LLCs and S corps are each separate business entities A corporation is formed by filing articles of incorporation with its state of incorporation. To be taxed as an S corporation it then has to file an election form with the IRS. An LLC is formed by filing articles of organization with its formation state.
Michigan recognizes the federal S corporation election and does not require a state-level S corporation election.
Corp Election teps for LLCs tep 1 Choose a name. tep 2 Choose a resident agent. tep 3 File Michigan Articles of Organization. tep 4 Create an operating agreement. tep 5 Apply for an EIN. tep 6 Apply for Corp status with IR Form 2553.
Filing as an S Corp in Michigan Step 1: Choose a Business Name. Step 2: Appoint Directors and a Registered Agent. Step 3: File Articles of Incorporation. Step 4: Create S Corp Bylaws. Step 5: Apply for an Employer Identification Number. Step 6: File Form 2553 for S Corporation Election.
Because of the one-class-of-stock restriction, an S corporation cannot allocate losses or income to specific shareholders. Allocation of income and loss is governed by stock ownership, unlike partnerships or LLCs taxed as partnerships where the allocation can be set in the partnership agreement or operating agreement.
S corp. An S corporation, sometimes called an S corp, is a special type of corporation that's designed to avoid the double taxation drawback of regular C corps. S corps allow profits, and some losses, to be passed through directly to owners' personal income without ever being subject to corporate tax rates.
Michigan is an ideal state to start an LLC due to its pro-business policies, affordable startup costs, and access to a skilled workforce. With straightforward registration and low annual fees, entrepreneurs can easily establish and grow their business in the Great Lakes State.