Entrepreneur’s guide to forming a business in North Carolina

If you have an idea and want to transform it into a business then North Carolina is the right destination for you. There are several advantages and state benefits available for first-time entrepreneurs. You can register a business in North Carolina in some of the key industries that are considered to be future-focused right from aerospace and transportation to biotechnology and information technology. The state also boasts a diverse and highly skilled workforce.

Why do companies prefer to register their business in North Carolina?

North Carolina is one of the few states that have consistently attracted new businesses, entrepreneurs, and diverse talent. The brightest minds in the state along with technologically enabled industrial sectors have been striving hard towards providing innovative solutions that address some of the greatest challenges faced by new and existing companies. If you start a business in North Carolina, the business climate will play a crucial role in helping you start, develop, and grow your company. Let’s look at what makes this state popular amongst business owners.

• Low business costs – One of the benefits you will enjoy when you register NC business online is the low business costs. This is due to the lower overall cost associated with construction, utilities, business taxes, labor, and logistics. A study by Forbes ranked North Carolina #2 in lowest business costs and is ranked #5 for competitive utility rates.
• Tax-Friendly Environment – One of the reasons why entrepreneurs prefer to start a business in North Carolina is its tax-friendly environment. The corporate income tax rate in the state is 2.5 percent, which is lower than the rate in Florida (5.5%), Georgia (5.8%), South Carolina (5%), and Virginia (6%). The state also offers a wide variety of tax incentive programs including sales and use tax exemption, as well as payroll tax incentives programs.

Steps to start a business in North Carolina

The state of North Carolina has one of the best legal & regulatory climates apart from a top-tier workforce and extensive infrastructure. A top North Carolina registered agent like IncParadise can help you form a new business in the state but there are several other areas that you need to focus on prior to launching your company. Let’s take a look at some of the key areas that will ensure that you are able to achieve business objectives.

1. Prepare a North Carolina Business Plan

Every business is different and hence their business plan should focus on the specific activities of the said entity. Normally, a business plan is prepared before you register a business in North Carolina. The plan should ideally be extremely detailed and take into account everything from business objectives to company milestones, financial objectives, marketing plans, and other key areas of management and operations. A good plan will also reveal how sustainable your idea truly is from a short-term and long-term point of view.

• Executive summary
• Company description
• Analysis of the Industry
• Competitor analysis
• Description of Product and services
• Management structure
• Operating Plan
• Company Milestones
• Sales and Marketing Plan
• Financial plan and projection

2. Attend Entrepreneurial Training or Development Programs in North Carolina

Systematic entrepreneurship training along with development programs facilitate active as well as passive learning. If you are a first-time entrepreneur planning to start a business in North Carolina then this type of training will help you to identify avenues of economic growth and development and also leverage such avenues. Entrepreneurship training in the state aims at equipping participants or small business owners with the required skills and relevant knowledge.

3. Choose a Business Structure for Your North Carolina Business

There are several important decisions to be made before you register a business in North Carolina. One such decision is that of choosing the right entity structure. The structure plays a key role as the chosen structure will affect the legal liability of a company, its taxation, its ability to get funds, as well as the management, and the overall operations. Whether you choose to incorporate in North Carolina or form an LLC or a sole proprietorship, each structure has a different tax treatment and comes with its own limitations and benefits. The registration or new business formation processes would also be different. The type of business entities you can choose in North Carolina are:

• Limited Liability Company (LLC)
• Corporation (C-Corporation)
• S Corporation
• Sole Proprietorship
• General Partnership

4. Naming Your North Carolina Business

The name of a business is the identity of that very entity. Hence, it is considered one of the most important elements of branding or marketing strategies. The name of a company is connected to everything associated with the entity from its products and services to its credibility and customer services. The single most necessary requirement to start a business in North Carolina is naming your business. You will not be able to register NC business online or offline without a name. Different states have different criteria when it comes to choosing a company name. Similarly, North Carolina has its own naming guidelines and process. Let’s take a look at how to name your entity in NC.

• The first step is to follow the naming guidelines as specified by the state of North Carolina. The naming guidelines will vary according to the entity structure.

  Example: If you choose to incorporate in North Carolina then the name should contain words like “corporation”, “incorporated”, “limited”, or abbreviations like “corp.”, “inc.”, or “ltd.”

• The North Carolina General Statutes also state that a business name should be unique and distinguishable. You can check with the Register of Deeds office in the county where you are planning to form your entity. You can also conduct a business name availability check.
• If your chosen name is available then you will need to reserve the name. You can do this using the form known as the Application to Reserve a Business Entity Name. The form needs to be duly filled and submitted to the Department of the Secretary of State along with a fee of $30. The name can be reserved for 120 days.

5. Choose Your Location for North Carolina Business

One of the details of a new company that is the key to business operations is the location of your business. You need to identify the right location before you register a business in North Carolina. While choosing a location, you need to consider several factors such as proximity to trade routes, logistics infrastructure, customer base or targeted audience, accessibility, market conditions, competition, and the availability of a skilled workforce. Different cities or counties in the state are home to specific industries or industrial sectors and that may prove advantageous.

For example: If you start a small business in NC and if the primary business activity is e-commerce or an online store then the city to choose is Raleigh. The city is currently ranked No. 1 for online businesses due to access to high-speed internet service as well as an environment influenced by technology and research.

• Raleigh
• Charlotte
• Winston-Salem
• Greensboro
• Catawba County
• Pineville
• Morrisville
• Conover
• Reidsville
• Hendersonville

6. Register Your North Carolina Business

If you want to start a business in North Carolina then there are certain state-governed processes that must be followed. You have to meet all state requirements and those governed by the 2020 North Carolina General Statutes for businesses. Once you have chosen a structure and reserved a business name, the next step is to apply for registration with the North Carolina Secretary of State.

