Posted August 15, 2021|
Thinking of starting a new business? Congratulations! One of the first things you will need to do is choose how you want to structure your business, as a Sole Proprietor/DBA, a Limited Liability Company (LLC), or a Corporation.
For many businesses, forming an LLC is the easiest and most flexible structure. LLCs provide personal asset protection, which shields you, the business owner, from being personally liable for business debts, losses, or legal issues.
If you Google “File an LLC in Michigan,” you will be directed to several links of companies that are happy to register the “Articles of Organization” for your LLC — for a fee. Hiring a lawyer is another option, but that will often cost hundreds, if not thousands, of dollars for them to complete.
Fortunately, this is something you can DIY, especially if you are a single-member (owner) LLC with no employees. Following are the instructions and links on how to register your LLC.
Step-by-Step Guide to Registering Your LLC
The first step is checking to see if your company name is available. You can search here.
As an example, let’s say you are opening a new ice cream store that you would like to call “Happy Michigan Ice Cream.” If you do a search for just “Michigan Ice Cream” you will see that name is already taken, but by adding “Happy” to the title, you can successfully register your new business.
You will go to the Michigan Department of Licensing and Regulatory Affairs (LARA) website to register your site. Click here for the link. On this page, you will choose “Domestic Limited Liability Company: 700 — ARTICLES OF ORGANIZATION.”
You will then be sent to the “Articles of Organization” form. This may look confusing, but it is a pretty easy process.
The most important piece of information is Article I — the name of your company. You will want to add LLC (no punctuation) at the end of the company name. Most companies can skip Articles II and III and go right to Article IV, resident agent. If you do not have a business address yet, you can use your home address. You will then need to enter the address again. Please note that your address will be public.
You can now skip down to the signature of the organizer, and select the button “Add new entry to this list.” You will add your name as the organizer and choose the “accept” radio button. Then click “add.”
You will then put in your name and address — again. Make sure that the business name is identical to the name in Article I. For the email, you can use either personal or business — this is how LARA will contact you on the status of your LLC. Note that you will need to add your email twice, both for “Contact Email” and “Delivery Method for Statutory Services.”
If you need your LLC in less than two weeks, you can choose to pay extra for expedited services. This is in addition to the $50 filing fee.
Click the “Review” button at the bottom of the page and make sure all the information is correct.
After you review and click “Submit Filing,” you will be directed to the payment section. Here you will click “Enter credit card details” to pay your $50 filing fee. You will receive a confirmation screen when your payment goes through.
And that is it. In seven to 10 business days, you will receive a confirmation that your Articles of Incorporation have been accepted, and you are officially an LLC. You will also receive instructions on how to log into your account with LARA to make any changes and keep your LLC account current. If you are a multi-member (owner) LLC, it is best practice to create an operating agreement for your business. This establishes each owner’s percentage of ownership in the LLC, dictates how your LLC will be managed, sets expectations and responsibilities for each owner, and mandates what will happen to the business if one of you leaves.
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Liz Hoffswell is a certified business consultant for the Michigan Small Business Development Center, which is based at the GVSU Seidman School of Business in Grand Rapids. She has more than 25 years of experience in management, operations, finance, sales, and marketing, working with organizations of all sizes. Additionally, Hoffswell is a serial entrepreneur and has started several small businesses throughout her career.