Setting up a Michigan business the way you will actually run it
Most formation problems do not show up at formation. They show up two years later, when a co-owner wants out, a lender asks for a document that was never signed, a customer sues, or the state lists the company as not in good standing. The paperwork you choose on day one decides how those moments go.
As a Grand Rapids business formation attorney, I form and advise Michigan LLCs, corporations, partnerships and nonprofits for owners in Grand Rapids, Kentwood, Cascade, Ada, Caledonia and across Kent County and West Michigan. I also litigate business disputes, so I draft with an eye to what a judge would read if the deal ever goes wrong. You deal with me directly from the first call. Big-Firm Power. Street-Level Grit.
The fees, forms and deadlines below are the ones in the Michigan statutes as I last reviewed them. They are set by statute and can change, so confirm the current figure with LARA before you file anything.
Business formation matters I handle in Grand Rapids and across Michigan
- Forming Michigan LLCs, including single-member and multi-member companies
- Operating agreements, shareholder agreements and partnership agreements
- Choosing between an LLC, a corporation and an S corporation election, working with your CPA on the tax side
- Forming Michigan corporations, including bylaws and the board and officer structure
- Forming nonprofit corporations, and separating the state filing from the federal tax-exemption question
- Registered agent, annual statement and good standing problems, including restoring good standing
- Assumed name certificates for businesses that operate under a different name
- Certificates of authority for out-of-state LLCs and corporations that will transact business in Michigan
- Business contracts and the clauses that decide who wins a later dispute
- Noncompete agreements, for employers and employees and between businesses
- Owner exits, buyouts and dissolution when the owners can no longer work together
- Corporation governance, including bylaws, directors and officers, and shareholder agreements
- Companies formed in Nevada that do business in Michigan, and the Michigan filings that follow
- Annual reports and good standing, including restoring a company that has fallen out of good standing
Choosing between an LLC, a corporation and an S corporation
On the Michigan side, the differences are mostly structure and paperwork. An LLC files articles of organization, may be run by its members or by managers, and needs no board or bylaws. A corporation files articles of incorporation, adopts bylaws, and has a board and officers. Both give owners limited liability from company debts, subject to veil-piercing rules.
An S corporation is not a separate Michigan entity. It is a federal tax election. A domestic LLC with two or more members is by default taxed as a partnership, and a single-owner LLC is disregarded as separate from its owner, unless it elects otherwise. Tax rates and payroll treatment are for your CPA, and I want your CPA in the conversation when the choice turns on tax.
Limited liability has limits. A personal guaranty is your own promise, and a court may pierce the veil when an LLC is a mere instrumentality of its owner, is used to commit a fraud or wrong, and the plaintiff suffers an unjust loss as a result. Keeping company money separate from yours and signing contracts in the company’s name help support the protection, but no one can promise how a court will rule in a specific case.
Operating agreements, registered agents and good standing
Michigan’s LLC Act does not make an operating agreement a condition of forming an LLC, but without a written one the Act’s default rules fill the gaps, and they may not match what the owners intended. If the agreement is silent on voting, each member of an LLC formed on or after July 1, 1997 has one vote, so votes do not follow ownership percentages. I put the terms in writing at the start.
A Michigan LLC must also keep a registered office and a resident agent in the state and file an annual statement by February 15 each year. If the company has no agent, or the agent cannot be found, a plaintiff may be able to serve the lawsuit through the state instead, and the case can move forward without the owners seeing it. After two consecutive missed statements, LARA sends a notice, and if the back statements and fees are not filed within 60 days the LLC is not in good standing. It still exists, and a certificate of restoration of good standing fixes it.
Partnerships, nonprofits and out-of-state companies
A Michigan partnership does not need a state filing. It is an association of two or more persons carrying on a business for profit as co-owners, so people can be partners without signing anything. With no agreement, the statutory defaults apply: equal profit shares, equal management rights and no salary. Equal splits can feel unfair when the partners contributed unequal money or time, which is a good reason to write the deal down.
A nonprofit is formed by filing articles of incorporation with LARA, but incorporating is not the same as being tax-exempt. Federal exemption under section 501(c)(3) is a separate step. A company formed in another state needs a certificate of authority from LARA before it transacts business in Michigan. The statutes list activities that do not count by themselves, but where your employees, inventory and contracts are located matters.
Assumed names, contracts and noncompetes
A business that operates under a different name files a certificate of assumed name. Filing creates no exclusive right to the name and is not trademark protection, and using an assumed name without filing can bar the owner from suing in Michigan courts over matters done under that name until the owner complies.
A Michigan contract does not have to be in writing unless a writing statute applies, and an email or text exchange can form a binding contract if the messages show an offer, acceptance and intent to be bound. Courts read clauses for what they say. A party may contract against liability for ordinary negligence but not for gross negligence or willful and wanton misconduct.
