- Step 1. Naming Your Minnesota LLC
- Step 2. Choose a Registered Agent
- Step 3. File Your Articles of Organization
- Step 4. Create an Operating Agreement
- Step 5. Get an EIN/Tax ID Number
- Step 6. Keeping Your LLC Running
- Minnesota LLC Resources
- Minnesota LLC FAQs
Step 1. Naming Your Minnesota LLC
One of the very first steps is to find an appropriate name. This name should be unique and should not risk infringe on other businesses in Minnesota; you also must follow certain state naming rules.
Legally Required Designation
In accordance with Minnesota LLC regulations, the name of your business must contain the phrase “limited liability company” or the abbreviation “LLC.” The name must not contain the words “corporation” or “incorporated,” and it cannot suggest that the business is different from the services you offer.
To make sure that the name you want to use is available, you can perform a name search on the Minnesota Secretary of State’s business filings database. If you find that the LLC name you want is available, you can file a Name Reservation request with the Secretary of State’s office.
The name reservation form can be filed online, by mail, or in person. There is a $55 fee for expedited in-person and online filing and a $35 fee to file by mail (you can send the completed document to the address on the form). Once this document is filed, it reserves your chosen name for up to 12 months ahead of establishment filing.
Additionally, you may want to perform a search of available domain names. It can be helpful to purchase a domain name ahead of time, regardless of when you want to set up a business website, as it will save you future stress.
When choosing an LLC name, keep in mind that you cannot include words that confuse your business with a government entity. This includes words like “IRS,” “Treasury,” or “State Department.”
You should also be aware that using words such as “dentist,” “attorney,” or “chiropractor” may require the presence of a properly licensed individual in your LLC, as well as filing separate paperwork. Minnesota does allow for the formation of professional LLCs, but there are a few separate naming and establishment rules you must follow, in addition to meeting professional licensing requirements. Read more about this here.
Using an Assumed Name
An assumed or DBA (doing business as) name is allowed for your LLC in Minnesota. This means you continue using the legally registered LLC name on all official documents, but use a different registered name when interacting with the public. This can be a great choice for a business owner who wants to market this LLC a specific way or maintain an extra level of privacy.
To start using a DBA name in Minnesota, you first need to register your chosen name with the Secretary of State’s office. This can be done by filing for a Certificate of Assumed Name. You can file the form online or by mailing it to the address on the document. There is a $50 fee for filing online or a $30 fee for filing by mail.
Once your Certificate of Assumed Name is processed, you must publish its notification in a qualified newspaper in the county that your LLC’s principal office is. The notification must be published in two consecutive issues, and you must retain the proof of publication on file to show you followed the regulations accordingly. More instructions can be found here.
Step 2. Choose a Registered Agent
Minnesota requires all LLCs in the state to appoint a registered agent, also called an agent for service of process. The registered agent for your LLC is responsible for receiving all legal documents, government communications, and tax documents, essentially acting as a contact between your business and state or federal agencies. They are also the responsible party that is contacted in the event of a lawsuit against your LLC.
You can appoint any Minnesota resident or business authorized to conduct operations in the state as your registered agent. As long as your appointee has a valid Minnesota street address and is available during regular business hours, they are eligible to be your registered agent. Keep in mind that your LLC cannot act as its own registered agent.
Step 3. File Your Articles of Organization
To fully establish your LLC as a functioning business, you must file your Articles of Organization with the Minnesota Secretary of State’s office. This document needs to include important information about your business, some of which you can preview below.
- Your LLC’s name
- Your LLC’s registered agent’s name and address
- Your LLC’s organizer’s name, address, and signature
- Your LLC’s email address and phone number
Your Articles of Organization can be filed online, in person, or through the mail. There is a $155 fee for filing online or in person and a $135 fee for filing through the mail.
If you would like to file your Articles of Organization online, you need to create an account on the Minnesota Secretary of State’s business filings portal. From there, you can select the option to register a new business and proceed through the steps. Upon submitting your information, you will be prompted to pay the $155 filing fee.
