No Games, Just Names
Certain words (or their abbreviations) must appear in the name of every corporation. They are as follows: Incorporated (Inc.), Corporation (Corp.), Company (Co.), Limited (Ltd.)
The name cannot be the same or very similar to another entity name registered with the Department of Licensing and Regulatory Affairs. The availability of a chosen name can be checked on on their website. If you wish to reserve a name, you may do so for six months by filing an Application for Reservation of Name with the Commercial Services Division.
The Pleasure of Paperwork
To become legally recognized as a corporation in Michigan, you must file an Articles of Incorporation form with the Department of Licensing and Regulatory Affairs. This form can be filed online or through the mail, and will state the following:
- Name and address of the corporation
- Name and address of each incorporator
- Name and address of the agent for service of process (who will accept legal papers on behalf of the corporation if it is to be involved in a lawsuit. This person or entity must have a physical address in Michigan as No PO Boxes will be accepted.)
- Purpose of the corporation
- Number of shares to be utilized by the corporation and the class of the shares. The corporation may issue up to 1 million shares, but will be assessed a fee of $50 for the first 60,00 shares and $100 for 1 million shares.
Corporations operating in Michigan are also required to file an annual report with the Department of Licensing and Regulatory Affairs. The report can be filed online, and is due by May 15 the year following incorporation.
Time for Taxes
There are many tax advantages to filing as an S-corp. In order to file that way, a corporation must file Form 2553: Election by a Small Business Corporation with the IRS. This form needs to be signed by all shareholders and filed within 75 days after the beginning of the corporations first tax year.
You will also need to file Form SS-4 to obtain an Employer Identification Number (EIN). This number will be required for most official paperwork including forms to open a corporate bank account.
For State and Local taxes that may be applicable to your business, please refer to Michigan’s Small Business Development Center.
Finalizing the S-Corp Set Up
Once your S-corp is set up, remember to get a business license in the city you are operating. Most cities pull data from newly-registered businesses in the state so they can track down who in their city should have a license. While you can wait for your city to come knocking if you are on a tight budget (and many will simply give you a deadline to get a license), some municipalities may not be so friendly about it.