How to File an LLC in Minnesota

Starting a small business in Minnesota is easy in theory. But you can run into many filing issues if you don’t know how to handle the paperwork. And one of the most significant filling concerns is about the type of business you want to start.

A Minnesota LLC can be your best option when committing to a business entity type. This article explains the LLC structure and the five steps you must take to create yours.

Key Takeaways

• Filing an LLC in Minnesota can be the best option for entrepreneurs looking to form an official business structure. LLCs provide flexibility and liability protection that combines the best parts of sole proprietorships and S and C corporations.

• Minnesota allows prospective business owners to reserve a business name for up to 12 months, unlike many states that cap reservations at 120 days. 

• While not required by state law, an LLC operating agreement is strongly recommended as a document that can help define operational and management structures.

What Is LLC Formation?

According to the Minnesota Secretary of State, a limited liability company or LLC is a business structure with elements from general partnerships, sole proprietorships, and corporations. It’s defined by its flexible management style and increased liability protection.

But what does that mean?

In essence, a Minnesota LLC gives owners nearly full autonomy over how to run their business. That means you control the management structure and how the company functions. This differs from having an S corp or C corp, which must adhere to many state regulations.

Moreover, LLC formation grants better liability protection than sole proprietorships and general partnerships. Your assets are protected against the majority of business-related bankruptcy and legal actions.

An LLC may still lack some liability protection in particular scenarios. And despite the overall freedom of using an LLC formation, there are still several rules to follow:

• You must pay sales tax if the business sells or leases tangible services and products

• You must file relevant documents to form your LLC

• You must pay the state fees for an LLC formation

• You must name and maintain a registered agent or service to process your legal documents

• You must file the annual report and pay the associated filing fee

• You must pay the state-mandated graduated fee for doing business in Minnesota if you exceed the $500,000 threshold on payroll, sales, or in-state property

• Your business name must contain the term “limited liability company” or one of its accepted abbreviations

An LLC business structure may not offer complete freedom, but the regulations are nothing to fear.

Who Should Form an LLC?

Forming an LLC is a consideration for owners who want to limit personal liability risks. It can protect various personal assets like homes, vehicles, and others from legal recourse.[1]

Small business owners may look at an LLC structure instead of going the corporate route. The extra level of control can help determine who can manage and invest in the business. This is usually done using an LLC operating agreement.

Lastly, business owners fearful of hostile takeovers can form an LLC. Under this structure, owners don’t have to distribute shares. Therefore, investors can’t acquire control from under the business founder.

Step-By-Step Guide To Starting Your Minnesota LLC

Minnesota, like most states, has different rules and forms when it comes to creating an LLC. Your LLC formation process also comes with specific filing fees. But the following step-by-step process will help you set up a Minnesota LLC.

Step 1: Choose a Business Name for Your LLC

Choosing a name for your LLC isn’t as easy as you think. It’s a time-consuming part of creating and incorporating an LLC in Minnesota and any other state. And there are two reasons for that.

First, your LLC name is connected to your branding and marketing. The name must resonate with your target audience and look great on marketing materials, logos, business cards, etc.

Secondly, your business name can’t be the same as another company operating in Minnesota. Therefore, it’s essential to consider the legal aspect of naming your LLC. The Secretary of State prohibits businesses from confusing customers or infringing on another LLC’s trademark. 

Fortunately, this four-stage naming process will help you avoid typical business naming issues.

Stage 1 — Run a Name Search

A name search is necessary when you have a few business names in mind. The Minnesota Secretary of State Search Business Filings service is an excellent way to identify other companies with a similar name in the state.[2]

The only downside is that you can’t search for a “doing business as” name (DBA). The online database only contains LLC names, not trade names and fictitious names. And those search restrictions can create issues with trademarks.

Therefore, you must also run a name search using online search engines. That’s the fastest way to find the names of sole proprietorships, DBAs, trade names, and so on. After you do your due diligence, you can move to the next stage.

