Are you thinking and researching about how to start a business in Minnesota? Along with filing your company with the state, one key step in the business formation process is obtaining any business licenses and permits that you are required to have.
However, since the exact licenses and permits that a Minnesota business is required to have will depend on several factors, figuring out which ones you need can sometimes be a little challenging. To help you out, we’ve put together a guide covering everything you need to know about business licenses and permits in Minnesota, including how to determine which ones your business needs and how to apply for them.
The purpose of business licenses and permits
The main reason why businesses in Minnesota are required to obtain business licenses and permits is that it allows various governing agencies to regulate business activity in their jurisdictions. To apply for a business license, you’ll be required to submit a lot of information about your business, including any assumed name (DBA) you use, and this information is used to verify that your business is compliant with various laws and regulations.
Business licenses and permits can be issued by agencies at the local, state, and federal levels. In most cases, business licenses are used to authorize businesses to operate in a specific location while permits are used to regulate specific activities. For example, a restaurant in Minneapolis needs a food license from the city’s health department, while a restaurant in an area without a local health program is licensed by the Minnesota Department of Health.
Business licenses vs permits
Business licenses and business permits share a lot in common, but there is one key difference between the two. Business licenses grant businesses the authority to operate in a specific location, and since Minnesota doesn’t have a state-issued business license, some Minnesota cities and counties license specific business types; many don’t require a general business license at all. Business permits, meanwhile, are used to regulate specific activities, and these can be issued by agencies at the local, state, or federal levels.
Types of business licenses and permits you might need for your Minnesota business
Where your business is located, its industry, and its activities are the primary factors that will determine which licenses and permits your business needs. With that said, here are the different types of licenses and permits a Minnesota business might be required to have, including those issued at the local, state, and federal levels:
- State Licenses: Minnesota does not issue a state business license, so most businesses in Minnesota won’t need any licenses from the state. However, there are some exceptions. Restaurants, caterers and food trucks are usually licensed by the Minnesota Department of Health or a local health agency, while grocery stores and food manufacturers are licensed by the Minnesota Department of Agriculture. Healthcare professionals are licensed by their state licensing boards.
- Tax Registration: If you sell taxable goods or services or have employees, register with the Minnesota Department of Revenue for a Minnesota Tax ID and a Sales and Use Tax account.
- Local Licenses: Different counties and cities in Minnesota have their own licensing requirements. To figure out which licenses are required in your area, you can contact your local city/county office.
Depending on your business activities, you may be required to obtain specialized permits as well, including permits such as:
- Zoning permits: Ensure that your business location aligns with local zoning regulations.
- Health permits: Necessary for businesses operating in food service or healthcare industries.
- Environmental permits: Required for businesses impacting air, water, or land.
- Building permits: Needed for construction or renovation projects.
For businesses operating in federally regulated industries, federal permits may be required as well. Here are the different federal permits that a Minnesota business might need:
- Alcoholic Beverages: A license from the Alcohol and Tobacco Tax and Trade Bureau (TTB) is required for businesses selling alcohol.
- Agriculture: Businesses that import or move animals, animal products or plants across state lines may need a permit from the U.S. Department of Agriculture (USDA).
- Aviation: A permit from the Federal Aviation Administration (FAA) is necessary for businesses involved in air transport or aircraft operations.
- Broadcasting: Companies that broadcast over radio or television airwaves must obtain a license from the Federal Communications Commission (FCC).
- Fishing and Wildlife: Businesses managing wildlife or fisheries may require permits from the U.S. Fish and Wildlife Service (FWS).
For more information about federal licensing requirements, check out the Small Business Administration (SBA) federal licenses and permits page.
How to obtain business licenses and permits in Minnesota
Before we get started, it’s important to note that the exact process for obtaining business licenses and permits in Minnesota will depend on which ones your business needs. Each agency has its own application process and fees. However, here is the general process that you will typically need to follow when applying for business licenses and permits in Minnesota:
Step 1: Determine what licenses and permits your business needs
The first and perhaps most important step is to determine exactly which licenses and permits your business is required to have. This can include licenses and permits issued from agencies at the local, state, and federal levels of government:
- State Licenses: Minnesota does not issue a statewide business license, so many businesses in Minnesota won’t need a license from the state. However, there are some specialized licenses and permits issued by the state of Minnesota, including food and health licenses, professional licenses, and environmental permits.
- Local Licenses: Different cities and counties in Minnesota have their own unique licensing requirements for businesses in their area. To see if your business is required to obtain a local license or other permits, you can contact your city/county office.
- Federal Licenses: If your business operates in an industry that’s federally regulated, you may need to obtain a license from the federal agency in charge of regulating the industry. For example, businesses in the aviation industry will need a permit from the FAA.
Step 2: Submit all required documents and application fees
To apply for most licenses and permits, you’ll have to submit an application form, and filling out this form will require you to submit a lot of information about your company. In some cases, you may need to submit supporting documents as well. Most business licenses and permits will also require you to pay an application fee, and the amount of this fee will vary from one agency to another.
Step 3: Track the status of your application and await approval
Once you’ve submitted your application for a business license or permit, you can usually track its status by visiting the website of the issuing agency. If the agency does not offer online tracking (which is sometimes the case for licenses issued at the local level), you can check your application status by contacting the agency’s office.
Processing times can vary quite a lot from one license/permit to another, and they vary by agency. Licenses that require inspections, exams, or background checks may take longer.
Step 4: Renew If needed
It’s important to keep in mind that many business licenses and permits must be renewed, often every year or two. Create a system for tracking the renewal deadlines for all your licenses and permits so you don’t miss any; failing to renew a business license or permit on time can potentially lead to fines and other penalties.
Conclusion
Obtaining all necessary business licenses and permits is a vital step when forming a business in Minnesota. Since the exact steps for obtaining business licenses and permits ultimately depend on which ones your business needs, figuring out the process for applying for them is sometimes challenging. However, we hope you’ve found this guide helpful!
If you’re considering an LLC as your business structure, you can learn more about how to start an LLC in Minnesota.
FAQ
You should always be certain that you have all required business licenses and permits before you start your business operations. Failing to do so can lead to some stiff penalties, including fines and even business closure.
Sole proprietors in Minnesota are treated just like any other business when it comes to licensing requirements. The licenses and permits that you will need as a sole proprietor depends on where you are conducting business and your business activities, just like it does for LLCs and corporations in the state.
Yes, most business licenses and permits will have to be renewed. You can check the renewal deadline on your license/permit to see when renewal is due.