Starting A Small Business In Minnesota

“Discover How To Quickly & Easily Start Your
Own Small Business In Minnesota For The New Year!”

Hi there…thank you for stopping by this website today! And congratulations on taking a step into the exciting world of starting your very own small business in Minnesota! My name is Emmanuel Betinis and I am a community banking specialist serving the local Minnesota area with a variety of small business needs. Before you sign up for your free financial review below feel free to browse around this site and enjoy all the information I have put together for you here today.

emmanuel betinis signature image starting business checking account
-Emmanuel Betinis
Minnesota Community Banking Specialist
Hopkins, MN 55343

 

How should I structure my business? What type of business entity should I choose?

 

Answer: The type of business entity that you choose for your newly started Minnesota business should certainly have some
thought and consideration put into it before you go ahead and choose. Depending on which type of business ownership
you choose can affect who has the authority to open accounts, borrow money and sign legal documents (among other things).
The type of business entity you choose can affect how much protection you are given as a business owner if you ever get sued.
It can also determine how much money it will cost you to start and maintain. There are several types of business entities, some
that are very simple and fast to setup with zero cost involved, and others that are more involved to establish and have annual
costs to renew each year. Here are the most common business structures today:

 

 

sole prop biz entity
Sole Proprietorship (AKA “Sole Prop”)

A sole proprietorship is the fastest and easiest way to get up and going as a small business in Minnesota. Here’s why:

1.) You are not required to register a business name with the state
2.) You are also not required to obtain a separate Tax Identification Number (TIN) for the business

That means you could be up and running in literally minutes!

Lets first talk about registering the business name…

For example, if your name is Jimmy Johnson, you could automatically name your business “Jimmy Johnson Lawn Care” without
having to register it with the state of Minnesota because your full legal name (first and last name) is contained within the
business name.

If you would prefer to operate your business under a name other than one that contains your legal first & last name
then you must file what’s called a Certificate of Assumed Name with the state of Minnesota. For example, if you’d like to use
“You Betcha! Lawn Care Service” instead of “Jimmy Johnson Lawn Care”, then you’d need to file the Certificate of Assumed Name
with the state of Minnesota. This is also known as adding a “DBA” to a sole prop, or “Doing Business As”. Adding a DBA is a great
way for someone to use a business name other than something that contains their legal name. This can sometimes make your
business sound much more exciting!  :)

To get an assumed name for your “sole prop” business you may do so by visiting the Minnesota Secretary of State’s website to
to register a Certificate of Assumed Name for your sole proprietorship. The fee to register an Assumed Name with the state of
Minnesota is currently $30 to file in the mail or for $40 you can file online right now at this link to instantly receive
your Certificate of Assumed Name for your sole proprietorship on their website. You can then save the document to your
computer and print a copy of the certificate for your records. You’ll need to provide a copy of this Certificate of Assumed
Name document in order to open business banking accounts using that “DBA” name you registered.

After you’ve registered your DBA with the state of MN you must publish this Assumed Name with your county’s local
newspaper for two consecutive publications. Failure to do this may result in a voided registration with the state! Many new
sole prop DBA business owners in Minnesota miss this step – don’t miss it! Here is a list of all the legal newspapers in MN
for each county and their corresponding eMail addresses, websites and contact phone numbers. After two consecutive
publications for your Assumed Name announcement in your county’s qualified legal newspaper they will give you an
affidavit of publication which you should keep for your records along with your other important business documents.

 

EIN

 

Now that we’ve talked about the business name registration requirements for Minnesota
for a sole proprietorship, what about
the Tax ID Number (TIN) requirements?

Since you’re not required to register a separate TIN for your sole prop, you may simply use your already existing TIN…your
Social Security Number (SSN)!

For security, if you do not want to use your social security number as the TIN for your sole proprietorship, then you may register for
a separate Tax ID Number (TIN) called an Employer Identification Number, or EIN. This type of TIN can add an extra layer of security
to your business when it comes to opening bank accounts and preparing taxes. By using an EIN your social security number will not
displayed as often, lowering your risk of identity theft. Applying for an EIN to use for your “sole prop” is free and can be obtained instantly on the IRS website at this link here or you may call the IRS and apply over the phone with a representative in the Business & Specialty Tax Line area of the IRS at (800) 829-4933. Whether you apply for an EIN online or via phone, there is no charge for registering a separate Tax ID Number for your business and only takes a few minutes.

TIP: These two things (the business name and TIN) are what you’ll use for business purposes
when it comes to opening bank accounts,
preparing your taxes and representing your business.

