Are you ready for the best guide on how to start an LLC in Minnesota? I sure hope so because I’m going to take you through the step by step process to setup a Limited Liability Company or as some call it a Minnesota LLC.
You’ll need to follow a few rules but I’ll take you through what you need and make sure the Minnesota Secretary of State’s office is happy with you as you decide on how to setup your registered agent service, operating agreement, business structure and get your Federal Employer Identification Number.
If you’d prefer to go through this step by step you can but I also think it’s important to consider looking at professional services that do this full time.
My recommendation is that you go look at the Best LLC Service which I think is Northwest Registered Agent. They will give you the first year of a registered agent for free and that is a requirement for Minnesota law.
Before we jump into this, I always love thinking about great business ideas for you based on what other Minnesota LLC ideas look like and what your state is known for.
Top Business Ideas for Minnesota LLCs:
- Boat Rental – ‘Land of 10,000 Lakes’ requires a boat rental company!
- Mall Kiosk – Mall of America – The largest mall in America – sell something inside this place
- Hiking Adventures – You can start a hiking company with all the outdoor adventures
- Real Estate – Duluth, MN is known for being a climate refugee spot so you can pick up some spots now and resell or just be a real estate agent because everyone in the US will start migrating to Minnesota once they run out of water in the west are get fed up with fires
Alright – you came here for how to start an LLC in Minnesota – not business ideas so let’s get started.
Name Your Minnesota LLC
The first thing you’ll need to do is give your LLC a name.
The name has to end with either “Limited Liability Company” or one of it’s abbreviations “LLC” or “L.L.C.”. If you want to use a corporate ending like “Inc.” or “Corp.” then that’s not allowed in Minnesota.
Your LLC name can’t be too similar to another business that is already registered in the state or the federal government has a trademark on. It’s always a good idea to do a quick search on the USPTO website to make sure your desired LLC name isn’t trademarked at the national level. If it is, you’ll need to choose something else.
You will also need to check with the Minnesota Secretary of State office by doing a business name search on their portal here: https://mblsportal.sos.state.mn.us/Business/Search
The official ‘how to check’ rules for online filings of your business name can be found here:
If you’re going to get a business name – please make sure you follow the official rules and instructions on the SoS page above.
You can reserve your LLC name with the Minnesota Secretary of State but it’s not required.
I generally don’t recommend doing this unless you’re 100% set on the business name because there is a $35 filing fee and it only lasts for 6 months.
I also highly recommend that whether you’re a business owner setting up a new sole proprietorship, single member LLC, multiple member LLC, Limited Liability Company or a Foreign LLC – it’s important that you’re following the Minnesota LLC naming guidelines so do just that for the state.
Once you’ve been able to get this organized and cleared up for your Minnesota LLC or Limited Liability Partnership, go get your digital version of this. I recommend that you use GoDaddy for this. It’s the best for setting up your version of a Minnesota LLC online.
Choose your registered agent
One of the requirements of a Minnesota LLC is having a registered agent or a registered agent service that will help you stay in compliance.
The rules for being a registered agent are:
- The agent must be a resident of Minnesota or a corporation that is authorized to do business in the state
- The agent’s office address must be identical to the LLC’s mailing address which will become the LLC’s principal place of business
- The registered agent must have a physical street address in the state – a P.O. box is not sufficient
- The agent must be available during normal business hours to receive and sign for official documents on behalf of the company
You can act as your own registered agent in Minnesota but I only recommend this if you have a physical office in the state that is open during normal business hours.
The state of Minnesota does require that every LLC have a registered agent but this is an easy requirement to meet. The registered agent service you’ll need can also be a law firm in Minnesota.
There are services like what we’ve talked about but if you’d prefer to have your individual or business entity setup with one of the small business owners that’s a local law firm – you can do that too. Just make sure you get the LLC owners to agree on having a registered agent because it’s a requirement for your business.
Prepare and File Articles of Organization
After you have gathered all of the information needed to form your LLC, it’s time to start the filing process with the state by preparing and submitting your Articles of Organization.
The Articles of Organization is a simple one-page document that includes:
the LLC’s name and address
the names and addresses of the members
the LLC’s registered agent and their address
the LLC’s purpose
the date that the LLC will dissolve (if applicable)
the signature of the organizer
You can find a copy of the Articles of Organization on the Minnesota Secretary of State website.
