How to Start a Hair Salon in Michigan: LARA Establishment License and Booth Rental Rules

Opening a hair salon in Michigan involves two separate sets of paperwork that new owners often mix up. The first is the business entity, an LLC, corporation or sole proprietorship filed with LARA or your county clerk. The second is the cosmetology license for the salon itself, issued by the Michigan Department of Licensing and Regulatory Affairs (LARA) through its Bureau of Professional Licensing. Every stylist who works in the salon also needs an individual license. This guide covers the steps in the order you should take them, the fees we could verify, and the items you need to confirm with the agency before you sign a lease.

This article is informational content, not legal or tax advice. Entity, tax and booth rental decisions depend on your specific facts, so consult a qualified Michigan attorney and a CPA before you finalize them.

Michigan has no general business license, so know which license you need

Michigan does not issue a general statewide business license. LARA's Corporations Division receives, reviews and files the documents that form and maintain a business entity, but it does not license businesses. Registering an LLC or corporation through the MiBusiness Registry is a filing, not a license. Michigan licenses by trade or activity instead. For a hair salon, that means the LARA Bureau of Professional Licensing, which issues the cosmetology establishment license. Counties and municipalities can add their own zoning, occupancy and health requirements.

LARA directs new owners to its State License Search to check whether their business needs a license. Run your business activity through that search before you commit to a lease, then confirm the answer with the Bureau.

What you need before you start

Gather these items first. Most delays in the process come from missing a document, not from the state's review.

• A business name that is available on the MiBusiness Registry business search. An LLC name must include "Limited Liability Company" or "LLC," "L.L.C." or "L.C."
• A Michigan resident agent and a registered office address. The registered office is a physical location. A P.O. box alone is not sufficient, and it does not have to be the salon.
• The formation document for your structure: Articles of Organization for an LLC, or Articles of Incorporation for a corporation.
• A floor plan of the salon showing the layout of the space.
• Your hours of operation.
• A list of the services you plan to offer.
• A federal Employer Identification Number (EIN) from the IRS, which you will need for payroll and most business bank accounts.
• A credit or debit card for LARA and MiPLUS fees.
• The name and cosmetology license number of every stylist, esthetician or manicurist who will work in the salon, or a plan to get each one licensed.

Step 1: Choose your business structure and file with the right office

Your structure decides which office you file with and what it costs. For a salon, the two most common choices are an LLC and a corporation. The main filing options are:

1. LLC. File Articles of Organization (Form CSCL/CD-700) with LARA. The filing fee is $50. Michigan calls the registered agent a resident agent, and the resident agent must be named in the Articles.
2. Corporation. File Articles of Incorporation for Profit Corporation (Form CSCL/CD-500) with LARA. The filing fee is $60.
3. Sole proprietorship or general partnership. File an assumed name certificate with the county clerk in each county where you do business. Sole proprietors do not file with LARA. County fees are set by statute and by each county clerk, so confirm the amount with your county before you file.

If you operate under a name different from your entity name, you may also need a Certificate of Assumed Name (Form CSCL/CD-541) with LARA. The fee is $25 for an LLC and $10 for a corporation or limited partnership. The certificate is effective through December 31 of the fifth full calendar year after the year it was filed.

LARA does not publish a guaranteed standard review time for routine filings. If you need a faster result, optional expedited review is available on top of the filing fee, using Form CSCL/CD-272:

• 24-hour review of a formation document: $50 extra
• Same-day review of a formation document: $100 extra
• Two-hour same-day review: $500 extra (the document must be received by 3 p.m.)
• One-hour same-day review: $1,000 extra (the document must be received by 4 p.m.)

Expedited review speeds up LARA's review of the filing. It does not speed up the salon license inspection in Step 4, so do not treat it as a way to open sooner.

Step 2: Reserve your name if needed and set up the resident agent

If you need time before filing, you can hold a name with a Name Reservation (Form CSCL/CD-540). The fee is $25, and the reservation lasts six months following the month of filing. The reservation does not replace the formation filing.

Your resident agent must be a Michigan resident, a Michigan corporation, a foreign corporation with a certificate of authority to transact business in Michigan, a Michigan LLC, or a foreign LLC authorized to transact business in Michigan. If you later change the resident agent or registered office, file a change on Form CSCL/CD-520.