So to conclude, sole proprietorships are a great way to get a business legally started for virtually zero to little
cost and also a great way to quickly start a business…in literally minutes! Some of the down sides to a sole prop
would be the fact that you’re not protected as an individual from the business. If something happened to the
business it would directly affect you. If someone sued your business, for example, they could go directly
after everything the business has including everything YOU personally have (like your house, car,
personal checking/savings and any other assets that you hold personally to your name) since it’s a sole
prop you’re still treated as an individual AND the business as the same entity/person. Any debts the business
has the owner is personally responsible for. Many times what new business owners will do, to start on a low
affordable budget, is start as a sole proprietorship, and see how the business goes. If you start to grow then
many will “convert” the sole prop into another type of business entity that provides more protection to the
individual, such as an LLC…

 

 

 

business partnership

Partnership

If you choose a partnership for your business type that means you’re going into business with someone else so there is a
voluntary contract between two or more people. For a partnership, it MUST have it’s own EIN (Employer Identification
Number). Applying for an EIN is free and can be obtained instantly on the IRS website at this link here or you may call the IRS and apply over the phone with a representative in the Business & Specialty Tax Line area of the IRS at (800) 829-4933. Whether you apply for an EIN online or via phone, there is no charge for registering a separate Tax ID Number for your business and only takes a few minutes.

There are a few types of partnerships…

==> General Partnership
==> Limited Partnership
==> Joint Venture

General partnership: All parties usually equally split the earnings and have an equal voice in the business. The individuals
that have the authority to borrow funds are usually identified in the partnership agreement.

Limited partnership: Limited partners invest in the business but have no say in management and can not borrow funds
in the name of the partnership. Unlike general partners that are usually fully liable for the business debts, limited
partners are only liable to the extent of their investment and in cases where they can not guarantee a debt.

Joint venture: This is formed to do some sort of business activity for a certain period of time and that period is limited
in the written agreement for the joint venture itself.

 

 

 

corporation entity business

Corporation

If you choose to register a corporation for your business entity that means the corporation is a separate legal entity all of
it’s own, separate from it’s owners or stockholders. It can sue…or it can be sued…as if it’s another person…as a separate
legal entity. It can own property. It can sign contracts and contract business. A corporation is owned by either one
stockholder or multiple stockholders. The stockholders are only liable for federal withholding tax and personally guaranteed
debts. The TIN used for opening accounts for a corporation is the EIN.

Applying for an EIN is free and can be obtained instantly on the IRS website at this link here or you may call the IRS and apply over the phone with a representative in the Business & Specialty Tax Line area of the IRS at (800) 829-4933. Whether you apply for an EIN online or via phone, there is no charge for registering a separate Tax ID Number for your business and only takes a few minutes.

There are four types of corporations… (didn’t think you were gonna learn this much, huh?)

==> Public Corporation: Has a board of directors that is elected by all shareholders. Can raise capital by selling additional
stock, issuing bonds or borrowing from banks, and it files taxes in the name of the corporation.

==> Closely Held Corporation: Does not offer stock for sale. The principal shareholders typically manage the business and
serve as corporate officers and directors. Files in the name of the corporation.

==> Professional Corporation: This is a closely held corporation. It may be formed by licensed individuals practicing
the same profession. Also, taxes are filed separately.

==> S Corporation: Another type of closely held corporation. Even though a separate tax return is filed, an ‘S corp’
does not pay corporate income tax. Instead, shareholders report profit or loss on their personal tax returns.

 

 

non profit entity

Non-profit Organization

If you choose this type of business entity then you’ll be creating an organization formed for the purpose of serving a
public or mutual benefit other than the pursuit of accumulation of profits. The most common types of non-profit
organizations are those of religious organizations and public benefit organizations.

These types of businesses hold a tax-exempt status with the IRS, and that status is determined by if the entity meets one of the following tax-code provisions: 501 (c) (3) through (13), 501 (c) (19), 527, or 528. A letter of determination by the IRS or other
documentation evidencing tax status must be obtained.

A non-profit organization must have it’s own separate TIN (EIN). Applying for an EIN is free and can be obtained instantly on the IRS website at this link here or you may call the IRS and apply over the phone with a representative in the Business & Specialty Tax Line area of the IRS at (800) 829-4933. Whether you apply for an EIN online or via phone, there is no charge for registering a separate Tax ID Number for your business and only takes a few minutes.

 

 

 

limited liability company

Limited Liability Company (LLC)

The LLC business entity has become a very popular option lately and is a cross between a sole prop and a
corporation (explained above). The nice thing about an LLC is that it provides you protection as an
individual, hence the name “limited liability” – because as the business owner your liability is limited in case
something happened…like getting sued for example. If someone sued your company they could only go after
the LLC itself since it is treated as an entirely different person…or “entity”…separate from the owner.

Because of the fact that an LLC is viewed as a separate entity from it’s owners (known as “members”) it has become
a popular option for businesses that want that liability protection right from the start for a minimal fee with the state
to have the LLC name registered (for example, “You Betcha! Lawn Care, LLC”).

