Find out how to qualify your LLC to conduct business in Minnesota.
If you own a company that was founded in a state other than Minnesota, you must qualify or register it in Minnesota in order to conduct business there. The requirements for qualifying your international (non-Minnesota) limited liability corporation (LLC) to conduct business in Minnesota are summarized here.
What exactly is a Foreign LLC?
If your LLC was founded in another state, it is referred to as a foreign LLC in Minnesota. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. An LLC founded in North Dakota, for example, is a foreign LLC in South Dakota.
Doing Business in Minnesota
If you are “transacting business” in Minnesota, you must register your foreign company with the state, according to Minnesota’s LLC Act. What exactly does this mean? Like other states, Minnesota’s LLC Act does not specify what “transacting business” with connection to international registrations entails.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
Minnesota’s LLC Act, like other states’, outlines some actions that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal business affairs such as holding member or manager meetings having a bank account in the state selling through independent contractors soliciting or obtaining orders that require acceptance outside the state before they become contracts creating or acquiring indebtedness, mortgages, or security
Check Section 322B.945 of the Minnesota Statutes for the exact legal definition of each of these objects. If your LLC’s only operation in Minnesota is one or more of the activities mentioned above, you should not be required to register with the state.
To register your international company in Minnesota, you must apply for a Certificate of Authority to Transact Business in Minnesota with the Minnesota Secretary of State. The SOS website has a blank application form that you may download.
To complete the form, you must supply the same information that you would need to incorporate an LLC in your home state. However, since each state is different, there may be materials that Minnesota requires that you did not need to submit when you initially formed your LLC. In particular, for a Minnesota Certificate of Authority, you must provide:
If different, the name of your LLC in the state where it was formed, as well as the other name under which the firm will conduct business in Minnesota (this is required if another Minnesota business is currently using your LLC’s name in Minnesota).
the name of the state in which your LLC is formed, the name and street address of your LLC’s Minnesota registered agent and registered office, the street address of your LLC’s principal place of business, the home street address of your LLC’s office in the state in which it was formed, and an authorized signature.
If you file by mail, the filing cost is $185; if you file online or in person, the price is $205.
What Happens If You Don’t Register?
If your LLC does business in Minnesota without a Certificate of Authority, it cannot file a lawsuit. Furthermore, if your LLC transacts or does business in Minnesota without permission, it will be held accountable for the fees it would have owing if it had been registered. Furthermore, both the LLC and any LLC member and management who transacts business in the state are subject to fines. However, the lack of a valid Certificate of Authority does not bar your LLC from defending claims in Minnesota or render any of your LLC’s contracts null and void. Furthermore, members of your LLC are not personally accountable for the LLC’s debts and liabilities just because the LLC did business in Minnesota without a legal certificate of authority.
Foreign Corporation Registration in Minnesota
The regulations and standards for international qualifying in Minnesota are identical whether your company is structured as a corporation rather than an LLC. You must, however, submit a separate application, Foreign Corporation or Cooperative/Certificate of Authority to Transact Business in Minnesota. For paperwork, information, and filing requirements for registering a foreign company in Minnesota, see the Minnesota SOS website.