Business & Nonprofit Formation

Business & Social Enterprise Setup

Whether you’re starting a business or a social enterprise, you should always use a business entity to protect yourself from liability. We can help you choose and set up the right entity type for your business or social enterprise, whether its a corporation or an LLC, or a less common entity type like an L3C, a partnership, a PLLC, a PC, an LP, or an LLP.

When you’re ready to get started, you can get a quote, learn more, or schedule a consultation below.

Single Owner

For Businesses & Social Enterprises

$550+

  • R File formation documents with Michigan government
  • R Draft private governing document
  • R Prepare documentation establishing ownership
  • R Provide owner guide to assist in operating the entity for your business
  • R Apply for EIN, if needed
  • R Two months of Zen Subscription included at no additional cost
  • Q Does not include provisions and documentation needed for multi-owner businesses

Multiple Owners

For Businesses & Social Enterprises

$1100+

  • R File formation documents with Michigan government
  • R Draft private governing document
  • R Prepare documentation establishing ownership
  • R Provide owner guide to assist in operating the entity for your business
  • R Apply for EIN, if needed
  • R Two months of Zen Subscription included at no additional cost
  • R¬†Includes provisions and documentation needed for multi-owner businesses

What is a business entity?

A business entity is a limited liability company, a corporation, or other type of legal “person” formed for a business purpose, such as a low-profit limited liability company (an L3C).

From a practical standpoint, setting up a business entity allows your limit your own liability for the debts owed by the business, so that your personal assets stay safe if the business ever fails. It also makes it easier to manage owner relationships in a mutli-owner business by defining the various owners’ rights and responsibilities, as well as clearly marking the boundaries between each owner’s personal property and the business’s property.

More abstractly, you can think of it as a representation of your business as a thing that is separate from you as an individual owner or group of owners, and a way to separate your own assets and liabilities from the assets and liabilities of your business.

Why is it important?

Without a business entity that offers limited liability, the assets of an owner are up for grabs to satisfy the debts of a business. That means if your business owes money, you owe money.

For instance, if an employee of your business hits a pedestrian while making a delivery, when the injured pedestrian sues your business they are suing you, and all of your personal assets are available to satisfy the judgment.

If you have limited liability because you set up a business entity and followed the guidelines for maintaining its limited liability protection, then the pedestrian can still sue your business, but only the business’s assets will be available to satisfy the judgment – your personal assets remain unreachable.

Additionally, having an entity set up simply makes a lot of other things considerably easier, like accepting investment or selling your business when you’re ready to retire. Having a business entity setup will allow you to be much more flexible when going through those transitions.

Can you set up a [insert entity type here]?

Yes, provided it is an entity type available in Michigan. For most businesses, an LLC/L3C or corporation will be appropriate, but if yours is one of the niche use cases for another entity type, we can assist you with that as well. As part of our service, we will help you determine which entity type is right for your business.

Note that some types of entities simply do not exist in Michigan, such as a benefit corporation. We may be able to assist you with setting up a benefit corporation, depending on the particular state where you would like to set one up. If you are interested in setting up a benefit corporation in particular, we recommend scheduling a consultation to discuss your options in further detail.

How long does it take?

Turnaround times vary, but typically an LLC we form for you will be available within 5 business days, though processing times vary. Single-owner businesses are usually completely setup in less than 10 business days. Mutli-owner businesses may take longer because there are frequently adjustments between drafts of governing documents and because there is simply more documents to draft.

Is a sole proprietorship an entity type?

No, a sole proprietorship is not an entity type – it is the business of a single individual who has not set up an entity. Operating as a sole proprietorship is rarely if ever a good idea because a sole proprietor has no limited liability for their business’s debts.

Can you set up C Corps and S Corps?

In short, yes, and that’s part of our entity formation service when appropriate.

The long answer is that C Corps and S Corps are tax elections, not entity types. You can have an LLC that is an S Corp or C Corp, a partnership that is a C Corp or an S Corp, or a corporation that is an S Corp or a C Corp. The LLC, the corporation, the partnership in the previous sentence – those are the entities that you set up, and then, if your particular circumstances allow it and the tax consequences make sense, you can choose to be taxed under the C Corp or S Corp taxation rules.

Why is it more expensive to set up a business with multiple owners?

Multiple owner businesses are almost always significantly more complicated than single owner businesses. It is crucial that the agreements between the owners are thorough and spell out each owner’s rights and responsibilities. Failure to do so can lead to extremely expensive disputes and destroyed relationships.

Nonprofit Setup

Planning to start a charity to help the world, or lobby state senators to pass a piece of legislation that will make the world a better place? Origami Legal can help you set up a nonprofit and secure a 501(c)(3) or other appropriate tax exempt status to help you help the world.

Nonprofit Setup

For 501(c)(3)s and Other Tax Exempts

$895+

  • R Prepare and file Articles of Incorporation in Michigan
  • R Prepare bylaws and various policy documents as necessary, including a conflict of interest policy
  • R Assist the nonprofit in running its first board meeting
  • R Complete initial corporate formalities
  • R Apply for EIN
  • R Apply for 501(c)(3) or other tax exempt status
  • R Respond to non-substantive IRS informational requests
  • R Apply for Michigan Solicitation License, if necessary
  • Q Does not include responses to substantive IRS informational requests, which may be available for an additional fee

What is a nonprofit?

A nonprofit is an organization that lacks ownership and does not pass its assets or profits to private individuals. Individuals and the organization’s leadership can earn money in exchange for their services, but they do not reap the profits of the nonprofits work.

The vast majority of nonprofits operate as tax-exempt organizations. There are many different kinds of tax-exempt status, but the most common is 501(c)(3) charities. Not all nonprofits are 501(c)(3)s, though, including many that you are probably familiar with. The Sierra Club, for instance, is a 501(c)(4).

What is 501(c)(3) status?

While there are many types of tax exempt nonprofits, 501(c)(3)s are unique in that they can receive charitable grants and donations which are tax deductible to the donor. This is obviously a significant benefit for organizations that plan to rely on grant funding.

How much does it cost?

Fees start at $895, which includes filing fees. That is for the simplest organization. More complex organizations can be significantly more expensive to set up.

Are there alternatives to 501(c)(3)s for charitable organizations?

If you want to fund a charitable mission but don’t want to go through the hassle of setting up your own nonprofit and applying for 501(c)(3) status, you may want to consider fiscal sponsorship. A fiscal sponsor is a 501(c)(3) that lends its 501(c)(3) status to other charitable projects in exchange for a percentage of the money raised.

Origami Legal believes that fiscal sponsorship is a great alternative to setting up a nonprofit when it’s an option.

How long does it take?

For organizations that qualify to use the simplest application available, the entire process typically takes 2-4 months. For other organizations that cannot use the simplest application, typical time is anywhere from a few months to a year.

Are results guaranteed?

We can’t guarantee an application for a particular tax exempt status will be successful. However, we will use our experience and expertise to tell you if we believe your application for tax exempt status is unlikely to be successful based on the information you provide.

Corporate Clean up, dissolutions, and other entity services

Quote for Other Entity Services

Variable Rates

  • R Free consultation to determine whether Origami Legal can assist you
  • R Flat fees available for most matter types

OR SCHEDULE A CHAT TO SEE HOW WE CAN HELP