- An LLC in Minnesota has to be registered with the Minnesota Secretary of State.
- The company's name availability should be checked with the official SOS website.
- Filing an Articles of Association is mandatory at the time of registering a company.
- An annual renewal form has to be filed with the Minnesota SOS at the end of each year.
- An EIN is necessary for managing the company's finances separate from the members.
What is an LLC?
An LLC is a company in which the owners or members have limited liability. The limited liability stems from the fact that the company is a distinct legal entity from its owners. Being a separate legal entity allows the company to file suits and represent itself in its own name in case a claim is filed against it. Therefore, any liability sustained by the companies by the court of law will not apply to the members except in some cases.
Additionally, another advantage of starting an LLC is its hybrid nature. The members of an LLC can enjoy the characteristics of a corporation, partnership, or sole proprietorship without having to deal with any drawbacks. An LLC is called a hybrid entity since it combines the features of different organization types. For instance, a company has a lot of flexibility in choosing the tax flow compared to any other business organization. Because an LLC is a hybrid, limited liability is a part of its core. The limited liability characteristic is borrowed from partnerships.
In the US, different states have distinct requirements for registering an LLC. For example, to start an LLC in Minnesota, there are specific requirements that include choosing a name to file the Articles of Association. However, like many other states where only this document is legally mandatory, the state does not ask for an operating agreement while registering your LLC in Minnesota.
How to Get an LLC in Minnesota?
The overall requirements of filing an LLC in Minnesota resemble those in other US states. However, it is necessary to brush up on specific conditions that exist within the state, like how to file documents and what tax regulations to follow after establishing the LLC.
Choose the Right Name and Trademark
The LLC's name is its future identity and hence has to be chosen with care. Additional effort goes into choosing not only the right but also a unique name that is not already in use. It is essential to cross-check across reputed domains to see which combinations are available. Looking at web domain availability while choosing a name for your LLC is also advisable. It is because the web domain would represent the LLC in the future, and choosing a domain name that corresponds to the organization's name is better.
The most reliable website to check name availability is that of the secretary of state. There are certain exceptions you can make if any name conflicts appear in your search. For instance, you can change numbers with words and vice versa, make a singular word plural or choose roman numerals instead of standard numbers. After settling on a name, you can reserve the title while the application is processed with the authorities.
In Minnesota, the name is reserved with the Minnesota Secretary of State. The Owners are allowed to initially keep the title for 12 months, followed by a renewal for another 12 months if the need arises. For the normal process of reservation, the state charges $35, while the fee is $55 for the expedited process.
A trademark is just as important as the name of a company. It is a logo by which your company would be known. The trademark is likely to be affixed on the company's seal. The company can register within Minnesota (with the Secretary of State) or the US Patent and Trademark Office on a federal level.
Register an Agent
Having a registered agent for the LLC is necessary for multiple accounts. The registered agent will send or receive correspondence in the company's name. The registered agent is responsible for handling the timely filing and mailing of all correspondence and legal paperwork as and when the need arises. The LLC members can choose a professional agency to represent them, or they can choose one of the members. The registered agent should be a resident of Minnesota who is over 18 years of age, an entity registered in Minnesota, or a foreign entity legally permitted to do business in the state. It is essential to mention the details of the registered agent in the Articles of Organization and the required duties.
File the Articles of Organization
Minnesota legally mandates filing the Articles of Organization before the members can register their LLC within the state. Whether the LLC has one or multiple members, filing the Articles of Organization with the Minnesota Secretary of State is necessary. The Articles of Organization need to include the following information:
- The name of the company
- The registered address of the company
- The name of the registered agent
- The name of the member/s and their signature
- Official email address of the company for legal notices
- The name for legal correspondence and phone number for daytime correspondence
The fee for standard processing and expedited processing is different. The expedited process costs $155, while the typical duration of processing would cost $20 less. Make sure to write the complete address on the envelope when mailing the documents to avoid any delays or reroutes.
