Oakland County Business Center -- Frequently Asked Questions

Do I start a non-profit or for profit business?

Do I need a license to open a business?

Do I need to register my business name?

What is a DBA? Where do I get one? What does it cost?

What is an Assumed Name? Where do I get one? What does it cost?

Where do I file if I want to incorporate my business?
What does it cost?

What is a Tax ID Number (EIN) and how do I get one?

Where do I register my business name?

Does my business qualify as a minority-owned business?

Where do I get a minority certification?

How do I qualify as a woman-owned business and who do I contact?

Where do I get zoning information?

I want to start a business in my home, what do I need to do?

Do I start a non-profit or for profit business?

What is a Nonprofit Organization?

A Nonprofit is an organization that serves some public purpose and therefore enjoys special treatment under the law. Nonprofit corporations, contrary to their name, can make a profit but can't be designed primarily for profit-making. The difference between nonprofit and for-profit organizations is that nonprofits use their profits to advance their programs, while for-profits distribute their profits to their owners or stockholders. Nonprofit organizations fall into five main categories:

1. Trade associations, organized to advance a group of people who have a profession in common (for example, Association of Research Librarians, International Association of Meeting Planners). This group also includes chambers of commerce and unions.
2. Charitable organizations, which must generally demonstrate a benevolent component. This is a diverse category, including religious groups, museums, environmental and educational organizations, libraries, and the many helping groups referred to as "charities." They are also referred to as 501 (c)(3) organizations, because that is the number of the IRS Code under which they are described.
3. Social clubs, such as country clubs and fraternal organizations.
4. Governmental groups, including city, county, state, and federal agencies.
5. Political groups - generally organized to promote certain policies, issues, or candidates for political office.

Should I Start a Nonprofit Organization?

To answer this question you must first ask yourself 2 questions:

   1.   "Who will benefit from the activity?" 

If the answer is that you or your family will benefit, then it's a good idea to start a for-profit company rather than a nonprofit organization. If your answer is that the community or the public at large will benefit, then a nonprofit structure may be the best route.

   2. "Will I allow the board of directors to set policy, including my salary, benefits, and even my employment
        by the organization?"

If your answer is "No, I want to keep control of the organization," then you want to make your corporation for-profit. If, however, you want the board to be autonomous, then a nonprofit organization can be a good fit.

Remember, you can sit on the board and you can have a vote when it comes to determining policy. However, on issues that affect your employment, salary, and benefits, you must excuse yourself from voting.

What are the First Steps to Starting a Nonprofit?

Here are the basic things you need to do to get started:

1. Define your organization's purpose and form, and write a mission statement. Your mission statement should explain why people will want to invest in your organization (as donors, volunteers, or recipients of service). Refer to "Demystifying the Mission Statement", on the resource page to explore this step in detail.
2. Form a board of directors. See "How to Create an Effective Board" on the resource page for a better idea of what you should look for in your board members.
3. File articles of incorporation. If you don't incorporate, board members and other individuals in your organization may be held personally liable in case of a lawsuit. Articles of Incorporation should be filed with your Secretary of State (or other department that has authority for this filing in your state).

Articles of Incorporation

Federal Employer Identification Number.

Federal Tax Exemption. ($400 minimum)

State Registration and Reporting.

Reporting to the IRS.

   4.   Write your organization's bylaws, or the rules you will adhere to.  An excellent source for sample
         bylaws refer to Citizens Media Law Project, Bylaws for Nonprofit Corporations in the Resource section
         for more information.

   5.   Apply for nonprofit status from the IRS. (Ask your local IRS office for IRS publication 557 and IRS form
         1023).
   6.   After you have received your letter of determination from the IRS, apply to your state department of
         revenue and your state department in charge of regulations (often called the Department of
         Regulation and Licensing).

   7.   Register your organization with the state. Contact the Secretary of State (Corporate Division) and
         Attorney General (Charities Division).

   8.   Apply for a solicitation license from your city. Check to see if your city requires you to have such a
         license before you can solicit funds.

   9.   Apply for sales tax exemption from your state.

   10. Apply for nonprofit bulk mail permit from your post office.

   11. Obtain liability insurance, including Directors' and Officers' (or D & O) insurance. D & O liability
         insurance is necessary to protect your board members' assets.

