How to Form an LLC in Minnesota in 7 Steps
Forming a limited liability company (“LLC”) in Minnesota involves several steps, including naming your LLC, appointing a registered agent, filing articles of organization, applying for an EIN, and setting up business and tax accounts.
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If you’re ready to form an LLC (limited liability company), you’re well on your way to establishing your company’s legal foundation and protecting your personal assets. The process of LLC formation is not difficult, but it does require several steps. Forming an LLC is a similar process in every state. However, some laws and procedures differ. Follow this step-by-step guide to start an LLC in Minnesota.
Steps to Form an LLC in Minnesota
Name Your LLC
Naming your Minnesota business is essential because it has both marketing and legal implications. From a marketing perspective, the name you choose is one of the first things potential customers will learn about your business. You want the name you choose to attract those customers to your products and services. From a legal perspective, you need to have an LLC name that satisfies the naming requirements in Minnesota.
Under Minnesota law, Minn. Stat. §322C.0108, note that your LLC name must:
- Be distinguishable from all other business names on record with the Minnesota Secretary of State
- Include the term “limited liability company” or the abbreviation “LLC”
Also, avoid using restricted terms or phrases unless you have the required licenses or approvals. Don’t use any words or phrases in your business name that suggest that your business is a governmental agency or indicate that your business is for an unlawful purpose.
Search For Your LLC Name
Make a list of a few potential names, and then head to the Minnesota Name Database to check for name availability. If a name on your list is already in use or reserved, you need to choose a different name for your business. You can reserve a name with the Minnesota Secretary of State under Minn. Stat. §322C.0109. To secure the name, file a name reservation application online and pay a fee of $55. The reservation holds the name for one year.
To avoid infringement on another business’s name, do a quick internet search to ensure the domain name is available and look on the United States Patent and Trademark Office (USPTO) website to see if it is registered. If the name isn’t in use, you may want to reserve your name so others can’t take it.
Protect Your LLC Name
Your business name is your identity and brand. There are two ways to stop others from using it: register the name as a trademark and a domain name.
- Trademark. You can trademark the name with the USPTO. While the application is pending, a trademark protects the name under common law. Once you receive your federal trademark, you can register it as a Minnesota trademark or service mark. You may also trademark the LLC only in Minnesota. The online or in-person fee for a state trademark is $70. If you register by mail, the fee is $50.
- Domain Name. Do a name search on the internet to determine that your internet domain name is available. If available, find an approved ICANN registrar to register the domain name.
Get a Registered Agent
In Minnesota, under Minn. Stat. §5.36, you must have a registered agent for your LLC. A registered agent handles service of process for your company. If someone decides to sue the company, there must be someone to accept the legal documents on behalf of the company. You must choose a person or company to serve as your Minnesota registered agent.
A registered agent must be:
- A resident of Minnesota or a business entity registered in Minnesota with a physical street address
- Available during regular business hours
Busy entrepreneurs often enlist a registered agent service company to serve as the registered agent for their small business since they can’t always be around to accept service of process.
File Your Articles of Organization
You’ll need to file articles of organization with the Minnesota Secretary of State to create an LLC in the state. You can file your LLC articles of organization by mail, in person, or online.
Under Minn. Stat. §322C.0201, the filing must consist of the following information:
- The LLC’s name (with “limited liability company” or the abbreviation “LLC”)
- Registered agent’s name and office address (a physical street address, not a P.O. Box)
- Name and address of at least one LLC organizer
- An email address for official notices
- A name and daytime phone number of someone to contact about the form
State fees for Minnesota articles of organization are $135 for filings by mail and $155 for in-person expedited or online filings.
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Draft an Operating Agreement
An LLC operating agreement is an internal document covering your organization’s rules and procedures. Without it, you might have to rely on Minnesota’s LLC default statutes if or when a conflict arises.
Operating agreements address the rights and responsibilities of the members, liabilities, procedures for admitting new members, procedures for voting, and the distribution of profits and losses.
Even if you are a single-member LLC, an operating agreement is helpful (and often necessary) when getting financing, attracting members, or trying to sell the business.
Get an EIN
Business owners need an EIN (Employer Identification Number) or Tax ID number if they hire employees or the LLC has more than one member. An EIN is like a Social Security number for your business. You’ll need this number to open up a business bank account and set up employer accounts.
Getting an EIN is simple and free. You can apply for an EIN on the IRS website when getting financing, attracting members, or trying to sell the business.
Set Up Business and Tax Accounts
LLC owners choose how the federal government taxes their businesses. The Minnesota Department of Revenue (DOR) handles state taxes. You may need to register your business entity with the DOR to get a Minnesota tax identification number.
And depending on your type of business operations, you may need to apply for business licenses and permits, sales and use tax accounts, and employer accounts.
