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How to Start a Minnesota LLC: Step-by-Step Guide – MarketWatch

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Don’t get snowed in with your efforts to start a Minnesota LLC — the registration process is straightforward if you have your business plan ready when you file. Use this step-by-step guide and answers to frequently asked questions to register your LLC. Minnesota makes it easy. Before we get to the steps of creating your LLC, we’ll answer common questions about the cost of an LLC and what it means to operate a foreign LLC in Minnesota.
If you’re ready to file everything at once, the cost of setting up your Minnesota LLC can be as low as $135. Minnesota is unique in that you can save money registering your LLC by mailing in your forms rather than filing online. Filing by mail costs $20 less across the board than filing online or in person. The most common documents filed when setting up an LLC or registering a foreign LLC include the following:
Filing your LLC paperwork in person includes expedited, or same-day, processing. The mail-in and online options can take one to two weeks to process. If you plan to file in-person, make an appointment online first.
A foreign LLC is a business formed in another state that wants to do business in Minnesota. Registering a foreign LLC requires filing a certificate of authority with the MN Secretary of State. Like domestic LLCs, foreign LLCs must make sure their business name is available and file an annual renewal with the state each year.
Your Minnesota LLC paperwork can be done in less than a day if you gather your information beforehand. You’ll want to think through your business plan and follow these six steps thoroughly. If you don’t see your questions answered along the way here, consult with a business attorney or formation company for help with your planning or paperwork. You can also search the Minnesota Employment and Economic Development website, which provides several free resources.
Now that you know what to expect as far as costs are concerned, it’s time for the fun part — choosing a name for your LLC. There are a few general rules for choosing a name for your LLC:
Minnesota provides guidelines for how to distinguish your preferred business name from another business name if they’re too similar.
How do you check if your name is available? Perform a Minnesota LLC name search on the Secretary of State’s website. This may require setting up a username and password. If your name is too similar to another business name, you can still try to use it by getting consent from the existing business and filing an application for consent to use the name with the Secretary of State.
Once you’re satisfied the name you want is available and meets Minnesota’s criteria, you can reserve the name until you’re ready to file the rest of your LLC paperwork. Do this by filing aname reservation form online with the Secretary of State, or in-person or by mail at the following address:
Minnesota Secretary of State – Business Services
First National Bank Building
332 Minnesota Street, Suite N201
Saint Paul, MN 55101
No, you’re not required to reserve your LLC name. However, if you’re not ready to file the rest of your paperwork when you decide on a name, you may want to save it so another business doesn’t take it in the meantime. That way, you can take your time fleshing out the rest of your business plan with one less item to worry about. Name reservations are effective for 12 months in Minnesota, and you can renew your reservation if you need more time.
Once you’ve decided on a name, you need to decide where you want to receive official correspondence on behalf of your business. This is known as designating a “registered agent,” which must be a physical address (not a P.O. box) in Minnesota. It’s simple to find a registered agent for your Minnesota LLC: Search online and you’ll get more results than you can count for affordable registered agent services. Yearly fees can run as low as $49 per year.
Minnesota only requires a registered address, not necessarily the name of an agent, though you can provide one. The address must be accessible during all business hours.
Yes, you can serve as your own registered agent. However, many business owners find it more convenient to have a registered agent company receive, scan and electronically send the documents. That way, you won’t be stressed about being out of the office, or being served with legal filings in front of customers.
This step is the meat and potatoes of the filing process. Your Minnesota LLCarticles of organization contains the information above, as well as the name and contact information for at least one LLC organizer.
This document also contains a Minnesota Business Snapshot, a voluntary form that may be shared with the public. It asks the following questions about the business you intend to register:
Keep the signed original copy for your records and submit a good quality photocopy to the Secretary of State by mail ($135) or in-person or online ($155).
Yes, you can register a non-profit LLC in Minnesota the same way as you would a regular LLC. If you want to register as a 501(c)(3) with the IRS, the Minnesota Secretary of State warns against using the non-profit LLC form with the IRS, as it doesn’t contain the required language. The state form is sufficient to set up your non-profit LLC in Minnesota, only.
Yes, Minnesota recognizes professional LLCs (PLLCs) for certain licensed services. If your LLC intends to provide any of the following services, you’ll need to register as a PLLC by including a statement with your articles of organization that the LLC “elects to operate under and is subject to Section 319B.01 to 319B.12 or that the firm elects to operate under and is subject to the Minnesota Firms Act.” You must also list which service(s) your LLC will provide out of the following list:
An established business formation company can help you gather the necessary filing information, usually for a flat fee and a guarantee that your application will be accepted. Though you may need to consult with an attorney or tax professional at some point, a formation company can help with the filing process without legal fees.
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Your Minnesota LLC is officially registered — what’s next? It’s time to finalize an operating agreement, a legal document explaining how your business will operate, from registration to dissolution. Templates for operating agreements are widely available at little to no cost. The U.S. Small Business Administration provides resources on drafting operating agreements as well. Keep a signed copy on file at your principal office.
While operating agreements aren’t legally required to run an LLC in Minnesota, they prevent confusion as to how the LLC should operate, which can protect you from legal trouble down the road. This is especially true if you have multiple members in your organization, since operating agreements spell out voting procedures and what happens if a member dies, retires or wants to sell their interest.
Minnesota will assign you a state tax identification number, but you’ll also likely need a federal employer identification number (EIN) if you plan to hire employees or have more than one LLC member. A federal EIN allows you to handle employment taxes and other issues and can be obtained for free on the IRS website.
For a single-member LLC, Minnesota doesn’t require a federal EIN to operate. You can use your Social Security number or state tax identification number for most activities. However, some banks may require a federal EIN to open business accounts.
Minnesota LLCs must file annual reports with the MN Secretary of State, called “annual renewals.” These reports keep your business active. They can be filed for free on the SOS website using an online form or uploaded as a PDF document.
We all miss deadlines every now and then. If you forget to file an annual renewal, you can file it late — you’ll just have to pay a reinstatement fee. A reinstatement fee costs $25 if you mail your form, and $45 if you file online or in person.
Make sure to do your research to learn what your Minnesota LLC tax filing requirements are. Minnesota has an LLC tax requirement for businesses earning over a certain amount, so your LLC may pay taxes on its revenue. Members will also owe personal income tax on the income received from the LLC.
You may need workers compensation insurance and need to meet state and federal employment tax obligations if you hire employees. A designated accountant would be a helpful investment so you don’t get behind on these obligations.
Starting a business in Minnesota should be exciting, not stressful. An experienced business formation company can take the stress off registering your LLC, so you can focus on what matters — growing your business.
Legal Disclaimer: This article contains general legal information, but does not constitute professional legal advice for your particular situation and should not be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed in your jurisdiction.
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