Frequently, many of the same basic questions arise when forming one’s own business in Minnesota. Answers to the three most common questions are below.
Location of the Business – Can I Use My Home Office?
Must your business have a physical address? Yes. However, you can use the address of your business’ virtual office. Virtual offices are offices where you, and many others, may hire someone to collect your mail. You might be able to rent a conference room for a few hours at a virtual office. You may also use your home address; however, there may be a city ordinance prohibiting a business from being transacted in your residential area.
Naming the Business – What Can It Be?
Another common area of inquiry deals with naming your business and trademarks. You may not name your business a name that is trademarked. You also may not use a name that is already the name of a business registered with the Minnesota Secretary of State. You may search the Minnesota Secretary of State website to see if your name has already been registered by someone else.
Additionally, if your business is a limited liability company it must have “LLC” at the end of its name. It is your choice whether to put a comma before the “LLC” and is simply a matter of preference. The more traditional format is to use a comma. The more contemporary way is to not use a comma.
You must use the “LLC” at the end of its name to communicate to the public its limited liability nature, or you will not preserve its limited liability. If you do not want to refer to your business as an “LLC,” you may file an assumed name or a “doing business as” name with the Minnesota Secretary of State. You must also pay a filing fee and publish notice of this assumed name two times in a legal newspaper in the county of your business.
Joint Versus Single Ownership of the Business – Who Should Own the Business?
Often times couples wonder if they should both be owners of the business. Sometimes the government, in giving grants or contracts to a business, will give preference to minorities. If you have a traditional marriage with one male and one female, you may want the female to own the business and therefore receive a minority preference.
In Minnesota, your business will be marital property either way, so it does not affect what will happen to the business or its assets in the unfortunate event of a divorce. Additionally, if a business has more than one owner the business must issue K1s at the end of the year for tax purposes.