Incorporate in Michigan

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Form Your Michigan C Corporation

Start setting up your Michigan C Corporation now - without any obligation. Save all of your incorporation information until you’re ready to incorporate.

MaxFilings competitive pricing is simple and straight forward - it includes all Michigan fees and other charges. There are absolutely no “hidden charges” to surprise you later.

A Michigan C Corporation is recognized by the law as an individual entity, separate from its shareholders (owners), and many times treated as a human being.

Michigan C Corporation shareholders enjoy limited liability for the debts, obligations and liabilities incurred by the business as well as liability stemming from possible legal action. Protection of shareholders’ personal assets is one of the major reasons Michigan business owners choose to incorporate. Normally, shareholders cannot lose more than the amount they invested in the corporation. If the corporation goes bankrupt, the shareholders will not be liable for its debts. Should someone sue the corporation and the corporation is found liable, they can take the corporation's property to satisfy the judgment but if that property does not satisfy the judgment, they will not be able to take a shareholder's personal assets, i.e. home, car, or bank account. There are exceptions to shareholders’ limited liability to keep in mind. For example an exception to a shareholder's limited liability occurs when the corporation has recklessly harmed people or has been used to perpetuate a fraud.

Michigan C Corporation Taxation

Michigan C Corporation shareholders do not report any of the business income and expense on their individual tax return. The corporation files tax returns and pays its income taxes (at generally lower tax rates than would individuals) while the individual shareholders report and pay personal income taxes only on monies paid them by the corporation.

It should be noted that shareholders are required to pay personal income taxes on income from dividends paid by a C Corporation even though income taxes have previously been paid by the corporation. This leads to what is commonly referred to as “double taxation”.

Why Form a Michigan C Corporation?

Michigan C Corporations best serve owners who want the limited liability, a more formal business structure, the ability to reduce overall income taxes and accumulate assets in the business, and ways to more easily raise capital.

Official documents must be filed with Michigan in order to form a Michigan C Corporation. MaxFilings can do this for you. Start setting up your Michigan C Corporation now >>

Some Points to Consider When Forming a Michigan C Corporation

• Official documents must be filed with Michigan in order to form a Michigan C Corporation and  state filing fees must be paid
• A Michigan C Corporation is considered by the law to be an individual entity, separate from its owners (shareholders)
• A Michigan C Corporation can have any number of shareholders
• A Michigan C Corporation is considered by the law to be an individual entity, separate from its owners (shareholders)
• A Michigan C Corporation can have any number of shareholders
• You must hold and keep minutes that document shareholders’ and board of directors’ meetings
• There can be some limitations as to the kind of business a Michigan C Corporation is allowed to conduct

Limited Liability

• Michigan C Corporation shareholders normally enjoy limited liability and can lose no more than the amount they invested in the corporation
• Michigan C Corporation shareholders cannot normally be held liable for legal judgments against the corporation or for any of the corporation’s debts or obligations
• Protection of Michigan C Corporation shareholders’ personal assets is one of the major reasons business owners choose to incorporate in Michigan  
• There are exceptions to shareholders’ limited liability where shareholders can be held liable

Raising Capital

• A Michigan C Corporation can raise additional capital easier than some of the other types of business since you can issue and sell stock or a variety of other financial instruments as evidence of interest in the corporation
• The sale of stock is sometimes subject to Michigan and federal securities laws
• Ownership can be easily transferred by selling stock in the corporation

Taxation

• Michigan C corporations are normally audited less frequently than sole proprietorships and partnerships
• Michigan C Corporations file tax returns and pay income taxes but since tax rates are lower for C corporations, owners can (by dividing profits) accumulate more in the corporation than is possible with pass-through taxation
• Michigan C Corporation shareholders face double taxation since they are required to pay personal income taxes on dividends paid them by the corporation
• Michigan C Corporations can reduce owners’ self employment taxes

Owners & Employees

• Owners working for the Michigan C Corporation are employees and are therefore eligible for certain fringe benefits such as group insurance plans, retirement and profit sharing plans, and tax-favored stock option and bonus plans
• Employees frequently prefer to work for a corporation that can offer them stock options and stock bonuses
• In a sense a Michigan C Corporation is immortal and perpetual since it does not end with the death of a shareholder owner as do some of the other business types

Public Perception

• The general public normally thinks of corporations as being more substantial than sole proprietorships and partnerships

This information is not an attempt to present all you should know when forming a C corporation in Michigan but rather to present just some of the basic information about Michigan C corporations. While we make every effort to ensure its accuracy, MaxFilings cannot and does not guarantee that all of the information is accurate or complete and/or current and it should therefore be independently verified. And, as always, you should seek the advice of qualified professionals who are familiar with your circumstances as well as applicable federal and Michigan laws.    

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