Once you’ve finished registering an LLC in Michigan, you may think you are ready to open the doors and get to work. However, before you do so, it is important to make sure that you have not overlooked the potential that your business may require business licenses or permits by the state.
Business licenses allow the owner the right to start, run, and maintain a business within the city, county, state, or country. Each municipality has the right to require a business license, regardless of the type of business that is operating within its borders.
Business permits are regulatory in nature. Permits indicate the business is operating within the safety, structure, and appearance of a business community. Permitting also shows proof that a business owner has agreed to follow the laws and ordinances which are required in a specific jurisdiction.
Failing to confirm whether a business needs licensing or permitting could result in a business owner being forced to shutter their operation and the imposition of steep fines and penalties for noncompliance.
While the state of Michigan does not offer or require an overall business license, unless you are operating in specific fields, there are several municipalities that do require licensing if a business plans to operate in their community. Some of these include:
Contact the relevant state or local government office for more information.
Michigan does require every business owner, even online businesses who are selling products to have a tax permit. Other permits which may be required include:
It is also important to be aware of any requirements which may face home-based businesses. Licensing and permitting may also apply to a business that you intend to operate from your home. You can learn more about these requirements from the State of Michigan website.
There are several steps to take that you may be required to complete before you are able to start doing business. These steps will help ensure you are not in violation of any local or state ordinances.
Business owners who fail to obtain, and maintain, the proper licenses and permits in Michigan will face penalties. Some of the most common penalties may include:
It is never a good idea to violate any licensing and permitting requirements. The resulting fines and penalties, and the blemish on your business name could be detrimental to your future ability to do business in Michigan.
Other communities which require permitting are Farmington Hills, Flint, Kalamazoo, Lansing, Livonia, Pontiac, Rochester Hills, Royal Oak, Saginaw, Southfield, St. Clair Shores, Taylor, Troy, and Wyoming. The processes for obtaining other Michigan business licenses vary from area to area.
Before you can ensure that you are not in violation of any local ordinance that requires a business to obtain permits or licenses, you should check with local clerks in the township in which your business will operate. The complete list of townships by county, as well as the contact information for the local clerks may be obtained on the Michigan Townships Association website.
Not every county has separate licensing requirements. However, to ensure that you are not missing any County rules, you should check with the individual county clerk where you are operating. County Clerk listings along with individual clerk contact information may be obtained from the Michigan Association of County Clerks website.
There are certain businesses that require licensing in Michigan. However, there is no mandatory state business license.
Every business owner should verify what their individual licensing requirements may be by checking:
This will allow you to make sure you are in full compliance with all rules pertaining to your business.
When someone is selling an actual product to a consumer, they must obtain a Michigan Sellers Permit or a sales tax permit.
Michigan does have a sales tax requirement that requires a license. The regulation is worded as follows: “A person shall not engage or continue in a business taxable under the sales tax law without securing a license, regardless of the amount of sales or the manner of obtaining goods for sale.”
To apply for a sales tax license, or seller’s permit, a business owner should use the online sales tax application portal. You can also obtain the hard copy which allows you to apply by mail. It is highly recommended that a review of the PDF document be conducted before using the online application portal so you understand what information you will need to complete the online application.
Every business license will require a fee. Most permits last only one year. Be certain you are in compliance with all requirements for payment of fees and renewal of your licenses and permits to avoid penalties.
Federal business licenses are not a requirement unless a business is operating in certain fields. However, if your business dealings are primarily in those categories, then licensing is mandatory. Anyone who believes their business may be subject to federal licensing requirements should carefully review the appropriate federal agency websites (provided below) to ensure they are in full compliance with all regulations.
While a federal license to operate a business in Michigan is not a foregone conclusion, there are certain industries in which a business may be required to be federally licensed to operate in any state. Businesses that operate in agriculture, alcohol, tobacco, or firearms, certain commercial fisheries, transportation, and other fields.
The following business categories require a business owner to file for a federal business license. These licenses are required if your business is engaged in any type of trade or transactions which impact the following industries:
Be sure you have carefully reviewed all requirements and gathered the appropriate documentation to prevent delays.
There are certain documents that will be required at both the state and federal levels to apply for licenses. These include:
To make sure your Michigan business will be operating legally, make sure you contact each appropriate agency for the required licensing and permitting.
If you operate a business that requires federal permitting or licensing, make sure you have obtained each permit and license you need to continue operating.
Shai Shmarel started his life as a corporate lawyer before switching to being an SEO and Content Manager at Tailor Brands. He has experience in managing companies, rankings SERPs and covering a content-driven approach for all things legal, business and marketing. When off work, you’ll usually find him chilling with a cup of coffee and a book in the desert.