How to Start a Business in Minnesota
Everything you need to form your Minnesota LLC, corporation, or sole proprietorship, with exact fees, timelines, and step-by-step instructions.
Forming an LLC in Minnesota costs 155 dollars when filed online or in person, or 135 dollars by mail. Minnesota has no separate LLC franchise tax; instead, LLC owners pay individual income tax ranging from 5.35 to 9.85 percent based on their earnings.
This guide covers every step from choosing a business structure to obtaining the licenses and permits required for your industry.
Choosing Your Minnesota Business Structure
This is the first decision and it affects everything: taxes, liability, paperwork. If you are unsure, an LLC is the right default for most Minnesota small businesses.
| Entity Type | Liability Protection | Taxation | Minnesota Filing Fee | Annual Cost | Best For |
|---|---|---|---|---|---|
| LLC | Yes | Pass-through | $155 | $0 Annual Renewal (Minnesota Statutes,... | Most small businesses |
| Corporation | Yes | Double (C-Corp) or pass-through (S-Corp) | $155 | $0 Annual Renewal (Minnesota Statutes,... | Raising investment, stock options |
| Sole Proprietorship | No | Pass-through | $0 | $0 | Freelancers, side hustles |
| Partnership | No | Pass-through | $0 | $0 | 2+ owners (consider an LLC instead) |
8 Steps to Start Your Minnesota Business
- 1
Choose your business structure
LLC, corporation, or sole proprietorship. Each has different costs, tax treatment, and liability protection.
- 2
Pick and reserve your business name
Search the Minnesota Secretary of State database. Reserve for $55 (12 months, renewable for additional 12 month periods).
- 3
Appoint a registered agent
Must have a physical Minnesota street address. Can be yourself (free) or a service ($100 to $300 per year).
- 4
File your formation documents
Articles of Organization (Minnesota Statutes, Chapter 322C) ($155) or Articles of Incorporation (Minnesota Statutes, Chapter 302A) ($155) with the Minnesota Secretary of State.
- 5
Get your EIN from the IRS
Free, online, takes about 5 minutes. Do not pay anyone for this.
- 6
Register for a sales tax permit if you sell goods
Through the Minnesota Department of Revenue. State sales tax rate: 6.875%.
- 7
Get required licenses and permits
Minnesota issues no general statewide business license.
- 8
Register for Minnesota taxes
Personal income tax: Graduated, four brackets: 5.35%, 6.80%, 7.85% and 9.85%.
How Much Does It Cost to Start a Business in Minnesota?
| Item | Cost | Notes |
|---|---|---|
| LLC filing fee (Minnesota Secretary of State) Required | $155 | The Secretary of State treats in-person and online filings as expedited service, which is what the higher 155 dollar... |
| Corporation filing fee Required | $155 | If forming a corporation instead |
| Annual Renewal (Minnesota Statutes,... Required | $0 | December 31 every calendar year. There is no fee if the entity is active and in good standing. |
| Name reservation | $55 | 12 months, renewable for additional 12 month periods |
| Registered agent service | $0 to $300/yr | Free if you serve as your own |
| EIN (IRS) Required | $0 | Always free |
| Business license | Varies | Minnesota issues no general statewide business license. |
| Operating agreement | $0 to $500+ | Free template or attorney-drafted |
| Realistic LLC total (year 1) | $155 to $455 |
Start a Specific Business in Minnesota
Minnesota Business Guides
- How to Start an LLC in Minnesota
- How to Start a Corporation in Minnesota
- Sole Proprietorship in Minnesota: How to Start One
- Minnesota Business License: What You Need and How to Get It
- Minnesota Home-Based Business Laws: Zoning, Permits and Rules
- How to Get an EIN in Minnesota
- Minnesota Business Name Search: How to Check and Reserve a Name
- How to Get a Resale Certificate in Minnesota
- Minnesota Registered Agent: Requirements and How to Choose One
- Best LLC Services in Minnesota
- Minnesota Business Taxes Explained for New Owners
- How Much Does It Cost to Start a Business in Minnesota
Why Start a Business in Minnesota?
- Forming an LLC costs 155 dollars filed online or in person and 135 dollars by mail, and the online price already includes expedited service.
- The annual renewal that keeps an LLC or corporation in good standing is free, with no fee at all as long as the entity is active, due each year by December 31.
- Minnesota issues no general statewide business license, so licensing is limited to the specific occupations and activities listed on the state License Minnesota portal.
- Minnesota requires only a registered office address in the state; naming a registered agent is optional for domestic LLCs and corporations under Minn. Stat. 322C.0113 and 302A.121.
- The state general sales tax rate is 6.875 percent, the corporation franchise tax is a flat 9.8 percent, and individual income tax runs from 5.35 percent to 9.85 percent across four brackets.
- Minnesota has roughly 5.83 million residents and about 507.7 billion dollars of state GDP in 2024, and 17 Fortune 500 companies are headquartered there.
Minnesota Business Resources
Frequently Asked Questions
- How long does it take to form an LLC in Minnesota?
- The Secretary of State offers expedited service for in-person and online filings (included in the 155 dollar fee), while mail filings are processed without expediting. The office does not publish a guaranteed turnaround in business days.
- What does it cost to start an LLC in year one in Minnesota?
- Filing costs 155 dollars for online or in-person filing or 135 dollars by mail. Your annual renewal due by December 31 is free as long as your LLC is active and in good standing.
- Can a non-resident form an LLC in Minnesota?
- Yes, you can form an LLC as a non-resident as long as you maintain a registered office address in Minnesota.
- What is the cheapest way to start an LLC in Minnesota?
- Filing by mail for 135 dollars is the cheapest filing option. Minnesota does not issue a general state business license, so you have no additional state licensing requirement, and your annual renewal is free.
- Is an operating agreement required for an LLC in Minnesota?
- An operating agreement is not required under Minnesota law. The legal requirements are filing your Articles of Organization and maintaining annual renewal by December 31.