Example: If you want to incorporate in North Carolina then you will have to submit the Articles of Incorporation pursuant to NC Gen Stat § 55-2-02 (2020). There will be a filing fee of $125 and it has to be submitted with the Business Registration Division, North Carolina SOS. Similarly, if you want to form an LLC then you will be required to file a Articles of Organization pursuant to NC Gen Stat § 57D-2-21 (2020). The filing fee will be the same as that of a business corporation.

Do you want to form a new business in North Carolina?

7. Get Your EIN

Every state in the USA has some form of business tax that every new and existing company has to file. Although North Carolina has a tax-friendly environment, there are some taxes applicable in the state. In order to file taxes, an entity will need a tax ID known as the Employer Identification Number (EIN). The EIN is a unique tax ID number that is issued by the Internal Revenue Service (IRS).

8. Open a Business Bank Account for your North Carolina Business

Operating a company, irrespective of the structure and the business activity, is always a challenging task. When it comes to maintaining a financial record of all transactions, it becomes an even more difficult task. This is why it is always recommended to open a business bank account. This account is different from personal banking in many ways as it provides several features associated with operating a company. Some of the features include digital invoicing, automated bookkeeping, 24/7 online or mobile banking, integration of payment gateways, higher card security, and lines of credit among others.

• Your bank account will help you to track business income as well as expenses
• It will enable client or vendor payments with ease
• Enable streamlining of all financial records and tax information of your company
• A business account creates a professional image and increases credibility
• Helps in providing clear financial records for auditing purposes

9. Obtain License and Permits

The importance of a business license lies in the fact that it allows your company to operate in a specific location within a city or county. The need to apply for licenses or permits arises after you register a business in North Carolina. Different states in the USA have different business license requirements, regulations, and structures. In North Carolina, there are no generic business licenses and some businesses may require a single license while others may need multiple permits or licenses. Let’s take a look at the business licensing requirements in the state after you register NC business online.

• North Carolina Certificate of Registration – This is also known as the Sales Tax License. If you start a business in North Carolina where selling products directly or indirectly to consumers is the primary activity, then you will need to register with the Department of Revenue. This license will be applicable even if you are selling online or have an e-commerce store.
• Regulatory and Occupational License – The second most important form of licensing is the state-issued, regulatory and occupational licenses or permits. There are 950 categories of licenses and encompasses various occupations right from accredited reinsurers to wine shops, transporters, recreational therapists, Business Enterprises Program Operators, CPA firms, and food establishments among others. The issuing authority will vary according to the license being applied for. If you start a small business in NC like a food establishment then the licenses and permits will be issued by the NC Department of Health & Human Services.
• Municipal or County License – This is a type of local license that will be determined by the city or county your company is based in. If you register a business in North Carolina and the company is operating out of Raleigh then you will need to apply for necessary permits from the City Council. You will also need to obtain the required approval from the Zoning staff.

10. Register for Taxes

Each state in the USA has its own taxation laws governing all businesses. If you start a business in North Carolina then the taxes applicable will vary according to entity structure and business activity. The different forms of taxes that your company may have to file are corporate income tax, privilege license tax, sales & use tax, franchise tax, and state withholding taxes.

11. Obtain Business Insurance

Business insurance is an important component of running any company successfully. The right form of insurance will help you in covering any costs associated with liability claims and property damage. There are different types of insurance available for businesses such as:

• Business owner’s policy (BOP) for small businesses
• Commercial property insurance
• Professional liability insurance policy
• General Liability Insurance (GLI)
• Business Income Insurance
• Workers’ Compensation Insurance

12. Annual and Ongoing Requirements

Once you start a business in North Carolina or begin operating in the state, it is important to ensure the said company fulfills all state compliances. This is also known as annual maintenance and helps with keeping the company active and current in the records of the North Carolina Secretary of State. Some of the important annual requirements include:

• The filing of an annual report is pursuant to the North Carolina General Statutes. There is a specific due date for each form of entity and this report has to be filed within the specified date
• Filing of tax returns like corporate tax or sales & use tax
• Paying off any payments, penalties, or fees due within sixty days

Some Important Quick Resources for North Carolina Business

Once you have devised a strong business plan, it is time to register a business in North Carolina. There are several details that will need your attention and several processes to undergo to operate the company successfully and for the maintenance of the new business. This is where proper information will provide much-needed guidance. There are various government and private agencies that can provide the necessary information and resources. Let us look at some of the important resources required to register a NC business online.

North Carolina Secretary of State

The office of the North Carolina Secretary of State (SOS) is responsible for overseeing chartering corporations, land records, and administering various commercial regulations. The office also provides valuable resources in areas related to new business formation, submission of annual reports, checking name availability, foreign businesses, and information on programs created for small businesses. You can also download forms to start a business in North Carolina.

• North Carolina Secretary of State
  2 S Salisbury St,
  Raleigh, NC 27601, USA
  Phone: 919-814-5400
  Email: [email protected]
  Website – https://www.sosnc.gov

North Carolina Taxation Department

The taxation department in North Carolina is known as the North Carolina Department of Revenue (NCDOR). This department is primarily responsible for administering the collection of different forms of tax in the state like state income tax, sales tax, gasoline tax, inheritance tax, and beverage tax. You will find information and other resources regarding all types of primary and other taxes applicable in the state. This is helpful especially if you are planning to incorporate in North Carolina.

• North Carolina Taxation Department
  Department of Revenue
  4701 Atlantic Avenue,
  Suite 118 Raleigh, NC 27604
  Phone: 919-707-0880
  Fax: 919-850-2954
  Website – https://www.ncdor.gov/

North Carolina Labor and Employment Departments

The North Carolina Department of Labor is also known as (NCDOL) and its primary objective is to foster a business and a labor environment that is healthy, safe, fair, and promotes a productive North Carolina. If you register a business in North Carolina then it is important to understand the state labor laws and regulations. This information is available with NCDOL. You will find information on Occupational Safety and Health, Consultation Programs, OSHA standards, and NCDOL online library among others

• North Carolina Labor and Employment Departments
  North Carolina Department of Labor (NCDOL)
  4 W Edenton Street
  Raleigh, N.C. 27603
  Phone: 1-800-625-2267
  Website – https://www.labor.nc.gov/

North Carolina Department of Commerce

The North Carolina Department of Commerce aims to improve the overall economic well-being of the state and its people. The department works closely with small businesses as well as local, regional, and national organizations to propel community, economic, and workforce development in the state. You can find valuable resources including information on a variety of state grants and performance-based incentive programs created for a small businesses in NC. You will also find information on key industries in the state, business information & reports, and training resources for businesses among others.

