How to Start an LLC in Michigan for Free
Most LLCs in Michigan must pay the $50 domestic filing fee. But you may qualify for exemptions. Read on to learn how.
 |
Starting an LLC in Michigan without spending anything might be a stretch. But cutting down costs is achievable.
Start Your LLC for $0 - Just Pay State Fees
- Check business name availability
- Lifetime compliance alerts
- Lifetime support via email and phone
- LLC filing + optional tools to build your brand
Form Your LLC at $0 + State Filing Fees
- Articles of organization
- Name check service
- Digital welcome packet
- Initial phone consultations with specialists about business insurance and taxes
Starter - $0 + State Filing Fees
- Includes 1 optional free year of Worry-Free Compliance that renews at $199/year
- Standard filing speed
- 100% accuracy guaranteed
- Other services are available with additional costs
That said, there are other costs to consider. But this guide will help you determine where and how you can save. Read on.
Why Should I Form an LLC in Michigan?
The Great Lakes State offers plenty of benefits for those who are brave enough to launch a limited liability company in the state.
Below are some of the best reasons to form an LLC in Michigan:
- Low startup and annual costs
It costs only $50 to file the Articles of Organization
with the Department of Licensing and Regulatory Affairs.[1] This is fairly cheap compared to other states' $100+ filing fees.
Annual report filing fees are cheap too—just $25 for general LLCs and $75 for professional LLCs. An LLC specifically for licensed professionals like doctors, engineers, and accountants.[2] The state doesn't require any other yearly costs aside from this, which helps you keep recurring costs low.
- Flat taxes and SALT workaround
Michigan has one of the lowest personal income tax rates in the country at 4.25%.[3] As an LLC owner, you get to keep more of the business profits.You might also benefit from Michigan's tax cap workaround. Instead of you paying state taxes directly, your LLC can elect to pay them at the business level. That's a big win because the IRS will recognize it as a business expense; you get to deduct the full amount instead of being stuck with the $10,000 limit.
- Generous R&D credit
Doing research and development activities in Michigan has never been better. Starting in 2025, the state is offering a juicy refundable tax credit: if your credit is bigger than your tax bill, you actually get cash back.Small businesses can claim up to $250 thousand, while bigger companies can get up to $2 million, just for doing qualifying R&D work right in the state.[4]
So if you want to build cool stuff with a Michigan LLC, now's the time to do so.
- Strategic location and world-class logistics
Michigan is considered the center of North America's trade game. You're within 500 miles of nearly half the U.S. and Canadian population, which means faster shipping and lower delivery costs to major hubs like Chicago, Toronto, New York, and beyond.Plus, Michigan doesn't slack on infrastructure. You've got multiple deep-water ports on the Great Lakes and one of the best-connected cargo airports in the country. If that's not enough, the state also hosts the busiest commercial border crossing with Canada, right in Detroit-Windsor.
Michigan can be a good state to start an LLC if you can maximize the state's unique benefits for entrepreneurs. Aside from its low filing fees, you might benefit from the Great Lakes State's strategic location, world-class infrastructure, and plenty of tax credits for qualified businesses.
Can You Get a Free LLC in Michigan?
You can start an LLC in Michigan for free through waiver fees if you're a veteran. You can also save on other costs through free LLC formation packages or by filing all the paperwork yourself.
Here's how to do each of them.
Apply for a Veteran-Owned LLC Fee Waiver
Michigan LLCs with a majority of interests owned by veterans may qualify for LLC fee waivers.[5] This means you won't have to pay for the LLC formation filing fee and annual report fee. Michigan's domestic filing fee is $50.
Just present evidence of your veteran status and prove that at least 51% of the LLC is owned by veterans.[5]
You can show your veteran status through your:[5]
- VA Veteran Health Identification Card
- Certificate of Military Service
- Certificate of Release or Discharge from Active Duty
- Michigan driver's license with Veteran designation
Not qualified for a waiver fee? Try a DIY approach instead.
Try a Do-It-Yourself Approach
If you plan to form an LLC in Michigan, consider doing everything yourself. This way, you won't have to pay for LLC formation services. These services can cost anywhere from $50 to $399 depending on the additional services included.
That said, here are some of the LLC formation expenses you need to prepare for:
| Michigan LLC Fee | Cost |
|---|---|
| Michigan LLC Formation Fee | $50[6] |
| Name Reservation Fee | $25[6] |
| Certificate of Assumed Name Fee | $25[6] |
| Operating Agreement Fee | Up to $2,000+ |
| Resident Agent Services Fee | Up to $399+ |
| Legal and Tax Advice | Up to $1,000+ |
The cheapest way to start an LLC in Michigan is to do everything on your own. For example, you can file the Articles of Organization, be the LLC's resident agent, and create the Operating Agreement using a free template online.
