How to start an LLC in Minnesota in 2024

When starting a new business, a limited liability company, or LLC, offers protections and potential financial benefits by protecting your and your members’ personal assets in the case the business is ever sued. In Minnesota, you can set up an LLC independently or with the assistance of a lawyer or LLC formation service. This guide shows you how to complete the steps to start an LLC in Minnesota and overviews the associated costs and free resources that can help you along the way.

6 steps to start an LLC in Minnesota

1. Choose a name for your LLC

The first step to starting a Minnesota LLC is choosing a name that’s available and meets Minnesota’s naming requirements. Minnesota requires that the name is unique from any other Minnesota LLC or corporation business name and it does not contain certain words (unless you are authorized to use them). Such words include: 

• Words that denote you are part of a government entity, such as “state department,” “CIA,” “FBI” or “treasury.”
• Words that denote your LLC is a type of business that requires licensure and you do not have the proper licensure, such as “bank,” “lawyer,” “credit union” and “attorney.” 

To determine if your name meets the state’s requirements and is unique, you must search for it using the Minnesota Secretary of State’s business name search tool. If this tools shows that the name you want for your LLC is already taken, you can differentiate your name in the following ways: 

• Pluralizing a word within the existing name. 
• Changing numbers in the existing name to Roman numerals or vice versa. 
• Changing numerals in the existing name to their word equivalents or vice versa (i.e., changing “1” to “one”). 
• Using the contracted version of a word that appears in the existing name (i.e., “nat’l” instead of “national”). 
• Creatively spelling words that appear in the existing name (i.e., changing “Crystal’s dinner” to “Kristal’s dinner”).
• Abbreviating words that form part of the existing name (i.e., changing “doctor” to “dr.”). 
• Removing or changing prepositions or conjunctions in the existing name (i.e., changing “Smith and Sons,” to “Smith Sons”). 

Continue searching new name variations using the Minnesota Secretary of State’s name search tool until you land on a name that is desirable and available.

In addition to ensuring your name is available within Minnesota, check the United States Patent and Trademark Office’s search trademark database to learn if the name is protected nationally from use by a new business. 

Finally, ensure your new name is marketable by searching for its domain name and social-media-handle versions. For example, if you have chosen the LLC name “Kwik Fix” for your auto repair shop, search popular social media platforms for @kwikfix and the internet for www.kwikfix.com to ensure these forms are available to market your LLC. 

Once you have a desirable name that is available within your state, is not protected nationally from use and is marketable, you can reserve the name so it remains available until you file your LLC formation paperwork. The most affordable way to reserve a name is by mail ($35). To file by mail, fill out a name reservation form. As you do, you must provide the following information: 

• Your desired or reserved LLC name. 
• Who the name is reserved for (you can provide your own name in this field). 
• Your LLC’s street address. 
• Your name, email address and phone number. 
• Your signature and the date. 

Your check or money order for the $35 filing fee should be payable to the “MN Secretary of State.” Mail your form and payment to the address listed at the bottom of the form. 

You can also file online for $55. Before doing so, you must create an account with the Minnesota Secretary of State by providing your email address and choosing a secure password.

Whether you file by mail or online, your name will be reserved for 12 months from the date of filing your name reservation. If you have not formed your LLC by your reservation’s expiration date, you can renew it for another 12 months. 

2. Create an operating agreement

While not required by the state, we strongly recommend creating an operating agreement for your LLC. Doing so confirms your LLC members’ limited liability protection in the event it’s challenged in court and can offer the following additional benefits:

• Dispute prevention support: Because your operating agreement outlines your LLC’s operational procedures and members’ rights and responsibilities, it helps to prevent member disputes that could otherwise arise due to member confusion. 
• Dispute resolution guidance: An operating agreement that clearly defines operating procedures can help to guide members to a clear understanding of them should confusion arise that leads to a member dispute. This guidance is invaluable as it could prevent irreconcilable member disagreements that sometimes lead to LLC dissolutions. 
• Foresight: Gathering your members together to brainstorm and agree on best operating procedures helps to set your LLC up for success by implementing best practices from day one. 
• Protection against state default operational rules: For LLCs that do not have an operating agreement, states offer generic LLC operating rules that must be followed. These rules may go against your LLC’s operating needs or your members’ wishes. By creating and signing an operating agreement, your members can override such state rules. 

Your operating agreement should include the following information:

• Your LLC’s purpose. 
• Your LLC’s management structure.
• The ownership percentage of each member.
• How disputes are resolved.
• The process to sell LLC shares. 
• The procedures to induct a new member.
• Your members’ responsibilities and voting rights. 
• Your LLC’s accounting method (accrual or cash method, for example). 
• The process to dissolve the LLC if ever necessary. 

You don’t have to draft an agreement on your own. Instead, you can access a template from a business formation service provider like Rocket Lawyer or Northwest Registered Agent, then fill in the provided outline with your LLC’s information. If you hire an LLC formation company, a template and professional guidance may be included in your plan or offered for an additional fee.

