Forming a Minnesota corporation can be a complex undertaking, so we’ve created an easy-to-follow guide to help you get started. The following steps are for forming a for-profit, domestic C corporation.
To start a corporation in the North Star State, you must file the Articles of Incorporation with the Office of the Minnesota Secretary of State. These articles legally form your corporation so that it can do business in the North Star State. Corporations are nationally and globally recognized, so you can expand outside of the state when the time comes to expand.
To simplify the process of forming a corporation in the state of Minnesota, we’ve put together 10 easy steps to form your business.
The first step to take after deciding to form a corporation is choosing a name for your new business.
As you brainstorm ideas, be aware of Minnesota naming laws, such as:
To find out if you can use the business name of your choice, you’ll need to do a name availability search. You’ll need to create an online account to access this service offered by the Minnesota Secretary of State. It’s also a great idea to do an easy domain name search to see if the business name or variation of it is available to use as a website address.
Reserving your corporation’s name is optional, but it ensures that you have the sole rights to it for 12 months from the time of filing. You can do this by filing a request for name reservation with the Minnesota Secretary of State for $35 by mail. The street address for mailing is:
Minnesota Secretary of State – Business Services
Retirement Systems of Minnesota Building
60 Empire Drive, Suite 100
St Paul, MN 55103
You can also pay $55 for expedited online or in-person filing.
If you’ve already registered your corporation’s name but want to operate under a different name, you must file a Certificate of Assumed Name with the Minnesota Secretary of State. It costs $30 by mail and $50 online or in-person. An assumed name is also known as a “doing business as” or DBA name. You’ll have to renew your Minnesota DBA certificate each year. It’s free to do so as long as the name is active and in good standing with the state.
By state law, you must publish your original Certificate of Assumed Name and any following amendments in a qualified legal newspaper for two consecutive issues. The notices must be published in the county where your principal place of business is located. You’ll receive proof of publication, known as an affidavit, after the notices have been published in the newspaper.
Before making the final decision on your business name, check to make sure it isn’t already trademarked at the state or federal level. After your corporation’s name is in use, you can apply for a trademark or service mark to further secure its protection. These marks can be the name of your company, a symbol, or a combination of such used to represent your goods or services. It will cost $50 to register your trademark with the state by mail and $70 in person. Online registration isn’t available.
At the federal level, you can register your trademark with the United States Patent and Trademark Office (USPTO), which affords greater protection if you want to do business outside of Minnesota. Registration with the USPTO costs $225 or $275 per class of goods or services. State and federal registrations are both valid for 10 years.
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The people appointed to run the corporation are “directors.” They generally serve on a board that meets regularly to discuss business and make decisions. Directors set policy and represent shareholders. They want the corporation to run as smoothly as possible and prosper while doing so.
Directors don’t need to be the corporation’s owners, but they can be. In Minnesota, the first board members can be named in the Articles of Incorporation or elected by the incorporators or shareholders. State law requires there to be one or more directors.
An organizational meeting is often held to choose directors before the corporation is officially formed. However, additional directors may be elected at the first annual meeting after incorporation or at any other time, as written in the company’s articles or bylaws.
Every Minnesota corporation is required to have a registered office and a registered agent. The agent serves as your official recipient for service of process and other legal notices. You can appoint a registered agent when filing your Articles of Incorporation. They can be an individual, such as yourself, or a business entity, like us. The registered office must be a street address within Minnesota, not a P.O. box. The registered agent must always be available during normal business hours.
While it may be tempting to act as your Minnesota registered agent, there are many reasons to hire a registered agent service. For example, a registered agent service like ours can:
File Minnesota Articles of Incorporation with the Secretary of State to legally form your corporation for $135 by mail. You’ll send the document to the address listed above. If you need expedited online or in-person filing services, it’ll cost $155. An optional Minnesota Business Snapshot survey is included at the end of the articles form.
If you’re ready to launch and don’t want to wait weeks for your paperwork to get processed, we can help. With our rush filing services, you can form your corporation in Minnesota in as little as one day. With our rush filing service, we prioritize your formation paperwork so you can get it filed with the Minnesota Secretary of State within 1-3 business days for just $100 + state fees.
In some other states, the Articles of Incorporation are known as a Certificate of Incorporation or a Corporate Charter. Choose to file your articles in Minnesota if it is going to be your primary place of business. If you expand in the future, you can file certificates with neighboring states to be authorized to do business in them.
