How to start a nonprofit in Michigan

Short answer: To start a nonprofit in Michigan, you incorporate by filing Articles of Incorporation — Nonprofit (Form CSCL/CD-502) with LARA, the Department of Licensing and Regulatory Affairs, Corporations Division ($20 as of 2026), get a free EIN from the IRS, adopt bylaws, and seat a board of at least three directors. Then comes the part people miss: a nonprofit is not automatically tax-exempt, so you file IRS Form 1023 (or 1023-EZ) to become a 501(c)(3). On the Michigan side, you register with the Attorney General’s Charitable Trust Section before soliciting donations — using the CTS-01 Initial Solicitation Form — and you claim the state sales and use tax exemption by giving vendors a completed Form 3372, with your IRS determination letter attached. One contrast worth naming up front: Michigan exempts churches from that charitable-solicitation registration, but a general nonprofit that asks the public for money usually has to register.

The federal core — EIN, bylaws, board, and the 501(c)(3) application — is the same in every state. For the full national walkthrough, read how to start a nonprofit; this page focuses on the Michigan layer stacked on top of it, where the state-specific forms, fees, and agencies actually live.

The formation steps that are the same anywhere

Forming a nonprofit in Michigan follows the standard checklist, and most of it is federal rather than state-specific:

1. Incorporate as a nonprofit corporation (the Michigan-specific part — covered in detail below).
2. Get an EIN — a free federal tax ID from the IRS, applied for directly at irs.gov. Never pay a third party for one; the EIN is always free.
3. Adopt bylaws — the organization’s internal rulebook for decisions, leadership, and money. Start from a proven document rather than a blank page; see nonprofit bylaws for what to include.
4. Seat a board of directors who govern the organization, set policy, and hold it accountable. Michigan’s Nonprofit Corporation Act requires at least three directors for most nonprofits (MCL 450.2505).
5. Apply for 501(c)(3) with Form 1023 — the step that turns a nonprofit corporation into a tax-exempt charity. Unlike a church, an ordinary nonprofit is not automatically exempt; you must file IRS Form 1023 (or the streamlined Form 1023-EZ if you qualify) and receive a determination letter (IRS, applying for 501(c)(3) status). The full path is in how to start a 501(c)(3).
6. Open a bank account in the nonprofit’s legal name using the EIN and formation documents.
7. Set up the books on fund accounting from day one, before the first grant or donation arrives.

Each of these is walked step by step in the national formation guide linked above. The rest of this page is the Michigan layer on top.

Incorporating a nonprofit in Michigan

Michigan creates the nonprofit as a legal entity when you file Articles of Incorporation — Nonprofit (Form CSCL/CD-502) with LARA’s Corporations, Securities & Commercial Licensing Bureau, under Act 162 of 1982. The fee is $20 as of 2026, made up of a $10 filing fee and a $10 franchise (organization) fee; confirm the current amount with LARA’s Corporations Division, since fees change. Optional expedited handling costs more, and you can file by mail or online through the MiBusiness Registry portal.

Form CSCL/CD-502 asks for the nonprofit’s name, its registered agent and registered office in Michigan, the incorporators, and a statement of purpose. A Michigan nonprofit can form on a membership or a directorship basis — directorship is the common choice for a small charity, with corporate action decided by the board. Two clauses do the heavy lifting for tax-exempt status and should go in at formation rather than as an amendment later:

• A 501(c)(3) purpose clause stating the organization is formed exclusively for charitable, religious, educational, or other exempt purposes.
• A dissolution clause stating that if the nonprofit closes, its assets pass to another 501(c)(3) organization, not to any individual.

Getting that language right at formation saves an amendment later, because the IRS looks for both on the Form 1023. The full breakdown of what these documents need is in articles of incorporation. Michigan’s standard Form CSCL/CD-502 leaves room to add these clauses as continuation language, and a new nonprofit is better off attaching them than relying on the bare template. The registered office, by the way, must be a street address — a post office box alone will not satisfy LARA.

Registering to fundraise in Michigan

Here is the step that surprises people coming from a church background, where it usually does not apply: Michigan requires most charities to register with the Attorney General’s Charitable Trust Section under the Charitable Organizations and Solicitations Act before they ask the public for donations. A general nonprofit soliciting grants, gifts, or member contributions almost always falls inside that system. The contrast with churches is real and worth saying plainly — churches and religious organizations are exempt from this registration, but an ordinary charity is not (Michigan Attorney General, charitable organizations).

You register first with the CTS-01 Initial Solicitation Form, submitting it with your founding documents to the Charitable Trust Section by efiling, email, mail, or fax. Two details make this easier than it sounds. First, the registration itself carries no fee — Michigan does not charge for the charitable license. Second, the threshold matters: registration is generally required for organizations that solicit or receive more than $25,000 a year in contributions, so a very small startup may not trip the line immediately. Treat that as a reason to watch the threshold, not to ignore it, because crossing $25,000 without registering puts you out of compliance. If you think your nonprofit might actually qualify for an exemption, you can file a CTS-03 Request for Exemption to get that confirmed in writing rather than assuming it.

Claiming the Michigan tax exemption

A federal 501(c)(3) determination letter exempts your nonprofit from federal income tax, but Michigan handles the state-level exemptions through its own mechanisms — and the everyday one a nonprofit uses is the sales and use tax exemption.

