How Much Does It Cost to Form a Corporation in Michigan?
Legal business registration — and keeping your business compliant with the state — involves necessary expenses and investment. Some of these costs are payable to the Department of Licensing and Regulatory Affairs, while others are due to additional state entities or the federal government. Here are some common requirements and fees.
Please note that fees for a permit or business license in Michigan may be due when you first form your business, on an ongoing schedule or on an ad hoc basis. Find more details below.
Initial Michigan Corporation Filing Fee
When setting up a corporation in Michigan, you’ll need to file a form and pay a filing fee. Here are the current Michigan Corporation fees and filing times:
When you use Incfile to form a corporation in Michigan, we charge you the state filing fee and forward it to the Department of Licensing and Regulatory Affairs when we file your incorporation paperwork.
Employer Identification Number
Every corporation in the country should have a unique EIN (Employer Identification Number) from the Internal Revenue Service. You'll use it when you open a business bank account, file taxes and pay employees. You can get one directly from the IRS, or Incfile can get one for you.
If you want to do business in a state other than the one where your business is based, you must create a Foreign Corporation.
Michigan Foreign Corporation Registration
Before you can bring an arm of your business from another state into Michigan, you must request Foreign Qualification in Michigan. This means the state gives you permission to conduct business there.
To request registration of a Michigan Foreign Corporation, you must complete an Application for Certificate of Authority and pay an initial fee of $60. The state may have additional registration requirements, so contact the Department of Licensing and Regulatory Affairs directly for more information and to ensure you're in compliance with state law.
Foreign Qualification to Operate in Another State
If you plan to expand your Michigan Corporation into another state, you’ll first need Foreign Qualification or a Certificate of Authority from that state. This is necessary before you can create a physical presence, hire employees or bank in that state.
You'll likely have to complete at least one application and pay a filing fee, but each state has its own requirements. Before you start the process, compare state filing times and state filing fees so you can plan accordingly.
Above all, contact the state government entity that administers business (usually the Secretary of State) to confirm their requirements and for specific instructions.
If you need assistance, Incfile provides a complete Foreign Qualification service for all states.
Michigan Annual Report Requirements
Most states require business entities to file an annual (or other periodic) report. Michigan is a little different in that the state will notify you in advance, and provide you with the form to fill out. A filing fee of $25 is due along with the filing of the form.
Michigan Business Licenses and Permits
Before you start doing business, you must secure the necessary state, federal or local business licenses and permits to operate your Corporation. Some of the fees will only need to be paid once, while others may be ongoing charges.
Permits and licenses vary based on:
Although some states do not legally require corporations to have bylaws, you are required to have them within the state of Michigan. You do not however need to file them with the state. Simply keep them in at the primary business location and follow them.
Bylaws generally outline rules for carrying out tasks related to managing your corporation including, but not limited to:
- The number of directors the corporation has
- How they'll be elected, their qualifications, and the lengths of their terms
- When, where, and how your board of directors can call and conduct meetings
- Voting requirements
The bylaws must then be adopted (and amended, if necessary) by the board of directors and shareholders.
Drafting a set of bylaws can be extremely helpful in making sure you’re organized and can help protect your business from any future changes and events that may affect your business.
Other Michigan Corporation Filing Requirements and Fees
The State of Michigan requires you to complete a few more tasks before you can begin conducting business.
Appoint a Director
Some states require corporations to appoint a full board of directors. Michigan Corporation Law requires all corporations to have at least one director. A single person can be the president, secretary, sole director and sole shareholder.
In Michigan, the board of directors (or the single director) elects officers, such as the president, CEO, etc. Michigan Corporation law requires corporations to have at least a president secretary, treasurer, and, if desired, a chairman of the board. A single person can hold more than 2 offices.
Issue Stock to Shareholders
To raise business capital and keep it separate from company owners' money, every Michigan corporation must sell stock to its shareholders. The Articles of Incorporation must authorize the sale of at least one share, and the corporation cannot sell more shares than are authorized.
Hold Annual General Meetings
This is one area where Michigan differs from other states. You may hold annual meetings, and it's generally a good idea to do so. But if you decide not to, the Michigan Business Corporation Act Chapter 450, Act 284, §§ 450.1402 states, "Failure to hold the annual meeting at the designated time, or to elect a sufficient number of directors at the meeting or any adjournment thereof, does not affect otherwise valid corporate acts or work a forfeiture or give cause for dissolution of the corporation..."
Change the Resident Agent
If your Corporation is based in Michigan, then you must have a Resident Agent in Michigan. You'll need to appoint one when you file your Articles of Incorporation. You can also change to a new Resident Agent later by filing a form and paying a fee of $5.
Reserving a Name for Your Corporation
If you're not quite ready to start your business, you can reserve a name for six months with the Department of Licensing and Regulatory Affairs by filing a form and paying a fee of $10. First, conduct a Michigan Corporation search and learn the state's business naming rules to ensure you choose a name that meets legal requirements.
Amending Facts About Your Corporation
When you incorporate, the Michigan Department of Licensing and Regulatory Affairs forms you fill out will state certain facts about your business at that time. Through the years, some or all of this information may change. If it does, you'll need to file a Certificate of Amendment with the Department of Licensing and Regulatory Affairs along with a filing fee of $60. You can do this yourself or Incfile can do it for you.
You'll need to file a Certificate of Amendment when you
- Change the company's name
- Add, remove or change a director
- Change the Resident Agent
- Change the number of shares your corporation is authorized to issue
- Change any other facet of your business that was listed on the original Articles of Incorporation
Get a Certificate of Good Standing
Some organizations may request that you prove your Corporation's compliance with laws and tax requirements. In many states, this proof is provided with a Certificate of Existence or Certificate of Status. In Michigan, it's called a Certificate of Good Standing.
If you need to prove you have met your commitments, you’ll need to request a Michigan Certificate of Good Standing from the Department of Licensing and Regulatory Affairs. You can do this via the state's online portal for a fee of $10.
The information listed above details many of the fees a standard Corporation will be required to pay in Michigan. In some circumstances, there may be other one-off, periodic or ad hoc fees not listed above.
Of course, your Corporation will also probably need to pay federal, state, self-employment (if it's an S Corp) and other taxes. You'll find more information on the Michigan taxes page.