To file your Minnesota Articles of Incorporation, you’ll need the following information:
Shares of stock are units of ownership interest in a company. They can be used to gain investors publicly or privately to start or grow your business. Those who own shares are called shareholders. Shares are also a way to reward investors, as shareholders receive dividend payments from profits.
Incorporators or a board of directors need to set rules by which the corporation will operate to ensure proper operation and avoid disputes. These rules, known as corporate bylaws, are created and outlined in a binding legal document.
Minnesota corporations can create corporate bylaws but aren’t required to by law. It’s still suggested that you do so and include information about your business. Corporate bylaws should also provide provisions for the regulation or management of:
A shareholder agreement contains the rights and responsibilities of your shareholders. The agreement ensures shareholder equality and protection. Their names, contact information, responsibilities, and voting rights should be outlined in the agreement. It should also cover details about:
Keep your shareholder agreement with your corporate records and legal documents. If you’re unsure how to draft a shareholder agreement, you can try an online template or seek professional legal services.
The number of authorized shares detailed in your Articles of Incorporation will need to be issued to shareholders. It’s required of all corporations to issue stock, and you’ll need to track how many shares have been issued and to whom. Shares are issued only once but can be sold or traded after their initial issuance.
Shares can be issued privately to those of your choosing or publicly to anyone who wishes to invest. If shares are issued publicly, your corporation is public and has to file quarterly statements with the U.S. Securities and Exchange Commission (SEC). To learn more about state regulations, contact the Minnesota Department of Commerce.
To comply with federal, state, and local government regulations, certain companies need to apply for additional business licenses or permits. These extra certifications may need to be applied for at the local, state, and/or federal levels.
There isn’t a one-stop shop to apply for business licenses and permits. They span across government agencies. To save yourself time and hassle, consider hiring a service like ours to research all the requirements.
To file for a federal employer identification number (EIN), you’ll need to contact the Internal Revenue Service (IRS). Also known as a federal tax identification number, an EIN is a unique number like a Social Security number. The federal government uses it to identify your corporation. You’ll need it to pay federal taxes, hire employees, and open a business bank account. You can apply for an employer identification number online at the Internal Revenue Service website or let us help secure an EIN for you.
A tax ID number from the Minnesota Department of Revenue is also required for corporations to pay state business income taxes. To pay Minnesota sales tax, you can also register for a sales and use tax account.
Having a dedicated business bank account is critical for separating business and personal expenses, especially at tax time.
Every Minnesota corporation must file an annual renewal (called an “annual report” in most states). It must be filed by Dec. 31 each year and contain the following information:
It’s free to file your annual renewal as long your Minnesota corporation is active and in good standing with the state.
Many variables affect startup costs for Minnesota corporations. It will at least cost $135 if you file your Minnesota Articles of Incorporation on paper through the mail. Minnesota charges higher fees for in-person and online filings.
Permits, licensing, business name reservation, assumed name registration, creating bylaws, drafting a shareholder agreement, and hiring a registered agent are just several steps that add more to your costs. Rely on our team of experts at ZenBusiness to handle the red tape, keep your business compliant, and assist with starting your small business.
There are many advantages to forming a business entity like a corporation. For one, it establishes your company as an official business, which keeps your business and personal finances separate. It also allows for stocks to be issued and funds to be raised. A corporation can be recognized as a legit business outside the U.S., which is great if you have dreams of expanding globally.
Minnesota also offers a variety of business incentives, such as tax breaks and financial assistance, to encourage new and growing corporations within the state.
Corporations in Minnesota pay state and federal taxes unless they’re a nonprofit that’s tax-exempt. Your company is taxed as a C corporation unless it applies to be taxed as an S corporation. C corporations pay a corporation franchise tax and federal income tax. An S corporation pays a Minnesota S corporation tax and federal income tax.
To be taxed by Minnesota, corporations must be located in Minnesota, have a business presence in the state, or have a Minnesota gross income to be subject to the franchise tax. Other state, local, and federal taxes may apply, so it’s best to speak to a tax professional to ensure you understand all the taxes that your corporation will need to pay.
No matter where you are in your phase of business ownership, we are here to help. Want to start a Minnesota LLC instead of a corporation? We can help there too! Whether you’re in St. Paul or St. Cloud, our suite of products and services is here to help you start, run and grow your business. Reach out to us today!
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Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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