The Land of 10,000 lakes. Hockey. Fishing, Waterfalls and magnificent mountain peaks are just some of Minnesota’s many claims to fame.
So, you’ve decided to go for it and are now looking for advice on how to set up an LLC in Minnesota. But what do we do after that? And how much will it cost you? Below, you’ll find a list of all the steps you need to take, in addition to the fees and documents you’ll need.
For small firms, forming an LLC may provide a number of benefits, including restricted liability and tax benefits. If you think an LLC seems to be the perfect choice for your company, here’s how to form one in Minnesota.
It’s important to keep in mind that you may either set up the limited liability corporation on your own or hire a business formation agency to do it for you.
1. Company naming basics
It’s crucial that you understand that your company’s name must adhere to all applicable local, state, and federal laws. If you want to form an LLC in Minnesota, the name must comply with:
- The limited liability company’s name is unique and not used by another company.
- The word “Limited Liability Company” or the abbreviation “LLC” must appear in the name of a limited liability company.
Once you’ve settled on a name, you can check its availability in Minnesota by using the Minnesota Secretary of State’s Search Business Filings tool.
Make a reservation for your limited liability company’s name with the Secretary of State.
Before filing your Articles of Organization with the Minnesota Secretary of State, it’s a good idea to reserve the name of your limited liability company.
In order to hold a name for up to a year, a Request for Reservation of Name must be submitted. You may either submit your paperwork online (which will need you to create an account) or by regular mail. Online name reservations cost $55, while mail-in applications cost $50.
2. Choose a Registered Agent
Service of process agents inside Minnesota is required of all LLCs, therefore every business in the state must appoint an agent to handle correspondence. The company or person who has agreed to accept service of process on behalf of the LLC in the event of a lawsuit.
It is permissible for the Registered Agent to be either a Minnesota resident or a Minnesota business registered to do business. A residential address in Minnesota is required for the Registered Agent’s position.
What exactly does a Registered Agent do?
You must choose a physical address and/or a registered agent service to receive official government communication on behalf of your company, such as tax forms, legal papers, notification of litigation, and other legal notices. Your company’s registered agent acts as its liaison with the government.
Registered Agent authorized representatives
A Registered Agent in Minnesota must either be a person who resides in the state full-time or a company (such a Registered Agent service) that is registered to do business in Minnesota. You have the option of selecting anybody currently employed by the business.
3. File your Articles Of Organization
Upon submitting Articles of Organization to the Minnesota Secretary of State, a limited liability company (LLC) is formally established in the state. Articles may be filed electronically or by regular mail. If you file through mail, you’ll pay $135 in addition to the $155 online filing charge.
Your Minnesota LLC Articles of Organization should include
- Identification information for the company (including postal and email addresses)
- Signature, together with the name and address of the registered agent and name, residence, and signature of LLC organizer
- Name, residence, and signature of LLC organizer
Minnesota companies owned by foreigners
In order to do business in Minnesota, an out-of-state LLC must first register with the Minnesota Secretary of State.
To do business as a foreign LLC in Minnesota, follow these steps:
- Follow the state’s LLC naming rules and do a check via the Search Business Filings app to ensure the name is available.
- Choose a registered agent in Minnesota.
- Register your business with the Minnesota Secretary of State by filing a Certificate of Authority to Conduct Business in Minnesota. Certificates may be submitted electronically or via mail. There is a $205 in-person/online filing charge, or a $185 filing cost if you submit your paperwork by regular mail.
4. Get a Cert from the State Government
After an LLC’s formation paperwork has been submitted and authorized by the state, the state will send the LLC’s members a certificate attesting to the LLC’s legal existence, provided the members have requested and paid for a copy.
5. Make an Operating Contract
Although creating an operating agreement is not required by law in Minnesota, it is highly suggested for all new limited liability firms.
It is important that the operating agreement:
- Provides details on how the LLC is organized.
- Define the roles and duties of each member of the LLC, as well as the procedures for managing the business.
There might be substantial legal and operational issues for a limited liability company (LLC) if its members don’t have a well-defined set of responsibilities spelled out in an operating agreement.
