Minnesota LLC

An LLC formation creates a business structure that combines the limited liability of a corporation with the tax benefits of a partnership. The rules that govern how to form an LLC in Minnesota and how to operate the LLC are covered in Minnesota Statutes Chapter 322B.

Just like with a partnership, the income and losses of the LLC are passed straight through to the owners of the business, unless al election has been made with the IRS at the time of the LLC formation to be treated as a corporation. As with a corporation, any liability for business related debts and obligations will generally rest with the entity rather than with the individual owners. Since the taxes are paid at the owner’s individual tax rate, the double taxation that occurs with a normal corporation is avoided. Unlike in a limited partnership, members can participate in the active management on the company without risking the loss of personal liability protection. It is important to note, that as of 2009, when a single member LLC taxed as a disregarded entity fails to pay federal unemployment taxes, the LLC may actually be liable instead of the owner.

Q: How quickly can I form an LLC in Minnesota?
A: Because of the high volume of LLC formations we handle in Minnesota, we are able to form an LLC in as little as 24 hours in some cases. Depending on the package you select, some items can take longer to complete.

Q: I am trying to decide on a name to use when I form an LLC. What are the rules related to naming my LLC?
A: Choosing a name is truly the first step in starting an LLC and is one of the most important. The name you select:

1. must contain, as the last words of the name, the words “limited liability company” or “LLC”.
2. may contain the name of one or more of the members
3. must clearly be distinguishable from the name of any other LLC registered in Minnesota
4. must not contain the words any words that suggest it is in the business of issuing policies of insurance and assuming insurance risks, such as “bank”, “trust”, “trustee”, “incorporated”, “inc”, “corporation”, “insurer”, “insurance company”, etc.

EZonlineFiling.com allows you to select 3 names in order of preference when you place your order and we are available to assist you with your name selection, to make certain your online LLC filing goes smoothly.

Q: What is an Operating Agreement?
A: An Operating Agreement is a formal document which spells out a wide variety of rules and regulations related to the governance of the LLC. This can cover everything from ownership percentages to rules on restrictions and/or prohibitions on the power of any or all members.

Q: Once I set up an LLC, am I finished or are there other issues I should consider?
A: Here are a few things you should know

1. General Considerations-Once you form an LLC, it may need to perform a series of tasks, such as getting both federal and state tax ID numbers, obtaining an unemployment compensation ID number, setting up and maintaining the accounting books and records, etc. Any and all actions taken and decisions that are made by the LLC must conform to the articles of organization, the operating agreement and applicable laws. Actions and decisions should also be recorded in the minute book.
2. Annual Registration-Limited Liability Companies must register with the Secretary of State once every year. They will send a registration form to the address of record for the registered agent of the company. This registration is due by the end of the year and failure to complete this document can result in the administrative dissolution of your company.
3. Operating Agreement- Most aspects of an LLC are controlled through this document. The operating agreement is very specific and you should get help creating this document if you are not familiar with it.