Minnesota LLC costs – summary

Articles of Organization	$135 by mail, $155 for online and in-person filing
Food Handlers License	$50 to $2,001, based on total earnings
Liquor License	$300 to $1,000, based on total earnings
Sales Tax Registration	Free
Registered Agent (Optional)	$199 to $400 annually
Business Name Reservation (Optional)	$35 by mail, $55 for in-person or online filing
DBA Registration (Optional)	$30 by mail, $50 for in-person or online filing

If you’re thinking of starting a business in Minnesota, you may be wondering how much it’s going to cost. While startup costs can vary from one business to the next, there are some expenses that are unavoidable. For example, if you’re forming an LLC in Minnesota, you have to pay for things like filing articles of organization, registering a DBA, or obtaining a business license.

Because these expenses are necessary to get your new venture off the ground, it’s imperative that you know what to expect so there are no surprises later on. So, with that in mind, let’s break down all the different administrative startup costs associated with forming an LLC in Minnesota.

General Steps and Costs When Forming a Minnesota LLC

For most companies, creating a limited liability company is the best option because it allows for pass-through income and limits the financial and legal liability of each founder. Thankfully, the process of forming an LLC in Minnesota is pretty straightforward, and the costs associated with this entity type are also pretty low (when compared to other states). Here’s a quick overview of each step and the total expense you can expect to pay.

Naming your Minnesota LLC

Your company name is the most important element because it’s what you’ll be using on all your paperwork and marketing materials. However, you must also make sure that your name is unique when compared to other Minnesota businesses. Fortunately, it’s free to look up your name to see if it matches anything that already exists. Not only can you customize your search to look for exact or partial matches, but you can see if the companies are active or inactive.

But what if you want to reserve your name so no one else takes it before you’re ready to form your LLC? In that case, you must submit a name reservation form, along with a filing fee of $35 if sent by mail or $55 for expedited service, in-person or online filing. While other states only reserve a name for 60 or 90 days, this form secures it for up to 12 months.

Another point to consider is whether you’ll be using a “doing business as” (DBA) name. DBAs can be helpful because they’re often more appealing to customers. However, because the DBA is different from your official LLC name, you must register it separately. For that, you’ll submit a Certificate of Assumed Name form, along with a $30 filing fee if sent by mail or a $50 fee if submitted in person or online. Also, while the form makes it seem like you’ll receive a certificate with your DBA on it, you’ll just receive confirmation that the Secretary of State has approved your DBA.

Filing articles of organization

The articles of organization form establishes your LLC with the state of Minnesota. You must submit an articles of organization form, along with a filing fee of $135 ($155 if filing in person or online). This form just requires some basic information about your new LLC, such as the name of the business, the location of your registered agent (more on that in the next section), and the names and contact information of each organizer.

We should also point out that the articles of organization are different from an operating agreement. This form simply tells the state of Minnesota about your business. An operating agreement outlines your company structure

Appointing a registered agent

Minnesota requires all LLCs to have a registered agent. This person is responsible for receiving official mail and legal notices on behalf of your business. You can act as your own registered agent, which may make sense if you’re forming a single-person LLC. However, if you’re creating an LLC with multiple organizers, it’s often best to use a third-party agent to avoid potential conflicts or legal hassles later on.

The cost of appointing a registered agent can vary depending on which service you use. On average, registered agents can charge between $199 to $400 for the year.

Creating an operating agreement

An operating agreement is an internal document that outlines the structure of your business, including each organizer’s responsibilities and what to do in certain events, such as the death of a founding member. Minnesota doesn’t require LLCs to have an operating agreement, and if you’re forming a single-member LLC, you probably don’t need one.

However, multi-member LLCs should have an operating agreement to avoid any legal headaches later on. While you can create your own agreement, it’s often better to use a law firm or third-party services. This way, you can ensure the agreement is legally binding and addresses all potential concerns regarding your business. The cost of creating an operating agreement with a third party can range from $300 to over $1,000, depending on the complexity of the document.

Other annual and additional Minnesota LLC costs

In Minnesota, the only “official” expenses associated with forming an LLC are registering your business with the Secretary of State and filing a Certificate of Assumed Name form (if applicable). However, depending on the nature of your new enterprise, you’ll likely have to secure other permits and licenses. Here’s a quick overview of the additional costs you may incur as you start your business.