Here are the steps to get started:
- Name Your Michigan LLC ($0 to $50)
There's no cost to naming your LLC. It's included when you pay the LLC formation filing fee. You'll also be asked to write your desired LLC name in the Articles of Organization.But before choosing a business name, you must conduct a name search. Michigan has a business database that you can access for free.
You can also reserve your desired name first. Paying the $25 name reservation fee can save that name for 6 months.[7] Plus, you can register an assumed name for an additional $25.[6] This lets your LLC do business under a different name.
Michigan's Naming Requirements:
Make sure to follow the state's naming requirements to prevent your Articles of Organization from getting rejected. For example, your LLC name must not contain restricted words if you can't prove that your LLC meets the criteria for using that word. Restricted words include:[8]- Hospital
- College
- Bank
- Drugstore
- Insurance
- Hospital
- Create an Operating Agreement ($0 to $2,000+)
You're not required to have an Operating Agreement in Michigan. But it's highly recommended because it outlines the internal rules and structure of your LLC.You can create one for free by using templates online. You can also use Article V of your Articles of Organization as an Operating Agreement.
Alternatively, you could hire an attorney to draft one for you. A business attorney typically charges a flat fee ($500 to $2,000) for a standard Operating Agreement. You might be charged an hourly rate ($150 to $350 per hour) if you need a more complex Operating Agreement.
LLC Operating Agreement
Among other things, an Operating Agreement should state:- The LLC's management structure (member or manager-managed)
- Each member/manager's initial contribution
- How the profits and losses are distributed
- The responsibilities of each member/manager
- The procedures for when a member/manager leaves or sells shares of the business
- The LLC's management structure (member or manager-managed)
- Choose a Resident Agent ($0 to $399+)
All Michigan LLCs are required to have a resident agent. Also called a registered agent, a resident agent is responsible for receiving business and legal documents on behalf of your LLC.You can do it for free if you're your LLC's resident agent. You only need to be at least 18 years old and have a physical street address in Michigan. Otherwise, professional resident agent services may cost up to $399+ per year.
How much does a resident agent cost in Michigan?
In Michigan, resident agent services could cost as low as $35 a year. However, the price gets higher if you want to use additional business services. Some resident agents offer their services for free in the first year. - File Your Articles of Organization ($50 to $1,000)
Your LLC's formation documents are commonly called the Articles of Organization. It contains important information about your LLC, including:- LLC name (with an "LLC" or "Limited Liability Company" at the end)
- Business purpose
- Duration of your LLC's life
- Resident agent's name and address
It could take days or weeks to process your application depending on the number of applicants. But you can expedite the process for a fee:[9]
- $50: 24-hour expedite
- $100: same-day expedite
- $500: two-hour expedite (if received by 3 PM ET)
- $1,000: one-hour expedite (if received by 4 PM ET)
You must submit your documents with the $50 domestic filing fee to the Michigan Department of Licensing and Regulatory Affairs. Unfortunately, the filing fee is mandatory. There's no way to file your articles for free unless you're a veteran.
Foreign LLC Registration in Michigan
In Michigan, the $50 filing fee is the same for domestic and foreign LLC registrations. But instead of the Articles of Organization, you need to register an Application for a Certificate of Authority to Transact Business in Michigan. This is an entirely different process and involves other steps. - LLC name (with an "LLC" or "Limited Liability Company" at the end)
- Get an EIN ($0 to $$)
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS). This number is used to identify a business entity for tax-related purposes.Some LLC formation services offer to process your EIN for a fee. That said, the IRS never charges fees for obtaining an EIN. You can get an EIN online in a few minutes at no cost.[10]
Note that you're not required to get an EIN if you're operating a single-member LLC. But you might need it eventually if you hire employees or open a business bank account.
As an optional step, you can seek business, legal, and tax advice for your LLC. Consulting with professionals will help you make the best business decisions, ensure you're complying with federal, state, and local policies, and help you minimize your tax burden.
Do these steps seem complicated? Try a free LLC formation service instead. They'll do the work for you.
Select a Free LLC Formation Package
LLC formation services help you avoid the hassle of doing the paperwork yourself. They can also answer your questions and ensure you follow the correct procedures when forming your LLC.
