Filing Articles of Incorporation in Michigan: Legal Issues Associated with Company Formation

Corporations, LLCs, and Limited Partnerships must file articles of organization in order to form in Michigan.

After filling out the articles of organization, you can submit them to the Corporations Division for online filing system by uploading using an electronic system or by mailing your forms and filing fee to the Commercial Licensing Bureau and Regulatory Affairs Secretary of State Corporations Division Box 30670 Lansing, MI 48909-7170

How to File the Michigan LLC Articles of Organization

Step 1: Get Your Articles of Organization Forms

Your articles of the organization serve as the initial application to form your LLC or LP. The state requires you to use a fillable form provided on their website; however, note that corporations must also attach their corporate charter to the form before submitting it.

You can download both forms via the Secretary of State’s website (see link above). To help make sure you include everything that is required by law, review each section below with special attention to notes and explanations provided.

Here are some additional details about filling out these forms:

  1. The name of your business must end in “Limited Liability Company” or “Limited Partnership” unless it is an existing corporation/LLC which has already filed documentation ending in “Corporation” or “Limited Liability Company.”
  2. The form may be filled out and saved electronically. However, the corporation must also attach its corporate charter to the completed LLC articles of organization application prior to filing.
  3. Provide name and address for Michigan resident agent – if you choose another business entity as your resident agent but complete this line, the state will assign a registered agent upon filing.
  4. For Michigan corporations, provide a docket number from your existing corporation. If no docket exists, use 0000000 as it is an easily accessible placeholder for those unfamiliar with the docketing procedure or who have not previously filed their articles of incorporation in MI. Note that even without a docket number, this placeholder can help you skip a step down the line.
  5. Sign the form with an electronic signature or by writing your name in pen on the signature line. You can also print, sign, and scan your application before sending it to avoid having to retype everything.
  6. If you are filing as a corporation, all forms must be accompanied by a $15 fee; LLCs, $25 fee; Limited Partnerships, $50 fee.

Step 2: Fill Out the Articles of Organization Online

After you have completed the forms, you are ready to file by uploading them on the Secretary of State’s website. You must pay for your filing before you can submit it. This is not an instant process; consider this step as more time-consuming than upload – even though it might seem that way.

Submitting online provides a direct electronic connection between you and the state which will make processing easier, but it takes some time for their system to accept each application, so plan accordingly.

Steps:

  1. Login or create your account with the MI SOS corporation portal – note that this is different from using their individual services login (if you are already registered with them under other contexts.) To do this, just click “my business” at the top of the page and then click “register” to create a new account
  2. After creating your corporation portal account, log in with this username and password. You can now upload forms, check on current filings you have made, and pay fees using either a credit card or debit card.
  3. On the previous screen, scroll down until you see the box labeled ‘Articles of Organization’ – this is where you will find all of the electronic applications already submitted via your new account, including yours, once you submit it after filling out the steps below.

Entity Name:

Domestic LLC – In order to file as an LLC, you must first create your Articles of Organization. Complete the form provided on the state’s website and upload it under this section.

Business Purpose:

Limited Purpose – This is the most common designation for a special LLC which has been created to pursue a specific, limited purpose. It must be included in the name of your LLC and may not be abbreviated or translated into another language.

If you are filing as an existing business with a Michigan docket number, enter it here – if no docket number exists, use 000000 as a placeholder.

Other Entity Type:

Corporation ( S corporation or C corporation) – If you are filing as a corporation, type ‘A’ under other entity type and complete additional fields that follow this one. If you choose corporate designations “Corp” or “Inc” but not both, then the state will automatically link all documents from now on, so there is no need to place those designations into your name. If you are forming a corporation, type ‘B’ here

Suppose filing as an existing business enters the docket number of your Michigan corporation. If no docket number exists, use 000000 as a placeholder.

Duration of LLC

Perpetual – An LLC that never expires

Choose “Perpetual” if you want your LLC to last forever and do not plan to dissolve it at any time in the future. Otherwise, see Limited Duration below

Limited Duration

20 Years – This is a common designation for an LLC which only lasts 20 years and must be renewed after those 20 years have passed. Enter the date of expiration here (month/day/year format). If this option does not apply, enter ‘N/A’ instead.

If filing as an existing business, type the docket number of your Michigan corporation here or use 000000 as a placeholder.