An employer may obtain a noncompete that protects its reasonable competitive business interests if it is reasonable as to duration, geographic area and the type of employment or line of business. A court has discretion to narrow an overbroad covenant but is not required to, so signing a broad covenant and assuming it will fall apart is risky. Noncompetes between two businesses are judged under a different standard, the rule of reason.
Michigan business formation questions I hear most
How do I form an LLC in Michigan?
You form a Michigan LLC by filing articles of organization with the state, which the statute calls the administrator at LARA. The articles state the company name, its purposes, the registered office and resident agent, and whether managers will run the business. The LLC exists once the filing takes effect. The statute currently sets the state filing fee at $50.
Does a Michigan LLC need a written operating agreement?
The Michigan LLC Act does not require you to file one, and it does not make an operating agreement a condition of forming the company. But the statute defines an operating agreement as a written agreement among all the members, or by the sole member. Without one, the Act’s default rules fill the gaps, and they may not match what the owners intended.
What is the difference between an LLC, a corporation, and an S corporation in Michigan?
An LLC and a corporation are Michigan entity types you form by a state filing. An S corporation is a federal tax election, not a separate Michigan entity. An LLC’s default federal tax treatment depends on its owners: disregarded if it has one owner, a partnership if it has two or more, unless it elects corporate treatment. A corporation without an S election is a C corporation. This is not tax advice, so confirm with a CPA.
Does my Michigan LLC need a registered agent, and can I serve as my own?
Yes. A Michigan LLC must keep a registered office and a resident agent in the state. You can be your own agent if you are an individual Michigan resident and your business office or residence is the registered office. A company that has a business office at the registered office can also serve.
When is the annual statement due for a Michigan LLC, and what does it cost?
A Michigan LLC files an annual statement of its resident agent and registered office by February 15 each year. An LLC formed after September 30 does not file on the next February 15. The statute sets the fee at $25 through September 30, 2027, and $15 if paid after that date.
How does a Michigan LLC or corporation use a business name different from its legal name?
It files a certificate of assumed name with the state, stating its true name and the assumed name. The certificate lasts through December 31 of the fifth full calendar year after the year of filing and can be renewed. The statutory filing fee is $25 for an LLC and $10 for a corporation.
How do I form a nonprofit corporation in Michigan?
You file articles of incorporation with LARA under the Nonprofit Corporation Act. The articles must state the name, the specific purposes, the share information if it is formed on a stock basis (or, if nonstock, its assets, financing plan, and whether it is on a membership or directorship basis), the registered office and resident agent, and the incorporators. The statutory filing fee is $10, and it can be waived if veterans make up the required majority.
Does my out-of-state LLC need to register in Michigan?
If it will transact business in Michigan, yes. A foreign LLC must obtain a certificate of authority from LARA before transacting business here. The statute lists activities that do not count by themselves, such as defending lawsuits, maintaining bank accounts, interstate commerce, and an isolated transaction completed within 30 days. The application fee in the statute is $50.
Is an oral contract enforceable in Michigan?
Yes, unless a writing statute applies, but proof is harder. Michigan’s statute of frauds, MCL 566.132, lists the kinds of agreements that are void unless in a signed writing. If your agreement falls outside those categories and outside other writing statutes, an oral agreement that meets the contract elements can be enforced.
Are employee noncompete agreements enforceable in Michigan?
They can be. MCL 445.774a lets an employer obtain an agreement that protects its reasonable competitive business interests, as long as it is reasonable as to duration, geographic area, and the type of employment or line of business. A covenant must guard against unfair competitive advantage, not bar use of general knowledge or skill.
Talk to a Grand Rapids business formation attorney about your company
If you are forming a company or cleaning up paperwork that was never finished, I handle your matter myself. Contact me 24/7 by text on WhatsApp. Your Rights, My Fight! Call for a free initial consultation.
Law Offices of Mitchell S. Bisson 2828 Kraft Ave SE, Suite 295 Grand Rapids, MI 49512 (616) 213-3327 | MBisson@BissonLegal.com
The Michigan starting a business library gives short answers on each topic, including these topics:
- Forming an LLC and operating agreements
- Running an LLC, owner exits and dissolution
- Corporations, S corporations and foreign companies
- Nonprofits, partnerships and assumed names
- Business contracts and contract clauses
- Noncompetes, trade secrets and commercial leases
- Forming a company in Nevada while doing business in Michigan
A formation problem that has turned into a fight is a matter for a Grand Rapids business litigation attorney, and commercial property questions are a matter for a Grand Rapids real estate attorney. The Michigan legal FAQs give short answers on other Michigan questions, or you can contact me directly.
This page provides general information about Michigan law and is not legal advice. Reading it does not create an attorney-client relationship. Laws change and every case turns on its own facts. Consult a licensed attorney about your specific situation.