LLC Cost in Minnesota – How Much to Pay for an LLC


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Perhaps you are hoping to form a Minnesota LLC. People assume that starting an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Minnesota.

Minnesota LLC Cost of Filing

Here are the costs involved in forming an LLC in Minnesota.

Cost of Filing Formation Certificates

The Minnesota Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Minnesota Secretary of State

Minnesota Domestic LLC

  • Online filing costs $155
  • Annual Report filing costs $0
  • Name Reservation fee costs $55 (online) and $35 (mail)
  • By Mail: Fill out the Application Form PDF and submit it to the following address: Minnesota Secretary of State – Business Services Retirement Systems of Minnesota Building 60 Empire Drive, Suite 100 St Paul, MN 55103, costs $135

Minnesota Foreign LLC

  • Online filing costs $205
  • Annual Report filing costs $0
  • Name Reservation fee costs $55 (online) and $35(mail)
  • By Mail: Fill out the Application Form PDF and submit it to the following address: Minnesota Secretary of State – Business Services Retirement Systems of Minnesota Building 60 Empire Drive, Suite 100 St Paul, MN 55103, costs $185

You can visit the Official Secretary of State of Minnesota website to learn more about Business Forms and Fees.

Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.

Minnesota LLC Formation Service or Registered Agent Fee

You need a registered agent to form an LLC in Minnesota, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.

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Business Permits and Licenses 

The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the Minnesota Department of Revenue for regulatory boards or agencies requiring licensing. 

Minnesota LLC Taxes to be Paid

Though the annual report filing in the State of Minnesota is free of cost, the LLCs in the State are subject to different State Tax filing obligations. Though the taxes vary from county to county.

Minnesota State Income Tax

This is the State Tax levied on any income you pay to yourself. The tax rate varies between 5.35% to 9.85%, depending on the total amount of taxable income.

Minnesota Sales Tax

The standard rate of sales tax applicable is at the rate of 6.875% and after the addition of local taxes, the rate can go as high as 8.375%.

Minnesota Federal Self- Employment tax

Any profit that Minnesota LLC Business members draw out from the business is liable to pay self-employment tax. The standard tax rate is 15.3%.

Employer Payroll Tax Withholding

If you hire employees in Minnesota, you must withhold payroll tax from their salaries. The standard rate of withholding is 7.65% of the taxable salary of the employees.

Cost Comparison among States

Every state has different costs of filing for an LLC to their respective State Authorities. If you wish to gain a better understanding of the costs of opening an LLC in a different state in comparison to Minnesota, read the table below:

StateFiling FeeAnnual Fee/Biennial FeeSales Tax 
Minnesota LLC $135 (mail)$155 (online)$06.875%
Wisconsin LLC $130 (online)$170 (mail)$255.00%
North Dakota LLC$135$50 (annual)5.00%
Iowa LLC $50$45 (online) (biennial)$60 (mail) (biennial)6.00%
South Dakota LLC$150$50 (annual)4.50%

The State of Minnesota’s economy has flourished in the previous decade with impressive wealth and low poverty rates. The major contributing industries are agriculture, manufacturing, and mining.

Other Costs

How Much Does It Cost to Maintain an LLC in Minnesota

To maintain an LLC in Minnesota you do not need to pay an annual fee. However, state income tax at 5.35% to 9.85%, sales tax at 6.875% and federal taxes are levied.

Creating an LLC in Minnesota can be an expensive process. However, you can save money by hiring a registered agent. Using a service to file your annual report and pay all of the fees can save you money and time. In addition, many companies offer premium packages that include an operating agreement and Employer Identification Number. This will help you avoid unnecessary costs, such as penalties and additional taxes.

One of the most important steps you must take when forming an LLC is to obtain a federal tax ID. This is also referred to as an EIN. An EIN is essentially your business’ social security number and it is needed for everything from opening a bank account to making payroll tax payments. It is also used for other things, such as tracking your business income and applying for federal and state business licenses. You can obtain a free EIN by visiting the official IRS website. You may also need to consult an accountant for help.

The first cost you will likely have to pay is filing fees for the Articles of Organization. The fees vary by state, but the minimum is $135. You can file the documents online or by mail. The online option is much faster and will allow you to avoid waiting in a long line.

You may also need to pay fees for business licenses and permits. The fees for these vary depending on your business activity and location. A business with employees will also need to register for unemployment insurance tax. It is also a good idea to open a separate bank account for your LLC. Having a business bank account will help you keep track of your financial transactions and separate business expenses from your personal expenses. Some banks will waive fees for minimum balances.

An LLC’s annual renewal is important to its health. The Minnesota Secretary of State requires all LLCs to renew their registration every year. Failure to renew your LLC’s registration could cause your business to lose good standing and it may not qualify for some professional licenses. You also risk losing administrative dissolution, which is a process that dissolves your business.

Minnesota business licenses are also required to be renewed each year. The fees for these vary by state, but they are typically less than you might expect. Some businesses will need to renew their licenses less frequently than others. You should always check the fees for the licenses you need to obtain.

In addition to paying taxes on time, it is also a good idea to keep detailed records of your financial transactions. This will help you avoid penalties and other surprise costs that might arise when you register an LLC in Minnesota. The Minnesota Department of Revenue has a detailed list of penalties and other costs that may be associated with registering an LLC.

In addition to the above expenses, you may also need to pay for business insurance. Having business liability insurance is important for your business. This will protect you from common risks and may be necessary if your business serves customers at physical retail locations.

F.A.Qs

Can I start an LLC for free?

It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.

Is an LLC expensive?

It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.

Does an LLC need a bank account?

The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.

In Conclusion

The cost of Minnesota is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.

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