How to start a Minnesota corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your Minnesota corporation.

How to start a corporation in Minnesota

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your Minnesota corporation

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following Minnesota requirements:

• Your name must use only English letters or characters.
• Your name must include at least one of these words, or an abbreviation of one of them: "Company," "Corporation," "Incorporated," or "Limited." If you use the word "Company," you cannot use "and" or "&" before the word.
• The name should not be deceptive or suggest a business purpose other than the one listed in your Articles of Incorporation. For example, don't use "Gold & Gems, Ltd" if your Articles say that you sell T-shirts.
• Your name should be different from any other business name in use or reserved in the state of Minnesota.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

2. Decide between a Minnesota S-Corp and C-Corp tax designation

There are similarities between a Minnesota S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences, however, come down to the following:

• Ownership Rules: A C-Corp can have unlimited numbers of stock classes and shareholders. An S-Corp cannot have more than one share class and 100 shareholders. Only citizens or legal residents of the United States may hold shares in an S-Corp.
• Taxes: A C-Corp is taxed as its own entity. This means it pays taxes on its earnings at the corporate level. Individual shareholders may also pay taxes on any dividends they receive. S-Corps do not pay corporate taxes. They're "pass-through" entities, meaning that owners pay taxes on their share of the earnings on their individual tax returns.
• Documents: A C-Corp is the default corporation designation. Any corporation that wants to become an S-Corp must file IRS Form 2553, Election by a Small Business Corporation.

3. Appoint directors and shareholders for your Minnesota corporation

Each state has its own personnel requirements for incorporating. In Minnesota, incorporators must be persons, not business entities, and they must be at least 18 years old. The state does not set age limits for directors.

Minnesota requires that corporations must have one or more directors, but does not require that directors live in the state. You may specify your own qualifications for directors in your Articles of Incorporation. You don't have to list director names or addresses in your Articles.

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a Minnesota address) or choose one to do that service for you (if you are not located in Minnesota or would like an extra layer of privacy).

5. File your Articles of Incorporation with the state of Minnesota

Once you have a business name and registered agent, you can register your business as a Minnesota corporation with the state by filing your Articles of Incorporation. This document may be referred to in other states as "Certificate of Organization," "Certificate of Filing," or "Articles of Organization."

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in Minnesota must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your Minnesota corporation.

What to do after incorporating in Minnesota

Minnesota requires that all corporations keep Corporate Minutes. This document records decisions made and actions taken during shareholder and directors meetings. You must keep Corporate Minutes for the past three years.

Another important document for a corporation is its Bylaws. Although Minnesota does not specifically require that you create this document, it's a very good idea to do so. The Bylaws formalize your company's structure, management, and operating procedures. If you do create bylaws, they must be consistent with your Articles and with applicable Minnesota statutes and laws.

Together, the Corporate Minutes and Bylaws protect your corporate status. You don't have to file either document with the state. Just keep them with your other corporate documents. Rocket Lawyer can help you compare Bylaws and Meeting Minutes requirements from state to state.

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in Minnesota means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in Minnesota, either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, you must also keep records – like Bylaws and Meeting Notes – to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state