Our picks for LLC formation services

nw logo Northwest Registered Agent
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ZenBusiness
  • Starts at $0 plus state fees
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  • Finance and marketing tools
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FAQs

How much does an LLC pay in taxes in Minnesota?

The amount each LLC pays in taxes will vary, but each owner will pay state income tax on their earnings. Tax rates in Minnesota range from 5.35 to 9.85%.

Can I be my own registered agent?

Yes, an owner can be a company’s registered agent. You can also ask a friend, family member, or coworker or hire a professional service to take on the role. A professional service will charge an annual fee and will notify you when documents come in.

Is an operating agreement required for an LLC in Minnesota?

An operating agreement is good business practice, but it’s not required. The state doesn’t mandate it or require you to submit it with your formation documents.

How long does it take to register an LLC in Minnesota?

Filling out the paperwork doesn’t take long, but once submitted, it usually takes the state 3 to 7 days to approve electronic submissions.

Do I need an EIN for my Minnesota LLC?

Most LLCs do obtain an EIN. You’ll need it to set up business bank accounts, apply for a loan, and hire employees. While some smaller LLCs can go without it, it’s best to get the number from the IRS. It only takes minutes.

Are there grants available in Minnesota?

Minnesota does offer a variety of grants for small businesses. The MN Department of Administration has a list of funding options and their application processes.

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When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons.

An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.

1. Select a name for your Minnesota LLC

Follow naming requirements

There are two major guidelines to follow when naming your LLC in the state of Minnesota:

  1. An LLC’s name must be distinguishable from the names of existing businesses on file with the Minnesota Secretary of State.
  2. An LLC’s name must either contain the phrase “Limited Liability Company” or the abbreviation “LLC.”

Need help coming up with a business name? Check out our free business name generator.

Check name availability

After choosing a name, make sure it’s available to use in the state by performing a search with the Minnesota Secretary of State Search Business Filings application.

Reserve your LLC name with the Secretary of State

It’s a good idea to reserve your LLC name with the Minnesota Secretary of State so that another business entity doesn’t use it before you are able to file your Articles of Organization.

A name can be reserved for up to 12 months with the filing of a Request for Reservation of Name. You can file online (requires account creation) or through the mail. The name reservation fee is $55 for online filings and $35 for mail filings.

2. Designate a registered agent

As in every U.S. state, forming an LLC in Minnesota requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address (not a P.O. box) in Minnesota OR if the individual or business is based out-of-state, they must have a business office in Minnesota.

Our picks of the best registered agent services

  • Northwest Registered Agent: Starting a business requires a lot of state-mandated paperwork, which can be confusing for new business owners. Northwest offers business services that can help entrepreneurs find the right documentation, fill it out, and file it on time with the right government agency. In addition to helping you set up an LLC, Northwest has a host of additional services, like registered agent services, that new owners will find useful too.
  • ZenBusiness: There’s no need to stress about filing paperwork when you work with ZenBusiness. This company offers a great variety of LLC services, the focus of which is to ensure your business is set up correctly with the proper paperwork filled out and delivered to the right branch of your state government. Of course, ZenBusiness does charge for their services, but customers say they get the most bang for their buck.
  • Harbor Compliance is a great fit for organizations that register in multiple states and for those who don’t want to pay excessive service fees. With their network and electronic document delivery, they help ensure your business never misses a legal notification.

FAQs

How much does an LLC pay in taxes in Minnesota?

The amount each LLC pays in taxes will vary, but each owner will pay state income tax on their earnings. Tax rates in Minnesota range from 5.35 to 9.85%.

Can I be my own registered agent?

Yes, an owner can be a company’s registered agent. You can also ask a friend, family member, or coworker or hire a professional service to take on the role. A professional service will charge an annual fee and will notify you when documents come in.

Is an operating agreement required for an LLC in Minnesota?

An operating agreement is good business practice, but it’s not required. The state doesn’t mandate it or require you to submit it with your formation documents.

How long does it take to register an LLC in Minnesota?

Filling out the paperwork doesn’t take long, but once submitted, it usually takes the state 3 to 7 days to approve electronic submissions.

Do I need an EIN for my Minnesota LLC?

Most LLCs do obtain an EIN. You’ll need it to set up business bank accounts, apply for a loan, and hire employees. While some smaller LLCs can go without it, it’s best to get the number from the IRS. It only takes minutes.

