Minnesota asks for more upfront than most neighboring states, then asks for nothing at all every year after, as long as you file on time. It's a trade that rewards founders who plan to stick around rather than form and forget. Here's what it takes to start a business in Minnesota in 2026.
1. Which business structure fits you?
Before you file anything, it helps to know what you're actually choosing between.
- Sole proprietorship. No filing required to start, and you and the business are legally the same entity. Simple, but you're personally liable for whatever the business owes.
- Partnership. Two or more people running a business together, with the same liability exposure as a sole proprietorship, just split across partners.
- LLC. The most common structure for small businesses in Minnesota. It separates your personal assets from the business's debts and lawsuits.
- Corporation, either S-corp or C-corp. More paperwork and more formality, usually worth it once you're bringing on investors or multiple shareholders.
For a deeper comparison, see our guide on choosing a business structure.
LLCs and corporations register with the Minnesota Secretary of State, the agency that handles business filings statewide. Sole proprietorships and general partnerships don't register there.
2. Register your business
Forming an LLC
You form an LLC in Minnesota by filing Articles of Organization with the Secretary of State. The filing fee is $135 by mail or $155 online or in person, since online and in-person filings are treated as expedited. Processing generally takes a few business days.
Every LLC needs a registered office with a physical Minnesota address; Minnesota permits but doesn't strictly require a separate named registered agent. Minnesota also has a newspaper publication requirement in some cases, so check whether it applies to your situation before you file.
Minnesota doesn't require an operating agreement by law, but it's still worth writing one, particularly for multi-member LLCs, to spell out how decisions and profits get split.
Sole proprietorships and DBAs
Sole proprietorships don't file Articles of Organization. If you're operating under a trade name, you'll register a Certificate of Assumed Name with the Secretary of State.
3. Get an EIN
An Employer Identification Number is free straight from the IRS and takes about 15 minutes online. You'll need one to open a business bank account, hire anyone, or file most business tax forms, even if you're a single-member LLC with no employees.
4. Check licenses and permits
Minnesota doesn't issue a single general statewide business license either. What you need depends on your industry and city: professional licensing for regulated fields, local permits in some cities, and sales and use tax registration if you sell taxable goods or services. Our guides on professional licensing by industry and zoning laws for home businesses cover more of this.
5. Understand Minnesota taxes
Minnesota has a progressive personal income tax, from 5.35% up to 9.85% at the top, one of the highest top rates in the country. Pass-through LLCs owe no separate entity-level tax; if you elect corporate treatment instead, the corporate franchise tax is a flat 9.8%.
Sales tax starts at a 6.875% state base, with local additions bringing the combined rate above 8% in cities like Minneapolis and St. Paul.
6. Stay compliant
Every Minnesota LLC files an Annual Renewal with the Secretary of State by December 31 each year, and unlike almost every other state, it costs nothing to file as long as your LLC is in good standing. Skip it, though, and the state can mark your LLC inactive and eventually dissolve it, which then requires a paid reinstatement to fix.
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 above come from the Minnesota Secretary of State and Department of Revenue as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Minnesota-licensed attorney or CPA about your specific situation.