Comparison
Michigan LLC vs. Delaware LLC — head to head
All figures verified against official state portals as of 2026-05-07.
| Factor | Michigan (MI) | Delaware (DE) |
|---|---|---|
| Formation filing fee | $50 | $90 |
| Annual fee | $25/year | $300/year (flat) |
| First-year total cost | ~$75 | ~$390 |
| Ongoing annual cost | $25 + RA service (~$50–$100/yr) | $300 + RA service (~$100–$150/yr required) |
| Online processing time | 5–10 business days standard; 24-hour ($100) or same-day ($200) | 1–2 business days standard; 24-hr (+$50) / same-day (+$100) / 2-hr (+$500) / 1-hr (+$1,000) |
| State income tax | Yes | None |
| Franchise / gross receipts tax | No franchise tax; 4.25% flat personal income tax on MI-resident member pass-through income | Flat $300/yr Annual LLC Tax regardless of revenue — not income-based |
| Name reservation | $25 for 180 days | $75 for 120 days |
| Publication requirement | None | None |
| Annual report deadline | Annual Report by February 15 ($25) | Annual LLC Tax payment by June 1 ($300) |
| Filing portal | Michigan LARA COFS | DE Division of Corporations e-Corp |
| Name search | MI name search | DE name search |
| Governing statute | MCL § 450.4101 et seq. | 6 Del. C. § 18-101 et seq. |
MI: $50 one-time + $25/yr Annual Report. DE: $90 one-time + $300/yr flat Annual LLC Tax.
Michigan annual obligations
What a Michigan LLC must file each year
- Due date
- February 15 each year
- Fee
- $25/year
- What to file
- Annual Report by February 15 ($25)
- Failure consequence
- $10 late fee if filed after February 15. Administrative dissolution if not filed by the end of the calendar year.
- Filing portal
- Michigan annual filing portal
Delaware annual obligations
What a Delaware LLC must file each year
- Due date
- June 1 each year
- Fee
- $300/year (flat)
- What to file
- Annual LLC Tax payment by June 1 ($300)
- Failure consequence
- $200 penalty immediately after June 1, plus 1.5% monthly interest on outstanding balance. Continued non-payment results in LLC void status.
- Filing portal
- Delaware annual filing portal
Michigan name rules
LLC name requirements in Michigan
- Required designators include LLC, L.L.C., or Limited Liability Company.
- Name must be distinguishable from existing MI entities.
- Name reservation: $25 for 180 days.
- Search at MI name search.
Delaware name rules
LLC name requirements in Delaware
- Required designators include LLC, L.L.C., or Limited Liability Company.
- Name must be distinguishable from existing DE entities.
- Name reservation: $75 for 120 days.
- Search at DE name search.
City-specific guides
Michigan and Delaware LLC formation by city
State rules apply statewide; city guides cover local context and additional permits.
Registered agents
Registered agent requirements: Michigan vs. Delaware
| Requirement | Michigan | Delaware |
|---|---|---|
| Required | Yes | Yes |
| Who can serve | MI resident 18+ with in-state street address, or registered MI entity | DE resident 18+ with in-state street address, or registered DE entity |
| Self-serve allowed | Yes (address becomes public state record) | Yes (address becomes public state record) |
| Consent required | Consent or appointment captured in the formation filing | Consent or appointment captured in the formation filing |
| Commercial RA typical cost | $50–$150/yr | $50–$150/yr |
Decision framework
How to choose: Michigan vs. Delaware LLC
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Compare formation costs: MI $50 vs. DE $90 Michigan's formation fee ($50) is $40 less than Delaware's ($90). Michigan's first-year total — $50 filing + $25 annual report + RA service — is dramatically lower than Delaware's first-year cost of $90 + $300 Annual LLC Tax + RA service. Michigan is one of the most cost-effective states for LLC formation.