Are there grants available in Minnesota?

Minnesota does offer a variety of grants for small businesses. The MN Department of Administration has a list of funding options and their application processes.

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3. File Articles of Organization

An LLC is formed in Minnesota with the filing of Articles of Organization with the Minnesota Secretary of State. You can file the articles online or by mail. The online filing fee is $155 and the mail filing fee is $135.

Your Minnesota LLC’s Articles of Organization must include the following details:

  • LLC name, address, phone number, and email address
  • Registered agent’s name, address, and signature
  • LLC organizer’s name, address, and signature

4. Create an operating agreement

Although not a legally mandated step for forming an LLC in Minnesota, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

  1. Describe the LLC’s business structure
  2. Establish the individual responsibilities and obligations of LLC members
  3. Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs). The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File an Annual Renewal

All LLCs active in Minnesota are required to file an annual renewal with the Secretary of State each year. The annual renewal is due by the last day of the calendar year (December 31) and can be filed for free online or through the mail.

Business licenses and permits

A Minnesota LLC may be required to obtain one or more state or local business licenses or permits depending on the nature of its business and its location.

You can find Minnesota state business license information at the Minnesota e-Licensing portal. For information on local licensing regulations, you should get in touch with a clerk or local government representative in the city or county where your LLC is based.

Understand taxes in Minnesota

Business owners often wonder how business taxes differ from personal taxes. If you set up a corporation, you’ll file business taxes and face double taxation, in which your business income is taxed as a business and again as personal income.

An LLC is different. It’s not a corporation, which means it’s not subject to corporate taxes. Instead, you’ll pay income tax on your income via your personal income tax return. You’ll pay federal taxes and state taxes on that income. There aren’t any additional LLC taxes to worry about.

Minnesota tax rates: In the state of Minnesota, there’s a graduated individual income tax, with rates ranging from 5.35 to 9.85%.

Consider working with an accountant: While you can file your own taxes as a business owner, many choose to work with an accountant. An accountant can ensure you comply with all tax laws and help you plan for taxes yearly. While you can base your annual tax burden on last year’s numbers, many factors can alter what you owe.

If you make more in sales or make several large purchases for the company, for example, both impact your taxes. To stay informed, a tax accountant can help.

Register with the Minnesota Department of Revenue: Certain Minnesota LLCs are required to register with the state’s Department of Revenue. Examples include LLCs that collect sales tax on retail goods and LLCs with employees. You can register with the Minnesota DOR online using its e-Services application.

File a BOI Report

New in 2024, businesses are required to file a report with the Financial Crimes Enforcement Network. This federal requirement asks business owners to provide contact information for all owners, stakeholders, or anyone with a controlling interest in the company.

The report is filed once and updated as needed. Businesses established before January 1, 2024, must file the report by January 1, 2025. New businesses will file the report within 90 days of existence.

When owners change, you’re required to update the report.

Learn more about BOI reporting.

LegalZoom can help you file a compliant and stress-free BOI Report for only $149.

FAQs

How much does an LLC pay in taxes in Minnesota?

The amount each LLC pays in taxes will vary, but each owner will pay state income tax on their earnings. Tax rates in Minnesota range from 5.35 to 9.85%.

Can I be my own registered agent?

Yes, an owner can be a company’s registered agent. You can also ask a friend, family member, or coworker or hire a professional service to take on the role. A professional service will charge an annual fee and will notify you when documents come in.

Is an operating agreement required for an LLC in Minnesota?

An operating agreement is good business practice, but it’s not required. The state doesn’t mandate it or require you to submit it with your formation documents.

How long does it take to register an LLC in Minnesota?

Filling out the paperwork doesn’t take long, but once submitted, it usually takes the state 3 to 7 days to approve electronic submissions.

Do I need an EIN for my Minnesota LLC?

Most LLCs do obtain an EIN. You’ll need it to set up business bank accounts, apply for a loan, and hire employees. While some smaller LLCs can go without it, it’s best to get the number from the IRS. It only takes minutes.

Are there grants available in Minnesota?

Minnesota does offer a variety of grants for small businesses. The MN Department of Administration has a list of funding options and their application processes.

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Post LLC tasks

Open business bank accounts

After business formation, all revenue should go into a business checking account.

