LLC FAQs

Scroll down for answers to the following frequently asked questions about Minnesota LLC’s:


What is an LLC?

An LLC stands for “limited liability company,” which is a type of entity recognized and governed by Minnesota statutes.

Why Should I Register a Minnesota LLC?

Organizing a Minnesota LLC may provide you with limited liability (asset protection), and may provide tax benefits.  Additionally, operating as an entity allows your company to build a credit history that may support future financing.  Organizing an LLC tells your customers that you are a legitimate business and may add value should you elect to sell your business in the future.

What Does “Limited Liability” Mean?

The words “Limited Liability” signify that it is only the assets of the entity, in most cases, that can be sued to satisfy company obligations.  In other words, an individual owner’s personal assets, except in unusual circumstances, are not available to satisfy debts of the company.

Who Can Own a Minnesota LLC?

Any person can be a “member” of an LLC, which is the term used to designate a person with an ownership interest in an LLC.   Additionally, certain types of corporations, trusts, and other entities can be members of a Minnesota LLC.  A member of an LLC does not need to be a U.S. citizen.  Accordingly, the LLC form of business is useful if prospective members are non-resident aliens.

Do I Really Need an Attorney to Register My Minnesota LLC?

You are not legally required to use an attorney to register a Minneosta LLC.  However, many people find the process to be confusing, complex, and replete with pitfalls.  An attorney is strongly recommended in all cases in which the LLC will have more than a single member.  An attorney familiar with organizing a Minnesota LLC will be able to give you competent advice on whether an LLC is appropriate for your needs, tax issues, management and organizational issues, and governance of the LLC.  In addition, to preserve the protections that an LLC can afford its members, it is required that formalities such as regular meetings, the creation of minutes, and tax returns be regularly prepared.  An attorney can advise you on each of these important corporate requirements.

Where Should I Register My LLC?

A Minnesota LLC is registered by filing Articles of Organization with the Minnesota Secretary of State.  The Minnesota Secretary of State is located in St. Paul, MN.  Trepanier MacGillis Battina P.A. has an electronic subscription agreement with the Minnesota Secretary of State and can file your Articles of Organization and confirm the company’s registration in one business day.

What Documents Are Needed to Form My LLC?

The only document required to organize an LLC in Minnesota is a set of Articles of Organization for an entity.  However, good corporate practice is that the following documents also be drafted and adopted by a limited liability company: 1.  Member Control Agreement2.  Operating Agreement3.  Contribution Agreement for each member purchasing an interest in the LLC4.  Minutes of the Organizer5.  First Minutes of the Board of Governors and Members6.  Federal employee tax identification number application7.  Minnesota Department of Revenue tax registration 

What is the Difference Between a Sole Proprietorship, a General Partnership, and an LLC?

A sole proprietorship is a single owner business that operates without filing an entity registration with the Minnesota Secretary of State.  A general partnership is an unregistered entity that consists of two or more persons working together with a goal of earning a profit in a business.  Neither sole proprietorships nor general partnerships provide limited liability to the owners of the business.  An LLC, or limited liability company, is an entity organized under state laws that is separate and distinct from its owners.  Accordingly, an LLC provides its owners (members) with liability protection for the debts or obligations of the LLC.  Unlike a sole proprietorship or a general partnership, a multi-member LLC is required to prepare a tax return and provide its members with a tax statement showing allocations of profits and losses.  To the contrary, owners of sole proprietorships and general partnerships report their profits and losses directly on an individual’s tax returns.

What is the Difference Between a C-Corporation and an LLC?

Both corporations and LLCs are creatures authorized by Minnesota statute statute.  A Minnesota corporation is governed by Minnesota Statute 302A.  A corporation is owned by shareholders, who in turn elect directors that appoint the officers to handle the day-to-day operations of the company.  In a small corporation, the same persons may be the shareholders, directors and officers of the company.  A corporation that does not elect S-corporation status is a C-corporation.  A C-corporation files its own tax return and may be obligated to pay a corporate income tax.  A C-corporation’s shareholders are also taxed upon receipt of dividends from the C-corporation.

An LLC, or limited liability company, is governed by Minnesota Statute 322B.  While an LLC and C-corporation share some attributes, LLCs are typically taxed as partnerships and not corporations.  Owners of LLCs are known as members.  The members of an LLC elect the governors who, in turn, appoint the managers that operate the business.  Because the importance of electing an appropriate entity type cannot be overstated, it is highly recommended that a person interested in starting a Minnesota business consult with an attorney prior to doing so.

What is the Difference Between an S-Corporation and an LLC?

Both corporations and LLCs are creatures authorized by Minnesota state statute.  A corporation that files an “S” election with the IRS, and whose election is accepted by the IRS, is commonly referred to as an S-corporation.  While there are similarities in the tax attributes and limited liability status of S-corporations and LLCs, there are key differences between the entity types.  For example, an LLC has no limitation on the number of members (owners) that it can have; an S-corporation is permitted a limited number of shareholders.  Any corporation, or person, can be a member of an LLC, while ownership in an S-corporation is more limited.  A single member LLC is typically disregarded for tax purposes while an S corporation with one shareholder remains a separate legal entity that is responsible for filing a separate tax return.  You should consult with a Minnesota business attorney before registering a business entity.