• North Carolina Department of Commerce
  301 North Wilmington Street
  Raleigh, North Carolina 27601-1058
  Phone: 919-814-4600
  Email – [email protected]
  Website – https://www.commerce.nc.gov/

North Carolina Industrial Commission

The North Carolina Industrial Commission focuses primarily on the fair and effective administration of the Tort Claims Act and the Workers’ Compensation Act in this state. As a business employing a workforce, the information and resources available on Workers’ Compensation Insurance will be quite helpful.

• North Carolina Industrial Commission
  430 N. Salisbury Street,
  Raleigh, NC 27603
  Phone: 919-807-2501
  Fax: 919-715-0282
  Email – [email protected]
  Website – https://www.ic.nc.gov/

Why choose Michigan for your business?

Every state in the USA provides various benefits to different kinds of businesses. The state of Michigan is one of the fastest-growing technology states that boasts of a pro-business climate. The state offers several business incentive programs including tax credit programs. If you transfer a business to Michigan then you will also be able to leverage the strong infrastructure as well as a wide variety of small business resources that will make moving LLC to Michigan or a corporation easier, more efficient, and inexpensive. Let’s look at some of the top benefits of relocating to this state.

Talented workforce

One of the top business benefits in Michigan is the availability of a talented workforce. Each business has a different requirement when it comes to employing talent and hence the talent pool is also quite diverse in the state. The existing talent pool plays a key role in developing the overall business climate as well. According to Nexient, a software company, Michigan has good engineering schools from which startups as well as Fortune 500 companies could recruit. After moving your business to Michigan, you will be able to leverage a workforce that is defined by grit, integrity, as well as a culture of innovation.

Global connectivity

One of the areas that many companies look at while thinking of relocation is global supply chain assets or global connectivity infrastructure. If you transfer a business to Michigan then you can benefit from onshoring and near-shoring solutions, which is an integral part of the state’s FDI Strategy. Today, Michigan is considered to be one of the top global destinations for Foreign Direct Investment (FDI). Foreign trade and global connectivity are possible as Michigan is home to 33 active deep water ports, 18 commercial airports, and 26 freight railroads. This is one of the top business benefits in Michigan. It is considered the strategic connection of distribution and transportation routes and creates a cost-effective supply chain for small businesses and medium enterprises.

Low cost of living

Michigan is affectionately known as the Mitten State and is considered to be one of the top 10 most affordable cities in the nation. Whether you are looking at the cost of living from a business or an individual perspective, it is low in most top-tier cities like Ann Arbor and Lansing. If you are considering moving your business to Michigan, some of the other low-cost cities to consider are Jackson, Okemos, Holland, Midland, and Rochester Hills.

Business incentives and grant programs

One of the most valuable and top business benefits in Michigan is the state business incentive and grant programs. The business incentives vary according to industry and also include tax credits. Apart from loans and other funding sources, the state provides grants under the MI Business Grant Program. When you transfer a business to Michigan, you can benefit from the following incentive and funding programs:

• MEDC Capital Access
• Michigan’s State Trade Expansion Program (MI-STEP)
• Michigan Mobility Funding Platform
• Early Stage Funding Programs
• DTE Small Business Program
• Michigan Business Development Program (MBDP)
• Critical Industry Program (CIP)
• Work Opportunity Tax Credit (WOTC)
• Small Business Alternative Credit
• MBT Certificated Credits
• State Essential Services Assessment (SESA) Exemption

Domesticating Your Company in Michigan

As a business or individual planning to relocate to Michigan, you may have several questions. One of the most commonly asked questions: “Does Michigan allow domestication, and what are the state laws or regulations applicable to proceed?” Domestication refers to changing the domicile of your corporation or LLC from any other state to Michigan. Unfortunately, Michigan business law does not have any provisions for entity domestication but there are other options available like conversion to a domestic entity and applying for foreign qualification.

Steps to Move a Corporation to Michigan

There are several benefits of moving a corporation to Michigan where the state provides just the right combination of infrastructure, resources, and support. This along with state incentive programs for small businesses makes Michigan an attractive option for new entrepreneurs as well as those who want to relocate their existing businesses. The big question is: “How do you transfer a business to Michigan?” The good news is that there are two options available, and we have included them below.

Register as a Foreign Corporation

One of the first options for moving your business to Michigan is to register it as a foreign company. This is a recommended option for those entrepreneurs who want to operate their business in the home state (incorporation state) as well as Michigan. If you are moving a Corporation to Michigan using the process of foreign qualification, as governed by 2022 Michigan Compiled Laws, Chapter 450 – Corporations, Act 284 of 1972 – Business Corporation Act, Chapter 10 Foreign Corporations. The process for foreign qualification is as follows:

• You need to designate a registered agent in Michigan for handling service of process
• Identify a corporate name or an assumed name and register the said name
• Submit a Certificate of Good Standing along with the name registration application
• Apply for a certificate of authority pursuant to MI Comp L § 450.2001 (2022) along with a fee of $60

Do you want to form a foreign corporation in Michigan?

Dissolve a home Corporation and establish a new Corporation in Michigan

The second option for moving a Corporation to Michigan is a lengthy process wherein you have to dissolve the existing company and form a domestic corporation in Michigan. The process of dissolution will be governed by the laws of the home state or the state of incorporation. Let’s look at an example to understand this.

