In Minnesota, limited liability companies are arguably the most popular business structure for small enterprises. There were about 13,797 new establishments in Minnesota between March 2019 and March 2020. Many people prefer LLCs because they are simple to run and offer lots of benefits, such as protection of your personal assets in case something happens to your business.
If you are unsure how to start an LLC in Minnesota, read on to learn the procedure of forming an LLC in Minnesota, the costs involved, and the operating agreement laws required to get your Minnesota LLC up and running.
Is an LLC Operating Agreement Required in Minnesota?
An LLC operating agreement isn’t mandatory when starting your business in Minnesota, but it’s highly advised to have one. This internal document helps to establish how your company will operate. An operating agreement sets out the responsibilities and rights of the managers and members. This document also plays a crucial part in showing that your LLC is a separate business entity.
Minnesota Operating Agreement Laws
As you plan on getting an LLC in Minnesota, you also need to know the operating agreement laws that govern businesses within the state. This way, you will remain fully compliant with the applicable laws as set out in 322C.0110 Minnesota laws.
Name of LLC
When crafting your LLC name in Minnesota, the law requires that you include the abbreviation LLC or L.L.C or the name ‘Limited Liability Company’.
Types of Minnesota LLC
You can only operate two types of businesses in Minnesota. Depending on your preference or business needs, the two types of LLCs can either be:
- Single Member Limited Liability Company (SMLLC)
- Multi-Member Limited Liability Company (MMLLC)
A Registered Agent
When appointing a registered agent for your Minnesota LLC, the registered agent must be:
- A business entity in Minnesota
- A resident of Minnesota
- A foreign business entity that is legally authorized to conduct business in Minnesota
- Should have a physical address within Minnesota.
Note that your LLC cannot be your own agent in Minnesota.
How Much Does it Cost to Form an LLC in Minnesota?
Before starting your Minnesota LLC, you need to know the costs involved in starting and running your business. These costs vary depending on the state you choose to start your enterprise. In Minnesota, you will pay a fee of $135 to the Secretary of state to file the articles of organization by mail. If you choose to file the articles of organization in person or online, you will pay $155.
You also need to file an annual renewal for your LLC as per the Minnesota law each year. If you wish to file this renewal online or in person, you will pay a fee of $45 and $25 to file by mail. You can file a name reservation for your LLC for $55 when filed in-person or online and $50 when filed by mail.
Foreign filing fees are slightly more at $185 by mail or $205 in person.
You can easily file all the required forms yourself, which is the cheapest option. If you face any challenges, you can decide to involve a lawyer, but this will come at an additional cost.
How to Form an LLC in Minnesota?
You can easily form a Minnesota LLC online by following the steps below.
Step 1 – Choose a Name for Your Minnesota LLC
The first step of starting your Minnesota LLC is to choose a business name. Whatever name you have in mind, make sure it’s easily searchable by potential customers, and it complies with the naming requirements in Minnesota.
Here are the naming guidelines you should follow:
- The company name must include a phrase that shows it’s an LLC, such as ‘limited liability company’ or an abbreviation such as LC, LLC, or L.C.
- Choose a company name that distinguishes you from other corporations, partnerships, limited partnerships, limited liability partnerships, and any limited liability companies in Minnesota.
- Don’t include words that can confuse your LLC, especially with a government agency such as a state department, treasury, FBI, and more.
- If you must include some restricted words such as university, attorney, or bank, you may need extra paperwork or assistance from a licensed individual like an attorney to be part of your business.
- Check if the URL is available: do a search online to see if your company name is available online as a web domain. Even if you plan to create your company website after some time, it’s a good idea to buy the URL early enough to prevent other businesses from acquiring it.
- Confirm if the name is available in Minnesota: you must confirm if the name you intend to use is already in use by another company in Minnesota. Conduct a filings search on the Secretary of State website.
Step 2 – Choose a Registered Minnesota LLC Agent
The next step is to appoint a registered Minnesota agent. This is a business entity or individual who accepts legal papers on behalf of the LLC in case you are sued.
Step 3 – File Articles of Organization
You then need to file your articles of organization with the government through the Secretary of State. You can register in person, by mail, or apply online as an individual or with an additional business partner. Ensure you have the following details to fill out the form:
- A registered office address
- The LLC name
- A registered office address
- Email address for official notices
- The organizer’s address, signature, and name
- Contact details including name and phone number
Step 4 – Create a Minnesota LLC Operating Agreement
Create an LLC operating agreement that outlines the operations and ownership of your company. This agreement ensures that all your business owners are on the same page and reduces possible future risks or conflicts.
Step 5 – Get a Minnesota LLC EIN
Next, apply for an Employer Identification Number from the federal government. This acts as an identification number by the IRS for your company. This number will also help keep your business and personal finances separate and protect your business from identity theft.
Step 6 – File Annual Renewals for Your LLC
The law requires all LLCs in Minnesota to file annual renewals once per year. You can fill the renewal any time before December 31 with the Secretary of State in Minnesota by mail or online.
Minnesota LLC Operating Agreement Template
Are you ready to start your LLC in Minnesota? Check out the LLC Operating Agreement Template to get you started: