How to Form an LLC in Michigan 2026: Complete Guide

Forming an LLC in Michigan provides liability protection and tax flexibility for your business. Michigan has low filing fees ($50) and a straightforward process with online filing available through LARA. This guide covers everything from choosing a name to maintaining annual compliance with Michigan's unique Annual Statement requirement.

Why Form an LLC in Michigan?

• Limited Liability Protection: Personal assets protected from business debts
• Pass-Through Taxation: Avoid double taxation (profits taxed once)
• Flexible Management: Member-managed or manager-managed options
• Low Formation Cost: Only $50 filing fee (lowest in the nation)
• Affordable Maintenance: $25 annual statement (much lower than most states)
• Business-Friendly: Strong economy, skilled workforce, Great Lakes access
• No Publication Requirement: Unlike New York or Arizona

Step-by-Step Formation Process

Step 1: Choose Your LLC Name

Your Michigan LLC name must comply with MCL § 450.4203:

• Be distinguishable from existing Michigan business names
• Include "Limited Liability Company," "LLC," or "L.L.C."
• Not contain restricted words ("bank," "insurance," "university") without licensing
• Not suggest government affiliation or use "Olympic" without authorization

Name Search: Check Michigan Business Entity Search

Name Reservation (Optional):

• Reserve name for 6 months
• File Form 450 online or by mail
• Fee: $25
• Renewable for additional 6-month periods

Step 2: Appoint a Resident Agent

Every Michigan LLC must have a resident agent (MCL § 450.4105):

• Has physical Michigan street address (no P.O. boxes)
• Available during normal business hours (9 AM - 5 PM)
• Can be an individual Michigan resident OR business entity authorized in Michigan
• Receives legal documents, service of process, and official correspondence

Options:

• Self-serve: You can be your own resident agent if Michigan resident
• Professional Service: Hire registered agent company ($125-$300/year)

Step 3: File Articles of Organization

Submit Form 700 (Articles of Organization) to Michigan LARA:

Filing Options:

• Online: Michigan LARA Online Filing (5-7 business days) - $50
• By Mail: Send to Lansing office (2-3 weeks) - $50
• Expedited Service: Add $50 for 24-hour processing

Mailing Address:

Michigan Department of Licensing and Regulatory Affairs (LARA)
Corporations Division
P.O. Box 30054
Lansing, MI 48909

Required Information:

• LLC name
• Purpose (can be "any lawful purpose")
• Registered office address (must be Michigan street address)
• Resident agent name and Michigan street address
• Name and address of organizer (person filing)
• Effective date (can be future date within 90 days)

Step 4: Create an Operating Agreement

Not required by Michigan law, but strongly recommended:

• Defines ownership percentages and capital contributions
• Outlines management structure (member-managed vs manager-managed)
• Decision-making authority and voting procedures
• Profit and loss distribution
• Buy-sell provisions and transfer restrictions
• Dissolution procedures
• Helps establish LLC as separate legal entity for liability protection
• Prevents disputes among members

Key Provisions to Include:

• Member names and ownership percentages
• Capital contributions (initial and ongoing)
• Management structure and responsibilities
• Voting rights and procedures
• How profits and losses are distributed
• Rules for adding or removing members
• What happens if member leaves or dies

Step 5: Obtain an EIN

Get free Employer Identification Number from IRS:

• Online: IRS.gov (immediate) - recommended
• By Fax: Form SS-4 (4 business days)
• By Mail: Form SS-4 (4-6 weeks)

When Required:

• Multi-member LLCs (always required)
• Opening business bank account
• Hiring employees
• Filing tax returns as partnership or corporation

Single-Member LLCs: Can use owner's SSN, but EIN recommended for privacy and banking.

Complete Cost Breakdown

Ongoing Requirements

Annual Statement (Required)

Michigan requires an Annual Statement (MCL § 450.4207):

• Fee: $25 per year
• Due Date: February 15th annually
• First Statement: Due February 15th the year AFTER formation
• Filing Method: Online only (no paper filing accepted)
• Late Fee: $50 if filed after deadline
• Consequence of Non-Filing: Administrative dissolution after 2 consecutive years

Information Required:

• Confirmation or update of registered office address
• Confirmation or update of resident agent
• Names and addresses of members or managers
• No financial information required

Update Address Changes

If your registered office or resident agent changes between annual statements:

• File Form 801 (Statement of Change)
• Fee: $10
• Must file within 30 days of change
• File online through LARA

Tax Obligations

• Federal Taxes: File Form 1065 (multi-member) or Schedule C (single-member)
• Michigan Corporate Income Tax (CIT): Most LLCs exempt (only if over $350,000 gross receipts AND electing corporate taxation)
• Sales Tax: Register if selling goods or taxable services
• Use Tax: Required for out-of-state purchases
• Withholding Tax: If you have employees
• Unemployment Insurance: If you have employees

Michigan Tax Requirements

Corporate Income Tax (CIT)

Michigan's business tax (MCL § 206.601 et seq.):

• Rate: 6% of adjusted business income
• Small Business Exception: LLCs with adjusted gross receipts under $350,000 are exempt
• Most LLCs: NOT subject to CIT (pass-through taxation)
• Only applies if: LLC elects corporate taxation AND exceeds $350,000 threshold

Sales and Use Tax

If selling taxable goods or services:

• Rate: 6% statewide (no local sales tax)
• Registration: Free through Michigan Treasury Online (MTO)
• Filing: Monthly, quarterly, or annually depending on volume
• Use Tax: Required for out-of-state purchases used in Michigan

Individual Income Tax

LLC members pay Michigan individual income tax on their share of profits:

• Rate: 4.25% flat rate (2026)
• City Taxes: Many Michigan cities levy additional income tax (Detroit 2.4%, Grand Rapids 1.5%, etc.)