Step 3: Apply for the cosmetology establishment license

The salon itself needs its own license from the LARA Bureau of Professional Licensing. The license covers a salon, a mobile salon or a cosmetology suite. Apply online through MiPLUS, LARA's online licensing system. Your application includes:

• A floor plan of the establishment
• Your hours of operation
• The services you will offer

The application fee is $75. That payment covers both the application and a 2-year license. Write down the exact expiration date when the license is issued, because the renewal window depends on it.

Do not confuse this with the barbershop fee. LARA lists an $80 figure for barbershop renewal. That is a different license for a different business type. It does not apply to your salon application, so do not budget with it or quote it to your landlord.

Step 4: Clear the pre-license inspection before you open

A pre-license inspection is required for a cosmetology establishment. You cannot conduct business until the inspection is complete and the license has been issued. That means no paid client appointments, no soft openings with paying customers and no staff working on clients before both steps are done.

Plan the inspection around your lease start date and your build-out schedule. Have the space finished, equipped and cleaned before you request the inspection. An inspection of an unfinished room often means a second visit, and the timing of that visit is set by the inspector's calendar, not by yours. Confirm how to request the inspection through MiPLUS or the Bureau when you submit your application.

Step 5: Set up the shampoo area, first aid kit and sanitation

The establishment rules require a shampoo bowl, a first aid kit and sanitation practices that the inspector will check. This guide does not specify the number of bowls, the first aid kit contents or the exact sanitation procedures, so pull the current rules from the Bureau before you order fixtures. Ask the inspector to walk you through the checklist if the rules are not clear to you.

Build the sanitation setup into your layout from the start. Adding a sink or moving a plumbing line after the build-out is expensive, and it can delay your inspection. Put sanitation supplies, a sealed station for implements and a first aid kit in your floor plan so the inspector can see them where you said they would be.

Step 6: Understand the booth rental rules

Booth rental is where many new salon owners get caught between licensing and tax questions. Keep the two issues separate.

The licensing rules are firm. Services are performed only in a licensed establishment or school. Each cosmetologist, esthetician or manicurist working in your salon needs an individual license, and those licenses must be posted. A booth renter who works in your salon needs their own individual license. Your establishment license does not cover them. Do not let anyone work a chair until you have confirmed that person's license is current.

The tax and classification questions are not settled by this guide. How a booth rental arrangement is treated for payroll and tax purposes, whether as rent, as an employee relationship or as independent contracting, depends on the terms of your agreement and on the facts of how the stylist works. Confirm the treatment with the Michigan Department of Treasury and with your CPA before you sign. Your attorney can draft the agreement so that it reflects how the business actually runs.

A written booth rental agreement should address, at a minimum:

• The license number each renter holds and the date you verified it
• Who supplies products, equipment and cleaning supplies
• Who sets prices, hours and booking
• How client records and retail sales are handled
• Who is responsible for sanitation at each station
• The rent amount, the payment schedule and any tax handling your CPA recommends

Step 7: Clear local zoning, occupancy and health approvals

State licensing does not replace local approvals. Michigan has 83 counties, about 275 to 280 cities, about 255 to 258 villages and 1,240 townships. Each one can set its own zoning rules, certificate of occupancy requirements and health approvals. Before you sign a lease, ask the city or township whether the address is zoned for a personal services business and what occupancy approval the space needs.

Also check the local income tax question. City income tax exists in only 24 Michigan cities. If your salon sits in one of them, plan for that tax with your CPA. If it does not, you will not owe a city income tax on this basis. Confirm the status of your city before you finalize your budget.

Step 8: Register for the taxes that apply to your business

Michigan treats the taxes for each entity type differently. Here is how the main pieces fit together:

• Sales tax. If you sell retail products such as shampoo, styling products or tools, register for a sales tax license with the Michigan Department of Treasury. The registration is free. The state sales tax rate is 6%, and the license can arrive in as little as 7 business days. Confirm with Treasury whether your services are subject to sales tax, because the answer is not part of this guide.
• LLC income tax. A standard LLC is a pass-through entity. Members report the income on the Michigan individual income tax at the flat 4.25% rate for the 2026 tax year. An LLC that elects federal C corporation treatment is subject to the 6% Michigan Corporate Income Tax. Michigan also offers an elective Flow-Through Entity Tax.
• Franchise tax. Michigan imposes no franchise tax. The only recurring LARA charge for an LLC is the annual statement.

