How to Start an LLC in Minnesota | 2024 Guide

Start a LLC in Minnesota

How to Start an LLC in Minnesota: If you’re looking to launch a business in Minnesota, starting a Limited Liability Company (LLC) may be the right choice for you. An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. This guide provides a step-by-step process for starting an LLC in Minnesota. From choosing a unique name to registering with the state and obtaining necessary licenses and permits, Webinarcare Editorial Team will walk you through setting up your new business entity. So grab a pen and paper, and let’s get started!

What is a Limited Liability Company?

A Limited Liability Company (LLC) is a type of business entity that combines a corporation’s limited liability protection with a partnership’s tax benefits. LLCs are popular among small business owners for their flexibility and ease of formation. In Minnesota, an LLC must have a unique name and file Articles of Organization with the Secretary of State. Depending on their business needs, LLCs may also elect to be taxed as a corporation or an S-corp. Owners of an LLC, called members, are not personally liable for the company’s debts and losses, and the company’s profits and losses are passed through to the member’s personal tax returns. This makes an LLC an attractive option for those seeking personal liability protection and simplified taxation.

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Steps on How to Start an LLC in Minnesota

To form an LLC for your business, you must follow the guidelines that include naming your LLC, hiring a Registered Agent, filing your Articles of Organization, creating your LLC operating agreement, getting an employer identification number, opening a bank account and getting business licenses and permits.

Step 1: Name your LLC in Minnesota

After you have decided on the idea to form an LLC in Minnesota, deciding the name for your LLC is significant. There is a complete guide on LLC name guidelines for you to have a proper LLC business name. Here are some regulations you must follow while naming your LLC,

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In Minnesota, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 1 year. You must file a name reservation application in Minnesota Secretary of State to keep the name.

Recommended: We recommend a professional service that can offer you unlimited name search, trademark and copyright registration at a reasonable price. We recommend using –

LegalZoom($0 + State Fees for LLC Formation)

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for filing Minnesota DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in three methods, online, by mail, and in person filing. However, before filing a DBA, you should know that you need to renew your DBA from up to one year, which costs around $50 for online filing and $30 for offline filing.

Step 2: Hire a Registered Agent in Minnesota

Hiring a Registered Agent in Minnesota is a must since a Registered Agent is a person or business entity responsible for receiving important legal documents on behalf of your Minnesota LLC. Most states require you to designate a Registered Agent when forming your LLC.

The qualifications of a Registered Agent vary depending on the jurisdiction. Still, generally, a Registered Agent must meet the following criteria:

  • Availability: A Registered Agent must be available during regular business hours to receive and process legal documents and official correspondence.
  • Physical Address: A Registered Agent must have a physical street address within the state where the LLC is registered. This address, known as the registered office, cannot be a P.O. Box.
  • Residency or Authorization: For individuals serving as Registered Agent, they must be residents of the Minnesota where the LLC was formed. A business entity acting as a Registered Agent must be authorized to do business within that state.
  • Age: A Registered Agent must be at least 18 years old.
  • Good standing: A Registered Agent should not have any legal or financial issues that impede their ability to fulfill their duties.

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. Some businesses use professional Registered Agent services to ensure compliance and proper handling of legal matters.

However, if you would like to have an easier process in filing the necessary documents, you can get Minnesota Registered Agent Services.

Step 3: File your Articles of Organization in Minnesota

The Articles of Organization for an LLC is an important document to start your limited liability company (LLC). Minnesota Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization.

Here are the guidelines and specific requirements in filing your Articles of Organization in Minnesota.

1. Obtain the Necessary Forms: Visit the Minnesota’s business filing office website, usually the Minnesota Secretary of State’s office, to download the required forms or file online.

2. Provide the Required Information: Fill in the necessary details in the form, which typically include:

  • The name of your LLC (must include an LLC designator such as “LLC,” “L.L.C.,” or “Limited Liability Company”)
  • The purpose of your LLC (a general statement or specific business activities)
  • The address of your LLC’s principal place of business
  • The name and address of your registered agent (the person or business entity responsible for receiving legal documents on behalf of your LLC)
  • The management structure of your LLC (member-managed or manager-managed)
  • The duration of your LLC, if not perpetual
  • The names and addresses of the LLC’s organizers or members

3. Sign and File the Form: Submit the completed form in the {state} state office, either by mail, in person, or online. You may mail it at Minnesota Secretary of State — Business Services, Retirement Systems of Minnesota Building, 60 Empire Drive, Suite 100, St Paul, MN 55103.

4. Pay the Filing Fee: When you submit your Articles of Organization, you’ll need to pay a filing fee of $135. Make sure to check and include the correct payment with your submission.

