How to Start a Business in Minnesota
Minnesota is home to more than 540,000 small businesses, which employ nearly 1.2 million workers and make up 99.4% of all businesses in the state.
In This Article
The Complete Guide
How to Start a Business in Minnesota — 12 Steps
This is a full walkthrough: entity selection, state registration, federal tax IDs, licenses, banking, insurance, and ongoing compliance. Every step includes the official Minnesota links, fees, and timelines.
Cost depends on your structure. A sole proprietorship may cost nothing to start. An LLC costs $155 to file online. A corporation costs $155. Step 3 walks through every option.
Minnesota: Key Business Facts
Updated: Feb 2026- LLC Filing Fee (Online)
- $155
- Sole Proprietorship / DBA
- $50
- Corporation Filing
- $155
- Processing Time
- 5-7 business days
- Expedited Option
- Included in online fee / same-day…*
- State Income Tax
- 5.35% to 9.85% (four brackets)
- Sales Tax Rate
- 6.875%
- Gross Receipts Tax
- No
- Franchise / Annual Tax
- Minimum fee of $0 for…**
- Filed With
- Minnesota Secretary of State
- State Business License
- Not required (check local)
- Last Verified
- February 24, 2026
* Expedited Option: Included in online fee / same-day in person
** Franchise / Annual Tax: Minimum fee of $0 for partnerships/LLCs with property and payroll under certain thresholds
Local licenses: Minnesota does not require a general state business license. Most cities (including Minneapolis, Saint Paul, and Duluth) require their own local business licenses, so check your city clerk's office before operating.
What It Takes to Start a Business in Minnesota
Starting a business in Minnesota requires filing with the Minnesota Secretary of State, obtaining an EIN, and registering for state taxes with the Minnesota Department of Revenue. The LLC filing fee is $155 online, and the state charges no fee for annual renewals filed on time.
Minnesota ranks among the top states for workforce quality and has a diverse economy anchored by healthcare, manufacturing, and technology. You can complete most formation steps online through the Secretary of State's business portal.
Validate Your Business Idea in Minnesota
Research your target market before investing money. Minnesota's strongest industries include:
- Healthcare and medical devices (home to Mayo Clinic, Medtronic, and UnitedHealth Group)
- Food processing and agriculture (the state produces more turkeys and sugar beets than nearly any other)
- Technology and financial services (Minneapolis-Saint Paul is a growing tech hub)
Contact the Minnesota Small Business Development Center (SBDC) for free one-on-one consulting and market research assistance. Their advisors help hundreds of Minnesota entrepreneurs refine business concepts each year.
Pro Tip
Write a Business Plan
Draft a business plan that covers your revenue model, target customers, startup costs, and 12-month financial projections. Banks and the SBA require a written plan before approving any business loan or line of credit.
Follow our step-by-step business plan guide to build a plan that satisfies lenders and keeps you focused during your first year.
Pro Tip
Choose Your Business Structure in Minnesota
Most founders in Minnesota choose an LLC because it combines personal liability protection with pass-through taxation. Filing an LLC costs $155 online at the Minnesota Secretary of State.
The four main structures are sole proprietorship, LLC, S-Corp, and C-Corp. See the full comparison below, or read our Minnesota LLC formation guide for a detailed walkthrough.
Pro Tip
Business Structure Comparison — Minnesota
Full comparison guide| Structure | Minnesota Filing Cost | Personal Liability | How You're Taxed | Best For |
|---|---|---|---|---|
| Sole Proprietorship | $50 (DBA) | ❌ None | Personal income tax. No separate return. | Freelancers, consultants, side hustles testing an idea with no employees. |
| LLC Most Common | $155 online | ✅ Personal assets protected | Pass-through by default. Elect S-Corp when profitable. | Most small businesses. Best balance of liability protection, flexibility, and tax options. |
| S-Corporation | ~$155 + IRS election | ✅ Personal assets protected | Pass-through. Owners pay themselves a salary — can reduce self-employment tax. | Profitable businesses (typically $50K+ net) where payroll tax savings justify the complexity. |
| C-Corporation | $155 | ✅ Personal assets protected | Corporate tax rate (21% federal). Double taxation on dividends. | Startups planning to raise VC funding, issue stock options, or eventually go public. |
| General Partnership | Free / No State Filing | ❌ None — all partners personally liable | Pass-through. Each partner reports share on personal return. | Two or more owners who trust each other and don't need liability protection. |
Which should you choose? Most first-time founders in Minnesota pick an LLC — it protects your personal assets without the complexity of a corporation. If you're not sure, consult a CPA or business attorney before filing. Read the full Minnesota LLC guide →
Choose and Register Your Business Name
Search the Minnesota business name database to confirm your desired name is available. Your LLC name must include "Limited Liability Company," "LLC," or "L.L.C." and must be distinguishable from any existing filing.
Reserve your name for 12 months by filing a Name Reservation for $55 online or $35 by mail. If you operate under a different name, file an assumed name (DBA) certificate for $50 online or $30 by mail.
Pro Tip
Important
Check Minnesota Business Name Availability
Search the official Minnesota Secretary of State database before you file.
Register Your Business with the State
File your Articles of Organization with the Minnesota Secretary of State online for $155. The online fee includes a $20 expedited processing surcharge compared to the $135 mail option.