Michigan no longer runs a separate application or “exemption number” for nonprofit sales tax. Instead, a 501(c)(3) organization claims the exemption at the point of purchase by giving the vendor a completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption, with a copy of its IRS determination letter attached. The Department of Treasury is explicit that a 501(c)(3) or 501(c)(4) organization must provide proof of its federal exempt status — the federal letter (or a prior Treasury letter) has to accompany the certificate (Michigan Department of Treasury, nonprofit information). This is the spot where a general nonprofit differs sharply from a church, which can sometimes buy tax-free as a house of worship without the federal letter; a regular charity needs the 501(c)(3) paperwork in hand before the certificate works.

On the income side, organizations recognized as exempt under section 501(c)(3) are generally outside Michigan’s corporate income tax to the extent their activities stay within their exempt purpose — but unrelated business income can still be taxable, so confirm your specific situation with the Michigan Department of Treasury rather than assuming a blanket pass. The practical sequence is the same either way: get the IRS letter first, then the state exemptions fall into place behind it.

Michigan filing at a glance

The table below maps each step to its agency, form, and cost. Treat the fees as accurate as of 2026 and confirm with the listed agency, since state fees change.

What you’re doing	Agency	Form	Fee (as of 2026)
Incorporate the nonprofit	LARA, Corporations Division	Articles — Nonprofit (CSCL/CD-502)	$20 (confirm with LARA)
Get a federal tax ID	IRS	EIN application (online)	Free
Apply for 501(c)(3) status	IRS	Form 1023 or 1023-EZ	$600 / $275 user fee
Register to fundraise	Michigan Attorney General	CTS-01 Initial Solicitation Form	No fee
Claim sales tax exemption	Michigan Dept. of Treasury	Form 3372 (given to vendors)	No fee

Setting up the books once the nonprofit exists in Michigan

Once the entity is formed and the exemptions are filed, the work shifts from one-time paperwork to the monthly routine — and that routine is where nonprofits either hold together or quietly fall apart. A nonprofit holds money in trust for the people and purposes it serves, much of it restricted by donors or grant terms, so it tracks money by fund rather than as a single bottom line. Set the books on fund accounting before the first grant lands, keep the giving records donors need, and document that the board reviews the finances; the discipline is covered in nonprofit accounting. The Michigan angle to keep on your calendar is the annual renewal to the Attorney General’s Charitable Trust Section — letting your charitable registration lapse can push it into delinquent status, and clean books are what make that renewal a five-minute job instead of a scramble.

FAQ

How much does it cost to start a nonprofit in Michigan? The required state cost is modest. Filing the Articles of Incorporation (Form CSCL/CD-502) with LARA costs $20 as of 2026 — a $10 filing fee plus a $10 franchise fee — the EIN from the IRS is free, the Attorney General charitable registration (CTS-01) carries no fee, and the sales tax certificate (Form 3372) has no fee either. So the Michigan paperwork runs about $20 plus your time. The bigger line item is federal: the IRS charges a $275 user fee for Form 1023-EZ or $600 for the full Form 1023, which is what actually makes you a 501(c)(3). Realistically, a small Michigan nonprofit can be stood up properly for a few hundred dollars once you include the federal exemption application.

Do you have to register a nonprofit with the Michigan Attorney General to fundraise? Usually, yes. Michigan requires most charities that solicit or receive contributions to register with the Attorney General’s Charitable Trust Section before they fundraise, using the CTS-01 Initial Solicitation Form, with registration generally required once the organization takes in more than $25,000 a year (Michigan Attorney General, charitable organizations). Churches are exempt from this step, but a general nonprofit is not — so a secular charity asking the public for money should register, while a congregation can document its exemption instead. The registration is separate from incorporating with LARA and separate from your IRS 501(c)(3) application.

How long does it take to start a nonprofit in Michigan? The Michigan incorporation itself is relatively quick — LARA processing for Articles often runs a couple of weeks by mail, with paid expedite options for faster turnaround, and online filings through the MiBusiness Registry can be faster still. The slow part is federal: the IRS can take anywhere from about a month (Form 1023-EZ) to many months (full Form 1023) to issue the 501(c)(3) determination letter, and you want that letter before you lean on the state sales tax exemption. Plan for the state entity to exist within a few weeks but the full tax-exempt status to take several months end to end.

Can one person start a nonprofit in Michigan? One person can begin the process, but they cannot run it alone on paper. Michigan’s Nonprofit Corporation Act requires most nonprofits to have a board of at least three directors (MCL 450.2505), so a single-founder organization still needs to recruit a board before it is properly governed. The IRS also scrutinizes one-person nonprofits on the Form 1023, and three mostly-unrelated directors signal real oversight that smooths the application. So a founder can drive the formation, but a Michigan nonprofit is a board-run entity by law.

If you are specifically starting a religious congregation rather than a general charity, the rules differ in a few meaningful ways — see starting a church in Michigan for that path, which skips the fundraising registration above.

---

Vestrybooks sets up a new Michigan nonprofit’s books on fund accounting from day one — funds, reconciliation, and the board reports — so the financial side is right before the first grant arrives. See how it works.

More state guides: Ohio · Indiana · Illinois · Wisconsin