Here's a list of what they typically offer:
- Business name availability search
- Preparation and filing of your LLC paperwork
- Registered agent services
- EIN services
Some companies offer to file your LLC formation documents for free while providing freebies like registered agent services for 1 year. But you may still have to pay for other services, like creating an operating agreement.
You can get started by checking out the companies that offer free packages below.
Best Free LLC Formation Packages
The best free packages offer services more than filing your Articles of Organization. First up on this list is Bizee, one of the most affordable business formation services today.
Bizee: Basic Package
Bizee, formerly known as Incfile, offers a Basic Package with a free LLC formation service. You just need to pay the state filing fee.
With Bizee, you'll also get free registered agent services for a year. These include receiving and scanning important legal documents on your behalf, such as tax notices and service of process.
ZenBusiness: Starter Package
ZenBusiness has a starter package for new entrepreneurs. It includes an LLC formation service and a 100% accuracy guarantee. This means your formation documents will be refiled for free if there is any mistake due to their error.
You can also use their Worry-Free Compliance service, so you never have to worry about missing deadlines for your annual report.
However, unlike Bizee, ZenBusiness' resident agent service comes with annual fees regardless of your package. It will cost you an additional $199 per year.[11]
Starter - $0 + State Filing Fees
- Includes 1 optional free year of Worry-Free Compliance that renews at $199/year
- Standard filing speed
- 100% accuracy guaranteed
- Other services are available with additional costs
Inc Authority: Free LLC Package
Inc Authority helps you form an LLC online for free. Just note that this doesn't waive Michigan's $50 domestic filing fee.
Inc Authority will prepare your formation documents and submit them to the Licensing and Regulatory Affairs. You also get a free resident agent service during your first year.
Swyft Filings: Basic Package
Swyft Filings has a basic package that includes free LLC formation services. You just need to pay Michigan's $50 state filing fee.
Swyft Filing's ComplianceGuard will automatically be added to your total bill. It's a 14-day free trial for a service that helps you stay compliant with annual state requirements.
Having said all this, it's not possible to start an LLC in Michigan completely for $0. Below are annual expenses you can't avoid.
LLC Annual Expenses You Can't Avoid
LLCs in Michigan generally can't avoid two types of annual expenses—the annual report fee and annual taxes. These fees are discussed below.
Michigan Annual Report
All LLCs in Michigan must submit an annual statement along with the $25 filing fee.[6] It updates the state of your LLC's current information, including the business address and registered agent's name. The report also confirms that your business is still active.
In Michigan, the LLC annual report is due by February 15th each year, starting the year after your business is formed. But if your LLC was formed after September 30th, you don't have to file an annual report in the year immediately following your formation.[12]
If your LLC's annual report is not submitted or the fee is unpaid within two years of the due date, your LLC will no longer be in good standing.[13] You can't get a Certificate of Good Standing, typically required by banks and investors. And you'll have to pay extra to reinstate your LLC.
All LLCs in Michigan must pay the $25 annual report fee.[6] You must also pay federal, state, and local taxes. Other annual expenses like resident agent services could add to your total bill as well.
Michigan Business Taxes
Your LLC in Michigan must budget for annual local, state, and federal taxes. LLC members are considered self-employed and must pay self-employment taxes on their share of the profits.
| Self-employment Tax Rate | 15.3% (combined); 12.4% goes to Social Security and 2.9% to Medicare[14] |
|---|---|
| Federal Income Tax | 10% to 37% of your taxable income[15] |
| Income Tax in Michigan | 4.25%[16] |
Additionally, some municipalities collect local income taxes:
| Municipality | For Residents | For Non-residents |
|---|---|---|
| Detroit[17] | 2.4% | 1.2% |
| East Lansing[18] | 1% | 0.5% |
| Flint[19] | 1% | 0.5% |
| Grand Rapids[20] | 1.5% | 0.75% |
If your LLC in Michigan sells products, you must also collect a 6% sales tax.[21] You can register online for a seller's permit (for free). Depending on the purpose and nature of your business, your LLC might be subject to more tax.
Consult with a tax advisor to determine the specific taxes that apply to your business. A qualified accountant could charge $300 yearly for a simple tax return. The fee is higher for more complex tax requirements.
Apart from the typical annual expenses, there are other fees you may need to budget for. Read on.
Other Potential Costs for LLCs
Some of these costs aren't mandatory. But since they can be essential in starting an LLC, it's always better to prepare for them.