5. Receive Confirmation: After your Articles of Organization have been filed and processed, you’ll receive a confirmation from Minnesota, typically a stamped and approved copy of the document or a Articles of Organization.

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Once you have successfully filed your Articles of Organization and it has been approved, your Minnesota LLC is officially formed. However, remember to complete additional steps, such as creating an Operating Agreement, obtaining an EIN, and registering for any required licenses and permits.

Step 4: Create Your Minnesota Operating Agreement

An operating agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in most states is not required. Yet, having one as an internal document is strongly advised. An operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

To understand how an operating agreement works, you should check out how to create an operating agreement in Minnesota.

Recommended: Get oprating agreement drafts ready on your table with a help of a professional service. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 5: Get an EIN

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN) in Minnesota. An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Minnesota can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

In obtaining an EIN for your LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 6: Open a Bank Account and Prepare for Taxes

After you have filed for and received your Employer Identification Number, you should open a bank account because you will use this account for yourself, your clients, and your employees.

Your business dealings in Minnesota might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, having an EIN makes tax preparation easier. You can anticipate paying employment and corporate taxes with Minnesota LLC.

Opening a bank account is necessary for Minnesota business. If you are still wondering where to open an account in your Minnesota, you should check the Best Bank for Small Business in Minnesota.

Step 7: Get a Business and License Permit

You must get a business license in Minnesota before establishing your LLC. A business license is a legal document granted by a state government body that permits you to conduct business within the area under its jurisdiction. The price of business licenses and permits in Minnesota ranges from $50 – $300. If there is a requirement for a specific license or city-based permit, you must inquire with the Minnesota Secretary of State.

Cost to Form an LLC in Minnesota

Even if you have a business name and structure in mind, you should consider whether you can afford the costs of forming an LLC in Minnesota. Articles of Organization costs around $135. The initial filing fee is $155 (online and $135 by mail or in-person), and the annual fee is $0.

If you forget to pay the annual fee for your Minnesota LLC, you will have a penalty of $25. However, you can check the Minnesota LLC Cost for additional information.

Advantages of Creating Minnesota LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via LLC in Minnesota. Important benefits will help you set up an LLC in Minnesota.

  • Pass-Through Taxation: The pass-through structure will make the company not pay twice the tax. Most start-ups and entrepreneurs in Minnesota apply for an LLC because of this structure. Pass-through taxation refers to how income and losses from an LLC (Limited Liability Company) are passed through to its members (owners) for tax purposes rather than being taxed at the business entity level. This means the LLC does not pay federal income taxes; the members’ profits and losses are allocated based on their interests. Each member then reports their share of the LLC’s income or losses on their personal tax returns and pays taxes at their individual tax rates.
  • Ownership Flexibility: If you need sole and primary control over your company’s operations, a sole proprietorship will allow you to do so. If you apply for an LLC in Minnesota with flexibility, you will have default rules set by law and need an operating agreement.
  • Personal Liability Protection: Personal Liability Protection protects your business from damage, debts, or legal obligations. In personal liability protection, the company’s profits and earnings will stay as is even if your company is about to be sued. This protection of having an LLC in Minnesota can also be extended to the company’s properties and assets. Many start-up companies will benefit from this since most are starting to build a company. Even if liability exists, the LLC in Minnesota will protect its assets.

