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Why Incorporate in Michigan?

Not only does Michigan have a low income tax rate, but Michigan also offers several business and tax incentives, provided your corporation meets certain criteria.

For example, the Michigan Business Development Program is designed to provide grants, loans or other economic assistance to businesses for highly competitive projects in Michigan that create jobs and/or provide investment.

For many entrepreneurs looking to form a larger business, creating a Michigan corporation may be the best choice. As a corporation, your business is able to buy and trade stock, and when it comes to excess profits, corporations offer more flexibility than an LLC. A corporation is allowed to pass income and losses to its shareholders, who report taxes on an individual tax return at ordinary levels.

Is an LLC Better Than a Corporation?

It all depends on your goals. Limited liability companies are usually better for smaller businesses. An LLC would be easier to set up, and would receive many of the same benefits as corporations, with less regulation.

Learn more about forming a Michigan LLC so you can decide which business entity is right for you.

Benefits of Forming a Michigan C Corp

  • The strongest form of liability protection possible by insulating your personal assets and finances from business debts, obligations, damages, bankruptcy or other liabilities
  • Several options to create, buy, sell or transfer stock, including publicly
  • The ability to issue more than one type of stock
  • The ability to raise more funds by issuing more stock
  • The ability to sell stock to investors inside and outside the U.S.

Benefits of Forming a Michigan S Corp

It offers several advantages similar to those provided by a C Corp including, but not limited to:

  • Options for creating, transferring and selling stock, though not as many as a C Corp
  • The capacity for up to 100 shareholders
  • Simpler rules than those applicable to C Corporations
  • Easy transfer of ownership simply by selling your stock
  • The possibility of saving money by allowing you to pay less self-employment tax

In this guide, you’ll find information on naming your corporation, getting a Resident Agent, the fees you’ll need to pay, business taxes and much more. We also cover what you'll need to register your corporation and how you'll interact with the Michigan Department of Licensing and Regulatory Affairs.

Starting a Business in Michigan Checklist

To help you along the way, use our Starting a Business checklist to keep track of everything you need to do to get your business up and running.

 

How to Form a Michigan Corporation Yourself in 6 Steps

1

Choose a Unique Business Name and Complete a State Corporation Search

Every Michigan business must have a unique name that isn't already in use by another business in the state. If you’re having difficulty coming up with a name, try using our Business Name Generator to gather ideas. You'll need to follow a few naming rules, which you can read about in detail on the Michigan Corporation Names page.

Once you’ve chosen a name, you’ll need to make sure it’s available in Michigan. To learn whether another company in the state is using your desired business name, use our tool to do a Michigan entity search.

You can also carry out a name search on the Michigan Department of Licensing and Regulatory Affairs (LARA) website.

We can check Michigan corporation name availability for you

2

Provide an Official Business Address for Your Corporation

Every Michigan corporation must have a designated address. That could be the address of your home (if you’re running the company from your domicile), a building where your office is located or any physical address of your preference. The address can be outside the state of Michigan and can be a P.O. Box.

You may also be able to use a virtual mailbox for your business address. Incfile can provide you with a Michigan virtual mailbox where we'll receive your mail, and scan it for your online review. This can be especially convenient if you run a home-based business and don't want your home address published as part of your business public record.

3

Assign a Resident Agent

Someone who receives official correspondence and is responsible for filing reports with the Michigan LARA is known as a Resident Agent. Every Michigan Corporation is required to have a Resident Agent.

You can fill this position, assign another manager in your business or use a Resident Agent service. If your Resident Agent in Michigan is a person, they must have a physical street address in Michigan and must be present during business hours to receive important documents on behalf of your company.

You'll appoint your Resident Agent when you file your Michigan Articles of Incorporation with the Department of Licensing and Regulatory Affairs and formally create your business.

All of Incfile’s business formation packages include Resident Agent service. It’s free for the first year and just $119 per year after that. You can also access a digital dashboard to view any document we've received on your behalf.

4

File Your Articles of Incorporation with the Michigan Department of Licensing and Regulatory Affairs (LARA)

Once you've gathered all the information for your Corporation, you’ll need to file a form with the Department of Licensing and Regulatory Affairs to create your Michigan Articles of Incorporation. This will officially create your business.

Here’s what is typically included:

  • Your corporation name
  • Your Corporation's purpose
  • The corporation’s capital structure (number of shares to be issued, who owns them, pricing, etc.)
  • Resident Agent's name and address
  • Names and addresses of incorporators
  • Signatures of incorporators

Your Articles of Incorporation can be filed online via the state's digital portal. You can also mail or file in person with the Department of Licensing and Regulatory Affairs, or Incfile can file it on your behalf. The Michigan Corporation filing fee is $60.

File by Mail

Michigan Department of Licensing and Regulatory Affairs,
Corporations, Securities, & Commercial Licensing Bureau,
Corporations Division
P.O. Box 30054
Lansing, MI 48909-7554

Submit in Person

2501 Woodlake Circle
Okemos, MI

You only need to file your Michigan Articles of Incorporation once, but every year after, you'll also need to file an annual report with the Michigan LARA and pay a filing fee of $25. Incfile can remind you about this every year, or we can do it for you if you have us handle the paperwork.

Let Incfile Handle All the Michigan Corporation Formation Paperwork for You for $0 + the State Fee

What are the fees and requirements to incorporate in Michigan?

