Starting a business can be a daunting task, but at Elsouri Law & Consultants we aim to streamline this process by providing you with quality legal services that will allow you to incorporate your business, draft an operating agreement, and if applicable, reduce your tax liability.

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Corporation Formation: For-Profit Entities in Michigan

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In Michigan  are generally four types of corporate structures and they are: Sole Proprietorships, Partnerships, Corporations, and Limited Liability Companies (LLC’s). Click the following link to see a table that explains the requirements and protections of each of these respective entities. 

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If you have a business in Michigan, incorporating can provide valuable liability protection. However, there are a lot of different factors that clients need to take into consideration when deciding which type of business entity is right for their situation and it is important to consult with a legal professional before forming any kind of business entity.

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Corporation Formation: Non-Profit Entities in the United States of America

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The first step of establishing a non-profit organization in the United States of America is incorporating your entity in your respective state, drafting an operating agreement that includes your non-profit’s mission, and obtaining an Employer Identification Number from the Internal Revenue Service (IRS).

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Generally, such organizations are incorporated as corporations to limit liability to the shareholders. After you complete the preceding steps, you must apply for Non-Profit status (i.e. 501 (c)(3) status) with the IRS by filing a IRS form 1023.

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The Form 1023 is up to 28 pages long. With the necessary attachments, schedules and other materials that may be necessary, it is not uncommon for these submissions to the IRS to be more than 100 pages. The form is used by the IRS to examine your proposed activity, and to primarily assess whether the organization was formed for exclusively 501 (c)(3) purposes. Moreover, the IRS closely assess for conflicts of interest and potential for benefit to insiders, grounds for denial.

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This process must be done within 27 months of incorporation or it can be done after that period if you apply for the 501 (c)(3) status after that prescribed period, but you will be considered a non-profit organization as of the date of application rather than from the date of incorporation.

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After obtaining 501 (c)(3) status, you must assess whether your state has a requirement for such organization to register to solicit charitable donations. Currently, 80% of U.S. States have a requirement.

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At Elsouri Law & Consultants, we specialize in this process and will be able to advise you every step along the way. Click the link below to schedule your consultation!

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