How To Start An LLC In Minnesota 

This step-by-step guide teaches you everything you need to know to start a thriving LLC in Minnesota. Read on if you want to form an LLC.

Start An LLC In Minnesota

Many people want to know how to start an LLC in Minnesota for free. While starting one isn’t expensive, there are a few fees involved and certain steps to take. Unfortunately, you can’t start an LLC in Minnesota for free. 

In this article, you learn everything there is to know about starting an LLC in Minnesota. This includes what to do before setting things up, the cost, and the steps to take. Let’s get started!

But first, let’s compare Minnesota to its neighboring states as a place to start an LLC.

StateMinnesotaWisconsinIowaSouth DakotaUS Average
Population5,707,3905,895,9083,190,369886,6676,619,825
LLC Filing Fee$155$130$50$150$130.38
LLC Annual/Biennial Fee$0 (however, an information report must be filed every year)$25 (every year)$45 (every 2 years)$50 (every year)$89.34 (every year)
Corporate Tax Rate9.80%7.90%5.5-9.8%0%*5.60%
Nominal GDP per capita$72,187$62,065$68,849$68,357$64, 773.08

Before You Set Up An LLC In Minnesota

Creating an LLC in Minnesota isn’t hard, but it takes some time and organizational skills. Therefore, it’s best to read through this guide before setting things up. You should also find out what business licenses and permits you require.

Some businesses, such as restaurants, require health, signage, and building permits. These vary based on the company and state.

To determine which licenses and permits your LCC requires, here are a few resources:

How Much Does It Cost To Start An LLC In Minnesota?

While everyone wants to find out how to start an LLC in Minnesota for free, certain fees are required.

Generally, the only cost associated with starting an LLC in Minnesota focuses on filing the Articles of Organization. You must pay the Minnesota Secretary of State, and that price is $155 online. However, you get a slight discount if you send the information by mail ($135).

You may also want to hire a registered agent service to ensure compliance. It also reminds you about filing deadlines to help you avoid late fees. There are many options, and ZenBusiness starts at $99 plus state fees.

Those are the most important costs associated with creating an LLC in Minnesota. However, there are other filing costs to consider, such as:

  • LLC Name Reservation – You can reserve your company name for 12 months before formation by paying $55 and filing the Request for Reservation of Name.
  • DBA Name – The “Doing Business As” name could be different than your LLC company name. File the Certificate of Assumed Name and then pay the $50 filing fee.
  • Get Certified Copies – You can request certified copies of your business documents. Go through the Secretary of State in Minnesota and pay $8 per item.
  • Good Standing Certificate – The Minnesota Certificate of Good Standing might be helpful. You can get it by paying $15 to the Secretary of State. Many lending institutions and banks require it.

Overall, you need to know how much to start an LLC in Minnesota. Expect to pay $155 to file the Articles of Organization. Those who want a registered agent can spend anywhere from $39 to $99 for that service.

With the other costs included, expect to pay around $322 at the low end and up to $500 at the high end

Steps To Start An LLC In Minnesota

Steps To Start An LLC

Now that you know the basics, forming an LLC in Minnesota doesn’t seem that difficult. To make it easier, follow this step-by-step guide. It includes everything you require!

1. Pick A Name For Your LLC 

The first thing to do is choose a company name. It needs to comply with Minnesota’s naming requirements and be searchable by potential customers. Here are a few guidelines to consider:

  • The business name must include “limited liability company” or an abbreviation (LLC).
  • Names can’t include words that might confuse the LLC with a government agency (State Department, Treasury, FBI, etc.)
  • Restricted words (university, attorney, bank, etc.) might require more paperwork. A licensed individual (lawyer or doctor) might have to be part of the LLC.
  • The name has to be distinguishable from other limited partnerships, limited liability partnerships, corporations, and LLCs.

It’s important to make sure that your preferred name is available in the state. Use the Business Entity Search option on the Secretary of State’s website to check.

You should also check to see if the business URL you want to use is available. While you might not create a website immediately, it’s best to buy it now so that others can’t acquire it.

2. Find A Registered Agent In Minnesota

A registered agent is the business entity or individual receiving your lawsuit notices, official government correspondence, legal documents, and tax forms. In a sense, this is the point of contact for the state.

Do You Need a Registered Agent in Minnesota?

You must nominate a registered agent for your Minnesota LLC. It could be yourself or some other individual within the company. 

However, the person must be a resident of the state. If you choose a corporation, such as a registered agent service, it must be authorized to conduct business in the state.

There are many registered agent services available. ZenBusiness is a great choice because you get the first year free (with your LLC formation). Then, it’s only $99 per year.

ZenBusiness – $49 + state fees to register your LLC (read review)
Incfile – $0 + $50 state fees to register your LLC (read review)

3. Articles Of Organization 

You must file your Articles of Organization to register the LLC. Apply online with the Minnesota Secretary of State or do it by mail or in person. This costs $155 if you do it online or $135 by mail or in person.

Those who want to expand an existing LLC into Minnesota should file a Foreign LLC online or by mail.

Articles Of Organization 

4. Other Required Documents

Depending on your business type and area, you may need state and local business licenses. Check with the city clerk in the LLC’s location to determine if you require them.

