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TLDR

• As the U.S.’s 12th largest state, Minnesota is known for its lakes and waterfalls. But in addition to its natural beauty, Minnesota is also home to the twin cities, Minneapolis and St. Paul, boasting over three million residents.
• Minnesota is also first in the nation for the number of Fortune 500 companies per capita as well as the first state nationally for the most medical device patents per capita. In addition, the state is the second-best state for economic opportunity and the labor force participation rate for women.
• When you register your startup in Minnesota, you'll need to satisfy several requirements to register your business successfully and compliantly. Before registering your Minnesota startup, it’s a good idea to research the market and potential competitors and create a business plan and a roadmap for moving forward. The State of Minnesota provides various resources to help you when starting a business.
• Before you register your startup in Minnesota, in addition to creating a business plan and choosing your business name, you must also determine your startup’s legal entity structure. For example, in Minnesota, you may choose to register as a(n): Corporation, Limited Liability Company (LLC), Limited Partnership (LP), and Limited Liability Partnership (LLP). You may also organize as a sole proprietorship or a general partnership in Minnesota; however, you do not need to register these business entities with the state.
• You need to identify and obtain a registered agent designated to receive court and other vital documents on your behalf. In Minnesota, like in other states, a registered agent is an individual or entity that can accept service of process for lawsuits and other legal or financial documents.
• Minnesota requires you to choose a unique business name, meaning no other Minnesota registered businesses have a name similar to your chosen one. To confirm if your startup’s name is distinguishable from other registered Minnesota businesses, you can use the business entities database.
• Finally, after completing the above steps, it's time to submit your formation forms to Minnesota’s Secretary of State. For new entities, the State of Minnesota provides sample forms for your use or review.
• Understanding the difference between domestic and foreign startups is critical to know when to conduct business in Minnesota. If your startup is registered in the State of Minnesota, then you have a domestic company. However, if you’re registered in another state, then you have a foreign business. As a foreign startup, before you conduct business in Minnesota, you must register with Minnesota by obtaining a Certificate of Authority.

As the U.S.’s 12th largest state, Minnesota is known for its lakes and waterfalls. But in addition to its natural beauty, Minnesota is also home to the twin cities, Minneapolis and St. Paul, boasting over three million residents.

Numerous Fortune 500 companies, such as Target, General Mills, Best Buy, and Land o’ Lakes, are headquartered in Minnesota, boosting the state’s economy. And, of course, many people know it as home to The Mall of America, the largest mall in the country.

Minnesota also has the “highest five-year business survival rate in America” as of 2020, a pandemic year. As Steve Grove, Commissioner of the Minnesota Department of Employment and Economic Development, told The Business Journals, “This ranking confirms something we know to be true – people who start things in Minnesota tend to stick to it. It’s part of that Minnesota work ethic that we’re known for. This ranking bodes well for our economy, as we know that small businesses account for 47% of the jobs in the state.”

If you consider registering your startup in Minnesota, this article will walk through what you need to know.

How to Register a Business Name in Minnesota

When you’re ready to register your startup, like other states, Minnesota requires you to choose a unique business name, meaning no other Minnesota registered businesses have a name similar to your chosen one. To confirm if your startup’s name is distinguishable from other registered Minnesota businesses, you can use the business entities database.

If you’re not quite ready to register your Minnesota startup, but you have a business name in mind, you can reserve your business name with the State of Minnesota for 12 months. To reserve your startup’s name, you should file a Name Reservation application with the Secretary of State’s office along with a $55 expedited filing fee (in-person or online) or a $35 filing fee if by mail. Upon expiration of the first 12 months, you may reserve your name for additional 12-month periods.

For any Minnesota startup not using its legal name, the founder may file for a Certificate of Assumed Name. For sole proprietorships or general partnerships, Minnesota founders can apply for an assumed name instead of using their personal names.

For corporations, limited partnerships, or limited liability companies, Minnesota founders may want to use an assumed name (often referred to as a “doing business as” or “DBA”) if they offer different products or services or if they want to appeal to other customers.

How to Register a Business in Minnesota

When you register your startup in Minnesota, you'll need to satisfy several requirements to register your business successfully and compliantly. Before registering your Minnesota startup, it’s a good idea to research the market and potential competitors and create a business plan and a roadmap for moving forward. The State of Minnesota provides various resources to help you when starting a business.