Standard processing takes 5 to 7 business days. After approval, you will receive a filed copy of your Articles confirming your LLC's existence.
You must designate a registered agent with a physical Minnesota address. See our Minnesota registered agent guide for affordable options starting around $100 per year.
Pro Tip
File Online with Minnesota Secretary of State
Official Minnesota business registration portal. Standard processing: 5-7 business days.
Get Your Federal EIN from the IRS
Apply for a free EIN at the IRS EIN online portal. The process takes about 10 minutes and your EIN is issued immediately upon completion.
You need an EIN to open a business bank account, hire employees, and file federal tax returns. Even single-member LLCs benefit from having an EIN to keep their Social Security number off business documents.
Pro Tip
Get Your Minnesota Licenses and Permits
Requirements vary by industry and location, but most Minnesota businesses need some combination of the following:
- Sales Tax Permit — required if selling taxable goods or services; register free at the Minnesota Department of Revenue
- Local Business License — Minnesota has no general state business license, but most cities (Minneapolis, Saint Paul, Rochester) require a city-level license; check your city clerk's website
- Professional License — required for contractors, healthcare providers, real estate agents, accountants, and other regulated fields; apply through the relevant Minnesota licensing board
- Employer Registration — register for unemployment insurance tax through the Minnesota UI system before hiring your first employee
- Food and Liquor Licenses — restaurants and bars need permits from the Minnesota Department of Health and their local city council
Pro Tip
Open a Business Bank Account
Bring your EIN confirmation, filed Articles of Organization, a government-issued ID, and your LLC operating agreement to any bank or credit union. Separating personal and business finances protects your LLC's liability shield and simplifies tax filing.
Compare fee structures and features in our best business bank accounts guide. Many online banks offer free business checking with no minimum balance requirements.
Pro Tip
Set Up Accounting and Understand Minnesota Taxes
Minnesota's individual income tax has four brackets ranging from 5.35% to 9.85%, and LLC profits pass through to your personal return. The state sales tax rate is 6.875%, and many cities add a local surcharge (Minneapolis adds 0.5%).
Register for all applicable tax accounts at the Minnesota Department of Revenue. If you expect to owe more than $500 in state income tax for the year, you must make quarterly estimated payments.
Track income and expenses from day one using accounting software. See our best accounting software picks for options that integrate with Minnesota tax filing.
Pro Tip
Get Business Insurance in Minnesota
Minnesota requires workers' compensation insurance for all businesses with employees (even one part-time worker). General liability insurance is not legally mandated but is the baseline policy for protecting against customer claims and property damage.
Compare coverage options in our best business insurance guide. Many Minnesota landlords and clients also require proof of general liability before signing a lease or contract.
Pro Tip
Important
Build Your Online Presence
Claim your free Google Business Profile to appear in local search results across the Twin Cities metro and Greater Minnesota. Add your hours, photos, and service area to start attracting customers immediately.
Build a simple website using a drag-and-drop builder. Our best website builders comparison covers affordable options that work well for new Minnesota businesses.
Pro Tip
Stay Compliant After Forming Your Minnesota Business
After forming, keep your Minnesota business in good standing by meeting these ongoing requirements:
- Annual Renewal — due by December 31 each year; filing fee is $0 when filed on time at the Secretary of State portal
- State Tax Filings — file annual Minnesota income tax returns (and quarterly estimated payments if owing over $500) with the Minnesota Department of Revenue
- Registered Agent — maintain a registered agent with a physical Minnesota address at all times; failure to do so can result in missed legal notices
- Business Licenses — renew any city-level or professional licenses by their annual expiration dates
- Sales Tax Returns — file monthly, quarterly, or annually depending on your sales volume
Missing your annual renewal deadline can result in administrative dissolution. Track all deadlines with StartupOwl's compliance calendar.
Pro Tip
Important
Minnesota Business Background & Context
State-specific data to help you plan — taxes, economy, funding, and what to expect after you form.
Frequently Asked Questions
What to Do Next
Once you've registered your Minnesota business, take these steps to set up for success.
Form Your Minnesota LLC
File your Articles of Organization online for $155 with step-by-step instructions.
Start Your LLC →
Get a Minnesota Registered Agent
Compare registered agent services that meet Minnesota's requirements, starting at $100 per year.
Compare Agents →
Open a Business Bank Account
Separate your finances from day one with a free business checking account.
Compare Accounts →
Explore Minnesota SBDC Resources
Access free consulting, market research, and financing guidance from your local SBDC advisor.
Visit MN SBDC →
Write Your Business Plan
Build a plan that satisfies lenders and keeps your first year on track.
Write Your Plan →
Disclaimer: This guide is for informational purposes only and does not constitute legal or tax advice. Requirements change — always verify current fees and requirements directly with Minnesota Secretary of State and the IRS before filing.
Ready to Form?
Get your Minnesota business registered with ZenBusiness — choose your structure, file the paperwork, and stay compliant from day one.
About the Author
Director of Entrepreneurial Strategy
Jennifer is a former founder who built and sold a boutique B2B logistics company in her thirties. She understands the emotional and strategic toll of building a business from the ground up without a massive safety net. She is deeply connected to the Atlanta startup ecosystem and is passionate about equitable funding.
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