Registered Agent Name and Registered Office Address

  1. Registered Agent Name: If you choose to be your own registered agent, use this box to provide the name of that registered agent. If you want a service to act as your registered agent, enter their company name and address for the street address. Note that if using a service as your agent, there is no need to place their business name or address into your Articles of Organization document since it will be automatically linked once filed so long as they are listed on your application.
  2. Registered Office Address: Enter the following information here only if different from Registered Agent Name above – otherwise, leave blank if filing as an existing LLC; please enter the docket number of your Michigan corporation here. If you do not have a business location in Michigan, please enter 777 Northshore Drive SW, Grandville, MI 49418 – This is the address of the Grandville Service Center for MCorp’s incorporation division. Note that if you are filing as an existing LLC, this information will be automatically linked upon submission since you provided it with your application above.

Additional Provisions

Type Yes in this box only if your LLC’s Articles of Organization is to have additional provisions that differ from what is listed above. Provide a brief statement or description of such provision here (maximum characters: 300). If no such provision applies, leave blank.

Step 3: File the Articles of Organization

Michigan offers an online document preparation service that can be used to file your Articles of Organization for only $149.00 with the state. The fee is non-refundable in the event of a rejected filing.

The service will automatically submit the paperwork to the Secretary of State for you, which usually takes about 5 business days but may take longer in some cases – in which case you would not receive any further notice from this office regarding your filings or missed fees until after 30 days have passed since submission when it becomes part of public record. To use this service, please click here.

When prompted, enter your eight-digit Corporation ID number (no spaces) that is listed on the confirmation page once you have completed filing at MCorp’s OnlineService Center. Please note that while it is possible to file a paper copy of your Articles of Organization instead, this service cannot be used to do so.

Create an Operating Agreement

An operating agreement is an internal document not filed with the state which outlines the members’ rights, responsibilities, and purpose of your LLC.

  • If you are filing as a business type ‘N/A’ here, if not using an agent, enter N/A here too; please note that if filing as an existing LLC, this information will be automatically linked upon submission since you provided it with your application above.
  • Please upload your Operating Agreement in Microsoft Word (.doc or .docx) format only; otherwise, you will be prompted to resubmit your articles on step 5 below for editing purposes. This file size may not exceed 10 MB (megabytes). File types accepted: doc, Docx – maximum allowed file size per upload is 10 megabytes (10MB).
  • If you need to upload more than one document or file, please place all of your documents into a zip folder before clicking the submit button.

Please note that if using an agent to file for you, this section will be left blank, and any agreement created between members should be attached as an exhibit.

Get an EIN

To create an EIN for your new business, you can either call the IRS at (800) 829-4933 or visit their website.

When prompted, enter your eight-digit Corporation ID number (no spaces) that is listed on the confirmation page once you have completed filing at MCorp’s OnlineService Center. Please note that while it is possible to file a paper copy of your Articles of Organization instead, this service cannot be used to do so.

Why does my Michigan corporation need an EIN?

One of the main reasons why you would need an EIN is for federal tax purposes. If your business is a corporation, this number may be required for any number of transactions involved with the Internal Revenue Service (IRS).

How do I get an EIN for my corporation?

You can get a free EIN from the Internal Revenue Service (IRS) by calling or visiting their website.

You can also apply for an EIN online through the IRS if you have a valid SSN and filing a W-7 application form with the IRS.

Open a Business Bank Account

You should open a business checking account before filing with the state. This makes it easier to pay any fees or taxes when they become due and generally simplifies the process of managing your new business – especially if there is more than one owner/shareholder/member involved.

Once you have opened an account, just let your service know which bank you will be using for this purpose so they can update your records accordingly. They also need their routing number (which is printed on every check) but do not list it here where anybody could see it; please note that if filing as an existing LLC, this information will be automatically linked upon submission since you provided it with your application above.

Get Licenses and Permits

In addition to filing with the state, you may need other licenses and permits from local or federal agencies.

These could include a retail license or business permit from your city or county, or any necessary tax registrations from the IRS, the Michigan Department of Treasury, or similar agencies in other states.

Please check here if you plan on filing for a Retail License. This is a local ordinance that requires additional forms and fees, which can be found at http://www.cityhalllansingmi.com/home/showdocument?id=19131.

Brand Your Business Name

If you plan on trademarking or reserving your business name, it is a very good idea to do so as soon as possible.

This will brand your new company and prevent others from taking credit for your hard work. It is also more difficult and expensive to change the name of a Michigan corporation than those in other states – so choose wisely!

