There are several types of business formations available in Michigan and each comes with rights and responsibilities that are helpful to know. Business formations are filed with the Michigan Department of Licensing and Regulatory Affairs.
A corporation is made up of a group of people, but the entity itself has powers and liabilities independent of its members. The incorporators appoint an initial board of directors to manage the business and affairs of the corporation.
A limited liability company is an entity where the members are the owners of the company. The business entity is separate from the members. Liability is limited to the financial contributions made by each member.
A limited partnership is formed by two or more people, with one or more general partners or one or more limited partners. The general partners are liable for all of the debts and obligations of the business. The limited partners are responsible for only the debts and obligations they contributed.
A limited liability partnership is also formed by two or more people, however the owners are personally liable for all debts of the business and obligations.
These are just a few examples of the business formations available in Michigan. There are separate filing requirements for each type.
It’s also important for the officers, members and/or partners of each entity to keep accurate records for the business. These may include invoices, bank records, tax documents and payroll records.
An experienced attorney can help those who are considering forming a business in Michigan by answering their questions and providing guidance.