Minnesota is ranked 5th in the US for the fastest startup growth. Therefore, starting a business in Minnesota is a superb choice for entrepreneurs.
With a population of 5.64 million people, your new startup in Minnesota is set to blossom.
All that’s required is to learn the legal steps to start that Minnesota business and get on the fast track to financial and personal independence.
Forbes iterated the strength of Minnesota’s economy by saying that it ranks as third overall for quality of life. There is also an unemployment rate of 3.2%.
Get started already, you have an adequate customer base to patronize that business!
What Is A Small Business in Minnesota?
In Minnesota, a small business is any firm employing fewer than 500 employees. It doesn’t mean a business run from the home but with the number of employees.
How Much Does it Cost to Start a Business in Minnesota?
The cost to start a limited liability company LLC in Minnesota is $155 online and in-person or $135 by mail.
This fee is paid to the Minnesota Secretary of State when filing the LLC’s Articles of Organization.
In addition, there are basically two ways to apply for the formation of an LLC in Minnesota.
Firstly, you can hire a professional LLC formation service to set up your business. They charge an additional service fee.
Secondly, you can use the free LLC form to guide you.
Do I Need A Business License to Start A Business in Minnesota?
Not every Minnesota business needs a license. However, many types of businesses either can or must get a license.
In general, businesses that fall under the business types we will list below will require a license to start up.
Do I need a Minnesota tax ID number to Start a Business?
Most businesses need a Minnesota tax identification number. However, a sole proprietorship or single-member limited liability company that does not have any of these tax obligations does not need a Minnesota tax identification number.
How To Start A Business in Minnesota?
According to the office of Minnesota Secretary of State, there are three basic steps to start a business in Minnesota. They look rather easy and we will describe them in detail.
This answers the question most people ask, is it difficult to start a business in Minnesota? The simple answer is no. Although the process may be rigorous, it doesn’t involve many stages.
Let us begin.
Starting a business in Minnesota requires these three basic steps:
#1 Write a Business Plan
In Minnesota, to start a business or a non-profit organization, you need to write a business plan. This is one of the initial steps while planning to start your business.
A written plan for launching and operating your business is essential to your success. A well-prepared business plan starts you off on solid footing, makes you more attractive to potential lenders, helps you make sound managerial decisions, and better positions your company for growth.
Every business plan must contain an executive summary, financial plan, operational and managerial plan and marketing strategy.
In Minnesota, everyone who starts a business should have a basic understanding of accounting and income forecasting.
You need to read this: Starting A Business After College | 10 Avoidable Mistake To Look
#2 Choose a Business Type
Before choosing a business type, you should know about the main business structures in Minnesota. Although we will list them below, you may still consult an attorney if you do not know which business type to form.
The business types are:
a. Assumed Names/DBA
This business type is for sole proprietors or general partners who do not conduct business with the full names of each individual doing business with them. They have to file a Certificate of Assumed Name.
Similarly, any corporation, limited partnership, or LLC that conducts business under a name other than the exact legal name of the entity, must file a Certificate of Assumed Name.
b. Minnesota Business Corporations
This business type is formed when two or more persons come together to form a corporation. The corporation has a general business purpose and has legal power of its own.
c. Minnesota Nonprofit Corporations
Any individual who wishes to form a nonprofit corporation in Minnesota must file Articles of Incorporation to include that there will be no monetary gain and no paying of dividends to the members. You may also apply for tax exemption if you are starting a nonprofit organization.
Foreign Corporations (Business, Nonprofit, Cooperative)
d. Minnesota & Foreign Limited Liability Companies
LLC can be formed by two or more people. It is a business organization that combines flow-through taxation with limited liability.
This means that it is a business that enjoys a liability shield (the owners are legally responsible for the business debts only to the amount of capital they invested) of a corporation and the flexibility and tax pass-through advantages of a partnership.
e. Foreign and Minnesota Limited Liability Partnerships
For you to start this type of business in Minnesota, an existing partnership will register to take part in the advantages which a limited liability company enjoys.
f. Minnesota Public Benefit Corporations
A public benefit corporation is a new type of profit-making business started in Minnesota in which the business promises to provide a general or specific benefit to society.
This benefit may not necessarily be related to the business the corporation operates. The business will submit an annual report that details how they met their public benefit.
There is no tax advantage to being a public benefit corporation, or to invest in one. There are no tax deductions to investors, and the company pays corporate tax on all profits.
Lastly, you must file for a public benefit corporation in person. It cannot be done online.
#3 Register/file your Business
You have registered your startup in Minnesota either by mail or in person. Before we go on to mention how to register your business, business registration does not give you a tax ID number. You have to file for this separately through the Minnesota Department of Revenue( for a state tax ID).
This will be helpful:
What Is A Trade Name For Business? Registration, Procedures.
How to Register your Business in Minnesota
Almost all businesses in Minnesota must register with the Office of the Minnesota Secretary of State.
Before registering your business, you must decide the structure/type of business you want to register.
Step1: Create an Online Account
Create an online account and login. Creating an online account here.
Step2: Choose a Business Structure
Go to the Business Filings Online page and click on the business structure you would like for your business.
Step3: Answer questions
Answer the questions about the non-profit status and professional status.
Step4: Verify Business Name
Verify if the name you would like your business to bear is available. To do this, just type the proposed name into the search box. You don’t need to type the entity ending (LLC, Corporation, etc) at the end, just use the drop-down menu to choose the way you would like the suffix displayed.
Take note of the following information as regards names;
Step5: Upload Documents
Enter other requirements. For the documents, it is recommended you save them as a PDF and the size should be less than 2MB.
The file name must be 10 characters or less and contain no punctuation, spaces or special characters.
Again, at the bottom of the forms is a place for signatures, typing in your name satisfies this requirement.
Make sure to review the file before clicking submit. After this, you’ll receive an Order Number specific to your filing. Record the Order Number before continuing. Then click on the “Go to US Bank” button.
Once on the US Bank page you will have the option to set up an e-service account with US Bank. The US Bank e-service account will store your credit card information for future transactions.
You can by-pass the US Bank e-services registration by clicking on “pay without registering”. This allows you to process a one-time payment with your credit card.
Step7: Confirmation Stage
After payment, you will receive a confirmation page along with a payment confirmation number. Print out the confirmation page or record the Confirmation Number. You will receive an email when the filing is processed as well as an email for the payment from US Bank.
Step 8: Final Stage
You will receive an email that your file hs been processes, it contains a link where yiou can download a copy of the filing.
All filings are kept in your Transaction History for 90 days. After which it is automatically wiped. You can access the transaction history by signing into your online account which you created in step1 and clicking on Transaction History. Click on the order number on the right and it will give you an option to download the filing.
#4 Define Brand
Creating a brand builds customer loyalty. It eliminates competition in the business world.
Ensure you have a unique selling point, a strong online presence, and great advertising channels.
#5 Establish a Web Presence
Social media will create awareness for your brand that you may not get operating locally in a year. It enables you to reach your target audience faster and even cheaper.
In addition, a professional website is instrumental to the long-term success of your business, regardless of what industry you. It enables customers to find your products and services.
Consider setting up social media accounts, registering for a google profile and creating accounts on review sites like Google Reviews.
Use social media to your advantage!
The process of starting a business in Minnesota is straightforward. And we have explained all there is to know.
It requires just three steps namely: write a business plan, choose the business structure you wish to form, and register it. That’s basically all. However, you need to register for taxes, brand your business, open bank accounts, and create a strong online presence.
The Office of Secretary of State will inform you of any other process if need be. In conclusion, remember to apply for your tax identification number.