How to Form an LLC in Michigan | 2025 Guide

Thinking about launching a business in the Great Lakes State? Before you get started, it’s essential to understand how to form an LLC in Michigan.

A Limited Liability Company (LLC) offers entrepreneurs flexible management, simplified taxes, and valuable personal asset protection. It’s a popular choice for small business owners who want to shield themselves from personal liability without the complexity of a corporation.

Michigan makes the process accessible and affordable, thanks to low state fees and streamlined filings through the Michigan Department of Licensing and Regulatory Affairs (LARA). In this guide, you’ll learn everything you need to start your business entity—from choosing a name and appointing a registered agent to filing with the IRS and setting up your operating agreement.

Do you send and receive global payments?

Try Wise Business >>

Wise Trustpilot Score: Excellent 4.3 out of 5 stars
No minimum balance requirement and no monthly fees
Integrates with QuickBooks, Xero, Sage, and more

How to Start an LLC in Michigan (Step-by-Step)

Step 1: Choose a Name for Your Michigan LLC

Your business name must comply with Michigan naming rules. It should include "Limited Liability Company," or one of its abbreviations, such as “LLC” or “L.L.C.” It must be distinguishable from other entities already registered with the Michigan Department.

To check name availability, use the business name search tool on LARA's website¹. While not required, you may reserve a name for up to 180 days by filing an Application for Reservation of Name and paying a $25 fee.

Step 2: Appoint a Registered Agent

Every Michigan LLC is required to appoint a registered agent—someone who can accept legal documents on the company’s behalf. The agent must have a physical address in Michigan and be available during normal business hours.

You can serve as your own agent or hire a professional registered agent service, which is especially useful if you’re not a Michigan resident or want to maintain privacy.

Step 3: File Articles of Organization with LARA

To legally form your LLC, submit Form CSCL/CD-700² (Articles of Organization) to the Michigan Department of Licensing and Regulatory Affairs. This form includes your business name, duration (if not perpetual), purpose, and your registered agent’s information.

• Filing Fee: $50.
• Submission Options: Online, by mail, or in-person.

Once filed and approved, your LLC becomes a recognized business entity in Michigan.

Step 4: Draft an Operating Agreement

Although not legally required in Michigan, having an operating agreement is highly recommended. This internal document outlines your LLC’s ownership, management structure, and procedures for resolving disputes.

It’s especially important for personal liability protection—proving that your LLC is a separate entity from you as an individual.

Step 5: Obtain an Employer Identification Number from the IRS

An Employer Identification Number (EIN) is necessary for tax reporting, opening a business bank account, and hiring employees. Even single-member LLCs should apply for an EIN to maintain separation between personal and business finances.

You can obtain an EIN directly from the IRS website³ free of charge.

Step 6: Register for Michigan State Taxes

Depending on your business type, you may be required to register with the Michigan Department of Treasury for state tax collection.

• If you plan to collect sales tax, you must register for a Sales Tax License.
• Businesses with employees must register for withholding tax.
• Some industries may require specialized tax accounts.

Registration can be completed online via the Michigan Treasury Online (MTO)⁴ platform.

Step 7: Apply for Necessary Business Licenses and Permits

There is no general state business license in Michigan, but you may need industry-specific licenses or local permits depending on your location and business type. Check with city and county offices, or visit michigan.gov for guidance.

Where does Wise Business fit in your business? Send Fast and Secure Business Payments

---

What Are the Business Requirements for a Michigan LLC?

To keep your LLC in good standing, you must meet a few ongoing requirements:

• File Annual Statements: Due by February 15 each year. The filing fee is $25.
• Maintain a Registered Agent: Required at all times.
• Keep Business and Personal Finances Separate: Open a dedicated business bank account to simplify tax filing and protect your personal assets.
• Comply with Federal and State Taxes: Pay any applicable income, payroll, or sales tax.
• Maintain Liability Insurance: Consider professional liability insurance to cover errors, omissions, or legal claims, especially if you’re in a service-based industry.

What Are the Benefits of Starting an LLC in Michigan?

Michigan is a competitive state for small business formation. Here are a few reasons why:

• Low Formation and Maintenance Costs: The $50 formation fee and $25 annual statement fee are among the lowest in the country.
• No General State Business License Required: Cuts down on red tape.
• Business-Friendly Services: Online filing, expedited processing, and professional assistance are readily available.
• Personal Liability Protection: Owners are not personally responsible for the company’s debts or legal obligations.
• Flexible Taxation Options: LLCs can be taxed as sole proprietorships, partnerships, or corporations.

Michigan does not impose a separate LLC tax, and only businesses that meet certain thresholds are required to pay the Corporate Income Tax (CIT).

How Much Does It Cost to Start an LLC in Michigan?

Here’s a breakdown of the basic and optional costs involved:

Service	Cost
Articles of Organization	$50
Name Reservation (Optional)	$25
Annual Statement	$25
EIN (IRS)	Free
Registered Agent Service (Optional)	~$100–$300/year
Operating Agreement (Optional)	Varies if using legal help

While the operating agreement and registered agent services are optional, they’re highly recommended for smoother operations and legal protection.

Can I Open an LLC in Michigan Without Living There?

Yes. You do not have to be a Michigan resident to form or operate an LLC in the state. You must, however, appoint a registered agent with a physical address in Michigan to receive service of process and official mail.

Can a Nonresident Open a Company in Michigan?

Absolutely. Michigan does not impose residency or citizenship requirements to form an LLC. Foreign nationals can own and operate an LLC, though additional steps may be required:

• Obtain an EIN from the IRS.
• Ensure compliance with visa-related limitations (if physically operating in the U.S.).
• Open a business bank account that may require additional documentation.

Foreign-owned LLCs may also want to consult with a business attorney to ensure full compliance.

Michigan LLC vs Other States: How Does It Compare?

Here’s how forming an LLC in Michigan compares to nearby states which are commonly considered by regional entrepreneurs.

Feature	Michigan	Indiana	Ohio	Illinois
Formation Fee	$50	$95	$99	$150
Annual Report Fee	$25	$50 (biennial)	None	$75
Sales Tax	Yes (6%)	Yes (7%)	Yes (5.75%)	Yes (6.25%)
Anonymous Ownership	No	No	No	No
Requires Registered Agent	Yes	Yes	Yes	Yes
Foreign Ownership Allowed	Yes	Yes	Yes	Yes

Michigan is the most cost-effective option, with low formation and maintenance fees. Indiana has higher costs and no privacy advantage. Ohio skips the annual report but adds a Commercial Activity Tax on gross receipts over $150,000. Illinois is the priciest, with the highest fees and no benefit for small LLCs. Michigan’s balanced structure and ease of filing make it a strong choice for Midwest entrepreneurs.

Open a Wise Business Account: Manage Your US Business Finances With Ease

Once you have established your business with an LLC, you’ll need a business account to manage your US finances. A Wise Business account is easy to open online and comes with no monthly fees. You can convert funds from your home currency to USD with low, transparent fees.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also send money to countries.

Some key features of Wise Business include:

Major local account details to receive international payments with ease No monthly account fees just a simple one-off fee for account details Receive payments from e-commerce platforms such as Amazon or via Stripe. Create invoices using the Wise invoice generator or invoice templates. Accounting integrations, including a QuickBooks Bill Pay connection. Bill payments will be synced, matched, and categorized in QuickBooks for simple reconciliation. Access to BatchTransfer. Fast payment of up to 1,000 people.

Open a Wise Business account online

Final Thoughts

An LLC in Michigan gives your business a strong legal foundation, personal asset protection, and a simple path to compliance. With low startup costs and clear guidance from the state, it’s one of the most efficient ways to launch and grow your company.

---

FAQs About Michigan LLCs

Are There Privacy Protections for Michigan LLCs

Michigan does not provide anonymous ownership for LLCs. Members and managers must be disclosed in state filings. If privacy is a concern, business owners may consider states like Wyoming or Delaware.

Why Do People Use Michigan for LLCs?

Michigan is attractive for its low startup costs, flat annual fees, no general business license requirement, and flexible LLC structure. The state also offers convenient online filing through the Michigan Department of Licensing and Regulatory Affairs, making it easy to launch and manage a business entity.

Is a Michigan LLC Tax-Free?

No. While Michigan does not charge a separate LLC tax, LLCs must still comply with state and federal tax requirements. If your LLC will have employees or collect** sales tax**, you must register with the Michigan Department of Treasury. Federal taxes must be filed with the IRS, and local taxes may also apply.

What Are the Disadvantages of a Michigan LLC?

The downsides of starting an LLC in Michigan include:

• No anonymous ownership: Michigan requires disclosure of members and managers in public filings.
• Flat 6% sales tax: LLCs that sell goods or taxable services must collect and remit sales tax.
• Annual reporting requirement: A $25 annual statement is due by February 15 each year.
• Registered agent required: Every LLC must maintain a registered agent with a physical address in Michigan.
• Recommended but optional protections: While not mandatory, having an operating agreement and professional liability insurance is advisable to strengthen legal protection and limit personal liability.

---

Sources:

1. Michigan Business Entity Search | LARA
2. Form 700 – Michigan Articles of Organization (PDF) | Michigan.gov
3. Apply for an EIN | IRS
4. Michigan Treasury Online (MTO)