Opening a business is a big risk. It’s a risk for everyone, not just the people who live in Minnesota. What if it doesn’t work? What if you fail? What if you lose all your money and investments? What if you lose your home, your life’s savings or more? This is entirely possible if your business is sued, but Minnesota law does offer a bit of reprieve for business owners. You might still lose everything you put into your business, but you don’t have to lose your personal assets if you are sued so long as you register your business as a Limited Liability Company. This works like a sole proprietorship, but you have the protection for your personal assets you get with a corporation. It’s a smart legal and financial move, and the law requires you file some specific paperwork and abide by specific laws to make it happen. All the paperwork required to form an LLC in Minnesota is available online on the Minnesota Employment and Economic Development website.
Forming an LLC in Minnesota
- Reserve a name
- Choose a registered agent
- File Articles of Organization
- Apply for an EIN if applicable
- Obtain business licenses
- Register with Minnesota Department of Revenue if applicable
- File annual renewals
The laws for becoming an LLC in Minnesota are quite simple. You need to follow the above steps and requirements in order, and you shouldn’t have any issue becoming an LLC in Minnesota. Choosing a name means filing for a name reservation so you can hold onto it while you file the rest of your paperwork. The form is available to file online or in person. The fee to file by mail is $35. If you want to file online, it’s $55.
Once your name reservation is approved, you choose a registered agent. Any person or corporation with a physical address in Minnesota can serve as your registered agent. You should choose an attorney or a law firm since this is a legal representative for your business, but Minnesota law doesn’t require you choose either. Now you file your Articles of Organization. Very specific information is required to file this paperwork, and the fee is $135 to file by mail and $155 to file online. Once this paperwork is filed, you have to apply for an EIN if you have more than one member. This is available on the IRS website, and it’s issued immediately.
If your business is new, you need to file for the appropriate business licenses. These differ based on the type of business you own, and the county in which you do business in Minnesota. Does your business collect sales tax for goods sold? If so, you need to register with the Minnesota Department of Revenue. Annual Renewals are due every year by December 31. The state mails you a reminder every year, and you need only remember to renew with the appropriate fee. The fee to renew online is $45. It’s only $25 to send your renewal by mail each year.
The biggest challenge in forming an LLC in Minnesota comes for business owners who have been in business for some time. If the name you’ve been using for a while now is already registered to another business owner in Minnesota, state law prohibits you from using the same name. This proves challenging for business owners with an established business history. You also have to provide the “LLC” at the end of your business name if you register. Sometimes you’re able to file a name that’s very similar with a small change that doesn’t affect the logos, cards, signs, and information you already have in place. Other times, you have to change your name entirely.
Forming an LLC in Minnesota takes some time, but it’s a simple process overall. You’ll be protected personally from any debts your business incurs. The fees to become an LLC are minimal, and much less expensive than the fees you’ll face if your business is ever sued. Protect yourself. Minnesota law allows you to do it, so take advantage of that.