Forming an LLC is a good option for growing businesses in Minnesota. A Limited Liability Company will allow you to strengthen your business’ operations and legitimize your company.
The price for forming an LLC in Minnesota is between $135 and $155, which covers the cost of all filing fees. You can get your LLC up in running in about 2-5 business days. An LLC is a good idea for small businesses as it allows you to separate your personal and business assets in case your business runs into legal or financial trouble. It gives you the freedom to continue operations as sole proprietor while having the protection of a corporation.
To file an LLC in Minnesota correctly, be sure to follow along with our step-by-step instructions:
How to Form an LLC in Minnesota – A Step by Step Guide
You can apply for your LLC on your own or through a professional service. While filing on your own isn’t complicated and doesn’t take too much time, you still want to make sure you complete each step as outlined below, ensuring your LLC is set up correctly the first time around.
If you’d rather not handle your business’s legal side, we suggest hiring experts to file all your business paperwork for you (a more worry-free approach).
Otherwise, if you’re a do-it-yourself kind of person, follow these 5 initial steps:
1. Name your Minnesota LLC
To form an LLC in Minnesota, you need to follow specific name requirements set by state law. Your business name needs to be unique, meaning no other company has a similar name.
Before checking to see if the business name you’d like is available, to abide by Minnesota LLC law, make sure the name of your company contains one of the following:
- Limited Liability Company
Your LLC name can be your business name, like Plumbing King L.L.C, or the name of one of your LLC’s members, such as Joe Smith LLC.
Check Name Availability
Once you’ve decided on your name, you need to check to see if it’s available and there’s no other company in Minnesota using it. The quick and easy way to do this is through a quick google search using your desired name.
If you don’t find any competing companies, you can move onto the next step – checking your business’s potential name through the Minnesota business name search.
If you aren’t ready to form an LLC yet but plan on doing so in the future, you can also reserve a name for up to 12 months by filling out the Name Reservation Form provided by the Minnesota Secretary of State Business and Lien System. You can file it online or in person, which costs $55, or via mail, which costs $50.
Using a Fictitious Name
If you don’t want to use LLC in your business name, then you can add a fictitious name once your business is registered. Also known as DBA (“doing business as,”) or a trade name, a fictitious name allows you to run your business under a name that’s not the legal LLC registered name.
You can also use a fictitious name if you plan on running several different businesses under your LLC formation.
Your DPA name must be registered by submitting a Certificate of Assumed Name with the Minnesota Secretary of State. The form can be sent online for $50 or by mail for $30. After you get approval, but before your DPA name can be used, you have to print the Certificate of Assumed Name in two consecutive issues of local newspapers for the county that your business is located in.
Once you’ve figured out what your business name is and you’ve made sure it’s still available, the next step is to choose a registered agent who will help you with the legal side of your business.
2. Choose a Minnesota Registered Agent
A registered agent is anyone who receives and sends legal documents on behalf of your company. They are the main point of contact between your company and the Secretary of State.
Minnesota, an LLC must have a registered agent who lives in Minnesota and has a valid street address (not a P.O. box).
An LLC registered agent can be:
- A family member or friend
- A Commercial Registered Agent
Why you should use a registered agent
While the easier route seems to have yourself, or one of your LLC’s members, act as the registered agent, there are some benefits in hiring a professional. A registered agent will ensure your business is always in good standing with the state, helping you stay organized and up-to-date. It also adds a layer of protection since they’ll help you in the case of a lawsuit or any penalties/fines.
Once you’ve decided who’s the best person to be your registered agent the next step is to submit your LLC application.
3. File a Minnesota LLC Articles of Organization
To create an LLC in Minnesota you need to submit the Articles of Organization application. Be prepared to include the following:
- Your LLC’s name
- The name and address of your LLC’s registered agent
- The name, address, and signature of one of the LLCs organizer (member-managed or manager-manged)
- Your LLC’s email address and phone number
What’s the difference between member-managed or manager-managed?
Member-managed is if you (and the other owners of your LLC) are responsible for everyday business activities. In contrast, manager-managed is if you decide to hire someone who is not a member to manage your business’s day-to-day activities.
Member-managed is more common for smaller businesses, while larger companies typically use manager-managed. You’d usually only choose manager-managed if you are a passive investor and aren’t involved much in the business.