FAQs

What does LLC stand for in Minnesota?
LLC stands for Limited Liability Company in Minnesota.
How do I start an LLC in Minnesota?
You can start an LLC in Minnesota by filing Articles of Organization with the Minnesota Office of the Secretary of State and paying the filing fee.
Can an LLC in Minnesota have only one member?
Yes, Minnesota allows single-member LLCs.
What does it cost to start an LLC in Minnesota?
The filing fee for Articles of Organization in Minnesota is $135.
How long does it take to form an LLC in Minnesota?
Processing times vary, but it generally takes 7-10 business days to form an LLC in Minnesota.
Does Minnesota require me to have a registered agent for my LLC?
Yes, Minnesota requires all LLCs to have a registered agent who resides in the state.
What type of business licenses will I need to operate an LLC in Minnesota?
This depends on the type of business you operate, but many LLCs in Minnesota need to obtain a business license or permit from their city or county.
Do I have to file an annual report for my LLC in Minnesota?
Yes, all LLCs in Minnesota need to file an Annual Renewal with the Minnesota Office of the Secretary of State by December 31st of each year.
Does Minnesota have a taxation system for LLCs?
No, Minnesota does not have a specific tax system for LLCs. Instead, LLCs in Minnesota are taxed like sole proprietorships, partnerships, or S corporations depending on their structure and management.
What is the minimum age requirement to start an LLC in Minnesota?
There is no age requirement to start an LLC in Minnesota.
What is the liability protection for members of an LLC in Minnesota?
Members of an LLC in Minnesota have limited liability protection, meaning they are not personally liable for the debts and obligations of the business.
Can a non-US citizen start an LLC in Minnesota?
Yes, non-US citizens can start an LLC in Minnesota as long as they have a valid US address and social security number or Individual Taxpayer Identification Number.
Does Minnesota have any publication requirements for forming an LLC?
No, Minnesota does not have any publication requirements for forming an LLC.
Can I change the name of my LLC in Minnesota after formation?
Yes, you can change the name of your LLC in Minnesota by filing an Amendment to Articles of Organization with the Minnesota Office of the Secretary of State and paying the fee.
Does Minnesota have any residency requirements for LLC members?
No, Minnesota does not have any residency requirements for LLC members.
What is the difference between a member-managed and manager-managed LLC in Minnesota?
In a member-managed LLC, members (owners of the business) manage the operations of the LLC, while in a manager-managed LLC, a designated manager or managers oversee the day-to-day operations.
Can I reserve a name for my LLC in Minnesota before filing?
Yes, you can reserve a name for your LLC in Minnesota by filing an Application for Reservation of Name with the Minnesota Office of the Secretary of State and paying the fee.
How do I dissolve an LLC in Minnesota?
You can dissolve an LLC in Minnesota by filing Articles of Dissolution with the Minnesota Office of the Secretary of State and paying the fee.
Is it required to have an operating agreement in Minnesota?
No, but an Operating Agreement is highly recommended for LLCs in Minnesota.
Can I change the structure of my LLC in Minnesota after formation?
Yes, you can change the structure of your LLC in Minnesota by filing Articles of Amendment with the Minnesota Office of the Secretary of State and paying the fee.
Can one LLC own another LLC in Minnesota?
Yes, one LLC can own another LLC in Minnesota.
How do I get a Federal Tax Number for my Minnesota LLC?
You can obtain a Federal Tax Number (EIN) for your Minnesota LLC by applying online at the IRS website.
Can I use a PO Box for my LLC address in Minnesota?
No, a PO Box cannot be used as a registered agent address for an LLC in Minnesota.
How can I check if my desired LLC name is available in Minnesota?
You can search for available LLC names in Minnesota on the Minnesota Office of the Secretary of State’s website.
Do LLCs need to hold annual meetings in Minnesota?
No, Minnesota LLCs are not required to hold annual meetings.
Can an LLC in Minnesota issue stock?
No, LLCs in Minnesota cannot issue stock as they are not corporations.
Can I add members to my LLC in Minnesota after formation?
Yes, you can add members to your LLC in Minnesota by filing an Amendment to the Articles of Organization.
When do I need to file Minnesota sales tax for my LLC?
Minnesota sales tax returns for LLCs are due on the 20th of the month following the close of the reporting period.
What happens if I fail to file my annual renewal with Minnesota?
If you fail to file your annual renewal in time, your LLC will be administratively dissolved by the Minnesota Office of the Secretary of State.
What is an LLC?
LLC stands for Limited Liability Company, it is a type of business entity that combines the flexibility of a partnership with the limited liability protection of a corporation.
How much does it cost to start an LLC in Minnesota?
The filing fee for forming an LLC in Minnesota is $155.
Can I form an LLC in Minnesota online?
Yes, you can form an LLC in Minnesota online through the Secretary of State’s website.
What is the name filing requirement for an LLC in Minnesota?
The name of an LLC in Minnesota must include the words “Limited Liability Company” or one of its abbreviations such as “LLC”.
Do I need an operating agreement for my LLC in Minnesota?
While it is not required by law, having an operating agreement is highly recommended for LLCs in Minnesota to establish operating procedures and reduce legal disputes.
Is there a residency requirement to form an LLC in Minnesota?
There is no residency requirement to form an LLC in Minnesota, anyone can form an LLC in Minnesota regardless of where they reside.
Do I need to schedule a tax ID application before I form my LLC in Minnesota?
No, you do not need to schedule a tax ID application before forming your LLC in Minnesota, but obtaining an EIN is a recommended step for most LLCs.
How do I name my LLC in Minnesota?
You must have a unique name that is not the same or too similar to any other LLC or registered business in Minnesota.
Do I need a registered agent for my LLC in Minnesota?
Yes, all LLCs in Minnesota must have a registered agent with a physical Minnesota address.
Can foreign LLCs form a business in Minnesota?
Yes, foreign LLCs can form a business in Minnesota by registering with the Secretary of State.
What is a dissolution date for an LLC in Minnesota?
The dissolution date for an LLC in Minnesota is the date that it plans to terminate its operations.
Do I need to file articles of incorporation for an LLC in Minnesota?
No, LLCs in Minnesota must file articles of organization instead.
Do I need a Minnesota state tax ID for my LLC?
It depends on whether your LLC has employees or is subject to certain types of taxes.
Do I need a business license in Minnesota for my LLC?
Some cities and counties require businesses to obtain a local business license to operate in Minnesota.
Can I change the name of my LLC in Minnesota?
Yes, you can change the name of your LLC in Minnesota by amending the articles of organization with the Secretary of State.
Can a single member own an LLC in Minnesota?
Yes, a single member can own an LLC in Minnesota, and it will be taxed like a sole proprietorship.
Do I need to file a certificate of good standing for my LLC in Minnesota?
Depending on your business requirements, you may be required to file a certificate of good standing for your LLC in Minnesota.
Can I file my LLC documents via email in Minnesota?
The state of Minnesota does not currently offer online filing such as email processing for LLCs.
Does Minnesota have annual report requirements for LLCs?
Yes, all LLCs in Minnesota must submit an annual report to the Secretary of State.
Is there a name reservation requirement for LLCs in Minnesota?
No name reservation is required for LLCs in Minnesota, but you may choose to file one to temporarily secure a name before filing.
What is the process for amending articles of organization for an LLC in Minnesota?
Amending articles of organization in Minnesota requires a form to be filed with the Secretary of State along with an appropriate fee.
Are there special management requirements for LLCs in Minnesota?
There is no specific management structure required for LLCs in Minnesota, so owners can choose to run the business in a way that works for them.
Do I need to publish a notice of formation for my LLC in Minnesota?
No, there is no publication notice requirement for LLCs in Minnesota, but local newspapers may charge for publication ad.
Can I have a nonprofit LLC in Minnesota?
Yes, there are options to register as an LLC Type-U (a Minnesota nonprofit LLC) which allows certain types control over their funds akin to a representative democracy with boards made up of allowable members or entities (may vary to type-f of family trust upon retirement).
What is the Foreign LLC Application for Registration in Minnesota?
The Foreign LLC Application for Registration in Minnesota allows a foreign LLC to operate in Minnesota.
Can LLCs in Minnesota be manager-managed?
Yes, LLCs in Minnesota can have either member management or manager management style.
Can I form my LLC as a benefit corporation in Minnesota?
Yes, Minnesota does offer the opportunity to form as a Benefit Corporation.
What is the expedited filing fee for LLCs in Minnesota?
Minnesota offers expedited filing for a higher fee. Consult their guide or website for current amounts and processing times.

