Form an LLC in Minnesota
Creating an LLC is an investment in yourself and in your entrepreneurial dreams. It is entirely achievable, and very much worthwhile to go into business for yourself and to pursue your passion. In Minnesota, forming an LLC is an easy but nuanced process that requires a great deal of care, but you are entirely capable of completing this process by utilizing our step by step guide.
There are tremendous benefits and clear advantages of forming an LLC that makes the process worthwhile. An LLC limits your personal liability because it is legally separate from its owners. In a sole proprietorship or a partnership, your business debts are also your personal debts and if there are legal issues your personal assets are at risk. In an LLC, your personal assets are protected.
Additionally, there is far less paperwork required for an LLC and LLCs are not required to hold annual meetings or keep extensive records. There are also tax advantages for LLCs. LLCs get several perks such as adopting the tax status of sole proprietorships, partnerships, S corporations or C corporations. Additionally, LLCs can take advantage of “pass-through” taxation which means that the LLC is not required to pay LLC taxes or corporate taxes.
LLCs are also not required to have a formal structure and have more freedom in regards to business management and business decisions making it the perfect business for someone looking to start their first business.
And creating a Minnesota LLC may appear to be an overwhelming task, but that’s what our professionals are here for! We’re ready to assist you every step of the way. Our detailed instructions can support you in learning about the process until you’re ready to allow us to efficiently guide you.
Disclaimer: The advice on this page shall not be interpreted as legal or tax advice. Rules and regulations vary, change over time, and are specific to your situation. Please consult one of our licensed professionals if you have specific legal or tax questions.
Who We Are
Run by successful entrepreneurs, our sole focus is making the LLC and business ownership process as painless as possible. This process often provides complexities that can be confusing and discouraging, but that’s why LLC Formations is a valuable asset to any new business. We help you take numerous factors into account so that you can successfully launch your business. We also provide self-guided questionnaires to guide you in the right direction.
LLC Formations prides itself on providing professional filing services and free business resources. We partner with the best professional filing agencies in the industry, thereby saving you time and money. We are here to help with both ordinary and extraordinary requests, regardless of how far along you are in the LLC process. And we are available to provide the proficiency you need to protect your business goals.
For new business owners, we can provide detailed and personalized guidance to reduce confusion and can answer any questions you might have. Our dedicated experts are well versed and ready to help! In the event that hiring a lawyer is necessary, we can help fill in the gaps that many costly law firms leave behind. We offer our clients tools that they can readily use and educational materials to understand the process. We don’t just fill out forms, we offer complete business services and we support your business endeavors to help you implement the necessary steps to get started the right way. We don’t break the bank and we provide straightforward, convenient assistance and guidance from informed professionals. We have tested and thoroughly reviewed other services and companies and we are prepared to give you the right advice.
A new entrepreneur is responsible for not only filling out all of the required paperwork but also satisfying state requirements as well. Factor in the additional steps needed to protect your new business from future liability and the process becomes a little bit more difficult. We can walk you through each step to simplify the process and protect yourself and your business.
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For guidance on how to form an LLC in Minnesota, please use the following instructions:
Pick the perfect name for your LLC
1. To create a Minnesota LLC the first step is to name it. Creating the perfect name is crucial. A name must be unique, creative, it must accurately represent your business, and above all, it needs to be memorable. Clients need to be able to easily search for the name of your LLC without added difficulties with pronunciation and spelling.
Things your LLC name can and cannot have:
- Your name must include the phrase “limited liability company” or an abbreviation (LLC)
- It cannot include restricted words or words that will confuse your LLC with a government agency (don’t represent yourself as a bank, or a branch of the government or use a name that might confuse your LLC for one)
- If your LLC must include restricted words, it may require extra paperwork in addition to a licensed individual (law firms require a licensed lawyer, tax firms require a licensed tax professional, etc)
2. Check to see if your name is available by conducting a Minnesota LLC search. A basic name search on the Secretary of State website will let you know if your LLC name is already taken. If you’re not quite ready to take the leap, you may reserve your LLC name for up to 12 months. To do this you must file an Application with the Office of the Minnesota Secretary of State Business and Lien System. This reservation must be filed online or by mail with the nonrefundable filing fee of $35 for mail-in requests and $55 online and in-person.
3. Check to see if your website URL is available. Even if you’re not 100% ready to set up your website, we advise our clients to check to see if your LLC name is available before committing to it. Buying the URL before someone else does is a smart step to avoid issues in the future and secures your business name for a website when you’re ready to create one.
4. Once your name has been officially registered with the Secretary of State, setting up professional email accounts is the logical next step. Your clients will have a way to contact you and you can ensure that your business is professional from the beginning. Furthermore, it protects you from attempting to create email addresses and finding out they are already taken.
Quick Tips & Info:
LLC is the abbreviated form of limited liability company. It offers many of the same benefits of a corporation but with added flexibility.
Getting a DBA or Trade Name - is it necessary?
DBA stands for “doing business as”. Most LLC’s don’t require the use of a DBA however if you need to conduct business utilizing an alternate name, a DBA is a necessary step. Contact us for more details on how we can help you file!
Choose a registered agent in Minnesota
The next step in starting an LLC in Minnesota is choosing a registered agent. This is a required step however, this is something we are ready to assist with. A registered agent is responsible for receiving legal documents on behalf of your LLC and acts as your LLC’s point of contact. Your registered agent must be a resident of the state of Minnesota or a corporation that has been authorized to conduct business within the state. A registered agent must be chosen carefully, however, you may elect any individual (including yourself).
In addition to those guidelines, your registered agent must also be 18 years or older, have a physical address in Minnesota, and must be available during the hours in which someone might receive service of process in person.
An alternative option to choosing an individual as a registered agent is to hire professionally registered agent services. While this option is a bit more expensive, it can help you to avoid any fees or legal issues pertaining to important documents or notices.
Should I use a service?
Your registered agent is a person/business who is nominated to officially send and receive papers on the LLC’s behalf. Utilizing a service ensures several things:
1. Paperwork will always be filed on time. In Minnesota, an LLC is automatically dissolved if the annual report has not been filed on time. The registered agent notifies you when reports are due, collects appropriate fees and takes care of filing for you.
2. Registered agent services allow you to keep your private business private. You can avoid listing your home address or personal information on your filings by using a service. Furthermore, if someone decides to file a lawsuit against you, the LLC will be served at the address listed. If the address listed is at a separate place of business and/or not at your home address, it saves you the embarrassment of having legal papers served in front of employees or family members.
3. Using a service gives you the freedom to work when needed – a registered agent must be consistently available during certain business hours. This affords you the freedom to come and go as needed without worrying about paperwork being received by the right person.
Minnesota Articles of Organization
Once you have designated a registered agent, in order to continue the Minnesota LLC registration process, you will need to file your Articles of Organization with the Secretary of State. You must determine whether or not your LLC will be manager-managed or member-managed before filing online, which can be completed in-person, online, or by mail. In order to learn more about the Articles of Organization and the differences between the types of management, please don’t hesitate to enlist our services so that we can take the guesswork out of the LLC process.
Prepare an Operating Agreement
Although this step is not required, we highly advise preparing an operating statement. For further assistance creating one, allow us to help. An operating agreement is further protection for your LLC but is not required to be filed with your Articles of Organization.
The initial costs for State Filing are $155 with expedited service for online and in-person submissions and $135 for applications submitted by mail. These forms are subject to change, however, so it’s best to check before mailing in your application.
There are not currently any requirements for publication when setting up an LLC in Minnesota.
Financing Your LLC
An LLC is typically created with financing from members and contributors, but it may also invest its own funds, borrow money or trade in the securities of other organizations and the government. LLC’s have a greater deal of flexibility and can even increase its own investment before accepting contributions from the outside.
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Depending upon how the LLC is created and what is within the Articles of Organization, if an LLC can be dissolved once a member’s interest is terminated if the last member terminates and no new members are admitted for 180 days. If the LLC was formed before August 1, 1999, the LLC can be dissolved when any member terminates the LLC. In Minnesota however, if the Articles of Organization dictate, the other members can continue business by merging into another Minnesota LLC.
Check your tax requirements
Your LLC may have additional regulatory and tax requirements which may include EIN if your LLC includes more than one member. If this applies to your LLC, it is your responsibility to obtain your own IRS Employer Identification Number or EIN – even if you currently have no employees. If your LLC is a one-member LLC your EIN must be obtained only if you have or will have employees or if you choose to have your LLC taxed as a corporation instead of as a sole proprietorship.
To obtain your EIN
In order to obtain your EIN, you must complete an online EIN application on the IRS website. There is not currently a filing fee.
Department of Revenue
If your LLC will be selling goods or collecting sales tax, you will need to register with the Department of Revenue. This registration can be done online or via mail with an application for registration.
Business Licenses and Permits
Depending upon your type of business and its location, your LLC may need to obtain local and state business licenses.
For new entrepreneurs, having representation comes in especially handy here. Your LLC must comply with regulations at all levels (federal, state, and local) including health permits, building permits, and signage permits. In addition to extra paperwork and fees, short classes may be required as well.
Filing Annual Reports
Another facet of having an LLC is filing an annual report with the Minnesota Secretary of State. All LLCs in Minnesota and foreign LLCs are required to file this report as well. All reports are by December 31st. These reports can also be filed online at the Minnesota Secretary of State website or via mail.
Another step in developing your LLC is properly insuring it. In order to assist you in mitigating risks the most common types of insurance are:
General Liability: Most common for small businesses, this insurance policy protects your LLC from lawsuits
Professional Liability: In order to protect yourself from claims of malpractice or other business errors, this type of insurance is common for accountants, consultants, etc.
Workers’ Compensation: Provides coverage for employees in the event of job-related illness, injury or death. Minnesota requires businesses with five or more employees (including LLC business officers, corporate officers, members, etc) to have workers’ compensation insurance.
While the entire process seems to be a big undertaking, don’t let that stop you from following your entrepreneurial dreams! If the outlined steps seem like just a little too much, allow us to help you! LLC Formations is both more affordable and more attainable than working with a lawyer and we equip you with the critical understanding that is necessary for the first steps of this entrepreneurial process. While winging it is doable, it’s just not advisable. Our experts are able to provide the up-to-date, state-specific instructions required to successfully start your business. With our services, forming an LLC is as quick and painless as possible but in general, this process can take anywhere from several days to several weeks. While this step in achieving your goals may seem daunting, it is necessary and absolutely doable. LLC Formations generally cares and would love the opportunity to help you get one step closer to a successful business by assisting you in filing for your LLC properly and giving you the advice that you need to get started on the right foot. Next our LLCs in Mississippi guide we show you how to start your next business in Mississippi.