Why do business in michigan

Other costs that vary by business include equipment, supplies and inventory; a website domain and hosting; rent for a retail or office space; a business bank account, and any other costs that your business requires to be functional.

These costs range from a few hundred dollars to tens of thousands. You may also need to pay fees for federal paperwork or licenses, such as filing for an Employer Identification Number for federal taxes.

Before you begin the process of registering your business, create a business plan to get a full picture of the startup costs involved. Lennon, director of business operations for recruiting and staffing company Aerotek. Business that qualify for the small business alternative credit under the CIT pay a tax rate of 1. If your business doesn't qualify for the CIT, you will likely need to pay the MBT, which imposes a business income tax of 4. The Michigan Department of Treasury provides more information about the state's business taxes.

Some business sales are taxed in Michigan, while others are not. Either way, it is smart to obtain a sales tax license through the Department of Treasury.

In some cases, this license will also allow you to make purchases for resale without paying taxes to the original vendor. Accessing capital for startups or expansions is a little more difficult in Michigan than on the coasts. Some small business owners have found that access is improving as the economy grows, though.

Heyboer noted that rapidly growing startups encounter many pain points, since access to venture capital is not as great in Michigan as it is in some other parts of the country.

Young companies should prepare for a difficult time finding investors and plan accordingly. Since venture capital is not widely accessible in Michigan, many entrepreneurs turn to local federal credit unions, such as the Michigan State University Federal Credit Union.

The federal Small Business Administration also provides loans, financing options and grants for small businesses and startups. There are also various nontraditional financing options available to entrepreneurs who lack the cash flow to start a business, many of them thanks to the internet. These include peer-to-peer lending and community development finance institutions. If you're a small business owner in Michigan looking for resources to help you move forward, there are many organizations and government agencies that can answer your questions and connect you with the resources you need to get up and running.

Adam Uzialko contributed to the reporting and writing in this article. Some source interviews were conducted for a previous version of this article. How much does it cost to start a business in Michigan? Your business needs monthly and annual upkeep to make sure it remains in good working order.

A sole proprietorship requires minimal annual upkeep, which is one of the benefits of this business designation. As a sole proprietor, your business income will be included in your personal taxes, but you can still take business deductions.

After each year of doing business, a Michigan LLC is required to submit an annual report to the government in order to remain in good standing. This report must be submitted by February 15 of the following year.

Corporations have slightly more ongoing regulations than other business types. A corporation's annual report must be filed by an officer of the corporation by May 15 each year. For a business in Michigan, your DBA is valid for five years.

After five years, or if you choose to change your business name, you need to renew it with the county in which your business operates. Here are a few questions to spur your thoughts about your brand:. How do you want your brand to make your customers feel?

What pain points should your brand solve for your customers? What are a few words to describe your business? Your online brand might include a website, social media accounts, and online review sites. You should explain what your business is, what products or services you offer, where to find your business if you have a physical location , and more. Your website is your opportunity to answer any questions potential customers might have, as well as show them why they should choose your business over your competitors.

This is also the place to break out your branding skills. You can hire someone to build your website for you, but you can also use website builders like Wix or Squarespace to easily build one yourself. Social media. There are many social media platforms where you can promote your Michigan business, but the key is finding the ones that make the most sense for your business.

In other words, which will highlight your business in the best, most logical way, and where are your potential customers most likely to find your business? For instance, if you run a photography or graphic design business, an Instagram page is a natural choice to showcase your work.

Online review sites. While many businesses have mixed feelings about online review sites such as Yelp and Google Reviews, customers use these sites to research businesses—which makes them incredibly valuable for your business.

This is especially true for service-based businesses, such as restaurants, salons, or mechanics. Complete your Yelp business profile and your Google My Business listing so potential customers can start discovering your new Michigan business.

Not only will you increase your chances of being found online, but you can also provide helpful information about your business, as well as monitor customer feedback and reviews, which you can use to keep improving your business. This article originally appeared on JustBusiness, a subsidiary of NerdWallet. Rather, the presumption is that an employment relationship is terminable at will, with or without cause. An employer can change the nature of the relationship through a written contract.

Statements in employee handbooks or oral statements can sometimes create a legitimate expectation that the relationship is only terminable for just cause, which is determined on a case-by-case basis. An employer cannot dismiss an employee for discriminatory reasons prohibited by law see Question An employee who brings a lawsuit and is found to have been unlawfully dismissed may be eligible to recover, for example:. Back pay. Front pay to compensate for economic damages reasonably expected to be suffered in the future.

Are redundancies and mass layoffs regulated? There are no state laws on redundancies or mass layoffs. No additional regulations are in force at state level. Tax Taxes on employment. In what circumstances is an employee taxed in your jurisdiction and what criteria are used?

A person who resides in Michigan for at least days out of the taxable year is presumed to be a resident for the purposes of Michigan income tax. What income tax and social security contributions must be paid by the employee and the employer during the employment relationship? Tax resident employees Resident employees must pay the state of Michigan income tax at a rate of 4.

This tax should be withheld from their wages. There are only federal social security withholdings. Non-tax resident employees If an employee is exempt from Michigan income tax, no Michigan income tax withholding or payments are required.

Federal social security withholding rules may still apply. Employers Employers must withhold the following from wages, unless an employee is exempt from these:.