Check for Additional Federal or State Requirements
Check state and federal websites to determine if there are any specific rules for your business. For example, some LLCs may have to file a Beneficial Ownership Information Report (BOIR) with FinCEN. Under current law, LLCs created in the United States are “domestic reporting companies” and are exempt from the BOIR requirement.
However, laws may change, so stay up to date with state and federal requirements.
Business and Tax Requirements in Minnesota
When you establish an LLC in Minnesota, you must follow all tax and license obligations. Register your business with the Minnesota Department of Revenue to determine your tax and license requirements.
State Business Tax
How you set up your LLC tax structure determines if your LLC pays a state business tax. If the LLC pays taxes as a corporation, the LLC pays a corporate franchise tax. If the LLC is a pass-through business entity, the LLC’s profits go on the individual members’ tax returns. A single-member LLC will be taxed like a sole-proprietor. A multi-member LLC will be taxed like a partnership. The members pay a state income tax.
State Employer Tax
As an employer, your LLC is subject to state rules—even if the employees are also members. Set up wage withholding tax accounts with the state. Additionally, an employer in Minnesota must:
- Register all new employees with the Minnesota New Hire Reporting Center within 20 days of the employee’s hire date
- Obtain workers’ compensation insurance for employees
- Set up an employer account with the Minnesota Unemployment Insurance Department
Sales and Use Taxes
If your LLC sells tangible goods or provides services, there is a 6.875% sales and use tax. This tax is charged to your customers and collected by you. You must remit the tax to the state. Register for a seller’s permit at the Minnesota Department of Revenue when you set up your business.
Business Licenses and Permits
You may need a business license or business permit for your Minnesota limited liability company. Requirements vary based on the location and the type of business you’re running. For this reason, it’s best to contact your local and state agencies to determine the requirements for your specific type of business. Minnesota has an eLicensing website to search for your business category. Check local licensing requirements with the city and county where you operate your principal place of business.
Registration in Other States
If you want your Minnesota LLC to operate in another state, you must register in that state as a foreign LLC. Contact the secretary of state’s office in that state to apply. You may need to provide a Certificate of Good Standing for your Minnesota LLC. You can order the certificate on the secretary of state’s portal to request a Certificate of Good Standing. The fee is $15.
Annual Requirements in Minnesota
You must file an annual renewal if you have a registered LLC in Minnesota. The good news is that so long as your LLC is in good standing, there is no fee for the report filing. The limited liability company annual renewal form can be filed online or mailed in. The due date is December 31st each year.
However, if your LLC changed its name or registered agent or office, you must file an amendment and send it along with the renewal form. And if the state dissolves your LLC for non-compliance, there’s a filing fee for the reinstatement.
FAQs About Minnesota LLC Formation
The state fee for filing the articles of organization by mail is $135. If filed online or in person, the cost is $155.
Single-member LLC. Minnesota allows an LLC with only one member, which is a single-member LLC. Single-member LLCs have similar formation and filing requirements as multi-member LLCs.
Multi-member LLC. You can form a multi-member LLC in Minnesota if your LLC has more than one member. Multi-member LLCs name a person or a group of people as "manager-members" to operate the LLC.
Professional LLC. A professional LLC or PLLC is a particular type of LLC only used by licensed professionals. In Minnesota, you must form a professional LLC if you hold a professional service license, such as a doctor, lawyer, or accountant. A PLLC can use the same articles of organization form as a regular LLC but must add the following:
- A statement that the Minnesota firm elects to operate and acknowledges that it is subject to Minnesota Statutes, Chapter 319B.01 to 319B.12
- A list of the professional service the organization is authorized to provide under Minnesota Statutes, Chapter 319B, subd 19
The initial articles of organization you file with the Minnesota Secretary of State establishes your LLC. When the LLC is accepted, you get a copy of the registration. Banks often request a copy of your Articles of Organization when opening up a business banking account. If you need another copy, you can order it from the Minnesota Secretary of State’s portal. The state charges a $3 fee plus a $10 online transaction fee for each copy. The state charges $5 if you want the document certified.
You use a Certificate of Good Standing when applying for a bank loan or registering as a foreign LLC in another state. Minnesota issues a Certificate of Good Standing verifying the formation of the LLC and the compliance with state laws. You can order a Certificate of Good Standing for $15 on the secretary of state’s portal.
To form a Minnesota LLC, you need the following:
- An LLC business name
- A registered agent
- A registered agent’s office address (physical street address)
- A filing fee of $155 if in person or online (or $135 by mail)
"LLC" is an abbreviation of "limited liability company," meaning the LLC owners aren’t personally liable for the LLC’s judgments and debts. That is why LLCs are a popular business structure. For example, if someone decides to sue the company, you have protection for your personal assets (such as your house or car). Without liability protection, you could lose personal assets in a lawsuit arising from a business debt or obligation. Although personal asset protection is a key benefit to LLC formation, there are other advantages to a Minnesota LLC:
- An LLC has flexible tax structures similar to a sole-proprietorship or partnership
- There are fewer reporting and recordkeeping obligations than corporations
- Minnesota does not charge an annual fee for Minnesota LLCs
LLC owners must file annual reports (annual renewals) with the Minnesota Secretary of State. It’s free if your company is active and in good standing. However, if you let your LLC’s standing lapse due to not filing the annual renewals, there’s a $45 online or in person filing fee for the reinstatement. The restatement filing fee is $45 if done by mail.
