Starting a Business in Michigan? We can Help you Today!
Opening a new business is exciting but needs proper planning and organization. Our services are not limited to the administrative process of filling out all the Federal and State forms to establish your new business. TAX Avenger helps you understand all the different structures of the business types, as well as the advantage and disadvantage of each entity. Such structures include S Corp, C Corp, Partnership, and Schedule C (individual business). We will assist you in choosing the right structure that best fits your business position.
We will walk you through how TAX Avenger will help you in the process of opening a new business. Including but not limited to what documents will need to be submitted, and which type of business is suitable for you. We will also assist with some operational and administrative tasks while running your business (including accounting, payroll, tax reporting, updating your records with the IRS, State, and if needed closing a company).
Do You Need help starting a business? We can help, Call today
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CPA in Canton
7365 N. Lilley Rd
Canton, MI 48187
Let’s Start with How to Open a Business
The First Step is to Choose the Business Name and the Legal Status of the company and to make sure that the business name is available with the State of MI through LARA (Licensing And Regulatory Affairs).
- Once the business name is selected, you should choose the legal status of the company. The most common is LLC (Limited Liability Company) or INC (Incorporation).
- There are many similarities in the characteristics between an LLC and an INC. Both will give their members or shareholders personal protection against the liability and the debts of the company.
- However, for tax purposes, the significant difference between them is once the LLC is set up it will be treated as a disregarded entity if one person owns it, or as a Partnership if more than one member owns it. On the other hand, a Corporation is treated as a C Corp regardless of the number of owners or shareholders.
- One important note is that both the LLC and Inc are eligible to be treated as an S Corporation using the form 2553 to make the election.
The Second Step is to File the Article of Incorporation with the State of MI
- The Articles of Incorporation is a document that needs to be filled out and sent to the State of MI, which includes the company’s necessary information.
- Whether you have chosen an INC or LLC, the Article of Incorporation should include, the company’s name, the purpose of the company, the number of each class share (for Corporations), address, the resident agent, and the name and address of the incorporators (For Corporations).
The Third Step is to Apply for an EIN or Tax ID Number with the IRS
- The EIN will be generated by the IRS, electronically using the IRS website.
- You need to follow specific steps with the IRS, through their websites, and fill out a form with the company and owner’s information.
- The EIN is the ID number of the company recorded with the IRS, and it is a must-have for several reasons such as filing the company taxes, opening a bank account, requesting information from the IRS, etc.
Let Us Know How We Can Help
BUSINESS STARTUP SERVICES In Canton Michigan
We will walk you through how TAX Avenger will help you in the process of opening a new business. Including but not limited to what documents will need to be submitted, and which type of business is suitable for you. Call today to get started!
The Next Step is Assisting You with Some Administrative and Operational Stages While Running Your Business
- After incorporating the company with the State of MI and getting the EIN from the IRS, you should open a bank account for the company.
- We will assist you in getting the licenses needed depending on your business type, such as sales tax licenses, retailer licenses, motor and vehicle licenses, among others.
- You should use the business account to pay all the business bills to suppliers, including payroll and payroll taxes, and to receive all the income from clients.
- The monthly bank statement should reflect the monthly expenses incurred by the company as well as the income shown as deposits.
- Accounting and Payroll (discussed in more details in the payroll section).
- Tax reporting: Depending on the type of business, your business may be subject to the following taxes:
a – Sales tax to the State, which is 6% on the taxable products in Michigan. For some industries as Gas stations, remote and online commerce, and Marijuana dispensaries, the reporting is a more bit complex. Whatever your business type is, and the level of complexity, TAX Avenger will guarantee to do it on your behalf
b – Payroll Tax to the IRS, and the State (discussed in more details in the payroll Section)
c – Income tax to the IRS, State, and Cities. The reporting and the payments of the taxes for businesses varies based on the type of business. For example, If the company is an individual business, owned by a single person and no election was made, the taxes of the company will be reported on the Schedule C under the Form 1040 of the individual tax return. However, if the company is owned by 2+ members/shareholders or the company made the election to be treated differently for tax purposes (Election of S Corporation) the company will be reported separately (i.e. 1120S, 1120, 1065) and the tax payments will be on the individual level in case the business is an S Corp or Partnership. But tax payments will be on the business level for C Corporation. The characteristics and the differences of the tax reporting forms for the companies can be found discussed in further details in Tax Return for Business and Individual services.
Updating Information and/or Closing the Business
It is crucial when changes happen to the business (i.e., relocating) to make the appropriate information updates with the IRS, State, and the City. Each type of change needs specific forms to be filled out correctly and sent to the IRS and State. TAX Avenger will handle these tasks on your behalf; whether you have changed your address, you selected a new assumed name, you appointed a new resident agent or even if you decided to close your business. It is essential to make sure that your information is up to date and accurate with the IRS, State, and city to prevent any notices.
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7365 N. Lilley
Canton, MI 48187