Legal documentation must be submitted to the state of Minnesota along with filing costs when establishing an LLC in this state.
Our team of business professionals spent hours poring over the official records available on the Secretary of State's website for the most up-to-date information on the costs involved in forming a Minnesota LLC.
This post gives a complete overview of the probable startup costs for an LLC in Minnesota and any additional charges you could incur when running this business structure.
Quick Summary
- It costs $135 to register a Minnesota LLC via mail and $155 if done online or in person for filing the Articles of Organization.
- Minnesota LLCs must pay a state sales tax rate of 6.785%.
- Filing annual reports or annual renewals in Minnesota is free for all LLCs.
How Much Does an LLC Cost in Minnesota?
An LLC in Minnesota costs $135 to file the Articles of Organization by mail and $155 if done in person or online through the Secretary of State's website.
However, there are other additional filing costs that you may incur, including business taxes, name registration, annual reports, and registered agent service fees.
Minnesota LLC Filing Fee
The Minnesota filing fee for a domestic LLC is $135 by mail and $155 when you submit the registration papers in person or online [1].
This amount covers submitting your registration papers, including the Minnesota Articles of Organization.
The standard processing time for the Articles of Organization is 4 weeks, but you can pay for expedited shipping and get your LLC paperwork approved in 2 business days.
Learn more about how long does it take to process an LLC in Minnesota.
Minnesota Registered Agent Service Fee
A registered agent has to be reachable during all regular operating hours and has a postal work address in Minnesota to receive legal and commercial mail.
The designated resident agent will also be responsible for filing your taxes, compliance work, and communicating with the Minnesota Secretary of State.
You can serve as the registered agent in Minnesota in one of two ways: personally or through another LLC member.
While you can act as your registered agent for your limited liability company, it can be cumbersome to handle the responsibilities of being an agent and managing your business concurrently.
This is why it's a good idea to hire a respected company that offers agent services. If you do so, the Minnesota LLC cost for registered agent services is between $49 and $300 annually, according to your chosen agent service.
Minnesota State Sales Tax
The Minnesota state sales tax rate is 6.785% [2]. Although this is the standard tax rate, the amount may be more because certain municipal taxes are levied at the district levels.
Depending on the municipality of your Minnesota LLC, the sales tax rate can be as high as 8.375%.
Other LLC Filing Costs
Apart from the registration filing fees, here are other Minnesota LLC filing costs.
1. Business Name Reservation
The Name Reservation form costs $35 by mail ($55 online or in person) and can be used to reserve your company's name if you have the perfect name in mind but aren't yet prepared to incorporate your LLC.
Although reserving a business name before registration is not required by Minnesota law, doing so will stop any other business entities from claiming your title before formally submitting your registration papers.
Also, according to state laws, you must conduct a name search and verify the availability and eligibility of the business name before applying for a reservation.
If you look up an LLC in Minnesota and find that your desired business name is available, the state will hold it for you for a maximum of twelve months, after which you can renew it for an additional twelve months with the same amount.
2. Certificate of Assumed Name
An assumed name is a different trade name that your Minnesota business entity operates under other than the legal name.
The Minnesota LLC cost for registering an assumed name is $30 by mail or $50 online or in person.
After the Minnesota Secretary of State approves your assumed name, they issue you a Certificate of Assumed Name so you can legally transact business in Minnesota with that name.
3. Minnesota Annual Renewal
The Minnesota Annual Renewal is a yearly report that Minnesota LLCs are required to submit.
As long as you submit your Annual Renewal by the deadline, December 31st, each year commencing the year after you incorporate your LLC, there is no filing fee ($0).
But, if you fail to submit your Annual Renewal by the deadline, the state will dissolve your company. And to revive your LLC, you'll have to pay a reinstatement fee of $25 by mail or $45 if you apply online or in person.
4. Minnesota LLC Taxes
In Minnesota, single and multi-member LLCs fall under the entities of the passthrough taxation system.
This means all business income is taxed at the individual state income tax of 5.35% to 9.85%, depending on your income bracket.
