How to Start a Corporation in Minnesota

How to Start a Corporation in Minnesota

How to Start a Corporation in Minnesota

A corporation in Minnesota is a legal entity separate from its owners (called shareholders). It has its own tax ID, can sign contracts, hire employees, and own property. The main tradeoff: a corporation requires more paperwork than an LLC, but it offers stronger liability protection and can be easier if you plan to raise outside investment or have multiple owners.

This guide walks you through the exact steps, costs, and timeline to incorporate in Minnesota. This is informational content, not legal or tax advice, consult an attorney or CPA for complex situations, especially if you have employees or plan to solicit outside investment.

What You Will Need Before You Start

Gather these materials before filing:

  • Business name: Must be distinguishable from other Minnesota corporations, LLCs, LLPs, and limited partnerships already on file. Must not contain "Limited Liability Company" or "LLC" (that signals an LLC, not a corporation). Your name can end with "Inc.", "Incorporated", "Corp.", or "Corporation". Run a name search first at mblsportal.sos.mn.gov to confirm availability, it's free and instant.
  • Registered office address: A physical Minnesota street address where the Secretary of State can serve legal papers. Cannot be a PO box. Does not have to be your principal place of business. If you don't have an office yet, some registered agent services offer addresses for a fee.
  • Names of incorporators: At least one person (can be you, a co-founder, attorney, or agent) who will sign the Articles. The incorporator is the person filing the paperwork, not necessarily an owner. The incorporator is not listed in public records after filing.
  • Articles of Incorporation template: You can download the fill-in-the-blank form from the Secretary of State or write your own (Minnesota Statutes Chapter 302A sets the legal requirements). Most incorporators use the official form to keep it simple.
  • Board of directors information: At least one director required. You can name the director in the Articles or in a separate board resolution filed with your records (not with the state).
  • Filing fee: $155 if filing in person or online (expedited service included), or $135 if filing by mail (not expedited). No additional fees for expedited, the higher price pays for immediate processing.

Step-by-Step Process to Incorporate

Step 1: Search Your Business Name (Free, 5 minutes)

Go to mblsportal.sos.mn.gov/Business/Search and search your intended name. The system will tell you if it conflicts with an existing corporation, LLC, limited partnership, or LLP in Minnesota. If your name is available, write down the exact name you want to file, spelling and punctuation matter.

If your name is taken, you have two options: pick a different name, or reserve your name with the Secretary of State for $55 (valid for 12 months, renewable). A name reservation holds your name while you prepare to file.

Step 2: Prepare Your Articles of Incorporation

Download the Articles of Incorporation form from the Minnesota Secretary of State at sos.mn.gov. The Articles are a 1 to 2 page document that includes:

  • The corporation's legal name (exactly as you searched it)
  • Number of shares the corporation is authorized to issue (e.g., 1,000 shares, or any number you choose; this does not limit growth)
  • The registered office address (the physical Minnesota address where legal papers can be served)
  • Name and address of the incorporator (the person filing)
  • Optional: names and addresses of initial directors
  • Optional: other provisions you want to include (such as eliminating directors' personal liability, or limiting shareholder voting rights)

Most incorporators use the standard Articles template and leave the optional sections blank. Keep it simple unless you have a specific reason to add restrictions.

Step 3: File Your Articles of Incorporation

You have three ways to file:

  • Online (fastest): File through the Minnesota Business and Lien System (MBLS) at mblsportal.sos.mn.gov. Upload your Articles, pay $155 by credit card. Processing is expedited (same day or next business day). You get a confirmation email with your filing receipt and entity ID.
  • In person: Walk into the Secretary of State's office in St. Paul with your Articles and $155. You get your receipt and status immediately. Address: 75 Reverend Dr. Martin Luther King Jr. Boulevard, St. Paul, MN 55155.
  • By mail: Mail your Articles and a $135 check to the Secretary of State at the address above. Processing is slower (no guaranteed timeline published) and not expedited. Include a cover letter with your name and phone number so they can call with questions.

Most incorporators file online because it is fast and you get proof instantly. Wait for your filing confirmation before moving to the next step.

Step 4: Obtain an Employer Identification Number (EIN)

An EIN is a federal tax ID for your corporation, issued by the IRS. You need it to open a business bank account, hire employees, and file taxes. Get your EIN for free at irs.gov/ein. You can apply online (instant, same-day approval) or by phone at 1-800-829-4933. Have your Articles filing receipt handy, you will need your state entity ID and formation date.

Online EIN applications are approved immediately and you can download your EIN letter the same day.

Step 5: Register for Minnesota Taxes

Go to the Minnesota Department of Revenue at mndor.state.mn.us and register for a Minnesota Tax ID (if you will have employees) and a Sales and Use Tax account (if you will make taxable sales). Both registrations are free. You will need your EIN and business address.

You only need to register for sales tax if you plan to sell goods or taxable services. If you are a service business with no retail component, sales tax registration may not be required, check with the Department of Revenue to confirm.

