Michigan, a state known for its strong and ethical working force has always been a good choice for many people around the U.S. to start their own business. It hosts some spectacular natural scenery, as it’s the only state to touch all four of the five great lakes. In 2019 alone, the state reported an additional 55,325 new jobs created during the physical year, enabling the state to quickly become more business-friendly for both residents and non-residents.
Small-medium businesses have seen a great deal of popularity over the last few decades, with the rise of LLC business registrations via the Secretary of State. Limited Liability Company’s or LLCs have become very prevalent among new and upcoming business owners, as it offers more liability and personal asset protection than owning and operating a sole proprietorship.
Why start an LLC in the state of Michigan?
The state has seen a slow rise in economic activity, and between 2016 and 2017, as normal economic growth was on a positive track. LLCs have become widely popular, as it can offer owners the benefit of operating a business as a separate entity from their assets. The state, just like many other states in the U.S. has made the formation process easier and more convenient.
Their ease of set-up has enabled more entrepreneurs and business owners to start and register a newly formed LLC. Not only is it easy, but the state offers a low 6% corporate tax on LLC businesses, which in more time has become very attractive.
How do LLCs impact the state economy?
Around 870,000 small businesses have been recognized by the state department and have seen a significant rise in economic and employment growth. Small-medium businesses, whether registered as an LLC or corporation, have in some ways become a key player in the state’s relatively large trading and commerce economy. If you have a great business idea, but running short on resources, in 2017, Michigan reported around 145,529 loans approved to business owners and small startups.
What are the requirements to form an LLC in Michigan?
Forming a Michigan LLC is straightforward, without many layers of complex and legal filing needed throughout. If you’re considering starting an LLC in the Wolverine State, take a look at our detailed guidelines online.
Step One. Give your LLC the right name by finding or registering a suitable name for your LLC. A simple online Google search will tell whether or not your business name idea has been used or not. In some cases, the state allows new owners to “book” their desired name with the state treasury before it gets used.
Step Two. Find a registered agent who can receive all legal documents for your LLC between the state and federal entities. This registered agent will be responsible for filing and receiving many important legal and formation processing documents for the business.
Step Three. Submit LLC articles of organization, with either a business lawyer, formation service provider, or perhaps on your own. It’s relatively straightforward and will take a couple of days before being returned.
Step Four. Establish and form an Operating Agreement between involved individuals of the LLC and the state of Michigan. This agreement will have to outline each participating member and their active role in the business, protecting each individual against business lawsuits and financial instability.
Step Five. You have to register for an Employer Identification Number (EIN) with the IRS on their website. To hire staff, open a business bank account, and register for state and federal taxes, you’ll be required to have an EIN.
In final thought, the state has many easy features and tax benefits that have made it more worthwhile to start a new LLC. There’s also the fact that the great endorsement and support for the state government allows for better operation and business loan support.