STARTING A BUSINESS IN MICHIGAN

Doing Business In Michigan

Business Facts

Products and services include automobiles, food products, information technology, aerospace, military equipment, furniture, and mining of copper and iron ore. Michigan is the third leading grower of Christmas trees with 60,520 acres (245 km²) of land dedicated to Christmas tree farming.

Businesses are going to Michigan, and businesses are expanding their operations there because of a business-friendly environment that ranks among the best in the nation.

Small Business and Startup Environment

Michigan has 765,487 small businesses, according to the most current federal data available. Of those 765,487 small businesses in Michigan, 209,751 have employees. The remaining 555,736 are Michigan small businesses that have no employees.

Michigan continues to receive recognition as a place for entrepreneurs to grow and expand their business, especially as startups and venture capitalists search for new opportunities. The state’s growing venture capital network, robust startup ecosystem, widespread university commercialization support and attractive quality of life have combined to establish Michigan as an attractive destination for emerging companies.

Cutting-edge companies continue to realize the competitive advantages that Michigan has to offer: high-tech engineering resources, top-notch research and design, and a highly skilled workforce matched with a low cost of living and low cost of doing business, with expansions in Michigan by companies like Duo and more recently, KLA and Samsung, we continue to see increased interest in Silicon Valley companies looking to relocate or expand into Michigan.

Major Companies

Michigan is home to large companies such as: General Motors, Ford Motor, Enstrom Helicopter, Lear, Whirlpool, Meijer, Dow, Federal-Mogul Holdings, Kellogg, Stryker

Step 1: Choose A Business Structure

The most common business structures are sole proprietorship, partnership, limited liability company (LLC), and a few different types of corporations—the standard corporation (often called a C corporation or “C corp”), the small business corporation (often called an S corporation or “S corp”), and the benefit corporation (often called a B corporation or “B corp”).

The most common business structures are:

► Sole Proprietorship in Michigan:

Happens when you operate your business as yourself. There is no separate legal entity created; the law treats you and your business as one person. You are responsible and personally liable for all business activities or wrongdoing.

► Michigan Partnership:

The same thing as a Sole Proprietorship, but just with 2 or more people. Like a Sole Proprietorship, a Partnership doesn’t create a separate legal entity and the partners are responsible and personally liable for any business activity or wrongdoing.

► Michigan Corporation:

A more complex legal structure that requires a board of directors, corporate officers, and shareholders. Corporations don’t usually work for most small business owners since they face double taxation. Corporations can be beneficial to companies that are looking to raise capital investment, take the company public, or have large healthcare expenses for their employees. The most common types of companies that form Corporations are high-growth technology and startup companies.

Unlike a Sole Proprietorship or a Partnership, a Corporation is a separate legal entity from its owners (called shareholders). It provides them with personal liability protection.

► Michigan LLC:

A legal entity that combines the benefits of a Corporation and a Sole Proprietorship/Partnership.

An LLC in Michigan is a separate legal entity under the law. And like a Corporation, it provides personal liability protection for the owners. If the LLC is sued, the owner’s personal assets – like their home, cars, and bank accounts – are protected. And like a Sole Proprietorship/Partnership, an LLC has pass-through taxation (so there’s no double taxation).

A Michigan LLC is the most popular option and a good choice for people who want to run a small business for two reasons:

Personal liability protection (personal assets are kept safe)
No double taxation

Unlike a Sole Proprietorship (and a Partnership), your Michigan LLC’s assets are separate and distinct from your personal assets. In the event your LLC gets sued, your personal assets are protected.

And unlike a Corporation, your LLC is not subject to double taxation. Instead, your LLC’s profits will “pass through” to your personal tax return and federal taxes are paid just once.

Step 2: Choose The Right Business Name

Choosing a business name is important, you want to make it easier for your customers to remember it, here are some tips:

Avoid hard-to-spell names.
Don’t pick a name that could be limiting as your business grows.
Conduct a thorough Internet search.
Search and purchase a domain name.
Use a name that conveys some meaning.
Conduct a trademark search.

Step 3: Register Your Business

Depending on the business structure you chose you will need to register your business.

Resale license

Department of corporations

Step 4: Obtain an EIN Tax Number

With limited exceptions, most businesses require an Employer Identification Number (EIN), also known as a Tax ID Number. An EIN is used to identify a business in its federal tax filings. Without an EIN, you can’t hire employees or open a business bank account.

Click Here to Apply for EIN number online

https://www.rivian.com/

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Get Inspired by these Michigan Startups

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http://www.guardhat.com/

Step 5: Open A Bank Account

– Open a business bank account:

Separates your personal assets from your company’s assets, which is necessary for personal asset protection.
Makes accounting and tax filing easier.

– Get a business credit card:

Helps you separate personal and business expenses.
Builds your company’s credit history, which can be useful to raise capital later on.

Step 6: Licenses & Permits

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

Here are some links for Michigan Businesses:

Selling products? Check Michigan Resale Permit

Business Licensing for the State of Michigan

Step 7: Branding & Marketing

Your brand is the image customers have of your business, so it’s important to determine who is your audience and what is the message that you want to project. That way, your company’s image will be what you intend it to be. It should be strategic and intentional.

Step 8: Establish a Web Presence

Creating an optimized website helps you to gain important visibility for the right terms. A website is a powerful sales tool and one that allows you to address your customers’ concerns, give them the information they need to make a decision and create compelling calls to action.

In addition to a website, you should also consider other avenues for promoting your business online: