How to Start a Residential Building or Remodeling Business in Michigan: Builder and M&A License

If you want to build homes or remodel houses in Michigan, the first question is not how to form your company. It is which state license your work requires. This guide covers the two residential license categories issued by the Bureau of Construction Codes at LARA, the Builder and Maintenance and Alteration (M&A) licenses, plus the filings and local approvals you will need before and after the state approves you.

Informational content only. This article is general information, not legal or tax advice. Licensing rules, fees and deadlines change. Confirm every figure with the agency named before you spend money or sign a contract. For a complex ownership structure, a licensing dispute or a tax question, talk to a qualified Michigan attorney or CPA.

Start with the license question: Builder or M&A

Michigan sets its residential licensing rules in Article 24 of the Occupational Code (MCL 339.2401 et seq.). The category you hold decides what work your company may legally perform, so pick the category before you spend money on anything else.

Item	Builder license	M&A license
What it covers	Building and altering residential structures	Only the trades named on the license
Trades available	Whole residential structure work	Carpentry, concrete, pools, basement waterproofing, excavation, insulation, masonry, roofing, siding and gutters, screens and storm sash, tile and marble, house wrecking
Typical fit	A company that manages whole-house new construction or full remodels	A company that does one or more specific trades, such as roofing or basement waterproofing

Two rules shape this choice. First, ask BCC whether the same person or company can hold both licenses. If you want builder and M&A coverage under one roof, ask BCC how that can be structured before you commit to a company setup. Second, an M&A license only covers the trades printed on it. A roofer with an M&A license cannot take on a tile job as its own trade unless tile is on the license, although work in another trade that is incidental and supplemental to the licensed trade is allowed (MCL 339.2404(3)).

Michigan has no general statewide business license

If you searched for a general contractor license Michigan or a general contractor license MI, you may have expected one statewide credential that covers every kind of building work. Michigan does not issue one. The closest state credential for home work is the builder license described above.

LARA states that its Corporations Division does not license businesses. The division receives, reviews and files the documents that form and maintain a business entity. Registering an LLC or corporation on the MiBusiness Registry is a filing, not a license. Licensing happens by trade or activity, through agencies such as the Bureau of Construction Codes, the Bureau of Professional Licensing and others. LARA directs new owners to its State License Search to check whether their activity needs a license.

For commercial work, Michigan has no state license for commercial general contracting. Check with the city or county where the project sits, because local rules fill that gap.

What you need before you start

Gather these items before you file anything. Most delays happen when an owner starts an application and then discovers a missing document.

• A business name that is available on the MiBusiness Registry business search, and a plan for whether you will reserve it
• Your choice of business structure: sole proprietorship, general partnership, LLC or corporation
• Records showing you completed 60 hours of approved prelicensure education
• The name of the individual qualifying officer who will stand behind the company's license
• A Michigan place of business for the company
• A Michigan resident agent, or a qualifying Michigan entity or foreign entity, and a registered office with a physical street address
• The $195 license application fee and a way to pay it
• A scheduled PSI exam, once BCC confirms you are eligible to sit for it
• A list of the cities, townships and counties where you plan to work, with the permit contacts for each
• Your calendar for the recurring state filings and the $150 renewal fee, due every 3 years

Step-by-step: how to get licensed and set up the business

Step 1: Pick the license category that matches your work

List the work you plan to sell in your first year. If your jobs are whole-house builds or full remodels that involve several trades, the builder license is the match. If you only perform specific trades, the M&A license is the match, and every trade you plan to offer must appear on it. Write down the list now. Adding a trade later is a change you will need to work through with BCC, so do not assume it is a simple update.

Step 2: Confirm that your job needs a license

A license is needed unless the total contract price for one project is under $600 or another statutory exemption applies, such as an owner working on their own home. The threshold is per project, not per invoice. Splitting one job into several smaller contracts to stay under $600 does not count, under MCL 339.2403(f). If you are close to the line, treat the job as licensed work and talk to BCC before you quote it.

Step 3: Complete 60 hours of approved prelicensure education

The license requires 60 hours of approved prelicensure education. Do not enroll in a course because it is labeled for contractors. Confirm with BCC that the provider and the course are approved, then keep the completion records. Those records feed into your application.

Step 4: Pass the PSI exam

Michigan's licensing exam for this category is administered through PSI. Ask BCC how to register and what to bring to the test site. Study the building code and the trade rules that match your license category. Plan a retake window in your schedule, because a failed attempt delays the license just as much as a missing form does.

Step 5: Form the business and set its name

Your legal structure controls which state filing comes next. Here is how each option works in Michigan.

• LLC: File Articles of Organization (Form CSCL/CD-700) with LARA. The filing fee is $50. The name must include Limited Liability Company, L.L.C. or L.C. Optional name reservation (Form CSCL/CD-540) costs $25 and holds the name for six months following the month of filing.
• Corporation: File Articles of Incorporation for a Profit Corporation (Form CSCL/CD-500). The filing fee is $60.
• Sole proprietor or general partnership: You do not file with LARA for the entity itself. You file an assumed name certificate with the clerk of each county where you do business, under MCL 445.1.

Every LLC and corporation must name a resident agent in its formation document. Michigan calls this a resident agent. The agent must be a Michigan resident, a Michigan corporation or LLC, or a foreign entity authorized to transact business in Michigan. The registered office is a physical location, and a P.O. box alone is not sufficient. Changes are filed on Form CSCL/CD-520.

Register the entity with the Corporations Division first. BCC's FAQ says a new LLC, corporation or partnership is a new legal person that needs its own company license application, while a sole proprietor may operate under an individual license.

