The business name chosen for the new Michigan Corporation must be different from all other business entity registered and reserved in Michigan (with some exceptions). Your new business’ name may not state or imply that it is organized for any other purpose that what’s permitted by state law and laid out in its articles of incorporation. The name also cannot contain a word, phrase, abbreviation, or a derivative of a word or phrase whose use is forbidden or restricted by state law. The name must include one of the following terms or its abbreviation: “Incorporated,” “Corporation,” “Company,” or “Limited.”
By paying a $25 fee, an available corporate name may be reserved for up to 180 days.
Additionally, a Michigan corporation may also conduct business under an assumed name or DBA (“doing business as” name) that complies with the state’s corporate naming rules. Doing so requires filing a certificate of assumed name with the state secretary of state (along with the $10 fee), and must be periodically renewed The filing fee includes a $10 nonrefundable fee plus a $50 organization tax for the first 60,000 shares authorized in the new corporation’s articles of incorporation. If more shares are authorized, the organization portion of the fee increases in a graduated manner. For each additional 20,000 shares (or a portion thereof), the organization tax is $30 more. The maximum organization tax for the first 10 million shares is $5,000. Most incorporators simply authorize 60,000 shares and pay the minimum filing fee.
State Incorporation Timelines
The state incorporation timeline is 3 weeks and has an expedited process of 8 days.
State Incorporation Filing Fees
The state incorporation filing fee is $60.
Articles of Incorporation
Corporations must file articles of incorporation with the Michigan Department of Labor and Economic Growth, Bureau of Commercial Services, Corporation Division, before conducting business in the state (Michigan Business Corporation Act contained in Chapter 450 (Corporations) of the Michigan Compiled Laws).
The articles must be delivered by at least one of the incorporators, accompanied by the filing fee of $60 minimum, depending on the number of shares authorized. There must be at least one incorporator, who must be either a natural person of adult age (18) or a corporation. The incorporator does not have to be a director, officer, or shareholder of the corporation.
The following information must be included in the articles of incorporation:
- Names and addresses of the incorporators
- Mailing address of the corporation’s principal office
- Street address and mailing address, if different, of the corporation’s initial registered office and the name of its initial registered agent at that office
- Duration or lifespan of the corporation, if it is not perpetual
- Aggregate number of shares that the corporation is authorized to issue
- Designation of stock classes and series of shares, as well as their relative rights, if any
- Statement of what authority the board of directors has (or doesn’t) to divide classes into series, if any
Michigan law allows a corporation to be formed for any lawful business activity. It is required to state the business purpose, but it is sufficient to state that the corporation may engage in any activity included in the purposes for which corporations may be legally formed under the Michigan Business Corporation Act. State law may have additional requirements for corporations that are formed for education-related purposes.
Michigan law also allows additional provisions to be included in the articles for managing the business and regulating the affairs of the corporation, as well as regulating the corporation’s powers, its board of directors, and shareholders
All corporations authorized to conduct business in Michigan must have and maintain both a registered office (which may be the same as its place of business) and a registered agent in the state-someone designated to receive official state correspondence, including notice if the corporation is “served” with a lawsuit. The registered agent must be either:
- An individual resident in Michigan whose business office or residence is the same as the registered office
- A domestic corporation, or
- A foreign corporation authorized to transact business in Michigan and having a business office that is the same as the registered office
Bylaws describe the corporation’s basic managerial and legal operating principles. The corporation’s initial bylaws must be adopted by its incorporators, its shareholders, or its board of directors.
A Michigan corporation should keep a copy of its bylaws at its main executive office, but is not required to file them with the state. The bylaws may contain any provision for managing the business and regulating the affairs of the corporation that’s not in conflict with law or the articles of incorporation. The board of directors or the shareholders may adopt, amend, or repeal bylaws, unless the articles of incorporation or the bylaws reserve this right to the shareholders. At its initial meeting, the board of directors should adopt corporate bylaws, and then keep them updated as time goes on. Bylaws normally address:
- Shareholders and directors meetings
- The authority, number, and tenure of directors
- Voting procedures
- The duties, responsibilities, and tenure of officers
- How stock is issued
- How and when annual financial information is provided to shareholders
In Michigan, officers must be named in the bylaws or elected by the board of directors. As a minimum, there must be a president, a secretary, and a treasurer; if desired, the corporation may have a chairman of the board, one or more vice presidents, and other officers as set forth in the bylaws or as decided by the board of directors
Officers may appoint other officers in compliance with the bylaws. If the articles of incorporation and the bylaws allows it, an officer may hold multiple offices in the corporation, but they may not sign any documents in more than one capacity.
At least one officer should be designated as responsible for preparing minutes of the directors’ and shareholders’ meetings, and for maintaining and authenticating corporate records.
Requirement Reports/Ongoing Compliance
A report must be filed with the Michigan Secretary of State no later than May 15 of each year, (except for the first year of incorporation) with a $25 filing fee, indicating:
- Corporation’s name
- Registered in-state office address
- Name of the corporation’s resident agent at that office in this state
- General nature of the business in which the corporation is engaged
- Names and addresses of the directors, president, secretary, and treasurer
- Foreign corporations authorized to transact business in the state, the total number of authorized shares and the most recent percentage used in computation of the tax required by the single business tax act
Within four months of the end of the corporation’s fiscal year, it must also send a financial report to its shareholders with its end-of-year balance sheet, state of income, and any other information required by state law.
Michigan imposes a Single Business Tax (SBT) on both corporate and noncorporate business income as the only general business tax levied by the state. The SBT replaced net income-based taxation with value-added taxation, which levies taxes on a “services consumed” or “benefits received” basis. It was enacted in 1976 to replace seven business taxes, including the corporate income tax. In 1999, the governor signed legislation to phase out the SBT by 2022.