Your Treasury registration and your tax elections should be set with your CPA before you open. Register for the online business tax account at Michigan's online business registration page, and use the Department of Treasury tax page to confirm which other taxes and withholding rules apply.

Renewals, relicensure and what voids your license

The establishment license is not permanent. The renewal fee is $50 every 2 years. You can renew no sooner than 90 days before the license expires. LARA allows a 60-day grace period after expiration, so check how it is counted on your renewal notice. If you miss that window, relicensure after a lapse costs $95.

Two events void the license, and each one requires a new application:

• A sale or transfer of the salon. If you sell the business or transfer ownership, the existing license does not carry over to the new owner.
• A change of location. Moving the salon to a new address voids the license. This does not apply to mobile salons, but it applies to a salon, a cosmetology suite and any fixed establishment.

Build these rules into your lease and purchase planning. A lease that lets you relocate in the first two years can be expensive if a move voids a license you have already paid for.

Fee summary

The table below lists the costs covered in this guide. Confirm every item on the agency page before you budget, because fees change and this guide is not a fee schedule.

Item	Agency	Cost	Notes
LLC Articles of Organization	LARA Corporations Division	$50	Expedited review costs extra
Corporation Articles of Incorporation	LARA Corporations Division	$60	Expedited review costs extra
Name Reservation	LARA Corporations Division	$25	Holds the name for six months after the month of filing
Assumed name certificate (LLC)	LARA Corporations Division	$25	Corporations and limited partnerships pay $10
Cosmetology establishment application	LARA Bureau of Professional Licensing	$75	Covers the application and a 2-year license, filed through MiPLUS
Establishment renewal	LARA Bureau of Professional Licensing	$50	Every 2 years, no sooner than 90 days before expiry
Relicensure after a lapse	LARA Bureau of Professional Licensing	$95	Applies after the renewal window closes
LLC Annual Statement	LARA Corporations Division	$25	Due February 15 each year
Corporation Annual Report	LARA Corporations Division	$25	Due May 15 each year
Sales tax registration	Michigan Department of Treasury	Free	Required if you sell retail products
Individual stylist license	LARA Bureau of Professional Licensing	Confirm on the Bureau fee schedule	Each stylist, esthetician or manicurist needs one

Common mistakes to avoid

• Treating the LLC filing as your license. The LARA filing creates the entity. It does not authorize you to perform services.
• Opening before the inspection clears. No business can be conducted until the inspection is complete and the license is issued.
• Signing a lease before checking zoning and occupancy. A space that cannot get local approval can cost you the deposit and the build-out.
• Using a P.O. box as the registered office. A P.O. box alone is not sufficient.
• Using the barbershop fee in your budget. The $80 figure belongs to a different license.
• Letting an unlicensed stylist work a chair. Every stylist needs an individual license, and booth renters are no exception.
• Assuming a booth rental agreement settles the tax question. The classification needs review by your CPA and confirmation with Treasury.
• Moving or selling without a new application. Either event voids the license.
• Forgetting the renewal window. Renewal opens 90 days before expiry, and a lapse adds the $95 relicensure fee.

What to expect from this process

Owners who file in the order above often find that the inspection and the build-out, not the state filings, control the opening date. The filings can move quickly when you use expedited review, but LARA does not publish a guaranteed review time, and the inspection depends on the inspector's schedule. Plan the lease and the opening date so that you have room for an inspection, and avoid committing to client appointments or staff start dates until the license is in hand.

A carefully prepared application may help reduce the number of corrections you receive, and a complete floor plan may help the inspection go more smoothly. Results depend on your specific space, your local approvals and the agency's workload at the time you file.

Next steps

1. Run your business through the LARA State License Search and confirm the Bureau's requirements.
2. Check your name on the MiBusiness Registry and file your entity with LARA, or your assumed name with your county clerk.
3. Confirm zoning, occupancy and health approvals with your city, township or county before signing a lease.
4. Submit the establishment application through MiPLUS with your floor plan, hours and services.
5. Schedule the pre-license inspection and do not open until the license is issued.
6. Put each stylist's individual license on file, and have your attorney and CPA review every booth rental agreement.

Michigan's Michigan Small Business Development Center can help you think through the business plan and budget before you file. For the tax and booth rental questions, your CPA and an attorney are the right people to ask.

This article is informational content, not legal or tax advice. Verify every fee, deadline and requirement with LARA, the Department of Treasury and your local government before you act, and consult a qualified attorney and CPA for your situation.