLCs in Michigan are subject to the corporate income tax.
Are there any special rules for foreign LLCs doing business in Michigan?
Yes, foreign LLCs doing business in Michigan must register with the Michigan Department of Licensing and Regulatory Affairs and may be subject to additional filing requirements.

Also Read

Why Michigan Corporation is So Important

One of the primary reasons why Michigan Corporation is so important is its role in fostering economic growth. Corporations in Michigan provide goods and services that are essential for our daily lives, stimulate competition in the market, and drive consumer demand. Without these corporations, our economy would not be as robust and dynamic as it is today.

Speaking of the economy, Michigan Corporation is also a major driver of job creation in the state. These corporations employ thousands of individuals across various industries, ranging from manufacturing to technology to healthcare. By providing stable and well-paying jobs, these corporations help families put food on the table, send their children to school, and build a secure future.

Moreover, Michigan Corporation is instrumental in driving innovation and technological advancement. Many corporations in the state invest heavily in research and development, leading to the creation of new products, services, and solutions that improve our quality of life. From cutting-edge medical devices to eco-friendly energy solutions, Michigan corporations are at the forefront of innovation, shaping the future of our society.

Another reason why Michigan Corporation is so important is its contribution to the local community. Many corporations in the state are actively involved in philanthropic initiatives and corporate social responsibility efforts. They donate to schools, charities, and non-profit organizations, supporting education, healthcare, and environmental conservation. By giving back to the community, Michigan corporations strengthen the social fabric and help those in need.

Furthermore, Michigan Corporation plays a significant role in attracting investment and business development to the state. A strong corporate presence in Michigan signals to potential investors that the state is business-friendly, with a skilled workforce, robust infrastructure, and access to markets. This, in turn, leads to increased investment, job creation, and economic growth, benefiting both corporations and the state as a whole.

In conclusion, Michigan Corporation is a vital entity that drives economic growth, creates jobs, fosters innovation, supports the community, and attracts investment. Its impact is far-reaching and essential for the prosperity and well-being of the state. As we look ahead to the future, it is crucial to continue to support and foster the growth of Michigan Corporation, ensuring its continued success and contribution to the state’s economy and society.

Conclusion

When determining which corporate form is best for you, be selective. You must know which business structure is bet-fitted for your product/service in Michigan. Consult a legal professional before you take the first step while setting up your business. Finding the ideal ratio of corporate advantages and legal protection that meets your unique needs is very important. In forming a corporation in Michigan, you need to ensure that every detail is well-formed so that your corporation will be successful. And if you have any questions, share them in the comment section below.

Leave a Comment