One of the initial actions you must take when opening a business in Michigan is to register your company name with the government. Depending on the kind of business entity you’re creating, the cost of registering a business name in Michigan varies. The costs are broken down as follows:
– Sole proprietorship: You don’t need to register your business name with the state if you’re operating your business as a sole proprietorship and using your own name as your business name. However, if your company is operating under a different name, you must submit a “Certificate of Assumed Name” to the county clerk’s office where your company is based. Depending on the county, this certificate’s filing fee ranges from $10 to $20.
– LLC: The Michigan Department of Licensing and Regulatory Affairs (LARA) must receive “Articles of Organization” from any limited liability companies (LLCs) that are being formed there. $50 is the filing fee for this. The “Articles of Incorporation” must be filed with LARA if you’re establishing a corporation in Michigan. A $50 filing fee is required for this.
Depending on the kind of business you’re running and where it’s located, you might also need to apply for a business license or permit in addition to registering your business name. Even though establishing an LLC doesn’t mandate that you get a business license, some industries may need particular permits or licenses. In order to make sure you are in compliance with all applicable rules, it is crucial to research the requirements for your specific business and location. Does Michigan require that I register my sole proprietorship?
Although you don’t have to register your sole proprietorship with the state of Michigan, depending on the kind of business you run and where it’s located, you might need to get a few licenses or permits. For instance, the Michigan Department of Agriculture and Rural Development will need you to obtain a food service license if you’re running a food service enterprise. Do sole proprietorships need to be registered?
As previously stated, if you use your own name as your business name, you don’t need to register your sole proprietorship with the state of Michigan. However, if your company is operating under a different name, you must submit a “Certificate of Assumed Name” to the county clerk’s office where your company is based.
Other than getting the required business licenses or permissions, there are no formal steps required to run a single proprietorship in Michigan. However, it’s a good idea to maintain complete records of your business’s earnings and outlays and to speak with a tax expert to be sure you’re complying with all applicable tax requirements.
A DBA (Doing Business As) doesn’t give the business owner any legal protection, which is one of its key drawbacks. This implies that any debts or legal actions brought against the company are the owner’s personal responsibility. DBAs also don’t provide trademark protection, so another company can use the same or a similar name without repercussions. Finally, DBAs might not be acknowledged by financial institutions, lenders, or other organizations, which can make it challenging to get loans or complete commercial transactions.
An additional tax return is not filed for a DBA (Doing Business As). Instead, the owner’s personal tax return is used to detail the business’s earnings and outlays.