Becoming a Michigan S-Corporation is a two-part process. First, you must register with the state as a regular corporation. Next, elect to have your corporation treated as an S-Corporation with the IRS. The state will acknowledge your S-Corporation status after the IRS approves the election.
There are many tax benefits to forming an S-Corporation. For example, S-Corporations do not pay income taxes because profits (and losses) are passed through to the individual shareholders. Officers of the corporation also have the opportunity to take distributions of profit tax-free. There are other benefits as well, making this structure popular among small business owners.
Conduct a name availability search. You business can’t have the same name as another Michigan business. Use the online name availability search to quickly verify availability.
Prepare Articles of Incorporation. Include a suffix to your business name that identifies you as a corporation. Examples include “Inc.," “Incorporated”, “Corp” and “Corporation."
Complete registered agent information. A registered agent is a person in the state of Michigan who will receive legal process service and certain correspondence on behalf of the corporation.
Complete the class of stock and number of shares to be issued by the corporation. An S-Corporation can only issue one class of stock.
Submit your articles by mail or in person with the filing fee. As of 2010, the fee for filing Articles of Incorporation is $60 (if issuing 1 to 60,000 shares of stock).
Send by mail to:
Michigan Dept. of Energy, Labor & Economics Bureau of Commercial Services, Corporation Division P.O. Box 30054 Lansing, MI 48909
File documents in person at:
2501 Woodlake Cir. Okemos, MI
Federal S-Corporation Election
Obtain federal Employer Identification Number (EIN). You can apply for an EIN number online and receive your number instantly. You will need the number to file the S-Corporation election request with the IRS.
Prepare Form 2553. This form is required to be recognized as an S-Corporation. Each officer of the corporation must provide his social security number and sign the election request.
Mail or fax your form. New entities must file the election within 75 days of registering with the state. If you send the form by mail, send it certified. If you send by fax, retain confirmation of submission. This is a time-sensitive document–in the event of receipt discrepancy, you will need to prove you sent the election timely. The IRS does not charge a fee for making the election.
- Michigan Department of Labor and Economic Growth: Articles of Incorporation
- Internal Revenue Service: Form 2553: Election by a Small Business Corporation
- Internal Revenue Service: Instructions for Form 2553
- Internal Revenue Service: Apply for an Employer Identification Number Online
- Michigan Department of Labor and Economic Growth: Name Availability Search
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.