Secure an Employer Identification Number
Any LLC in Minnesota has to register for an Employer Identification Number or EIN. An EIN is like the Social Security Number for companies. It protects the entity from identity theft and helps the business manage its finances. Since the LLC is a legal entity separate from its owners, its finances should also be separated from that of the members. The application for an EIN is submitted to the federal level, and you require the tax ID number given by the state to apply. For online filing of EIN, it is essential to have the following at hand:
- The legally registered name of the company
- The assumed name, if applicable
- The official address of the business
- The NAICS Code
- The names of the members and registered agent and their social security numbers
- The contact information for the registered agent
Filing an EIN is important because it would be the key to paying taxes and dealing with other finance-related matters. For instance, it would be used while signing up for a business bank account. An EIN would make the back end of running the business smoothly.
Complete Other Regulatory Requirements
Apart from the EIN and annual renewal of the LLC, some other regulatory requirements may or may not apply to your company. These include securing adequate licenses to function in Minnesota and registering with the Department of Revenue.
Getting Business Licence
There are multiple businesses that would require additional licensing after registering with the Minnesota Secretary of State. The mandates are mentioned on the Minnesota E Licensing portal, allowing the members to keep up with the law requirements before they can begin a business in the state.
Department of Revenue
Registering with the Minnesota Department of Revenue (DOR) is necessary if the LLC is directly selling goods. If the company is collecting sales tax, it is necessary to register the business on the portal to follow regulatory requirements.
Key Considerations While Filing an LLC in Minnesota
Due to exceptions in regulations and because of the diversity of businesses, there are certain instances where additional filing is necessary. For example, the company should submit a DBA form if the business is working under an assumed name. In addition, annual renewal through a state-issued form in Minnesota is compulsory for any LLC that wants to stay registered with the Secretary of State.
File a DBA
There may be cases when a name is already registered, but the members want to do business under an assumed name. In this case, they would have to file a DBA. The application form is $30 for regular mailing and $50 for online or expedited service. The state government requires the members to publish the Certificate of Assumed Name in any respected newspaper for two issues. After that, the assumed name would be valid for a year and can be renewed without any extra fee. However, there is a fee of $25-$45 for renewing the name if it has expired.
Annually Renew the Documents
Annual renewal of the LLC is mandatory by law and has to be done by the end of December to prevent the company from shutting down. Minnesota offers a renewal form for the same with no charges. Along with this renewal form, the company can also submit an amendment form in case the details are different now than they were at the time of filing. For instance, if the agent's name or the company's phone number has changed, it has to be mentioned via an amendment form so that the state can update its information. The amendment form via offline mode costs $35, and $20 more for in-person filing.
Make an Operating Agreement
An Operating Agreement is not mandatory in Minnesota. However, many LLCs make it all the same to prevent future disputes regarding the company's scope of work and the members' obligations. An operating agreement in Minnesota would cover the following areas:
- The scope of activities the company can undertake in the ordinary course of business
- The range of activities a member should undertake in the ordinary course of business
- The rights and obligations of the members regarding the company
- The duties of the members concerning each other
- Conditions governing any8 future amendment to the Operating Agreement
Since all the points mentioned above govern the professional responsibility of the company and its members, it helps outline the duties without leaving any room for misunderstanding. The document is meant to safeguard the interests of the company and its members in unprecedented situations during the business. An operating agreement in an LLC precedes the Articles of Association. However, for all LLCs that have not created an Operating Agreement, the Articles of Association would be seen as the primary document.
Frequently Asked Questions
How do I check the name availability for my LLC?
It is essential to check the name availability for an LLC to prevent any clashes with existing companies. You can make a title search on the Minnesota Secretary of State website after signing up.
Is it mandatory to file an Operating Agreement in Minnesota?
No, Minnesota does not legally mandate filing an operating agreement. Therefore, only the Articles of Association are necessary to start the registration process. However, an operating agreement can prevent future legal disputes and override the Articles of Association.
Who can be an agent for an LLC?
In Minnesota, a state resident or a business entity can become a registered agent. In addition, a foreign company with a license to work in Minnesota can also be the registered agent.
Filing an LLC in Minnesota requires securing a unique name and filing the proper documents within a set time frame. It is possible to do business under an assumed name and expedite document processing with extra fees. An LLC is advantageous because it is a separate legal entity and also because of tax filing flexibility. However, it is crucial to keep up with all legal mandates of registration and regulations from time to time in case of renewals or operations.
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