How to Get a Business License in Michigan

A crucial step in starting a limited liability company (LLC) in Michigan is acquiring all the necessary licenses and permits. Depending on your business, you may need them at the federal, state, and local levels. 

This is a must, as you could face major penalties and even business closure without them. Lucky for you, this guide lays out all you need to know to ensure full compliance in Michigan.

Which Department Issues Business Licenses and Permits?

In most states, many agencies and departments issue licenses and permits depending on industry and location. For example, in Michigan, the Department of Licensing and Regulatory Affairs issues most licenses, while the Department of the Treasury issues some. 

Federally, different departments oversee different industries. As a result, licenses and permits are generally industry-specific, except for health permits from the Occupational Safety and Health Administration (OSHA). For example, your business may need a U.S. Department of Agriculture license if you run a farm. 

If your business sells fireworks, you must register with the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Most industries, however, do not require licensing at the federal level. 

The Small Business Association (SBA) has put together a handy guide that details which licenses and permits are needed for various types of businesses. 

Common Business Licenses and Permits

Here are some common licenses and permits you may need.

Federal Licenses

If a federal agency regulates your industry, you’ll need to be licensed by that agency. Federal agencies that may require you to be licensed include:

• The Department of Agriculture
• The Alcohol and Tobacco Tax and Trade Bureau
• The Bureau of Alcohol, Tobacco, Firearms, and Explosives
• Department of Transportation

State Licenses

Common licenses at the state level include:

• Industry-specific licenses for certain professions and industries, such as construction, plumbing, electrical, childcare, food handling, liquor, architecture, and finance
• Health licenses and permits
• Doing business as (DBA) permits using a name other than your LLC.
• Sales tax permit

Local Licenses

At the municipal or county level, you may need the following:

• Building and zoning permits
• Health licenses and permits
• Fire permits
• Sign permits

How to Obtain a Business License in Michigan

In Michigan, you’re not required to get a general business license. 

1. Unless you’re operating as a sole proprietorship or partnership, you’ll need to register your business entity with the state, usually as an LLC or a corporation. 

You can do so online with the Department of Licensing and Regulatory Affairs. 

2. You’ll need to register for sales tax on the Department of the Treasury website if you sell goods or services.
3. Other licenses require applications with specific departments. For example, if you run a home improvement business in Michigan, you’ll need a residential builder’s license. You’ll apply with the Department of Licensing and Regulatory Affairs.
4. Check with local governments for required licenses and permits at the local level. 

How Much Does a Business License Cost in Michigan?

License and permit fees vary. A sales tax permit, for instance, costs nothing in Michigan, while forming an LLC costs $100.

Do Licenses and Permits Have to Be Renewed?

Some licenses and permits in Michigan need to be renewed annually, including a sales tax permit. Most professional licenses need to be renewed annually as well.

Check with issuing departments for renewal requirements for other licenses and permits.

In Closing

Obtaining licenses and permits is a critical step when starting an LLC in Michigan, so make sure you check with state and local government offices and fully comply with their requirements. If you operate without the proper licenses and permits, you could face steep fines or even the closure of your business. 

If you’re unsure of state or local regulations and need help, consult a business attorney, as proper licensing is an absolute must.