The key to making the most of Michigan corporation and partnership law is the decision to incorporate your business. A corporation affects your ability to gain capital, controls the amount of debt you assume and determines your tax obligations. However, these advantages must be balanced against the additional taxes your business will incur.

Michigan partnership law makes a partnership subject only to personal income tax, unlike a corporation. On the other hand, business partners may be held responsible for business debts.

There are several options for forming a company under MI corporate law. These include:

1. Michigan corporations as a profit or non-profit corporation. An S corporation (S-corp) is taxed under Subchapter S of the Internal Revenue Code which generally does not include income taxes.

2. A Michigan limited liability company (LLC). This is a hybrid business entity that shares the characteristics of both a corporation and partnership. It pays incomes taxes and is more suitable for a small business with one owner.

3. A Michigan limited partnership. This type of partnership has limited partners in addition to general partners.

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Determine the type of corporation that best suits your business under corporation law in Michigan

The most important factors to consider are the personal liability obligations and tax implications. You should also familiarize yourself with the operating requirements and reporting regulations.

I recommend: The Michigan website has a page dedicated to starting a business in Michigan that includes a guide and FAQ. The Michigan Small Business & Technology Development Center offers tools, financing options and counseling for new business owners.

Find an attorney that specializes in Michigan corporation and partnership law

Incorporating in Michigan must comply with the disclosure, operating and reporting requirements. Michigan corporation law specifies these requirements in detail.

I recommend: Bassey and Selesko in Southfield has specific expertise in corporate law including business organization. Currie Kendall is located in Midland and offers legal services to start your business including incorporation.

Find sites to help you form a corporation in Michigan

You must file the registration forms and pay the associated fees as required by Michigan corporation law in order to perform Michigan LLC registration. You may also need to file Articles of Incorporation, depending on the type of corporation you decide to register. These sites frequently have a Michigan corporation search capability to ensure your company's name is unique.

I recommend: Ceoready.com specializes in forming businesses in Michigan and also provides a comparison of the different business types. Michigan LLC Formation and Resident Agent Services provides a detailed description of the steps needed to form a corporation or LLC in Michigan.

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Helpful advice for making the most of this Guide

• •  Michigan corporation law requires annual fees and filings to maintain your corporation. Corporations are automatically C-corps unless they specifically register as S-corps with the primary difference being the way they are taxed. One person may frequently hold more than one position in these corporations and many if not all shareholders are also directors in a small corporation.

If you'd like to start a business in Michigan, you must understand the basics of Michigan corporation law. The structure of your Michigan corporation will be instrumental in the success of your business. It will affect your tax treatment, filing requirements, funding potential and liability obligations.

The ownership plans for your business entity determine how to incorporate in Michigan. A traditional corporation is useful to raise money with investors, or to allow ownership to employees in the form of shares. However, Michigan corporate law requires complex ongoing paperwork and will tax your business income on corporate and shareholder levels.

Registration under Michigan LLC laws is less complicated. Taxation occurs only on one level. The structure is simple, and can require only two people to incorporate. Under Michigan partnership law, a partnership is appropriate for business ventures that have a limited time-frame or a small number of people involved. Taxation benefits are similar to a Michigan LLC, in that there is no double taxation. The drawbacks include increased exposure to liability for the actions of the partnership.

The options to form a corporation in Michigan are:

1. A business corporation.

2. A limited liability corporation (Michigan LLC).

3. A limited partnership.

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Choose what works under Michigan corporate law

The decision as to whether to form a corporation or partnership depends on your long-term goals. Ownership is easier to divide in Michigan corporations, while partnerships are not well-suited for growth or sale, and do not offer stocks. Taxation is different for both types of entities. And, finally, Michigan corporation registration, including Michigan partnership law, requires varying filing of paperwork and fees.

I recommend: FindLaw will guide you through picking the entity structure that works for you. If you need further advice, look for a site such as lawyers.com to find a Michigan attorney.

Make your Michigan corporation or Michigan LLC a reality

MI corporation law requires filing certain forms, as well as submitting fees. The filing may include articles of incorporation, or, for Michigan LLC registration, articles of organization. Fees will vary depending on the structure.

I recommend: Find the appropriate business entity form through the Department of Labor and Economic Growth's (DLEG) Document Management System, and confirm fees by checking the DLEG fee schedule. A Michigan corporation search using the DLEG search engine is useful to locate potential competitors.

Know the details of Michigan corporation and partnership law

You are required to abide by all Michigan rules and regulations with regard to Michigan incorporation, so review the related statutes carefully.

I recommend: Review the related codes and statutes of Michigan corporation law from DLEG. If you are concerned about following the law properly, engage a reputable incorporation firm such as ActiveFilings.

Michigan corporation and partnership law education and training will teach you how to create business entities such as a Michigan incorporation or limited liability company (LLC). Attorneys who specialize in corporation and partnership law must also know how to perform a Michigan corporation search.

The requirements needed to practice Michigan corporate law are determined by the state and may depend on the specific type of corporation law you wish to practice. A legal education in corporate law has three general phases:

1. The practice of Michigan partnership law requires a law degree. Practicing attorneys will generally require a Juris Doctor (J.D.) degree from a law school approved by the state of Michigan.
2. An aspiring lawyer will need to pass a bar exam that is administered by the state. A background check will also be performed along with a character and fitness evaluation.
3. The lawyer must apply to Michigan’s licensing authority and pay the required fees. The admittee then takes an oath to comply with the rules regarding the practice of law in Michigan.
   

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Complete the formal education needed to learn about Michigan corporation laws

There are a variety of universities in Michigan that grant J.D. degrees recognized by the state of Michigan. The required courses must be updated to keep up with changes in corporate law.

I recommend: The University of Michigan Law School is one of the top law schools for placing graduates in prestigious national law firms. The Michigan State University College of Law is a private law school that is fully accredited by the American Bar Association.

Gain admission to the bar in order to form a Michigan LLC

As a Michigan corporate lawyer, your clients will frequently wish to form corporations or partnerships with their businesses. Michigan has specific bar exam requirements and also allows lawyers licensed in other states to practice law in Michigan through reciprocity agreements.

I recommend: Michigan Bar Exam Appeals provides specific information on the scoring process for the bar exam, especially for the purpose of appealing the score. Adaptibar summarizes the format and scoring procedure for the Michigan bar exam.

Obtain the additional requirements needed to practice Michigan corporation law

Get licensing information necessary for a career in Michigan corporation law. An attorney in Michigan must also meet that state's continuing education requirements in order to renew a license to practice law.

I recommend: The State Bar of Michigan allows provides complete details on the bar admissions process for Michigan. The Michigan State Board of Law Examiners answers specific questions of getting admitted to the Michigan bar.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Consider a Master of Laws (LLM) degree as a means of distinguishing yourself from other attorneys who practice corporation law in Michigan. An LLM is a postgraduate law degree that generally requires an additional year of study at a law school. Graduates from regional schools frequently obtain an LLM in order to compete with graduates from more highly ranked law schools. This is also an excellent opportunity to begin specializing in corporate law.