Starting a business is exciting, and 2026 is a great time to set your plans into motion. It’s also a moment where a few early decisions can either set you up for smooth growth or create stress you didn’t see coming. The good news is that the process for starting a business in Michigan is fairly clear once you know the right steps.
Michigan makes it easy to file paperwork, but filing alone doesn’t protect you from disputes, tax issues, or costly mistakes later. This guide breaks down how to start a business in Michigan with a simple checklist so you know what to do and when it makes sense to get legal help.
Quick Summary
- Your business structure affects liability, taxes, and control.
- Filing with Michigan LARA is just the starting point.
- Skipping tax, hiring, or contract steps leads to issues later.
- Early legal guidance helps prevent disputes and cleanup costs.
1. How to Start a Business in Michigan: Choose the Right Structure First
Before you file anything, decide how your business will be structured. This choice affects how much personal risk you take on and how your business runs day to day.
Common business structures in Michigan
Most small businesses fall into one of these categories:
- Sole proprietorship: Easy to start, but no separation between you and the business.
- Partnership: Shared ownership and shared responsibility.
- Limited Liability Company (LLC): A popular option for Michigan business owners because it offers flexibility and liability protection.
- Corporation: Often used for businesses planning to scale or bring on investors.
Do you need a lawyer to start an LLC?
Michigan doesn’t require one to file forms, but structure decisions affect taxes, ownership rights, and future disputes. Getting advice early helps you avoid locking yourself into something that doesn’t fit your plans.
2. Pick a Business Name That Works in Michigan
Once you know your structure, you’ll need to choose and check your business name.
What to Do Before Filing
- Search Michigan’s business entity database through the Michigan Department of Licensing and Regulatory Affairs (LARA).
- Confirm the name isn’t already in use or too close to another business.
- Decide if you’ll need an assumed name, also called a DBA.
- In Metro Detroit, name conflicts happen more often than people expect. Two names don’t need to match exactly to cause confusion with customers or vendors.
Why this matters: Changing your business name later means updating contracts, licenses, bank accounts, and branding.
3. File Your Business With Michigan LARA
To officially form your business, you’ll file with the Michigan Department of Licensing and Regulatory Affairs (LARA).
This step includes:
- Filing Articles of Organization for an LLC or Articles of Incorporation for a corporation.
- Listing a registered office and resident agent.
- Paying the required state filing fee.
Once LARA approves your filing, your business exists in the eyes of the state. Many owners think this means they’re done. They’re not.
4. Create an Operating Agreement or Internal Rules
This step gets skipped more than almost any other, especially by single-owner LLCs.
An operating agreement or internal set of rules helps define:
- Who makes decisions
- How money moves in and out of the business
- What happens if ownership changes later
Even if you own the business yourself, written rules protect you if questions come up with banks, investors, or courts.
5. Get an EIN and Open a Business Bank Account
Most Michigan businesses need an Employer Identification Number (EIN). The IRS issues EINs online at no cost.
After you get your EIN:
- Open a business bank account
- Keep business and personal finances separate
- Use the business account for income and expenses
Mixing funds creates tax headaches and weakens liability protection.
6. Register for Michigan Taxes Through the Treasury
Many new business owners forget this step, which leads to penalties later.
Depending on what your business does, you may need to register for:
- Sales tax
- Use tax
- Withholding tax
- Other state tax accounts
Michigan uses Michigan Treasury Online (MTO) for business tax registration and management. Your EIN often becomes your state account number.
7. Planning to Hire Employees? Handle This Early
Hiring even one employee brings new responsibilities under Michigan law.
Employers usually need to:
- Register with Michigan’s Unemployment Insurance Agency
- Report new hires to the state
- Follow wage and hour rules
Worker classification mistakes are a common source of disputes and audits. Many business owners run into trouble here without realizing it.
8. Don’t Overlook Contracts and Legal Basics
This is where preventive legal planning pays off the most.
Common Contracts Michigan Businesses Need
- Customer or client agreements
- Vendor and supplier contracts
- Independent contractor agreements
- Commercial leases
Online templates don’t account for Michigan-specific issues or the way your business actually operates. Small gaps in contracts tend to show up when money or expectations clash.
Do You Need a Business Formation Lawyer in Michigan?
You can file forms on your own, but that’s only part of the process. A business formation lawyer helps you think through the parts that don’t come with instructions.
Legal guidance helps with:
- Choosing the right structure
- Drafting operating agreements
- Reviewing leases and contracts
- Spotting risks before they turn into disputes
Early legal help from a Detroit business lawyer often costs far less than fixing issues after they surface.
FAQs About Starting a Business in Michigan
How long does it take to start a business in Michigan?
Online filings through LARA are often processed fast, while tax registration, banking, and required licenses can add additional time.
Key factors that affect timing:
- Online state filing speed
- IRS and state tax setup
- Opening a business bank account
- Industry-specific licenses or permits
Knowing where delays happen helps you plan realistically and avoid launch setbacks.
How much does it cost to start an LLC in Michigan?
The state filing fee is low, but total startup costs vary. Beyond the filing fee, costs depend on licensing requirements, accounting support, and whether you use legal assistance.
Common cost considerations include:
- State filing fee
- Business licenses and permits
- Accounting or bookkeeping setup
- Legal or formation services
Budgeting beyond the filing fee prevents surprise expenses later.
Can I change my business structure later?
Yes, but changing your business structure can have consequences.
Structural changes may affect taxes, contracts, and compliance requirements, which is why choosing carefully at the start is often easier.
Before changing structures, consider:
- Tax implications
- Existing contracts and agreements
- State and federal filing requirements
Early planning reduces the risk of costly changes down the road.
Becoming a Michigan Business Owner
Starting a business in Michigan goes beyond filing paperwork. The right structure, clear internal rules, proper tax setup, and solid contracts protect you as your business grows. Spending a little more time up front can save you stress, money, and disputes later.
Talk to a Michigan Business Formation Lawyer
If you’re forming an LLC, adding a partner, or signing contracts, a short legal review can help you avoid common mistakes. The Rubinstein Law Firm works with Michigan business owners to get things set up the right way. Contact us today to schedule a consultation and move forward with confidence.
