Set Up Your Business

What is a business legal structure?

• Businesses in the United States are legal entities defined by city, state, and federal laws. The legal structure of a business can vary. Some businesses are structured as corporations, some as limited liability companies, some as sole proprietorships, and so on.
• In order to start your business, you’ll need to decide on an appropriate legal structure, and work with an attorney or other service provider to prepare the necessary documentation.

Why is it important to choose the correct legal structure for my business?

There are many legal and financial issues to consider when choosing a legal structure for your business. The right legal structure can help limit your liability and protect your personal assets from bankruptcy. Legal structure can also influence the way your business is taxed, and the way it carries out day-to-day operations.

Which legal structure is right for my business?

• There are many factors to consider when determining an appropriate legal structure for your business, and it’s best to consult with a business counselor, attorney, or accountant before making a decision.
• The Small Business Administration is a great resource for learning more about possible legal structures for your business.

• Operating agreements, bylaws, and partnership agreements are essential governing documents for different business entities.
• An operating agreement outlines the ownership and operating procedures of an LLC, defining how the company will be run and the rights and responsibilities of its members
• Bylaws serve a similar purpose for corporations, establishing the company's internal rules, procedures, and management structure.
• A partnership agreement is a contract between partners in a partnership that sets out the terms and conditions of their relationship between the partners, including their rights, responsibilities, and share of profits or losses.
• While operating agreements and partnership agreements are not always legally required in all states, they are strongly recommended to ensure smooth operations and protect owners' interests, and are often requested by private third parties like banks, landlords, etc.
• Consult with a legal professional about what documents are right for your business.

• Name your business and check if your desired name is available with the Michigan Secretary of State.
• Registration will occur with the Licensing and Regulatory Affairs (LARA).
• Additionally, one must comply with the City of Flint’s Licensing protocol.
• Documents can be submitted for filing online, in person at the Secretary of State’s Office, or by mail. If you submit documents by mail, please include a cover letter with contact information, including your phone number, so that a filing officer can contact you if there are any questions.
• To avoid the return of your documents, make sure that you include the correct filing fee. Make checks payable to the Secretary of State.

• If you plan on forming a corporation or limited liability company, you will need to choose a registered agent. The registered agent is designated by law as the entity’s agent for service of process and official government communications. The name of the registered agent and the location of the registered office must be listed in the entity’s formation documents.
• The registered agent can be a member of the entity or a designated third party who resides in Michigan. The registered agent may be a corporation as long as the corporation is authorized to transact business in Michigan. The registered agent’s office must be identical to the registered office.
• The registered agent and registered office must be continuously maintained in this state. Failure to maintain a registered agent and/or office can result in the administrative dissolution of the company.