How to Form an LLC in Minnesota

Starting an LLC in Minnesota is easy

To start an LLC in Minnesota you will need to file the Articles of Organization with the Minnesota Secretary of State, which costs $155 online. You can apply online, by mail, or in-person. The Articles of Organization is the legal document that officially creates your Minnesota Limited Liability Company.

Follow the step-by-step guide below to start your Minnesota LLC today and get your business up and running.

STEP 1: Name your Minnesota LLC

Choosing a company name is the first and most important step of starting a Minnesota LLC. Be sure to choose a name that complies with Minnesota naming requirements and is easily searchable by potential clients.

1. Follow the naming guidelines:

• Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
• Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
• Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
• Your name must be distinguishable from any other Minnesota limited liability company, corporation, partnership, limited liability partnership, or limited partnership.

For a complete list of naming rules in Minnesota, you can read Minnesota's Availability Guidelines.

2. Is the name available in Minnesota? Make sure the name you want isn't already taken by doing a Business Filings Search on the Minnesota Secretary of State's website.

3. Is the URL available? We recommend that you check online to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.

After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

Not sure what to name your business? Check out our LLC Name Generator.

FAQ: Naming a Minnesota LLC

STEP 2: Choose a Minnesota LLC Registered Agent

You are required to nominate a Minnesota registered agent for your LLC.

What is a registered agent? A registered agent is an individual or business entity responsible for receiving important tax forms, legal documents, notice of lawsuits, and official government correspondence on behalf of your business. Think of your registered agent as your business's point of contact with the state.

Who can be a registered agent? a Registered Agent must be a resident of Minnesota or a corporation, such as a registered agent service, authorized to transact business in Minnesota. You may elect an individual within the company including yourself.

Recommended: ZenBusiness provides the first year of registered agent service free with LLC formation ($39 + State Fees)

FAQ: Nominating a Registered Agent

STEP 3: File the Minnesota LLC Articles of Organization

To register your Minnesota LLC, you will need to file the Articles of Organization with the Secretary of State. You can apply online, by mail, or in-person. Some states refer to the Articles of Organization as the Certificate of Formation or Certificate of Organization.

The Minnesota Articles of Organization for an LLC (limited liability company) is a legal document to officially form your business. You’ll be expected to provide the name of the LLC, the name and address of the registered agent, your starting date, and the state filing fee.  After you file the Articles of Organization, we recommend you obtain an Employer Identification Number (EIN) if you plan to hire employees and open a business bank account.

Now is a good time to consider whether your Minnesota LLC will be member-managed or manager-managed. We recommend learning more about member-managed vs manager-managed LLCs before you file.

If you’re expanding your existing LLC to the State of Minnesota, you will need to form a Foreign LLC.

FAQ: Filing Minnesota LLC Documents

STEP 4: Create a Minnesota LLC Operating Agreement

A Minnesota LLC is not required to have an operating agreement, but it's a good practice to have one.

What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

For more information on operating agreements, read our Minnesota LLC operating agreement guide.

FAQ: Creating a Minnesota LLC Operating Agreement

STEP 5: Get a Minnesota LLC EIN

What is an EIN? EIN stands for Employer Identification Number. EINs are a nine-digit number assigned by the Internal Revenue Service (IRS) to help identify businesses for tax purposes. It is essentially a social security number for a business. 

An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN).

Why do I need an EIN? An EIN is required to:

• Open a business bank account
• File and manage Federal and State Taxes
• Hire employees

Where do I get an EIN? You can get an EIN for free from the IRS. Getting an EIN is an easy process that can be done online or by mail.

Note
FOR INTERNATIONAL EIN APPLICANTS: You do not need a SSN to get an EIN. For more information, read our How to Get an EIN as a Foreign Person guide.

FAQ: Getting a Minnesota LLC EIN

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Protect Your Business & Personal Assets

Business Banking for Personal Asset Protection

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your Minnesota LLC is sued. In business law, this is referred to as piercing your corporate veil.

You can protect your business with these two steps:

1. Opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

2. Getting a business credit card:

• Helps you separate personal and business expenses.
• Builds your company's credit history, which can be useful to raise capital later on.

Get Insurance For Your Minnesota LLC

Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:

• General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
• Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
• Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Minnesota, businesses with one or more employees, excluding business owners, are required by law to have workers' compensation insurance. Get a free quote with ADP.

Properly Sign Legal Documents

Improperly signing a document as yourself and not as a representative of the business can leave you open to personal liability. When signing legal documents on behalf of your company, you could follow this formula to avoid problems:

1. Formal name of your business
2. Your signature
3. Your name
4. Your position in the business as its authorized representative

See the image below for an example.

This ensures that you are signing on behalf of your LLC and not as yourself.

Keep Your Company Compliant

Minnesota LLC Permits & Licenses

Does my Minnesota LLC need business licenses and permits?

To operate your Minnesota LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.

