How to start an LLC in minnesota [Best Article]

Last updated : Aug 20, 2022

How much does it cost to form an LLC in Minnesota?

How much does it cost to form an LLC in Minnesota? The Minnesota Secretary of State charges $135 to file the Articles of Organization by mail and $155 to file online or in-person. You can file an LLC name reservation for $50 if filed by mail and $55 if filed online or in-person.

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

You can file your LLC by mail or you can file it online. If you file by mail, the fee is $135 and the approval time is 4-7 business days. If you file online, the fee is $155 and the approval time is immediate.

What is needed for LLC Minnesota?

To start a Minnesota LLC you'll need to file the Articles of Organization with the Minnesota Secretary of State, which costs $155 online. You can apply online, by mail, or in-person. The Articles of Organization is the legal document that officially creates your Minnesota Limited Liability Company.

How is an LLC taxed in Minnesota?

In Minnesota, this corporate tax generally is a flat 9.8% of taxable income. However, additional or alternative taxes may also apply. In general, if your Minnesota LLC is taxed as a corporation, it will need to pay some kind of income taxes or fees to the state.

What is the disadvantage of an LLC?

Disadvantages of creating an LLC States charge an initial formation fee. Many states also impose ongoing fees, such as annual report and/or franchise tax fees. Check with your Secretary of State's office. Transferable ownership. Ownership in an LLC is often harder to transfer than with a corporation.

What are the benefits of an LLC vs sole proprietorship?

Only LLCs can choose corporate tax status A key difference between LLCs vs. sole proprietorships is tax flexibility. Only LLC owners can choose how they want their business to be taxed. They can either stick with the default—pass-through taxation—or elect for the LLC to be taxed as an S-corporation or C-corporation.

Can I be my own registered agent in Minnesota?

Can I Be My Own Registered Agent In Minnesota? Yes, any owner or employee of a business can be its registered agent in Minnesota as long as they are over the age of 18, and have a street address in Minnesota.

How do I get a tax ID number in Minnesota?

Before you make any taxable sales in Minnesota, you must register for a Minnesota Tax ID Number and a Sales and Use Tax account. If you need a Minnesota Tax ID Number, you can apply: Online – Go to Business Tax Registration. By phone – Call 651-282-5225 or 1-800-657-3605 (toll-free)

What is a sole proprietorship vs LLC?

An LLC exists separately from its owners—known as members. However, members are not personally responsible for business debts and liabilities. Instead, the LLC is responsible. A sole proprietorship is an unincorporated business owned and run by one person.

Does an LLC need an EIN?

An LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN. An LLC applies for an EIN by filing Form SS-4, Application for Employer Identification Number.

How do I get an LLC?

1. Choose a Business Name.
2. Check the Availability of Your Business Name.
3. Register a DBA Name.
4. File Your LLC's Articles of Organization.
5. Designate a Registered Agent.
6. Draft an Operating Agreement.
7. Fulfill the Publication Requirement.
8. Obtain Business Permits and Licenses.

Do you need an LLC to sell on Etsy?

The short answer is no. An LLC is not necessary for artisans, craftspeople, and other producers looking to sell goods on Etsy. Having said that, starting an LLC may be a wise move that maximizes your income and minimizes your liability.

Is a husband and wife considered a single member LLC?

Overview. If your LLC has one owner, you're a single member limited liability company (SMLLC). If you are married, you and your spouse are considered one owner and can elect to be treated as an SMLLC.

How much are business taxes in MN?

Minnesota also has a 9.80 percent corporate income tax rate. Minnesota has a 6.875 percent state sales tax rate, a max local sales tax rate of 2.00 percent, and an average combined state and local sales tax rate of 7.49 percent. Minnesota's tax system ranks 45th overall on our 2022 State Business Tax Climate Index.

What is the point of having an LLC?

The LLC has two main advantages: It prevents its owners from being held personally responsible for the debts of the company. If the company goes bankrupt or is sued, the personal assets of its owner-investors cannot be pursued. It allows all profits to be passed directly to those owners to be taxed as personal income.

What do LLCs protect you from?

The main reason people form LLCs is to avoid personal liability for the debts of a business they own or are involved in. By forming an LLC, only the LLC is liable for the debts and liabilities incurred by the business—not the owners or managers.

What should I put for purpose of LLC?

Statement of Purpose. Most states do not require you to be specific about the purpose of your LLC. Instead, a statement such as "The purpose of the Limited Liability Company is to engage in any lawful activity for which a Limited Liability Company may be organized in this state" is usually sufficient.

Should I get my EIN or LLC first?

We recommend you form your LLC before you get your EIN. One of the main reasons is that when you apply for your EIN, the IRS application asks you to submit the approved legal name of your business and the date it was formed. So, it is helpful to have your LLC formed and registered before you try to get your EIN.

Is it better to be self employed or LLC?

