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?
Yes, you can use your home address for your business address.
Must your business have a physical address?
Yes. If you don’t want to use your home address, you need to have a physical address where your business is operated or use a registered agent service.
Naming the business – What Can It Be?
In deciding what to name your business you should be aware that there are legal limitations to the names you can use. First, there are limitations based on what others have used. Second, there are limitations based upon using “LLC” in the name.
If a name or group of words is trademarked, the law does not permit you to use that name as the name for your business. If a name is already being used by another Minnesota business and that business registered the name with the Minnesota Secretary of State you may not use that name as the name for your business.
In order to determine whether the name you wish to use has already been registered with the Minnesota Secretary of State by another business you may use the online Minnesota Secretary of State Business & Nonprofit search.
Limited liability companies use “LLC” at the end to tell that world that the company was formed as an LLC. Corporations use “inc.” at the end to tell the word that the company formed was a corporation. LLCs create a very important protection for the owners of the LLC. This important protection is limited liability.
Forming an LLC rather than a partnership or sole proprietorship protects the owner of the company against personal liability for the actions of the company or others within the company. An owner is always liable for his or her own acts. Therefore, it is required that an LLC use “LLC” in its filing with the Minnesota Secretary of State in order to tell the world that the owners have limited liability and protect that status.
It does not matter whether you use a comma before LLC. This is a stylistic choice that makes no difference to the Minnesota Secretary of State and has no legal ramifications. However, if you do not want to refer to your company with “LLC” at the end at all, you may form your business using “LLC” and then file an assumed name or a “d/b/a” name with the Minnesota Secretary of State that does not include “LLC.” This will require payment of a filing fee. Next you must publish notice of the assumed name twice in a legal newspaper in the county of the business. After that you are no longer required to refer to your business with “LLC” at the end.
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.