To file your Articles of Organization through the mail, you must print this form and complete it: use dark ink or type your information in. Then, place the form in a secure envelope along with a check made out to the Minnesota Secretary of State for $135. Send the sealed envelope to the address below:
Minnesota Secretary of State – Business Services
Retirement Systems of Minnesota Building
60 Empire Drive, Suite 100
St Paul, MN 55103
If you prefer to file your Articles of Organization in person, you must print and complete this form. Bring the document along with a valid form of payment to the address below during the listed business hours. You must pay a filing fee of $155 for in-person filing as it is considered expedited.
Minnesota Secretary of State – Business Services
Retirement Systems of Minnesota Building
60 Empire Drive, Suite 100
St Paul, MN 55103
(Staffed 8 a.m. – 4 p.m., Monday – Friday, excluding holidays)
Step 4. Create an Operating Agreement
LLCs in Minnesota are not required to create or file an operating agreement, but it is recommended that you draft one up anyway. An effective operating agreement sets clear guidelines for how your LLC is managed, the rights that members or managers have, and what to do if your LLC dissolves or experiences a lawsuit.
If you choose not to create an LLC operating agreement, Minnesota LLC law will dictate how your LLC is to be managed in the event of dissolution, conflict, or lawsuit. This may not be in your best interest, so creating an operating agreement can protect yourself and your assets.
To help you create an operating agreement, here is a sample template. If you decide to use a template, be sure to change all applicable areas to match what you have decided for your business and Minnesota LLC requirements; consult with a business advisor or attorney to make this process easier.
Step 5. Get an EIN/Tax ID Number
Once your LLC has been officially established in Minnesota, you must apply for a Tax ID number, also known as an EIN (Employer Identification Number), through the IRS. Any LLC that has more than one member — or any single-member LLC that wants to hire employees or chooses to be taxed as a corporation — must apply for an EIN.
Your EIN is used to identify your business to the IRS on all tax documents and necessary government filings; the number acts as a social security number for your LLC. If you want to hire employees, file federal taxes, open business bank or credit accounts, or apply for business funding, you need an EIN.
It is free to apply for your EIN with the IRS, and you can file the application online or by mailing it in. Keep in mind that if you are a foreign filer or do not have a social security number, you must file for your EIN through the mail.
The quickest and easiest way to apply for your EIN is online; you will receive your number once your application is completed. Visit the IRS website to apply for your free EIN.
You must fill out this form when applying for your LLC by mail. If you are a foreign filer or do not have a social security number, leave section 7b blank. Mail the completed form to the address below. You can follow up on any questions with the IRS at (267) 941-1099.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 6. Keeping Your LLC Running
There are several ongoing tasks that ensure your business continues to run smoothly.
File Annual Reports
Every LLC conducting business in Minnesota is required to file an annual report with the Secretary of State’s office. This report is due by December 31st each year and can be filed at any time during the calendar year. Failure to file will result in an involuntary dissolution of your LLC by the state.
If your LLC is active and in good standing with the Secretary of State’s office, there is no fee to file the annual report. If your business is in poor standing or has previously been dissolved by the state, you must reinstate it by filing the current year’s annual report. You can file online or in person for a $45 fee or by mail for a $25 fee. The mailing and in-person delivery address is listed on the paper renewal form.
Separate Your Business Finances
Minnesota doesn’t require LLCs to open separate business bank accounts, but you may want to consider starting one regardless. A business credit or debit account can keep your LLC’s finances separate from personal ones; this officially establishes the LLC as an independently operating business. This can protect your assets in the case of a lawsuit against your business.
You most likely need to show your Articles of Organization, operating agreement, EIN, or other LLC documents to open a bank account for your LLC. Compare all your options before deciding which bank account to open, as banks will have varying minimum required balances or credit spending limits; you want to be sure that you select what is the best for your LLC’s needs.
Keep Up With Federal and State Taxes
While operating your LLC, you need to keep up with federal and state taxes to avoid major penalties and fines that interfere with your business’s operations.
Federal Tax Requirements
There are several tax structures you can choose from to use in your LLC that may meet different company needs: each structure comes with its own unique type of federal taxation. This article can help you gain an in-depth understanding of the differences between each type and help you decide which is best.