Stage 2 — Get an Online Domain Name

Securing your domain name is the ideal next step after confirming the availability of your business name. Every modern business needs an online presence, from a small LLC to a large corporation. Thus, it would be best to have a domain name and a website to promote your business, communicate with customers, etc.

Moreover, customers tend to do their research on companies and brands. If they can’t find you online, they might not be inclined to buy your products and services. But you can’t create a website without a domain name relevant to your LLC name.

Here are the fastest ways to find the availability of your preferred domain name:

• Use your favorite browser to type a domain name and find exact matches or similar results

• Use a domain name registrar to see if the domain name you want is available

To speed up the process, use a registrar. That way, you can quickly buy the available domain name once you find it.

You could also buy a taken domain name from its owner, but that is often much more expensive than getting an available name. You can save thousands of dollars, if not more, by not transferring a used domain name.

Stage 3 — Reserve Your LLC Name in Minnesota

The name availability issue isn’t wholly solved just because there isn’t another company with your LLC name operating in the state. When you have everything ready and can file the Articles of Organization, someone else might use your LLC name.

You can reserve your chosen business name and ensure your LLC can use it. Name reservations are temporary and last 12 months. For this, you must file the Name Reservation – Original Filing form with the Minnesota Secretary of State.[3]

There’s a $55 filing fee if you upload the document online or deliver it in person. However, you only pay $35 when submitting the business name reservation paperwork by mail. You can send your file to the following address:

Minnesota Secretary of State – Business Services

First National Bank Building

332 Minnesota Street, Suite N201

Saint Paul, MN 55101

Note that Minnesota is one of the few states that let you reserve a name for more than four months. And while doing this isn’t mandatory to form your LLC, it prevents someone else from stealing your business name if you aren’t ready to file the Articles of Organization.

Stage 4 — File Trademarks

Your business name doesn’t have a lot of protection after you form your LLC. Therefore, filing trademarks is crucial for having legal protection. You can file trademarks on the business name, trade names, and various marks relevant to your brand and company.

Once you have trademarks, you can contest any unauthorized use of identifying marks or similar marks in a court of law. The Minnesota Trademark, Service Mark, Certification Mark, or Collective Mark application costs $50 in state filing fees when submitted by mail.[4]

Suppose you’d prefer to submit your paperwork by mail, online, or request expedited processing. In that case, you’ll need to pay $70 in state fees instead. You can use the following address when submitting the paperwork:

Minnesota Secretary of State — Business Services

First National Bank Building

332 Minnesota Street, Suite N201

Saint Paul, MN 55101

This is an essential legal document to obtain during your LLC formation.

Step 2: Fill Out Minnesota Articles of Organization

Suppose you have a reserved business name, a domain, and trademarks. In that case, you should be ready to file the Articles of Organization. The process differs depending on the type of LLC you want to create. Likewise, the filing fee varies between a foreign LLC and a domestic LLC formation process.

But regardless of your entity type, you can send all documents to this address:

Minnesota Secretary of State — Business Services

First National Bank Building

332 Minnesota Street, Suite N201

Saint Paul, MN 55101

Filing for a Domestic LLC

If you’re a Minnesota resident looking to file an LLC in the state, you’re forming a domestic LLC. You must fill out and file the Minnesota Limited Liability Company Articles of Organization form and pay the associated filing fee. The fee is $155 for online filings and expedited processing for in-person submissions.

