You've got a great idea for a new business and you're ready to hit the ground running. But first, you need to consider all the legal steps necessary to make your business legit.
The first step is deciding which form of business entity to use. This will involve both legal and tax considerations. The possible forms of business entities to choose from include sole proprietorships, partnerships, limited liability companies (LLCs), corporations and S-Corporations.
Once you have chosen a suitable business entity to conduct your business, you will need to register your business name at the state level by filing the appropriate documents. Entities can also conduct business under an assumed name. The appropriate formation documents are the Articles of Organization for LLCs, Articles of Incorporation for Corporations or Certificate of Limited Partnership for limited partnerships. Sole proprietorships are an unincorporated business venture that is owned by a single person, so there is no state level registration.
Next, you will need to apply for a federal Tax Identification Number from the IRS. Some businesses may require a state tax license if they are involved in the retail sale of tangible goods, while other businesses may need a license or permit to conduct their business.
And that is just the beginning of all the things you need to consider when starting a business in Michigan. Check back soon for Part II.