Step 6: Open a Business Bank Account

Visit your bank and open a business checking account in your corporation's name. Bring your Articles filing receipt, your EIN letter, and a photo ID. The bank will ask for your business address, EIN, and incorporation date. Most banks can open an account same day if you have these documents.

Timeline: How Long Does It Take?

  • Name search: instant (online, free)
  • Preparing Articles: 15 to 30 minutes
  • Filing (online): 1 day (expedited processing)
  • EIN (online application): same day
  • Tax registration: 1 to 3 days (online)
  • Bank account: same day

Total time from start to finish: 3 to 5 business days. If you mail your Articles, add 1 to 2 weeks.

Annual Renewal Requirement

Every year by December 31, you must file an Annual Renewal (also called Annual Report) with the Minnesota Secretary of State. The renewal is free if your corporation is active and in good standing. If you miss the December 31 deadline, the Secretary of State will dissolve your corporation without notice under Minnesota Statutes Section 302A.821. Reinstatement costs $25 by mail or $45 online or in person, so file on time to avoid this fee.

Costs Summary

Item Cost
Name search Free
Articles of Incorporation filing (online or in person) $155
Articles of Incorporation filing (by mail) $135
Name reservation (optional) $55 (12 months)
EIN (federal, from IRS) Free
Minnesota Tax ID registration Free
Sales Tax registration Free
Business bank account (varies by bank) $0 to $300
Annual renewal filing (if timely) Free

Minimum cost to incorporate: $155 (filing fee only). Most incorporators spend $155 to $300 total if they file online and do not reserve a name.

Common Mistakes to Avoid

Filing an Article With a Name That is Already Taken

The Secretary of State will reject your Articles if your name conflicts with a business already on file. Always search the name database before drafting your Articles.

Using a PO Box as Your Registered Office Address

The law requires a physical street address. A PO box is not valid. If you don't have a physical location yet, many registered agent services will provide an address for $50 to $100 per year, or you can use a co-working space address.

Missing the December 31 Annual Renewal Deadline

Set a calendar reminder for early December to file your Annual Renewal. Miss the deadline and your corporation is automatically dissolved. Reinstatement requires an extra fee and paperwork.

Confusing State Filing With Tax Registration

Filing your Articles with the Secretary of State is separate from registering for taxes with the Department of Revenue. Both are required if you will have employees or make taxable sales. File with the Secretary first, then register for taxes.

Forgetting to Obtain an EIN

You cannot open a business bank account or hire employees without an EIN. Get it immediately after your Articles are filed. It is free and takes 15 minutes online.

After Incorporation: What Happens Next

Once your corporation is officially formed, you should:

  • Hold your first board meeting: Document the initial board appointment, authorize the bank account, and authorize the officers to sign checks and contracts. Keep minutes in your corporate records.
  • Issue stock certificates: Your shareholders receive stock certificates showing their ownership stake. This is a formality but important for legal and tax records.
  • Create a corporate bylaws document: Bylaws are your internal operating rules (how meetings are held, who can sign checks, etc.). Not filed with the state, but kept in your records.
  • Open a business bank account: Your corporation must have its own bank account; do not mix personal and corporate funds.
  • File your first tax return: Corporations file Form 1120 (federal) and Form MN-1120 (Minnesota) with the IRS and Minnesota Department of Revenue. Deadline is typically April 15 (or 15 days after the corporation ends its fiscal year). Talk to a CPA about timing and strategy.
  • Obtain any occupational licenses: Some businesses (contractors, real estate agents, childcare providers, etc.) need occupational licenses. Check with the city or county where you will operate.

Taxes After Incorporation

A Minnesota corporation that files as a C corporation pays a flat 9.8 percent state corporate franchise tax on income, plus a minimum fee (currently $0 for corporations with less than $1,280,000 in Minnesota property, payroll, and sales; rising to $12,830 for corporations with $51,280,000 or more). Consult a CPA to choose between C corporation, S corporation (pass-through), or other tax elections that may lower your tax burden.

When to Consult a Professional

You can file your Articles yourself if your situation is straightforward: you are the sole incorporator, you have one director, and you plan to be the only shareholder. However, consult an attorney if:

  • You have multiple shareholders or co-founders with different ownership stakes
  • You plan to raise outside investment or venture funding
  • You plan to have complex voting rights or classes of shares
  • You want to eliminate directors' personal liability or add bylaws restrictions
  • You are not sure whether a corporation or LLC is the right choice for your business

Talk to a CPA about your tax strategy as soon as your corporation is formed. The choice between C corporation and S corporation status can significantly affect your taxes, and it is easier to plan this from the start.

Key Resources

Summary

Incorporating in Minnesota takes 3 to 5 business days and costs a minimum of $155. The process is straightforward: check your name, prepare and file your Articles of Incorporation, get an EIN from the IRS, and register for state taxes. File online with the Secretary of State for faster service. Remember to file your free annual renewal every December 31 to keep your corporation in good standing.

This guide is informational. It is not a substitute for legal or tax advice. Every business is unique, and the specific steps that apply to your situation depend on your industry, ownership structure, and growth plans. Consult an attorney or CPA for personalized guidance on incorporating, structuring ownership, and managing your corporate taxes.