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Compare annual obligations: MI $25/yr vs. DE $300/yr Michigan's Annual Report is $25/yr due February 15. Delaware's Annual LLC Tax is a flat $300/yr due June 1. Over 3 years: Michigan ~$125 ($50 + 3×$25) vs. Delaware ~$990 ($90 + 3×$300). Michigan costs approximately one-eighth of Delaware's 3-year total. For a 10-year holding period, Michigan saves over $2,700 in recurring annual obligations compared to Delaware.
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Consider Delaware's Court of Chancery advantage Delaware's primary structural advantage is its Court of Chancery — a dedicated business court with specialist judges and no juries. Over a century of LLC and corporate case law makes business disputes highly predictable. This matters for venture-backed startups, multi-entity holding structures, and companies expecting institutional investor scrutiny. For most Michigan-based small businesses and operating LLCs, this advantage does not apply and does not justify the $300/yr Annual LLC Tax.
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Evaluate privacy: DE member non-disclosure vs. MI public record Delaware's Certificate of Formation requires only the LLC name and registered agent — member names and addresses are absent from the public record. Michigan's Articles of Organization include member or manager names and addresses on the public LARA record. For business owners who want maximum privacy, Delaware's structure is meaningfully stronger. The cost of that privacy is Delaware's $300/yr Annual LLC Tax plus required commercial RA service ($50–$150/yr) for out-of-state owners.
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Factor in the foreign qualification cost for Delaware Most Delaware LLCs formed by Michigan-based owners that operate in Michigan will trigger a Michigan foreign LLC registration requirement ($50 Certificate of Authority) plus Michigan's $25/yr Annual Report. The combined annual carrying cost — Delaware $300/yr + Michigan $25/yr — makes Delaware formation approximately $300/yr more expensive for a Michigan-operating LLC than forming directly in Michigan.
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Evaluate home-state convenience for Michigan operators Michigan-based business owners who form in Michigan can maintain their LLC with a single $25/yr Annual Report, a Michigan-address registered agent (which they can self-serve), and no dual-state filings. Banks, attorneys, and commercial landlords in Michigan accept Michigan LLCs without additional explanation. For operators with purely Michigan-based customers and operations, home-state formation eliminates dual compliance overhead.
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Choose your state and file Michigan: file at cofs.lara.state.mi.us (Articles of Organization, $50). Delaware: file at icis.corp.delaware.gov (Certificate of Formation, $90). After formation, obtain an EIN at irs.gov/ein, draft an operating agreement, and open a business bank account. Michigan-based business owners should almost always form in Michigan. Delaware makes sense when structural advantages (Court of Chancery, investor familiarity, privacy) outweigh the $300/yr Annual LLC Tax and dual-state carrying cost.
Provenance
Statute basis & official sources
Last verified 2026-05-07.
Michigan Limited Liability Company Act, MCL § 450.4101 et seq. (Michigan LLC Act); Michigan Annual Report: MCL § 450.4207a; Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq.; Delaware Annual LLC Tax: 30 Del. C. § 502(b); IRS guidance on single-member LLC disregarded entity treatment.
Why you need an LLC (either state)
- Without entity formation, the business name is unprotected in both Michigan and Delaware; a competitor can register the same name as an LLC. Check availability and reserve before filing -- Michigan: https://cofs.lara.state.mi.us/CorpWeb/CorpSearch/CorpSearch.aspx ($25 for 180 days); Delaware: https://icis.corp.delaware.gov/Ecorp/EntitySearch/NameSearch.aspx ($75 for 120 days).
- Michigan: failure to file the Annual Report by February 15 results in a $10 late fee; failure to file by year-end results in administrative dissolution. Delaware: failure to pay the Annual LLC Tax by June 1 results in $200 penalty + 1.5% monthly interest, ultimately voiding the LLC.
FAQ
Michigan vs. Delaware LLC — common questions
Is it cheaper to form an LLC in Michigan or Delaware?