You will need to include a check or money order for this amount made payable to the “Secretary of State” with your Articles of Organization. You can also submit your Articles of Organization online but there is an additional $10 fee for this service.
Once you have completed and signed your Articles of Organization, you will need to submit them to the Minnesota Secretary of State along with the filing fee.
Create an operating agreement
An operating agreement is not required in the state of Minnesota but it’s a good idea to have one.
This document outlines the ownership and operating procedures of your LLC.
It should include:
- the names and contact information of the members
- how the LLC will be managed
- the percentage of ownership for each member
- the voting rights of each member
- the duties and responsibilities of each member
- what will happen if a member leaves the LLC
- how new members can be added to the LLC
The operating agreement is an important document because it can help prevent disagreements between the members down the road. It’s also a good way to set up the LLC so that it’s run in a professional and organized manner.
When you setup a Minnesota Limited Liability Company this is one of the most important documents because it will help you with keeping track of your personal assets and if you have multiple LLC members, you’re going to want to have this on file with your business accountant or just wherever you’re going to keep your Minnesota LLC documents.
There are many ways to keep track of operating agreements and technically I don’t think it’s legal documents but if you are going to conduct business as a Minnesota LLC – you’re going to need this.
You can find a template for an operating agreement on the Minnesota Secretary of State website. You can also use a Minnesota LLC registered agent to help you through one of the services I’ve recommended earlier.
Get an EIN
The next step is to obtain an Employer Identification Number (EIN) from the IRS. This is a nine-digit number that is used to identify your business for tax purposes.
You can apply for an EIN online, by fax, or by mail. If you apply online, you will receive your EIN immediately. If you apply by fax or mail, you should receive your EIN within four weeks.
You will need an EIN to open a business bank account and to file your taxes.
There are a variety of reasons why a Federal Tax Identification Number is so important, a few of the reasons are to keep track of these items:
- Collect Sales Tax
- Federal Taxes
- Business Transactions
- Business Expenses
If you’re going to hire employees and looking for any business advice, I’d highly recommend you make sure you’ve setup the right tax structure and organized your business by having this number.
Open A Business Bank Account
Now that you have your EIN, you can open a business bank account. This will help you keep your personal and business finances separate. It will also make it easier to track your business expenses.
When you’re ready to open a bank account, you’ll need to take your Articles of Organization and your EIN to the bank. The bank will use these documents to verify that you are authorized to open an account in the name of your LLC.
Some banks will require that you deposit a certain amount of money into the account when you open it. This is typically a small amount, such as $50.
I’d recommend you setup an account with Novo.co. It’s a bank that could also help you find a business credit card and make sure you’ve filed online for it. It’s an online business account to help you even if you have more than one member to the business that needs to sign up. This will also work for single member LLCs so if that’s you – go get an account with them.
Get Small Business Insurance
The next step is to get small business insurance. This will protect your business from lawsuits and other financial damages.
There are a variety of different types of insurance available, so you’ll need to do some research to determine which type is right for your business. Some common types of business insurance include:
- Product liability insurance
- Professional liability insurance
- Property insurance
- Workers’ compensation insurance
You can get a quote for small business insurance from Commercial Insurance.
Get a Business License
The next step is to apply for any licenses and permits that you need. Depending on the type of business you are running, you may need to get a local, state, or federal business license.
You can find out what licenses and permits you need by contacting your city or county clerk’s office or by visiting the U.S. Small Business Administration website.
File an Annual Report
The final step is to file an annual report with the Minnesota Secretary of State. This report is due on the anniversary of the date that your LLC was formed.
The report must include:
The name and address of your LLC
The names and addresses of your LLC’s members and managers
The name and address of your LLC’s registered agent
You can file your annual report online, by mail, or in person. The filing fee is $35.
Pay Annual Taxes
If you have any employees, you will also need to pay annual taxes. The Minnesota Department of Revenue will send you a tax return form each year. This form must be filed by April 15.
The tax rate for LLCs is 9.8%. This tax is imposed on the LLC’s gross income.
Congratulations! You’ve now completed all the steps necessary to form your LLC in Minnesota!
Now that you’ve formed your LLC, it’s time to start thinking about how you’re going to grow your business.