If you have your business plan ready before you submit, the registration procedure for a Minnesota LLC is simple, so don’t let it overwhelm you. To register your LLC, follow these instructions step-by-step and refer to the frequently asked questions section. It’s simple in Minnesota. We’ll address frequently asked issues regarding LLC costs and what it means to run a foreign LLC in Minnesota before moving on to the LLC creation process.
Pros and Cons of Forming an LLC in Minnesota
Pros
- Minnesota offers strong limited liability protection for LLC members
- LLCs in Minnesota have flexibility in their management structure and operational procedures
- Minnesota doesn’t impose income tax on traditional LLCs
Cons
- Minnesota requires LLCs to pay annual renewal fees and file an annual report with the Secretary of State’s office
- Minnesota imposes a franchise tax on LLCs based on their income, which can be a significant financial burden for LLCs with higher earnings
How to Set Up an LLC in Minnesota: 6 Steps
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.
1. Name Your Minnesota LLC
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:
- Must include either “Limited Liability Company” or “LLC”
- Must be distinguishable from other business names
- Can’t contain words or phrases which are misleading about the type of services you offer
- Must be in English or using English letters or characters
- Can’t contain “corporation,” “incorporated” or similar terms
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
Do I Need to Reserve My LLC Name?
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.
2. Find a Registered Agent
After settling on a name, you must choose the address for formal communication representing your company. This is referred to as appointing a “registered agent,” and it requires a physical location in Minnesota—not a P.O. box. Locating a registered agent for your Minnesota LLC is easy: There are a plenty of results for reasonably priced registered agent services when you search online. There are annual costs as little as $49 in some cases.
Minnesota does not always need the name of an agent, but you are welcome to supply one. All that is needed is a registered address. All business hours must be able to access the address.
Can I Be My Own Registered Agent?
It is possible for you to act as your own registered agent. Nonetheless, a lot of business owners feel that having the paperwork received, scanned, and sent electronically by a registered agent organization is more convenient. In this manner, you won’t have to worry about missing work or getting served with court documents in front of clients.
3. File Articles of Organization
The main course of action in the filing procedure is this phase. The information above is contained in your Minnesota LLC articles of organization, along with the name and contact details of at least one LLC organizer.
A voluntary version that may be shared with the public, the Minnesota Business Snapshot, is also included in this document. It inquires about the following details regarding the company you want to register:
- How many full-time workers do you currently have in Minnesota?
- Which North American Industry Classification System (NAICS) code best characterizes the business (if multiple codes apply, select the one that better describes the source of the most revenue)?
- Whether any members of the LLC identify as women, people of color, veterans, people with disabilities, or immigrants.
- Whether the person in charge of operations works on the business full-time or part-time; what range the LLC’s gross revenue for the previous year falls into; and whether to keep the signed original copy for your records.
- You can also submit a high-quality photocopy of the document to the Secretary of State via mail ($135), in person ($155), or online.
Can I Set Up a Non-Profit LLC?
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.
Can I Set Up a Professional LLC in Minnesota?
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:
- Accounting
- Architecture or landscape architecture
- Certified interior design
- Chiropractic medicine
- Dentistry or dental hygiene
- Engineering
- Geoscience
- Law
- Medicine and surgery, including physician assistants and podiatric medicine
- Optometry
- Pharmacy
- Psychology, including marriage and family therapy
- Registered nursing
- Social work
- Surveying
- Veterinary medicine
Where Can I Find Help Preparing My Articles of Organization?
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.
4. Create an Operating Agreement
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.
Why Do I Need an Operating Agreement?
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.
5. Request a Federal Tax ID Number
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.
Do I Need an EIN If I’m the Only Member of My LLC?
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.
6. File an Annual Report
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.
What if I Forget to File My Annual Report?
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.
What Other Obligations Do I Have After Registering My LLC?
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.
How Much Does it Cost to Set Up an 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:
| Document | Mail-In Fee | In-Person or Online Fee |
| Articles of Organization for Domestic LLC | $135 | $155 |
| Name Reservation/Renewal of Name Reservation | $35 | $55 |
| Amendment to Articles of Organization | $35 | $55 |
| Certificate of Authority for Foreign LLC | $185 | $205 |
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.
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What’s a Foreign LLC?
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.
The Bottom Line: Forming an LLC in Minnesota
Forming an LLC in Minnesota is a fairly straightforward process that can be completed in just a few steps. Consider exploring the leading LLC formation services which can further streamline starting your business.
Ready to Form Your Minnesota LLC?
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.
Frequently Asked Questions: Minnesota LLC Formation
What is the cost of forming an LLC in Minnesota?
It costs approximately $135 to officially file your LLC in Minnesota. Additionally, Minnesota imposes annual renewal fees and filing fees based on your LLC’s annual revenue. The renewal fee varies, and the filing fee depends on your LLC’s revenue, so the exact cost can differ from one business to another.
What is the Minnesota Annual Renewal?
The Minnesota Annual Renewal is a requirement for LLCs to file an annual renewal with the Secretary of State’s office. The renewal includes updated information about your LLC, such as its current address and management details. The cost of the renewal filing varies based on your LLC’s annual revenue. Failure to file the annual renewal and pay the associated fee can result in your LLC falling out of good standing with the state.
Do I need an operating agreement for my Minnesota LLC?
While Minnesota doesn’t legally require LLCs to have an Operating Agreement, having one is highly recommended. An operating agreement is a crucial internal document that outlines how your LLC will be managed and how decisions will be made. It can help prevent disputes among members and provide clarity on the operation of your business.
