Once you have decided to start a business in Michigan and conducted market research to determine whether your idea is feasible, you will need to take certain steps to give your business a legal structure. You may be interested in creating an S corporation, a corporation, a limited liability corporation (LLC), a limited partnership, a general partnership, a professional corporation, or a sole proprietorship. Each has different legal requirements, and it is important to consult a business attorney who can explain the advantages and disadvantages of each of them. At the Neumann Law Group, our Grand Rapids and Traverse City business formation lawyers can help you with your needs.The Process of Business Formation
Depending on your legal structure, you will need to file with the appropriate local or state government agency. Choosing the correct legal structure is a crucial decision, and many different factors should be considered. The size of the business, whether there are employees or partners, the number of owners, and the quantity and value of the assets are factors to be considered. However, you should consult with an attorney in order to make sure that you really understand the different legal structures and which of them would meet your business objectives.
You must meet certain requirements to qualify as an S Corporation. Some benefits include that you avoid double taxation, and your losses may be offset against income by owners. However, there are certain restrictions, and you need to operate on a calendar year for reporting. You will need to file Articles of Incorporation with the Department of Labor & Economic Growth, Bureau of Commercial Services, Corporation Division.
A nonprofit corporation is created under the Michigan Nonprofit Corporation Act. Generally, a nonprofit is formed for the purpose of conducting charitable, religious, or educational activities, such as a private school, church, or community service.
Limited liability corporations or LLCs may be treated as partnerships or sole proprietorships for income tax purposes. The owners of the LLC are known as members, and they are comparable to stockholders in corporations. You will need to file Articles of Organization in order to create an LLC, and you must have a written operating agreement. Without this agreement, you will not be able to take full advantage of the form, and the law will determine your distribution and voting rights. Our business formation attorneys can help Traverse City and Grand Rapids residents determine whether an LLC is right for them.
Limited liability partnerships have two or more participants, but there are two types of partners. General partners have the same powers, restrictions, and rights as partners in general partnerships. They may incur unlimited liability and receive assets as set forth in a partnership agreement. Limited partners are not liable for the partnership's obligations. They may only receive a share of profits based on the allocation set forth in the partnership agreement, and they do not have a voice in how the business is managed. They must be registered with the Bureau of Commercial Services, Corporation Division of the Department of Labor & Economic Growth.
Corporations are legal entities that have their own privileges, liabilities, and rights, which are separate from the people who create them. Like people, they may own property, borrow money, and conduct business. They are complex and more heavily regulated than other forms of business. They are composed of officers, directors, and shareholders.Consult a Business Formation Lawyer in Grand Rapids or Traverse City
Business formation is best done with the help of an attorney. Our firm may be able to assist you. Our principal, Kelly Neumann, is an experienced trial lawyer who can keep an eye out for issues that might give rise to litigation. Our Traverse City and Grand Rapids business formation attorneys also represent clients in Ann Arbor, Flint, Lansing, Kalamazoo, Detroit, Wyoming, Saginaw, Muskegon, Midland, Holland, Warren, and Petoskey, as well as areas throughout the Upper Peninsula. Contact the Neumann Law Group at 800-525-NEUMANN or via our online form to set up an appointment. We also can advise people who need a food license attorney or assistance with many other issues related to business formation.