How to Form an LLC in Minnesota: A Complete Step-by-Step Guide

If you are planning on starting a new business in Minnesota, an LLC can be a great option due to their ease of formation, flexibility in ownership, and liability protection for owners. There are important considerations to keep in mind during this process to ensure you are meeting all requirements by the state and correctly form your new business. A checklist can be helpful to avoid forgetting any steps in this process. The steps you will need to complete will include:

1. Choosing a business name

2. Appoint a registered agent

3. Submit your Articles of Organization

4. Draft an operating agreement

5. Obtain an EIN

6. Maintain ongoing compliance to stay in good standing

This guide will cover the key processes of forming and keeping a new LLC in good standing with the state of Minnesota. You can either choose to go through this process on your own, or you can have a service like Firstep complete this for you so you are able to focus more time on getting your new business up and running. To start, you will need to select a strong business name.

Step 1: Choosing a Business Name

The first step of forming a new LLC in Minnesota will be to choose a business name. Your name will need to be unique and distinguishable enough from other active businesses in the state, so it's important to use the business name search tool to check if your chosen name is already in use or not. It can be helpful to brainstorm a few different names you would like so if one is already taken you can easily choose another name.

There are some requirements your business name will need to meet such as containing a designator like "L.L.C", "LLC", or "Limited Liability Company". Also, you will need to make sure you are avoiding using misleading terms in your business name that do not relate to your business such as "bank", "insurance", or "law". These terms will only be approved if these relate to your business offerings or industry, and typically professional services will need certain licensing as well.

Step 2: Appoint a Registered Agent

Any LLC that is formed in Minnesota will be required to have an active registered agent. Your registered agent will be responsible for receiving any service of process that is sent to your business, such as notices of legal action or important documents sent to you by the state. You are able to appoint whoever you would like as your registered agent whether that be yourself, a trusted friend or family member, or you can hire a registered agent service. Your registered agent will need to meet certain requirements such as being 18 years or older, having an active address in the state of Minnesota, and being available during regular business hours which are Monday through Friday 9am-5pm.

Be aware that if you do choose to be your own registered agent the address you list will be on your business's Articles of Organization, which is public information. If you want to avoid this, you will need to appoint someone else or use a service that is able to list their business address on these documents.

Step 3: Submit Your Articles of Organization

With your name and registered agent chosen, it's now time to file your Articles of Organization to officially form your new LLC. This form can be found on the online filings tab from the business page and scrolling down to select to form a limited liability company. Be sure you are choosing the correct type of LLC, either domestic or foreign, but in most cases this will be domestic. You will then be asked to submit your name and choose the designator for the business, and then be directed to begin filling out the form.

The first step will be to enter the organizers of the business including the name and address of each person. This address does not need to be in Minnesota. You will then be asked to enter the name of your registered agent, and on the next page you will need to enter the address information for whoever you appoint. After this, you will enter your mailing address. You only need to enter this information if you want your mail sent somewhere other than your registered agent address. The following steps will be uploading any additional attachments to this filing, as well as giving contact information such as email, phone number, and name the state will be able to send links to your documents at. To finish the form, you will be asked for an email official notices can be sent to and also there is a voluntary survey at the end, but you are not required to fill this out.

Once you have gone to the next step, you will be sent to a review page to ensure all information you entered is accurate and entered correctly. This is where you need to check for any typos or misspellings of your information. After checking, you will choose to submit this form and be taken to a payment page. The total cost of an Articles of Organization in Minnesota will be $155 if filing online. It will be $135 if done through the mail, but you will need to print out this form and mail it in which can make the processing times much longer than if done online. If this is done online, the process will be instant and you can download your documents through the final page.

Step 4: Draft an Operating Agreement

With your new LLC officially formed, a good next step will be to draft an operating agreement. This document will define the roles and responsibilities of the owners of the business, and detail how certain processes will be done such as when members join or leave the business. Also, operating agreements define the ownership percentages, voting rights, rules for tie breakers when votes are split, and decision making processes.

Operating agreements are not legally required in Minnesota, but they are highly recommended to ensure all owners understand what roles they are responsible for and how things will get done in the business. As your business grows, it will be much easier to handle certain processes if you have clearly defined roles and ways your business will do things such as how you will handle a new owner joining the business. Operating agreements will also strengthen your liability protection that LLC owners enjoy as it will define how your business is keeping personal and business finances separated, as well as ensuring you are legally conducting business and following any guidelines imposed by the state of Minnesota.

