It’s time to get your Minnesota business off the ground. If you want to learn how to form an LLC in Minnesota, then this is the guide for you.
While it can seem daunting to create a new business entity from scratch, you shouldn’t be put off by the process. In this article, we’ll take you step-by-step through the process of creating an LLC in Minnesota, including what forms you need to fill in and who can help.
So if you’re ready to start your business journey, then let’s dive in.
Start By Choosing a Name for Your Minnesota LLC
The first and most crucial step of forming an LLC in Minnesota is choosing a company name. You should choose an LLC name that is easy to pronounce, remember, and related to your business in Minnesota.
The name must also comply with the general LLC naming rules in the United States and specifically in Minnesota:
- The name of your Minnesota LLC must be unique and distinguishable from other Minnesota LLCs, partnerships, or corporations
- Your Minnesota LLC name must not include words that can confuse your LLC with other business names or government agencies
- The name of your Minnesota LLC must include the word “limited liability company” or one of its acronyms, “L.L.C.” or “LLC,” often at the end
- Restricted words like banks, universities, attorneys, etc., may require additional paperwork and a licensed professional, such as a doctor, to be part of the Minnesota LLC
For a complete list of naming rules of a Minnesota LLC, you can read the Minnesota Name Availability Guidelines.
After choosing a name for your Minnesota LLC, check if the chosen name is available and not already taken by another business entity. You can do that by running a name search on the Minnesota Secretary of State website.
Secure a domain for your Minnesota LLC name.
If the name you want for your Minnesota LLC is available, you should check online and confirm if your chosen LLC name is available as a web domain.
You can also reserve your LLC name through the Minnesota Statutes Section 322C.0109. This prevents others from acquiring and using it.
Next, Hire a Registered Agent
All Minnesota LLCs must have a registered agent. A registered agent is a business entity or a person who acts as the official point of contact between your company and the state. They receive and forward legal documents, such as official government correspondence, tax forms, and service of process on behalf of your company.
The registered agent for your LLC must have a physical address in the state (a P.O. Box address is not acceptable). They must also be available during all regular working hours. While you or any member of your company can act as a registered agent, we recommend hiring one of the following professional registered agents:
ZenBusiness is one of Minnesota’s leading registered agent service providers. They act as a registered agent for over 300,000 businesses, helping them to remain compliant with state laws
For an annual fee of $199, ZenBusiness provides the following registered agent services:
- Access to a custom dashboard
- Document scanning
- Mail forwarding
- Fast turnaround
- Email notification
You can upgrade your registered agent subscription to include features like two free filling changes per year and annual report notifications. Other LLC formation services offered by ZenBusiness are annual reports, operating agreements, a domain name and website, business license reports, incorporation, and taxes and accounting.
Northwest is another popular registered agent in Minnesota. They are slightly cheaper than ZenBusiness, costing $125 per year, and you get the following registered agent services:
- Document storage
- Scanned documents
- Compliance alerts
- Pre-filled state forms
- Mail forwarding
- Annual report reminders
- Corporate Guides
- Compliance calendar
One standout thing about Northwest is that when you use their registered agent services in more than four states, you will get the services at a discounted rate of $100 per year.
IncFile is another of the top-recommended registered agent service provider in Minnesota. Its registered agent services will cost you $119 a year, and you will receive the following services:
- Automatic mail forwarding
- Access to a tailored dashboard
- Custom email and SMS alerts
- Receive all your essential legal and business correspondence promptly.
With IncFile, you get a complimentary year of registered agent services if you use the company to form your Minnesota LLC (more on that later).
File Articles of Organization
After choosing a name and hiring a reputable registered agent for your Minnesota LLC, the next step is filing an Article of Organization with the Minnesota Secretary of State. This legal document registers your business as a separate legal entity.
The simplest way to file the Article of Organization for your LLC is online via the Minnesota Corporations Business & Liens Portal. To register, you will require an active email address and an account using your LLC name. You will need to pay $155 for online filing.
If you don’t want to file your Article of Organization online, you can apply in person or by mail. If you opt for this option, you must download the Minnesota Articles of Organization and accurately fill the copy. Then, send or mail your copy in person and a money order or check for a fee of $155 (if expedited filing service in-person) or $135 for mail filing to the following address:
Minnesota Secretary of State
Business Service Department
The Minnesota Retirement Systems Building
60 Empire Drive, Suite 100
St Paul, MN 55103
Consider Creating an Operating Agreement
Like name reservation and trademarking, creating an Operating Agreement for your Minnesota LLC is not mandatory. However, there are many reasons you should consider formalizing an Operating Agreement for your LLC.
First, an Operating Agreement outlines the contract agreement between all members of the LLC. It also defines the ownership percentages for your business entity and the responsibilities and roles of each member and manager. A comprehensive Operating Agreement also protects the “limited liability” status of your Minnesota LLC. Moreover, it will help you resolve internal misunderstandings and disputes among managers and members.
