A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in Minnesota. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
Under Minnesota law, an LLC name must contain the words "Limited Liability Company" or the abbreviation "LLC."
Your LLC’s name must be distinguishable from the names of other business entities already on file with the Minnesota Secretary of State. Names may be checked for availability by searching the Minnesota business name database. You may reserve a name for 12 months by filing a Name Reservation wiith the Office of the Minnesota Secretary of State Business & Lien system. The application may be filed online or by mail. The filing fee is $50 for filing by mail, $55 for onlne and in-person filings.
Every Minnesota LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered agent must be a Minnesota resident, a Minnesota business entity, or a foreign business entity authorized to do business in Minnesota. Your LLC may not act as its own agent. The registered agent must have a physical street address in Minnesota.
A Minnesota LLC is created by filing Articles of Organization with the Minnesota Secretary of State. The articles must include:
The articles may be filed online or filed by postal mail. The filing fee is $135 for filing by mail and $155 for online and in-person filings.
An LLC operating agreement is not required in Minnesota, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For local licenses, check with the clerk for the city where the LLC's primary place of business is located (or county if it is in an unincorporated area). For state license information, check the State of Minnesota Elicensing portal. For more information, see Nolo's article How to Get a Small Business License in Minnesota.
Department of Revenue: In some cases, for example if you have employees or will be selling goods and collecting sales tax, you’ll need to register with the Minnesota Department of Revenue (DOR). You can register online using the DOR’s e-Services webpage. For more information on Minnesota LLC tax registration, see Nolo's article Minnesota LLC Annual Filing Requirements.
All LLCs doing business in Minnesota must file an annual renewal once every calendar year with the Minnesota Secretary of State. The renewal can be filed any time before December 31. The renewal can be filed online or by mail. A paper renewal form is available. The filing fee is $45 for online and in-person filings, and $25 for filings by mail. For more information on Minnesota LLC annual renewals, see Nolo's article Minnesota LLC Annual Filing Requirements.
All of the paperwork and procedural steps to start a limited liability company can be done online using Nolo's Online LLC Formation service.
If you are just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business. To learn more about LLCs and decide if it is the right business structure for you, see What is a Limited Liability Company (LLC)?
It is important to make sure that your LLC's name is distinguishable from the names of other existing businesses on file with the Minnesota Secretary of State. You can conduct a name search for free on the Minnesota SOS website to make sure your proposed name is available.
Filing on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but will often cost you hundreds, if not thousands, of dollars in the process. Nolo's Online LLC formation service can complete all of the paperwork and filings for you, with packages starting at just $49.00. To learn more about the costs associated with forming and running an LLC, see How Much Does It Cost to Form an LLC?
Minnesota does not require LLCs to have operating agreements, but it is highly advisable to have one. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default. For more information, see The LLC Operating Agreement.
To do business in Minnesota, all LLCs organized outside of the state must register with the Minnesota Secretary of State. Foreign LLCs must appoint a registered agent for service of process physically located in Minnesota. To register, file a Certificate of Authority to Transact Business in MN (LLC). The application may be filed online or by mail. The filing fee is $205 for online and in-person filings, and $185 for filings by mail.
Before filing, make sure the LLC’s name is available in Minnesota by checking the Minnesota business name database. If the name is not available, the foreign LLC must adopt an assumed name for use in Minnesota.
For most formation purposes, a Minnesota single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in Minnesota are the same as those listed above.
Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see Nolo’s article, How Single-Member LLCs Pay Federal Income Tax.
If you provide a licensed professional service in Minnesota and want to form an LLC, you will be required to form a professional limited liability company (PLLC). Examples of professional services include architects, attorneys, dentists, certified public accountants, and more. Generally, if you provide a service that requires you to obtain a Minnesota state license before practicing, then you are a professional service. Each member of the company must be licensed in order to form a PLLC. To learn more about forming a Minnesota PLLC, see our article, How to Form a Professional LLC in Minnesota.
If you reach the point where it is time to close your business and cease all operations, then you will want to properly dissolve your LLC to limit your liability for lawsuits and government fees. Learn about the steps you will need to take in How to Dissolve an LLC in Minnesota.