Step 5: Obtain an EIN (Employer Identification Number)

Another document that you will need to get after officially forming your new LLC will be an EIN, or employer identification number. This number will be issued to your business by the IRS and they will only issue one number for each business. It does not expire, but you will need to ensure you keep the documentation and EIN number you are given because you will most likely need it while conducting regular business operations.

You can either choose to obtain this number on your own, or have a service like Firstep get this for you. Since this is done through the IRS, it's important to be aware you will need to input all information exactly how it appears on your Articles of Organization to get your document approved. If you have already gotten an EIN before and forgot it or lost the documentation for it, you can still retrieve it. However, this process will take much longer than getting a new one, and since only one number is issued to each business you will have to go through the process of dealing with the IRS to retrieve it. Firstep is also able to do this for you so you do not have to deal with the IRS, but the timeline is reliant on the IRS which can take multiple weeks or longer.

Your EIN will be used for tax purposes, hiring employees, or opening a business bank account. Typically to open a business bank account you will be required to provide your Articles of Organization, your EIN, operating agreement, and personal ID. This is also helpful when dealing with outside vendors or partners as you will not need to ever provide your personal social security number if you have an EIN for your business.

Step 6: Maintain Ongoing Compliance and Good Standing

With your new LLC formed and all required documents obtained, the last and one of the most important things you will need to do is maintaining ongoing compliance with the state of Minnesota. This compliance will include things such as annual reports to renew your business registration as well as filing for any required business licenses that are needed for your specific industry.

Annual Reports

For LLCs in Minnesota you will be required to submit annual reports each year by December 31st. You are able to submit these reports at any time throughout the year and will be used to update any business, registered agent, or ownership information. In Minnesota these reports cost $0, and will be submitted through the business page on the Minnesota secretary of state website. Be sure to use these reports to ensure all your business information is updated and accurate, and to file your annual reports on time.

Failure to file your annual reports on time can lead to additional fines and fees that are imposed on your business, and if left long enough can lead to potential administrative dissolution. If your business is administratively dissolved, you will no longer be in good standing and not considered able to legally do business in the state. The typical fee for reinstatement in Minnesota will cost around $85 if filing online, and will catch up your business for all missed annual reports. If your business has been administratively dissolved for more than a year with no action taken, other businesses will be able to take your name so it's important to take care of this as soon as possible.

Business Licenses

Depending on the industry your business is in, you may be required to file for certain business licenses and this is typically done through the local government. In most cases, businesses that will need to do this are professional services such as healthcare, law, construction, and insurance. If you are operating in these spaces or think you may need this certification, be sure to check with your local government or do your own research to ensure you are not missing this step.

FAQs on LLCs in Minnesota

Where do I go to submit my Articles of Organization and annual reports in Minnesota

Both of these tasks are able to be taken care of from the same website, the Minnesota business portal. To see if you owe for annual reports, you will first need to search your business name or file number using the search tool. To submit an Articles of Organization and form a new LLC you will need to go to the business filings tab, scroll down on this page, and choose the domestic limited liability company option.

Do I need to live in Minnesota to form an LLC in the state

No, you do not need to live in Minnesota to form a new LLC in the state. However, you will need to be able to provide a registered agent with a current and active address in Minnesota to get your Articles of Organization approved. The organizers of your LLC are able to list addresses from any state.

When am I able to file my annual report for my Minnesota LLC

In the state of Minnesota, you are able to file your annual report at any time during the year. The due date is December 31st, and filing is available at any time throughout the year. It can be helpful to set your own date early in the year to file this each year to ensure you do not forget or miss any deadlines.

What if I don't have a registered agent

If you do not have someone you trust to appoint as your registered agent, you are able to hire a service to handle this for you. By doing this, you will not need to list your personal address on your formation documents and this service will be responsible for receiving service of process on your behalf and getting you these documents in a timely manner.

Is it required by law to have an operating agreement in Minnesota

No, it is not legally required for Minnesota LLCs to have an operating agreement to form their business. However, it is highly recommended as you will most likely need this document to be able to open a business bank account as well as when dealing with certain outside vendors, partners, or investors. Operating agreements also help enforce your liability protection which provides owners of the LLC more protection in ensuring they are keeping personal and business finances separate, and they are following all regulations that are in place for Minnesota LLCs.

How much does it cost to form and maintain an LLC in Minnesota

To form a new LLC in Minnesota and submit an Articles of Organization it will cost $155 if filing online and you do this on your own. To keep your business in good standing and compliant with state guidelines, you will need to file annual reports by the due date of December 31st, and this will cost $0. A service like Firstep is able to take care of both these processes for you so you do not have to deal with filling out the paperwork and remembering deadlines, as well as ensuring these are always correctly submitted with accurate and updated information.