Forming an LLC in Michigan
I am Mitchell Bisson, a Grand Rapids business formation lawyer. I have litigated for over 15 years. Starting a company raises a short list of practical questions: what to file, what it costs, what to call it, and how the owners will make decisions. This page covers forming a limited liability company in Michigan, including residency, fees, name rules, operating agreements, member-managed and manager-managed structures, and contracts signed before the company exists. I help Michigan business owners with these steps. The short answers below come from my Michigan legal library.
Many LLC disputes trace back to paperwork that was never done, not to the filing itself. Two or three people file articles of organization online, open a bank account and sign a lease or a supplier contract. They plan to write the operating agreement later. Later arrives when one owner wants out, wants more money, or signs something the others never approved.
The first rule is timing. An LLC exists only when its articles of organization take effect. Under MCL 450.4202(2), existence begins on the effective date of the articles, and under MCL 450.4104(6) a filed document is effective when the state endorses it, unless the document sets a later time not more than 90 days after delivery. A person who signs a contract for a company that does not exist yet generally becomes personally liable on it. Duray Development, LLC v. Perrin, 288 Mich. App. 143, 151 (2010).
The second rule is that the filing is not the end of the paperwork. A Michigan LLC has to keep a registered office and a resident agent in the state and file an annual statement by February 15 each year, with an exception for a company formed after September 30. MCL 450.4207(1), (3).
This page covers what the documents must contain, how the filing works, what it costs where I could verify the number, what the company owes the state every year, the mistakes I see, and when a gap turns into a dispute. I form companies for owners, and where a dispute arises I act for either side. Nothing here predicts how your matter will turn out, and I do not promise outcomes.
Michigan LLC formation, filing and compliance at a glance
These are the rules in the statutes, the state’s forms and the case law. How they apply depends on the owners, the documents and the facts.
| Issue | What the law requires | Time limit or key rule | Authority |
|---|---|---|---|
| Creating the company | Executed articles of organization filed by one or more organizers, who may or may not become members | Existence begins on the effective date of the articles. Filing is conclusive evidence of formation, except in an attorney general action | MCL 450.4202(1)-(2); MCL 450.4104(6) |
| Contents of the articles | Name, purposes, registered office address, initial resident agent, a statement if managers will run the business, and the duration if not perpetual | Members manage unless the articles say managers do | MCL 450.4203(1); MCL 450.4401 |
| Name | Must contain “limited liability company,” “L.L.C.” or “L.C.”; no “corporation,” “incorporated,” “corp.” or “inc.”; distinguishable on the state’s records | A reservation runs to the end of the sixth full calendar month after the month of the application | MCL 450.4204; MCL 450.4205(1) |
| Registered office and resident agent | Both kept continuously in Michigan | If there is no agent or the agent cannot be found, service may be made on the state’s administrator | MCL 450.4207(1), (4) |
| Annual statement | A filing naming the resident agent and the registered office address | Due February 15. After two consecutive missed years the state sends a notice, and 60 days later the company is not in good standing | MCL 450.4207(3); MCL 450.4207a(2)-(3) |
| Operating agreement | A written agreement by the sole member, or between all the members, about the company’s affairs and business | Not required for filing. If silent on voting, each member has one vote, and distributions go in equal shares | MCL 450.4102(2)(r); MCL 450.4502(1); MCL 450.4303(1) |
| Authority to bind the company | A manager is the company’s agent, and an act that apparently carries on the business in the usual way binds it | The exception needs a lack of authority plus actual knowledge by the other party, or a limit shown in the articles or the Act | MCL 450.4406; MCL 450.4402(4) |
| Signing before the articles take effect | The person who signs for a company not yet in existence generally becomes personally liable | The company can be liable instead if it ratifies or adopts the contract, or if the de facto corporation doctrine (applied to an LLC in Duray) fits | 288 Mich. App. 143, 151, 159 (2010) |
What the articles and the operating agreement have to say
The articles of organization. The Act lists what the articles must contain: the company’s name, its purposes, the initial registered office address with the name of the initial resident agent, a statement that the business is to be managed by or under the authority of managers if that is the plan, and the duration if it is not perpetual. MCL 450.4203(1). The articles may also contain any provision that does not conflict with the Act or another Michigan statute. MCL 450.4203(2). The state’s Form 700 (Rev. 07/25) says its format “contains only the minimal information required to make the document fileable and may not meet your needs.” I treat it as the floor.
