When you're a business owner, the number of items on your to-do list seems to be never-ending. Each time you finish a task, several more seem to magically appear to do next.
Some of these things can be put off, but when it comes to operating your small business in Michigan, it's important to prioritize items like getting your business license.
It's not an easy process to undertake. That's where we come in!
In this article, we'll go over whether or not you need a business license, how to get a business license in Michigan, how much it costs, and how your license may be connected to business insurance.
Here we go!
The state doesn't offer a general business license or business permit.
Instead, you still may be required to license your business, depending on:
Regardless of whether or not you need a business license, it still can come in handy when building a foundation for a successful business in Michigan. Securing your license can help you:
Now that you know how beneficial it will be to get your business license, we'll walk you through the basic steps of how to to do it.
Most business entities (i.e., LLC, corporation, partnership) need to apply for an employment identification number (EIN) with the Internal Revenue Service (IRS). If you're planning to file taxes as a sole proprietor, then you may use your Social Security number instead.
As we said earlier, although there's no general license to do business in Michigan, the rules differ, depending on where you run your business. Each city's county clerk office will determine what types of permits you'll need and the process for your individual company (and its trade) to register for a business license.
Here are some examples of cities with their requirements:
Head to Detroit's business license center to determine if you'll need a zoning permit. After that, you can apply for a business license specific to your trade or profession.
Only certain businesses are required to get licenses in the City of Grand Rapids, such as food trucks, business owners who work out of their home, street vendors, dance halls, and more.
Go to Grand Rapids' business licensing page to find the requirements for your specific business. If you're unsure, you can call the city clerk's office at 616-456-3016.
Depending on your industry, you may need to go here and apply for a business license to operate in Lansing. For example, if you're a health club owner, auctioneer, street vendor, massage therapist, etc., you'll need to apply for a business license.
No matter what sort of small business you plan to run, go to the City of Sterling Heights' Business and Licensing page to apply for a business license. All businesses are required to register for a license if they operate in Sterling Heights. Any questions, including those about home business operations, can be answered by calling the city offices at 586-446-2489.
Depending on your profession, you will be required to get a business license in Warren. You can check if your profession is listed as one of the required industries on their business licensing page here.
How to apply will be dictated by your local municipality. Most of the cities mentioned above will specify whether to apply by mail or online via their linked pages.
Some cities may give only the option of mailing your application and paying by check or money order; other cities allow you to pay online, but you will be charged a processing fee for the license you need.
Depending on which city you do business in, you may be required to apply and register for a business license every year. However, some cities require only a one-time application and/or fee.
Be sure to read carefully, and if you are in one of the cities that requires a renewal each year, be sure to mark your calendar, giving yourself enough time to renew your license the following year.
How much your license costs you will depend on:
Each city has a different requirement for the cost of your business license, should you need one, and the rules differ by city.
For example, in Detroit, each profession has a different fee for a business license. In Grand Rapids, each profession not only requires a different business license fee, but also a different renewal fee. However, as of the publication date of this post, Sterling Heights requires only a one-time fee of $50 for a business license.
Each city also has different benchmarks for when your business license expires. For example, in one city, licenses could require renewal after April 30, whereas others may require renewal after June 30.
Attention to detail is key here! We suggest keeping documentation of what information you'll need and where to find it if you need to refer back.
Some cities, like Grand Rapids or Sterling Heights, require you to present proof of business insurance (which you can do by presenting a certificate of insurance when applying for your license, depending on your profession.
For example, if you're operating a food truck in Grand Rapids, you'll need to present proof of general liability insurance; if you own a massage establishment in Sterling Heights, you'll need to provide professional liability insurance.
Even if your local county clerk doesn’t require proof of insurance, we still suggest getting business insurance for your company. Getting coverage could help you:
Don't worry — it doesn't take too long to get your business insured. You can use our free quote comparison tool to determine how much your business insurance policy may cost — we'll show you options from the best providers who offer affordable coverage.
You may need to show proof of business insurance to get your license.
That’s where we come in. Compare free insurance quotes for policies as low as $25.95/month.*Start Here >
Congrats on making it to the end of the article. Now you have the know-how you need to get your business licensed in Michigan.
Our suggested steps above are meant to make the licensing process a bit easier, so you can continue with your to-do list, and more importantly, what it is you love to do!
Let us know how we did and if there are any steps you'd suggest we add to make the process even easier.
* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.
I’ve told stories since I learned to talk and written since I could hold a pen. As a small business owner myself - I'm a freelance writer and yoga teacher - I love contributing to the entrepreneurship community in different ways (including writing for Simply Business!). When I’m not drafting articles for SB, I can be found on my yoga mat, perusing an indie bookstore, and writing (with my cat nearby of course).
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.