Accounting firm License Requirements in Michigan
Last reviewed: June 2026
Quick Answer
Michigan does not require a general accounting firm license to operate as a non-CPA accounting business. However, if you provide tax preparation services, you must register with the IRS as a tax return preparer (PTIN required per Internal Revenue Code § 6109). If you employ CPAs, those individuals must hold Michigan CPA licenses issued by the Michigan Department of Licensing and Regulatory Affairs (LARA). CPA licensure is mandatory for anyone signing off on financial statements or audits in Michigan.
Key Facts
- •Michigan does not require a general accounting firm license to operate as a non-CPA accounting business.
- •However, if you provide tax preparation services, you must register with the IRS as a tax return preparer (PTIN required per Internal Revenue Code § 6109).
State Licence Requirements
Licence name
Certified Public Accountant (CPA) License (required only if signing financial statements, audits, or offering audit services; optional for general accounting services without audit opinions)
Issued by
Michigan Department of Licensing and Regulatory Affairs (LARA), Accounting Division
Cost
$200-$350 for initial license application and exam registration
Processing time
6-12 weeks after exam passage and experience verification
How to apply
To become a CPA in Michigan and sign financial statements, you must pass the Uniform CPA Examination administered by the American Institute of CPAs (AICPA). Step 1: Apply for CPA candidacy through the Michigan LARA online portal (https://www.michigan.gov/lara). Step 2: Submit official transcripts showing completion of at least 120 semester hours with a concentration in accounting and business courses, verified by your university registrar. Step 3: Pay the application fee ($200-$250) and CPA exam registration fee ($150-$200). Step 4: Register with Prometric to schedule your CPA exam at an authorized testing center in Michigan. Step 5: Pass all four sections of the Uniform CPA Examination (Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, Regulation). Step 6: Complete 24 months of accounting experience under a CPA supervisor. Step 7: Submit your license application to LARA with proof of experience and exam passage. You must cite Michigan Public Act 212 (Occupational Code, MCL 339.201 et seq.) which governs CPA licensing and defines who may call themselves a 'Certified Public Accountant.' Non-CPA accounting services (bookkeeping, financial analysis, tax planning) do not require this license.
Federal Requirements
Accounting firms must obtain an Employer Identification Number (EIN) from the IRS under 26 U.S.C. § 6109 if hiring employees or operating as a partnership. If providing tax preparation services to clients, all preparers must register with the IRS and obtain a Preparer Tax Identification Number (PTIN) per the Unrestricted Tax Practice regulations (31 U.S.C. § 330 and Treasury Circular 230). The firm must comply with the Gramm-Leach-Bliley Act (15 U.S.C. § 6801) if handling client financial information, requiring safeguards and privacy policies. Firms handling payroll or employee benefits must comply with the Employee Retirement Income Security Act (ERISA, 29 U.S.C. § 1001) if offering retirement planning services. All employees must have valid Social Security Numbers and participate in E-Verify if required. The Americans with Disabilities Act (42 U.S.C. § 12101) applies to client-facing operations and employee accommodations. If the firm provides any services related to securities or investment advice, registration with the SEC or FINRA may be required under the Securities Exchange Act of 1934.
Local & County Requirements
Local requirements vary significantly by Michigan city and county. Most cities require an occupancy permit or business license for any home or office-based accounting firm, typically costing $50-$200 annually. Detroit requires a business license from the Department of Finance (cost $50-$100) and zoning compliance if operating from a commercial location. If your accounting firm operates from a home office, many Michigan cities restrict home-based professional services; check with your city zoning department. Ann Arbor requires a business license ($100-$150) and strict adherence to home occupation ordinances if operating from residential property. Grand Rapids requires a business license ($75-$125) and proof of compliance with building codes if in a commercial space. Lansing and other mid-sized cities typically require a city business license ($60-$120) and may require local tax registration. If you lease commercial office space, your landlord may require proof of liability insurance (minimum $1 million) before occupancy. County-level requirements in Wayne County, Oakland County, and Macomb County may include commercial property tax registration and, in some cases, local licensing for professional service providers. Contact your city/county Assessor's office to confirm business registration requirements and your local Planning & Zoning Department if your space is residential or mixed-use. Fire safety inspections may be required for commercial office spaces in any Michigan municipality.
Total Cost Breakdown
First-year costs for an accounting firm in Michigan vary based on whether you hire CPAs and offer audit services. For a non-CPA accounting firm (bookkeeping, tax planning, financial analysis only): Business license/registration $50-$200 (varies by city), EIN application $0 (free), PTIN registration for tax preparation $0 (free online via IRS), liability insurance (minimum $1 million recommended) $600-$1,200 annually, office space or home office setup $0-$2,000. Total for non-CPA firm: $650-$3,400 first year.