The certificate of organization, called the articles of organization in Minnesota, is a legal document filed with the Minnesota Secretary of State. The LLC articles of organization is a document of public record. An operating agreement, however, is a private document regarding the rules of your business.
A DBA, or "doing business as," is also called a trade name or fictitious business name. A DBA is a name other than the legal business name used for conducting business. You don’t need to worry about registering a DBA if you’re only using your legal company name for business activities. However, if you want to do business under another name in Minnesota, you file a Certificate of Assumed Name. One of the people intending to conduct the business must sign the certificate. The online filing fee is $50. If you file the certificate by mail, the state fee is $30.
After the Secretary of State accepts the certificate, you must publish a notice of the assumed name in a qualified legal newspaper where the principal place of business operates for two consecutive issues.
Note that you must renew the assumed name each year by filing an Assumed Name Annual Renewal form by December 31st. There is no state fee for filing the renewal.
Depending on your business operations, you may need a business license or permit issued by the state or your local city or county office. Check state requirements on Minnesota’s elicensing website and with your city or county governments. If you provide services as a licensed professional, you must have a state license issued by the professional licensing agency.
Yes. Minnesota offers an online business services portal to file your LLC’s articles of organization. The filing fee for online registration is $155. You must first set up an account with the Secretary of State. If you don’t want to set up an account, you can also use business formation service companies to set up your LLC.
To file your articles of organization, you can deliver it in person or send by mail to:
Minnesota Secretary of State – Business Services
First National Bank Building
332 Minnesota Street, Suite N201
Saint Paul, MN 55101
Yes, even though you can serve as your own LLC’s registered agent, there are advantages to using a registered agent service. Some of the benefits are:
- Handling sensitive matters. Registered agents accept service of process at their registered office address. Any lawsuits are not served at your place of business or in front of your customers.
- Privacy protection. The registered agent’s address appears on the public record, keeping your address private.
- LLC compliance. Registered agents notify you of annual filing deadlines so you don’t jeopardize your LLC’s good standing.
- Availability. A registered agent must receive service of process during regular business hours. As a busy entrepreneur, you may not be available during those hours.
- Administrative assistance. If you need to get a Certificate of Good Standing or need help with registration in another state, registered agents can help you with the paperwork.
An LLC formed under Minnesota state law is a domestic LLC. An LLC formed outside Minnesota is a foreign LLC. To operate your business in Minnesota, you must either create a domestic LLC or register an LLC formed in another state as a foreign LLC in Minnesota.
If you want to do business in another state, you register as a foreign LLC in that state. Generally, the steps for a foreign LLC registration are:
- Contact the Secretary of State’s office in the new state to apply as a foreign LLC
- Check that the LLC’s business name is available in the state’s name search database
- Complete the application for a foreign LLC
- Submit the application with a Certificate of Good Standing issued by the Minnesota Secretary of State
- Pay the new state’s application fee
If you have an LLC in another state or county, you must register it in Minnesota to legally do business here. You apply to the Secretary of State as a foreign LLC.
First, check the name availability database to see if you can use your business name in Minnesota. You also need a Minnesota registered agent and office address. Then complete the following steps:
- Submit a Certificate of Authority to Transact Business in MN to the secretary of state
- Pay a foreign LLC filing fee of $205 state fee online or in person registration or $185 if by mail
When you want to close your business operations in Minnesota, you dissolve your LLC. First, you should follow any dissolution procedures outlined in your LLC operating agreement. Then you must close all tax and business accounts.
There are two more steps to do with the Minnesota Secretary of State:
- Download and complete a Statement of Dissolution form. This statement informs the state you are dissolving your LLC. The fee is $55 for online or expedited in-person service or $35 by mail.
- Download and complete a Statement of Termination form. This form is the final step to closing your LLC. The fee is $55 for online or expedited in-person service or $35 by mail.
No. Only Delaware, Nevada, New Mexico, and Wyoming offer anonymous LLCs at this time. An anonymous LLC does not reveal owners’ names in the articles of organization. Therefore, a business owner seeking privacy may use professional registered agent services to keep their personal address off the formation documents, which is a public record.
Disclaimer: The information presented here does not constitute legal advice or representation. It is general and educational in nature, may not reflect all recent legal developments, and may not apply to your unique facts and circumstances. Consider consulting with a qualified business attorney if you have legal questions.
How to Start an LLC in Other U.S. States
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