How to Form an LLC in Minnesota | 2025 Guide

Home to 17 different Fortune 500 companies—including Target, Best Buy, and General Mills—Minnesota offers a highly-educated workforce and a strong, diverse economy. It is also ranked as the second best state in the country for economic opportunity—it’s said that entrepreneurs who start their business in Minnesota are more likely to see it last beyond five years than anywhere else in the country.[^1]

If you’re looking to take advantage of Minnesota’s vibrant economy, strong infrastructure, and business-friendly tax incentives, you’re in the right place. This guide is designed to walk you through the process of forming an LLC in detail, so you stay compliant every step of the way.

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How to Start an LLC in Minnesota (Step-by-Step)

If you want to start an LLC in Minnesota, you’re in the right place. Follow our step-by-step guide to get started in 8 steps or less.

#1 - Choose Your LLC Name

Your business entity name must be unique in Minnesota and include “Limited Liability Company,” “LLC,” or “L.L.C.” Avoid the use of restricted words like “bank” or “insurance” unless you meet additional requirements.[^2]

Check name availability using the Minnesota Secretary of State’s online database. You can reserve a name for 12 months for $55 (online/in-person) or $35 (mail).[^3]

#2 - Appoint a Registered Agent

Every Minnesota LLC will need to have a registered agent with a physical address in Minnesota.

The agent can be an individual Minnesota resident (including yourself) or a business authorized to operate in Minnesota. Ultimately, the registered agent will receive legal and tax documents on behalf of your LLC, so you’ll need to choose someone you trust.

#3 - File Articles of Organization

Now that you’ve chosen a name and a registered agent, it’s time to file your Articles of Organization with the Minnesota Secretary of State. This document officially registers your LLC.

You can file online, by mail, or in person. The filing fee is $155 (online/in-person) or $135 (mail). You’ll need to include your LLC’s name, registered agent information, and a principal office address.

#4 - Create an Operating Agreement

While an operating agreement isn’t required by Minnesota law, it’s still strongly recommended.

This internal document outlines ownership, management structure, member roles, and procedures for resolving disputes. It’s an important way to prevent future misunderstandings and resolve disputes.

#5 - Apply for an Employer Identification Number EIN

You can get an Employer Identification Number (EIN) from the IRS for free. All you need to do is apply online at the IRS website.

An EIN is required for opening a business bank account, hiring employees, and filing state and federal taxes.

#6 - Register for Minnesota State Taxes

Depending on your business type, you may need to register for state sales tax, withholding tax, or other industry-specific taxes with the Minnesota Department of Revenue.

Most LLCs will need a Minnesota Tax ID Number. You can learn more about the requirements at the Department of Revenue website.

#7 - Apply for Business Licenses and Permits

While the state of Minnesota doesn’t require a general business license, the requirements vary from city to county. Certain industries, such as food service, construction, and childcare, also require state or local permits. Depending on your business activities, you may need to interact with a commercial licensing bureau or regulatory authority.

Professionals like consultants, accountants, and healthcare providers should evaluate their need for professional liability insurance to protect their business from claims of negligence, misrepresentation, or other mistakes in providing professional services. Some industries may actually mandate proof of professional liability insurance to operate.

#8 - File Annual Renewals

Minnesota LLCs are required to file an Annual Renewal each year by December 31st to remain in good standing. There’s no filing fee if you submit the report on time, though late filings cost an extra $25.[^4]

Businesses operating in highly regulated fields like healthcare may also consider hiring regulatory affairs professionals to ensure continued compliance with state, federal, and international regulations. Medtech and life sciences sectors are particularly prominent in Minnesota, so regulatory affairs professionals are a great way to navigate complex approval processes and ongoing compliance obligations.

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What are the business requirements for a Minnesota LLC?

Minnesota’s LLC requirements are pretty straightforward:

• Unique Name: Must comply with Minnesota’s naming rules.
• Registered Agent: Must have a physical address in Minnesota.
• Articles of Organization: Filed with the Secretary of State.
• Operating Agreement: Strongly recommended for internal governance.
• EIN: Required for tax purposes and hiring employees.
• State Tax Registration: Required for businesses with employees or those selling taxable goods/services.
• Business Licenses/Permits: May be required depending on your industry and location.
• Annual Renewal: Must be filed by December 31 each year.

What are the Benefits of Starting an LLC in Minnesota?

One of the primary benefits is limited liability protection, which shields owners’ personal assets from business debt and lawsuits. LLCs in the state also enjoy pass-through taxation, meaning profits and losses are reported directly on the members’ personal tax returns, avoiding double taxation.

The management structure is highly flexible, too, so the company can be managed either by its members or appointed managers. There’s no requirement for a formal board of directors.

