Tag Starting a Michigan Business

Starting a Michigan Business: Michigan Business One Stop

 

 

 

 

 

 

In my talks with other aspiring business owners I’m always surprised by the lack of awareness of Michigan Business One Stop.  What is it?  It’s Michigan’s online portal with pretty much everything you need to get your business up and running.  All in one location.  Talk about a time saver.

Here are just some of the things you can do with Business One Stop:

  • Learn about Financing your Business
  • Tax Information
  • Play with the One Stop Simulator
  • Find Employer Resources
  • Business Entity Search
  • Keep track of filings

The Business Start Up Tool on One Stop is a great tool for creating varying scenarios for launching different types of business.  It will help you understand the state requirements for that business, including costs and time frames.  It’s really simple to use and leaves you with a wealth of knowledge for the onset.

The site includes a online secure service for starting your business.  Right online.  Register for taxes, apply for licenses and permits.

If you’re in the process of starting a business, Michigan Business One Stop is the place to go.

Have you used Michigan Business One Stop?

 

 

 

Starting a Michigan Business Series: Forming a Corporation

It’s Monday, which means only one thing.  Starting a Michigan Business time.  This week the focus is on Forming a Corporation, what you need know, where you need to go, and how to find the documents you need to get started.

First things first.

1.  Choose a name.

Have you settled on a name?  Make sure you name is not already taken by visiting  the Michigan Corporation Division Name Availability Search.

You’ll also need check the list of restricted words. These words are not allowed in your corporate name:  List of Restricted Words

2.  Determine if your business is subject to special licensing or permits.

No need for surprises.  You can check online here:  michigan.org/medc/services/license.  You may also want to check with your local county, city or township clerk for local requirements.

3.  File Paperwork with the State of Michigan

Be thorough when completing the paperwork.  Be sure to have the proper corporate form, filled out completely.  Forms are returned if not properly completed.

4.  Register for a federal Employer Identification Number (EIN)

You can apply for an EIN number by faxing your SS-4 (Application for Federal Employer Identification Number – EIN) to 859.669.5760 or calling 800.829.4933

5.  Register for Michigan Taxes

You’ll need to complete Michigan Taxes Form 518 and return to the Michigan Department of Treasury and fax to 517.636.4520

Corporation Advantages:

  • Shareholders (company owners) have personal limited liability
  • Access to capital is easier than with other structures
  • Profits can be divided between owners and the corporation which reduces taxes and offers lower tax rates
  • Perpetual existence. Upon death of an owner (stockholder) the corporation continues to exist
  • Tax benefits for employee fringe benefits such as medical, dental, and disability

Corporation Disadvantages:

  • Fees. It costs money to incorporate, plus recurring annual corporate fees
  • There are formalities that MUST be followed. There is no flexibility here
  • Profits paid to owners are subject to double taxation
  • Can be complex to set up and maintain
  • Dissolution does not automatically happen

A great resource for starting a business is Michigan Business One Stop.  It’s an online portal with access to FAQ’s and necessary documents for starting a business.

If you have questions you can call the DELEG (Department of Engery, Labor & Economic Growth, Bureau of Commercial Services, Corporation Division) at 517.241.6470.  Or visit online at michigan.gov/corporations

It’ never a bad idea to seek out the services of a lawyer and accountant when launching a new a business.  While these steps will get you on your way they should never be considered a replacement for legal advice.

Starting a Michigan Business Series: Corporation or Partnership?

As an entrepreneur you end up wearing quite a few hats.  This doesn’t always leave time for finding relevant information for your business.  Were do you even begin when it comes to starting your small business?  The Starting a Michigan Business Series will be designed to answer FAQ’s related to launching a business in Michigan.

First up in our series is Corporation or Partnership?  Is there an advantage to one over the other?

Quite simply, it depends.  Not quite what you were looking for.  Yet it really is determined by your situation.  Each has an upside and downside.

Let’s take a look at the differences.

Corporation Advantages:

  • Shareholders (company owners) have personal limited liability
  • Access to capital is easier than with other structures
  • Profits can be divided between owners and the corporation which reduces taxes and offers lower tax rates
  • Perpetual existence. Upon death of an owner (stockholder) the corporation continues to exist
  • Tax benefits for employee fringe benefits such as medical, dental, and disability

Corporation Disadvantages:

  • Fees. It costs money to incorporate, plus recurring annual corporate fees
  • There are formalities that MUST be followed. There is no flexibility here
  • Profits paid to owners are subject to double taxation
  • Can be complex to set up and maintain
  • Dissolution does not automatically happen

Partnership Advantages:

  • Pooling of resources, expertise and strengths
  • Fewer formalities than other business structures
  • Does not pay Federal income taxes
  • Liability is spread among the partners
  • Investment can come from partners as a quick easy loan. This creates interest income for the partners and a business deduction

Partnership Disadvantages

  • All partners are personally liable for business debts and liabilities
  • There may be unequal commitment (think time and finances, click here)
  • Can be difficult to attract investors
  • Partners may have differing opinions on how to run the business

If you’re a current small business owner, what has your experience been with these business structures?  What would you recommend to an entrepreneur just getting started?