Either way, to ensure it meets the unique needs of your LLC, we advise you to have a business lawyer review your operating agreement prior to your members signing it. Many LLC formation companies, such as Rocket Lawyer and LegalZoom, offer such legal services for a fee.

3. Choose a registered agent

Minnesota requires you to appoint a registered agent for your LLC. A registered agent is a designated person or company that receives legal notices on your LLC’s behalf. For example, if your business is sued, the process server delivers the notifying paperwork to your registered agent. A registered agent can be a person or an entity. However, in Minnesota, the LLC itself or the its principal executive office cannot serve as your LLC’s registered agent. 

For an individual to serve as a registered agent in Minnesota, they must meet the following criteria: 

• Be at least 18 years old. 
• Have a street address in Minnesota (not a PO box). 
• Be available at the listed registered agent address during all regular business hours throughout the year. 
• Be able to receive documents on the LLC’s behalf and alert responsible parties who can address them in a timely manner. 

You can act as your own registered agent, but many business owners hire a professional registered agent firm for several reasons, including:

• Owner privacy: Registered agent contact information is recorded in public registered agent databases. When you hire a registered agent service, their address is made public instead, allowing you to protect your personal address and other contact details from public awareness.
• Reputation management: It can be embarrassing to have someone show up at your business to notify you that your LLC is being sued in front of customers or personnel. If you hire a third-party registered agent, that paperwork will be delivered to their office, not yours, and you will be discretely notified of their reception and viewing availability via an online portal. 
• Dependability: A registered agent who is internal to your LLC must be available during all regular business hours throughout the year at the listed registered agent address. If they leave the office for business travel or sick time off, documents could be delivered when the registered agent is absent, which can lead to penalties. To avoid this, many LLCs hire a registered agent service that can be always present during business hours, meet state requirements and provide timely notification when documents are delivered.
• Extra compliance support: Many registered agent service providers offer additional features and tools to help LLCs stay compliant with state laws and regulations. It might, for example, alert LLC personnel if a document has not been addressed in a timely manner or offer an online calendar with reminders of filing due dates. 

Hiring a registered agent costs from $0 to $300 per year, depending on the provider and services offered. If hiring a registered agent service provider is best for your LLC, read our best registered agent guide to find the right one for your business needs.

4. Submit your articles of organization

Submitting your articles of organization marks your LLC’s official legal formation. To complete this step, you must fill out and submit an articles of organization form, along with a filing fee. To complete the form online, you need the following information: 

• Your LLC’s name. 
• Your registered agent’s name and address. 
• The name and address of your LLC’s organizer (which is likely you). 
• An email address where the Minnesota Secretary of State can send official notices. 
• The name and phone number of someone the state can contact about this form as needed. 
• How many employees your LLC has. 
• Whether you or a member of your LLC is a woman, member of a community of color, a veteran, a member of a disability community or a member of an immigrant community. 
• The industry in which your LLC operates. 
• Whether your LLC operates full or part time. 
• Your LLC’s gross revenue for the last year.
• Credit or debit card information to pay the filing fee.

You can complete a PDF version of the form and send it by mail to the address listed at the bottom of the form, but the easiest way for most LLCs to form their business is by using the Minnesota Secretary of State website to file their articles of organization. 

To file online, access the state’s search business filings page (the same page where you searched for available names). At the top of the page, click “create an account.” Follow the prompts to create an account. 

Once you’ve created an account, return to the “search business filings” page and scroll down to “file a new business or nonprofit.” From the list, click “limited liability company (domestic)”. Follow the prompts to fill out the form, pay your $155 filing fee and submit the form. 

Creating your LLC requires a fee. Online filing costs more but is likely to be approved faster than a paper application sent by mail. Here are the filing fees, depending on your submission method.

You will receive an email once your form has been processed. Click the link within the email to access a downloadable and printable copy of your certificate of formation. Keep the document in your records with your other LLC business documents. 

New LLC reporting requirement alert 

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has implemented a new reporting requirement for all non-exempt LLCs starting on January 1, 2024. 

The requirement is called the Beneficial Ownership Information (BOI) report and it is estimated to only take about 20 minutes to complete. 

Here’s what you need to know:

• LLCs formed before January 1, 2024 have until January 1, 2025 to file.
• LLCs formed between January 1, 2024 and January 1, 2025 have 90 days to file from the confirmed date of the businesses’ registration.
• New LLCs formed after January 1, 2025 will have 30 days to file from the confirmed date of formation.

For all details, FAQs and to file, visit FinCEN’s BOI website. 

5. Obtain an employer identification number (EIN) 

An employer identification number (EIN) identifies your LLC before the federal government like a Social Security number does for a person. It is also useful for opening an LLC bank account, applying for business loans or grants, applying for business permits or licenses and hiring employees. Getting an EIN from the Internal Revenue Service website is free and takes about 15 minutes. 

