An LLC MN, or a limited liability company in Minnesota, is a business entity that provides limited liability to its owners from business obligations, including debts, in the state of Minnesota. It differs from a corporation in a variety of ways, including taxes, ownership structure, and legal obligations. 

To form an LLC in Minnesota, you will have to:

  • Choose an LLC name.
    1. Make sure that the name you want is available by conducting a name search.
    2. Follow Minnesota naming guidelines. An LLC must have “Limited Liability Company,” “L.L.C.,” or “LLC” in it, while some words are restricted or forbidden.
    3. See if the web address (URL) of your name, or something similar, is available. You may not want a website now, but you may want one in the future.
    4. For similar reasons, see if an email address related to your business name is available.
  • Choose a registered agent.
    1. Minnesota requires your LLC to have a registered agent. This is a person or business that receives and sends legal papers for your LLC. They must either be a Minnesota resident or company that can conduct business in the state.
    2. A registered agent can be an individual within your LLC, including yourself.
  • File Articles of Organization.
    1. These include such information as your LLC’s name, address, registered agent name and address, and status as manager-run or member-run. 
    2. You can file in-person, by mail, or online.
  • Form an operating agreement.
    1. This outlines your LLC’s operating procedures and ownership structure. Minnesota does not require one, but having one is advised.
  • Get an employment identification number (EIN).
    1. This identifies your company to the IRS and is necessary for filing state and federal taxes.
    2. An EIN may also be required by some banks to operate a business checking account.
  • File your annual report.
    1. This should state the LLC’s address, registered agent address, and several other essential business details.
    2. LLCs must file an annual report for the Secretary of State by mail or online.

Seven Key Steps After Forming a Business

Once you have chosen your LLC name and finished the necessary steps to form your business, your work is still not done, however. To keep your business in good standing, you should:

  • Get a business bank account and credit card.
    1. A business bank account separates LLC assets from personal assets, which will help protect the latter.
    2. It also makes tax filing and accounting easier
    3. A business credit card separates LLC and personal expenses.
    4. It also helps build a credit history for your LLC, which can help you raise money for your LLC later.
  • Register your company for Minnesota state taxes.
    1. LLCs generally file the same kind of tax return in Minnesota as they file with the IRS.
    2. However, an LLC can elect to be regarded as a corporation for tax purposes with the IRS.
    3. Multi-member LLCs that don’t elect corporate status are treated as a partnership.
    4. Single-member LLCs that don’t elect corporate status are treated as individuals, and LLC income is reported in the single member’s 1040.
    5. Some taxes you will or may have to register for include:
      1. Employee withholding tax.
      2. Minnesota sales tax.
      3. Unemployment insurance tax.
      4. Unemployment withholding tax.
      5. Taxes specific to your industry.
    6. Minnesota does not have a franchise tax, but it does have a “minimum fee” for multi-member LLCs with annual sales, payroll, and property exceeding $970,000, subject to inflation. LLCs under $970,000 must still file an M3 form.
  • Focus on accounting.
    1. Organizing your books will simplify tracking your finances, including expenses, income, and bills.
    2. Tax software is a good option for this. The best choices automatically sync with your bank, match transactions to purchase orders, bills, and invoices, and can be accessed on your phone.
  • Get your business permits and licenses.
    1. LLCs must comply with all local, state, and federal regulations.
    2. The U.S. Small Business Administration (SBA), Minnesota government’s e-licensing website, or a professional service can help with this.
    3. License details will vary from state to state. Don’t assume details; know them. Some licenses may require short classes.
  • Get workers’ compensation insurance.
    1. Most LLCs with employees are required to have workers’ compensation insurance.
    2. If this cannot be obtained in the voluntary market, assigned risk-plan coverage may be found elsewhere.
  • Comply with employee hiring regulations.
    1. If an LLC has employees, it must:
      1. Ensure they can legally work in the U.S.
      2. Report new employees to the state as “new hires.”
      3. Provide employees with workers’ compensation insurance.
      4. Withhold income taxes.
      5. Print and place compliance posters in easily visible locations.
      6. Meet state requirements for employee pay.

Creating an LLC in Minnesota is a complex, multi-step process, but you break it down and handle each step with care, there is no reason why you too cannot soon enjoy all the benefits an LLC can offer for your enterprise.

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