The Minnesota Secretary of State Business and Lien system allows you to complete the forms and submit them online, or you can print them out and either mail them in or file them in person. Either way, you have to first register an account on the website to access the forms. It costs $155 online or $135 by mail and between 2-5 business days to get approval.
Once you get approval, you can move onto step 4 – creating an LLC Operating Agreement. If you’re operating your LLC by yourself, skip to step 5.
4. Create a Minnesota LLC Operating Agreement
If your LLC has two or more members, it should have an operating agreement. Although it’s not required in Minnesota, we suggest creating one to outline how the business is structured and how it will operate among its members (and/or managers).
Some of the sections you’ll typically find covered in an operating agreement include:
- Capital distributions
Again, while this is not a necessary step, as you don’t have to mail it to the secretary of state, it is recommended if your LLC has more than 2 members. It helps clarify the rules of your LLC and makes sure they are legally documented.
After you’ve agreed and created an LLC Operating Agreement, the next step is to create your unique employer identification number.
5. Apply for your Minnesota LLC Employer Identification Number (EIN)
Once your LLC is approved, you’ll need to get an employer identification number (EIN).
An EIN is a federal tax ID number that registers you with the Internal Revenue Service (IRS). This number identifies your company when filing taxes.
How to register for an EIN:
– Apply online or,
– fill out the Employer Identification Number form and fax it to 855-641-6935, or mail it to:
Internal Revenue Service,
Attn: EIN Operation,
If you apply online, you’ll get instant approval. If you apply by fax, it takes up to 4 business days, whereas mailing can take up to 4 weeks. Applying for your EIN is completely free!
Minnesota LLC Registration – Final Checklist & Summary
Ready to get started? Use this simple checklist to make sure you’ve dotted your i’s and crossed your t’s!
- Name your LLC – Your business name needs to include either Limited Liability Company or the abbreviation LLC. The name you choose cannot be used by any other business in Minnesota. To check if your desired name is in use, you can search for it in the Minnesota Business Name Database.
- Choose a Registered Office – A registered agent is a person who receives and sends legal documents on behalf of your company. It can be you, a friend or family member, or a commercial registered agent.
- File a Minnesota LLC Articles of Organization – Filing an LLC in Minnesota involves submitting the Articles of Organization, which can be found in the Minnesota Secretary of State Business and Lien system. Forms cost $155 for online filing and $135 if you file by mail. Your LLC can take at least 2-5 business days to be approved.
- Apply for your Minnesota LLC Employer Identification Number (EIN) & File your Tax Registration Form – Once you get approval for your LLC, you need to apply for an employer identification number (EIN) through the IRS. This number identities your company when filing taxes. You can apply online for free, and approval is instant.
- Create Minnesota LLC Operating Agreement – If your LLC has two or more members, you should create an LLC operating agreement that outlines how the business is structured, who is responsible for what, and how much of the LLC each person owns. You don’t have to send your operating agreement to the Minnesota state, but you should have one, so everything is documented and signed by all members.
Always double-check your LLC information is correct before submitting any paperwork. You want to avoid simple mistakes and ensure your business is set up correctly from the get-go. If it’s within your budget, we recommend using a formation service to help form your LLC. They can act as your registered agent and make sure your company is always in good standing. Just make sure you do your homework and choose one of the best LLC services for your business.
Our first recommendation is to go with ZenBusiness, an LLC creation service that holds your hand from start to finish. Packages start as low as $49.
How To Apply for a Minnesota LLC Online
Now that you know the exact steps on what’s needed to form your LLC, it’s time to start the application process. There are two ways of going about this:
1. Do it Yourself
Taking the DIY route is a good option if your budget is tight or you’ve previously opened an LLC and understand how it works.
2. Use an Online Formation Company
Using an LLC formation service is a better option if it’s your first time opening up an LLC and if it’s within your budget (formation services cost anywhere between $49 – $199). This is typically a better choice if you want to avoid headaches and have peace of mind knowing professionals handle everything for you.
If using a professional service is more up your alley, here are our top 3 recommendations:
ZenBusiness built its platform to meet the needs of your business throughout its lifetime. When you pay for their services, you’ll receive a personalized dashboard for your business to store documents, receive alerts, and manage your website.