Can an LLC Be Taxed as an S-Corporation? 

Yes, if certain conditions are met, an LLC can file an election form with the IRS that provides it will be taxed as an S corporation.

Do I Need Stock Certificates for My LLC?

Do I Have to Register My Business in the State of Minnesota? 

Regardless of whether the appropriate entity is an LLC, S-Corporation, or C-Corporation, an attorney can help you register your business in accordance with applicable Minnesota laws and regulations.  Some businesses in highly regulated industries must be registered with the State of Minnesota before they can operate in that specific industry.

Do I Have to Obtain a Minnesota Business License?

As discussed above, depending on the specific industry in which you operate, in some cases you may be required to obtain a special business license under Minnesota law, in addition to simply filing the articles to create your LLC, S-Corporation, or C-Corporation.

Am I Required to Obtain Federal and State Tax ID Numbers?

Regardless of which type of entity you create, you will typically need to obtain Federal and State Tax ID Numbers.  An attorney can help you obtain the necessary tax ID numbers. You should not delay in obtaining your necessary federal and state tax ID numbers.

Do I Have to Register an Assumed Name?

If you plan to do business under a name that is different than the legal name of the entity, Minnesota law requires that you register an “assumed name” with the Minnesota Secretary of State (SOS).  This is sometimes called a “DBA” or “D/B/A” which stands for “doing business as.”  The purpose of registering the assumed name is to let the public know who they are really dealing with.  For example, if the legal name of the corporation is Peterson Enterprises, Inc. but you are doing business as “Main Street Contractors,” you must register that name with the SOS.

How Can a Business Attorney Help?

Regardless of whether the appropriate entity is an LLC, S-Corporation, or C-Corporation, an attorney can help you register your business in accordance with applicable Minnesota laws and regulations.  Some businesses in highly regulated industries must be registered with the State of Minnesota before they can operate in that specific industry.  As discussed above, depending on the specific industry in which you operate, in some cases you may be required to obtain a special business license under Minnesota law, in addition to simply filing the articles to create your LLC, S-Corporation, or C-Corporation.  Regardless of which type of entity you create, you will typically need to obtain Federal and State Tax ID Numbers.  An attorney can help you obtain the necessary tax ID numbers. You should not delay in obtaining your necessary federal and state tax ID numbers.  If you plan to do business under a name that is different than the legal name of the entity, Minnesota law requires that you register an “assumed name” with the Minnesota Secretary of State (SOS).  This is sometimes called a “DBA” or “D/B/A” which stands for “doing business as.”  The purpose of registering the assumed name is to let the public know who they are really dealing with.  For example, if the legal name of the corporation is Peterson Enterprises, Inc. but you are doing business as “Main Street Contractors,” you must register that name with the SOS.  Whatever legal entity is chosen, a business attorney can assist the corporation and/or its owners in a variety of ways.  Through proper planning, consultation, and contracts, many business and legal problems can be avoided to begin with.  Rather than thinking of the business attorney as a “necessary evil,” the corporate lawyer should be considered a trusted advisor who watches your business grow and helps develop an evolving legal strategy along the way.  Among other things, a small business attorney can help you:    

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The Minnesota corporate law firm of Trepanier MacGillis Battina P.A. in Minneapolis, Minnesota represents entrepreneurs, business owners, investors, and individuals who wish to incorporate in Minnesota, find out how to incorporate in Minnesota, organize a Minnesota limited liability company (LLC), register Minnesota LLC, incorporate Minnesota LLC, incorporate Minnesota Subchapter S Corporation, incorporate Minnesota S-Corporation, incorporate Minnesota S-Corp., incorporate Minnesota business, incorporate Minnesota C-Corporation, register Minnesota business, obtain Minnesota business license, startMinnesota sole proprietorship, start a Minnesota business, obtain Minnesota tax ID numbers, and obtain Minnesota assumed name. Our Minnesota LLC attorneys, Minnesota LLC incorporation attorneys, Minnesota LLC lawyers, Minnesota corporate lawyers, Minnesota corporate super lawyers, and Minnesota AVVO lawyers help clients register Minnesota LLCs and Minnesota limited liability companies wherever they might live, including Minneapolis, St. Paul, Apple Valley, Blaine, Bloomington, Brainerd, Brooklyn Park, Burnsville, Coon Rapids, Duluth, Eagan, Eden Prairie, Edina, Lakeville, Mankato, Maple Grove, Minnetonka, Moorhead, Plymouth, Richfield, Rochester, St. Cloud, Stillwater, Twin Cities, Woodbury and other cities within the State of Minnesota (MN) (Minn.).