Forming a Minnesota corporation can be a complex undertaking, so we’ve created an easy-to-follow guide with many links to important laws and state forms to help you get started.
How do I form a Corporation in Minnesota?
Steps to form your Minnesota Corporation
- Name Your Corporation
- Appoint Directors
- Choose an Minnesota Registered Agent
- File the Minnesota Articles of Incorporation
- Create Corporate Bylaws
- Draft a Shareholder Agreement
- Issue Shares of Stock
- Apply for Necessary Business Permits or Licenses
- File for an EIN and Review Tax Requirements
- Submit your Corporation’s first report
To start a corporation in Minnesota, 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 grow.
To simplify the process of forming a corporation in the state of Minnesota, we’ve put together 10 easy steps to form your business:
Step 1: Name Your Minnesota Corporation
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:
- The name must be in English or any other language expressed in English letters or characters.
- The name must contain “corporation,” “incorporated,” or “limited.” It can also contain an abbreviation of one of these words. “Company” or “Co.” may be used instead, as long as it isn’t immediately preceded by “and” or “&.”
- The name must be different from the name of each profit or nonprofit domestic corporation, limited partnership, limited liability partnership, and limited liability company.
- The name must be distinguishable from each profit or nonprofit foreign corporation, limited partnership, limited liability partnership, and limited liability company on file, authorized, or registered to do business in Minnesota.
To find out if you can use the 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 name or variation of it is available to use as a website address.
Reserving your corporation’s name ensures that you have the sole rights to it for 12 months from the time of filing. File a request for name reservation with the Minnesota Secretary of State for $35 by mail. The mailing address 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 for online or in-person. An assumed name is also known as a “doing business as” or DBA name. You’ll have to renew this certificate each year, and 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 run in the newspaper.
Before making the final decision on your business name, check to make sure it isn’t already trademarked on 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.
Step 2: Appoint Directors
Directors are the people who are appointed to run the corporation. 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. The number of directors required by state law is one or more.
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.
Step 3: Choose an Minnesota Registered Agent
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 a ZenBusiness partner. The registered office must be a street address within Minnesota, not a P.O. box.
While it may be tempting to act as your registered agent, there are many reasons to hire a registered agent service. For example, they can:
- Keep a permanent physical address for your business
- Receive sensitive legal notices privately
- File your documents securely and in a timely manner
Step 4: File the Minnesota Articles of Incorporation
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.
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:
- Name of the corporation
- Registered office and agent details
- Number of authorized shares
- Incorporators and their addresses
- Email address for official notices
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.
Step 5: Create Corporate Bylaws
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:
- Board of directors
- Conflict of interest
- Amending the bylaws
Step 6: Draft a Shareholder Agreement
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:
- Distributing dividends
- Selling and transferring stock
- Amending the shareholder agreement
- Dividing assets if the corporation dissolves
If you’re unsure how to draft a shareholder agreement, try an online template or seek professional legal services.
Step 7: Issue Shares of Stock
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 Commerce Department.
Step 8: Apply for Necessary Business Permits or Licenses
Certain businesses need to apply for additional permits or licenses to operate legally. These extra certifications may need to be applied for at the local, state, and/or federal levels. Search the state’s licensing web portal, Minnesota ELicensing, to see if you need a state-required license.
There isn’t a one-stop shop to apply for business permits or licenses. They span across government agencies. To save yourself time and hassle, consider hiring a service to research all the requirements.
Step 9: File for an EIN and Review Tax Requirements
To file for an Employer Identification Number (EIN), you’ll need to contact the Internal Revenue Service (IRS). An EIN is a unique number like a Social Security number. The federal government uses it to identify and tax your corporation. You can use it for things like hiring employees or opening a business bank account. Apply for an EIN online or let ZenBusiness 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.
Step 10: Submit Your Corporation’s First Report
In Minnesota, every corporation must file an annual renewal. It must be filed by Dec. 31 each year and contain the following information:
- File number issued by the Minnesota Secretary of State
- Home jurisdiction
- Corporate name
- Registered office address
- Registered agent, if any
- Principal executive office address
- Name and business address of the chief executive officer
- Email address for official notices
It’s free to file your annual renewal as long your corporation is active and in good standing with the state.
How much does it cost to start a corporation in Minnesota?
Many variables affect startup costs for Minnesota corporations. It will at least cost $135 if you file your 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.
What are the benefits of a corporation in Minnesota?
There are many advantages to forming a corporation in Minnesota. 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.
How is an Minnesota corporation taxed?
Corporations in Minnesota pay state and federal taxes unless they are 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.
Minnesota Corporation FAQs
- Does running a corporation in Minnesota involve more paperwork than running other types of businesses?
Yes, a corporation often requires a lot of administrative paperwork because of its complex business structure.
- What is the difference between an LLC and a corporation in Minnesota?
An LLC is a limited liability company owned by members. It’s a simpler business organization than a corporation. It doesn’t have a board of directors, shares, or shareholders. The management of an LLC is more flexible and has fewer requirements.
- How do I change my corporation’s name in Minnesota?
File an amendment to your Articles of Incorporation to change your corporation’s name in Minnesota for $35 by mail or $55 for expedited service in person or online. You can also change the name on your annual renewal application.
- How many people are needed to form a corporation in Minnesota?
Only one person is needed to form a corporation in Minnesota. The individual must be at least 18 years old.
- Can I form my Minnesota corporation online?
Yes, you can form your Minnesota corporation online by filing your Articles of Incorporation with the Secretary of State. Domestic business corporations can file online for $155, and nonprofit corporations can file for $90.
- How do I dissolve my Minnesota corporation?
A Minnesota corporation may be dissolved before or after issuance of shares. If they meet the dissolution requirements, they have to file a Notice of Intent to Dissolve with the Minnesota Secretary of State. The fee is $35 by mail or $55 in-person or online.
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