Example: If you have an existing corporation in the state of Florida then you will first need to file the Articles of Dissolution for Florida Profit Corporation. Prior to filing the articles, you will need to obtain approval from either the shareholders of the said company or the corporation’s directors. Some states like Florida have a filing fee for Dissolution while others don’t.

• Appoint a Michigan registered agent to facilitate service of process
• Identify and reserve a corporate name using the Application for Reservation of Name
• File Articles of Incorporation pursuant to MI Comp L § 450.1202 (2022) along with the appropriate fee
• Prepare bylaws for your Michigan Corporation
• Apply for necessary business licenses and permits

Steps to Move an LLC to Michigan

The state of Michigan provides a pro-business environment that facilitates the success, growth, and expansion of small businesses and medium enterprises. The state is home to diverse industries and you can transfer a business to Michigan in any of these high-growth industries. Some of the top industries include advanced manufacturing, technology cluster industries, auto production, the semiconductor industry, and the financial services sector among others. The following two options make moving LLC to Michigan possible.

Register as a foreign LLC

Moving your business to Michigan can be highly beneficial from the perspective of expansion. In a scenario where you would want to operate your company in the existing state and also expand to Michigan, the solution that works best is to register your LLC as a foreign entity. The process of moving an LLC to Michigan is known as foreign qualification. The process of foreign qualification is governed by the 2022 Michigan Compiled Laws, Chapter 450 – Corporations, Act 23 of 1993 – Michigan Limited Liability Company Act, Article 10. The following steps would be helpful with registering a foreign LLC:

• Hire and maintain a registered agent in Michigan for handling service of process pursuant to MI Comp L § 450.4207 (2020)
• Identify a name and register the business name or assumed name of the said LLC by filing a Michigan Assumed Name Certificate
• Submit a Certificate of Existence or Certificate of Good Standing from the home state
• Apply for a Certificate of Authority to Transact Business in Michigan pursuant to the provisions of Act 23 of the Public Acts of 1993

Do you want to register a foreign LLC in Michigan?

Dissolve a home LLC and form a new LLC in Michigan

If you are thinking of moving an LLC to Michigan but don’t want to operate your company in two different states then this is a viable option. All you have to do is close or dissolve your limited liability company in its current state and register a new LLC in Michigan. The procedure can be exhausting as you will be required to file different types of documentation in the former and new state before you will be able to transfer a business to Michigan. Let’s look at an example to understand this.

Example: If you are operating a limited liability company in the state of Colorado then you will first need to file a Statement of Dissolution for Colorado LLC. The LLC dissolution can be categorized as a voluntary, Administrative, or Judicial dissolution. There is a $25 fee for filing this statement. You will also need to collect a certificate of good standing from Colorado, which will be submitted in Michigan.

• Appoint a Michigan registered agent to facilitate service of process
• Identify and reserve a business name using the Application for Reservation of Name after conducting a name availability search
• File Articles of Organization pursuant to MI Comp L § 450.4203 (2022) along with the appropriate fee
• Prepare LLC operating agreement
• Apply for necessary business licenses and permits

Move Your Business to Michigan with IncParadise

Michigan is fast becoming one of the most popular tech hubs for startups and foreign entities. Its robust infrastructure and the availability of a talent pool help businesses to achieve steady growth and accelerate their expansion plans faster. If you want to transfer a business to Michigan then the state presents many opportunities. IncParadise can help you with the process of moving a Corporation or LLC to Michigan with ease.

Doing Business in Michigan

Doing business in Michigan can be quite promising from the point of view of stable growth and future expansion. Michigan boasts of a strong economy with the Real Gross Domestic Product (GDP) at $567.94 billion. The state has a pro-business climate driven by a wide variety of Michigan small business incentives. Michigan has also received from the Standard & Poor’s (AAA) the highest credit rating amongst the 15 states with AAA ratings. The state is also home to several Fortune 1000 companies as well as industries such as finance, technology, insurance, real estate, manufacturing, logistics, service, film, transportation, communications, and trade shows. The progressive income tax structure along with tax credits and other tax-related benefits makes it easier for entrepreneurs to start a new business and achieve sustainable growth.

Why do businesses prefer doing business in Michigan?

Doing business in Michigan is a very enjoyable experience due to the several advantages that the state offers. The state has a robust infrastructure and strong supply chain management. Several companies headquartered in the state are now listed in the Fortune 500 list including ExxonMobil, Walmart, and Amazon. New businesses can also check the availability of Federal and Michigan small business grants to help provide the initial financial boost required. Let us take a look at some of the advantages of conducting business in this state.

• Emerging Startup Ecosystem – The state of Michigan is considered to be one of the newest startup ecosystems in the USA. The Global Startup Ecosystem Report (GSER) has revealed that Michigan is considered the best high-tech hub emerging in the Midwest. The city has been conferred with the title of an emerging high-tech hub and is ranked among the top 10 startup ecosystems in Detroit and Ann Arbor. Startups will not only be able to apply for Michigan small business grants but can also bid for a venture capital investment. The venture capital share in the state of Michigan has had a jump of 866 percent between 2016 ($300 million) and 2020 ($3.1 billion). The state is also home to several accelerators and incubators for startups and entrepreneurs like Ann Arbor SPARK, Automation Alley, and NextEnergy among others.
• Diverse Talent Pools – One of the top requirements for any new business is a skilled, reliable, and committed workforce, and Michigan offers all of these and much more. It is home to some of the top universities and colleges such as the University of Michigan, Ann Arbor, Michigan State University in East Lansing, Wayne State University in Detroit, and Michigan Technological University in Houghton, among others. Whether you plan to establish a software startup, want to explore transportation services, or start a new business in the temperature-controlled logistics industry, Michigan’s diverse talent pool will not disappoint you. The state has successfully created a strong talent pipeline overseen by the Michigan Economic Development Corporation (MEDC), which makes doing business in Michigan highly profitable.
• Grant Programs – Every business requires a strong financial plan and some form of funding to give the startup the initial boost it requires. This is where Michigan small business grants can be helpful as they are different from loans. You have to pay a loan back, but grants are not paid back. The most important is the MI Business Grant Program administered by the Department of Treasury. Some of the other grant programs in the state include Michigan Small Business Relief Program, the Michigan Small Business Restart Program, Entrepreneurship & Innovation Program, and the International Trade Program among others.

