How to Start a Business in Minnesota: 2026 Guide

Last updated: November 2026

If you want to know how to start a business in Minnesota, the process is more straightforward than it first looks. The state runs most of its registration through the Secretary of State’s online filing system, an LLC costs $135 by mail or $155 online to form, and Minnesota has no general statewide business license. The steps below work for most new owners, whether you plan to open a shop in Minneapolis, run a service business in St. Paul, or work from home in Duluth.

The headline numbers to know: forming an LLC in Minnesota costs $135 by mail or $155 online, the annual renewal for a Minnesota LLC or corporation costs $0, and the state sales tax rate is 6.875% before local taxes are added. The annual renewal is free — a fact that a lot of guides get wrong — but it still has to be filed every year by December 31.

Contents

• Pick a business idea and structure
• Name your business
• Pick a registered agent
• File your formation paperwork
• Write an operating agreement
• Get an EIN
• Register for Minnesota taxes
• Licenses and permits
• Open a business bank account
• Hiring employees
• Ongoing duties and costs
• Common mistakes
• Checklist
• Frequently asked questions

1. Pick a business idea and structure

Start with what you will sell and who will buy it. A clear idea makes every later step easier, from naming the business to picking the right licenses. You do not need a perfect plan, but you should know your product or service, your likely customers, and how you plan to charge.

Next, pick a legal structure. The three most common choices for small owners are:

• Sole proprietorship: You and the business are the same in legal terms. It is simple and cheap to start, but your personal assets are not protected if the business runs into debt or a lawsuit.
• LLC (limited liability company): The most popular choice for small businesses. It separates your personal assets from the business and keeps the paperwork light.
• Corporation: Best if you plan to raise outside money or issue shares. It comes with more formal rules and record-keeping.

If you are just starting out and want protection without heavy paperwork, an LLC is usually the right call. Minnesota’s Small Business Development Centers and the Department of Employment and Economic Development (DEED) offer free one-on-one help across the state, which is a good place to talk through the choice. If you are still unsure about the basics, read this beginner’s guide to starting a business first.

2. Name your business

Your business name must be different from every other business name already registered in Minnesota. For an LLC, the name must also include a designator such as “LLC” or “Limited Liability Company” at the end.

Check name availability through the Minnesota Secretary of State’s business name search before you file. If you have a name you love but are not ready to file yet, you can reserve it for $35 by mail or $55 online while you get ready.

Pick a name that is easy to say, easy to spell, and easy to remember. Check that a matching domain name is free too, since most customers will look you up online first. If you plan to trade under a name other than your legal business name, you will need to file a Certificate of Assumed Name, which costs $30 by mail or $50 online. See this guide on how to register a DBA for how that works.

3. Pick a registered agent

Minnesota requires every LLC and corporation to have a registered agent: a person or company with a physical Minnesota street address who can receive legal papers for your business during business hours. A P.O. box does not count.

You can act as your own registered agent if you have a Minnesota address and are there during business hours. Many owners use a commercial registered agent service instead, mainly to keep a home address off the public record and to make sure nothing important gets missed.

4. File your formation paperwork

For an LLC, the filing is called the Articles of Organization. You file it with the Minnesota Secretary of State, online through the Business Filings Online system. The filing fee is $155 online or $135 by mail. Online filings are usually processed in about 24 hours, while mail filings take around 5 to 7 business days.

The filing asks for your LLC name, your registered agent’s name and Minnesota address, and organizer details. Once the state accepts it, your LLC legally exists. A corporation files Articles of Incorporation instead, for the same $135 by mail or $155 online, and a nonprofit files for $70 by mail or $90 online.

You will need to create an online account with the Secretary of State to file online. Keep the confirmation and your filing receipt with your business records.

5. Write an operating agreement

Minnesota does not require you to file an operating agreement, but you should still write one. It sets out who owns what share of the business, how profits are split, how decisions are made, and what happens if an owner leaves. Without one, state default rules decide these questions for you, and those defaults may not match what you intended. This matters even more if you have a business partner.

6. Get an EIN

An EIN (Employer Identification Number) is a free federal tax ID from the IRS. You need one if you hire employees, and banks usually ask for it when you open a business account. Even a single-owner LLC often gets one to keep business and personal finances separate. You can apply free on the IRS website; see this guide on how to get an EIN for the step-by-step process.

7. Register for Minnesota taxes

Once you have your EIN, register for state taxes with the Minnesota Department of Revenue. You do this by filing Form ABR, the Application for Business Registration, through the department’s e-Services system. Once registered, you get a Minnesota Tax ID, which you use for your state tax accounts.

The main Minnesota taxes to know are:

• Sales tax: Minnesota’s general state sales tax rate is 6.875%, and local taxes are added on top. If you sell taxable goods or certain services to Minnesota customers, you must collect sales tax and file returns with the Department of Revenue.
• Personal income tax: Minnesota’s personal income tax rates run from 5.35% to 9.85%. Income that passes through from an LLC or S corporation to its owners is taxed at these rates, so set money aside as you earn it.
• Corporation franchise tax: If you form a corporation instead of an LLC, Minnesota charges a 9.8% franchise tax on corporate income.
• Employment taxes: If you hire staff, you will owe unemployment insurance tax and workers’ compensation coverage, plus federal payroll taxes.

