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How to get a business license in Michigan?

Michigan is gradually becoming extremely popular amongst entrepreneurs as it offers a pro-business climate and a vibrant economy. It is home to a variety of industries including diversified manufacturing operations, a robust food and agricultural system, high automotive manufacturing strength, a good technology environment leading to legendary innovations, and semiconductor industries among others. You can form a new business in any of these industries by obtaining a Michigan business license. This guide will provide you with all the information related to the different types of Michigan business licenses and permits, the issuing authority, and how you can obtain them.

Business License in Michigan

Every business operating in any state in the nation is required to obtain some form of license or permit. If you start a company in Michigan then you will need to obtain a Michigan business license. There are many types of licenses that may be applicable and the licensing requirement in this state would be different from other states. A business license or permit can be issued to individuals as well as to both domestic and foreign businesses. The importance of a Michigan business license lies in the fact that without it, you will not be able to operate your business or facilitate transactions in the state. Michigan has its own specific licensing laws, regulations, fees, and renewal requirements. An individual or a company may require one or more licenses or permits to operate in the state.

What business license do I need in Michigan?

Michigan is home to an abundant workforce and offers a wide variety of business resources for those planning to form a startup in the state. First, you will need to apply for and obtain a Michigan business license to make your company operational. Licenses can vary according to business activity and location. Therefore, it is important to conduct a Michigan business license search. It is important to note that there are no general licenses in the state and not all businesses require licenses and/or permits.

The state has a dedicated portal for licenses and regulations known as the “State License Search”. You can search the portal for Michigan business licenses and permits based on industry and state departments like the Food Service License or the Michigan Department of Agriculture and Rural Development. You can also search using specific professions or occupations. There is another category of licensing applicable called county licenses which depend on the city or county where your business is located. You can conduct a Michigan business license search by visiting the respective county or city page e.g., if you start a business in Lansing City, MI then you will find all relevant licensing information as well as Lansing City Code and ordinances on the city clerk portal.

Steps to Apply for a Michigan Business License

The process of conducting a Michigan business license search can be quite arduous especially when it comes to identifying the type of permits specific to your business. Hence, we have created a list of Michigan business licenses and permits as well as requirements, so it becomes easier for you to understand how they can be obtained.

1. Search for necessary Michigan general business licenses

One of the most common types of business licenses is a general license, and it is applicable in several states. The state of Michigan doesn’t have the provision for a single general operating license or permit for businesses. The primary Michigan business license is one based on the industry your business is classified under. Let’s look at an example to understand this:

Example: You are planning to establish a transportation network company in Michigan. You will be required to apply online in order to obtain a Michigan business license. You will need to use the Michigan Commercial Licensing, Enforcement and Regulation System (MiCLEAR) to apply for the same.

You can conduct a Michigan business license search using the Department of Licensing and Regulatory Affairs (LARA) portal. This is also known as a “State License Search” and it will help you identify licenses issued by the state department.

2. Obtain applicable federal licenses

Most small businesses or large enterprises require state business licenses and local permits but some specific industries or areas are governed by the Federal government and may require you to apply for a Federal license. If your business falls under any of the following industries then you will need to contact the respective federal agency for obtaining a license.

  • Drug Manufacturing – You will need to contact Food and Drug Administration (FDA)
  • Selling of tobacco, alcohol, or firearms – Licenses are issued by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (AFT)
  • Investment Advising – You need to approach the Securities and Exchange Commission (SEC)
  • Broadcasting – The Federal Communications Commission (FCC) governs these licensing requirements
  • Preparation of meat products – Licensing requirements are overseen by the Food and Drug Administration (FDA)
  • Ground transportation – You need to obtain a license from the Department of Transportation (DOT)

3. Search for local or county licenses and permits

Once you form a business in Michigan, the city or county your business is situated in will also define the type of license required. The types of licenses, fees, and local ordinances applicable will vary depending on the city or county. Let’s look at an example to understand how you can obtain a Michigan business license at the county or city level.

Example: The physical address of your company is in Detroit, MI. Now, if your business falls under any of the categories mentioned by the city then you will need to obtain a local Michigan business license and permit. The categories are Amusement, Consumer Services, Food Services, Gas Station, Lodging, Motor Vehicle for Hire, Night Club, Retail, Second Hand Sales, and Vendors among others. Now, if you want to start a hotel or public lodging then you will need certain clearances from the Detroit Health Department, Fire Marshal Division, and Treasury Clearance. You will also need to apply for a Commercial Certificate of Compliance. Once you have all these clearances, you will be able to apply for a Michigan business license under the Lodging Category. The fee will vary according to the type of hotel and number of rooms like if you were to start a hotel having 1-50 rooms then the fee will be $345/year and if you start a Public Lodging House then the fee is $223/year.