Business licenses & permits

In Minnesota, all companies that sell products must have a sales tax number. Fortunately, there’s no charge to obtain this number, and you don’t have to get a separate seller’s permit. That said, there are costs associated with different types of business licenses, such as:

• Food Service License – Minnesota categorizes the licensing fees for food handlers based on your total sales from the previous year. Since you’ll be filing for the first time, you only have to pay the lowest fee. Once you submit sales receipts, you’ll have to adjust the fee accordingly. For example, the fee is $50 if you sell less than $15,000 of food, but it jumps to $77 if you sell between $15,000 and $50,000 in a year. The highest licensing fee is $2,001 for businesses with sales of more than $250K annually.
• Liquor License – Unlike other states, Minnesota has a statewide liquor license requirement, also known as the “optional 2 am liquor license.”. This license allows you to sell any alcohol until 2 am. However, some cities, like Stillwater, set additional requirements and charge additional fees. The cost of a Minnesota liquor license runs from $300 to $1,000 based on gross receipts from the previous year. In addition to the statewide license, you must also submit the correct form to Alcohol and Gambling Enforcement based on your business type. For example, if you’re a catering company that also serves alcohol, you must submit the right form, along with a $300 administrative fee.
• Contractor License – You must get licensed to work as a general contractor in Minnesota, and the base fee for your license is $180. However, the renewal cost can vary based on your earnings. Renewal fees can range from $320 for receipts under $1 million to $520 if your receipts are over $5 million.

In addition to these common licenses, you may also have to obtain permits or licenses for other business types, such as massage therapy, healthcare clinics, hairstyling, and more. Typically, cities and counties require these permits or licenses, so you’ll have to do some research to determine what paperwork you’ll need and how much it will cost.

Annual report

Minnesota requires all LLCs to submit an annual report of their earnings and operations. If you submit this report by December 31st of each year, there is no cost to file. Best of all, as long as you submit this report, there is no annual fee to renew your LLC.

LLC formation expenses you can write off

As you can see, forming an LLC in Minnesota is relatively affordable, especially when compared to other states. However, even if you spend money on third-party services like a registered agent or help with an operating agreement, you can write off these expenses on your taxes. Here’s a breakdown of what the IRS allows you to deduct.

• Costs of completing the Articles of Organization – Even if you pay for expedited service, you can write off the expense. However, if you don’t keep your company in good standing by filing the annual report, you may not be able to deduct late fees and reinstatement penalties
• DBA Fees – Registering a DBA is a necessary part of forming your business, so you can deduct the filing fees necessary if you choose to use an assumed name.
• Operating Agreement Costs – If you create your own operating agreement, there are no expenses to deduct. However, if you use a third-party service, you should be able to write off those expenses.
• Registered Agent Costs – You can claim the costs of hiring a third-party registered agent, but if you act as your own registered agent, you can’t make any deductions.
• Attorney Fees – When forming an LLC, it’s often best to consult an attorney, especially when creating legal documents or operating agreements. Fortunately, these fees are often deductible as startup costs.

Minnesota LLC Filing Fees

Fee Type	Mail Filing Fee	In Person andOnline Filing Fee(*Not Available online)
Domestic LLC
Articles of Organization – Original Filing	$135.00	$155.00
Amendment	$35.00	$55.00
Annual Renewal	$0	$0
Annual Reinstatement	$25.00	$45.00
Change of Registered Office and Agent	$35.00	$55.00
Conversion	$60.00	$80.00 *
Domestication	$60.00	$80.00 *
Merger	$60.00	$80.00 *
Resignation of Agent	$35.00	$55.00 *
Statement of Authority	$35.00	$55.00 *
Statement of Authority Amendment	$35.00	$55.00 *
Statement of Authority Cancellation	$35.00	$55.00 *
Statement of Denial	$35.00	$55.00 *
Statement of Dissolution	$35.00	$55.00
Statement of Termination	$35.00	$55.00
Foreign LLCs:
Certificate of Authority – Original Filing	$185.00	$205.00
Amendment	$35.00	$55.00
Annual Renewal	$0	$0
Annual Reinstatement	$25.00	$45.00
Change of Registered Office and Agent	$35.00	$55.00
Conversion	$60.00	$80.00 *
Domestication	$60.00	$80.00*
Resignation of Agent	$35.00	$55.00 *
Withdrawal	$35.00	$55.00

Conclusion

Overall, forming an LLC in Minnesota is a smart move for most businesses and entrepreneurs. Now that you know the administrative costs associated with this process, you can plan accordingly and budget for these expenses. That said, Minnesota charges much less than other states, so you should be able to get your business off the ground sooner and for less money.

Another point to consider is whether you should use third-party services. Typically, if you’re forming a multi-member LLC, it’s better to rely on professionals than handle everything yourself. This way, you can be sure everything is done correctly, and there should be no conflict of interest among the LLC organizers.

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