How to Start a Business in Michigan
Everything you need to form your Michigan LLC, corporation, or sole proprietorship, with exact fees, timelines, and step-by-step instructions.
Michigan charges $50 to form an LLC. LLCs report their income at Michigan's flat 4.25% individual income tax rate with no state franchise tax. The annual reporting fee is $25, due by February 15 each year.
This guide covers every step from choosing a business structure to obtaining required licenses.
Choosing Your Michigan Business Structure
This is the first decision and it affects everything: taxes, liability, paperwork. If you are unsure, an LLC is the right default for most Michigan small businesses.
| Entity Type | Liability Protection | Taxation | Michigan Filing Fee | Annual Cost | Best For |
|---|---|---|---|---|---|
| LLC | Yes | Pass-through | $50 | $25 Annual Statement (Form CSCL/CD-2700) | Most small businesses |
| Corporation | Yes | Double (C-Corp) or pass-through (S-Corp) | $60 | $25 Annual Report (Form CSCL/CD-2500) | Raising investment, stock options |
| Sole Proprietorship | No | Pass-through | $0 | $0 | Freelancers, side hustles |
| Partnership | No | Pass-through | $0 | $0 | 2+ owners (consider an LLC instead) |
8 Steps to Start Your Michigan Business
- 1
Choose your business structure
LLC, corporation, or sole proprietorship. Each has different costs, tax treatment, and liability protection.
- 2
Pick and reserve your business name
Search the Michigan Department of Licensing and Regulatory Affairs (LARA), Corporations, Securities and Commercial Licensing Bureau, Corporations Division database. Reserve for $25 (six months following the month of filing).
- 3
Appoint a registered agent
Must have a physical Michigan street address. Can be yourself (free) or a service ($100 to $300 per year).
- 4
File your formation documents
Articles of Organization (Form CSCL/CD-700) ($50) or Articles of Incorporation for Profit Corporation (Form CSCL/CD-500) ($60) with the Michigan Department of Licensing and Regulatory Affairs (LARA), Corporations, Securities and Commercial Licensing Bureau, Corporations Division.
- 5
Get your EIN from the IRS
Free, online, takes about 5 minutes. Do not pay anyone for this.
- 6
Register for a sales tax permit if you sell goods
Through the Michigan Department of Treasury. State sales tax rate: 6%.
- 7
Get required licenses and permits
Michigan has no single general statewide business license.
- 8
Register for Michigan taxes
Personal income tax: 4.25% flat rate for the 2026 tax year.
How Much Does It Cost to Start a Business in Michigan?
| Item | Cost | Notes |
|---|---|---|
| LLC filing fee (Michigan Department of Licensing and Regulatory Affairs (LARA), Corporations, Securities and Commercial Licensing Bureau, Corporations Division) Required | $50 | LARA does not publish a guaranteed standard review time for routine filings. |
| Corporation filing fee Required | $60 | If forming a corporation instead |
| Annual Statement (Form CSCL/CD-2700) Required | $25 | February 15 each year, beginning the year after formation. |
| Name reservation | $25 | six months following the month of filing |
| Registered agent service | $0 to $300/yr | Free if you serve as your own |
| EIN (IRS) Required | $0 | Always free |
| Business license | Varies | Michigan has no single general statewide business license. |
| Operating agreement | $0 to $500+ | Free template or attorney-drafted |
| Realistic LLC total (year 1) | $50 to $375 |
Start a Specific Business in Michigan
Michigan Business Guides
- How to Start an LLC in Michigan
- How to Start a Corporation in Michigan
- Sole Proprietorship in Michigan: How to Start One
- Michigan Business License: What You Need and How to Get It
- Michigan Home-Based Business Laws: Zoning, Permits and Rules
- How to Get an EIN in Michigan
- Michigan Business Name Search: How to Check and Reserve a Name
- How to Get a Resale Certificate in Michigan
- Michigan Registered Agent: Requirements and How to Choose One
- Best LLC Services in Michigan
- Michigan Business Taxes Explained for New Owners
- How Much Does It Cost to Start a Business in Michigan
Why Start a Business in Michigan?
- Filing Articles of Organization for a Michigan LLC costs $50, among the lower state formation fees in the country.
- Ongoing state maintenance for an LLC is a $25 annual statement due February 15; corporations pay a $25 annual report due May 15.
- Michigan levies a flat 4.25% individual income tax for the 2026 tax year, so pass-through LLC income is taxed at a single rate rather than a graduated one.
- Sales tax is 6% statewide and Michigan does not allow city or local sales taxes to be added on top.
- C corporations pay a 6% Corporate Income Tax, and Michigan lists no franchise tax among its business taxes.
- Michigan is the 10th most populous state, with 10,127,884 residents as of July 1, 2025, giving in-state businesses a large domestic customer base.
Michigan Business Resources
Frequently Asked Questions
- How long does it take to form an LLC in Michigan?
- The Michigan Department of Licensing and Regulatory Affairs does not publish a guaranteed processing time for routine filings. Expedited review is available for a $50 fee to have your formation document reviewed in 24 hours.
- What does it cost to start an LLC in Michigan?
- The filing fee is $50. You will also owe a $25 annual statement, due each February 15 beginning the year after formation.
- Can a non-resident form an LLC in Michigan?
- Yes. Michigan does not impose a residency requirement for LLC formation.
- What is the cheapest way to start a business in Michigan?
- Form a limited liability company. The LLC filing fee is $50, compared to $60 for a corporation. Michigan does not require a general business license, and sales tax registration is free.
- Is an operating agreement required for a Michigan LLC?
- No. Michigan requires Articles of Organization for LLC formation but does not require an operating agreement.