How to Qualify a Foreign LLC in Minnesota

Explore our guide for essential insights on securing a foreign LLC qualification in Minnesota, ensuring a smooth entry into the vibrant market of the Land of 10,000 Lakes.

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Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!

But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.

It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.

For example, if your LLC is registered in Iowa and you are looking to open a second location in Minnesota, you may need to complete a foreign qualification in Minnesota before you can expand there.

Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.

What happens if I fail to foreign qualify before doing business in Minnesota?

Foreign qualifying is essentially asking permission to do business in the state of Minnesota. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Minnesota yields consequences that are far costlier than registering in the first place.

If you fail to foreign qualify, your business will be prohibited from commencing or maintaining an action or proceeding in Minnesota courts until it acquires a Certificate of Authority. The Secretary of State will be appointed as your registered agent, and the Attorney General can cut off your business activities in the state.

However, transacting business without authorization won’t completely discontinue your activities in Minnesota. You’ll still be able to defend an action or lawsuit, and your prior contracts will still be valid.

Regardless, losing your revenue stream and legal footing in the state is not something you want to risk, so foreign qualify as soon as you begin doing business in Minnesota.

To see what state law has to say about it, see Section 322C.0808 of the Minnesota Statutes.

What is considered “doing business” in Minnesota?

We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Minnesota? This isn’t explicitly defined in Minnesota’s Statutes, but generally, you are considered to be “doing business” in most states and required to foreign qualify if:

  • Your LLC has a physical presence in the state. This could mean anything from offices to stores to warehouses, as well as other structures.
  • Salespeople, agents, or other representatives are doing business on your behalf in the state.

If you’re unsure whether or not you need to file for a foreign qualification in Minnesota, we suggest seeking legal counsel.

Could I be exempt from foreign qualifying in Minnesota?

The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Minnesota. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:

  • Maintaining or settling lawsuits in a Minnesota court
  • Carrying on matters of internal affairs, like LLC member and/or manager meetings
  • Having bank accounts in the state
  • Transferring and/or exchanging the LLC’s own securities in the state
  • Managing or holding title to real or personal property
  • Making or investing in loans; creating or acquiring indebtedness
  • Collecting debts
  • A single, isolated transaction, not in the course of regular business activity, completed within 30 days

You’re likely exempt from foreign qualifying if you find your only business activities in Minnesota on this list. Look over the full list in the Minnesota Statutes, Section 322C.0803. But sometimes it’s hard to tell if your activities constitute doing business or not. In these cases, again, it’s wise to get some legal advice.

How to Foreign Qualify Your LLC in Minnesota

Foreign qualification in Minnesota is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Minnesota, you can do so online, by mail, or in person.

If you have deals on the table, clients ready for new projects, or if you’re just generally excited to start doing business in Minnesota, use the Business Services page to file online. This is the quickest method. To get started, you will need to create an account. Then, select “Limited Liability Company (Foreign)” from the list and the rest of the process will be smooth sailing.

If you prefer to do business by mail, download the “Certificate of Authority for a Foreign LLC” form and follow the instructions on page 3. When you’re finished, send your form to:

First National Bank Building

332 Minnesota St., Suite N201

St Paul, MN 55101

Do you call St. Paul home? Or will you be passing through on a trip? Feel free to drop your form off in person at the same address.

The fee for your Certificate of Authority varies depending on how you file. Mailed forms require a $185 fee, while online and in-person deliveries cost $205. This is because online and in-person submissions receive expedited (24-hour) processing, while mailed forms are processed in 2-4 days.

Here’s how you can pay:

  • Online: Credit or debit card
  • Mail: Check or money order made payable to the “Minnesota Secretary of State”
  • In Person: Check, money order, or card

After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification, and you’re embarking on another chapter in the life of your business.

Minnesota Secretary of State Contact Information

Address:
332 Minnesota Street, Suite N201
St. Paul, MN 55101
Email:
business.services@state.mn.us
Telephone:
(651) 201 – 1324
Website:
https://www.sos.state.mn.us/

Name Requirements to Remember

Let’s not forget the all-important state naming rules. A non-compliant name can throw a hitch into your whole registration process, so double-check that your name is acceptable. In Minnesota, your LLC name must:

  • Use the words “limited liability company” or the abbreviation “LLC”
  • Be in the English language or a language expressed in English characters
  • Not contain “corporation,” “incorporated,” or any abbreviation of either word
  • Not use terms that would indicate it was formed for an unpermitted purpose
  • Be distinguishable from every other business entity name on record with the Secretary of State (perform a Minnesota LLC name search to make sure the name you want is available)

You can also reserve your Minnesota business name if you’re not quite ready to foreign qualify your LLC.

Frequently Asked Questions

  • We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a jurisdiction where you don’t have permission to do so.

  • You’ll typically need to wait roughly 24 hours for an online or in-person submission, while mailed forms are processed within 2-4 days of receipt. Minnesota has relatively quick turnaround times compared to most states.

  • Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Minnesota state law. For more information about business licenses and more in this state, check out Minnesota’s handy Business Licenses and Permits page.

  • Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file a Minnesota LLC Annual Renewal.

  • The overall costs of operating a Minnesota LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.

  • The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.

    Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.

  • Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Minnesota registered agent.

    The service then registers your Certificate of Authority with the state to qualify your LLC to do business in Minnesota.

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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Written by Team ZenBusiness

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