Incentive Programs in Michigan

When you form a startup in Michigan there are several benefits for you to enjoy including a wide variety of Michigan small business incentives programs. These programs have been created to target first-time entrepreneurs as well as existing small and medium-sized enterprises (SMEs). Here is a list of some of the most popular and top incentive programs in the state.

Michigan Business Development Program (MBDP)

If you are planning to start a company and are searching for Michigan small business funding options, then the Michigan Business Development Program (MBDP) might be just right for you. This program is administered by the Michigan Economic Development Corporation (MEDC) on behalf of the Michigan Strategic Fund (MSF). The primary objective of this funding program is to enable business growth by encouraging investment in the state and offsetting costs. A business can apply for this type of funding through the creation of qualified new jobs as well. You can receive funding in the form of Michigan small business grants, direct loans, or other categories of economic assistance. The maximum amount available under this program is $10,000,000.

Critical Industry Program (CIP)

The Critical Industry Program (CIP) is a Michigan small business funding program that provides qualified investments to qualified companies. Here, a qualified investment refers to a loan, grant, or other economic assistance towards a project undertaken by the company applying for funding. This Michigan small business grants program is administered by the Michigan Economic Development Corporation (MEDC) on behalf of the Michigan Strategic Fund (MSF).

Strategic Site Readiness Program (SSRP)

The Strategic Site Readiness Program (SSRP) is administered by the Michigan Economic Development Corporation (MEDC). This is a type of Michigan small business incentives program that provides financial incentives to eligible businesses or applicants. The activities eligible for this incentive program can vary from land acquisitions to infrastructure improvements, creation of wastewater infrastructure, improvement of buildings, building construction or demolition, and environmental remediation among others.

Jobs Ready Michigan

The Jobs Ready Michigan program has been created specifically to meet the growing talent needs of small businesses, which are expanding in the state or planning to relocate to Michigan. This is a flexible program and is highly responsive toward the specific talent requirement of companies, thus making doing business in Michigan effortless. The program addresses the various costs associated with the recruitment and training of individuals in occupations that are considered high-skill, high-demand, or high-wage. If your company is planning to create jobs in the state then you will be eligible to apply for this Michigan small business grants program.

State Essential Services Assessment (SESA)

This is a different type of Michigan small business incentives program. The program has two parts: the State Essential Services Assessment (SESA) Exemption, and the Alternative State Essential Services Assessment (SESA) Incentive. The exemption program is primarily for projects planned or operational in eligible distressed areas (EDAs). The alternative SESA incentive program focuses on projects undertaken in other areas (non-distressed areas). The SESA exemption can be to 100 percent exemption for a maximum period of 15 years. The alternative SESA incentive is equal to a maximum of 50 percent exemption for a period of up to 15 years. The SESA incentive program makes doing business in Michigan quite advantageous.

Michigan Community Revitalization Program (MCRP)

The MCRP is one of the top Michigan small business incentives programs and is made available to small businesses by the Michigan Strategic Fund (MSF). The focus of the Michigan Community Revitalization Program (MCRP) is to encourage as well as promote redevelopment of brownfield and historic preservation sites along with structural renovations of sites located near high-impact corridors and in traditional downtowns. This program may require businesses or applicants to pay an application fee or any other expense, which is incurred during administering of the award. The proposed incentive amount can be less than or more than $1,000,000.

Funding Support Programs in Michigan

The Michigan Economic Development Corporation has created several programs that focus on Michigan small business funding. One of the key factors that contribute to operating a business successfully is access to capital. Most small to medium-sized businesses require some form of capital, and this is made possible through MEDC Capital Access. MEDC Capital Access is made up of several other programs and their primary objective is to help small businesses throughout the state receive loans from banks as well as lending institutions. Some of the programs within MEDC Capital Access include the Collateral Support Program, the Loan Participation Program, and the Capital Access Program.

Growing MI Business Grant program

The Growing MI Business Grants Program by the Michigan Department of Treasury provides funding to businesses in different industries. This Michigan small business grants program aids in the creation of a process by which small businesses can receive a specific percentage of the financial losses incurred by the entity. It is calculated based on the said entity’s entire timeline of operation. The total amount of funds available to eligible businesses is $409 million. Some of the business categories eligible under the Michigan small business funding program include entertainment venues, recreational facilities, exercise facilities, food establishments, and public lodging establishments among others.

Michigan Small Business Survival Grant Program

The Michigan Small Business Survival Grant program supports the funding needs of various businesses in the state that have been disproportionately impacted by COVID-19. This Michigan small business grants program makes grants available of up to $20,000 for businesses that closed down due to the Covid-19 impact. It also awards grants of up to $15,000 to businesses that are operational or partially closed. The grant is disbursed through nonprofit economic development organizations (EDO) in the state like Invest UP, Target Alpena, Middle Michigan Development Corporation, Lansing Economic Area Partnership, and Ann Arbor Spark among others.

Ready to Start a Business in Michigan?

Every new startup or business requires some form of financial assistance during its formation and operational stage, this helps them to execute their business goals in a better way. The state offers several kinds of assistance through the Michigan small business incentives programs specifically for small and medium enterprises across diverse industries. If you want to start a new business in this state then there are plenty of funding programs you can take advantage of after registering or incorporating your company.

