Benefits of a corporation
One of the primary reasons people form corporations is to limit their liability if the corporation is sued. A corporation’s owners are not personally responsible for the corporation’s financial obligations, and creditors cannot pursue owners’ personal assets. There may also be tax savings and other benefits to forming a corporation.
Requirements for incorporating in Minnesota
Preparing your articles of incorporation
To form a corporation in Minnesota, you must file articles of incorporation with the Secretary of State and pay a filing fee. Your corporation’s existence begins when you file the articles.
The articles of incorporation must contain the following information:
- Name of the corporation
- Names and addresses of incorporators
- Registered agent and registered office
- Stock structure and the total number of shares the corporation is authorized to issue
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Naming your corporation
Your must choose a name for your corporation that is available for use in Minnesota. You can check name availability at the Secretary of State’s website.
You may reserve a name for 12 months by filing a name reservation request with the Secretary of State. A name reservation can be renewed for additional 12-month periods.
When choosing a name for your business, it must conform to the following requirements:
- Your business name must contain the words “corporation,” “incorporated,” “company” or “limited,” or an abbreviation of one of those words. However, “company” or “co.” cannot be immediately preceded by the word “and” or the symbol “&,” e.g., you cannot use “Thompson & Company.”
- It must be distinguishable from other business entity names on file with the Minnesota Secretary of State and from any names that have been reserved for use, unless you file a written consent signed by the entity that is currently using the name.
An incorporator’s primary responsibility is to sign and file articles of incorporation with the Secretary of State. When specifying incorporators, you must adhere to the following requirements:
- Your corporation must have at least one incorporator.
- An incorporator must be a person who is at least 18 years old.
- If the articles of incorporation do not name initial directors, the incorporators may elect directors, or they may act as directors until a board of directors is elected or shares are issued, whichever comes first. The incorporators may also transact corporate business, including selecting officers and approving bylaws. After the initial directors have been chosen, the incorporators have no further duties.
Corporate directors set the overall policies and goals of the business and are responsible for overseeing its management. They have the duty to exercise good business judgment and act in the best interests of the corporation.
When specifying your corporation’s directors, you must adhere to the following requirements:
- A corporation must have a minimum of one director. There is no maximum number of directors, but the articles of incorporation or bylaws should state the number of directors.
- Directors must be individuals. Although Minnesota law does not impose any other eligibility requirements, the articles of incorporation or bylaws may establish additional qualifications for directors.
Specifying a registered agent and registered office
Every corporation must maintain a registered office, which is the place where legal documents and notices addressed to the corporation are sent. A registered agent is the person at the registered office who will receive these documents and forward them to the corporation.
The following requirements apply when specifying a registered office for your corporation:
- The articles of incorporation must designate a registered office and provide a street address in Minnesota for that office. The registered office does not have to be the corporation’s principal place of business.
- The articles may also designate a registered agent at the registered office address. A registered agent may be a person or a corporation, limited partnership, or limited liability company that is organized or authorized to do business in Minnesota.
Stating a corporate purpose
All Minnesota corporations are incorporated for general business purposes. You are not required to state any other purpose for your corporation.
Bylaws provide the directors, officers and shareholders with written guidelines for the corporation’s structure and how it will operate. Bylaws may contain provisions for managing the corporation’s business and regulating its affairs. A Minnesota corporation may adopt bylaws, but they are not required.
The only requirement for bylaws in Minnesota is that anything enumerated in the bylaws must be consistent with the law and the articles of incorporation.
Costs of incorporating in Minnesota
The Minnesota Secretary of State requires a fee when filing articles of incorporation or reserving a corporation name. These fees can vary based on whether filings are done by mail, in person, or online. Corporations are also required to pay state and federal income taxes.
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