First of all, well done.
You’ve found something you’re passionate about and decided to turn it into a business. This is commendable because the decision to become an entrepreneur is a big undertaking. Whether this company will be your day job, your side hustle or some combination thereof, you are are now putting your dreams into action and getting ready to do something great.
To help you through the entity formation process, I’ve created this guide that highlights information you need to know as a single-member limited liability company (LLC) in Minnesota. Here you will learn what being an LLC in Minnesota means, and more importantly, what it takes to become a Minnesota LLC. I’ll point out the decisions you need to make before we file the paperwork with the Secretary of State. There are some decisions you will need to make on your own in order to decide what works best for you and your business. However, if you have any questions or want to bounce anything off me, I am more than happy to help. Just let me know.
What is an LLC?
When forming a business in Minnesota, the first step is to decide what type of entity is best for your company. Examples of entities include a corporation, partnership or limited liability company (LLC). The best entity for your company depends on structure, liability, tax, and management considerations. LLCs offer substantial flexibility while combining the liability protection of a corporation with the tax treatment of a partnership. For these reasons, LLCs are increasingly popular business entities not just in Minnesota but the United States as well. If you are reading this guide, chances are you’ve already decided that a single-member LLC is best for you; know you’re in good company. Neon Esquire is an LLC too!
In an LLC the owners are called members. A member is an individual or commercial entity that has become a member of the LLC and has not dissociated from it. In a single member LLC, the owner is the only member.
Members of LLCs may enter into one comprehensive long-form operating agreement or a series of one or more stand-alone agreements covering different matters. Under Minnesota law, an operating agreement is the agreement, whether oral, in a record, implied or in any combination thereof, of all the members of an LLC concerning the following matters:
the relations among the members and between the members and the LLC;
the rights and duties of managers and governors under MN Chapter 322C;
the LLC's activities and the conduct of those activities; and
the means and conditions for amending the operating agreement.