You can start a business in Michigan with no money, or close to it. A sole proprietorship under your own legal name costs nothing in state fees. Add a county assumed name certificate if you want to operate under a different name, and you’re out about $10. Form an LLC for liability protection and you’ll pay $50. Every tax registration — federal EIN, Michigan tax accounts, sales tax license — is free. The harder part isn’t the filing fees. It’s knowing every requirement so you don’t skip something that creates problems later, and being honest about whether “no money” means “no investment at all” or “small investment, done carefully.”
Pick the Structure That Matches Your Budget
Your structure decides both your startup cost and how much personal risk you carry.
A sole proprietorship is the cheapest path. Operate under your own legal name and there’s no state filing at all. You just start working. The catch: your personal assets are reachable for every business debt and lawsuit. House, car, savings — all on the table.
A limited liability company costs $50 to form in Michigan and puts a legal wall between your personal assets and business obligations.1State of Michigan. LARA Filing Fees Schedule One or more people can organize an LLC by filing Articles of Organization with the state.2Michigan Legislature. Michigan Compiled Laws 450.4202 – Limited Liability Company Formation For most bootstrapped operations, this is the honest sweet spot between cost and protection.
One important boundary on that protection: it only holds if you treat the business as genuinely separate from yourself. Courts can disregard an LLC’s protection — lawyers call it “piercing the veil” — when the business was never adequately funded or when the owner mixes personal and business money freely. A $50 LLC that signs a $10,000 lease with nothing in its bank account isn’t really protecting anyone.
Corporations exist too, starting at $60 in state fees, but they involve more paperwork and formalities and rarely make sense when you’re starting with nothing.1State of Michigan. LARA Filing Fees Schedule For almost everyone reading this, the real choice is sole proprietorship or LLC.
Lock Down Your Business Name
Before you file anything, search the Michigan Business Entity database to confirm your proposed name isn’t taken.3State of Michigan. LARA Business Entity Search The state will reject your formation documents if your name is too similar to an existing entity, which wastes time and potentially a filing fee. The search is free and takes a couple of minutes.
Forming an LLC? Your business name is set in the formation documents — no separate name registration. Running a sole proprietorship under something other than your legal name? You need an assumed name certificate (a DBA) filed with the county clerk where the business is located. The fee is typically around $10 and varies a little by county.4Barry County. DBA Registration
Neither a DBA nor an LLC registration gives you a trademark. If you want exclusive rights to a name beyond Michigan’s entity database, federal trademark registration through the USPTO starts at $350 per class of goods or services.5United States Patent and Trademark Office. Summary of 2025 Trademark Fee Changes That’s not a day-one expense, but worth knowing before you spend heavily on branding.
File the LLC Paperwork (If You’re Going That Route)
For an LLC, you file Articles of Organization using Form CSCL/CD-700 with the Corporations, Securities & Commercial Licensing Bureau.6State of Michigan. Limited Liability Company Submit online through the Corporations Online Filing System at michigan.gov/corpfileonline, or mail paper forms to LARA in Lansing.
The form asks for basic information: business name, purpose, registered office address, and whether the LLC is member-managed or manager-managed. You’ll also state whether the business has an end date or exists indefinitely. Most people choose perpetual, which is the default under Michigan law.2Michigan Legislature. Michigan Compiled Laws 450.4202 – Limited Liability Company Formation
Being Your Own Resident Agent
Every Michigan LLC and corporation needs a resident agent — someone at a physical Michigan address who can accept legal documents. Professional services charge $100 to $300 a year for this. You can serve as your own for free if you’re a Michigan resident and the registered office matches your business or home address.7Michigan Legislature. Michigan Compiled Laws 450.4207 – Registered Office and Resident Agent The trade-off is that your home address becomes public record.
How Long Approval Takes
Standard online filings currently take roughly seven to ten business days. Mailed submissions take longer because they’re routed through a separate receiving facility first. Expedited processing is available if you need it: $50 for 24-hour review, $100 for same-day, scaling up to $1,000 for one-hour service.8State of Michigan. CSCL Articles of Incorporation Filing Instructions On a zero-budget launch, the standard timeline is fine. Just plan around it.
Once approved, you’ll get a filed copy of your Articles. That document proves the business exists and you’ll need it to open a bank account.
Get Your Tax Numbers (All Free)
Three tax registrations handle most new Michigan businesses. None cost anything.
Federal EIN. The IRS issues this nine-digit number for free through its website, usually within minutes.9Internal Revenue Service. Get an Employer Identification Number You need it to open a business bank account, file business tax returns, and hire employees. Third-party sites that charge for this are selling you something the IRS gives away.
Michigan tax registration. Go to Michigan Treasury Online (MTO) and use “Start a New Business (E-Registration)” to register for state taxes.10State of Michigan. New Business Registration Form 518 by mail works too, but online authenticates in 10 to 15 minutes versus four to six weeks by mail.11State of Michigan. MTO Registration FAQs You’ll need your EIN, business start date, and estimated sales volume.
Sales tax license. If you sell tangible goods or certain services in Michigan, you need one. There’s no fee.12State of Michigan. Sales Tax License FAQ Register through the same MTO process.
