Form a S-Corp in Michigan
Everything you need to know about forming a S-Corp in Michigan. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose a Corporate Name
Select a unique business name that includes a required designator such as 'Corporation,' 'Incorporated,' 'Company,' or an abbreviation like 'Corp.' or 'Inc.' Search the Michigan Department of Licensing and Regulatory Affairs (LARA) business entity database to confirm your desired name is available.
30 minutes
Appoint a Registered Agent
Designate a registered agent with a physical street address in Michigan who is available during normal business hours to receive legal and official documents on behalf of the corporation. The registered agent can be an individual Michigan resident or a registered commercial agent service.
1-2 hours
File Articles of Incorporation
Prepare and file Articles of Incorporation (Form CSCL/CD-500) with the Michigan Department of Licensing and Regulatory Affairs, Corporations Division. The filing fee is $60 and can be submitted online, by mail, or in person; include the registered agent's name and address, incorporator information, and the number of authorized shares.
1-2 hours
Create Corporate Bylaws
Draft corporate bylaws that establish the internal rules and governance structure of the corporation, including procedures for shareholder meetings, board of directors responsibilities, officer roles, and voting rights. While not required to be filed with the state, bylaws are essential for corporate formality and S-Corp compliance.
2-4 hours
What's Next After Filing
Once your S-Corp is officially formed, you'll want to complete these important steps:
- •Hold Organizational Meeting & Issue Stock — Conduct an initial organizational meeting of the board of directors to adopt bylaws, appoint officers, and authorize the issuance of stock. Issue shares only to eligible S-Corp shareholders — U.S. citizens or permanent residents — and maintain a shareholder ledger; note that S-Corps are limited to 100 shareholders and one class of stock.
- •Obtain EIN and Elect S-Corp Status — Apply for a federal Employer Identification Number (EIN) through the IRS website at no cost, then file IRS Form 2553 (Election by a Small Business Corporation) to elect S-Corporation tax treatment. The election must be filed no later than two months and 15 days after the beginning of the tax year in which the election is to take effect; Michigan automatically recognizes the federal S-Corp election.
- •Register for Michigan Taxes and Obtain Licenses — Register with the Michigan Department of Treasury for applicable state taxes, including Michigan income tax withholding if you have employees, sales tax if selling taxable goods, and the Michigan Business Tax or Corporate Income Tax obligations. Obtain any required local business licenses or industry-specific permits necessary to legally operate in your city or county.
Advantages
- ✓Pass-through taxation avoids federal corporate double taxation, with income and losses reported on shareholders' personal tax returns
- ✓Shareholders who are active in the business can reduce self-employment tax liability by splitting income between salary and distributions
- ✓Provides the same limited liability protection as a C-Corporation, shielding personal assets from business debts and liabilities
- ✓Michigan automatically conforms to the federal S-Corp election, simplifying state tax compliance with no separate state-level election required
- ✓Established corporate structure enhances credibility with investors, lenders, and business partners compared to sole proprietorships or partnerships
Considerations
- •Strict IRS eligibility restrictions limit S-Corps to 100 shareholders, one class of stock, and only U.S. citizens or permanent residents as shareholders, limiting growth and investment flexibility
- •Requires strict adherence to corporate formalities such as annual meetings, board resolutions, and maintaining separate financial records, which adds administrative burden compared to an LLC
- •Shareholders who work in the business must receive a 'reasonable salary' subject to payroll taxes before taking distributions, adding payroll compliance complexity
Annual Obligations
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