You only pay $135 if you send the document via mail. Fortunately, the paperwork is self-explanatory and isn’t difficult to complete. Here’s some of the information requested by the Office of the Minnesota Secretary of State to form your LLC:[5]

• Payment details

• Your LLC name

• The registered agent’s street address, contact information, and name

• The registered agent’s signature

• Your company’s mailing address

• Email address for future follow-ups

• Information on employees and gross revenues

• NAICS codes

Filing for a Foreign LLC

If you’re an out-of-state entrepreneur looking to file an LLC in Minnesota, you’re starting a foreign LLC. You can’t file Articles of Organization. Instead, you must file the Certificate of Authority to Transact Business in Minnesota.[6]

This form incurs a $185 fee for mail submissions and $205 in state fees for in-person and online filings. But it’s important to understand that the extra cost also factors in an expedited service. Getting your authorization quicker is worth the additional $20.

Here is some of the information requested in the form:

• Company’s legal name

• Alternative LLC name used in Minnesota

• Home jurisdiction information

• Registered agent and registered office information

• Principal business address

• Employee and gross revenue information

• NAICS codes relevant to your business

The formation document is essential for any foreign entity to do business in Minnesota, whether it’s an international company or from a different state. It’s worth noting that, unlike other states, the Minnesota Secretary of State doesn’t ask for a Certificate of Good Standing or annual report for a foreign LLC business formation application.

Step 3: Hire a Minnesota Registered Agent

Every LLC must have a registered agent, resident agent, or statutory agent. The Secretary of State won’t allow a Minnesota LLC to operate without electing and maintaining a registered agent. Luckily, you can choose between individuals and business entities to represent you.

Here are the critical duties a registered agent performs for your company:

• Receive, sign, and process legal documents like service of process for your LLC

• Keep regular business hours to ensure you get legal correspondence in a timely fashion

• Maintain a registered office in the state and use a physical mailing address

It’s also worth knowing that LLC owners can name themselves as registered agents in the Articles of Organization.

Should You Be Your Own Registered Agent?

Owners serving as registered agents for their companies isn’t uncommon. However, hiring a registered agent service is better for several reasons:

• You don’t have to list your actual address in the public record

• Your sensitive legal documents won’t be served during client meetings

• Your foreign LLC doesn’t need to have a physical address in Minnesota 

• You can leverage their expertise to ensure your Minnesota LLC stays compliant

• You can keep irregular business hours and enjoy a flexible schedule

• You can focus on growing your business instead of paperwork

Swyft Filing’s registered agent services can help your domestic and foreign Minnesota LLC if you want a professional service provider to handle your legal correspondence. The fees start at $199 per year, not counting state fees. This service can give you the peace of mind, privacy, and compliance you need to operate in the state.

Step 4: Create an LLC Operating Agreement

After you elect a registered agent, you should draft your Minnesota LLC operating agreement. Like trademarking and name reservations, this step isn’t mandatory. However, business owners benefit from formalizing an LLC operating agreement for many reasons.

First, this legal document outlines the contract between all LLC members. It defines everyone’s roles and responsibilities and the ownership percentages for your business entity.

Secondly, your LLC operating agreement is crucial for adding more liability protection when forming an LLC. Not having a legally binding contract may subject your LLC to rules and regulations that apply to a sole proprietorship. That means creditors can go after personal assets to settle business-related debts.

Here’s what you can add to an LLC operating agreement for single-member LLCs and multi-member LLCs:

• Ownership percentages for each member

• The profit and loss distribution scheme among members

• Voting rights for each member

• Core duties for all LLC members

• Outline specific powers for particular members

• Set the buyout, selling, and ownership transfer guidelines

Formalizing an LLC operating agreement simplifies how you can structure and run a business in Minnesota. You may be subject to the state’s general business rules without it. Moreover, the contract also helps resolve internal disputes among members.

Step 5: File for an Employer Identification Number

You’re almost ready to do business with your Minnesota LLC. You have a business name, trademarks, LLC Articles of Organization or Certificate of Authority paperwork, a registered agent, and an operating agreement.

However, your business also needs an Employer Identification Number or EIN. And depending on your products, services, and area of expertise, you may need more business licenses.

Getting Your EIN

Think of an EIN as your Minnesota LLC’s Social Security number. The process for obtaining an EIN is relatively the same in all states. You must request it through the Internal Revenue Service (IRS). 

