How To Set Up A Minnesota LLC

If you are thinking of starting a business in Minnesota and want to form a Limited Liability Company, it is important to understand the process and requirements for setting up your business right. In this guide, I’ll provide the information you need to get started, including the steps involved and the necessary paperwork.

Related: Starting A Business In Minnesota Checklist

What is an LLC?

The Limited Liability Company (LLC) is a popular business structure for many businesses starting in Minnesota. It provides personal liability protection and has the potential to save money on taxes. Our guide teaches you how to form an LLC in Minnesota without an attorney.

Unlike a Minnesota sole proprietorship or partnership, where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal entity that protects the business owner’s personal assets. So, if the LLC is sued, the owner’s personal assets are usually protected.

Besides liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

Steps To Form A Minnesota LLC

Step 1: Choose an LLC Name

The first step in forming a Minnesota Limited Liability Company is to make sure the name you want is available. Every LLC in Minnesota must have a distinguishable name from other entity names registered in the state. The Minnesota Secretary of State makes it easy to do a Minnesota LLC name search so you can quickly find out if your LLC name is available. 

In addition to making sure the LLC name is available, you also must include one of the following phrases or abbreviations at the end of the business name:

• Limited Liability Company
• LIMITED LIABILITY COMPANY
• L.L.C.
• L. L. C.
• LLC

A comma may be used after the business name and before the designator.  “Twin Cities Treasures LLC” and “Twin Cities Treasurer, LLC” are acceptable.

If there is a name you want to use but aren’t ready to form the LLC, the Request for Reservation of Name can be filed to hold the name for up to 1 year.

The name must also not contain any words or phrases that indicate or imply the business is organized for anything other than a legal business activity.

A few other Minnesota naming requirements include:

• Words or phrases such as insurance, brokerage, or anything similar may indicate the business is involved with insurance underwriting unless permitted by the state to do so.
• The & symbol can’t be used.
• The only allowed characters are the numbers 0-9 and the letters A-Z.
• The name must be under 250 characters.

If you plan to use a different name from the one that you register (perhaps you want to run multiple businesses under the LLC), you can use an assumed name (sometimes referred to as a fictitious business name, trade name, DBA, or Doing Business As name).  To register an assumed name, file the Certificate of Assumed Name, along with the state filing fee. Additionally, a legal notice is required to be placed in a newspaper in the county where the business is located for two consecutive issues.

Step 2: Appoint a Minnesota Registered Agent

In Minnesota, every LLC will need to designate a registered agent. A registered agent is an individual or company with a Minnesota street address responsible for legal correspondence. This commonly includes receiving legal documents, such as lawsuit notifications, on behalf of the business.

While many LLC owners opt to fulfill this role, some hire registered agent services. Utilizing a registered agent service ensures that your LLC adheres to state requirements while offering an added layer of convenience and confidentiality since the owner’s personal address isn’t disclosed in public records.

Related: How To Appoint A Minnesota Registered Agent?

Step 3: File the Minnesota LLC Articles of Organization

The paperwork to officially create an LLC in Minnesota is called the Articles of Organization. To submit the paperwork, you can file online through the Minnesota Secretary of State or download and mail the Minnesota Articles of Organization form.

Related: How To Fill Out The Minnesota Articles Of Organization

A few sections and terms can be confusing when filling out the Articles of Organization. I’ll go over the sections that tend to give people trouble so you can answer them right.

Organizers

The LLC Organizer is involved with filing the Articles of Organization.  The Organizer may or may not be a member (LLC owner), such as a mentor, attorney, or accountant, but the initial members could also be an organizer. 

Client Reference

Individual filers will leave this section blank. However, if an attorney or entity formation service completed the articles on your behalf, they would include a reference number to track the application.

Minnesota Business Snapshot

This voluntary section includes information regarding the number of employees, women, minority or veteran ownership, business classification, and more.  

What To Do After Starting A Minnesota LLC

Once the LLC has been formed, there are a few additional steps to take. Below is a list of the most common tasks.

Prepare a Minnesota LLC Operating Agreement

The LLC operating agreement is a document that governs the framework of an LLC and covers ownership rights, LLC member responsibilities, distribution of profits and losses, and more.

Most states (including Minnesota) do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

• The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
• Member’s personal liability protection may be diminished.
• Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Obtain an EIN

If the LLC will hire employees or is owned by more than one member, an EIN is required. 

The EIN or Employer Identification Number (also referred to as a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to an individual’s social security number, the EIN identifies business entities for tax purposes.

Related: How To Register For An EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

• A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
• Copies of the original formation paperwork from the state showing the official creation of the LLC.
• Driver’s licenses of the members.
• In some circumstances, a Minnesota Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, various business licenses and permits will likely be needed before starting your business. Some common registrations include:

• Business license: Minnesota does not have a general business license, but some cities require businesses to obtain licensing before they can start.
• Professional license: Certain services, such as barbershops, accountants, salons, and others, must be licensed in Minnesota.
• Sales tax permit: A Minnesota sales tax permit from the Minnesota Department of Revenue is necessary to sell products and certain services.

Related: How To Register A Business In Minnesota

File the Minnesota LLC Annual Renewal

LLCs are required to file an annual report with the Minnesota Secretary of State every December 31st. Unlike most states, the annual filing fee is $0.

Related: How To File A Minnesota LLC Annual Report

Minnesota LLC FAQs