Business Licenses and Permits

State-Level

• No general state business license required in Michigan
• Industry-specific licenses: Required for certain professions
  • Contractors and builders
  • Healthcare providers
  • Food service and restaurants
  • Professional services (real estate, cosmetology, etc.)
  • Check Michigan LARA for requirements

Local Level

• City/County Business License: Many Michigan cities require local business licenses
  • Detroit: $50-$200+ depending on business type
  • Grand Rapids: Business registration required
  • Ann Arbor: Home occupation permits for home-based businesses
• Zoning Permits: Required if operating from physical location
• Building Permits: Required for construction or renovation
• Health Permits: Required for food service businesses

Professional LLCs (PLLCs)

Michigan allows certain licensed professionals to form PLLCs (MCL § 450.4901 et seq.):

Who Must Form PLLC

• Attorneys
• Physicians and healthcare providers
• Dentists
• Veterinarians
• Architects
• Professional Engineers
• Certified Public Accountants
• Other licensed professionals as defined by MCL § 450.4901

Additional Requirements

• All members must be licensed in same profession (or related professions as allowed)
• Name must include "PLLC" or "Professional Limited Liability Company"
• File Form 701 (instead of Form 700)
• Must include professional license numbers in filing
• May require approval from licensing board before formation
• Filing Fee: Same $50
• Liability Note: Does not shield from professional malpractice liability

Series LLCs

Michigan does NOT allow Series LLCs:

• Series LLCs allow multiple "series" under one parent LLC
• Each series has separate assets, members, and liability protection
• Available in states like Delaware, Texas, Illinois
• Michigan alternative: Form separate LLCs for each venture

Operating an Out-of-State LLC in Michigan

If formed in another state but doing business in Michigan, must register as foreign LLC:

When Required

MCL § 450.4801 requires foreign registration if you're:

• Maintaining an office or physical location in Michigan
• Regularly conducting business activities in Michigan
• Owning or leasing real property in Michigan
• Having employees working in Michigan

Foreign LLC Registration

• File Form 409 (Application for Certificate of Authority)
• Fee: $50 (same as domestic LLC)
• Designate Michigan resident agent
• Submit Certificate of Good Standing from home state (dated within 60 days)
• Annual Statement: Same $25 annual requirement due February 15

Consequences of Not Registering

• Cannot bring lawsuits in Michigan courts
• Subject to penalties and back fees
• Personal liability exposure for members
• Contracts may be voidable

Dissolving a Michigan LLC

To officially close your Michigan LLC:

1. Vote to Dissolve: Members approve dissolution per operating agreement (usually majority or unanimous vote required)
2. Wind Up Business Affairs:
   • Pay or make provision for all debts and liabilities
   • Distribute remaining assets to members
   • Cancel business licenses and permits
   • Notify creditors and claimants
3. File Certificate of Dissolution: Form 802 with LARA
4. Fee: $10
5. File Final Tax Returns:
   • Federal Form 1065 (final return)
   • Michigan sales tax return (if applicable)
   • Final Annual Statement if dissolution occurs before Feb 15
6. Cancel Sales Tax License (if registered)
7. Close Business Bank Accounts after all transactions complete

Reinstating a Dissolved LLC

If your LLC was administratively dissolved for non-filing of Annual Statement:

• File Form 803 (Application for Reinstatement)
• Fee: $50 reinstatement fee PLUS all past-due annual statements ($25 each)
• File all delinquent annual statements
• Pay any late fees ($50 per delinquent year)
• Time Limit: Can reinstate up to 5 years after dissolution
• Effect: Reinstates LLC as if dissolution never occurred

Frequently Asked Questions

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

The filing fee for Michigan LLC Articles of Organization is $50 (lowest in the nation). There is no annual report, but you must file an Annual Statement for $25 each year due February 15th. Total first-year cost is $75 minimum ($50 formation + $25 annual statement in following year).

How long does it take to form an LLC in Michigan?

Online filings through Michigan LARA typically process within 5-7 business days. Mail filings take 2-3 weeks. Expedited processing (24-hour) is available for an additional $50 fee. Your LLC exists once LARA approves and files your Articles of Organization.

Does Michigan require an annual report for LLCs?

Michigan requires an Annual Statement (not a traditional annual report) due February 15th each year. The fee is only $25. You update your company information (registered office, resident agent, members/managers), but do NOT need to provide financial information. This is one of the most affordable annual requirements in the nation.

Do I need a Michigan address to form a Michigan LLC?

Your registered office must be a Michigan street address (can be your resident agent's address). Your principal office can be anywhere in the world. However, you MUST have a Michigan resident agent with a physical Michigan address. If you're out of state, hire a registered agent service ($125-$300/year).

Can one person form an LLC in Michigan?

Yes. Michigan allows single-member LLCs. The process is identical to multi-member LLCs, and you still get full liability protection. For federal taxes, single-member LLCs are "disregarded entities" (taxed as sole proprietorships on Schedule C) unless you elect corporate taxation.

What is the difference between LLC and PLLC in Michigan?

A PLLC (Professional LLC) is required for licensed professionals like doctors, lawyers, accountants, architects, and engineers. PLLCs have the same liability protection as LLCs, but all members must be licensed in the same profession. PLLCs do NOT protect members from professional malpractice liability—only from general business debts.

What happens if I don't file my Michigan Annual Statement?

If you miss the February 15 deadline, you'll owe a $50 late fee. If you fail to file for 2 consecutive years, Michigan will administratively dissolve your LLC. You can reinstate within 5 years by filing Form 803, paying a $50 reinstatement fee, all past-due annual statements ($25 each), and late fees ($50 each).