4. Check for professional licenses

Of the many licensing classifications, one of the more significant types of licensing classifications is professional licenses. This License is governed by the Bureau of Professional Licensing (BPL). A Professional Michigan business license is divided into two categories and they are:

  • Health Licensing – This area focuses on issuing licenses based on a specific health profession. Some of the common professions include Acupuncture, Occupational Therapy, Behavior Analysts, Pharmacy, Genetic Counseling, Veterinary Medicine, Psychology, Nursing Home Administrator, and Dentistry among others. You will need to apply online using the Michigan Professional Licensing User System (MiPLUS) for the appropriate license or permit.
  • Occupational Licensing – The distribution of Occupational Licenses is governed by the Michigan Occupational Code. There are several categories of occupational professions for which you will need to obtain a Michigan business license. Some of these categories include Accountancy, Appraisal Management Companies (AMCs), Real Estate Brokers, Professional Surveyors, Personnel Agencies, Professional Engineers, and Collection Agencies among others.

5. Obtain any other necessary Michigan licenses and permits

The type of business activity will also define whether you need to apply for a Sales Tax License or not. This is a type of Michigan business license required by businesses or individuals planning to sell tangible personal property. The type of business activity can vary from retailing to a variety of services. There is no fee for a sales tax license.

6. Obtain home-based business licenses if required

Home-based businesses are gaining popularity due to several factors with low cost being a primary factor. If you are planning to start a business from home then it may be subject to some business laws as well as state regulations. Most home businesses are normally sole proprietorships, while some may even be partnership firms. When you operate from your home, the type of Michigan business license and permits required may also vary depending on the business activity. You might have to apply for temporary licenses and permits or even occupational licenses. For this reason, it is essential to conduct a proper Michigan business license search. Here are some details to focus on:

  • You need to be aware of local zoning regulations and obtain the necessary clearances as any violation can lead to fines or even the closure of businesses.
  • You may require local licenses for which you will need to check with the County Clerk’s office or the licensing departments of the city where your business is located.
  • The licenses required by a home-based business will depend on the business activity. The following example will provide more clarity.

    Example: If you are an event planner starting your business from home then you may require both yearly and temporary permits and licenses. You will first need to obtain an event planning certification. It is necessary to obtain a Michigan business license depending on factors connected to a specific event like serving alcohol, food preparation and the selling of food, outdoor events, outdoor structures, live entertainment, and large gatherings. If your event has outdoor structures then you will need a building permit and need food licenses from the city’s Department of Health.

7. Renew and maintain licenses

Once you have obtained a Michigan business license, it will remain valid for one year. It is important to note that temporary licenses and permits are required for specific purposes and events and therefore do not require renewal. The licenses issued by the state, or city will need to be renewed to ensure the business operations are not interrupted. Some professional and occupational licenses also need to be renewed annually like the Personnel Agency licenses, which expire each year on December 31st. You can renew Michigan business licenses and permits online using the Michigan Professional Licensing User System (MiPLUS) or the Michigan Commercial Licensing, Enforcement and Regulation System (MiCLEAR).

Local license renewal dates may vary, and you will have to renew them with the county or city that has issued them. If you fail to renew the licenses and continue to operate your business without a valid license then you may acquire penalties, with each violation constituting a separate offense. That is why IncParadise offers a “Business License Research Report” service to ensure that you can obtain the required licenses. This research report contains a list of filing instructions, supporting document requirements, and fees for all business licenses and permits for your company in Michigan.

Need any Assistance in Obtaining Your Michigan Business License?

If you are planning to start a new business in the state of Michigan then it is absolutely essential to obtain a Michigan business license. The types of licenses and permits can vary depending on the location of your company and activity. The Michigan business license search, application, fee, and renewal processes, and requirements are different for each type of license and are detail-oriented.

We, at IncParadise, can guide you toward obtaining the necessary business licenses and permits. We also provide additional services to new and existing Michigan businesses like EIN Tax ID and Foreign Qualification among others.

Do you need help with a Michigan Business License?