In general, most LLCs are taxed as sole proprietorships or partnerships. This means you will be expected to file Schedule C along with your individual income tax return to declare any income that you receive through your LLC. When using this tax structure, you should keep in mind that you most likely need to pay self-employment tax (at a rate of 15.3%), in addition to any income tax. You may also need to make quarterly estimated tax payments to avoid IRS fines; the IRS website gives more details on this.
You can also choose to have your LLC taxed as a corporation, like an S Corporation or a C Corporation. To do so, you need to fill out IRS Form 8832 and IRS Form 2553 to declare it. After these forms have been processed, your LLC will be treated as a corporation and expected to file a separate corporate tax return with the IRS.
Minnesota Business Taxes
Minnesota does not implement a general business tax, but you may need to pay additional state taxes depending on your LLC’s taxation structure. LLCs that are taxed as sole-proprietorships or partnerships (i.e., as pass-through entities) are required to report any business income on their individual state income tax return each year, thus paying taxes on it.
LLCs that elect to be taxed as either S or C Corporations may be liable to pay a separate corporation franchise tax. More information on this can be found on the Minnesota Department of Revenue website.
Sales and Use Taxes
Any LLC in Minnesota that sells goods or services will likely be required to pay sales and use taxes. This tax is registered for and paid through the Minnesota Department of Revenue. You can find more information on who is eligible for this tax, how to calculate your tax burden, and payment due dates here.
State Employer Taxes
If your LLC is hiring employees, you are likely liable to pay withholding tax and unemployment insurance taxes. Keep in mind that you may also need to pay these taxes on a federal level.
Minnesota withholding tax is registered for and paid through the Minnesota Department of Revenue; more information can be found here. The Minnesota Department of Employment and Economic Development takes care of unemployment insurance taxes. More information can be found here.
Acquire Necessary Permits and Licenses
There is no general business license requirement in Minnesota, but you may need to obtain certain permits or licenses on a local level. Check with the County Clerk’s office where your LLC’s principal office is located to be sure you meet all licensing requirements. For information on professional licensing in Minnesota, check out the state government’s licensing website here.
On a federal level, you may be required to obtain certain permits and licenses for your LLC, depending mostly on the type of business you run and the services you offer. To determine if you need to meet additional federal licensure requirements, use the directory on the US Small Business Administration’s website.
Minnesota LLC Resources
The below list of Minnesota LLC resources can guide you through every step of establishing your business in the state.
- Available LLC name search
- Reserve an LLC name
- Available domain name search
- Certificate of Assumed Name
- Articles of Organization
- Minnesota Business Filings Portal
- Operating Agreement template
- IRS EIN online application
- Annual Report form
- Minnesota Department of Revenue
- Minnesota Department of Employment and Economic Development
- Minnesota State Professional Licensing
- S. Small Business Administration
Minnesota LLC FAQs
Checking out these frequently asked questions may help resolve any lingering worries about starting an LLC in Minnesota.
In Minnesota, it costs $135 to file your Articles of Organization by mail or $155 online. You may also need to pay a fee for reserving an LLC name or registering a DBA name in the state.
The cheapest way to start your LLC in Minnesota is to file your Articles of Organization by mail without first reserving an LLC name or registering a DBA name. Doing it this way only costs $135 to get your business established in the state.
The fastest way to start an LLC in Minnesota is to file your Articles of Organization in person or online. These filing methods have a higher filing fee ($155) than mail filing ($135) because they are considered expedited; expect to have your LLC established within 1 business day when filing online or within 4 to 7 business days by mail.
How much your Minnesota LLC pays in taxes depends on the individual taxation structure that you set up. In addition to federal taxes, you may also be liable to pay state income taxes or corporation franchise taxes, sales and use taxes, or state employer taxes
In Minnesota, you must file state reports annually; the report is due by December 31st of each calendar year. If your LLC is in good standing, there is no fee for the annual report. If your LLC has been dissolved by the state or is in poor standing, you need to pay a $45 fee (online or in person filing) or a $25 fee (mail filing) to file the report and reinstate your business.
You also need to consult any operating agreements or internal documentation that your LLC has to proceed down the agreed-upon wrap-up terms and fully close your business.