ZenBusiness charges work on a tier system. There are three different tiers with pricing as follows:
- The Starter = $49 annually
- The Pro = $199 annually
- The Premium = $299 annuall
IncFile provides you with a full suite offering startup services to best support your business formation.
Their pricing model also depends on the state you are filling. You can generate a personalized quote on their website by entering the necessary information about your business.
LegalZoom is an online legal service provider that helps you to be able to create legal documents without having to pay the expensive lawyer fees. Some of the services they provide assistance to includes business formation, copyrights, and trademarks.
LegalZoom has many different pricing options available. For their LLC service, pricing begins at $79 + the allotted state fee.
After Starting Your Minnesota LLC
You’re approved – now what? The journey doesn’t stop here – there’s still a handful of things you need to do to get your business off the ground. We recommend ticking off the following items to make sure your LLC gets off on the right foot.
Purchase A Domain For Your Business
Even if your business is local, having an online presence is essential in creating trust, professionalism, and a way for people to find you. If you haven’t already thought about getting a website, now’s the time. In a tech-saturated world, you need a domain to not only attract new customers but help create a good first visual impression of what your business does and how it can help.
Get A Business Phone Number
Since your business is now an approved Minnesota LLC, you should think about getting a business phone number. Having a business number is a great way to show professionalism to your clients and customers. It makes you more serious and, more importantly – more trustworthy.
There are various online phone services you can go with, or you could go the traditional route and open an account through a local branch. You can get a local number or a 1-800; the options are endless!
Open Your Minnesota LLC Business Bank Account
You’ll want to open a business account that’s separate from your personal banking. This will not only make accounting easier, but you won’t have to worry about your finances mixing in with your business finances.
USA Business Bank Accounts
If you already have online banking, it might be easier to open a business account through your current bank, so all your banking (although in separate accounts) will be accessible in the same place. If you prefer to open something new, keep these checking accounts in mind:
Chase – Free checking account with no extra fees – as long as you keep a $1,500 minimum balance.
BlueVine – Free checking account with mobile banking and a debit MasterCard.
Bank Novo – Open a free checking account with Free transfers and free ATM fees.
Flag Ship Bank – Open a simple checking account catered to your business needs.
Along with your business checking account, you should apply for a business credit card too. Having a business credit card is an excellent way to establish your business credit score (which may help if you ever need a loan). It also makes it easier for online purchases, and again, it will keep your personal and business finances separate.
Find Accountant/Buy Accounting Software
Taxes get complicated fast and can be a burden to handle. We recommend getting an accountant or using accounting software to ensure all your spending actions are tracked (payroll, bills, invoices, receipts, etc.). Here are some popular options to look into:
Wave – Free invoicing & accounting software with credit card processing & payroll services.
Intuit Quickbooks – Online accounting software to track expenses, customize invoices, and run reports.
Freshbooks – Accounting software to send invoices, track time, manage receipts, expenses, and accept credit cards.
Directory of Federal Tax Return Preparers with Credential – If you want to use a local tax specialist, you can search for a certified public accountant (CPA) through the IRS online directory.
Having all of your business reports in one spot is highly beneficial, so you can keep an eye on your cash flow. To run a successful business, you will need to analyze how your business performs and narrow down what’s working or what isn’t working. Finding areas for growth will ensure success.
Don’t Forget to File an Annual Renewal
Each year, before December 31st, you must file an Annual Renewal as per Minnesota law. Failure to do so can lead to the deactivation of your LLC. Your first report is due the following year after your LLC was approved. For example, if you got approval in September 2021, your first report is due before the end of 2022.
It costs $45 if you renew online or in-person and $25 if renewing by mail.
If you forget to file, the State has the right to shut down your LLC.
Notify Minnesota Of Any Changes You Make To Your LLC
If at any time you make changes to your LLC you need to inform the state. If you’re using a registered agent they can do this for you. If you’re going about this alone, you can update changes through Minnesotai’s business portal or through your registered agent.