For a CPA-owned or CPA-staffed firm: Include all above costs plus CPA license application and exam ($200-$350), CPA exam registration with Prometric ($150-$200), accounting education verification and transcripts ($50-$100), continuation through 24-month experience requirement (no additional fees but includes salary costs), first renewal after licensure ($250-$300 in year 2), and CPE courses for mandatory 40 hours during first two years ($300-$600 depending on provider). If hiring multiple CPAs, multiply license costs by number of staff. Total for CPA firm: $2,000-$6,500 first year depending on staffing and exam pass rate. Additional costs may include: accounting software subscriptions ($50-$300/month), office equipment ($1,000-$5,000), business insurance including workers compensation if hiring staff ($800-$2,500), and phone/internet ($100-$300/month). Realistic total range for professional startup: $5,000-$12,000 for the first full year.
Licence Renewal
If you hold a Michigan CPA license, renewal occurs biannually in odd-numbered years (next renewal cycle runs through December 31, 2025, then 2027, and so on). Renewal deadline is December 31 of the renewal year. The renewal fee is $250-$300 per two-year cycle. Continuing Professional Education (CPE) is mandatory: you must complete a minimum of 40 CPE hours during the two-year renewal period, with at least 2 hours in Michigan Professional Responsibility and 2 hours in ethics. CPE must be obtained from AICPA-approved or state-approved providers. You can renew online through the Michigan LARA portal (https://www.michigan.gov/lara) or by mail. Online renewal takes 2-3 weeks; mail renewal takes 4-6 weeks. If you miss the December 31 deadline, your license becomes inactive (non-delinquent status). You may still renew for up to 12 months after the deadline, but you cannot practice as a CPA during this period and may face late fees of $50-$100. After 12 months past the deadline, you must reapply for licensure. Non-CPA accounting firms do not require license renewal, but must renew local business licenses annually (typically $50-$200 depending on city).
Penalties for Operating Without a Licence
Operating as a CPA or signing financial statements, audits, or audit-related services without a Michigan CPA license violates Michigan Public Act 212 (MCL 339.201 et seq.). Penalties include civil fines of $500-$2,000 per violation under MCL 339.2703. Criminal penalties apply if operating illegally: you can be charged with a misdemeanor, punishable by up to 90 days in jail and/or a fine of up to $500, or a felony punishable by up to 2 years imprisonment and/or up to $5,000 in fines under MCL 339.2704. The Michigan LARA Accounting Division actively investigates complaints filed by clients or competitors, triggered by clients discovering unsigned audit reports or financial statements. LARA audits accounting firms annually for license compliance and can issue cease-and-desist orders prohibiting the unlicensed practice of accounting. Public records of violations are posted on the LARA website. Operating without proper licensing voids your professional liability insurance; insurers will deny claims if you were not licensed at the time of the error. This exposes you to unlimited personal liability for malpractice damages. Clients can sue for breach of contract, negligence, and fraud if they relied on services provided by an unlicensed individual claiming CPA status. The Disciplinary Subcommittee can also revoke or suspend licenses for aiding and abetting unlicensed practice under MCL 339.2702. Regulatory fines accumulate: first violation is typically $500-$1,000, second violation $1,000-$2,000.
Explore recommended accounting software and business formation services designed for Michigan-based accounting firms.
Get notified when licensing rules change
Licensing requirements and fees change periodically. We'll email you when this page is updated.
Frequently Asked Questions
Do I need a CPA license to start a bookkeeping or tax preparation business in Michigan?
No, Michigan does not require a CPA license to provide bookkeeping services, tax planning, or general accounting services. You can legally operate a bookkeeping or tax preparation business without a CPA license under Michigan law. However, you cannot use the title 'Certified Public Accountant' or 'CPA,' and you cannot sign financial statements, audit reports, or attest to the accuracy of financial records (those functions are reserved for licensed CPAs under MCL 339.201). If you provide tax preparation services to clients, you must register with the IRS as a tax return preparer and obtain a Preparer Tax Identification Number (PTIN) per 31 U.S.C. § 330. You will also need a Michigan business license from your city or county ($50-$200). A CPA license becomes mandatory only if you want to perform audits, review financial statements professionally, or specifically market yourself as a CPA.
How long does it take to get a Michigan CPA license, and what are the main steps?