Michigan Business Tax

Most business entities are required to file tax returns at the federal level as well as the state level. If you have registered a company in Michigan then some form of business taxes may be applicable. A Michigan business tax calculator will help you in determining your taxes but before that, you will need to understand the various taxes required by the state. The Michigan business tax rates, as well as the filing processes, will be different from those in other states of the USA. It is also important to note that foreign entities would be required to file taxes in their home state (state of formation) as well as Michigan or other states of operations.

What taxes do businesses pay in Michigan?

The state of Michigan is considered to be one of the top states for new and expanded corporate facilities. It is currently ranked number 3 with the most popular being the Detroit-Warren-Livonia metro area. The state offers some remarkably aggressive film incentives, which have generated economic activity amounting to $430 million. The state also has a fairly good business tax climate that attracts entrepreneurs to the state.

Corporate Income Tax (CIT)

The Corporate Income Tax (CIT) has a flat rate of 6% and has to be filed by profit corporations in the state of Michigan. This is one of the important Michigan Corporation taxes and will not be applicable if the apportioned gross receipts are less than $350,000. There is a formula for this type of tax and is currently based on an entity’s sales in the state, divided by its total sales everywhere. The CIT has replaced the Michigan Business Tax (MBT) since 2012. It is important to note that certain tax credits or tax incentives like the Small Business Alternative Tax Credit program help in providing some relief.

Sales and Use Tax

The sales and use tax is an important Michigan business tax and will be paid to the state or local governing body depending on the jurisdiction in which the said business is operating. Normally, a business owner or entity involved in the selling of taxable goods or services has to collect this tax from purchasers or consumers and pass it forward to the appropriate state or local tax authority. This tax is administered by the Michigan Department of Treasury. The base tax rate for Michigan sales tax is 6% and the local tax is also 6%.

Withholding Tax

The withholding tax is a type of Michigan business tax that is levied at the Federal and state level. It is also known as the payroll withholding tax and the current tax rate in the state is 4.25%. The Department of the Treasury, Internal Revenue Service requires employers to withhold employment taxes from their employees. The employment taxes have several components including federal income tax withholding, Medicare taxes, and Social Security taxes. The IRS provides a withholding table also known as Percentage Method Tables for Income Tax Withholding for withholding allowances and applicable taxes. You can also use a Michigan business tax calculator to determine your withholding taxes at the Federal and state level.

Are you thinking of forming a new company in Michigan?

How are Michigan Businesses taxed?

If you are planning to form a new business in Michigan then one of the foremost annual requirements is filing your business tax returns. The state does not have any franchise tax or privilege tax but there are several other forms of small business taxes. The type of Michigan business tax and the tax rates may vary according to the type of entity structure and the location of the said company. It is also important to note that Michigan LLC tax filing requirements will vary from that of a corporation or a sole proprietorship. You may be required to file more than one type of tax return. Let us look at the various entities and their tax obligations in Michigan.

Taxes for an LLC

If you are planning to start a limited liability company in Michigan, then for taxation purposes it will be considered a pass-through entity. This simply means that the LLC will not be required to file federal or Michigan LLC taxes. Since an LLC is a flow-through entity, the income will pass through to the owners and other members. Normally, in such a situation, members have to file personal income tax and the state has a Flow-Through Entity (FTE) Tax.

Taxes for a C Corporation

If you are thinking of incorporating a Michigan C corporation then your company will be subjected to the Michigan Corporate Income Tax (CIT). The tax rate is a flat 6 percent and it replaced the earlier applicable Michigan Business Tax (MBT) in 2012. The CIT Michigan Corporation taxes takes into account the business income of a C corporation along with certain additions as well as subtractions before apportionment and business loss deduction after apportionment.

Taxes for S Corporation

If you elect an S Corporation tax status in Michigan then one of the benefits is that you will not be required to file Michigan Corporate Income Tax (CIT). However, if an S corporation is an insurance company or a financial institution then it will be subjected to CIT. An S Corporation may also be required to withhold on the shareholders and hence be subjected to withholding tax. One of the important Michigan corporation tax filing requirements is that an S Corporation will be required to submit Form 518 for Michigan Business Tax Registration to file taxes in the state.

Taxes for a Sole Proprietorship

A sole proprietorship is one of the easiest forms of business to start in Michigan. A sole proprietorship is run by a single owner and hence is required to file individual income tax. The tax rate is 4.25 percent and you will have to use the 1040 form to file this return each year. A sole proprietorship may also be required to file sales tax depending on the business activity.

Taxes for Partnerships

If you form a Michigan partnership company then the applicable Michigan business tax would be quite similar to that of sole proprietorships. Partners in the company will be required to file their individual tax returns based on the income they have earned through the said business. Apart from this, if your company is based in Detroit then you will be required to file the City Partnership Tax, which is normally due on the 15th day of the 4th month after the tax year ends. This tax has to be filed by partners although the partnership can elect to pay the taxes on behalf of all the partners.

Ready to Incorporate Your Michigan Company?

You can form different types of entities in Michigan from a Sole Proprietorship, to a Limited Liability Company, or a C Corporation. You can also elect for S Corporation status. There is an exhaustive process for new business formation and you will also need to file all applicable taxes each year. IncParadise, one of the top incorporation service providers in the state can provide you with meaningful assistance. We can help to register your LLC or corporation in Michigan.

Michigan Foreign Qualification

Every state has its own set of advantages that play a key role in attracting entrepreneurs and businesses. The state of Michigan also has several advantages although its business climate is the primary reason behind the increase in Michigan LLC foreign registration. The availability of an abundant workforce is also an important reason why entrepreneurs want to shift their business to this state. There are several top industries including the core industries that have a faster and more stable growth rate like the mobility and automotive manufacturing industry and semiconductor industry. A Michigan foreign business registration will also open the doors to various state business incentives and grants that your company can benefit from.

What is a Michigan foreign qualification?

