How to Start a Business in Minnesota and Form an LLC
- Minnesota Business Facts and Environment
- Step 1: Decide on a Business Structure
- Step 2: Pick a Business Name
- Step 3: Register the Business
- Step 4: Obtain Your Federal Employer Identification Number
- Step 5: Open Company Bank and Credit Accounts
- Step 6: Set-up An Accounting System
- Step 7: Obtain Licenses and Permits
- Step 8: Hire Employees (if applicable)
- Step 9: Obtain Business Insurance
- Step 10: Systemize and Organize
- Step 11: Branding and Marketing
- Step 12: Annual and Ongoing Requirements
- Important Minnesota Contacts
Minnesota Business Facts and Environment
MN Business Facts
Minnesota, also known as the North Start State and Gopher State, brings in approximately $16 billion annually from the tourism industry. Other major industries in Minnesota are healthcare and medical equipment, high technology, finance and insurance, forest products, printing and publishing, food products, iron ore mining.
The state’s agriculture industry produces corn, soybeans, sugar beets, and wheat. Major livestock includes hogs, dairy cows, beef cattle and turkeys.
Major Companies Headquartered in Minnesota
Minnesota is the home of many major companies including Target, UnitedHealth Group, Cargill, Best Buy, 3M, Coustic-Glo International Ceiling Maintenance, U.S. Bank, Mayo Clinic and Ecolab.
Startup Environment
Minnesota has an outstanding business climate with a history of leading the nation for new business 5-year survival rate and Main Street Entrepreneurship. Minnesota entrepreneurs also benefit from low operating costs, competitive tax rates and streamlined regulatory processes. The state’s strong sense of community, high civic engagement and government support of business contribute to the ease of starting a company in Minnesota.
Step 1: Decide on a Business Structure
There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.
- A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
- A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
- An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.
Step 2: Pick a Business Name
Choosing a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that the better). In Step 3 we’ll show you how to search for the name in Minnesota, but we highly recommend you do the following before searching Minnesota state databases:
- Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
- Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
- Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself.
TIP: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
- Make sure your company name choice is available by searching the Minnesota Business Entity Database. NOTE: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).
Restrictions on Minnesota Business Name & Business Purpose
- Minnesota business names should be unique and distinguishable from existing businesses. Your Minnesota LLC must contain the words “Limited Liability Company” or one of the abbreviations “LLC” or “L.L.C.” Your Minnesota corporation must contain the words “corporation,” “incorporated,” “company” or “limited,” or an abbreviation of one of those words.
Step 3: Register the Business
Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in Minnesota.
How to form an LLC in Minnesota
- File the “Articles of Organization” with the Minnesota Secretary of State Business Filings.
- Once the articles are filed and approved you will need to properly organize the LLC (this also applies to “1-person LLC’s”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.
How to Incorporate in Minnesota
- File the “Articles of Incorporation” with the Minnesota Secretary of State Business Filings.
- Hold an “Organizational Meeting” to determine the percentage of ownership for each shareholder as well as resolve to do tasks like open a company bank account, pay back pre-incorporation expenses, elect S-Corporation status and more.
- Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
Considerations when incorporating or forming an LLC in Minnesota
- Check our order form to find out how long Minnesota is currently taking to process regular and expedited orders.
- A Registered Agent is required for every Minnesota business. Hire a professional Registered Agent who will provide their address and forward any important documents to you. Many people list their home or business address on the Articles of Organization or Incorporation. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional registered agent is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).
Ready to register a business in Minnesota?
- We specialize in registering businesses in Minnesota.
How to Register a DBA in Minnesota
- File a Certificate of Assumed Name Registration with the Minnesota Secretary of State.
- After filing, you must publish your Certificate of Assumed Name or Amendment to Certificate of Assumed Name with a qualified legal newspaper for two consecutive issues in the county where the principal place of business is located.
- For all Minnesota DBA forms, fees and a list of legal newspapers, click here.
Ready to Start Now? Let Us Do The Work
Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.
- Learn more about our business formation service
- Read our verified reviews and 100% Satisfaction Guarantee
- Contact our friendly support team if you have any questions
Step 4: Obtain Your Federal Employer Identification Number
Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.
To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.
TIP: We will obtain your EIN for you if you we form your company.
Step 5: Open Company Bank and Credit Accounts
To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork b) your EIN c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).
Click here to view a list of our recommended banks in our Vendor Network.
TIP: Our business formation service includes a free banking resolution for your use.
Step 6: Set-up An Accounting System
Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.
Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.
Review our list of Accountants, Accounting Software and Bookkeepers in our Vendor Network.
Step 7: Obtain Licenses and Permits
Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).
TIP: We can help you identify the necessary forms to obtain your business license.
Step 8: Hire Employees (if applicable)
If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.
Review our list of recommended Payroll Providers in our Vendor Network.
Step 9: Obtain Business Insurance
There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection. Click here to view our preferred provider of business insurance online.
Click here to view our list of insurance providers in our Vendor Network.
Step 10: Systemize and Organize
Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.
Step 11: Branding and Marketing
Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.
Step 12: Annual and Ongoing Requirements
DBA: An annual renewal is required to maintain in good standing. Any Assumed Name certificate that expires as a result of failing to file the annual renewal may be reinstated by filing the annual renewal and paying the applicable fee.
LLC: Minnesota LLCs are required to file an annual renewal every year by December 31.
Corporation: Minnesota corporations must file an annual renewal every calendar year.
Click here to view our MyCompanyWorks Premium™ service which can automate most or your ongoing compliance tasks.
Important Minnesota Contacts
Business & Liens (for Corporation, LLC and DBA filings)
Retirement Systems of Minnesota Building
60 Empire Dr., Suite 100
Saint Paul, MN 55103
Metro Area: 651-296-2803
Greater MN: 877-551-6767
Minnesota Taxation Departments
Minnesota Labor and Employment Departments
Minnesota Startup Resources
Small Business Administration (SBA) Minnesota
- Minneapolis SCORE, founded in 1964, is the oldest of 364 chapters located throughout the United States, to serve small business entrepreneurs nationwide.
- The Central Minnesota Chapter of SCORE, “Counselors to America’s Small Business” is part of a national nonprofit association dedicated to entrepreneur education and the formation, growth and success of the nation’s small business.
- Southeast Minnesota SCORE offers FREE business mentoring, low-cost or no-cost business training, and numerous tools to help you start or grow a business.
Minnesota Legal Statutes
- Minnesota Business Corporation Act – a legal summary.
- Minnesota Revised Uniform Limited Liability – the specific act that applies to Minnesota LLCs.
Minnesota Chambers of Commerce
MNvest.org – Minnesota investment crowdfunding
Minnesota Angel Investors
Minnesota Business News
Minnesota Department of Employment and Economic Development (DEED) – the state’s principal economic development agency. DEED programs promote business recruitment, expansion, and retention; international trade; workforce development and community development.
Minnesota Small Business Development Center
- The West Central Minnesota Small Business Development Center (WC MN SBDC) provides over 3,500 hours of no-cost business consulting to over 250 clients on a yearly basis.
- The SE Minnesota SBDC is operated by the Rochester Community and Technical College with support from the Small Business Administration, the Department of Employment and Economic Development, multiple regional partners and local funding sources.
- UMD CED consulting programs provide one-on-one services to business start-ups and existing businesses focusing on feasibility studies, market research, business plan development, loan packaging, operational assistance, procurement assistance, manufacturing, management, problem solving, and information technology.
Minnesota Green Business
- The mission of Conservation Minnesota is protecting Minnesota by solving the state’s most important conservation problems.
