Organize your Minnesota Limited Liability Company (LLC) today!
If established properly, a Minnesota limited liability company (LLC) offers most of the advantages of a corporation (including limited liability for the members, governors, and managers) with most of the tax advantages and flexibility of a partnership, thereby avoiding "double taxation."
A Minnesota LLC is often superior to an S-Corporation due to the ability to split financial rights (the right to share profits) and governance rights (the right to vote). Further, the LLC structure allows flexibility between the members in terms of how profits will be split, rather than always splitting profits pro rata based strictly on the percentage of ownership held by each owner (as is required for S-Corporations). Finally, while there are strict limits on the number and types of shareholders for S-Corporations, these restrictions do not apply to LLCs.
The Minnesota corporate lawyers of Trepanier MacGillis Battina P.A. can help you establish your Minnesota LLC. One of our attorneys will walk you through the steps of forming your Minnesota LLC, including:
- Prepare Minnesota LLC Articles of Organization;
- File the Minnesota LLC Articles of Organization with the Minnesota Secretary of State;
- Prepare Minutes of Action of the LLC Organizer resigning and appointing the Board of Governors (if you choose to establish a Board of Governors);
- Prepare Minnesota LLC Operating Agreement;
- Prepare Minnesota LLC Member Control Agreement;
- Prepare First Set of Minutes and designate the LLC's managers and governors;
- Prepare Subscription Agreement(s) for all owners who will receive LLC membership units;
- Prepare Minnesota LLC Unit Membership Ledger for all membership units issued;
- Prepare Minnesota LLC Unit Membership Interest Certificates (unless you prefer the Units to be uncertificated);
- Obtain Federal Tax ID Number for the Minnesota LLC;
- Obtain Minnesota State Tax ID Number for the Minnesota LLC; and
- Assemble Minnesota LLC Corporate Minute Book.
In order to receive the full benefit of "limited liability," you generally must do more than simply file your Articles of Organization with the Minnesota Secretary of State (admittedly a fairly straight forward process). While the Secretary of State will recognize the creation of the Minnesota LLC at this point, many additional steps are helpful in minimizing the chances that the "liability shield" will later be pierced by creditors who seek to hold the members, managers, and governors liable for the company's business debts.
As a general rule, you must follow all corporate formalities contained in the Minnesota Limited Liability Company Act, Minnesota Statutes Chapter 322B. Among other things, this includes issuing membership units, appointing a Board of Governors (unless you choose to have the LLC run by its managers), and appointing the officer-level positions of the Minnesota LLC (including Chief Manager and Chief Financial Officer). You should resist the temptation to file "postcard" Articles of Organization with the Secretary of State and then forget about the incorporation process without completing these additional steps.
If there will be more than one owner in your Minnesota LLC, there are other good reasons to consult with a Minnesota corporate law attorney. In situations involving multiple partners, you should strongly consider creating the following additional documents:
- Minnesota LLC Buy-Sell Agreement;
- Minnesota LLC Employment Agreement; and/or
- Minnesota LLC Non-Compete Agreement.
The Minnesota Buy-Sell Agreement (often incorporated into the Member Control Agreement) will typically place restrictions on the rights of the members to sell their ownership interests in the LLC to third parties. The Buy-Sell Agreement will usually grant the LLC a "right of first refusal" to match any third party offers. It will also indicate whether the member must sell back his/her membership units upon termination of employment, resignation, death, disability, divorce, etc. Finally, the Minnesota Buy-Sell Agreement will set an agreed upon price (or formula) for redeeming the membership units once these triggering events occur.
The Minnesota Non-Compete Agreement is an essential tool for ensuring that if one of the members leaves the company (voluntarily or involuntarily), he/she will not compete against the LLC and divert its customers and clients for an agreed-upon period of time negotiated between the owners when the LLC is formed.
These documents will provide you the necessary legal structure to start your business right.
If you would like additional assistance registering your Minnesota LLC, contact one of the Minnesota LLC attorneys of Trepanier MacGillis Battina P.A. We typically quote a flat fee for completing the LLC formation process. The initial consultation is free and there is no obligation.
Craig W. Trepanier, Esq.
Trepanier MacGillis Battina P.A.
8000 Flour Exchange Building
310 Fourth Avenue South
Minneapolis, MN 55415
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Minnesota Limited Liability Company.com serves entrepreneurs, business owners, and individuals who wish to incorporate, create, organize or register a Minnesota LLC. Our Minnesota LLC attorneys represent clients in the Twin Cities and Greater Minnesota area, including Minneapolis, St. Paul, St. Cloud, Rochester, Duluth, Albert Lea, Apple Valley, Eagan, Eden Prairie, Edina, Minnetonka, Richfield, the Twin Cities, and other Minnesota cities (MN) (Minn).