If you are thinking of expanding your operations to Michigan then you will have to follow the process of foreign qualification in Michigan, which is governed by the Michigan Compiled Laws. This qualification process doesn’t require you to form a new business or register a company all over again. When you opt for Michigan foreign business registration, you will also be able to operate your company in your home state (state of original registration) as well as the new state (Michigan).

Example: You have formed a domestic LLC in Colorado by filing articles of organization. Colorado will be considered as your home state. You are now thinking of expanding your business to Michigan. If you want to move your business completely then you will have to close your Colorado LLC and start a new LLC in Michigan. If you want to operate in both states then you can apply for Michigan LLC foreign registration. This process will provide you with the authority to transact business in the new state as well.

Doing business in Michigan

When a limited-liability company or a business corporation, or any other type of entity is operating in any other state apart from its home state (state of registration) then they are considered a foreign company. Such a company can operate only when they undergo the process of foreign qualification in Michigan. Each state has its own laws when it comes to foreign qualifications, and hence before you can register your business, it is important to understand what doing business in Michigan refers to.

• If a company is defending, maintaining, or settling any legal proceeding
• If an entity has a bank account in the state
• If a business holds meetings in the state
• If a firm is selling its products or services through an independent contractor
• When a company creates or acquires indebtedness, security interests, and mortgages in personal or real property
• If a business secures or collects debts
• When an entity is transacting business in interstate commerce

Michigan Foreign Qualification Process

If you have already registered an LLC or a business corporation in another state but want to conduct business in Michigan then you will need to undergo a Michigan foreign corporation registration. It is important to note that all out-of-state businesses require authority to transact business in the state. If you operate a business without obtaining the required authority then the said business would be considered to be breaking the Michigan Compiled Laws for Foreign LLCs or Corporations. There will be consequences for transacting business without authority including severe penalties. Let us look at the process of a Michigan foreign entity search and registration for LLCs and corporations.

Michigan Foreign Corporation Registration

If you are already operating a corporation in another state and want to expand your operations to Michigan then you will need to apply for a Michigan foreign corporation registration. This is also known as the process of foreign qualification and will be governed by the 2021 Michigan Compiled Laws, Chapter 450 – Corporations, 284-1972-10 Chapter 10 Foreign Corporations. You will have to obtain the authority necessary to transact business in this state and there are certain steps to follow. The steps for a Michigan foreign entity search and registration are:

1. Business Name

The first step towards a Michigan foreign corporation registration is determining a business name and registering it. The corporate name should comply with state laws and should contain words like “corporation,” “incorporated,” or abbreviations like “Inc.,” “corp.,” and “co.” Once you have chosen a name, it is important to conduct a Michigan foreign entity search also known as a name availability search. This will ensure your chosen name is available for registration.

2. Registered Agent

Whether you are forming a new business or incorporating a foreign entity, there are certain state guidelines you have to follow. A Michigan foreign business registration will be possible only if you continuously maintain a registered agent in the state pursuant to MI Comp L § 450.1241 (2021). We at IncParadise are one of the top Michigan registered agents and have helped several domestic and foreign entities to incorporate in this state.

3. Certificate of Authority

The most important step towards a Michigan foreign corporation registration is to get the necessary authorization to transact business in the state. You will need to file the Application for a Certificate of Authority pursuant to MI Comp L § 450.2002 (2019). This application has to be submitted to the Michigan Department of Licensing And Regulatory Affairs, Corporations, and Securities & Commercial Licensing Bureau along with a fee of $60. The fee includes 2 components, which are a non-refundable fee of $10 and an initial franchise fee of $50. You can submit the application using the COFS (Corporations Online Filing System) as well as by mail or in person.

Do you want to register a foreign Corporation in Michigan?

Michigan foreign LLC registration

If you are already operating a limited liability company in another state and want to expand your business to the state of Michigan then one of the best options is foreign qualification. This process is also known as Michigan LLC foreign registration and will help you to transact business in the state without the need to register a new LLC. A Michigan foreign entity search and registration will be governed by the 2021 Michigan Compiled Laws, Chapter 450 – Corporations, Act 23 of 1993 Michigan Limited Liability Company Act (450.4101 – 450.5200) – Article 10. The process for foreign qualification is as follows:

1. Business Name

One of the first requirements for a Michigan LLC foreign registration is a business name. You have to select a name in accordance with the naming regulations of the state. A Michigan LLC name should contain words like “limited liability Company”, “limited company” or abbreviations like L.L.C or LLC. The chosen name should also be available and you can guarantee this is possible by conducting a name availability search also known as a Michigan foreign entity search.

2. Registered Agent

One of the important aspects of any new business formation including a Michigan LLC foreign registration is the service of process, which is executed by a registered agent in the state. According to MI Comp L § 450.4207 (2019), a foreign limited liability company has to continuously maintain a registered agent in the state. A registered agent services offered by IncParadise will not only help fulfill state requirements like service of process but also assist with other annual compliances like filing of annual reports. IncParadise is one of the top Michigan registered agents and has helped with several foreign business registration in this state.

3. Certificate of Authority

A foreign limited liability company that wishes to transact business in this state will need to go through the process of a Michigan foreign business registration or foreign qualification. You will need to apply for and obtain a certificate of authority pursuant to MI Comp L § 450.5002 (2021). The document to be submitted is known as an Application for Certificate of Authority to Transact Business in Michigan and it has to be submitted to the Michigan Department of Licensing and Regulatory Affairs, Corporations, Securities & Commercial Licensing Bureau, Corporations Division. The filing fee is $50 (non-refundable) and you can utilize the expedited service by paying an additional fee. The Michigan LLC foreign registration will require you to submit a Certificate of Good Standing acquired from the home jurisdiction or the state of formation.

Want to form a foreign LLC in Michigan?

Need Any Assistance in Applying for Michigan Foreign Qualification?

Michigan is one of the top states when it comes to the business climate, an experienced workforce, and low cost of operations. Whether you form a domestic entity or apply for a foreign qualification in Michigan there are numerous state benefits including business incentive programs and grants. As one of the leading registered agents in Michigan, IncParadise can assist you with the process of foreign corporation registration or foreign LLC formation.

