To start an S corp in Michigan, you form a corporation or LLC with the state, obtain a federal EIN, and then file IRS Form 2553 to elect S corporation tax treatment. The S corp itself is not a separate entity type in Michigan; it is a federal tax election that sits on top of an underlying corporation or LLC formed under state law. Below is the full sequence, from choosing the entity to keeping it in good standing.
Step 1: Choose Between a Corporation and an LLC
Michigan gives you two base entities that can carry an S corp election: a corporation formed under the Michigan Business Corporation Act, or an LLC formed under the Michigan Limited Liability Company Act.1Michigan Legislature. MCL 450-1101 Both qualify for S corp tax treatment. They differ in how the business runs day to day.
A corporation issues stock, elects a board of directors, and adopts bylaws. An LLC has members, a manager or member-managed structure, and an operating agreement. The S election changes only how the IRS taxes the business, not how Michigan classifies it. Pick the structure that fits how you plan to operate, then follow the corresponding formation path.
Step 2: Reserve a Name and Appoint a Registered Agent
Your business name must be distinguishable from every other entity already on file with Michigan’s Corporations, Securities & Commercial Licensing Bureau. Search existing names for free through the MiBusiness Registry Portal at mibusinessregistry.lara.state.mi.us before drafting any paperwork.2State of Michigan. Corporations Division A conflicting name will trigger a rejection.
Corporations must include a designator such as “Corporation,” “Incorporated,” “Company,” “Limited,” or an abbreviation. LLCs must include “Limited Liability Company,” “L.L.C.,” or “LLC.”3Michigan Legislature. Michigan Limited Liability Company Act 450-4204 If you want to secure a name before filing, Michigan allows a name reservation for a limited period.
Every Michigan entity must also designate a registered agent to receive legal documents and state correspondence.4Department of Licensing and Regulatory Affairs. Registered Agent and Registered Office The agent needs a physical Michigan street address; a P.O. box will not work.5Michigan Department of Licensing and Regulatory Affairs. Articles of Incorporation CSCL-CD 500 You can serve as your own agent, appoint someone inside the business, or hire a commercial service, which usually costs between $100 and $300 per year. If you act as your own, you have to be available at that address during normal business hours.
Step 3: File Formation Documents With LARA
The filing depends on the entity you chose. Corporations file Articles of Incorporation on Form CSCL/CD-500. LLCs file Articles of Organization on Form CSCL/CD-700.6Michigan Department of Licensing and Regulatory Affairs. Articles of Organization CSCL-CD 700 Both require the business name exactly as cleared through your search, the registered agent’s name and Michigan street address, and the name and address of at least one organizer or incorporator.
Corporations also list the total number of authorized shares and whether they are common, preferred, or both.5Michigan Department of Licensing and Regulatory Affairs. Articles of Incorporation CSCL-CD 500 Because an S corporation can have only one class of stock, most Michigan S corps authorize a single class of common shares.7Office of the Law Revision Counsel. 26 USC 1361 – S Corporation Defined
Filing Fees
- LLC (Form 700): $50.
- Corporation (Form 500): $60 minimum, which covers a $10 nonrefundable fee plus a $50 organization fee for up to 60,000 authorized shares. Authorizing more shares raises the fee. For example, 60,001 to 1,000,000 shares costs $100 plus the $10 nonrefundable fee.
Fees come from LARA’s official schedule.8michigan.gov. Filing Fees
How to Submit and Expedite
LARA prefers online filing through the MiBusiness Registry Portal, though mail and in-person filings are accepted at the Lansing office.2State of Michigan. Corporations Division Expedited processing is available on top of the base filing fee: $50 for 24-hour turnaround, $100 for same-day, $500 for two-hour same-day, and $1,000 for one-hour same-day.8michigan.gov. Filing Fees Once the state processes the filing, you receive a stamped copy confirming the entity exists.
Step 4: Adopt Bylaws or an Operating Agreement
Michigan corporations are required to adopt bylaws. The initial bylaws are adopted by the incorporators, shareholders, or directors and cover items like director elections, meetings, and voting.9Michigan Legislature. MCL 450-1231 Bylaws stay in your internal records; you do not file them with the state.
An LLC is not explicitly required to have an operating agreement, but Michigan law makes one important. A member can only withdraw “as provided in an operating agreement,” so without one, members may have no clear exit.10Michigan Legislature. Michigan Limited Liability Company Act An operating agreement also documents ownership percentages and profit sharing, which the IRS may look at when reviewing the S election.
Step 5: Get an EIN From the IRS
You need a federal Employer Identification Number before you can file for S corp status. The IRS issues EINs for free through its online application, and approval is immediate.11Internal Revenue Service. Get an Employer Identification Number The tool runs Monday through Friday from 6:00 a.m. to 1:00 a.m. Eastern, with reduced weekend hours, and times out after 15 minutes of inactivity. You must finish in a single session.
The IRS limits applications to one EIN per responsible party per day, and the agency never charges for the number itself. Skip third-party sites that add a fee.