Business Permits and Licenses
Michigan does not have a general state-level business license. However, your LLC may need to get local business permits. For example, at Grand Rapids, business licenses for home-based businesses and street vendors could cost up to $500.[22]
In Detroit, businesses with a physical location must get a Certificate of Occupancy and a business license. The certificate is free, but licenses could cost up to $1,500.[23]
The number of permits and licenses your LLC needs depends on its business purpose. Some businesses may be regulated simultaneously by various governmental offices, racking up total costs of over $1,000.
Most LLCs who sell taxable goods or services in Michigan need a sales tax license.[24] Even if you only sell online, you still need to get a sales tax license.
Business Bank Account
An LLC provides limited liability. This means personal assets (like your home and car) are protected from business debts and liabilities. However, mixing personal and business finances in one bank account can weaken this shield.
If you can't clearly distinguish between personal and business transactions, a court might hold you personally liable for business debts. A separate business bank account creates a clear separation of personal and business finances.
While opening a business bank account is frequently accompanied by charges, check out banks for LLCs that have low fees and valuable perks to help your business grow.
Once your LLC has a sufficient credit history, you can submit a business loan application to the U.S. Small Business Administration. You must submit a business plan and show proof that you understand your LLC's finances.
Business Insurance
If your newly-formed Michigan LLC needs to hire employees, you might need to get workers' compensation insurance.[25]
You can get workers' insurance policies through the following:[25]
- Compensation Advisory Organization of Michigan
- Private Insurance Carrier
- Self-insurance
If you have no plans to hire employees soon, your LLC may still benefit from business insurance that covers expenses from unexpected events and damaged property.
When shopping around for business insurance, consider the specific risks your LLC faces. Prioritize getting the right coverage for your specific needs and get quotes from multiple providers.
LLC Employer Obligations
If you're planning to hire staff for your Michigan LLC, you must comply with certain employer obligations like:
- Reporting employees
In Michigan, employers must report new staff to the government within 20 days of hiring them. - Withholding taxes
As an employer, you must withhold federal, state, and local income taxes from your employees' wages. Then, forward everything to the government. - Paying unemployment taxes
It's also your responsibility as an employer to contribute to the state's unemployment fund, which helps provide benefits to people who lose their jobs.
Take time to learn more about your obligations as an employer, from local to federal requirements.
Business Website
A business website and social media presence are dedicated online spaces for your LLC. They're essential for marketing, customer engagement, and brand visibility in today's digital world.
Hire a professional web developer if you want a highly customized and unique website. Or you can do it yourself using a website template through popular content management systems like WordPress and Wix (around $15 to $20/mo).
Even if you're not planning to build a business website now, it's a good idea to at least buy the domain name. This prevents others from using your LLC's name as a web address.
Domain squatters often monitor newly registered LLC names. They purchase corresponding website domains and then resell them at significantly higher prices.
Types of LLC in Michigan
There are several types of LLC structures in Michigan:
- Single-member LLC
An LLC with only one owner, common for freelancers and solopreneurs. It still gets full liability protection and can be taxed as a sole proprietorship or S corp. - Multi-member LLC
An LLC with two or more owners. It can be member-managed, meaning all the members are involved in the day-to-day operations of the business. Or, it can be manager-managed, so only one person is in charge of running the LLC. - L3C
Also known as "low-profit liability companies," a business structure that combines the benefits of a nonprofit and for-profit LLC. The business cause must remain the primary focus, while the earnings are only secondary. - Series LLC
A Series LLC allows you to create individual "series" or units under a single LLC, each with its own assets, liabilities, members, and business purpose. It's commonly used for businesses managing multiple product lines. Each series can have liability protection separate from the others. - Restricted LLC
Restricted LLCs aren't taxed during the first 10 years of formation. The clincher is this kind structure prevents making distributions to members. Also, the articles of organization must expressly state that the LLC will be restricted. - Professional LLC
This one's for licensed professionals like doctors, lawyers, architects, accountants, or veterinarians who want to form an LLC. All members must be licensed in the same profession. - Foreign LLC
An LLC formed in another state that wants to do business in Michigan. You must register your out-of-state LLC as a foreign entity with the Michigan Department of Licensing and Regulatory Affairs to operate legally.
Of course, one type of LLC can also be another. For example, a series LLC could also be a restricted LLC. You can mix and match the different types of Michigan LLC structures based on your needs.
