Michigan Startup Costs Overview
Michigan State-Specific Costs
Formation Costs
There are several types of business entities you can choose for your company. Which is best for your business depends on a variety of factors, like ownership in the business, taxation, and more. Each structure has its own one-time formation or set-up cost that varies by state.
Annual Reporting Fees
In many states, business entities must file an annual report. Annual reports are short documents that provide updated information about your business, including the name and address of the business, the people who run it, and its registered agent. Keeping this information up to date ensures you stay compliant.
The most cost efficient way to report annually is to do it yourself. Here are the costs for annual filings for the state.
Franchise Tax Fees
Franchise taxes are state fees that businesses pay in order to have the right to operate in those states. They are paid in addition to state and federal income taxes. Here are the franchise tax fees for each business entity structure in this state.
C-Corporation
No franchise tax
S-Corporation
No franchise tax
State Income Taxes
Most states (44 out of 50) levy a corporate income tax.
C-Corps pay a C-Corp state income tax rate.
If the income tax is pass-through, as with S-Corps, use your personal income tax rate.
For LLCs, the tax rate depends on the how you set up the LLC business structure.
- Single-member LLC: treated as a disregarded entity (pass-through). Apply your personal income tax rate
- Multi-member LLC: treated as a partnership (pass-through). Each person pays personal income tax based on their share of the LLC's income and their own personal income tax rate.
- LLCs as S-Corps: if the LLC elects to be taxed as an S-Corp (pass-through), the LLC is taxed at the personal income tax rate.
- LLCs as C-Corps: if the LLC elects to be taxed as a C-Corp, the LLC is taxed at the C-corp income tax rate.
S-Corporation
Pass-through
Sales Tax
The Michigan Sales Tax is 6%
Non-State Specific Costs
These costs are similar across states. We estimate the total non-state specific costs to be $XXX. Link to Overall Costs page.
Total Costs for Starting a Business in Michigan
Summing up the above fees, we estimate the total cost for starting a business in this state to be:
$XX
