Determine if the name of your Corporation complies with the requirements of MCL 450.1211
Pursuant to MCL 450.1211 "The corporate name of a domestic corporation shall contain the word "corporation", "company", "incorporated", or "limited" or shall contain 1 of the following abbreviations: corp., co., inc., or ltd., with or without periods." Similarly, the corporate name must comply with the requirements of MCL 450.1212 and MCL 450.1213 as the corporate name must be distinguishable and should not be misleading.
Draft and File the Articles of Incorporation with the State of Michigan
Once you have determined that the proposed name of your Corporation you will need to draft and file the Articles of Incorporation with the State of Michigan.
A Michigan Corporation is required to have bylaws which set forth how the corporation is operated. Specifically, MCL 450.1231 states "The initial bylaws of a corporation shall be adopted by its incorporators, its shareholders, or its board. The shareholders or the board may amend or repeal the bylaws or adopt new bylaws unless the articles of incorporation or bylaws provide that the power to adopt new bylaws is reserved exclusively to the shareholders or that the bylaws or any particular bylaw shall not be altered or repealed by the board. The bylaws may contain any provision for the regulation and management of the affairs of the corporation not inconsistent with law or the articles of incorporation."
Hold the Organizational Meeting as required pursuant to MCL 450.1223
MCL 450.1223 states that "Before or after filing of the articles of incorporation a majority of the incorporators, at a meeting or by written instrument, shall select a board and may adopt bylaws. On or after the filing date of the articles any member of the board may call the first meeting of the board upon not less than 3 days notice by mail to each director. A majority of the directors constitutes a quorum for the first meeting of the board. At the first meeting, the board may adopt bylaws, elect officers and transact such other business as may come before the meeting." Under Michigan Law, your corporation must have at least 1 Director. Similarly, you will need to elect officers. Pursuant to MCL 450.1531 a single person may hold more than one office; however, they may not be able to sign certain documents which are required to be signed by at least 2 officers. As such, it is advisable to have at least 2 officers.
Determine whether to Issue Stock Certificates
The Corporation may issue stock certificates for consideration pursuant to MCL 450.1314. Alternatively, if the corporation does not issue stock certificates it must comply with MCL 450.1336 and send the shareholders a written statement containing the information that would be contained on a stock certificate.
Make sure to open a separate bank account in the name of the Corporation. A creditor would likely be able to pierce the corporate veil if corporate funds are commingled with personal funds. As such, it is always advisable to have a separate bank account for your business. The Bank will typically require your Articles of Incorporation, EIN, and/or Corporate Bylaws to open the Account.
Obtain the necessary License or Permits
Michigan law requires certain Corporation to be licensed prior to commencing business. For example, if you are a building company, make sure that the Corporation is properly licensed prior to entering into contracts or you risk not being paid. Similarly, local ordinances may require you to obtain a business permit. As such, it is advisable to check with your local municipal government to determine if there are any specific requirements to do business in your area.
In Michigan, if you employee 3 or more people or have employed anyone for at least 35 hours per week for 13 or more weeks, you are required to carry Worker's Compensation Insurance. When obtaining Worker's Compensation Insurance you should also inquire about obtaining a general commercial policy for your business. Similarly, you should prepare an employee handbook and any necessary contracts for employees to limit your liability and avoid disputes.
Begin Operating your Business
After you have completed the above steps you can begin operating your business. You will be required to file an annual report with the State of Michigan DELEG in order to maintain your status as a Corporation. Similarly, should you have any questions or issues with starting your business or any of your business practices it is always advisable to contact an attorney.
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