Minnesota asks for more upfront than most neighboring states, then asks for nothing at all every year after, provided you file on time. It's a tradeoff that favors founders planning to stick around rather than form an LLC and forget about it. The sections below walk through the actual process of starting a business in Minnesota in 2026.
1. Which business structure fits you?
Four structures cover almost every small business in Minnesota, and picking the right one early saves headaches later.
- Sole proprietorship — no filing required, you and the business are one legal entity, and you're on the hook personally for anything the business owes.
- Partnership — the same setup as a sole proprietorship but shared between two or more owners, liability included.
- LLC — the standard choice for small Minnesota businesses, since it keeps business debts and lawsuits away from your personal assets.
- Corporation, S-corp or C-corp — more paperwork and formal structure, generally adopted once you're bringing on investors or several shareholders.
We cover the tradeoffs between these in more depth in our guide on choosing a business structure.
The Minnesota Secretary of State handles business filings statewide, and that's where LLCs and corporations register. Sole proprietorships and general partnerships don't need to.
2. Register your business
Forming an LLC
Minnesota LLCs form by filing Articles of Organization with the Secretary of State. Mailing it in costs $135; filing online or in person costs $155, since both count as expedited service. Either way, expect processing to wrap up within a few business days.
Minnesota requires a registered office at a physical in-state address for every LLC; naming a separate registered agent is allowed but not strictly mandatory. One quirk worth checking before you file: Minnesota still has a newspaper publication requirement that applies in some situations.
There's no Minnesota statute requiring an operating agreement, but especially with multiple members, having one in place avoids ambiguity later about who decides what and how profits get divided.
Sole proprietorships and DBAs
Articles of Organization aren't part of the picture for sole proprietorships. A trade name instead gets registered as a Certificate of Assumed Name, filed with the Secretary of State.
3. Get an EIN
An Employer Identification Number comes free from the IRS in about 15 minutes online, and you'll need it for a business bank account, hiring, or most tax filings, no matter how small your single-member LLC is.
4. Check licenses and permits
No general statewide license exists in Minnesota either. Requirements depend on industry and city: professional licensing for regulated fields, local permits in some cities, and sales and use tax registration for anyone selling taxable goods or services. Our guides on professional licensing by industry and zoning laws for home businesses cover more.
5. Understand Minnesota taxes
Minnesota's personal income tax is progressive, running from 5.35% to a top rate of 9.85%, among the highest top marginal rates in the country. No entity-level tax applies to pass-through LLCs, though electing corporate treatment brings a flat 9.8% corporate franchise tax instead.
The state sales tax base is 6.875%, and local additions push the combined rate past 8% in cities such as Minneapolis and St. Paul.
6. Stay compliant
Minnesota LLCs file a free Annual Renewal with the Secretary of State by December 31, a rare no-cost requirement compared to most states, provided the LLC is in good standing. Ignore it, however, and the state can mark the LLC inactive and eventually dissolve it, a status that costs money to reverse through reinstatement.
Minnesota business costs at a glance
| Item | Cost |
|---|---|
| Articles of Organization (LLC) | $135 mail / $155 online |
| Annual Renewal (every year, due Dec 31) | Free |
| Registered agent service (optional) | $100 to $250/year |
| EIN | Free (IRS) |
| State income tax | 5.35% to 9.85% (progressive) |
| State sales tax | 6.875% + local, over 8% in major cities |
Frequently asked questions
How much does it cost to form an LLC in Minnesota?
$135 by mail, or $155 online, since online and in-person filings count as expedited.
Does Minnesota's annual filing cost anything?
No. The Annual Renewal is free every year as long as your LLC is in good standing, unusual compared to most states.
What's the personal income tax rate in Minnesota?
Progressive, from 5.35% up to 9.85% at the top, one of the highest top rates in the country.
How high is sales tax in Minnesota?
A 6.875% state base, with local additions pushing combined rates above 8% in cities like Minneapolis and St. Paul.
When is Minnesota's Annual Renewal due?
By December 31 each year.
Fees and rates cited come from the Minnesota Secretary of State and Department of Revenue as of 2026 and can change, so confirm before you file. This page offers no legal or tax advice; talk to a Minnesota-licensed attorney or CPA about your particular circumstances.