You can fill out the form online from Monday to Friday, 7 a.m. to 10 p.m. Eastern Standard Time. The form must be completed in one sitting. To fill out the form, you need the following information:

• Your LLC’s legal name, mailing address and street address. 
• The name and Social Security number of a controlling member of your LLC (called a “responsible party”. 
• The type of entity (in this case, a limited liability company). 
• The reason you’re applying (in this case, select “started a new business”). 
• The date the business formed (see your certificate of formation to retrieve this date). 
• The closing month of your LLC’s accounting year. 
• The number of employees your LLC has hired (if applicable). 
• The date wages were first paid to employees (if applicable). 
• Your LLC’s industry. 
• The types of products or services your LLC sells. 
• The name and contact information of someone the IRS can contact about the form if needed. 

You can apply online by accessing the IRS’s apply for an employer identification (EIN) online page. Scroll down below the fold and click “apply online now.” Follow the prompts to fill out and submit the form. 

Once you’ve submitted the form, you will immediately be presented with a confirmation page with your EIN. Print the form to keep with your LLC business documents. 

6. Get a Minnesota Tax ID

Your business will also likely need a Minnesota tax ID. This number may be necessary for completing some key business tasks, such as opening an LLC bank account. In Minnesota, you need a tax ID if your LLC: 

• Makes taxable sales in Minnesota.
• Performs taxable services in Minnesota, such as building cleaning and maintenance, operating a dry cleaning business, offering pet care services or performing lodging and related services. 
• Leases property in Minnesota. 
• Hires employees. 
• Makes estimated business tax payments (most LLCs do). 
• Pays special taxes, such as on the sale of alcohol, tobacco or insurance premium products. 
• Has solid waste management taxes to report. 
• Pays the Minnesota use tax (required if you buy, lease or rent taxable items or services and the seller doesn’t charge Minnesota sales tax).
• Files an S corporation or partnership tax return. 

To apply, you need the following information: 

• Your LLC’s EIN. 
• The names and Social Security numbers of your LLC’s officers or members. 
• Your name and email address. 
• Your business name and address. 
• Your LLC’s NAICS code. To locate this code, search by your industry using the North American industry classification system search tool.

Apply by visiting the Minnesota Department of Revenue’s business registration page. Scroll to the bottom and click the next arrow (>). Follow the prompts to fill out the form and submit it.

7. Submit annual renewals

Keeping your LLC current in Minnesota doesn’t require additional annual fees but you must submit an annual business renewal to remain in good standing. If you fail to file your annual renewal, your LLC will be dissolved.

To file an annual renewal, sign into your Minnesota Secretary of State account. From there, visit the business filings online page and search for your business. From the search results, click “details” under your business name, then “file amendment/renewal” on the next page. Click “online filings,” then complete the form as prompted. Finally, click “submit.”

You will be taken to a confirmation page with a confirmation number. Print this document. Once your filing is processed, you will receive an email with a link. Click the link to download a copy of your filing. 

Find the best LLC services for Minnesota: Top LLC services of 2023

Frequently asked questions (FAQs)

Can I set up an LLC for free in Minnesota?

You cannot set up an LLC for free in Minnesota. Depending on how you register, most businesses will pay either a $135 or $155 fee to file LLC articles of organization. Other fees may also apply, such as fees for hiring a registered agent service and to reserve a business name. If you use an LLC formation service, you’ll typically have to pay an annual fee to that company. To learn more, read our cost to start an LLC guide. 

Do Minnesota LLCs pay taxes?

Minnesota LLCs are pass-through entities, meaning LLC members pay taxes on their personal income tax returns based on their share of ownership. When your LLC is taxed as an S corporation, your members must pay income taxes based on the number of shares they own. 

In addition, the LLC must pay state taxes on built-in gains and net capital gains that are subject to federal tax. It also must pay a minimum fee if its property, payroll and sales or receipts total exceeds a set threshold of $1,160,000. However, if the company’s property, payroll and sales is less than $1,160,000, the company does not owe a minimum fee. In addition, the federal tax rate of an S-corp elected LLC is 9.8%.

Do I need a registered agent in Minnesota?

Yes, every Minnesota LLC must designate and maintain a registered agent. The LLC cannot act as its own registered agent but a person within it can. If you don’t act as your LLC’s registered agent, you must designate a person or a third-party entity to do so. 

If a person, they must reside in Minnesota, be present at the registered agent address during all regular business hours throughout the year and be at least 18 years old. If an entity, it must be a Minnesota business or a foreign entity authorized to do business in Minnesota. A PO box alone is not an acceptable registered agent address.

Do Minnesota LLCs need to file an annual report?

Minnesota LLCs must file an annual renewal once every calendar year. There’s no renewal fee if the entity is active and in good standing.

How do I dissolve an LLC in Minnesota?

According to Minnesota statute 3322C.0701, your LLC must follow your operating agreement’s guidelines on company dissolution policies and procedures, including the circumstances in which it can be dissolved and the voting procedures for dissolving it. All members must also consent to its dissolution. You must then fill out a statement of dissolution for a Minnisota limited liability company.