To create an Operating Agreement for your LLC in Minnesota, you must provide the following information:
- The voting rights of each LLC member
- The ownership percentage for every member
- Ownership transfer, selling, and buyout guidelines
- Profit and loss sharing scheme among members
- Core roles, duties, and responsibilities of each member
Obtain Relevant Licenses and Permits
To operate your LLC in Minnesota, you must comply with all the state, federal, and local government regulations by obtaining all the relevant licenses and permits.
Therefore, we recommend visiting the Minnesota Department of Revenue to apply for the relevant seller’s license and permit.
You may also require additional licenses and permits depending on the location and type of your business. We recommend using the Minnesota Department and Labor License and Registration Lookup tool to determine the permits and licenses necessary for your Minnesota LLC.
Sign Up for Federal and State Tax IDs
The next step in forming your LLC in Minnesota is to acquire a Federal and State Tax Identification Number, also called an Employee Identification Number (EIN).
The IRS issues Federal and State Tax IDs and uses them to track your LLC’s tax reporting. For instance, you will need a Federal and State Tax ID for the following reasons:
- To hire employees
- To open a business bank and credit account
- For tax purposes
Acquiring a Federal and State Tax ID is free and straightforward. You just need to go to the IRS website and fill out the form.
One of the things you must have to acquire a Federal and State Tax ID is an ITIN (Individual Taxpayer Identification Number or your personal SSN (Social Security Number). If you do not have either of the two numbers, you will be required to jump through several hoops to obtain your Federal and State Tax ID.
Next, Open a Business Bank Account
After forming your Minnesota LLC, you will need to open a separate bank account for your business. This helps distinguish personal finances from business revenues and profits. Opening a business bank and credit account for your LLC will also assist you in tracking your business’s cash flow, investments, expenses, and tax deductions.
To open a business bank and credit account for your Minnesota LLC, you will need the following documents:
- An Operating Agreement for your LLC
- An Article of Organization
- Federal and State Tax ID
If you are unsure about the best Minnesota bank to open an account with, consider the following:
Now Purchase Minnesota Business Insurance
Purchasing the relevant business insurance policies for your Minnesota LLC is essential. Think about the insurance type you may require for your Minnesota LLC before purchasing a policy.
The most common insurance coverage policies in Minnesota are:
- General liability insurance
- Commercial automotive insurance
- Workers’ compensation insurance
- Commercial property insurance
- Professional liability insurance
- Business income insurance.
Get a range of competitive quotes for business insurance by using a comparison site like Insureon.
Speed Things Up With an LLC Formation Package
If you don’t have time to go through the steps of forming your Minnesota LLC on your own, consider buying an LLC formation package to speed up the process.
For example, LegalZoom offers both premium and free LLC formation packages. Their Basic pricing plan is entirely free, and it includes a business name check, a digital welcome packet, a customizable website, and an Article of Organization. You only need to pay the state filing fee.
If you need more features, you can buy their Pro package at $249 per year. In return, you will get the Basic Plan perks plus phone consultations, operating agreements, EIN, and customized guides depending on your industry and location.
Moreover, they have a Premium package that costs $299 per year. This package will give you access to all the Basic and Pro perks, plus hands-on guidance and unlimited guidance from professional business attorneys.
Some companies, such as IncFile, offer LLC formation services, such as registered agent, EIN, and personalized business contract templates, free of charge. You will only be required to cover the state fees.
You may also want to consider Northwest and ZenBusiness. Their appealing LLC formation packages will walk you through all the essential Minnesota LLC formation steps, only at $225 and $199, respectively.
FAQs About Forming an LLC in Minnesota
How Long Will It Take to Form My Minnesota LLC?
Mail approvals for your Minnesota LLC will take three to four weeks. This accounts for 11-12 working days. However, Article of Organization filing online will be processed immediately.
How Much Does It Cost to Set Up an LLC in Minnesota?
It costs $155 to set up an LLC in Minnesota. This is the fee paid to file your Article of Organization.
Can I Act as my Own Registered Agent in Minnesota?
Yes. You can appoint yourself as a registered agent for your Minnesota LLC as long as you have a permanent physical address in Minnesota and are available to receive and send compliance documents during regular business hours.
Can I Form a Single-Member LLC in Minnesota?
Yes. You can form a Single-member LLC under the Minnesota laws. The steps involved are similar to what we have covered in this article.
Launch Your Minnesota Business Today
While there are some steps you must follow diligently to form an LLC in Minnesota, the process is fairly straightforward.
However, if you don’t have time to form a Minnesota LLC on your own, you can hire a professional LLC formation service provider, such as ZenBusiness, IncFile, Northwest, and LegalZoom, to complete the process.
Best of luck in your endeavors!