If you have incorporated a business in Michigan or planning to form a small business in the state then it’s time to apply for a business license. In order to operate your business in Michigan, business licenses, permits, and other professional licenses have to be obtained. Absence of license or permit to operate a specific business can lead to heavy penalties and in some cases, closure of the business.

There are several types of businesses that require a permit or business license in Michigan to become operational and at the same time, not all businesses require licenses issued by the state. There are certain licenses or permits that are handled at the city, county, or town level. The information regarding various types of license or permits issued in Michigan is available at the State Licensing Division of the Michigan Government.

How to Get a Business License in Michigan

Where and how do you apply for a Michigan company license? Are permits required for my business entity? Does the business entity require a single license or multiple permits or licenses? Who is the issuing authority for these licenses or permits? The only way to answer these questions is by understanding the process of business licensing.

Here is a step-by-step approach towards acquiring a business license in the state of Michigan.

Step#1: The Industry or Business Type

How would you know what type of business or professional license is required to operate in Michigan? The type of industry or the activities of a business entity helps in identifying the type of business license required.

There is a long list of permits or licenses issued mostly by the state of Michigan but some of the important categories according to industry segmentation are:

• Accountancy
• Agrichemical Bulk Storage Facility Registration
• Different classes of Hotels
• Clothing Manufacturer and store
• Clubs and Coffee shops
• Continuing Care Communities
• Drug Rehabilitation Counselling Centers
• Environmental Testing
• Fish Breeder
• Food Establishment and Food Cart
• Gaming Business
• Grocery Stores
• Alcohol Buyer or Seller
• Loan Company
• Pharmacy

These are some of the categories for which statewide licenses are issued. Click here to check other licenses and permits issued by Michigan State.

Step#2: Licenses issued by City/County

If your business or industry type doesn’t fall under a statewide license then you will have to check with the local city or county office. A business license in Michigan can also be issued by local counties or cities in which the business is located.

Let’s take a look at an example to understand this better.

If you establish a business, which is an Amusement Park in the City of Detroit that has 5 devices (games) or more then the Michigan company license will be issued by City of Detroit, Business License Center.

The fee for the license or permit is $690. If you were to establish a carnival within the premises then you would be required to pay an additional fee of $58 and if there is an outdoor circus then the fee would be an extra $400.

There is a single application that covers all categories of licenses in the City of Detroit. You can check the fee and download application to get an insight into the process.

Step#3: Requirements for Business License

How is a business license in Michigan issued? Is there a process? What documentation is required? The following example will help you understand how the process works:

Type of Business

• Type of Food Service Establishment – A food service establishment consists of restaurants, delicatessens, cafeterias, temporary food service establishments, retail establishments, vending machines, mobile units, and special transitory food units.
• License Issuing Authority – Michigan Department of Agriculture and Rural Development (MDARD)
• Cost of procuring a license or permit – The business license fee for a Retail Food Establishment is $186 and this includes grocery store, retail bakery, convenience store, and fish market among others. If you want to establish a fixed restaurant, cafeteria, coffee shop, luncheonette, tearoom or any other eating or drinking establishment then you will be required to contact the local health department to know the license fee applicable. Download Application

If you have any questions regarding registration of your business or require information regarding business license in Michigan, feel free to call us at 702-871-8678.

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Is there any advantage for a startup company Michigan? The state with 64,980 inland lakes is considered to be the center of the U.S. automotive industry with three major automobile companies headquartered within the Detroit metropolitan area. Today, Michigan is ranked among the top 10 states that offer an excellent business climate to start-ups and new businesses. The sector industry in terms of growth, expansion, and payroll jobs is the Manufacturing sector followed closely by the financial activities sector, Information, Construction, and Other services sector (nonprofit organization, and personal services).

Business Growth Incentive for New Businesses

As one of the top registered agents in the state, we can help you to register a new business in Michigan as this will ensure you are able to take advantage of the business climate and leverage state provided incentives and grants. Let’s take a quick look at why Michigan is the right destination for establishing a business:

Advantage#1: The benefits of Incorporation or LLC formation

Corporation

• Michigan Corporate Income Tax (CIT) Credit: It is also known as MBT certificated credits and corporations and can derive tax credits under this program on their corporate income tax. There are a variety of credits applicable under this including federal contracts credit, brownfield redevelopment credit, and hybrid technology research and development credit among others.
• Independent life: When you register a new business in Michigan as a Corporation, it will enjoy an independent life. This means that the incapacitation or death of a stockholder will not have a negative impact on the business operations.
• Changes in Ownership: One of the advantages of a start-up company Michigan is that changes in ownership are made possible through sale, purchase, and gifting of stock. This can take place without disturbing the ability of the corporation to conduct its business.