Michigan LLC Resources
Starting an LLC in Michigan can be much easier when you know where to get the help you need (and never knew you needed). Here are some of the essential go-to sites for Michigan LLC owner aspirers:
- Department of Licensing and Regulatory Affairs
Download limited liability company forms and compile a list of business licenses and permits your LLC will need. - Business Entity Search
Before filing the articles of organization, search for the business name you want to use to see if it's available. If you choose a name already being used in the state, the state will reject your LLC application. - Michigan Department of Treasury - Taxes
Learn more about the state and local taxes your LLC needs to pay, depending on what your LLCs does and where it's located. - Michigan Incentive Programs
The Michigan Economic Development Corporation is your gateway to business grants, loans, or other financial assistance. They offer plenty of choices for startup entrepreneurs, and some can help you pay for LLC filing fees. - Michigan Small Business Development Center
Get free access to a growth team that can help you plan your business growth, better understand your LLC's evolving market, and educate you on ways to improve your LLC's cyber security. - Michigan Works!
Michigan Works offers comprehensive employer solutions like recruitment assistance, help with online job postings, and wage research. They can help you attract and recruit the best qualified candidates for your Michigan LLC. - Pure Michigan Business Connect
This free service gives you access to local, national, and global supply chain sourcing opportunities. Useful for both the supplier and buyer.
Check out this list of informative articles, best for beginner entrepreneurs:
Bottom Line
You can start an LLC in Michigan for free if you qualify for fee waivers. These fee waivers are available for veteran-owned LLCs. And they waive the mandatory fees for filing your paperwork.
Unfortunately, if you're not qualified, there's no avoiding the filing fees. Plus, there are other fees that you'll have to budget for that come with starting an LLC.
LLC formation services that offer free packages can make your work easier without adding to the cost. But you can also do the paperwork yourself so you can avoid extra fees altogether.
Starter - $0 + State Filing Fees
- Includes 1 optional free year of Worry-Free Compliance that renews at $199/year
- Standard filing speed
- 100% accuracy guaranteed
- Other services are available with additional costs
References
- ^ Michigan Department of Licensing and Regulatory Affairs. Domestic Profit and Domestic Professional, Retrieved 8/4/2025
- ^ Michigan Department of Licensing and Regulatory Affairs. Limited Liability Company Filing Information, Retrieved 8/4/2025
- ^ Michigan Legislature. Michigan Taxpayer's Guide for the 2024 tax year, Retrieved 8/4/2025
- ^ Michigan Department of Treasury. Notice Regarding New Research and Development Credit, Retrieved 8/4/2025
- ^ Michigan Department of Licensing and Regulatory Affairs. Waiver of fees for veterans, Retrieved 08/19/2025
- ^ State of Michigan. Filing Fees, Retrieved 08/19/2025
- ^ State of Michigan. Application for Reservation of Name, Retrieved 08/19/2025
- ^ State of Michigan. Restricted Words, Retrieved 08/19/2025
- ^ Michigan Department of Licensing and Regulatory Affairs. Expedited Service Request - Optional, Retrieved 08/19/2025
- ^ Internal Revenue Service. How to Apply for an EIN, Retrieved 08/19/2025
- ^ ZenBusiness. Products & Pricing, Retrieved 08/19/2025
- ^ Michigan Department of Licensing and Regulatory Affairs. Annual Filings, Retrieved 08/19/2025
- ^ State of Michigan. Limited Liability Company Filing Information, Retrieved 08/19/2025
- ^ Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes), Retrieved 08/19/2025
- ^ Internal Revenue Service. Federal income tax rates and brackets, Retrieved 08/19/2025
- ^ Michigan Department of Treasury - Taxes. Income Tax Rate Change Overview, Retrieved 08/19/2025
- ^ State of Michigan. What cities impose an income tax?, Retrieved 08/19/2025
- ^ City of East Lansing. Income Tax, Retrieved 08/19/2025
- ^ City of Flint. Income Tax Forms, Retrieved 08/19/2025
- ^ City of Grand Rapids. Income Tax Department, Retrieved 08/19/2025
- ^ State of Michigan. Sales and Use Tax, Retrieved 08/19/2025
- ^ City of Grand Rapids. Business Licensing, Retrieved 08/19/2025
- ^ City of Detroit. Licensing and Permits - Buildings, Safety Engineering, and Environmental Department, Retrieved 08/19/2025
- ^ Michigan Department of Treasury. Who Needs A Sales Tax License?, Retrieved 08/19/2025
- ^ Michigan Department of Labor & Economic Opportunity. Employer Insurance Requirements, Retrieved 08/19/2025
Nicole King is a research analyst at CreditDonkey, a business formation services comparison and reviews website. Write to Nicole King at nicole.king@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.
|
|
| ||||||
|
|
|