Also Read

How Fast Can I Form an LLC in Minnesota

The process of forming an LLC in Minnesota is relatively straightforward, thanks to the state’s business-friendly laws and regulations. In fact, with the help of modern technology, entrepreneurs can complete the necessary paperwork and submit it online, streamlining the process significantly.

One of the first steps in forming an LLC in Minnesota is choosing a unique name for your business. While this may seem like a simple task, it’s important to ensure that your chosen name complies with the state’s naming requirements. This includes making sure the name is not already in use by another business and includes the designation “LLC” or “Limited Liability Company.”

Once you have selected a name for your LLC, the next step is to file Articles of Organization with the Minnesota Secretary of State. This document outlines vital information about your business, such as its name, address, and registered agent. By submitting this paperwork online, you can typically receive approval within a matter of days.

After your Articles of Organization have been approved, you will need to create an operating agreement for your LLC. While this step is not required by law, it’s highly recommended as it outlines the management structure and operations of your business, which can help prevent potential conflicts down the road.

Finally, you will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This unique nine-digit number acts as a social security number for your business and is necessary for opening a business bank account or hiring employees.

Overall, the process of forming an LLC in Minnesota can be completed relatively quickly when all steps are followed promptly. With online filing options available, entrepreneurs can expect to have their LLC up and running in a matter of days, rather than weeks or months.

It’s important to note that while forming an LLC in Minnesota may be fast and efficient, it’s essential to do thorough research and seek advice from legal and financial professionals to ensure that you are making the best decision for your business. By taking the necessary steps to form an LLC correctly, entrepreneurs can protect themselves and their assets, setting their business up for long-term success.

Conclusion

In conclusion, starting an LLC in Minnesota is a strategic choice for entrepreneurs seeking a flexible, straightforward business structure with limited liability protection. By following the essential steps, including choosing a business name, filing Articles of Organization, appointing a Registered Agent, creating an Operating Agreement, obtaining an EIN, and securing the necessary licenses and permits, you can successfully establish your LLC. This business structure offers numerous advantages, such as pass-through taxation and ownership flexibility, making it an attractive option for small business owners looking to grow and protect their ventures. As always, consult legal and business professionals for guidance specific to your situation and state requirements.

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