Important Resources:
University of Richmond, School of Law – Starting a Nonprofit: What You Need to Know 

Society for Nonprofit Organizations (SNPO) – Starting a Nonprofit 

Citizens Media Law Project, Forming a Nonprofit Corporation in Michigan 

Michigan Nonprofit Association, Starting a Tax – Exempt Nonprofit in Michigan 

Michigan Articles of Incorporation, For use by Domestic Nonprofit Corporations 

Citizens Media Law Project, Bylaws for Nonprofit Corporations 

Demystifying the Mission Statement  

How to Create an Effective Board of Directors 

Michigan State University Library, Grants for Nonprofits 

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 Do I need a license to open a business?

Oakland County does not require a business license. However, check with the State of Michigan and the community where the business will be located to see if they require a license.

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Do I need to register my business name?

You are not required to register a business name if the business is formed as a sole proprietorship and you are using your own (eg. John Smith) name when billing your customers or receiving payments for goods or services to your name. If, however, you choose to conduct the sole proprietorship as "Smith Company", you are required to obtain an "Assumed Name" or "DBA" (Doing Business As.) These are issued by the Oakland County Clerk's Office, 1200 North Telegraph Road, Pontiac, MI 48341-0412.

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What is a DBA? Where do I get one? What does it cost?

A DBA, or Doing Business As, is the name under which you do business. You can request your DBA at the Oakland County Clerk's Office, 1200 North Telegraph Road, Pontiac, MI 48341-0412. The fee for filing a DBA is $10 at this time. Forms are also available online and may be downloaded, completed, and returned along with payment. You can check online or at the County Clerk's Office to see if the name you have chosen is available.

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What is an Assumed Name? Where do I get one? What does it cost?

An Assumed Name is the name under which you will operate your business. You would file an Assumed Name so that no one else can use that name. You can request an Assumed Name at the Oakland County Clerk's Office, Assumed Names Division at 1200 North Telegraph Road, Pontiac, MI 48341-0412. Forms are also available online and may be downloaded, completed, and returned along with payment. The filing fee at this time is $10.

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Where do I file if I want to incorporate my business? What does it cost?

Should you wish to incorporate your business, you would contact the State of Michigan, Bureau of Commercial Services, Corporate Division, of the Department of Labor & Economic Growth. For more information, you can reach them at 517-241-6470.

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What is a Tax ID Number (EIN) and how do I get one?

An Employer Identification Number, or Tax ID number, identifies the business for federal and state tax purposes. Sole Proprietorships with NO EMPLOYEES do not require an EIN. For more information, visit the federal Internal Revenue Service (IRS).

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Where do I register my business name?

You register your business name with the County Clerk's Office if you are filing as a Sole Proprietorship or Partnership, or the State of Michigan if you are filing for an LLC or some other type of corporate entity.

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Does my business qualify as a minority-owned business?

To qualify as a minority owned business, your business must be 51 percent or more owned by an individual of Native American, African, Asian, Indian, Pacific Asian or Hispanic descent.

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Where do I get a minority certification?

Contact the Michigan Minority Business Development Council, 3011 West Grand Boulevard, Detroit, MI 48202. Their phone number is 313-873-3200. Certification is also available through the Michigan Department of Transportation and the Wayne County & Detroit Civil Rights Department.

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How do I qualify as a woman-owned business and who do I contact?

To qualify as a "Woman Owned Business", a business must be 51 percent owned and operated daily by a woman. For further information contact the Center for Empowerment & Economic Development, Michigan Women's Business Council, Ann Arbor. Their phone number is 734-677-1444. Or you may contact the National Association of Women Business Owners, 600 Lafayette, Suite 205, Detroit, MI 48226. Their phone number is 313-927-0200.

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Where do I get zoning information?

All zoning information comes from the city, village or township where your business is going to be located.

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I want to start a business in my home, what do I need to do?

The first step is to contact the community where the business is to be located and see if the zoning laws will permit the business you want to start in that area. After that, starting a business at home is the same as starting a business anywhere.

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