Step 6: Name the qualifying officer and the Michigan place of business

A company needs its own license, plus an individual qualifying officer named on the application. The qualifying officer is the person the state holds responsible for the company's licensed work. The qualifying officer must also hold an active individual builder or M&A license (MCL 339.2405(1)). Confirm with BCC what else that individual must show. Then confirm the Michigan place of business requirement. If you plan to run the company from a home office, ask BCC directly whether that location qualifies before you list it on the application.

Step 7: Submit the application and pay $195

Submit the license application with the $195 fee, the education records and the qualifying officer information. Keep a complete copy of everything you send. BCC timelines can vary. Ask BCC for the current processing time, and do not set a start date for paid jobs until the license is issued.

Step 8: Check the bond requirement with BCC

Ask BCC whether a bond is required for the license category you are applying for, and get the answer in writing. Do not assume a bond is required or that it is not. Call BCC at 517-241-9316 with the license category and business structure in hand, because the answer can depend on those details.

Step 9: Get the local permits and approvals

Permits are local. A state license does not replace a building permit from the city, township, village or county where the work happens. Michigan has 83 counties, about 1,240 townships, and several hundred cities and villages, so the process changes from one jurisdiction to the next. Ask each local building department about:

• Building and trade permits for each job type
• Zoning compliance for the work and for any home office or shop
• Certificates of occupancy when the work changes how a structure is used
• Health approvals where the work touches water, sewer or food-related spaces
• Any local business license or registration, which is separate from the state license

If the company's office sits in one of the 24 Michigan cities that levy a city income tax, ask that city how the tax applies to your business.

Step 10: Register your taxes

The tax treatment depends on how the business is organized. A standard LLC is a pass-through entity. Its members report the income on their Michigan individual income tax return 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 imposes no franchise tax on LLCs, and the main recurring LARA filing is the annual statement covered in Step 11. Michigan also offers an elective Flow-Through Entity Tax. Ask a CPA whether it fits your business.

Retailers must register separately with the Michigan Department of Treasury for a sales tax license. The registration is free and can arrive in as little as 7 business days. Confirm with Treasury whether any part of your work makes you a retailer, and register online through the Treasury business registration page if it does.

Step 11: Calendar the recurring filings and the renewal

Set reminders for each deadline before you start taking jobs.

• LLC Annual Statement (Form CSCL/CD-2700): $25, due each February 15, beginning the year after formation. An LLC formed or qualified after September 30 does not owe a statement on the February 15 immediately following.
• Corporation Annual Report (Form CSCL/CD-2500): $25, due each May 15, beginning the year after incorporation. If the report is late, the total due rises on a published schedule, from $35 for filings from May 16 to May 31, up to a $75 maximum on or after September 1.
• License renewal: $150 every 3 years, using the 2026 figure. Confirm the amount with BCC before you pay.

Expected results

Following these steps in order may leave you with a state license in the category you chose, a properly named entity, and a list of local approvals you can use to bid on the work your license covers. You may also find that the process takes longer than you planned, because agency timelines are not fixed and local permits vary.

Expedited options exist for LARA filings, and they cost extra. For formation documents, LARA lists a 24 hour review for $50, same day review for $100, two hour review for $500 (received by 3 p.m.) and one hour review for $1,000 (received by 4 p.m.). Expedited review speeds up the LARA step only. It does not speed up BCC, local permits or your exam schedule. The license does not guarantee customers, and it does not replace the permits, insurance and contract work that a residential business needs.

Common mistakes to avoid

• Splitting one job to stay under $600. The state does not count it as a separate project under MCL 339.2403(f).
• Assuming the builder license covers M&A trades, or the reverse. Each category has its own scope, so ask BCC before you assume one covers the other.
• Listing a P.O. box as the registered office. The registered office must be a physical location.
• Choosing an LLC name without the required ending. The name must include Limited Liability Company, L.L.C. or L.C.
• Treating the state license as a permit. Local building permits are separate, and you need them for each job.
• Skipping the bond question. Ask BCC directly, and keep the answer in your file.
• Missing the annual filing. An unfiled annual statement or report creates problems with LARA, so calendar the February 15 and May 15 deadlines when you form the entity.
• Starting paid work before the license is issued. Confirm the license status with BCC before you quote a job as licensed work.

Tips from the filing trenches

• Call the local building department before you buy materials for a new market. Each city and township may ask for different documents.
• Keep one folder with every license, filing receipt, education record and permit. Lenders, insurers and property owners will ask for them.
• Ask a Michigan Small Business Development Center adviser to review your business plan before you file. You can find advisers through the Michigan SBDC at michigansbdc.org.
• Use the SBA's Michigan district page at sba.gov/district/michigan to find local SBA resources for financing and planning questions.

When to get professional help

Hire a qualified Michigan attorney if you plan to operate under a complex ownership structure, bring in partners, or want both builder and M&A coverage through related companies. Hire a CPA if you are choosing between a standard LLC and an LLC that elects corporate tax treatment, or if you want to use the Flow-Through Entity Tax. A professional can also explain how your contract terms interact with the license category you hold.

Official Michigan resources

• LARA Corporations Division: https://www.michigan.gov/lara/bureau-list/cscl/corps
• MiBusiness Registry business search, to check names before you file: https://mibusinessregistry.lara.state.mi.us/search/business
• MiBusiness Registry Portal, for online filings: https://mibusinessregistry.lara.state.mi.us/
• Michigan Department of Treasury: https://www.michigan.gov/taxes
• Treasury online business registration: https://www.michigan.gov/taxes/business-taxes/new-biz/online-business-registration
• Bureau of Construction Codes: call 517-241-9316, or find the bureau through the LARA site at https://www.michigan.gov/lara

This article is informational content, not legal or tax advice. Verify every fee, deadline and requirement with the agency named before you act on it.