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Michigan LLC - How to Start an LLC in Michigan - YouTube

Channel: TRUiC

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- [Narrator] How to form an LLC in Michigan.

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If you are interested in starting an LLC

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in the Great Lakes State, you have good reason.

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Michigan has low corporate taxes and cost of living

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yet provides great access to funding.

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Every state has slightly different requirements

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for forming an LLC.

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Follow along closely to learn the required steps

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for creating your own Limited Liability Company

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in the state of Michigan.

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(gentle music)

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There are two ways to form an LLC in Michigan.

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You can form one yourself

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or you can hire a service to do it for you.

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Let's start by looking at the five basic requirements

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to form an LLC in Michigan on your own.

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One, name your LLC.

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Every state has its own rules

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about what kinds of names are allowed for LLCs.

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In general, you will need to observe

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these naming guidelines.

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Your name must include the phrase Limited Liability Company

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or one of its abbreviations, LLC,

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or L.L.C. with a period following each letter.

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Restricted words such as bank, attorney,

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law office, et cetera may require additional paperwork

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and may also need a licensed professional

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to be part of the LLC.

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Your name can not include words

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that could confuse your LLC with a government agency

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such as FBI, treasury, state department, et cetera.

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You can not use a name that has already been registered.

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To see if your name is available in your state,

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you'll need to do a name search.

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This free service is available

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on your state's Secretary of State website.

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Check out our free guide

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for finding the direct link to your state.

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We also recommend that you check to see

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if your business name is available as a web domain.

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Even if you don't plan to make a business website today,

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you may want to buy the URL in order to prevent others

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from acquiring it.

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Two, choose a registered agent.

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Michigan requires that you nominate a registered agent

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for your LLC who is your business's point of contact

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with the state.

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The registered agent can be an individual

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within the company, including yourself,

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or you can hire a professional service

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authorized to do business in Michigan.

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They will send and receive legal papers on your behalf.

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These documents include official correspondence

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like legal summons and document filings

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which your registered agent will receive and forward to you.

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Your registered agent will help remind you

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to file the necessary reports.

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Failure to properly maintain your LLC

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can result in fines and dissolution.

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So this assistance is valuable.

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Three, file the Articles of Organization.

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To register your LLC, you will need to file

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the Articles of Organization with the state of Michigan.

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This can be done online, by mail, or in person.

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Your LLC will be considered Member-Managed

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unless you state in Article Five

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that your LLC is Manager-Managed.

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Member-Managed means all members of the LLC

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manage the company.

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This is good for small organizations

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where everyone is involved in day to day operations.

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The second option is Manager-Managed

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where individuals are pointed to manage the LLC.

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This is appropriate for large organizations

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where not everyone is involved

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in the day to day affairs of the business.

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Four, create an operating agreement.

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Although not every state requires it,

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you should always create an operating agreement

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to establish ownership terms

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and member roles for your LLC.

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This foundational document is the core of your LLC

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and will help you maintain your organization

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as well as further establish your LLC

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as a separate legal entity.

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There are six main sections of an operating agreement.

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Organization outlines when and where

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the company was created, who the members are,

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and how the ownership is structured.

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Management and Voting addresses how the company is managed

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as well as how the members vote.

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Capital Contributions covers

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which members financially support the LLC

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and how more funds will be raised in the future.

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Distributions outlines how the company's profits and losses

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are shared among members.

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Membership Changes describes the process

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for adding or removing members

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as well as if and when members

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can transfer their ownership shares.

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And Dissolution which explains the circumstances

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in which the LLC may be dissolved.

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An operating agreement is an internal document.

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It does not need to be filed with the state.

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However, it should be updated every time there is a change

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in membership or management at the company.

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You can download a free sample operating agreement

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or create a custom one

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using our free operating agreement tool

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at howtostartanLLC.com.

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Five, obtain an EIN.

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Lastly, you'll need to get

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an employer identification number, or EIN, from the IRS.

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Also known as a Federal Tax Identification Number,

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your EIN is like a social security number for your LLC

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and is how the IRS tracks your business for tax purposes.

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And the EIN is also necessary

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to open a business banking account

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and legally hire employees.

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EINs are free of charge

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and can be obtained from IRS online or through the mail.

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And with that, you'll have formed

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a Michigan LLC on your own.

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Option two, hire a professional service.

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The second way to create a Michigan LLC

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is to hire a professional service

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to create your LLC for you.

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Hiring a professional service to file your forms

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and act as your registered agent for the LLC

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will cost you an additional $50 to $150.

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However, there are several benefits to working with a pro.

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A hired registered agent helps

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with getting your reports filed on time,

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helps you stay organized

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by keeping your business mail separate,

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and is available at all regular business hours

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to accept official mail and legal papers

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on your LLC's behalf.

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A final and important additional benefit

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of using a service is privacy.

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A professional service will provide a level of privacy

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by withholding your personal name and home address

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from the LLC's contact information.

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There are many reasons you might not want

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your personal information easily accessible

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and associated with your business.

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Hiring a professional LLC formation service

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is an easy way to accomplish this.

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Now that you have seen the different requirements and ways

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you can form an LLC in Michigan,

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visit our site and take some time to research your options

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and establish a solid foundation

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for your business activities.

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Click on the links in the description below

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to research the top five professional formation services

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or get more information

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on how to form a Michigan LLC on your own.

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Now you know all the steps to form an LLC in your state.

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For a more detailed guide, go to howtostartanllc.com.

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You can also create an operating agreement

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and use our business plan too free of charge.

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Give the video a like if you found it useful

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and subscribe if you'd like to see more.

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And if you have questions or encounter any roadblocks,

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