Member-managed or manager-managed. Unless the articles state that managers will run the business, the members manage it and are treated as managers for purposes of the Act, including the agency rule in section 406. MCL 450.4401. When the articles hand management to managers, they also serve as notice to third parties that managers, not members, hold the agency authority. MCL 450.4402(4). The operating agreement has to match the choice.
The operating agreement. The Act does not make filing an operating agreement a condition of forming the company. It defines the term as a written agreement by the member of a one-member company, or between all the members of a larger one, about the company’s affairs and the conduct of its business, and the definition includes any provision in the articles on those subjects. MCL 450.4102(2)(r). A shared understanding, or an email thread among some of the owners, may not meet that definition.
What the Act decides if the agreement is silent. Each member has one vote regardless of the money put in, and a majority in interest approves most member matters. MCL 450.4502(1)(b), (8). Distributions go in equal shares. MCL 450.4303(1)(b). A person who acquires an interest directly from the company is admitted only on the unanimous vote of the members entitled to vote. MCL 450.4501(2)(a). An assignee becomes a member only on a unanimous vote, and an assignment alone entitles the assignee to distributions, not a role in management. MCL 450.4506(1); MCL 450.4505(2). A member may withdraw only as the operating agreement provides. MCL 450.4509(1). Only the members, not the managers, may authorize a dissolution by unanimous vote, a merger, an amendment to the articles or a conversion. MCL 450.4502(4).
Filing the articles with the state, and what it costs
Where the filing goes. Articles are filed with the Corporations Division of the Michigan Department of Licensing and Regulatory Affairs (LARA). The Division’s frequently asked questions page, which I checked on Oct. 28, 2026, says the online route begins at michigan.gov/corpfileonline, requires a MiLogin for Business account, uses form CSCL/CD-700, and is paid by debit or credit card. The state’s form says a later effective date, no more than 90 days after delivery, may be stated as an additional article. Filed documents are open to public inspection. MCL 450.4104(4).
What the state charges. The state’s Form 700 (Rev. 07/25) lists a nonrefundable fee of $50 for articles of organization, and MCL 450.5101(1)(b) sets the same amount. I checked both on Oct. 28, 2026. Fees can change, so I confirm the amount before anyone pays. If veterans will hold a majority of the initial membership interests, the fee for the initial articles is waived on a signed affidavit and a DD214, a DD215 or another form the department accepts for each veteran who will be an initial member. MCL 450.5101(7)-(8). The administrator also charges an extra fee when expedited filing is requested. MCL 450.4104(8). That is the state’s charge, separate from what you pay me or an accountant. I explain my own fee at the consultation.
The name. A name that satisfies the statute does not, by itself, give you rights in the name against someone else, so a trademark search is a separate step. MCL 450.4204(5). LARA’s naming page advises waiting until the articles are filed before ordering signs and stationery, and says operating under any other name requires a certificate of assumed name (CSCL/CD 541).
The registered office and resident agent. The resident agent is either an individual Michigan resident whose business office or residence is the registered office, or a domestic or authorized foreign corporation or LLC with a business office there, and it is the person on whom process, notices and demands for the company may be served. MCL 450.4207(1)-(2).
Keeping the company in good standing after it is formed
The annual statement. LARA’s questions page says annual statements are filed online through the MiBusiness Registry Portal and, in its instructions for restoring good standing, puts the annual statement fee at $25 per missing year (revised Oct. 7, 2026, checked Oct. 28, 2026). The fee statute schedules a change for payments after September 30, 2027, MCL 450.5101(1)(g), so I confirm the number before filing.
What a missed statement costs. If a company misses the annual statement for two consecutive years, the administrator must notify it. If it does not file all the missing statements and pay the fees within 60 days after the notice is sent, it is not in good standing. It then cannot get a certificate of good standing, its name becomes available to another entity, and the administrator accepts no document from it except a certificate of restoration. It remains in existence and may continue to do business. MCL 450.4207a(2)-(4). The same page lists the restoration fee as $50.
