Entrepreneurs starting new businesses in Michigan have multiple options for structuring their companies. People running a business on their own may establish a simple sole proprietorship. Those working with partners may create a formal partnership arrangement.
Corporations are an option for businesses that people intend to scale up as they prove successful and for those bringing in investors as early as possible. Many people choose to establish limited liability companies (LLCs) as a way of splitting the difference between the ease of sole proprietorship and the protection of a corporation.
An LLC has members who participate in the company’s creation and management. How many members are necessary to form an LLC in Michigan?
Sole member LLCs are common
An entrepreneur with a business idea does not need multiple other people to start an LLC. They have the option of forming a sole member LLC without sharing control with anyone else or risking conflicts with other members who have different visions for the organization.
Sole member LLCs require the same paperwork as any other LLC, but only one person has the authority to make decisions about the company and manage business operations. The entrepreneur enjoys liability protection. An LLC creates a degree of social separation from the business as well, as the person starting the company can choose a unique brand name instead of using their own name for the business.
Entrepreneurs exploring their options for protecting themselves legally and financially may want to discuss different business formation options with a lawyer. An attorney’s guidance can help people manage business formation paperwork and choose the right entity type, given their plans for their company.