How to form a Michigan corporation

Benefits of a corporation

Forming a corporation limits owners’ responsibility for the corporation’s financial obligations. In a sole proprietorship or general partnership, the business is considered to be an extension of its owners, which means the owners’ personal assets—including houses, cars, and bank accounts—can be used to pay business debts. A corporation is a legal entity separate from its owners, and for this reason, only the assets of the corporation can be used to pay the corporation’s obligations. There may be additional benefits to forming a corporation.

Requirements for incorporating in Michigan

Preparing your articles of incorporation

A corporation exists as soon as you file articles of incorporation, along with the required filing fee, with the Corporations, Securities and Commercial Licensing Bureau of the Michigan Department of Licensing and Regulatory Affairs. The minimum information required for the articles of incorporation is as follows:

• Name of the corporation
• Corporate purpose
• Names and addresses of incorporators
• Registered agent and registered office
• Stock structure
• Duration of the corporation, if not perpetual

Stock structure

A corporation in Michigan can have different types of stock, called classes or series. These types of stocks can have different advantages, for example, one can offer voting rights while another may not.

Regarding the corporation’s stock structure, the articles must include the following information:

• The articles of incorporation must specify the total number of authorized shares of stock.
• If there will be more than one class or series of shares, the articles must include a designation for each class or series and state the number of shares in each class or series. The articles must also state the preferences, limitations, and relative rights of each class or series, to the extent that these items have been determined.
• If a class of shares is to be divided into series, the articles must state any authority the directors have to divide a class into series and to determine the number of shares, preferences, limitations and relative rights of a series.

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Naming your corporation

You should always do a preliminary check to make sure the corporate name you want is available. You can do this by searching the online records of the Corporations, Securities and Commercial Licensing Bureau or by using an online entity name check service.

A corporate name may be reserved for six months by submitting an application to the Corporations, Securities and Commercial Licensing Bureau or by using an online entity name reservation service.

Your corporation’s name must meet the following requirements:

• It must contain the words “corporation,” “incorporated,” “company,” or “limited,” or the abbreviations “corp.,” “inc.,” “co.,” or “ltd.”
• It must be distinguishable from the name of any corporation, limited partnership or limited liability company formed or authorized to do business in Michigan or any reserved, registered or assumed name.

Specifying incorporators

A person who signs and files the articles of incorporation is called an incorporator. You must meet the following requirements when specifying incorporators:

• There must be at least one incorporator.
• An incorporator may be a person or an entity. There are no other eligibility requirements for incorporators.
• Before or after filing the articles of incorporation, the incorporators must elect directors and may also approve bylaws. After the directors are chosen, the incorporators have no other duties.

Specifying directors

A corporation’s board of directors sets corporate policies and manages the business of the corporation. Directors have a fiduciary duty to the corporation and its shareholders, which means they must always place the best interests of the corporation ahead of their own personal interests.

The following requirements apply when specifying your corporation’s directors:

• A corporation must have at least one director. There are no additional state law requirements for the size of the board.
• The articles or bylaws must specify the number of directors the corporation will have.
• A director must be at least 18 years old. The articles or bylaws can establish other qualifications.

Specifying a registered agent and registered office

A registered agent, also known in Michigan as a resident agent, is a person designated to receive documents, notices, and demands on behalf of the corporation. When specifying a registered agent for your Michigan corporation, you must adhere to the following requirements:

• The articles of incorporation must list a resident agent and a registered office. The resident agent’s business address must be identical to the registered office address.
• The resident agent may be an individual who resides in Michigan or a corporation or limited liability company that is formed in or authorized to do business in Michigan.

Stating a corporate purpose

Michigan allows corporations to use an all-purpose clause, stating that the corporation “shall have unlimited power to engage in and to do any lawful act concerning any or all lawful business activities for which corporations may be organized under the Michigan Business Corporation Act.” This allows flexibility in case a corporation’s main purpose changes in the future.

Incorporation bylaws

A corporation’s bylaws provide a roadmap for how the corporation will operate. Michigan law does not specify particular content for bylaws but does state that they may contain any provision for regulating and managing the corporation’s affairs.

The requirements for a corporation’s bylaws are as follows:

• The incorporators, shareholders, or directors must adopt initial bylaws for the corporation.
• Bylaws must be consistent with the law and the articles of incorporation.

Costs of incorporating in Michigan

The Michigan Corporations, Securities, and Commercial Licensing Bureau requires a fee when filing articles of incorporation or reserving a corporation name. Corporations are also required to pay state and federal income taxes.

LegalZoom can help you start a Michigan corporation online in three easy steps. We provide corporate formation and filing services, including providing a registered agent in Michigan.