Compliance is straightforward, too, since LLCs face fewer reporting requirements compared to corporations. Minnesota also supports business owners by not imposing a state franchise tax on LLCs. While the state’s corporate tax rate is 9.8%, most LLCs are taxed as pass-through entities, so members pay income tax at individual rates.

How Much Does It Cost to Start an LLC in Minnesota?

The typical total startup cost is between $135-$400+ (excluding licenses/permits and legal fees). Here’s a breakdown:

Process	Cost
Name Reservation (optional)	$55 (online/in-person), $35 (mail)
Articles of Organization	$155 (online/in-person), $135 (mail)
Annual Renewal	$0 (on time), $25 (late)
Professional Registered Agent Service	$0-$200/year (optional)
Business Licenses/Permits	Varies by industry and location
Operating Agreement	$0-$200+ with legal help
EIN	Free (IRS)

Can I Open an LLC in Minnesota Without Living There?

Yes. Minnesota doesn’t require LLC owners or members to live in the state or even in the US. However, you’ll need to have a registered agent with a physical Minnesota address.

Can a Nonresident Open a Company in Minnesota?

Yes, non-US residents can own and form an LLC in Minnesota. There aren’t any citizenship or residency requirements for members or managers.

However, you’ll need to appoint a registered agent with a Minnesota address to receive legal documents on your behalf. Be sure to comply with federal tax and reporting requirements as well.

Comparison with Other States

If you’re looking to start an LLC in Minnesota, it’s worth comparing the state’s benefits and disadvantages with its closest neighbors. Every owner will have unique requirements based on cost, privacy, tax environment, and other key factors, which we’ve outlined in the chart below:

Feature	Minnesota	Wisconsin	Illinois	Iowa
Filing Fee	$135-155	$130	$150	$50
Annual Report Fee	$0 (on time)	$25	$75	$60 (biennial)
Privacy	Standard	Standard	Standard	Standard
Tax Environment	No franchise tax; pass-through taxation; 9.8% corporate tax	No franchise tax; pass-through taxation; 7.9% corporate tax	No franchise tax; pass-through taxation; 9.5% corporate tax	No franchise tax; pass-through taxation; 5.5-8.4% corporate tax
Best For	Growing businesses, flexible management	Startups, low annual costs	Larger businesses, urban markets	Cost-sensitive startups

Ultimately, Minnesota’s LLC formation costs and requirements are similar to its neighbors. While it has a higher filing fee, it stands out by charging no annual renewal fee for those who file on time.

Privacy protections are standard across the region, with all states requiring public disclosure of member or manager names.

Tax-wise, Minnesota’s corporate income tax rate is the highest among its neighbors. That said, most Minnesota LLCs are taxed as pass-through entities, so members pay individual income tax rather than corporate tax. The lack of a franchise tax is a plus for LLCs.

Overall, it’s a solid choice for growing businesses seeking a flexible management structure and a large, diverse economy. Its neighbors may appeal to more cost-sensitive startups and members prioritizing lower tax rates.

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Conclusion

Centrally located in the midwestern United States, with access to the dynamic Minneapolis-St Paul metropolitan area, it’s no surprise that so many business owners are looking to form LLCs in Minnesota. While its filing fees aren’t as low as some other states, and it mandates annual reports, many business owners will find it’s worth the investment.

Be sure to follow state and local requirements. Opening a business bank account, creating an operating agreement, and applying for an EIN are all important steps towards setting yourself up for long-term success.

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FAQ: Minnesota LLC

Privacy Protections for Minnesota LLCs

Minnesota requires that the names and addresses of LLC organizers and registered agents be listed in public filings. There is no provision for anonymous LLCs. For added privacy, some business owners use a professional registered agent service.

Why Do People Use Minnesota for LLC?

Minnesota offers a strong legal framework, no franchise tax, and simple, predictable compliance processes. The state’s economy is diverse, and its workforce is highly educated. The LLC structure is ideal for businesses seeking limited liability, operational flexibility, and straightforward tax treatment.

Is a Minnesota LLC Tax-Free?

No. While there’s no state franchise tax, LLC members still need to pay state and federal income taxes. If the LLC elects corporate taxation, it pays the 9.8% corporate tax rate. The state will also collect sales tax on taxable goods and services.

What Are the Disadvantages of a Minnesota LLC?

Unlike states like Wyoming and Delaware, Minnesota isn’t an anonymous LLC state, meaning all LLCs must disclose ownership information. Member and manager names are public record, which isn’t ideal for everyone.

While an annual filing is pretty standard, it’s still an additional burden for members and managers. Plus, all members will pay self-employment taxes on their share of profits.

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Sources:

1. A Robust and Diverse Economy | mn.gov
2. Naming Your Business | Minnesota Secretary of State
3. Name Reservation | Minnesota Secretary of State
4. Renewing Your Business | Minnesota Secretary of State