Michigan is dramatically cheaper. Michigan's formation fee is $50 with a $25/yr Annual Report. Delaware's formation fee is $90 with a $300/yr Annual LLC Tax. Over 3 years: Michigan ~$125 ($50 + 3×$25) vs. Delaware ~$990 ($90 + 3×$300). For Michigan-based businesses, forming in Michigan saves approximately $865 over three years — and the gap widens if you add Michigan's $50 foreign qualification fee for a Delaware LLC operating in Michigan.
Why do so many startups form in Delaware instead of Michigan?
Delaware's Court of Chancery is a dedicated business court with over a century of well-developed LLC and corporate case law, making business disputes highly predictable. Institutional investors and VCs often require Delaware entities as a condition of investment. Delaware also offers stronger contractual flexibility under the LLC Act (6 Del. C. § 18-101) and complete member privacy on the public record. For a Michigan-based small business, these advantages rarely justify the $300/yr Annual LLC Tax plus the cost of Michigan foreign qualification ($50 + $25/yr).
If I live in Michigan, should I form my LLC in Delaware?
Almost certainly not, unless you're raising institutional capital. If your primary place of business is Michigan, Michigan will require you to foreign-qualify your Delaware LLC ($50 Certificate of Authority + $25/yr Annual Report). You'd then pay DE's $300/yr Annual LLC Tax plus MI's $25/yr — a combined $325/yr in annual obligations vs. Michigan's $25/yr alone. For most Michigan-based small businesses, form in Michigan.
Does Delaware have better privacy than Michigan for LLC owners?
Yes. Delaware's Certificate of Formation requires only the LLC name and registered agent — member names, addresses, and ownership percentages are not part of the public record. Michigan's Articles of Organization list member or manager names and addresses on the LARA public record. For business owners who want maximum privacy, Delaware's structure is meaningfully stronger. The cost of that privacy is Delaware's $300/yr Annual LLC Tax plus required commercial RA service ($50–$150/yr) for Michigan-based Delaware LLC owners.
What is the Michigan Annual Report, and does Delaware have an equivalent?
Michigan's Annual Report is a $25/yr filing due by February 15 with the Michigan Department of Licensing and Regulatory Affairs (LARA). It updates the LLC's public record and keeps the entity in good standing. Delaware's equivalent is the Annual LLC Tax — a flat $300/yr payment due June 1, regardless of revenue. Michigan's $25/yr is one of the lowest annual LLC maintenance costs of any state; Delaware's $300/yr is among the highest for a flat fee.
How long does LLC formation take in Michigan vs. Delaware?
Delaware is faster. Delaware's standard processing is 1–2 business days; same-day processing requires a $100 fee above the $90 base. Michigan's standard processing is 5–10 business days; expedited 24-hour processing costs $100 and same-day costs $200. Delaware's sub-hour tiers (2-hr +$500, 1-hr +$1,000) have no Michigan equivalent. For most routine formations with no hard deadline, Michigan's timeline is acceptable.
What are the registered agent requirements in Michigan vs. Delaware?
Both states require a registered agent with a physical in-state street address (no PO boxes). Michigan permits self-service RA for owners with a Michigan street address. Delaware requires a DE-address RA — most Michigan-based Delaware LLC owners must use a commercial service ($50–$150/yr). Michigan commercial RA services typically run $50–$100/yr. Maintaining your own RA in Michigan is free but places your address on the LARA public record.
Which state is better for a small Michigan-based business — Michigan or Delaware?
Michigan, for almost all small businesses. Form in the state where you live and operate — that's where economic nexus exists and where customers, vendors, and banks are familiar with the entity. A Michigan LLC at $50 formation + $25/yr Annual Report keeps total compliance costs low and avoids the dual-filing complexity of a Delaware LLC foreign-qualified in Michigan. Delaware's advantages (Court of Chancery, investor familiarity, privacy) matter primarily for venture-backed startups and investor-facing structures.
§ A Building permits by city
§ B LLC formation guides
§ C Companion tools
Disclaimer: Informational only — not legal advice. LLC laws change; verify with a Michigan or Delaware business attorney or CPA before filing.