In drafting your business plan, you’ll want to consider marketing, advertising, sales, location, and ownership, to name a few categories. To help guide you, you can check in with the U.S. Small Business Administration, providing additional guidance for determining the feasibility of starting your business as well as how to create a business plan.

Once you’ve identified some of your business’s operation basics, it is then time to register your start-up. Below, we'll address how to register your business step by step.

Determine Your Business’s Entity Structure

Before you register your startup in Minnesota, in addition to creating a business plan and choosing your business name, you must also determine your startup’s legal entity structure. For example, in Minnesota, you may choose to register as a(n):

• Corporation
• Limited Liability Company (LLC)
• Limited Partnership (LP)
• Limited Liability Partnership (LLP)

You may also organize as a sole proprietorship or a general partnership in Minnesota; however, you do not need to register these business entities with the state.

Your chosen business entity determines the next steps in registering your Minnesota startup. To learn more about the state’s permissible entity types, you can visit Minnesota’s Secretary of State’s webpage.

Identify Your Registered Agent

Next, you need to identify and obtain a registered agent designated to receive court and other vital documents on your behalf. In Minnesota, like in other states, a registered agent is an individual or entity  that can accept service of process for lawsuits and other legal or financial documents.

In Minnesota, the registered agent must have a Minnesota street address. Therefore, a P.O. Box is not sufficient. Additionally, the registered agent must be available during regular business hours to receive any service of process.

Submit Your Formation Forms

Finally, after completing the above steps, it's time to submit your formation forms to Minnesota’s Secretary of State. For new entities, the State of Minnesota provides sample forms for your use or review.

For example, suppose you choose a limited liability company structure for your Minnesota startup. In that case, you can use the state's official forms to complete your Articles of Organization with Minnesota’s Secretary of State to create your startup. You may file online or through US Mail. The filing fee is $135 if filed by mail and $155 for expedited service in-person and online filings.

For corporations, Minnesota founders will file Articles of Incorporation with the state. The filing fees for corporations are the same as those mentioned above for limited liability companies.

After submitting your registration forms, you need to learn about any required state or local licenses, such as a business license.

How Much Does It Cost to Register a Business in Minnesota?

Depending upon your chosen entity for your Minnesota startup, you will have filing fees due when registering your business, as mentioned above. If you want to do business in Minnesota, but your startup was registered in another state, you may have different filing fees to pay.  

Also, depending upon your entity, you may be liable for business taxes. To determine if you owe Minnesota taxes and how much you may owe, it’s best to engage an accountant familiar with Minnesota tax laws to advise you.

What if I Want to Do Business in Minnesota but I Registered My Startup in Another State?

Understanding the difference between domestic and foreign startups is critical to know when to conduct business in Minnesota. If your startup is registered in the State of Minnesota, then you have a domestic business. However, if you’re registered in another state, then you have a foreign company.

As a foreign startup, before you conduct business in Minnesota, you must register with Minnesota by obtaining a Certificate of Authority.

Benefits of Registering a Business in Minnesota

Here are some benefits of registering your startup in Minnesota:

• Minnesota is first in the nation for the five-year business survival rate.
• Minnesota is also first in the nation for the number of Fortune 500 companies per capita as well as the first state nationally for the most medical device patents per capita.
• The state is the second-best state for economic opportunity and the labor force participation rate for women.
• Other accommodations include the best airport in the country (running four years straight).
• And don’t count out the quality of life. Minnesota is ranked the least stressed state in the country, the best state to raise a family, and the second-best state for working moms and dads.
• The state has excellent outdoor activities to enjoy, with lots of music festivals to boot.

Limitations Associated with Registering a Business in Minnesota

Here are some limitations of registering your startup in Minnesota:

• Winters can be challenging, to say the least.
• Where winters can be cold and snowy, summers are filled with mosquitos, thanks to the breeding grounds of all of the lakes.
• People are blunt. If you’re used to hospitality, you won’t find it in Minnesota.
• The taxes are shockingly higher than other states.
• Public transportation is lacking outside of the larger cities.
• Minneapolis is one of the most dangerous cities in the U.S.

We can help!

At AbstractOps, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most—your business. If you're looking for help registering your Minnesota startup, we can get your documentation ready, overall shepherding this process to ensure it's done right. Get in touch to learn more! 

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Note: Our content is for general information purposes only. AbstractOps does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.