The legal business form of the LLC, or Limited Liability Company, offers the benefits of several other traditional business forms. Limited liability is an advantage that the LLC shares with the corporation, but instead of being taxed as its own entity, it is treated more like a sole proprietorship or partnership for tax purposes. Like a corporation, a LLC can have unlimited shareholders, called members. But a key difference is if one of these shareholders dies or files for bankruptcy, the LLC is dissolved and will stop operations unless the remaining members form a new LLC. Business forms with limited liability have existed for hundreds of years, but the modern LLC became more popular in Michigan since the legislature enacted laws authorizing its formation.
Can My Business Be Formed as an LLC?
The right business form is a decision left up to each business that openes in Michigan. An LLC is started simply by filing the appropriate form with the Secretary of State. However, some charge additional fees for the formation of LLC?s, and in Michigan there are certain laws that govern the actions of LLC?s. In deciding whether you should organize as an LLC, you should consider carefully the applicable laws. Finding the right business structure for your company can lead to increased profits, but the process may take some time.
Can I Change the Form of My Business to an LLC?
Businesses in Kent County may change their forms in particular circumstances. Whether a business may convert to a LLC or not is determined by Michigan law.
How Can an Attorney Help?
Attorneys practicing business law in Michigan can advise you on whether it would be favorable for your business to form or convert to a LLC.