State license information can be found through the ELicensing Portal on the Secretary of State’s website.

Companies that collect sales tax should register with the Minnesota DOR (Department of Revenue).

5. Operating Agreement

Minnesota LLCs aren’t required to have operating agreements, but it’s good practice. This legal document outlines the operating procedures and ownership of the limited liability company.

When you have a comprehensive operating agreement, it ensures that the business owners are on the same page. This reduces future conflict for everyone involved.

6. Get An EIN

An EIN  is the nine-digit Employer Identification Number given to you by the IRS (Internal Revenue Service) to identify businesses solely for tax purposes. In a sense, it’s like a Social Security Number for companies.

Sometimes, it’s called an FTIN (Federal Tax Identification Number) or a FEIN (Federal Employer Identification Number).

You require an EIN to:

  • Hire employees
  • File state and federal taxes
  • Open your business bank account

If you have a sole proprietorship currently, you must get a new EIN to convert it to an LLC. Receive the number from the IRS online or by mail/fax.

The Forms You Need To Register An LLC In Minnesota

 Here are the forms needed to create an LLC in Minnesota:

Did You Know?

An LLC is the most popular legal structure in Minnesota. It protects the corporation and personal assets of all members and offers excellent flexibility. They’re often the same price as a corporation, but they’re easier to set up.

LLC Taxes In Minnesota

LLC owners must file state and federal taxes in Minnesota. Typically, each person files separate state taxes, and the business files federally together.

Federal taxes are paid to the IRS from each individual member. They’re similar to traditional returns. However, state taxes are slightly different. Every person listed in the LLC as a member must file state tax returns.

Minnesota also charges a fee for doing business in that state, which must be paid each year. Members must also pay sales tax and employer taxes.

The corporate tax is 9.8 percent of the taxable income, but additional taxes can apply. However, the sales tax is based on the county or municipality in which you do business.

Corporate Tax Rate

Is Minnesota A Good Place To Start An LLC?

Yes, Minnesota is seen as a decent place to start your LLC because there are few tax demands compared to other states.

How Long To Form An LLC In Minnesota

It can take a few weeks to file the necessary documents, but it takes about six months to form an LLC in Minnesota. 

That gives you time to get everything organized, send in the right documents, and more.

How Much Does It Cost To Run An LLC In Minnesota?

The only cost associated with running an LLC from the state’s point of view is the Annual Renewal report. You pay $45 for that. 

However, you’ve got to think about the utilities, building rent, and other costs tied to running your business. 

What To Do After Formation?

Starting and registering your LLC is just the beginning. Here are a few things people should focus on once it’s formed:

  • Create a LogoYou need something that reminds people of you when they see it.
  • Build a Website or eCommerce Store – Creating a website helps you stay open 24/7.
  • Bank Account – You need a business bank account to keep your finances separate from that of the LLC.
  • Business Insurance – Most companies need insurance to protect themselves from liability.
  • Annual Reports – Generating annual reports is crucial for the shareholders and other members.

It’s important to ensure that you’ve got everything necessary for the business to run smoothly!

Resources To Start A Successful LLC In Minnesota

Here is a list of all the resources you require to start an LLC in Minnesota:

How To Dissolve An LLC In Minnesota

If you no longer want to own the LLC, you should officially dissolve it. Otherwise, you might run into legal trouble or be required to pay penalties. 

Make sure that you close all of your business tax and bank accounts and file a Minnesota Articles of Dissolution document.

Conclusion

You learned how to start an LLC in Minnesota, including the steps to take and the associated costs. 

Plus, you got a crash course in taxes. Use these resources to make a name for yourself in the business world.

Frequently Asked Questions (FAQ)

Typically, the only fee associated with it is the Articles of Organization ($155). You may want to hire a registered agent, which ranges from $99 to $200. You might have other costs involved depending on the type of business.

Creating an LLC in Minnesota is a simple process, but it takes time. Generally, you should: Name the LLC Choose a registered agent (even if it’s you) File your Articles of Organization Create your Operating Agreement Get an EIN Once it’s formed, you have other things to think about, such as your business website, logo, and marketing efforts.

Forming an LLC in Minnesota often takes time. Generally, the processing time (both online and mail) takes one to two weeks. It generally takes about eight hours to complete all the paperwork needed. However, you might need a few hours for research, such as reading this guide and checking to see if your business name is available.

LLCs must file tax returns at the state and federal levels. Generally, you report your income to the IRS with the partnership return form if you have multiple members or the 1040 Schedule C form if you’re a single-member LLC. State taxes can be a bit more confusing. Depending on your business, you may have multiple state tax options, such as: Minnesota sales tax Minnesota employer taxes (withholding and unemployment insurance)

The LLC is only good for one year in Minnesota. Therefore, you must file a Minnesota LLC Annual Report every year, either online or by mail.

Yes, Minnesota requires a registered agent, but you can be your own. Otherwise, you might want to consider a registered agent service, such as Zen Business.

Author

Matija

Matija

Amazing content is the core of what we do. With more than 5 years of experience in branding, name development, and business, Matija helps create and manage content production.

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