Michigan and federal income tax. Business vehicles. When is a business vehicle subject to tax in your jurisdiction? Tax resident business An entity that meets the minimum contacts requirement, such as an office or a full-time employee, is considered a resident for tax purposes. Non-tax resident business Non-residents are subject to the same taxes as resident vehicles, except that the tax is imposed on their Michigan source income only see Question They are taxed according to a unitary business concept by which taxable business income is apportioned according to what proportion of their sales are within Michigan as compared with their total sales worldwide.

What are the main taxes that potentially apply to a business vehicle subject to tax in your jurisdiction including tax rates? Michigan's state business income taxes are imposed on the Michigan components of worldwide income using unitary concepts. Pass-through entities, such as LLCs and S corporations, are subject to the Individual Income Tax Act under which they will be taxed on their passed-through distributions, income, and losses at the individual income tax. The individual income tax rate is 4.

Property taxes Michigan's property tax is assessed at the state and local levels, and can be reduced at both levels. Certain personal property tax exemptions are available for businesses.

Many industrial and consumer goods and transactions are exempt from Michigan sales taxes. Items purchased in other states but consumed in Michigan are subject to use tax. Services that repair, improve or alter tangible property owned by others are also subject to the sales tax. Dividends, interest and IP royalties.

How are the following taxed:. Dividends paid to foreign corporate shareholders? Dividends received from foreign companies? Interest paid to foreign corporate shareholders? Intellectual property IP royalties paid to foreign corporate shareholders?

Groups, affiliates and related parties. Are there any thin capitalisation rules restrictions on loans from foreign affiliates? There are no thin capitalisation rules other than those applicable under federal law. Must the profits of a foreign subsidiary be imputed to a parent company that is tax resident in your jurisdiction controlled foreign company rules?

There are no state-controlled foreign company rules other than those applicable under federal law. Are there any transfer pricing rules? There are no state transfer pricing rules other than those applicable under federal law.

How are imports and exports taxed? The taxation of imports and exports is governed by federal law. Double tax treaties. Is there a wide network of double tax treaties? Competition Are restrictive agreements and practices regulated by competition law? Is unilateral or single-firm conduct regulated by competition law? Competition authority The following are competition authorities in Michigan:. The Department of Justice. In addition to government entities, private parties injured by unreasonable restraints of trade may bring anti-trust actions in federal and state courts.

Restrictive agreements and practices Michigan anti-trust law is broadly modelled on the federal anti-trust laws in that it prohibits horizontal and vertical agreements among competitors, suppliers or customers which unreasonably restrain trade or create unreasonable clogs on competition. Michigan applies the per se standard to agreements which exchange of price information among competitors serve no purpose other than to destroy competition like price fixing, horizontal division of markets, tying agreements and concerted refusals to deal.

Michigan also applies the per se standard of illegality to resale price maintenance agreements between suppliers and retailers. Other than its position with regard to resale price maintenance, Michigan generally follows the federal interpretation of anti-trust laws. Unilateral conduct Unilateral, or single-firm conduct is regulated at federal level.

Unilateral conduct which monopolises any market or can lead to a monopoly in any line of commerce in the US or in trade with foreign countries violates Section 2 of the Sherman Act 15 USC 1 et seq. Attempts to monopolise interstate or foreign commerce by engaging in predatory conduct with the intent to create monopoly power, and having a dangerous probability of success, also violate Section 2 of the Sherman Act.

The act also prohibits commercial bribery. Penalties for violation of the Sherman Act include prison sentences, very large fines for individuals and very harsh injunctions and fines for corporations. Violations of the civil trade regulation statutes can also result in huge monetary judgments by reason of class action and stringent injunctive relief in order to restore competition. Are mergers and acquisitions subject to merger control? Acquisitions, mergers and joint ventures, depending on the size of the transaction, are regulated by the federal agencies under the authority of the Hart Scott Rodino Act 15 USC 18a Annually, the Federal Trade Commission publishes the size of the transactions which must be reported to the Federal Trade Commission and Antitrust Division of the Department of Justice.

There is no obligation for parties to a merger or acquisition to report such transactions to the Attorney General or other state agency in Michigan, but under the state trade regulation laws, the attorney general could undertake to investigate such a transaction if that office thought that a particular transaction would create an unreasonable restraint of trade in Michigan. Foreign to foreign acquisitions, depending on the nature of the business and the presence of the parties in the US may be subject to the filing requirements of the Hart-Scott-Rodino Act depending on the particulars of the transaction.

Consider inviting local media to your grand opening and to different events you hold throughout the year. Michigan offers excellent opportunities for many different kinds of businesses, but currently, the state employs the most people in healthcare, manufacturing, and food services.

Other companies that work in the state include:. The Great Lake State offers a low cost of living, business-friendly tax codes, affordable commercial real estate, and an educated workforce. Your startup funds will go a little further in Michigan than in other states as the cost of living is low, and business taxes are reasonable.

While you may gravitate towards the bigger cities of Detroit or Grand Rapids, research shows Holland, Michigan, is the best place to start a business. This filing fee must be submitted along with completed Articles of Organization to the state for approval.

The filing fee in Michigan is lower than in most states. All Rights Reserved. Start a Business in Michigan Today Start now. Michigan DBA. Michigan Resident Agent. Michigan Corporation. Popular States to Start a Small Business. How to Start a Business in Alabama. How to Start a Business in Illinois. How to Start a Business in Iowa. How to Start a Business in Maine. How to Start a Business in Michigan. How to Start a Business in Montana.

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