The Cost of Starting an LLC in Minnesota

As a result of the personal liability protection it provides for its members, an LLC (Limited Liability Company) is a common business form for many entrepreneurs. If you’re thinking about forming an LLC in Minnesota, you might be curious about the price. We’ll go through the fees and costs involved with forming an LLC in Minnesota in this post, along with other crucial information you should be aware of.

1. Filing Fees

The filing fee is the first expense you’ll face when forming an LLC in Minnesota. The cost to file articles of organization with the Minnesota Secretary of State as of 2021 is $155 per document. You can pay this fee online or by mail. The processing of the application and approval of the LLC usually takes the Secretary of State’s office two to three working days. All Minnesota LLCs are required to have a registered agent, who is a person or business designated to receive legal documents on the LLC’s behalf. You must use a registered agent service if you don’t feel comfortable acting as your own registered agent. Although the price for these services varies, you should plan to spend, on average, between $100 and $300 annually.

3. Operating Agreement Fees

Although an operating agreement is not required by law, it is strongly advised that LLCs have one in place. The LLC’s ownership and management structure, as well as its financial and operational policies, are described in this document. Either you can construct an operating agreement on your own or you can pay a lawyer to do it for you. The typical range of legal costs for an operating agreement is $500 to $1500.

4. Renewal fees each year Once your LLC is set up, you must submit a renewal application every year to the Minnesota Secretary of State. There is no charge for this renewal. Your LLC will be dissolved if the renewal is not submitted. Can I Register an LLC on My Own? In Minnesota, you can submit an LLC by yourself, yes. It is possible to complete the process online or by mail, and it is rather simple. However, it is advised that you seek the help of a lawyer or a business formation agency if you are unsure of the procedure or have queries. What Steps Should I Take to Form an LLC? You must submit Articles of Organization to the Secretary of State in Minnesota in order to create an LLC. Additionally, you must decide on a name for your LLC and appoint a registered agent. You must get all relevant licenses and permits before starting your business after your LLC has been approved. In Minnesota, how is an LLC taxed? LLCs are normally taxed as pass-through entities in Minnesota. As a result, the LLC does not have to pay taxes on its own earnings. Instead, the LLC’s members receive a pass-through of the earnings, who they then report and tax on their personal income tax returns. Should I Use My LLC to Pay Myself a Salary? You have the choice as an LLC member of whether to pay yourself a salary or receive distributions from the LLC’s earnings. Each alternative has advantages and disadvantages, so it is advised that you consult a tax expert to identify the best course of action for your circumstances.

Finally, establishing an LLC in Minnesota can be a quite inexpensive procedure. Many entrepreneurs consider personal liability protection to be a smart investment despite the expenditures (such as filing fees and registered agent fees) involved. You may create a profitable LLC in Minnesota and accomplish your business objectives with the appropriate advice and tools.