LLC

• Industrial and Hi-Tech Tax Abatement (PA 198): If you register a new business in Michigan as an LLC then you can qualify for several tax abatement and credit programs including the “Industrial and Hi-Tech Tax Abatement” program. As a part of these programs, tax incentives are available to LLC firms that enable renovation as well as expansion of aging facilities and also build new facilities.
• Limited Liability: As an owner of a Michigan LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.
• Flexible Profit Distribution: A start-up company, Michigan LLC has the benefit of being able to select different ways of distribution of profits unlike a partnership where the distribution is 50-50.

Advantage#2: Business Incentive Programs

Once you register a new company in Michigan, the business entity will be able to qualify for several incentive programs that include loans, funds, grants, tax credits and much more. Some of the top incentive programs include:

• Michigan Development Corporation Renaissance Zone: This is a Business Incentive Program where business entities are certified as Eligible Next Michigan Business (ENMB) will be able to benefit from tax exemptions on real property taxes, local corporate income tax, personal property taxes, and utility users tax for a period of 10 years.
• Brownfield Redevelopment: This is a business incentive program that aims at promoting the revitalization of environmentally distressed areas in a city. You can qualify for this program after you register a new business in Michigan. This program promotes “Tax Increment Financing” for environmental as well as non-environmental activities.
• New Personal Property Tax Exemption: As a part of this business incentive program, a business entity involved in research and development, manufacturing, wholesale trade, mining, and operations can be eligible for tax abatement on personal property taxes in specifically targeted areas.

Once you register a new company in Michigan, there are several other programs that you can benefit from and these include Neighborhood Enterprise Zone, MEDC Business Development Program-BDP, Private Sector Gap Financing Tools, Community Ventures Program, New Markets Tax Credits, Small Business Alternative Credit, and Michigan Pre-Seed Capi​​​tal Fund​​​​​ among others.

Are there any Disadvantages of Incorporating in Michigan?

Michigan provides a very good business climate and plenty opportunities for small and medium sized businesses. This is not all; there are several state, city/county, and federal incentives that a start-up company in Michigan can benefit from but are there any disadvantages that can hamper business growth? There are a few disadvantages and they vary according to the type of business entity you plan to form. For instance, the processing of a corporation requires more documentation as compared to an LLC. The disadvantages are almost inconsequential as compared to the advantages the state offers.

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Michigan has been witnessing good growth and it has a stable economy. The dollar GDP of Michigan was $505 billion in 2017 and 39 percent of the GDP comes from international trade (imports and exports). The industry with maximum contribution to the GDP is the manufacturing industry and this is the industry where most people form a Michigan business in. Another industry that is currently ranked 3rd in the state is professional and business services and the real value added by this industry to the Gross Domestic Product (GDP) of Michigan is $60.6 billion.

How do you form a Michigan business LLC or Corporation? There is a specific process that you need to follow to ensure proper registration of your business in the state. We have provided a small guide to help you in getting an insight into the process.

If you feel overwhelmed by the process or require any information regarding company formation in Michigan then we are there to help you! We are one of the top Michigan registered agents and are familiar with all business processes pertaining to the state of Michigan.

Michigan LLC Registration and Formation

LLC company formation in Michigan is governed by Chapter 428 Uniform Limited Liability Company Act. The procedure for registration and formation of LLC is as follows:

Step#1: Maintain a registered agent

If you are planning to form a Limited Liability Company in Michigan then you will be required to continuously maintain a registered agent in the state pursuant to MI Comp L § 450.4207 (2014). This law is applicable for domestic limited liability companies as well as foreign limited liability companies. We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in Michigan. We can assist you to form a Michigan business LLC.

Step#2: LLC Name Reservation

One of the foremost steps towards company formation in Michigan is identifying a name for your business entity. What is the process? The process is as follows:

• Identify a name for your business entity
• According to MI Comp L § 450.4205 (2014), the name should contain the phrase or words “limited liability company” or the abbreviations “L.L.C.”, or “LLC”.
• The chosen name should be distinguishable and should not be deceptively similar to the name of any limited partnership, corporation, or limited liability company
• Apply for reservation of name pursuant to the provisions of Act 23, Public Acts of 1993 (limited liability companies)
• Submit the form though mail or online with the Michigan Department of Licensing and Regulatory Affairs along with the applicable fee. An LLC can reserve its name for a period of 6 months.

