Select a business name in the first step. You must select a name that is available and complies with Michigan’s rules before registering your firm. On the website of the Michigan Department of Licensing and Regulatory Affairs (LARA), you can look up available company names. Your company name needs to be distinctive and different from any other registered firm in the state. Although Michigan does not mandate LLC in company names, it is advised to do so in order to make your business structure very apparent.
Step 2: File a state registration form You must submit a “Certificate of Conducting Business as a Sole Proprietorship” to LARA in order to register your sole proprietorship in Michigan. Online or mail-in filing is an option. The processing time is normally 7 to 10 business days, and the filing fee is $10. A certificate of registration will be given to you if your registration is accepted.
Step 3: Acquire Required Licenses and Permits You might need to apply for extra licenses and permits from the state or local government depending on the nature of your firm. By contacting your local government agency or using the Michigan Business One Stop website, you can look up licenses and permits.
LLC versus Sole Proprietorship
Whether to file as a sole proprietorship or an LLC is a popular question. While each business form has advantages and disadvantages of its own, LLCs often provide additional legal and tax protection. The owner of a sole proprietorship is personally responsible for all business debts and obligations, but it is simpler and less expensive to start up and operate. Business License for an LLC And finally, if you have an LLC, do you need a business license? Yes, it is the answer. Depending on your business operations, you might still require a business license or permit from the state or local government, even if you have an LLC.
In conclusion, remember to follow these instructions to register your business with the state if you’re launching a sole proprietorship in Michigan. In order to ensure compliance with local and state legislation, you should also do your homework and acquire any licenses or permissions that are required. A sole proprietorship might be an easy and affordable alternative for establishing your firm, even though forming as an LLC may provide more legal and tax advantages.
Doing Business As (DBA)s do not submit a separate tax return. Any income and costs associated with a sole proprietorship are recorded on the owner’s personal tax return, and a DBA is simply a name under which the business conducts its operations.
You can pay yourself in a number of ways if you’ve created an LLC, such as as a salary, through guaranteed payments, or through distributions of earnings. It is crucial to keep in mind that the solution you select can have tax repercussions, so it is advised to speak with a tax expert to figure out the greatest course of action for your particular circumstance.