If you’re starting up a small business, you may have heard of the benefits of forming a Limited Liability Company, also known as an LLC. You may know that it can protect your personal liability if a business’s creditor attempts to collect a debt or someone files a lawsuit against your business, among other things, and you might also be aware that forming an LLC means you don’t have to file your business’s taxes separately from your personal taxes, which can save you a lot of time.
What you might not know is that forming an LLC in Minnesota is actually pretty easy to do. All you have to do is follow four steps.
Decide on a Name for Your LLC
When you decide to form an LLC, the first thing you need to do is decide on a name for your company that is distinguishable from any of the business names that the Minnesota Secretary of State has on file. You can check to see whether your business name is available by checking the Minnesota business name database, and you can file the application online or by mail for a fee of around $50.
You should also know that if you have a business name you like but you don’t want to form your LLC immediately, you can reserve your business name for 12 months. All you have to do is file a name reservation with the Minnesota Secretary of State Business & Lien system.
Choose a Registered Agent
When you form an LLC, you have to select an individual to serve as a registered agent who will accept legal papers on your LLC’s behalf if someone sues it.
This individual can be almost anyone—an individual, a Minnesota business or even a foreign business entity that is authorized to do business in Minnesota. No matter who they choose, though, they’ll have to have a physical street address in Minnesota. You should also know that the LLC can’t act as its own agent.
File the Articles of Organization
Once you’ve settled on a name and know who the registered agent will be, you’re ready to file the Articles of Organization with the Minnesota Secretary of State. You can file them online, in person or by mail, for a fee of around $135.
The Articles of Organization will need to contain:- The name of your LLC
- The name and address of the LLC’s registered agent
- The name and address of the LLC organizer
- A phone number and an email address
You should be aware that once you’ve filed your Article of Organization, you’ll want to make sure your new LLC has all the proper business permits and licenses. Unfortunately, every business is different, so there’s no one-size-fits-all answer about what permits and licenses you’ll need. Your best bet is to contact an attorney who specializes in business law and have them help you figure out what you’ll need to be in compliance.
Write up an Operating Agreement
Okay, full disclosure—the State of Minnesota doesn’t require you to take this step, but you’ll probably want to do it anyway. An operating agreement is just a document you’ll create for your business that lays out the ground rules for how you (and your partners) will run your LLC and sets out the rights and responsibilities of both managers and members.
Having an operating agreement can help you protect your limited liability status. It also lets you run your business by your own rules instead of the default rules of the state of Minnesota, and it can also prevent any management and financial misunderstandings.
Set Your LLC up for Success With First Alliance Credit Union
Forming an LLC isn’t hard, and it can provide several benefits to small business owners.
If you’d like even more benefits for your small business, become a member of First Alliance Credit Union today. We offer business perks, including loans that will help get your fledgling company off the ground, business credit cards with appealing interest rates and even business checking and savings accounts that offer a robust online banking platform with a free electronic bill pay service!