State Fee State Filing Time Expedited Filing Time
$60 4 Weeks 11 Business Days *
State Fee $60
State Filing Time 4 Weeks
Expedited Filing Time 11 Business Days *

*24 hours ($50), Same-day ($100), 2 Hours ($500), 1 Hour ($1000)

Annual Report

Frequency

Annually

Due Date

May 15th

Filling Fee

$25

5

Get an Employer Identification Number (EIN) from the Internal Revenue Service

You'll need an EIN to identify your business to the IRS. You use this number when filing and paying taxes, when submitting payroll information and payments for your employees, and opening a business bank account. You can obtain one directly from the IRS, or Incfile can get one for you as part of the Michigan Corporation formation process.

6

Write Bylaws

A set of rules that govern how a corporation will be run, bylaws detail how many directors the corporation will have, whether the board of directors will have annual meetings, and voting requirements, among other things.

Some states require companies to create bylaws - including Michigan. Although you aren't required to file your bylaws with the state, Michigan does require you to have and follow bylaws for your corporation. Regardless of legality, it’s always a good idea to write them to protect your business from any future changes and events.

Michigan Corporation Types

C Corporation

When you file to start a corporation, by default, it's a C Corp. This is the choice for large businesses that will trade shares in the stock market.

A Michigan C Corp will offer you several liability protections, but it will also be required to adhere to numerous strict rules and regulations. It will also likely have a substantial amount of administrative overhead, and won't enjoy as many tax advantages as other corporation types.

Learn more about C Corporations.

S Corporation

Technically, an S Corporation isn't a business entity the way LLCs and C Corporations are. It's a tax filing status. An LLC or a C Corporation can be an S Corporation. It's just a matter of filing a form with the IRS.

The main reason to file as an S Corp is to save money on self-employment taxes. To get an idea of how much money you might save, use our S Corp Tax Calculator.

If you want your Michigan C Corp to be treated as a Michigan S Corp, file the IRS Election by a Small Business Corporation form, also known as Form 2553 or an S Corp Election form.

Consult with your tax advisor or accountant to determine whether this is your best option.

Learn more about S Corporations.

Compare S Corp vs. C Corp to learn the benefits and drawbacks of both, and decide which one will best suit your needs.

Professional Corporation

Some states, including Michigan, allow certain occupations to form Professional Corporations which will provide professional services. The state's Business Corporation Act defines a professional service as:

"... a type of personal service to the public that requires that the provider obtain a license or other legal authorization as a condition precedent to providing that service."

However, not all licensed professions may be permitted to form Professional Corporations. Per Michigan Business Corporation Act, Chapter 450, § 450.1282, a few of the professions permitted to form a Michigan Professional Corporation include, but may not be limited to:

  • Accountants
  • Chiropractors
  • Dentists
  • Optometrists
  • Veterinarians
  • Physicians

Check with the MI Department of Licensing and Regulatory Affairs (LARA) to confirm whether your business should and can be a Professional Corporation.

Foreign Corporation

If your business operates in another state and you want to expand into Michigan — or vice versa — you’ll need to form a Foreign Corporation.

Learn more about Michigan Foreign Corporation registration.

Nonprofit Corporation

Charitable organizations can incorporate as nonprofit corporations. This means all the profits they generate are donated to the organization supported by the charity, minus administrative costs.

A nonprofit corporation is also exempt from federal and state taxes, allowing more of the profit to benefit the charity.

Note: Everything in this guide applies to for-profit corporations, and mostly to C Corps and S Corps. Items listed as requirements for forming a corporation may or may not also apply to nonprofits.

Limited Liability Company

Depending on the kind of business you want to establish, or your personal circumstances and goals, a limited liability company (LLC) may be a better option. For example, you may not need the options to buy and sell stock. Or you may simply want to start a small business with a few employees, or even just yourself.

A Michigan LLC is usually a better option for a smaller business. It's easier to set up, but it still offers you certain advantages you'd get from a corporation. You can even have your LLC treated as an S Corporation for tax purposes to save you money.

Regardless of which direction you decide to go, we can help you with your Michigan business registration. Learn more about Limited Liability Companies.

Sole Proprietorship or Partnership

These are the simplest types of businesses to set up. That's because there's no real setup to do. If you don't choose to form a separate business entity, by default, you'll have either a sole proprietorship (just you) or a partnership (you and one or more other people).

Neither of these options provide you with any special benefits or liability protections and can leave your personal assets vulnerable. For these reasons, we don't recommend them.

Compare business entity types to decide which one is best for you.

Helpful Resources from the State of Michigan

More Information in This Guide

You’ll find plenty more insight and guidance on the other pages of this guide, including:

Michigan Corporation Names

How to search the state business registry and find the right name. Includes information on naming rules, assumed names, reserving a Michigan Corporation name and more.

Michigan Resident Agents

How to appoint, change and search for Resident Agents. Also includes the duties they fulfill and the rules they’re required to follow.

Michigan Incorporation Fees

Details the various fees you’ll need to pay and the state and federal requirements you’ll need to meet. Includes details about Employer Identification Numbers (EINs), state and federal business licenses, annual reports and more.

Michigan Corporation Taxes

Covers the various taxes you’ll have to pay to the state and federal governments. Includes details about state taxes such as sales and income, and federal taxes such as income and self-employment.

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