Form a Michigan Corporation
Form a Michigan (MI) corporation with the Michigan incorporation experts at LawInc.com Forming a Michigan corporation has never been simpler. We will help you form your Michigan corporation, the right way. To get started, simply click on “Order Now.” Please feel free to call us, anytime, with any questions.
Incorporating in Michigan
Forming a Michigan corporation can be vital to businesses based of Michigan. At LawInc, we prepare your Michigan corporation Articles of Incorporation, bylaws, stock certificates, stock ledger and more. We can even obtain your Michigan corporation Tax ID number and file your Michigan S corporation election with the IRS.
Michigan Incorporation Information
The following Michigan incorporation information will likely be helpful when deciding to incorporate in Michigan.
Michigan Corporation Name
The first step in forming a Michigan corporation is selecting the business name. Michigan corporation names:
- Must contain “Corporation,” “Incorporated,” “Limited,” or abbreviations of these words.
- Shall not contain language stating or implying that the corporation is organized for a purpose other than that permitted by law and its articles of incorporation.
- Must be distinguishable from any name of record with the Secretary of State.
An available Michigan corporation name may be reserved with the Department of Commerce, Corporation Division, Corporation and Securities Bureau, for a 6 month period.
LawInc.com permits you to choose up to three names and will conduct a name search for your Michigan corporation, prior to filing.
Michigan Corporation Formation
Michigan Filing Procedure: To incorporate in Michigan, you must file Michigan Articles of Incorporation with the Michigan Secretary of State.
Michigan Corporation Articles of Incorporation: The Michigan Articles of incorporation should include:
- Name of the Michigan corporation.
- Purpose of the Michigan corporation.
- Total number of authorized common and preferred shares of the Michigan corporation.
- Name and address of the Michigan corporation’s registered agent.
- Name and address of each Michigan corporation incorporator.
Michigan Corporation Filing Fees:
|More than 10,000,000||$500 for first 10,000,000 plus $1,000 for each additional 10,000,000, or portion thereof|
Michigan Corporation Authorized Shares: The maximum number of authorized shares for the minimum organizational and admissions fee is 60,000 shares with or without par value.
Michigan Incorporator: Minimum number of incorporators is one (1) (a person – person means an individual, a partnership, a domestic or foreign corporation, or any other association, corporation, trust, or legal entity) and there is no requirement that the incorporator be a resident of Michigan.
Michigan Corporation Purpose: It is acceptable to state either alone or with a specific purpose clause, “The purposes for which the corporation is organized shall to engage in any lawful business for which a corporation may be organized pursuant to the Michigan Business Corporation Act.”
Michigan Corporation 1244 Stock: Election to have stock classified as IRC Section 1244 stock allows for a substantially larger application of the deduction from business losses to ordinary income than regular stock. With regular stock, you can only offset $3,000 against ordinary income. With the issuance of Section 1244 Stock, the corporation can claim an ordinary loss deduction of as much $100,000.
Michigan Registered Agent: A Michigan corporation must maintain a registered agent and office to receive service of process in Michigan. The Michigan registered agent should be available, at a Michigan physical address, during normal business hours to accept important legal and tax documents on behalf of the Michigan corporation. The registered agent can either be (1) an individual with a physical Michigan address or (2) a corporation authorized to serve as registered agent.
Michigan Corporation Post-Filing Requirements
Michigan Corporation Annual Report: Michigan LLCs must file an annual report which is due on May 15th of each year starting after the first year of formation. The Michigan corporation annual reports cost $25.00. To file and pay online, visit http://www.michigan.gov or http://www.michigan.gov/lara/0,4601,7-154-35299_35413-136482–,00.html. Failure to file on time results in a $10 penalty per month late, up to a maximum of $50.
Michigan Corporate Minutes: Michigan corporations should hold and document annual shareholder and director meetings.
Michigan Corporation Taxes
Michigan Corporation Taxes: For information on the Michigan state income tax rate, visit: http://www.michigan.gov/treasury
Michigan C Corporation: All Michigan corporations formed by default are “C” corporations. A Michigan C corporation is a Michigan corporation that has not made an election to be an “S” corporation. The term C corporation is specifically used because the entity is taxed under subsection C of the IRS code. Michigan C corporations are taxed at two levels (“double taxation”). This means that the corporation itself pays its own tax when it makes money (the first tax). The owners or shareholders are then taxed again when they are paid a salary or dividend by the corporation (the second tax). Despite double taxation, Michigan C corporations offer many planning and benefit opportunities.
Michigan S Corporation: A Michigan S corporation is a corporation that has made an election with the IRS to be treated for tax purposes as a “pass-through entity.” This means that corporate profits and losses are passed through to the shareholders (owners) who report them on their own personal tax returns and pay the tax at the individual level. The corporation pays no federal income tax at the corporate level. Michigan S corporations are not subject to the double taxation C corporations encounter. The State of Michigan recognizes S corporation status. Michigan does not require a state election.
These are the 3 main advantages of forming a Michigan S corporation:
- No double taxation: One of the main advantages of Michigan S corporation status is that it avoids the double taxation that occurs with a regular Michigan C corporation. In a Michigan C corporation, the corporation pays income tax on its profits and, if those profits are distributed to shareholders, the shareholders pay income tax on the distribution.
- Loss deductions: The availability of losses. Shareholders of a Michigan S corporation generally may deduct their share of the corporation’s net operating loss on their individual tax returns in the year the loss occurs. Losses of a Michigan C corporation, however, may offset only the corporation’s earnings.
- Self-employment tax savings: By electing S corporation status, only the earnings actually paid out to you as salary are subject to payroll taxes; money left in the business is not subject to payroll taxes or self-employment tax. All income passes through, but its tax status depends on whether it is classified as salary or ordinary income.
Federal Tax Identification Number/Employer Identification Number (EIN): The Federal Tax Identification Number, also known as the Employer Identification Number (EIN) is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. All Michigan corporations should obtain an EIN. The federal taxpayer identification number of the corporation should be included in the Articles of Incorporation. However, the failure to include the number will not cause the Secretary of State to reject the Articles of Incorporation for filing.
Michigan Corporation Dissolution
Michigan Corporation State Dissolution Requirements: A Michigan corporation can be voluntarily dissolved by filing an Affidavit to Dissolve Corporation with the Michigan Secretary of State. If the Michigan corporation has commenced business, Form 531,Certificate of Dissolution should be filed with the Michigan Department of Licensing and Regulatory Affairs (LARA). Tax clearance, from the Michigan Department of Treasury, will be required after submitting the Certificate of Dissolution. If the Michigan corporation has not commenced business, Form 530,Certificate of Dissolution should be filed with the Michigan Department of Licensing and Regulatory Affairs (LARA). Tax clearance, from the Michigan Department of Treasury, will not be required after submitting the Michigan Certificate of Dissolution.
Michigan Corporation Federal/IRS Dissolution Requirements: Corporations are required to file IRS Form 966, Corporate Dissolution or Liquidation. A final tax return should be filed with the IRS. Form 966 should be filed along with the final tax return. Final state tax returns may also need to be filed. Follow up with an accountant regarding all tax related requirements.