Step#3: Articles of Organization and Certificate of Authority

If you are planning to form a Michigan business LLC then the most important step is to prepare and file the proper documents for a Limited Liability Company. The steps are:

• If you want to register a domestic LLC then you will be required to file “Articles of Organization” governed by MI Comp L § 450.4203 (2014).
• If your business entity is a foreign LLC then you will be required to file “Certificate of Authority” pursuant to MI Comp L § 450.5001 (2014).
• The application or documentation for registration of LLC can be filed with the office of the Michigan Department of Licensing and Regulatory Affairs, in person or online.

We can file the form on your behalf as your registered agent in the state and provide you with certified copies of the LLC registration.

In case, you have any questions regarding how to form a Michigan business, feel free to call us on 702-871-8678.

Michigan Corporation Registration and Formation

If you are planning to form a Corporation in Michigan then the procedure for registration and formation is as follows:

Step#1: Maintain a Registered Agent

If you are planning to form a business or professional corporation in Michigan then you will be required to continuously maintain a registered agent in the state pursuant to MI Comp L § 450.1241 (2014). This law is applicable for domestic as well as foreign corporations. We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in Michigan. We can assist you to form a Michigan business as we are in compliance with all regulations in the State of Michigan.

Step#2: Corporate Name Reservation

In order to form a corporation in Michigan, one of the key steps is identifying a name for your business entity. What is the process? The process is as follows:

• Identify a name for your business entity
• According to MI Comp L § 450.1212 (2014), a corporate name should contain the phrase or words “corporation”, “company”, “incorporated”, or the abbreviations “Corp.”, or “Inc.”
• The chosen name should be distinguishable and should not be deceptively similar to the name of any limited liability company, limited partnership, or corporation
• Apply for reservation of name pursuant to MI Comp L § 450.1215 (2014).
• Submit the form through mail or online with the Michigan Department of Licensing and Regulatory Affairs along with the applicable fee. An LLC can reserve its name for a period of 6 months.

Step#3: Articles of Incorporation and Certificate of Authority

If you are planning to form a corporation in Michigan, then the most important step is to prepare and file the proper documents for a business corporation. The steps are:

• If you want to register a domestic corporation then you will be required to file “Articles of Incorporation” pursuant to MI Comp L § 450.1202 (2014).
• If your business entity is a foreign corporation then you will be required to file an ” Certificate of Authority” to transact business in the state pursuant to MI Comp L § 450.2002 (2014).
• The application or documentation for registration of a corporation can be filed with the office of the Michigan Department of Licensing and Regulatory Affairs, in person or online.

We can file the form on your behalf as your registered agent in the state and provide you with certified copies of the incorporation.

If you have any questions regarding Michigan incorporation or LLC formation, you can simply visit the Michigan Business formation page.

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Business Information & Rankings

• Michigan ranked 8th on the Top States Business Climate Rankings. (Site Selection, 2005)
• Michigan ranked 2nd for New Capital Spending for 2005. (Ernst & Young’s U.S. Investment Monitor)
• Michigan ranked 5th as a Small Business-Friendly State. (Small Business & Entrepreneurship Council’s Small Business Survival Index, 2005)
• Michigan ranks as the leading U.S. automobile manufacturer.

Cost of Living Index

Crime Rate

Michigan has the 20th lowest overall crime ranking in the U.S. However, it ranks 3rd in hate crimes. (FBI, 2004)

Fees & Taxes

Business Inventory Tax
Business inventory is exempt.

Corporate Income Tax
Michigan charges a Single Business Tax (SBT), which is a modified value-added tax (VAT). The base of the SBT is the difference between a company’s sales and the cost of materials. The SBT consists of two brackets. All taxable receipts under $45,000 are not taxed. All receipts over $45,000 are taxed at a 1.9% rate.

Personal Income Tax
Michigan charges a 3.95% flat rate tax (7/2004).

Personal Property Tax
Taxable. Michigan is one of the 38 states that collect property taxes at both the state and local levels. Michigan no longer has an intangible property tax.

State Sales and Use Tax
Base Rate: 6.0%
Machinery Rate: None

There is an exemption for sales to an industrial processor for use or consumption in industrial processing; computers and computer equipment used in operating industrial processing equipment.

Unemployment Insurance
Michigan’s new employers’ rate is 2.7% for 2 years.

Once your company is set up, you will need:

1. Tax ID (EIN) – free over the Internet or phone.
2. Yearly Requirements and Fees for Minnesota companies
3. Company Minutes & Stock Certificates – are included in incorporation. You will have access to documents generated on your client account.

Minnesota additional services

• Registered Agent
• Annual Report
• EIN (Tax ID)
• More Additional Services

• Why Minesota?
• Minesota Registered Agent
• Minesota Annual Requirements
• Minesota Corporation Statutes: Minnesota Statutes 2005: Chapter 302A