8 Benefits of Forming an LLC in Minnesota
Setting up an LLC in Minnesota makes sure your business finances stay separate from any personal finances and that each member’s personal possessions are safe. It’s a great business entity for small, medium or large businesses as it gives you the freedom of a sole proprietorship or partnership with the protection of a corporation. Best of all, it’s easy to get (approval is instant), and it won’t cost you an arm and a leg. Some of its major benefits include:
1. Protect Your Personal Assets
The LLC will have its liability that does not automatically extend to the owners, unlike a sole proprietor, where you are legally responsible for everything. That means Minnesota LLC protects the liabilities and debts incurred by the business. In most situations, your assets, such as your car, home, or savings, will never be at risk if your Minnesota LLC is faced with lawsuits or bankruptcy.
2. Benefit From Business Profit Taxation
In an LLC in Minnesota, your profits and losses can pass through to your income without having to have corporate taxation.
3. Simple to Create and Maintain
The formation of a Minnesota LLC requires minimal paperwork and requirements. They are known for being easy to start and simple to maintain.
4. Minimal Restrictions
Your business matters can be managed by more than one owner or member while still being one main business to the public. This means all decisions and transactions behind the scenes can be equitably distributed while presenting one entity as you move forward.
5. Heighten Your Credibility
As you move forward, your Minnesota LLC will continuously be recognized as an entity. People and other businesses prefer doing business with a legitimate entity because it shows your level of professionalism.
6. Gain Access to Business Loans
When you form your Minnesota LLC, you will obtain a DUNS number and build your business credit, helping you to further build upon your business.
7. Benefit From Flexible Profit Distribution
In an LLC, you are not required to spread the distribution of profits equally across the owners. You have complete control over profit distribution in your Minnesota LLC.
8. Good For Any Kind Of Business
An LLC business structure in Minnesota is an excellent choice for both medium and higher-risk level businesses. You might always want to consider opting to go with an LLC if you have a significant amount of personal assets to protect from your company. And lastly, LLCs are great for owners who are interested in paying lower tax rates than corporations.
If you want to legitimize your business operations while remaining financially and legally secure, forming an LLC is a great move for any business owner in Minnesota. An LLC will allow you to keep your personal assets and business assets independent, meaning you will be protected in case your business gets sued or runs into financial problems. You’ll have the added protection of a corporation but maintain the flexibility and freedom of a sole proprietorship or partnership.
Making sure you fill out all the required paperwork, both for the Articles of Organization and your Annual Renewals, is essential in keeping your LLC in good standing with the state. If you’re uncomfortable filing reports and submitting forms, we recommend using formation services like ZenBusiness, who can act as your registered agent. Using a formation service ensures everything is filed correctly and is a great way to keep your LLC legal and active.
FAQ About Forming Minnesota LLC
There are several different steps you’ll need to take to form your LLC legally. It’s a lot of information to take in and can get confusing. To help out, we’ve compiled some answers to the most frequently asked questions:
What are LLCs, and why are they important?
An LLC is a Limited Liability Company. It’s a business structure used to protect your assets, like your house, your car, or even your savings. No matter what happens to your business (lawsuits, bankruptcy, etc.) your assets are kept safe.
How much does it cost to start an LLC in Minnesota?
You can file an LLC either online, in person, or by mail. It costs $55 for online and in person filing and $50 if you decide to file by mail.
How long does it take to form an LLC in Minnesota?
It can take at least 2-5 business days to process your LLC paperwork.
Can you Start an LLC on your Own?
Yes, you can start forming an LLC on your own by following the step-by-step instructions provided in this article. For additional help, look to hire an all-around service provider.
Do you need a lawyer to Start an LLC in Minnesota?
No, you can start an LLC without a lawyer just be prepared to file and report everything on your own. If you’re not interested in getting a lawyer but want to make sure everything is filed correctly, use an online business formation service, like the ones listed in this article, with ZenBusiness as our #1 recommendation.
Does an LLC need to make money?
No, an LLC doesn’t need to make profits, but if you’re claiming tax deductions with no income, the IRS will likely audit your business.
What are the downsides to having an LLC?
There are pros and cons to forming an LLC. The pros are tax reductions, protecting your personal assets, and creating credibility for your business (and possible future business loans). The main con of an LLC is you’re considered self-employed. This is a disadvantage as you’d be taxed under self-employment and responsible to pay Social Security and Medicare taxes. The amount you’d be required to pay depends on your business’s total net earnings.