The entire process typically takes 18-36 months from start to licensure. Step 1 (1-2 months): Apply for CPA candidacy with LARA, submit transcripts proving 120+ semester hours in accounting/business courses, and pass the initial application review. Step 2 (2-4 months): Register for the Uniform CPA Examination with Prometric and study for the exam. Step 3 (3-6 months): Sit for and pass all four sections of the CPA exam (many candidates complete this within 6-12 months of study). Step 4 (12-24 months): Accumulate 24 months of accounting work experience under a supervising CPA (this runs concurrently with exam preparation). Step 5 (6-12 weeks): Submit your final license application to LARA with proof of exam passage and experience verification. LARA then processes your application and issues your license. The critical timeline: you cannot apply for your final CPA license until you have completed the 24-month experience requirement AND passed all four exam sections. Many professionals take 2-3 years from start to holding an active license.
What happens if I start an accounting firm without the proper licenses or registration?
If you operate as an unlicensed accounting firm, you face multiple serious consequences. If you claim to be a CPA or sign financial statements or audits without a license, Michigan LARA can issue a cease-and-desist order immediately, forcing you to stop all work. Civil fines range from $500-$2,000 per violation (MCL 339.2703). Criminal charges can result in misdemeanor conviction (up to 90 days jail and $500 fine) or felony conviction (up to 2 years prison and $5,000 fine) under MCL 339.2704. Your professional liability insurance will deny any claims because you were not licensed, leaving you personally liable for all malpractice damages—potentially hundreds of thousands of dollars. Clients can sue you for breach of contract and fraud. If you prepared tax returns without registering for a PTIN with the IRS, you face IRS penalties of $50-$100 per return filed. The Michigan Department of Licensing and Regulatory Affairs actively investigates complaints and maintains a public disciplinary record. Operating unlicensed also damages your reputation permanently; your firm name will appear in public violation databases. If you later decide to become properly licensed, your prior unlicensed operation may be considered against you in licensing decisions.
Can I move my CPA license from another state to Michigan, and how long does reciprocity take?
Michigan does recognize CPA licenses from other states through reciprocal licensure, but the process is not automatic. If you hold an active CPA license in good standing from another state, you can apply for Michigan CPA licensure by reciprocal endorsement without retaking the Uniform CPA Examination. However, Michigan requires verification that your home state's CPA requirements are equivalent to or exceed Michigan's standards (MCL 339.206). Step 1: Request an official record of licensure from your home state's CPA board. Step 2: Confirm your home state has reciprocal agreement status with Michigan (most U.S. states do, but some international CPAs face additional scrutiny). Step 3: Submit your reciprocal licensure application to Michigan LARA with your official license record, proof of 24 months of accounting experience under a CPA, and the reciprocal application fee ($200-$350). Step 4: LARA reviews your qualifications and verifies your home state requirements (typically 4-8 weeks). Step 5: If approved, you receive your Michigan CPA license. Important: some states have lower education or experience requirements; if Michigan determines your home state is less rigorous, you may be required to take additional courses or testing. CPE (continuing education) reciprocity does not apply: once licensed in Michigan, you must meet Michigan's 40-hour CPE requirement per renewal cycle, even if your home state requires less.
What is the cost and timeline for a Michigan business license, and do I need it even if I'm a CPA?
Yes, all accounting firms operating in Michigan must obtain a local business license or registration, regardless of CPA status. This is a city or county-level requirement, not a state license. Cost ranges from $50-$200 depending on your Michigan city; Detroit charges $50-$100, Ann Arbor charges $100-$150, Grand Rapids charges $75-$125, and Lansing charges $60-$120. Timeline is typically 1-2 weeks from application to issuance. You apply directly to your city or county's Business License or Finance Department—contact your city hall or check your municipality's website for the online portal. Required documents usually include: your business name and structure (sole proprietor, LLC, etc.), EIN, physical business address, and proof of any professional licenses (your CPA license if applicable). The business license renews annually, typically in the same month each year (often January or July depending on your city). If you operate from a home office, many Michigan cities require a 'home occupation permit' in addition to or instead of a standard business license; costs range from $25-$100 annually, but some residential areas prohibit home-based professional services entirely. Always verify zoning compliance with your city zoning department before setting up a home office.
Other Business Types in Michigan
accounting firm Licensing in Other States
See accounting firm licensing in every state →Sources & References
- PTIN required per Internal Revenue Code § 6109).
- U.S.C. § 6109
- U.S.C. § 330
- U.S.C. § 6801)
- U.S.C. § 1001)
- U.S.C. § 12101)
Licence requirements change. Verify current requirements with the issuing agency before applying.
Editorial standards: This guide is reviewed against primary government sources and cites 6 statutes. Last reviewed June 2026. Scheduled for re-verification by June 2027.
See our editorial policy for how content is created and verified, or report an inaccuracy.