- [Narrator] How to form an LLC in Minnesota.
Minnesota is an excellent place to form a new LLC
with fast startup growth, great access to funding,
and the second highest quality of life in the country.
Every state has slightly different requirements
for forming an LLC.
Follow along closely to learn the required steps
for creating your own limited liability company
in the State of Minnesota.
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There are two ways to form an LLC in Minnesota.
You can form one yourself,
or you can hire a service to do it for you.
Let's start by looking at the five basic requirements
to form an LLC in Minnesota on your own.
You can also find these steps in more detail on our website,
linked in the description below.
One, name your LLC.
Every state has its own rules
about what kind of names are allowed for LLCs.
In general, you will need to observe
these naming guidelines.
Your name must include the phrase,
Limited Liability Company,
or one of its abbreviations, LLC or L.L.C.
with a period following each letter.
Restricted words, such as bank,
attorney, law office, et cetera,
may require additional paperwork
and may also need a licensed professional
to be part of the LLC.
Your name cannot include words
that could confuse your LLC with a government agency,
such as FBI, Treasury, State Department, et cetera.
You cannot use a name that has already been registered.
To see if your name is available in your state,
you'll need to do a name search.
This free service is available
on your state Secretary of State website.
Check out our free guide
for finding the direct link to your state.
We also recommend that you check to see
if your business name is available as a web domain.
Even if you don't plan to make a business website today,
you may want to buy the URL
in order to prevent others from acquiring it.
Two, choose a registered agent.
Minnesota requires that you nominate
a registered agent for your LLC
who is the business's point of contact with the state.
The registered agent can be an individual
within the company, including yourself,
or you can hire a professional service
authorized to do business in Minnesota.
They will send and receive legal papers on your behalf.
These documents include official correspondence,
like legal summons and document filings,
which your registered agent will receive and forward to you.
Your registered agent will help remind you
to file the necessary reports.
Failure to properly maintain your LLC
can result in fines and dissolution,
so this assistance is valuable.
Three, file the Articles of Organization.
To register your Minnesota LLC,
you will need to file the Articles of Organization
with the Minnesota Secretary of State.
This can be done online, by mail, or in-person.
You will need to state whether your LLC
will be member-managed or manager-managed.
Member-managed means all members
of the LLC manage the company.
This is good for small organizations
where everyone is involved in the day-to-day operations.
The second option is manager-managed
where individuals are appointed to manage the LLC.
This is appropriate for larger organizations
where not everyone is involved
in the day-to-day affairs of the business.
Four, create an operating agreement.
Although not every state requires it,
you should also create an operating agreement
to establish ownership terms and member roles for your LLC.
This foundational document is the core of your LLC,
and will help you maintain your organization,
as well as further establish your LLC
as a separate legal entity.
There are six main sections of an operating agreement.
Organization outlines when and where
the company was created, who the members are,
and how the ownership is structured.
Management and voting addresses how the company is managed,
as well as how the members vote.
Capital contributions covers
which members financially support the LLC,
and how more funds will be raised in the future.
Distributions outlines how the company's profits and losses
are shared among members.
Membership changes describes the process
for adding or removing members,
as well as if, and when, members can transfer
their ownership shares.
And dissolution, which explains the circumstances
in which the LLC may be dissolved.
An operating agreement is an internal document.
It does not need to be filed with the state.
However, it should be updated every time there's a change
in membership or management at the company.
You can download a free sample operating agreement
or create a custom one using our free
operating agreement tool at HowToStartAnLLC.com.
Five, obtain an EIN.
Lastly, you'll need to get
an Employer Identification Number, or EIN, from the IRS.
Also known as a Federal Tax Identification Number,
your EIN is like a Social Security Number for your LLC,
and is how the IRS tracks your business for tax purposes.
And the EIN is also necessary
to open a business banking account
and legally hire employees.
EIN's are free of charge,
and can be obtained from the IRS online or through the mail.
And with that, you'll have formed
a Minnesota LLC on your own.
Option two, hire a professional service.
The second way to create a Minnesota LLC
is to hire a professional service
to create your LLC for you.
Hiring a professional service to file your forms
and act as your registered agent for the LLC
will cost you an additional 50 to $150.
However, there are several benefits to working with a pro.
A hired registered agent
helps with getting your reports filed on time,
helps you stay organized by keeping
your business mail separate,
and is available at all regular business hours
to accept official mail and legal papers
on your LLC's behalf.
A final and important additional benefit
of using a service is privacy.
A professional service will provide a level of privacy
by withholding your personal name and home address
from the LLC's contact information.
There are many reasons you might not want
your personal information easily accessible
and associated with your business.
Hiring a professional LLC formation service
is an easy way to accomplish this.
Now that you have seen the different requirements
and ways you can form an LLC in Minnesota,
visit our site and take some time to research your options
and establish a solid foundation
for your business activities.
Click on the links in the description below
to research the top five professional formation services,
or get more information on how to form
a Minnesota LLC on your own.
Now you know all the steps to form an LLC in your state.
For a more detailed guide, go to HowToStartAnLLC.com..
You can also create an operating agreement
and use our business plan tool free of charge.
Give the video a like if you found it useful,
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And if you have questions or encounter any roadblocks,
leave a comment below.
Good luck in starting your small business.
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