You can't avoid self-employment taxes entirely, but forming a corporation or an LLC could save you thousands of dollars every year. If you form an LLC, people can only sue you for its assets, while your personal assets stay protected. You can have your LLC taxed as an S Corporation to avoid self-employment taxes.

When should you go from sole proprietor to LLC?

People most commonly make the switch from sole proprietorship to LLC if they find they need one or more of the following: more personal liability protection, more tax options or more funding potential.

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how to form an LLC in Minnesota Minnesota is an excellent place to form a new LLC with vast start-up growth great access to funding and the second highest quality of life in the country every state has slightly different requirements for forming an LLC follow along closely to learn the required steps for creating your own limited liability company in the state of Minnesota there are two ways to form an LLC in Minnesota you can form one yourself or you can hire a service to do it for you let's start by looking at the five basic requirements to form an LLC in Minnesota on your own you can also find these steps and more detail on our website linked in the description below one name your LLC every state has its own rules about what kind of names are allowed for LLC's in general you will need to observe these naming guidelines your name must include the phrase limited liability company or one of its abbreviations LLC or LLC with a period following H letter restricted words such as Bank Attorney law office etc may require additional paperwork and may also need a licensed professional to be part of the LLC your name cannot include words that could confuse your LLC with the government agency such as FBI Treasury State Department etc you cannot use a name that has already been registered to see if your name is available in your state you'll need to do a name search this free service is available on your state's Secretary of State website check out our free guide for finding the direct link to your state we also recommend that you check to see if your business name is available as a web domain even if you don't plan to make a business website today you may want to buy the URL in order to prevent others from requiring it to choose a registered agent Minnesota requires that you nominate a registered agent for your LLC who is your business's point of contact with the state the registered agent can be an individual within the company including yourself or you can hire a professional service authorized to do business in Minnesota they will send and receive legal papers on your behalf these documents include official correspondence like legal summons and document filings which your registered agent will receive and forward to you your registered agent will help remind you to file the necessary reports failure to properly maintain your LLC can result in fines and dissolution so this assistance is valuable 3 by all the articles of organization to register your Minnesota LLC you will need to file the articles of organization with the Minnesota Secretary of State this can be done online by mail or in person you will need to state whether your LLC will be member managed or manager managed member managed means all members of the LLC manage the company this is good for small organizations where everyone is involved in the day-to-day operations the second option is manager managed where individuals are appointed to manage the LLC this is appropriate for larger organizations where not everyone is involved in the day-to-day affairs of the business 4 create an operating agreement although not every state requires it you should always create an operating agreement to establish ownership terms and member roles for your LLC this foundational document is the core of your LLC and will help you maintain your organization as well as further establish your LLC is a separate legal entity there are six main sections of an operating agreement organization outlines when and where the company was created who the members are and how the ownership is structured management and voting addresses how the company is managed as well as how the members vote capital contributions covers which members financially support the LLC and how more funds will be raised in the future distributions outlines how the company's profits and losses are shared among members membership changes describes the process for adding or removing members as well as if and when members can transfer their ownership shares and dissolution which explains the circumstances in which the LLC may be dissolved an operating agreement is an internal document it does not need to be filed with the state however it should be updated every time there is a change in membership or management at the company you can download a free sample operating agreement or create a custom one using our free operating agreement tool at how to start an LLC comm 5 obtain an ein lastly you'll need to get an employer identification number or ein from the IRS also known as a federal tax identification number your CIN is like a social security number for your LLC and is how the IRS tracks your business for tax purposes an ein is also necessary to open a business banking account and legally hire employees EW ends are free of charge and can be obtained from the IRS online or through the mail and with that you'll have formed a Minnesota LLC on your own option to hire professional service the second way to create a Minnesota LLC is the higher professional service to create your LLC for you hiring a professional service to file your forms and act as your registered agent for the LLC will cost you an additional fifty to one hundred and fifty dollars however there are several benefits to working with a pro a hired registered agent helps with getting your reports filed on time helps you stay organized by keeping your business mail separate and is available at all regular business hours to accept official mail and legal papers on your LLC's behalf a final and important additional benefit of using a service is privacy a professional service will provide a level of privacy by withholding your personal name and home address from the LLC's contact information there are many reasons why you might not want your personal information easily accessible and associated with your business hiring a professional LLC for mation service is an easy way to accomplish this now that you've seen the different requirements and ways you can form an LLC in Minnesota visit our site and take some time to research your options and establish a solid foundation for your business activities click on the links in the description below to research the top five professional formation services or get more information on how to form a Minnesota LLC on your own now you know all the steps to form an LLC in your state for a more detailed guide go to how to start an LLC com you can also create an operating agreement and use our business plan tool free of charge give the video a like if you found it useful and subscribe if you'd like to see more and if you have questions or encounter any roadblocks leave a comment below good luck and starting your small business you