The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.

Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.

Find out how to obtain necessary licenses and permits for your business or have a professional service do it for you:

• Federal: Use the U.S. Small Business Administration (SBA) guide.
• State: Use the State of Minnesota's Government ELicensing Website.
• Local: Contact your local county clerk and ask about local licenses and permits.

Minnesota LLC Tax Requirements

Depending on the nature of your business, you may be required to register for one or more forms of state tax.

Minnesota Sales Tax

If you are selling a physical product, you’ll typically need to register for a seller's permit through the Minnesota Department of Revenue website.

This certificate allows a business to collect sales tax on taxable sales.

Sales tax, also called "Sales and Use Tax," is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.

Read our sales tax guide to find out more.

Minnesota Employer Taxes

If you have employees in Minnesota, you will need to register for Unemployment Insurance Tax through the Minnesota Department of Employment and Economic Development website. You will also need to sign up for Employee Withholding Tax through the Minnesota Department of Revenue website.

FAQ: Additional Minnesota LLC Taxes

Federal LLC Tax Requirements

Most LLCs will need to report their income to the IRS each year using:

• Form 1065 Partnership Return (most multi-member LLCs use this form)
• Form 1040 Schedule C (most single-member LLCs use this form)

How you pay yourself as an owner will also affect your federal taxes. Visit our guide to learn more about how to pay yourself from your LLC.

Partnership Tax

Minnesota imposes a Partnership Tax on multi-member LLCs with property, annual payroll, and annual sales totaling more than $970,000 (indexed annually for inflation). Multi-member LLCs with revenue below that threshold are exempt from paying the minimum fee, but still need to file Minnesota form M3. This form can be filed online or by mail. 

FAQ: Minnesota Partnership Tax

File Your Minnesota LLC Annual Report

Minnesota requires LLCs to file an annual report with the Secretary of State. An annual report in Minnesota is also referred to as an annual renewal.

Avoid Automatic Dissolution

LLCs may face fines and even automatic dissolution when they miss one or more state filings. When this happens, LLC owners risk loss of limited liability protection. A quality registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines and by submitting reports on your behalf.

Make Running Your Business Easier

After starting a business, two of the most important things you can do are get professional accounting and hire the right employees. Streamlining these processes can save you time and money as your business grows.

Hiring Employees in Minnesota

If you plan to hire employees for your Minnesota LLC, stay compliant with the law by following these steps:

• Verify that new employees are able to work in the US
• Report employees as "new hires" to the State
• Provide workers' compensation insurance for employees
• Withhold employee taxes
• Print workplace compliance posters and place them in visible areas of your workspace

Find out more information from the Minnesota Employment and Economic Development website. 

FAQ: Hiring Employees in Minnesota

Accounting For Your Minnesota LLC

It’s critical to get your books in order, even if you haven’t officially opened for business. A well-managed accounting system will help you:

• Track your business finances, including bills, expenses, and income.
• Simplify your annual tax filings.

You can maintain your accounting in two ways:

• Use a DIY accounting software. This can come with an increased risk of errors especially when starting a new business.
• Hire an accounting service. They can provide comprehensive advice to help optimize your bookkeeping and taxes as well as additional services such as payroll etc.

Interfacing with Clients and Customers

In the day-to-day of running a business, it's hard to be readily available for new clients or customers who want to contact you. For service-based businesses that don’t already have a brick-and-mortar location, a virtual office can solve this problem. You can get a dedicated business mailing address and a business phone number with call-forwarding so that you never need to worry about losing a potential customer.

Women in Business Tools and Resources

If you have a woman-owned business, many resources are available to help you concentrate on your business’s growth:

• Funding - (ie. grants, investors, loans)
• Events - (ie. conferences, meetups)
• Guides - (ie. business formation, personal growth)
• Support - (ie. advice, communities, business strategies)

Our information and tools will provide educational sources, allow you to connect with other women entrepreneurs, and help you manage your business with ease.

More Information

Foreign LLCs in Minnesota

Forming a foreign LLC allows your company to operate as one entity in multiple states. If you have an existing LLC and want to do business in Minnesota, you will need to register as a foreign LLC. This can be done online or by mail.

How to Obtain a Certificate of Good Standing

A Certificate of Good Standing verifies that your Minnesota LLC was legally formed and has been properly maintained. Several instances where you might need to get one include:

• Seeking funding from banks or other lenders
• Forming your business as a foreign LLC in another state
• Obtaining or renewing specific business licenses or permits

You can order a Minnesota LLC Certificate of Good Standing online or by mail.

Dissolve Your Minnesota LLC

If at any point in the future you no longer wish to conduct business with your Minnesota LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your Minnesota LLC, there are two broad steps:

• Close your business tax accounts
• File the Minnesota Articles of Dissolution

When you are ready to dissolve your LLC, follow the steps in our Minnesota LLC Dissolution Guide.