6. Get an EIN (Employer’s Tax Identification Number) (EIN)
A Federal Employer Identification Number (EIN), often known as a tax ID number, is required by many LLCs. An Employer Identification Number (EIN) is required by the Internal Revenue Service (IRS) when registering a company, opening a bank account, and, in many situations, hiring personnel.
The IRS’s website provides the tools you need to determine whether you require an EIN and submit an application. Single-member limited liability companies (LLCs) are one of the few types of firms that may use the owner’s SSN in place of an EIN.
Official Permission to Conduct Business
Depending on the specifics of the Minnesota LLC’s operation and its location, the state or local government may require the company to get a business license or permit.
Minnesota E Licensing is the place to go to learn about the state’s requirements for obtaining a business license. Contact the municipal or county clerk in the area where your LLC will be operating to find out about the specific licensing requirements that apply to your business.
7. Submit Annual Renewals
Any Minnesota limited liability company that wants to keep operating each year must submit a renewal with the state’s secretary of state. The yearly renewal application is due on December 31 each year and may be submitted electronically or by regular mail.
Find general details on submitting your LLC’s annual report here. In-person and electronic filings cost $45 but mailing in your paperwork would just set you back $25.
Fees and Next Steps?
In Minnesota, a limited liability company (LLC) is established by submitting Articles of Organization to the Secretary of State.
Filing costs consist of:
- The filing cost for a Name Reservation Request is $55 (online and in person) or $50 (by mail).
- There is a $155 online filing cost, a $135 in-person filing fee, and a $135 postal filing fee for the Articles of Organization.
- Filing fees for a Minnesota Certificate of Authority to Conduct Business are $185 if filed through mail and $205 if filed online (foreign LLCs only)
Next steps to take
If you want to legally operate a business, you need to register your limited liability company (LLC). The business should have a strategy for keeping the LLC registered and in good standing with the state.
The following opportunities are available to you after you have formed a limited liability company:
- Acquire any required permissions or licenses, such as those from the health department, zoning authorities, the Department of Motor Vehicles, your local municipality, professional associations, and so on. To legally sell in certain states, a seller’s permission is needed.
- Get your company registered with the state’s tax department.
- Establish a company bank account.
- Start up your own company’s credit card account now.
- Invest in business insurance.
- Having a trademark in place might help you protect your business’s name and logo.
DIY company formation or hire a service?
To establish an LLC, you need not retain legal counsel. Creating a limited liability company (LLC) in most states entails filing paperwork with the secretary of state and the IRS (IRS).
If you’re not experienced with forming an LLC, it may be in your best interest to hire a professional LLC provider to help you get started.
When starting a business, entrepreneurs may save both time and money by using a professional LLC agency that specializes in company forms. They can take care of the things you haven’t had time to think about for as little as $50 and as much as $500 such as:
- Forming an operating agreement for your limited liability corporation that details the who, what, where, when, why, and how of your business.
- Making articles of incorporation that detail the LLC’s founding date, registration agent, and management.
- Taking up the role of registered agent for your business.
- Preparing comprehensive documentation in case of audits or legal actions.
- Paying the required fees and signing up with the right authorities.
- It is important to reserve the LLC name and get it registered.
- Having the required formation and legal paperwork completed and filed.
What are the Minnesota LLC company formation fees?
The Articles of Organization must be filed with the Minnesota Secretary of State and cost $135 if submitted through mail, or $155 if submitted over the Internet or in person. A name reservation costs $50 if registered via mail and $55 if lodged electronically or in person.
How long does the Minnesota company formation process take?
It might take up to 4 weeks for an MN LLC mail application to be approved. This includes the time it takes to complete your paperwork (typically 4-7 business days) and the time it takes to deliver your paperwork. To submit paperwork electronically, Minnesota’s online LLC registration system guarantees instant acceptance.
How are LLCs taxed in MN?
The corporation tax rate in Minnesota for LLCs is a fixed 9.8 percent of income. However, there may be other taxes involved. For the most part, if a Minnesota LLC is treated as a corporation for tax purposes, it will owe corporate income taxes or charges to the state.
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