Thanks for your comment Adrianne Bevell, have a nice day.
- Jean Falso, Staff Member

in today's video we're going to be talking about how to start an llc in minnesota and i'm going to be giving you three ways to do it the diy route through the state website the diy do-it-yourself route using online legal tools or hiring an attorney as far as hiring an attorney i'm also going to give you a tip on how you get a 15-minute consult for free so you're not immediately running the meter but more important than all of that is we're going to be talking about terms that are related to cracks in your llc and what i mean by that is sometimes you can set up an llc but if it's not done correctly there are cracks and it's not a legit llc and you're creating a lot of liability for yourself so if you're not familiar with terms such as piercing the corporate veil registered agents or co-mingling funds i'm going to be talking about those throughout this video and explaining what those mean and why it's so important to understand that so first why don't we look at the diy route if you're going through the state website so if you were to google minnesota llc this first listing here is going to take you to the state website as you would expect state websites are not the best as far as user experience but as far as state websites go this one's not terrible but what you're looking at here is there's two ways to go about this one is you can do the articles of organizations for an llc you fill this out you print it up and you mail it in or the other route is you can click here and then this is going to open up where you can do a online search through this route you can create an account up here and then you can pretty much go through the same steps that's on that pdf but be able to do it through an online portal so the first thing i want to talk about is this little tiny mention right here filing fee of 155 and then for expedited service in-person and online filings and then 135 dollars if by mail so if you do this whole thing by mail it is going to be 20 cheaper as if you go through the online route which to me is crazy because it should be easier going online but that's just the way they set it up and do know that that fee you're going to pay that regardless of how you do it if you go with an attorney they may bake it into their cost structure but there is going to be a 155 fee that you have to pay to the state to get set up with an llc or 135 if you mail it in now one of the things you should be aware of is this business name search right the the goal of this is that when you have a name for your llc there can't be another name similar to it you need a unique name so if we were to put like vikings in here which obviously is going to be taken in the state of minnesota uh what you're gonna see is all these listings and it's active and these are trademarked and it's going to give you all this information and details and all these names now if we were to put something crazy in and just let the fingers go wild right and you click search this is what you're looking for is no results match the criteria entered so it's nice that they have this connected to their online database and this is going to let you know if the name you have in mind is going to work and then from there you can create an account and then you can go through the steps it's pretty much going to walk you through this pdf online but one of the things that i don't like is as you go through that process is they kind of like glaze over important things and what i mean by that is in this particular case in article 2 it talks about the registered office address and agent so it's talking about a registered agent but it really doesn't explain what a registered agent is so i think at this point it's actually more important to explain exactly what an llc is and then how some of those terms i mentioned earlier in the video relate to your llc so some people think there's like a tax advantage for having an llc there's not it's simply about limiting your liability but if you think of it in this way you have your business assets so as you build your business and you have maybe an office or a retail store or location and you have these assets that you're accruing but at the same time you have your personal assets your personal home personal bank account personal car things of that nature an llc draws a division between these two asset classes and that division is called the corporate veil that is the thing that protects your personal assets if you are unfortunately to be sued if that attorney were to sue you they can only come after your business assets but what that attorney is going to try to do is pierce the corporate veil and basically what they do is they try and find a crack in your llc and if they're able to do that then what they can do is essentially erase that division and if they were to sue your business they can not only come after your business assets but your personal assets as well so that is why you're setting up the llc is to limit your liability but one of the things that people are unaware of is when you're setting up with a registered agent they're not really sure what that is and they just say i don't know that's my cousin jimmy down the street because i'm trying to save some money and i just want to get this thing set up and these services such as the state websites really don't spell out what a registered agent is there's a nice article here on ink file if you're not familiar with ink file it's an online legal tool for setting up llcs and business entities and as you scroll down a little bit it kind of gets into a bullet point list of what a registered agent is basically it's a third party it acts as like a go-between uh for your business so when you're getting official documentation or different things it's going to that registered agent who has a different address than your office and then they are forwarding you that information so official letters and correspondence from your secretary of state service of process notices so basically if you get sued to make sure you're like appearing in court official federal government correspondent information notifications tax forms and requests for payment and then request to complete permits company filings or reports so the problem is is if you just make some random person your registered agent because they live in minnesota which is required of your registered agent being a legit registered agent and making sure that your llc is up to date that you may be creating cracks in your llc because maybe you didn't do your company filings or reports because that person never told you about it because they didn't know about it so it's really important that you have an official registered agent and somebody that knows what they're doing so that you're not creating a crack in your llc so that if attorney were to sue you they can pierce the corporate fail and come after your personal assets as well so that to me is the biggest disappointing part about going through the state website yes if you want to save 20 bucks by filling this out yourself and hoping to get everything correct you can do that but what i typically recommend is going thr

Thanks Irving your participation is very much appreciated
- Jean Falso

About the author

Jean Falso

I've studied discrete geometry at Baruch College, CUNY in New York City and I am an expert in robotics (outline). I usually feel frustrated. My previous job was area, ethnic, and cultural studies professor I held this position for 23 years, I love talking about animation and canoeing. Huge fan of Macaulay Culkin I practice motocross racing and collect bobbleheads.