Distributions and taxes. A distribution may not be made if, afterward, the company could not pay its debts as they come due in the usual course of business, or its total assets would be less than its liabilities plus certain superior preferential rights of other members. MCL 450.4307(1). I do not give tax advice, and tax questions belong with your CPA. For orientation only, a domestic LLC with one owner is by default disregarded as separate from its owner for federal tax, and one with two or more members is a partnership, unless it elects otherwise. 26 CFR 301.7701-3(a), (b)(1).
Mistakes and gaps I see in LLC paperwork
No operating agreement, or one that not every member signed. The statutory definition is a written agreement of all the members. Without one, the Act’s defaults decide votes, distributions and who can join, and they may not match what the owners thought they had agreed.
Articles that say one thing while the owners do another. The articles control whether the company is member-managed or manager-managed, and they put third parties on notice. If the articles name managers but the members run the company as equals, or the reverse, the two collide when a contract is signed or a vote splits.
Signing before the articles are effective. A lease, loan or supplier agreement signed in the company’s name before the state endorses the articles is the pattern in Duray. The person who signs generally becomes personally liable, and shifting the liability to the company depends on facts argued afterward.
Treating the company’s money as the owners’ money. Paying personal debts from the company account, or taking distributions the company cannot afford, builds the record a creditor will use.
The wrong entity form for a licensed profession. LARA’s LLC page says dentists, osteopathic physicians, physicians, surgeons, doctors of divinity or other clergy, and attorneys at law must form as a professional service LLC, which uses a different state form (CSCL/CD 701). Each member and manager must be licensed in one or more of the services the company renders. MCL 450.4904(1).
What happens if the formation is done wrong
Personal liability for a contract signed too early. In Duray, a man signed the articles of organization for a new excavation company on the same day he signed a contract on its behalf, but the state did not endorse the articles until about a month later. The Court of Appeals held that the company did not exist on the day of the contract. The trial court had held the man personally liable on the view that the de facto corporation doctrine could not apply to LLCs. The Court of Appeals reversed that ruling and held that the doctrine applies to LLCs, so the company, not the individual, was liable on that contract. 288 Mich. App. 143, 150-152, 159 (2010). Filing first and signing second avoids the argument.
Losing the liability shield. The starting rule is that a member or manager is not liable for the company’s acts, debts or obligations unless the law or an operating agreement provides otherwise. MCL 450.4501(4). Courts apply the rules for piercing a corporate veil to LLCs: the entity must be a mere instrumentality, it must have been used to commit a wrong or fraud, and the plaintiff must have suffered an unjust injury or loss. In Florence Cement Co. v. Vettraino, the Court of Appeals reversed a trial court that had refused to pierce, where the members ran the company as their own, left it undercapitalized and insolvent, and one falsified a sworn statement to a lender, leaving a contractor unpaid. 292 Mich. App. 461, 468-471 (2011). The court directed the trial court, on remand, to order the members to refund the unlawful distributions to the company so it could satisfy its obligation to the contractor. 292 Mich. App. at 477.
Personal exposure for distributions. A member or manager who votes for or assents to a distribution that violates the operating agreement or the distribution limits is personally liable, jointly and severally, to the company for the excess if the member or manager did not comply with the manager’s duties under section 404. A member who accepts a distribution knowing it is unlawful is liable for the excess received. The claim is barred unless commenced within 2 years after the date the effect of the distribution is measured. MCL 450.4308(1), (3), (5).
When a formation gap becomes a member dispute
Many member disputes start as a disagreement the paperwork should have settled. I represent members who bring these claims and members and managers who defend them.
Deadlock. A majority in interest means a majority of the votes held by members entitled to vote. MCL 450.4102(2)(n). With two members and one vote each, my reading is that a majority takes both votes, so a split approves nothing. An operating agreement can set a tiebreaker or a buy-sell process.
Manager duties. A manager must act in good faith, with the care an ordinarily prudent person in a like position would exercise, and in a manner the manager reasonably believes to be “in the best interests of the limited liability company.” Unless the operating agreement or a member vote provides otherwise, a manager must also account to the company for profit or benefit taken from a transaction connected with the company’s business or from personal use of its property. An action for failure to perform those duties must be commenced within 3 years after it accrues or 2 years after it is discovered or should have been, whichever occurs first. MCL 450.4404(1), (5)-(6). A deal in which a manager has an interest is not set aside merely because of the interest if the manager shows it was fair to the company, or that the material facts were disclosed and the disinterested managers or members approved it, unless the operating agreement says otherwise. MCL 450.4409(1).
Oppression and exit. A member may sue in circuit court to establish that the acts of the managers or members in control are illegal or fraudulent or are willfully unfair and oppressive conduct toward the company or the member. If the member establishes grounds, the court may order relief that includes dissolution, a purchase of the member’s interest at fair value, or damages. A damages action must be commenced within 3 years after accrual or 2 years after the member discovers or should have discovered the claim, whichever occurs first. The statute’s definition of willfully unfair and oppressive conduct excludes conduct permitted by the articles, an operating agreement or another agreement the member signed. MCL 450.4515(1)-(2). That exclusion is why the terms of the paperwork matter so much in these cases. A company is dissolved on events that include a unanimous vote of the members entitled to vote or a decree of judicial dissolution. MCL 450.4801.
How I handle an LLC formation
- Learn who the owners are and what they expect. I ask who is putting in money or work, who decides what, who signs, what happens if someone leaves, and what has already been signed or promised.
- Choose the structure and the name. We decide between member and manager management, I check whether a licensed profession requires a professional LLC, and I search the state’s records for the name.
- Draft the articles. I prepare the articles with the required items and any added provisions, and confirm the resident agent and registered office address.
- File and track the effective date. I confirm the current fee, submit the filing through the state, keep the endorsed copy and note the date the company came into existence. Nothing is signed in the company’s name before that date.
- Write the operating agreement. I draft an agreement every member signs that matches the articles and covers voting, management, distributions, new members, transfers, deadlock and exits.
- Set the calendar and tell you plainly where a gap is. I note the February 15 annual statement, the records to keep, any assumed name filing and the points for your CPA. If the paperwork leaves a risk, I say so.
What happens after the articles are filed
Once the state endorses the articles, the company exists, and filing is conclusive evidence that the conditions for formation were met, except in an action by the attorney general. MCL 450.4202(2). From there the work is the operating agreement, the member and manager records, contracts signed in the company’s name, and the annual calendar.
Later changes are state filings too. LARA’s questions page says a voluntary dissolution requires a certificate of dissolution and a tax clearance request to the Michigan Department of Treasury within 60 days of filing, and that a company not in good standing must restore good standing first (revised Oct. 7, 2026, checked Oct. 28, 2026).
What I need from you
Bring the full legal names and addresses of everyone who will own part of the company, what each person is contributing in cash, property or work, and any percentages the owners have discussed. Tell me who will manage the business and who may sign. Bring two or three name choices, the address you want for the registered office, and the person or business that will serve as resident agent. Bring any lease, loan or contract that has been signed or promised, the emails and texts among the owners about the deal, and, if an existing business is moving into the company, a list of its assets, debts and licenses.
Do not sign a contract in the company’s name before the articles are effective. Do not mix personal and company money. Do not sign an operating agreement copied from the internet without reading what it says about voting, transfers and exits. Do not promise anyone a share of the company by text until someone has checked it against the paperwork.
Where a dispute about your Michigan LLC would be heard
Forming an LLC is a state filing, not a court case. If a dispute does arise, I represent clients in Grand Rapids, Kentwood, Grandville, Wyoming and across Kent County. Under MCL 600.8301(1), the district court has exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000. Kent County district courts include the 61st District Court in Grand Rapids, the 59th in Walker and Grandville, the 62A in Wyoming, the 62B in Kentwood and the 63rd for Rockford, Lowell, Cedar Springs, East Grand Rapids and the surrounding townships. Larger claims are filed in the Kent County Circuit Court, the 17th Judicial Circuit. A member’s action under MCL 450.4515(1) is brought in the circuit court of the county where the company’s principal place of business or registered office is located. A dispute between businesses, or between a business and its owners, managers, suppliers or similar parties, can qualify as a business or commercial dispute under MCL 600.8031, which defines the cases eligible for a business court docket.