On how income is taxed: sole proprietors report business income on their personal Michigan return, with no separate business filing. Single-member LLCs work the same way by default; the IRS treats them as “disregarded entities” that flow through to your personal return.13Internal Revenue Service. Form 8832 Entity Classification Election Multi-member LLCs default to partnership taxation. An LLC can elect corporate taxation, but that rarely helps a brand-new business with no income to shelter.
The Recurring Costs You Can’t Skip
Starting cheap doesn’t mean staying free. A few obligations catch new owners off guard.
Every Michigan LLC must file an annual statement with LARA and pay a $25 fee by February 15. LLCs formed after September 30 don’t owe their first statement until the following February 15.14State of Michigan. Limited Liability Company Filing Information Missing the deadline can bring penalties and eventually dissolve the LLC.
Michigan doesn’t issue a single statewide business license, but your city or county may require local permits depending on your industry and location. Home-based businesses especially should check local zoning before operating — some residential zones restrict business activity that adds traffic, noise, or signage. A call to the local zoning office is free and prevents fines.
One boundary worth naming because it recently changed: federal beneficial ownership reporting under the Corporate Transparency Act. An interim final rule published in March 2025 exempted all domestic reporting companies from this requirement.15Federal Register. Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension As of early 2026, new Michigan LLCs and corporations formed domestically do not need to file BOI reports with FinCEN. Watch for updates; the rule could change.
Open a Separate Bank Account
Even sole proprietors should open a dedicated business account. Mixing personal and business money is one of the fastest ways to undermine LLC liability protection and create a tax mess at year-end. Most banks want your EIN, a government photo ID, and your formation documents (filed Articles of Organization, or DBA certificate for a sole proprietor). Some require a minimum opening deposit, so ask first — a few institutions offer zero-minimum business checking.
If You Plan to Hire
A one-person operation is simple. The moment you bring on an employee, federal and state requirements multiply.
Michigan law requires workers’ compensation coverage once you regularly employ one person working 35 or more hours per week for 13 or more weeks, or three or more employees at any time (including part-time). Sole proprietors are not considered employees of their own business, so a one-person sole proprietorship is exempt. LLCs where every employee is also a member, manager, and 10% or greater owner can file an exclusion form (WC-337) instead of buying a policy.16State of Michigan. Employer Insurance Requirements
New Michigan employers also pay a 2.7% state unemployment tax rate on employee wages in 2026.17State of Michigan. Unemployment Insurance Taxes Federal FUTA tax is 6.0% on the first $7,000 of each employee’s wages, with a credit of up to 5.4% for employers who pay state unemployment, bringing the effective federal rate to 0.6%.18Internal Revenue Service. Topic No. 759, Form 940 FUTA Tax Return
Every new employee must complete Form W-4 for withholding and Form I-9 to verify employment eligibility.19Internal Revenue Service. Hiring Employees Retain the I-9 for three years after the hire date or one year after employment ends, whichever is later.20USCIS. 10.0 Retaining Form I-9 Michigan also requires you to report every new or rehired employee to the Michigan New Hire Reporting Center, operated through the Office of Child Support.21State of Michigan. New Hire Reporting Federal law sets a 20-day deadline from the hire date in most states.
Free Help Michigan Already Pays For
Michigan has an unusually strong network of no-cost support. Not generic hotlines. Actual consultants and former executives who work with you one-on-one.
The Michigan Small Business Development Center (SBDC) provides free, confidential consulting on business plans, market research, and financial projections, with advisors in every county.22Michigan SBDC. Our Small Business Support Services If you’re starting with no money, an SBDC consultant can help you figure out which corners you can safely cut and which you can’t.
SCORE chapters across Michigan pair new owners with retired executives for free mentoring, in person or online.23SCORE. SCORE Southeast Michigan Free Business Mentoring The value is specific industry experience — your mentor has probably navigated the exact problem you’re about to face. Chapters operate in metro Detroit, Grand Rapids, Traverse City, and other regions.
The Michigan Economic Development Corporation runs Pure Michigan Business Connect, which links small businesses with procurement opportunities and supply chain partners. For a service business or small manufacturer, this can bring customers before you spend anything on marketing.
Michigan Works! offices across the state offer free workforce development assistance. If you’re planning to hire, they can help with finding candidates, understanding employment rules, and accessing training programs that would otherwise cost real money through private recruiters or HR consultants.
The Honest Version of “No Money”
The legal mechanics are cheap. A sole proprietorship with a DBA runs about $10. An LLC with all free tax registrations costs roughly $75 in year one ($50 formation plus $25 annual statement). That part is genuinely accessible.
But “legally formed” and “ready to operate” are different things. You may need general liability insurance, which averages around $45 per month for small businesses. Some industries require professional licenses with their own fees. Operating from home might mean a separate phone line, basic supplies, or a small inventory.
And remember the veil-piercing problem. Taking on business obligations with nothing in the business bank account isn’t lean startup discipline. It’s risk you’ve handed to yourself. You don’t need a fortune to start in Michigan. You do need enough to meet the obligations the business creates.
Use what Michigan gives you for free first: SBDC consulting, SCORE mentorship, zero-fee tax registrations. Build a realistic plan for the first 90 days of actual operation. Then file the paperwork knowing you’ve accounted for the full picture, not just the formation step.