Just visit any state website for information on how to register yourself as the owner of your company’s brand. You can then list this information under “Trademarks” when filing with MCorp or use another designation that best suits you if you are using an agent to file instead.

Business Credit Score

Business Credit Score involves the credit score of a corporation. It is also known as business rating and affects the borrowing ability and business operations of a company. A Business Credit Score helps lenders decide whether to provide loans, and it may also affect other lending terms such as interest rates, collateral requirements, or the amount of loan requested.

What Do I Do After My Michigan Corporation Is Formed?

Once your corporation has been formed by MCorp, you will need to keep track of certain dates and events in order to maintain your status as a legitimate, active corporation in the eyes of the state. These include:

  • Annual Report Date (due between January 1st and April 1st each year) – This is an annual report that records information like any amendments made to the Articles of Incorporation or Bylaws, important corporate minutes from any annual or special meeting(s), officers, directors, members and more.
  • Corporate Record Date (usually the last day of the month, but may vary by state) – This is simply the date that the information contained in the annual report will be listed as “verified” or official.
  • Stock Transfer Date / Stockholder Meeting (both are due within 90 days of each other) – This is when you have to update MCorp with any stock transfers involving new owners, share amounts, etc. It also needs to include minutes from any meetings taking place where voting rights were granted, or decisions regarding major corporate changes were made.

Write Corporate Bylaws

If you want to ensure that your business is operating according to your initial vision, writing corporate bylaws is the way to go.

These rules and regulations need to be followed at all times, or else they can later be used against you if someone tries to take legal action against the corporation after it has dissolved.

Please note that in most cases, larger corporations will have much more extensive guidelines for employees, shareholders, etc.

However, larger structures are not required in Michigan, so this will vary depending on what you want out of your corporation.

Do I need bylaws for my Michigan corporation?

This is the number one question asked by entrepreneurs when they are filing for incorporation. The answer is yes, you need to have bylaws formalized and in place, if it is your wish to be protected both now and later on down the road.

Bylaws function as the glue for keeping your business together, so not only do they help guide people into making good choices but also provide a legal record of these guidelines should something go wrong in the future.

Not having them will leave you open to risk – however, writing them can be tedious work, especially if it is done by a committee or without proper guidance, which may result in an incomplete set of rules that are difficult to read or abide by.

What should bylaws include?

Bylaws should include a number of important details such as:

  • the purpose of the corporation,
  • how profits will be dispersed and to whom,
  • how many directors the board will have and how they are nominated or elected,
  • if there is any preferred stock in play and how it works in conjunction with common stock (this will protect founders and employees in case things go wrong later on),
  • rules for holding meetings, where they can take place, and what documentation is required beforehand.

How do I write bylaws?

It can be helpful to take a look at existing guidelines for other corporations in order to get an idea of what is right and what you need.

However, the important thing to remember when writing your own set of rules is that they should include everything that may end up being vital information down the line, but also be specific enough that people will actually follow them.

  1. Make them simple enough to understand without getting too wordy,
  2. Consider including a clause that states if these rules are not followed, everyone involved could potentially face legal ramifications which might make people more motivated to abide by them,
  3. If there are any details you aren’t sure about, ask an attorney or contact a service that offers free consultations for new clients.
  4. If your corporation includes shareholders, stock certificates need to be written up within 120 days after filing for incorporation. These documents are important because they represent the shares that each owner holds, so it is crucial that they are accurate and match up with their respective numbers on file with MCorp. If not, there could be problems down the line when someone tries to transfer ownership of their stock, or someone’s company gets sued for having faulty documentation.
  5. Miscorporation – This states whether or not you want your business classified as a Close Corporation (CC) or if it would rather be an Open Corporation (OC). The benefits of CC are that the board members are allowed some protection from personal liability, meaning they cannot be held responsible for damages or debts of the business. This is also referred to as the business judgment rule, which simply states that no one person who makes decisions for the corporation can be held accountable outside of it unless there is a clear conflict of interest involved.

It is important to note, however that this designation does not protect directors from certain unlawful acts, including:

  • willful misconduct
  • gross negligence
  • intentional violation of the law.

OCs offer no such protections and thus should only be used by those who do not plan on having employees work directly under them.

Hold an Organizational Meeting

The organizational meeting is meant to officially establish the business and must be held within twenty-five (25) days after filing for incorporation.

It can be helpful to make sure all of your shareholders and directors are present at this time; however, it is not required.