Why people hire me for a Michigan LLC formation matter
You work directly with me, the lawyer handling your matter. I give you the strengths and weaknesses of your paperwork straight, including the gaps that could cost you later. I build the structure the facts support, and then we decide together how to proceed.
Fees depend on the type of matter, its complexity and whether a dispute is likely. I explain my fee arrangement at the consultation, before you decide whether to hire me.
Questions I hear from people starting an LLC in Michigan
Do I have to live in Michigan to form a Michigan LLC?
The Michigan LLC Act does not appear to include a residency requirement for organizers or members. One or more persons, a term that includes individuals and other legal entities, may organize an LLC by filing articles of organization. Michigan does require a registered office in the state and a resident agent, who is either an individual Michigan resident at that address or a qualifying entity with a business office there. Taxes, licenses, and registration elsewhere can still turn on where you live and work.
How much does it cost to form an LLC in Michigan, and can it be rushed?
The statute currently sets the state fee for articles of organization at $50. Expedited filing costs extra: $50 for a formation document filed within 24 hours, $100 same day, $500 within 2 hours, and $1,000 within 1 hour. If veterans will hold a majority of the initial membership interests, the articles fee can be waived with an affidavit and discharge papers.
What are the rules for naming an LLC in Michigan?
A Michigan LLC name must include “limited liability company,” “L.L.C.” or “L.C.” (a low-profit LLC uses its own designator). It cannot include “corporation,” “incorporated,” “corp.” or “inc.” It also has to be distinguishable from other names on the state’s records. You can reserve a name for the rest of the month of the application plus six full calendar months.
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.
If our LLC has no operating agreement, how are votes counted?
For an LLC with no operating agreement provision on voting, each member has one vote, regardless of how much each put in. Matters put to a member vote pass by a majority in interest of the members entitled to vote. Some decisions, such as dissolving, merging, amending the articles, or converting, belong to the members rather than managers.
What is the difference between a member-managed and a manager-managed LLC in Michigan?
A Michigan LLC is member-managed unless the articles of organization say managers run the business. In a member-managed LLC the members act as the managers. In a manager-managed LLC, the articles name that structure, and the managers, who need not be members, handle management under the operating agreement.
Can a manager or member sign contracts that bind a Michigan LLC?
Usually yes for a manager, and for a member of a member-managed LLC. A manager is the company’s agent, and an act that apparently carries on the business in the usual way, including signing in the LLC’s name, binds the company. The exception applies only if the manager lacked authority and the other party actually knew it, or the articles or the Act show the lack of authority.
I signed a contract for my business before my LLC was formed. Am I personally liable?
You can be. A Michigan LLC comes into existence when its articles of organization take effect, and the Court of Appeals has said a person who signs for a company that does not yet exist generally becomes personally liable on the contract. The company can be held liable instead if it later ratifies or adopts the contract, or if a court applies the de facto corporation or corporation by estoppel doctrines, which the court said can apply to LLCs. The safer course is to file first and then sign in the LLC’s name.
Related Michigan pages
- Grand Rapids Business Formation Attorney
- Operating agreements and managing an LLC
- Grand Rapids Business Entity Choice Attorney
- Grand Rapids Corporation Formation Attorney
- LLC member and shareholder disputes
- Michigan LLC Member Disputes: Buyouts and When to Sue
- Running an LLC, Owner Exits and Dissolution in Michigan
- Forming an LLC and operating agreements in Michigan
I help Michigan business owners form limited liability companies and put operating agreements in place. Contact me 24/7 by phone or email. Your Rights, My Fight! Call for a free initial consultation.
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Law Offices of Mitchell S. Bisson, 2828 Kraft Ave SE, Suite 295, Grand Rapids, MI 49512, serving Kent County and West Michigan.
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.