Step 6: File IRS Form 2553 to Elect S Corp Status
With the entity formed and an EIN in hand, request S corporation tax treatment by filing IRS Form 2553, Election by a Small Business Corporation.12Internal Revenue Service. About Form 2553, Election by a Small Business Corporation The business must meet every federal eligibility rule:
- It must be a domestic entity organized in the United States.
- It can have no more than 100 shareholders. Spouses and their estates generally count as one shareholder.
- Shareholders must be individuals, certain estates, or qualifying trusts. Other corporations, partnerships, and nonresident aliens are not allowed.
- Only one class of stock can be outstanding, with identical rights to distributions and liquidation proceeds.
These come from the federal definition of a qualifying small business corporation.7Office of the Law Revision Counsel. 26 USC 1361 – S Corporation Defined
What the Form Asks For
Form 2553 requires the business name, EIN, date and state of incorporation, and the tax year the election should take effect. It also lists every shareholder’s name, Social Security number, ownership percentage, and share acquisition date. Every shareholder must sign. If even one eligible shareholder does not consent, the IRS rejects the election.
The Deadline
For the election to apply to the current tax year, you must file Form 2553 no later than two months and 15 days after the beginning of that tax year. For a calendar-year business, that is March 15. A newly formed entity can file within two months and 15 days of formation to have the election apply from day one.13Office of the Law Revision Counsel. 26 USC 1362 – Election, Revocation, Termination Filed later than that window but before the 15th day of the third month of the following year, the election takes effect at the start of the next tax year.
Where to Send It
Michigan businesses mail Form 2553 to the Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999, or fax it to 855-887-7734.14Internal Revenue Service. Where to File Your Taxes for Form 2553 The form cannot currently be filed electronically. After processing, the IRS mails a CP261 notice confirming that the election is in effect.15Internal Revenue Service. Understanding Your CP261 Notice Keep the CP261 permanently; banks and lenders often ask for it.
If You Miss the Deadline
Late election relief is available if the entity intended to be an S corp, the only failure was missing the deadline, you had reasonable cause, and both the business and every shareholder reported income consistent with S corp treatment for every affected year. The request must be made within three years and 75 days of the intended effective date.16Internal Revenue Service. Late Election Relief
Step 7: Register for Michigan State Taxes
Michigan’s Corporate Income Tax generally does not apply to S corporations. The CIT reaches entities that file federally as C corporations, plus insurance companies and financial institutions.17State of Michigan. Corporate Income Tax That is the main state tax advantage of the election.
If the S corp has employees, you still have to register for state income tax withholding through Michigan Treasury Online at mto.treasury.michigan.gov using the EIN.18State of Michigan. New Business Registration You also register for an unemployment insurance account through the Michigan Unemployment Insurance Agency’s MiWAM system. A 10-digit Employer Account Number arrives within two to three business days.19State of Michigan. Register Your Business
Step 8: Pay Yourself a Reasonable Salary
This is the single most common S corp compliance problem. Any shareholder who performs services for the business must receive reasonable compensation, meaning a regular salary subject to payroll taxes, before the business pays out any non-wage distributions.20Internal Revenue Service. S Corporation Compensation and Medical Insurance Issues “Reasonable” means what you would pay someone else to do the same work.
If the IRS decides an owner underpaid themselves to avoid payroll taxes, it can reclassify distributions as wages and add back taxes and penalties.20Internal Revenue Service. S Corporation Compensation and Medical Insurance Issues Set a defensible salary from the beginning and keep notes on how you arrived at it, whether from industry surveys, comparable job listings, or a payroll advisor.
Step 9: Keep Up With Annual Filings
Michigan requires an annual filing to stay in good standing:
- LLCs file an annual statement due February 15, with a $25 fee. If the LLC was formed after September 30, the first annual statement is not due until February 15 of the second year after formation.
- Corporations file an annual report due May 15, with a $25 fee. Late penalties start at $10 for filings between May 16 and 31 and rise each month, reaching $50 for filings received on or after September 1.
Both can be filed through the MiBusiness Registry Portal.21State of Michigan. Annual Reports and Annual Statements A corporation that fails to file or pay can be administratively dissolved by the state, at which point it loses the authority to do business, and reviving it requires more filings and fees.22Michigan Legislature. Business Corporation Act Chapter 8 – Dissolution
On the federal side, the S corp files an annual information return on Form 1120-S reporting income, deductions, and each shareholder’s share. For calendar-year filers, Form 1120-S is due March 15. An automatic six-month extension is available by filing Form 7004 before the deadline.23Internal Revenue Service. Publication 509 (2026) Tax Calendars
Each shareholder receives a Schedule K-1 showing their share of income, losses, and credits, which they report on their personal return. Because nothing is withheld from distributions, shareholders who expect to owe $1,000 or more generally have to make quarterly estimated tax payments.24Internal Revenue Service. Estimated Taxes Items pass through to shareholders based on their ownership percentage for each day of the year they held shares.25Office of the Law Revision Counsel. 26 USC 1366 – Pass-Thru of Items to Shareholders