Articles

• Choosing a Business Entity. Typically, you'll select one of four entities for your business: a sole proprietorship, a partnership, a corporation, or a limited liability company (LLC).  With a sole proprietorship or partnership, you're personally liable for all business debts.  With a corporation or LLC, your personal liability is limited.  Depending on the type of business risks you anticipate, a corporation or LLC may be the preferred entity.
• Filing the Start-Up Documents. The type of entity you choose will determine the documents that you must file with the state or county government. If you have a sole proprietorship and are using a business name other than your own, you should file a Certificate of Assumed Name with the Washtenaw County Clerk.  If you have a partnership, you should file a Certificate of Co-Partnership with the County Clerk.  Other business entities must file start-up documents with the Michigan Department of Energy, Labor & Economic Growth: Articles of Incorporation for a corporation, or Articles of Organization for an LLC.
• Obtaining Necessary Licenses and Permits. Only a small number of businesses - such as a restaurant - need a license or permit from the state or local authorities.  If yours is one that does, you'll need to apply early on to avoid possible delays.
• Getting a Tax ID Number. You need to get a tax number from the IRS by filing Form SS-4.  You can learn more at the official site: www.irs.gov.
• Buying Insurance. You'll want to get property insurance to reimburse you if your business property is damaged or destroyed.  You'll also want liability insurance to protect you if someone is injured through your business operations.  And a business with employees needs workers' compensation insurance.
• Doing Business at Home. If you have a home-based business, check to see that you won't be violating the local zoning ordinance, or any covenants, conditions and restrictions that affect your property.  Also, talk to your insurance agent: you may need a business rider to your homeowner's insurance policy.
• Understanding Your Commercial Lease. Before signing a lease for business space, read the terms carefully.  Make sure you're clear on the extent of the financial obligations.  Your business may be responsible for charges beyond the basic rent - for example, for maintenance costs and property taxes.

The attorneys at the Ann Arbor firm of Hamilton, Judge, Schroer & Steingold can guide you through all phases of the start-up process.

• Residency. You need to be a Michigan resident, meaning that Michigan is your permanent home - the place you intend to return to whenever you go away.  A temporary absence, such as going to Florida for the winter, won't destroy your status as a Michigan resident.  You may be asked to show documents verifying your claim that a specific home is your principal residence.  Examples include a driver's license, voter registration card, checks listing the property address, income tax records, and charge account statements.
• Multiple Residences. If you own two homes in Michigan, only one of them can be your principal residence.
• Claiming the Exemption. You claim the exemption by signing a Homeowner's Principal Exemption Affidavit, and filing it with the local tax assessor.  When you buy a home, the closing officer or your real estate agent may help you with the filing.  The tax assessor needs to receive the Affidavit by May 1 if you are to benefit from the exemption for the current calendar year.  (But if the seller already had the exemption in place, the taxes for the current year will be based on the home's exempt status.  This is helpful if you close on your purchase after May 1.)
• Re-filing. Once the Affidavit is filed with the assessor, there's no need to file another one in later years.  You'll get the benefit of the exemption as long as you continue to own and occupy the home as your principal residence.

The attorneys at the Ann Arbor firm of Hamilton, Judge, Schroer & Steingold can advise you on how the principal residence exemption applies to your specific situation.

• Contractor's Inspection. An experienced contractor can spot problems - or potential problems - with the home's electrical, plumbing, heating and air-conditioning systems.  The inspector can also check out the condition of the roof, basement, and other structural elements.  If you're not satisfied with the condition of the house, the seller may agree to reduce the sales price or correct the problems before closing.  If that doesn't work, you're free to cancel the deal.
• Radon Inspection. Radon is an invisible, odorless and tasteless gas that can cause health problems - especially if the level exceeds 4.0 picocuries per liter.  The contractor who inspects the home can use a simple test kit to determine the radon level.  If the level is too high, there are ways to remediate the problem.  You and the seller can work which of you will pay for the remediation.
• Lead-Based Inspection. Lead-based paint may be present in older homes.  This can be a problem if you have young children.  You can have the home checked for lead-based paint, and then determine the cost of correcting the problem.  If the seller is unwilling the bear the cost, the contingency clause in the sales contract will let you void the contract.
• Pest Inspection. A qualified pest inspector can check for the presence of wood-destroying insect or damage caused by them.
• Well and Septic Inspection. If the home isn't served by municipal water and sanitary sewer services, you want to make sure the water is safe to drink and the septic system is in good shape.  Health regulations in Washtenaw County require a homeowner to have a certified inspector examine the well and septic system before selling the home.  Your home purchase should be contingent on your satisfaction with the inspection report.  You can also have an inspection made by an expert selected by you.

The attorneys at the Ann Arbor firm of Hamilton, Judge, Schroer & Steingold can help you include appropriate contingency language in the sales contract, and advise you on issues related to inspections.