Forming a Corporation in Michigan

Steps to Create a Corporation

Here is an outline of the steps you need to follow in order to form a corporation (specifically, a "C corporation") in Michigan. You should also read the general section on forming a corporation for information that is applicable in any state. Additionally, you should familiarize yourself with the Michigan Department of Labor & Economic Growth, Bureau of Commercial Services website, which has useful resources, but is difficult to navigate.

1. Choose a business name for the corporation and check for availability.

  • Michigan law requires that a corporation name contain the word "corporation," "company," "incorporated," or "limited" or one of the following abbreviations: "corp.," "co.," "inc.," or "ltd." Additionally, your corporation name must be distinguishable from other names on file with the state.

2. Recruit and/or appoint a director or directors for the corporation.

  • Under Michigan law, a corporation must have at least one director.
  • There is no minimum age requirement for directors.
  • Directors need not be residents of Michigan or shareholders of the corporation, unless the articles of incorporation or bylaws so require.
  • The number of directors that will constitute the corporation's board of directors should be set forth in the bylaws.

3. Prepare and file articles of incorporation with the Department of Labor & Economic Growth, Bureau of Commercial Services, Corporation Division.

4. Create the corporation's bylaws.

  • There is no set criteria for the content of bylaws, but they typically set forth internal rules and procedures for the corporation, touching on issues like the existence and responsibilities of corporate offices, the size of the board of directors and the manner and term of their election, how and when board and shareholder meetings will be held, who may call meetings, and how the board of directors will function. You are not required to file bylaws with the state, but the corporation must keep a copy at its principal place a business. For general information on corporate bylaws, please see the Bylaws page.

5. Hold an organizational meeting.

6. Issue stock certificates to the initial owners of the corporation.

7. Obtain any required local licenses.

8. Determine what tax and other regulatory obligations the corporation has, and take care of any necessary registrations.

  • Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.
  • Whenever you hire an employee in Michigan, you must inform both the IRS and the State of Michigan. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information on reporting new hires at the Michigan New Hire Reporting Center website.
  • As a business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.
  • As of January 1, 2008, a new business tax regime -- called the Michigan Business Tax -- takes effect in Michigan. Under it, qualifying small businesses in Michigan will pay a tax equal to 1.8% of adjusted business income. Probably all small online publishing businesses will qualify -- the law requires that officers of the corporation not be paid more than $160,000, gross receipts not exceed $18 million, and business income not exceed $1.3 million. For more information on the Michigan Business Tax, see the Michigan Business Tax FAQ on the Michigan Department of Treasury website.

9. Open a bank account for your business.

  • It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your corporation. You will probably need a Tax ID number (EIN), a copy of the articles of incorporation, and a resolution identifying authorized signers if those names are not listed in the articles. Here is one example of the documentation that banks ask for.

Other Notable Requirements for Maintaining a Corporation in Michigan

  • Michigan corporations must file an Annual Report every year with the Department of Labor & Economic Growth before May 15. The filing fee is $25, and you can file the form online via the FILEonline Service.

Additional Steps and Information about Forming an S Corporation

  • An S corporation has the same basic organizational structure as a regular corporation, but some of the tax advantages of a partnership or LLC. An S corporation pays no federal income tax, except for tax on certain capital gains and passive income. Instead, the corporation's profits and losses "pass through" to shareholders, and profits are taxed at individual rates on each shareholder's Form 1040. Certain requirements and additional obligations apply -- please see the S Corporation page for details.
  • To form an S corporation, designate "S" status with IRS via Form 2553 within 2 months and 15 days of filing your articles of incorporation with Michigan. There is no additional paperwork that must be filed with Michigan to obtain "S" status.


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