Register before you make your first sale or your first hire, not after. Late registration can mean penalties on taxes you should already have been collecting.

8. Licenses and permits

Minnesota has no general statewide business license that every business must hold, which surprises a lot of new owners. That does not mean you need nothing. Check three layers instead: your city license, your county requirements, and any industry-specific permits.

A restaurant needs health permits, a contractor needs trade licensing, and a home-based business may need local zoning approval. DEED keeps a licenses and permits guide that lists which state agencies license which types of business, and it is a good starting point. This guide on how to get a business license explains the general process.

If you do business in Minneapolis or St. Paul, check the city’s own licensing rules too. Both cities license many types of business locally, and those licenses are separate from anything the state asks for.

9. Open a business bank account

Open a separate business bank account as soon as your LLC is formed. It keeps your personal and business money apart, which protects your liability shield and makes tax time far simpler. Bring your Articles of Organization, your EIN letter, and your operating agreement; most banks ask for at least the first two.

10. Hiring employees

If you plan to hire, there are a few registrations to handle before your first payday. Register as an employer with DEED for unemployment insurance tax, and set up workers’ compensation coverage, which Minnesota requires for nearly every employer. You will also need to withhold federal income tax and pay federal payroll taxes, and report new hires to the state.

Post the required workplace notices, keep payroll records, and check whether your city has its own rules on top of the state ones.

11. Ongoing duties and costs

Staying in good standing in Minnesota is straightforward, but the dates matter:

• Annual renewal: Every Minnesota LLC and corporation must file an annual renewal with the Secretary of State by December 31 each year. The fee is $0 for a domestic business — it costs nothing, but it still has to be filed. You can file it at any time during the calendar year. Foreign corporations are the exception: their renewal costs $115 by mail or $135 online.
• Reinstatement: If you miss the renewal and the state dissolves your business, getting it back costs $65 by mail or $85 online. Filing the free renewal on time is far cheaper.
• Assumed name renewal: If you filed a Certificate of Assumed Name, its annual renewal is also $0.
• Tax filings: File sales tax, withholding tax, and income tax on the schedule the Department of Revenue assigns you, based on your volume.
• License renewals: City and specialty licenses renew on their own cycles; keep a list with dates.

Total state cost for a typical first year: $155 to form the LLC online ($135 by mail), plus $0 for the annual renewal. A registered agent service, if you use one, is extra.

12. Common mistakes

• Skipping the free renewal: The annual renewal costs $0, so owners assume there is nothing to file. It still has to be filed by December 31 every year, and missing it can get your business dissolved.
• Paying a third party for the renewal: Some services charge a fee to file a renewal that the state does for free. File it yourself through the Secretary of State’s online system.
• Assuming no license means no rules: There is no general state license, but city and industry permits still apply — and Minneapolis and St. Paul license many businesses locally.
• Forgetting to collect sales tax: Minnesota’s 6.875% state rate plus local taxes applies to most goods. Register for a sales tax permit before your first sale.
• Mixing personal and business money: One shared account can weaken the liability protection you formed the LLC to get.
• Using a P.O. box as a registered agent address: The state requires a physical Minnesota street address.

13. Checklist

• Choose your business idea and structure
• Pick and check your business name (reserve for $35 by mail or $55 online if needed)
• Pick a registered agent with a Minnesota street address
• File the Articles of Organization ($155 online or $135 by mail)
• Write an operating agreement
• Get a free EIN from the IRS
• Register for Minnesota taxes with Form ABR and get your MN Tax ID
• Check DEED’s licenses and permits guide for your industry
• Check Minneapolis or St. Paul city rules if they apply to you
• Open a business bank account
• Register as an employer if you hire staff
• File your free annual renewal by December 31 each year

Frequently asked questions

How much does it cost to register a business in Minnesota?

Forming an LLC costs $155 online or $135 by mail. A corporation costs the same. Add $30 by mail or $50 online if you need an assumed name, and the annual renewal is free.

Is $3,000 enough to start a business?

For many service and home-based businesses, yes. $3,000 covers the state fees with plenty left over for a website, basic tools, and your first marketing. A shop, restaurant, or business that needs stock or equipment will usually need more, so work out your real startup costs before you commit.

How do I start a small business for beginners?

Start with one clear idea, pick a name and check that it is free, then choose a structure — an LLC for most beginners. File with the Secretary of State, get your EIN, register for Minnesota taxes, and check licenses. You do not need to do everything in one day; take it one step at a time.

Does Minnesota have a general business license?

No. Minnesota does not have a general statewide business license. You still need to check city licenses and any permits for your industry.

When is the Minnesota annual renewal due?

The annual renewal is due by December 31 each year. It costs $0 for a Minnesota LLC or corporation, and you can file it at any time during the calendar year.

Can I start a business in Minnesota from another state?

Yes. You do not need to live in Minnesota to own a Minnesota LLC, but you still need a registered agent with a Minnesota street address.

This article is general information, not legal or tax advice. Fees and rules change, so confirm the current details with the Minnesota Secretary of State and the Minnesota Department of Revenue before you file.