There are many reasons why an entrepreneur may choose Minnesota incorporation. One of them is the limited liability protection that it offers. The owners will not be personally liable for any of the actions and financial obligations of the corporation. In addition, creditors cannot pursue the personal assets of the owners.
Doing Business In Minnesota
Among the most important decisions that a business owner will have to make before launching a company has to do with the state where it will be registered. For some entrepreneurs, the most obvious option is the place where they reside. However, that is not a requirement. Sometimes the best choice is the state that offers the most benefits and fits the company’s unique needs.
Consider Minnesota incorporation. This state is a good place for startups due to its business-friendly environment and growing economy. It has competitive tax rates and business policies. It is home to a highly skilled and educated workforce. Additionally, the regulatory processes in the state are easy to understand, and the operating expenses are generally low.
Here are other benefits that corporations can enjoy in Minnesota:
- Tax incentives for the following:
- Custom-created software
- Information services
- Internet access
- Inventories
- Personal property
- Utilities
- Transferring of ownership will not disturb the corporation’s operations. You can sell, buy, or gift stocks to have a change in ownership.
- A corporation is a separate entity. Even if a shareholder dies, business operations will continue.
- The state offers various incentives and programs such as the community development program for so-called Opportunity Zones. If the company qualifies for this, it can receive a temporary deferral on capital gains and a permanent exclusion from taxable income on capital gains. Minnesota’s Department of Employment and Economic Development has financing programs to help companies create and retain high-quality jobs. Check if the business qualifies for the Job Creation Fund or Innovation Loans for Entrepreneurs.
- Other incentive programs for Minnesota businesses include the following:
- Bioscience Incentive Program
- Border Cities Enterprise Zones
- Emerging Entrepreneur Loan Program
- Foreign Trade Zones
- Greater Minnesota Business Expansion Tax Credits
- Research and Development Tax Credit
- Tax Abatement Program
Minnesota Incorporation
As stated earlier, registration of a business entity in the state is easy to understand. However, it involves multiple steps and requirements. Make sure to properly complete all of them to avoid any issues.
Here is a short guide to help get started:
- Step 1: Choose an appropriate name for the corporation.
The name of the business entity plays an important role. It is what people will recognize, so you have to make sure that it represents the company well. Aside from that, ensure that the desired name complies with the naming regulations of the state.- It has to contain the proper designator. It can include “corporation,” “incorporated,” “limited,” or any of their abbreviations. Or use the word “company” or its abbreviation, but it cannot be followed by the word “and” or the character “&.”
- The company name cannot imply that the corporation was formed for any illegal purpose.
- Do not use a term that could mistake the company for a government agency.
The company name has to be unique. A name cannot be used if another entity in the state has already taken it. To ensure this, conduct a name availability search using the business search portal of the Secretary of State.
There is also the option to reserve a desired name. File a Name Reservation application with the Secretary of State. If it is submitted by mail, the filing fee is $35. If it is filed online, it’s $55. Doing this will reserve the company name for 12 months.
- Step 2: Select a registered agent.
All business entities operating in Minnesota have to appoint a registered agent to accept services of process, compliance documents, government correspondence, and other legal mail on behalf of the company. A business owner can nominate an individual or another entity like DoMyLLC. When choosing who will serve as the registered agent, make sure they qualify.If you choose an individual, they should:- Be a resident
- Be at least 18 years old
- Have a registered office address that is not a P.O. box in Minnesota
- Be available at that address during regular business hours
If you opt for a company, they should:
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- Be authorized to do business in Minnesota
- Not be the corporation itself
- Have a physical address in Minnesota
- Be available at the said address during regular business hours.
- Step 3: Hold a meeting.
Before filing formal paperwork, the company has to hold its initial organizational meeting to do the following:- Accomplish and execute the formation documents
- Create the bylaws and approve them
- Select the company’s initial directors
- Determine the share structure
- Execute a statement from the incorporator
- Step 4: File formal paperwork.
To formally register a corporation, you will have to file the Articles of Incorporation with the Secretary of State. Mailed submissions cost $135. Online, in-person, and expedited filings are worth $155.When filling out the form, be sure to include the following:- Name of the corporation
- Name and address of the registered agent
- The number of authorized shares the company can issue
- Name and address of the incorporator
- Step 5: Obtain an Employer Identification Number (EIN).
The company will need an EIN from the Internal Revenue Service (IRS). This number will be necessary for tax purposes, hiring employees, and opening a business bank account. Get one online or by mail free of charge. - Step 6: Completing other requirements.
Depending on the company’s business activities and the location of its primary place of business, you may have to obtain additional licenses or permits. Check this with local and state government agencies.
Minnesota incorporation not only legalizes the businesses activities in the state but also protects the owner and the company. Although the process is simple, it takes a bit of time and requires attention to detail. If you need help with handling the steps, contact DoMyLLC. Our team of experts can streamline the whole ordeal. We can also serve as the registered agent.