This meeting includes:

  • the confirmation and acceptance of these bylaws
  • nominating and electing trustees, if necessary,
  • reading out all resolutions passed by the board previously or that will take place during this meeting

File Michigan Reports & Taxes

Every year, after the annual shareholders meeting but before December 31st, MCorp must receive a copy of your Annual Report along with copies of any new bylaws or resolutions approved during this time.

Corporations are required to pay state taxes either in quarterly installments or once a year, depending on their total assets and gross receipts.

For more information about filing deadlines and forms, please visit http://www.michigan.gov/businessregistration/0,4664,7-277–49674_47707—,00.html.

What should I know about Michigan corporate taxes?

One of the most important things to remember about filing taxes is that they are due on the 15th day of the fourth month after the end of your corporation’s fiscal year.

For example: if your fiscal year ends on March 31st, then you will need to file and pay any taxes no later than May 15th (unless it falls on a weekend or holiday, in which case it would be the next business day).

In addition, corporations have to pay an annual franchise tax along with their annual report. These payments come due once every calendar year, so if you file for incorporation in June 2016, even though your first fiscal year will not be complete until the following March, the franchise tax must still be paid by December 31st.

The amount is based on the total assets of your corporation, so it is important to keep an accurate corporate records book.

You can calculate your franchise tax by multiplying the number of shares you have issued by $2 or by using this formula:

  • ∏ (thousands of dollars owed / 100) x (shares outstanding – treasury shares).

Example – If 3,000 shares are outstanding and there are only 2,000 in the treasury, then you will need to pay $6,000 in franchise taxes.

Do corporations have to register with the Michigan Department of Treasury?

No. Corporations are exempt from this requirement as long as they have filed their articles of incorporation with the state and paid all fees.

How much does it cost to start a Michigan corporation?

In filing your articles of incorporation, the Michigan Department of Licensing and Regulatory Affairs Corporations accepts credit or debit cards as well as checks or money orders.

Fees range from a low of $25 to a high of $100, depending on how many shares you would like to authorize. If there are any additional filings required at a later date, then those will have an associated fee as well.

How long does it take to start a Michigan corporation?

It usually takes approximately five (5) business days for MCorp to file your articles of incorporation. Once that is completed, then it should only take an additional two (2) business days for the state to provide you with a certificate of filing, assuming there are no other forms to complete.

Does a Michigan corporation need a business license?

In most cases, corporations do not have to file for a business license in the state of Michigan. However, this may vary depending on the type of business you are conducting and whether or not that activity is taxable in some way.

You can find more information about filing for a business license here: http://www.michigan.gov/documents/lara/Business_License_Information-90344_7.pdf.

What is a registered agent in Michigan?

A registered agent in the state of Michigan is a person or company who agrees to receive legal documents on behalf of a corporation during normal business hours.

This must be an individual who lives within the state, either as a resident or someone with an office in the state, or it can be a business that has registered with the Secretary of State.

What is a foreign Michigan corporation?

A foreign corporation is one located in another state. Doing business in the state of Michigan requires registering with the Department of Licensing and Regulatory Affairs by filing articles of incorporation or a certificate of authority.

If you are only doing business within the state, then you don’t have to file for a foreign status, but if you are organizing your company through an out-of-state office, then this must be indicated in your articles.

What are the advantages of incorporating in Michigan?

According to http://www.incorporatingadvice.com/, there are several reasons why someone might choose to incorporate in the state of Michigan:

  • It’s tax-friendly
  • There are no income taxes if your corporation is not domiciled in Michigan
  • If your corporation is domiciled in a state other than Michigan, it’s still tax-friendly as long as you do not have a physical presence within the state
  • The Application Fee and Articles of Incorporation are both only $50.

Can Northwest help me form a nonprofit corporation?

Yes, Northwest can help you form a nonprofit corporation in the state of Michigan. They are experts at guiding nonprofits through the process by making sure that all forms are completed correctly and filed on time. For more information, visit www.nonprofitnwmi.com.

How can I get a Michigan phone number for my corporation?

If you are incorporating in the state of Michigan, then you are required to have a registered agent. The agent can also help you get a phone number.

If you are not incorporating, then it will depend on who your business partners are and if they are willing to share their numbers with you.

Conclusion

The state of Michigan has several online resources to help you complete your corporate filings. It is important to use the tools provided by the state because they are designed with very specific requirements in mind that must be followed exactly in order for your filing to be accepted.

Leave a Reply

Your email address will not be published. Required fields are marked *