You should keep your personal and business finances separate as a professional business. To do so, you’ll need a business checking account and should consider a business savings account and credit card, too. You’ll need a tax ID or an EIN to open accounts.

Explore your banking options: Banks aren’t just a digital safe; they offer features that can help your startup thrive. Some online banks, for example, offer online bill pay, invoicing, and integrations with common payment apps like PayPal or Venmo. Ideally, you’ll find a bank that can complement the way you do business and does more than “hold your money.”

As you conduct research, explore their features and introductory offers to see if they’re a good fit for your new LLC. Consider these options: Found, Relay, and Mercury.

Obtain a Certificate of Good Standing

Your Minnesota business should request a Certificate of Legal Existence to have on file. This certificate shows you are in good standing with the state, which is why it’s called a Certificate of Good Standing in other states.

While customers won’t ask to see it, you might come across a situation where you need it. A vendor might request it, or if you’re applying for a grant or a loan, you may need to provide it.

You can request a copy of the certificate through the Secretary of State.

Set up a business website

It’s fair to say that every business needs a website. A website provides credibility, but it also gives you a chance to connect with customers and make sales. Some businesses are 100% online, which makes a website a very important piece of the company.

To get a site published, follow these steps:

  1. Search for and purchase a domain name.
  2. Sign up for web hosting.
  3. Pick a web builder like Domain.com or GoDaddy to create a site with no coding experience necessary.
  4. Tailor your site to your customers, adding appropriate pages, content, and images.
  5. If you’re selling goods, add an e-commerce section to your site.
  6. Review and test your site.
  7. Publish it.

Domain name availability: You’ll start by reviewing and buying a domain name. Your domain name should match or be similar to your business name. It’s a good idea to review domain name availability while you’re naming your Minnesota limited liability company or nonprofit.

Costs to set up an LLC

Average cost to set up an LLC in Minnesota: $205-$355

While business owners are excited about earning money, you must also set up expenses. You’ll pay filing fees to register your business and to file an Annual Report. You may also incur fees associated with a registered agent service. Here’s a closer look at set-up fees:

  • Incorporation fees: To set up a Minnesota LLC, you must file Articles of Organization with the state. To file these documents, LLC owners are charged $155.
  • Annual Renewal filing fee: Once your business is registered, you must keep it in good standing with the state. To do so, you must file an Annual Renewal. While most states do charge a filing fee to submit this document, Minnesota does not. There is no cost.
  • Registered agent fees (optional): State law requires you to list a registered agent on your Articles of Organization. The business owner or an employee can serve as the registered agent, but some companies choose to pay a registered agent service to receive official documents for them. If you choose this route, you’ll pay an annual fee ranging between $50-$200.

Foreign LLCs doing business in Minnesota

An LLC formed outside of Minnesota that wishes to do business in the state must register with the Minnesota Secretary of State.

Follow these steps to do business in Minnesota as a foreign LLC:

  1. Comply with Minnesota LLC naming guidelines and run a search using the Search Business Filings app to confirm the name’s availability.
  2. Appoint a Minnesota registered agent.
  3. File a Certificate of Authority to Transact Business in MN with the Minnesota Secretary of State. You may file the certificate online or by mail.  The filing fee is $205 for in-person and online filings and $185 for mail filings.

FAQs

How much does an LLC pay in taxes in Minnesota?

The amount each LLC pays in taxes will vary, but each owner will pay state income tax on their earnings. Tax rates in Minnesota range from 5.35 to 9.85%.

Can I be my own registered agent?

Yes, an owner can be a company’s registered agent. You can also ask a friend, family member, or coworker or hire a professional service to take on the role. A professional service will charge an annual fee and will notify you when documents come in.

Is an operating agreement required for an LLC in Minnesota?

An operating agreement is good business practice, but it’s not required. The state doesn’t mandate it or require you to submit it with your formation documents.

How long does it take to register an LLC in Minnesota?

Filling out the paperwork doesn’t take long, but once submitted, it usually takes the state 3 to 7 days to approve electronic submissions.

Do I need an EIN for my Minnesota LLC?

Most LLCs do obtain an EIN. You’ll need it to set up business bank accounts, apply for a loan, and hire employees. While some smaller LLCs can go without it, it’s best to get the number from the IRS. It only takes minutes.

Are there grants available in Minnesota?

Minnesota does offer a variety of grants for small businesses. The MN Department of Administration has a list of funding options and their application processes.

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