There's also a federal self-employment tax rate of 15.3% (12.4% covers social security, and 2.9% is for Medicare).
However, if LLC owners set their businesses to be taxed like a corporation, they'll be subject to a 9.8% corporate tax rate plus a 21% federal corporate tax rate.
5. Certified Document Copies
The Minnesota Secretary of State charges $8 for certified copies of business documents ordered by mail or $18 for online filings.
Certified copies are duplicates of the original documents, verified and sealed by the Minnesota Secretary of State.
For various reasons, such as to open a Minnesota business bank account, obtain a line of credit, or register your company in another country, you need a certified copy of your articles of incorporation.
You can also preserve your certified document copies for internal management reasons.
6. Certificate of Good Standing
A Certificate of Good Standing in Minnesota costs $5 by mail and $15 online.
A Certificate of Good Standing is a recognized state document that attests to your company's existence in Minnesota.
A Certificate of Good Standing could be required to register your company in another state and to prove your company’s good status.
7. Minnesota LLC Operating Agreement
When creating a Minnesota LLC, an operating agreement is a valuable document.
An operating agreement document may:
- Set expectations for how members will govern the company
- Provide guidelines and standards for resolving disputes
- Modify the distribution of gains and losses
If your LLC does not have a governing operating agreement, it must adhere to Minnesota's LLC-specific laws and regulations.
This can be a disadvantage considering that the state laws aren't always flexible or tailored to your specific business entity needs, like an operating agreement.
8. Employer Identification Number
In Minnesota, all business firms must have Employer Identification Numbers (EINs) to file their federal taxes.
An EIN is issued by the Internal Revenue Service (IRS) and is required to establish a company bank account, purchase insurance policies, and pay your employees.
An EIN is also valid for safeguarding your business privacy because if you don't have it, you'll be forced to use your personal social security number on company paperwork.
You can file for an EIN for free ($0) by submitting relevant documents to the IRS. Alternatively, you can hire an LLC formation service to register an EIN on your behalf for a fee of $50-$100.
9. Professional Business Licenses
You likely require a professional license if you work in a specialized industry that requires training.
The Minnesota state board that oversees your business sector issues these professional licenses, and the cost will vary depending on the license type.Â
To determine which state licenses your company needs, visit Minnesota's eLicensing page.
10. Business Insurance Premiums
You must legally get workers' compensation insurance from a private company if you have staff for your LLC. Failure to get this insurance can result in fines of up to $1,000 per worker each week the individual remains uninsured.
The cost of this insurance will differ based on the insurance provider you select and the degree of risk associated with the workers' jobs.
Low-risk employees often pay $1 per $100 of payroll, whereas high-risk individuals typically pay $25 per $100 on average.
Foreign LLC Registration
A Certificate of Authority from the Secretary of State is required to register a foreign LLC in Minnesota, and it costs $185 by mail ($205 online or in person).
An LLC not created in Minnesota but qualifies to conduct business there is referred to as a foreign LLC.
Foreign LLCs must also get all required Minnesota licenses and permissions and file the Minnesota Annual Renewal annually, which is free if done on time.
If you plan to change the registered agent service for your foreign LLC, you must submit a Change of Registered Office and Agent form and pay a filing fee of $35 by mail and $55 online.
FAQs
How Much Does an Annual Report Cost in Minnesota?
An annual report costs $0 in Minnesota. All LLCs must file the annual renewal with the secretary of state to update their business information and stay compliant.
Do You Need Professional Help with Your Minnesota LLC?
Owning an LLC in Minnesota is a big deal because of the costs and hassle of filing paperwork.
However, hiring the best Minnesota LLC formation services can make forming and running your LLC enjoyable and straightforward.
With their extensive range of business formation plans, these services will assist you in promptly establishing your LLC and maintaining compliance throughout the term of your LLC.
References:
- https://www.sos.state.mn.us/business-liens/business-forms-fees/business-filing-certification-fee-schedule/
- https://www.revenue.state.mn.us/guide/taxes-and-rates