With it, you can collect employment taxes should your LLC have employees.

The IRS also uses the EIN to analyze your LLC’s income tax, federal tax, and other tax returns. Of course, other institutions also require EINs from LLCs. For example, financial institutions ask for an EIN before you can get a business bank account or business credit card.

Getting your EIN is easy and free. You can submit the application online using the IRS website. You’ll need Form SS-4. Foreign LLCs, such as international companies, can get their EIN over the phone at 267-941-1099.

Note that getting an EIN for your LLC requires you, the owner, to provide a valid tax identification number.

Getting Additional Minnesota Business Licenses

Some Minnesota LLCs fall under the Professional Firm category. You should carefully select the professional services your company is authorized to provide.

Furthermore, some locations and areas of activity can require additional licenses. You can learn all you need about licenses using the State of Minnesota Licensing portal. It has an extensive database.

Another consideration is whether to register with the Minnesota Department of Revenue or DOR. 

Registration isn’t mandatory, but you need it to sell goods, collect sales tax, and hire multiple employees.

Renewing Your LLC

Every Minnesota LLC must file an annual renewal form before December 31. It costs $25 for mail submissions and $45 for in-person and online filings. You can use the same address as for most other filings.

Minnesota Secretary of State — Business Services

First National Bank Building

332 Minnesota Street, Suite N201

Saint Paul, MN 55101

Let Us Handle Your LLC Paperwork

Entrepreneurs deal with a lot every day. Taking on additional responsibilities like the administrative work involved in forming a small business isn’t recommended. Swyft Filings can take time-consuming tasks off your plate.

Our LLC formation service in Minnesota can help you file your formation documents quickly and efficiently. So far, we’ve helped over 250,000 business entities with their business formation and online filing needs. We can help your Minnesota LLC get started in business and remain compliant.

If you want to start an LLC in Minnesota, contact the Swyft Filings team to discuss a personalized service that fits your company.

FAQs

How much does it cost to set up an LLC in Minnesota?

Articles of Organization filings cost between $135 and $155. Certificate of Authority filings for foreign LLCs cost between $185 and $205.

How is an LLC taxed in Minnesota?

Unlike in most states, Minnesota LLCs pay some fees despite being pass-through tax entities. Federal taxes still fall on the LLC members. However, the state charges a fee for doing business in Minnesota from some LLCs. The graduated fee concerns limited liability companies with at least $500,000 in sales, payroll, and in-state property.

What are the benefits of a Minnesota LLC?

A Minnesota LLC offers more personal liability protection. It also gives owners more freedom in deciding the management and ownership structure of the business.

How do you dissolve an LLC in Minnesota?

You can file a Minnesota Limited Liability Company Notice of Dissolution form. The mail filing costs $35. However, it costs $55 for in-person filing and expedited service. You can make all filings at the following address:

Minnesota Secretary of State

Business Services Retirement Systems of Minnesota Building

60 Empire Drive, Suite 100

St Paul, MN 55103

Bibliography

1. Minnesota Secretary of State. “Business & Liens – Start a Business – Types of Minnesota Businesses.” Accessed February 10, 2023.

2. Minnesota Secretary of State. “Business & Liens – Search Business Filings.” Accessed February 10, 2023.

3. Minnesota Secretary of State. “Business & Liens – Business Forms, Fees – Name Reservation.” Accessed February 10, 2023.

4. Minnesota Secretary of State. “Business & Liens – Business Forms, Fees - Trademark & Service Mark Forms.” Accessed February 10, 2023.

5. Minnesota Secretary of State. “Business & Liens – Business Forms, Fees – Limited Liability Company Forms.” Accessed February 10, 2023.

6. Minnesota Secretary of State. “Business & Liens – Business Forms, Fees – Foreign Limited Liability Company Forms.” Accessed February 10, 2023.