Starting an LLC in Minnesota requires filing the articles of organization with the Secretary of State. The cost of filing the documents is $155. Once the Secretary of State accepts the articles, your Minnesota LLC comes into existence.
The process is fairly simple and straightforward. However, there are a few necessities to handle so that the LLC gets approved without a hitch. These formalities are relatively easy to handle and some due diligence can save you a lot of trouble.
This quick guide takes a look at how to form a Minnesota LLC. We’ll also look at some of the important steps to take after you’re done setting up your LLC.
1. Choosing A Name For Your MN LLC
The name is the biggest identifier of your Minnesota LLC. This is the name that your company will use to reach out to potential customers. So careful thought is necessary. It’s also important to remember that a lot of companies are already registered in the state and there can’t be duplicate names.
Minnesota requires that all LLC names be unique and distinguishable upon record. This means your LLC can’t have the same or very similar name to already existing entities. These entities also include government agencies and departments. Additionally, some words might be unavailable or restricted from use in LLC names.
Once you have decided on a name for your company, you can check its availability through the Minnesota business name database. A search should give you a good idea if there are entities with same/similar names as the one you intend to use.
When going for a name reservation, it’s also useful to check the USPTO website. This way, you can avoid any possible problems with trademark infringement.
Acceptable Designators For Minnesota LLCs
Names of Minnesota LLCs should end with proper designators that identify the entity. Accepted designators for Minnesota are:
- Limited Liability Company
LLC is the most commonly used designator.
Name Reservation For Minnesota LLCs (Optional)
Minnesota allows name reservations for entities for a period of 12 months. To do this, you have to file for Name Reservation with the Office of the Minnesota Secretary of State Business & Lien system. Once the reservation period is over, you can file for a renewal for another 12 months.
The filing fee is $55 for expedited in-person filings or online filings. For filings via mail, the fee is $35. Payments via check or money order should be made payable to the MN Secretary of State.
2. Appoint A Registered Agent
Every LLC in Minnesota must have a registered agent in the state. This can be a person or entity who agrees to receive service of process on behalf of your LLC. Service of process involves receiving legal documents if your business is sued. Other aspects include receiving summons, notices, subpoenas, etc.
A registered agent may also receive general correspondence. Although, the primary reason for this requirement is to receive the service of process.
Your Minnesota LLC registered agent must have a physical street address in the state. PO Box addresses or similar aspects aren’t accepted. Additionally, the registered agent should be available during normal business hours so they can receive service of process (if necessary).
So, your registered agent can be:
- Any person who is a full-time resident of Minnesota
- A domestic company that has its main office in Minnesota
- A foreign business entity that is allowed to do business in Minnesota and has a physical office address
Mostly, people choose to go with commercial registered agents. These are business entities that agree to serve as the Registered Agent for your LLC. Since they can easily fulfill the requirements of registered agent responsibilities, they’re often a useful pick.
3. How To Form A Minnesota LLC – Articles Of Organization
Filing your Minnesota Articles of Organization is the biggest step to forming your LLC. These documents are filed with the Secretary of State. Your LLC comes into being once the Articles of Organization are approved by the SOS.
Articles of Organization can be filed online, via mail, or through walk-in.
To file Minnesota Articles of Organization online, you can visit the portal on the SOS website.
Filings via mail or in-person require downloading and completing the Articles of Organization.
The filing fee for online and in-person submission is $155. If submitted via mail, the filing fee is $135. Postal mail filings should include a check or money order for the filing fee. These should be made payable to the Minnesota Secretary of State.
The office address if you choose to walk-in or mail the form is:
MN Secretary of State
60 Empire Drive
Saint Paul, MN 55103
Processing time for filing Articles of Organization via mail is 4-7 business days. Online filings are processed near-instantly. Walk-in filings too have a quick turnaround. Online is the recommended method due to faster processing and easier handling.
Once the Articles of Organization are approved, you’ll receive a stamped copy of the approved Articles, an acknowledgment letter, and a Certificate of Organization.
4. Get An Operating Agreement For Your MN LLC
An Operating Agreement is not required by law in Minnesota. However, it is a key internal document that remains highly advisable for an LLC. As an internal document, the Operating Agreement doesn’t need to be filed with the Secretary of State or any other government agency. However, you (and other LLC members, if applicable) should keep an agreement.
Several facets of your business and Minnesota LLC can be touched in the operating agreement. These include roles and responsibilities of each member, how much of the LLC is owned by each member, approach to taxation, hiring policy, dispute resolution, and other operational aspects.
While the importance of an Operating Agreement for multi-member LLCs can’t be overstated, it remains important for single-member LLCs too. At the very least, it shows that your LLC is truly a separate entity and is being governed and run properly.
5. Getting An EIN Or Federal Tax ID
Once your LLC is approved by the secretary of state, you should move to get an EIN (Employer Identification Number). You can get this number by filing with the IRS. There is no filing fee.
The easiest way is to file for EIN online. However, in case you can’t file online, you’ll have to download and fill Form SS-4. Once completed, you can mail or fax this form to the IRS. Form SS-4 is applicable for several instances, including when the LLC is owned by another business entity, or if the applicant doesn’t have an SSN.
Having an EIN makes it possible for your business to have its own bank account and credit cards. It’s practically necessary if you intend to hire employees for your Minnesota LLC. Several other aspects, including tax requirements, come into play.
6. File Minnesota LLC Annual Renewals
All LLCs in Minnesota must submit an Annual Renewal to the MN Secretary of State. Annual Renewals must be filed every calendar year before December 31.
Annual Renewals can be filed online or via mail after downloading and filling a form. There is no filing fee for LLCs that are active and in good standing with the Secretary of State. Nevertheless, LLCs that have been dissolved by the state will need to pay a fee if they wish to be reinstated.
7. Business Permits, Licenses, And Taxation
Your LLC might need various business licenses or permits to continue its trade/activities. These are generally dependent on the industry of your business and local laws set forth by the city/county of operation. You’ll have to check with local administration to make sure you’re in the clear where local permits, licenses, and taxation are concerned.
State taxes may vary by the industry of your business. However, depending on your business, you might also have to pay Sales Tax or similar requirements. In such cases, you’ll have to register with the Minnesota Department of Revenue.
For the purpose of federal taxation, LLC get pass-through taxation by default. In these cases, the profits of your LLC are added to your returns filed with the IRS. It’s also possible to structure your LLC in a way that it gets taxed as an S-corp or C-corp. This will change tax requirements.
As with any business, careful planning of your tax responsibilities is important. You’ll also have to stay on top of not just federal requirements, but also local and state tax laws and licensing requirements.