I'm in Northern Michigan - Traverse City area. I know that in order to know what is legal, you have to talk to the County health inspector or Agriculture inspector. Baked goods typically fall under the AG depending on what you're doing. Each county has different requirements. However, I think that this requirement is state-wide-double check with your local person--in order to sell commercially you have to have a licensed kitchen that is used only for the purpose of commercial cooking. You can have it at your home, provided zoning laws allow, but it has to be a completely separate kitchen. Now, I was told by my local guy that there is no need for commercial equipment, just that it is in good working order and fit for the intended purpose-that is something your inspector would approve.
Otherwise, if you're doing an assumed name, you need to have your dba filed with the county clerk. It's not very expensive-$10 for me.