Doing Business As or DBA in Michigan

Michigan is home to several small businesses, startups, and large enterprises that operate under a variety of entity structures including LLCs, sole proprietorships, and partnerships. Whatever the entity structure, you will need to name your to register and become operational. When a new business is set up, it can use the owner’s legal name like Jenny Baker LLC. Alternatively, the company can proceed with filing a DBA in Michigan like Jenny’s Truffles and Cakes. If you are wondering how to look up a DBA in Michigan, then there is a process that you would need to follow, but first, it is important to identify the conditions under which you can use a DBA.

What is DBA in Michigan?

When we say DBA, it refers to ‘doing business as.’ A DBA (Doing Business As) is a registered business name, which is not the legal name of the owner and one can operate their company under such a name. You need to register a business name and similarly, filing a DBA in Michigan is also necessary. It is also known as an assumed name, trade name, and fictitious name. Normally, when an individual starts a business, by default their name is taken as the name of the entity. In such a scenario, if the said individual doesn’t want to use their legal name and instead chooses another name then he/she will have to fill out a Michigan DBA online application.

Example: If Sophie Smith wants to start a software business then by default the business name will be her own name. If Sophie wants to name her business as “Sophie’s Software Systems” then she will need to apply for a Michigan DBA online. When she registers the DBA, her full name will not be legally attached to the business name.

• The Business Structure – Sometimes the business structure plays a key role in defining the business name. If you start a small business and the entity structure is a sole proprietorship or partnership then you can use your own name or legal name. If you don’t want to use your own name then filing an assumed name certificate in Michigan becomes important. A DBA name can also be used by other entity structures like corporations and LLCs.
• Combination of Names – As an individual or business owner, you can use your own name, the name of partners, or a combination of the owner’s name and the product or services being offered. If Susan Shaw and Jane Stewart start a business in wedding planning then the name of the business could be Shaw & Stewart wedding planners or Susan & Jane wedding events. Such a name would not require you to apply for a Michigan DBA online or offline.
• Flexibility – If you’ve already formed an LLC or a profit corporation and want to operate multiple businesses then all you have to do is use fictitious names or assumed names instead of creating a new entity. This is possible by filing the assumed name certificate in Michigan. This option helps to minimize the cost of forming a new business.

Filing DBA in Michigan for an LLC and Corporation

A DBA (doing business as) is known as an assumed name in Michigan and is governed by the Michigan Compiled Laws. If you are planning to form a limited-liability company or a profit corporation in the state then one of the first things to do is select a business name. You can start your company using the owner’s legal name or opt for an assumed name or fictitious name. There is a specific process for filing a DBA in Michigan which includes searching for the name availability. The process as well as the fee may be different from the business name reservation process.

Do a Michigan DBA Name Search

If you are planning to register an assumed name in Michigan then the first step is to select a proper name and then conduct a DBA name search. As a business owner if you are asking yourself how do I look up a DBA in Michigan then the following ways will guide you:

• You can conduct a “Search for a business entity” using the online system of the Michigan Department of Licensing and Regulatory Affairs (LARA). This is a part of the corporation’s online filing system and will provide the option to search through an extensive database of businesses registered or incorporated in the state.
• You can also search for trademarks or federally registered names using the trademark database also known as Trademark Electronic Search System (TESS).

File a Michigan Assumed Name Certificate

Once you have chosen an assumed name for your business after having conducted a trade name search, the next step is to apply for a Michigan DBA online or offline. The registration of an assumed name is an important process as it will help in notifying the general public regarding the existence of such an entity, and the fact that it is conducting its business under the said DBA. The registration of the Michigan trade name is applicable for both domestic and foreign entities.

• 2407 N Grand River Ave
  Lansing, MI 48906
  Telephone: (517) 241-6470

Register your Michigan DBA with ease!

Managing a Michigan DBA

Once you apply for a Michigan DBA online or offline, it will facilitate the ability to transact your business within the state using the said assumed name or DBA. Each state has its own laws and regulations concerning trade names or DBAs. These laws are also applicable for the renewal, changing, or canceling of an assumed name or DBA in the jurisdiction or state where you are planning to conduct your business. Let’s look at the various processes applicable to managing Michigan DBA online applications.

How to renew Michigan DBA?

An assumed name or DBA (Doing Business As) name is valid till December 31 of the 5th full calendar year following the date of name registration. So if you filed your assumed name certificate in Michigan on January 16, 2023, then it will expire on December 31, 2027. The form for a renewal is the same as the registration form, i.e., Certificate of Assumed Name. The renewal fee will be the same as the registration fee, which is $10 for corporations and $25 for limited liability companies.

How to change a Michigan DBA?

After filing a DBA in Michigan, changing the assumed name is possible, but the process will require you to contact the county in which the business is located or is operating from. You will have to file a DBA or assumed name change request with the office of the county clerk. Once you have applied for a name change, you will need to update the information on all official documents like the corporation bylaws or LLC operating agreement, business bank accounts, business licenses and permits, and you will also need to notify the IRS of name change.

How to cancel a Michigan DBA?

If you want to cancel or withdraw a Michigan assumed name or DBA at any given point in time, then it is possible through a different process. You will be required to submit the Certificate of Termination of Assumed Name with the Michigan Department of Licensing And Regulatory Affairs, Corporations, and Securities & Commercial Licensing Bureau. There is a non-refundable fee of $10 for corporations and $25 for limited liability companies.

Need Any Assistance in Filing a Michigan DBA?

The process to apply for a Michigan DBA online or offline requires you to provide accurate information while being compliant to state DBA laws and federal trademark laws. The process of conducting an assumed name search can be quite confusing and demanding. IncParadise can gladly assist you with this process. We have expertise and knowledge regarding Michigan Business Regulations and can help you with the Michigan DBA online application.