Another reason an LLC is a popular option is because it has some attributes of a sole proprietorship and some attributes of
a corporation. It’s like a sole prop because a single-member LLC can file taxes as a sole prop can, right on your personal
tax return, known as a Schedule C filing. An LLC is like a corporation because it comes with the liability protection of
a corporation to it’s members but without the hassles of filing taxes as a corporation.

So, basically, an LLC = tax flexibility + liability protection

An LLC company name must be registered with the Secretary of State in Minnesota in person. The current filing fee to
register an official LLC company name is $135 for the standard filing. You may instantly register your LLC on the state
of MN website right now at this link here for $145. After you file your LLC you will receive “Articles of Organization”.
The Articles of Organization are the legal documents that prove an LLC’s existence with the state and are required for
various business activities including opening business bank accounts for the LLC.

The TIN used for opening business bank accounts for an LLC is usually an EIN. However, if it is a single member LLC (just you)
then you may use either your own Social Security (SS) number OR an Employer Identification Number (EIN) for the LLC.
Obtaining a separate TIN for the LLC rather than using your SSN can add another layer of security to your identity and
is required if you plan on having employees. But even if you don’t plan on having employees, having a separate EIN
can help separate the business as it’s own entity from yourself further, and can make passing down or selling the
business in the future much easier than using your SSN for the LLC.

After you register your LLC with the MN Secretary of State, an EIN can be obtained instantly on the IRS website
at this link here
or you may call the IRS and apply over the phone with a representative in the Business & Specialty
Tax Line area of the IRS at (800) 829-4933. Whether you apply for an EIN online or via phone, there is no charge for
registering a separate Tax ID Number for your business and only takes a few minutes.

LLCs can also have classes of stock and are managed by the members or by selected “managers”. As far as liability is
concerned, it is limited to each owner’s investment in the company. Income is taxed to the owners and losses are
passed through to the owners.

To conclude, LLCs are great option to get started with personal protection from the beginning, flexible
tax options every year and a low startup filing fee with the state.

 

personal checking account for business use - bad idea

 

Should I use my personal checking account for my business?

The answer is: Absolutely NOT!

ALWAYS open a separate business checking account
for your business instead of
using your personal checking account
no matter how “small” you think your business will be in the beginning…

Here’s why…

1.) Peace Of Mind Money Management

So that you can easily access business-only transactions later on, all your business transactions need to be properly
recorded. Having business accounts makes this a breeze. For tax purposes having business accounts will give you the
peace of mind knowing you’ll never get in trouble in case you’re audited.

2.)  Save Time

By having your business transactions organized this way will ensure you do not suffer the stressful experience of tax
time dealing with a mixed up personal checking account. Getting business accounts Today for this reason alone is
enough to save you a ton of hassle in the future…making accounting for the business very easy and pain-free! :)

Also, having separate business accounts now for your new business will save you time in the future if you ever choose
to outsource your tax work to someone else…no matter how small the business of yours may be!

3.)  Save Money

Lastly, you’ll save money on potential fees by having things separate and organized from the beginning vs. having to
spend more of your valuable time chasing down certain transactions that may be “lost” in the mix of your personal account(s)
and also saving you the time of explaining certain transactions to another person that you may outsource your
tax work to.

Unfortunately, many small business owners will still go ahead and use their personal bank accounts for their business
expenses. Doing this can get you into a very tricky situation down the road when you need to go back and try to
separate your business expenses from your personal expenses. You’ll thank yourself for taking the initiative from the
start to Get Business Accounts ASAP. As a business owner, you’ll have enough things to worry about managing…let alone
keeping track of all your expenses mangled in with everything else in your personal checking account.

 

 

What next? How do I get set up properly with the correct business accounts?

Simply fill out the form below & click SUBMIT
OR open a business checking account online here.

After you put in your info and click the SUBMIT button below I will be in touch with you to either
help you with your new business accounts over the phone or in person at a local branch location in
Minnesota.

You’ll discover…

>>> The fastest & easiest way to register your business name
>>> How to accept payments from your customers
>>> How to protect yourself and your business with insurance
>>> How to get your own Tax Identification Number (TIN) for your new business for free
>>> How to pay employees w/ Direct Deposit
>>> How to plan your individual retirement
>>> How to build credit for your new business
>>> How to get the most convenience out of your new business bank accounts

…and much more…

 

UPDATE FOR THE MONTH OF MAY: It’s Small Business Appreciation Week which means you’ll get
a free $50 BONUS just for opening a business checking package after an opening deposit of $100
or more!

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Simply Fill Out The Form Below & Click Submit!

*(denotes required field)
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Simply fill out the form above and I will be happy to go out of my way to ensure
you’re getting the most convenience out of your business banking as possible.
You may also open a business checking account online HERE if you wish to do
so instead of by phone or in person.

I look forward to helping you succeed financially!

Sincerely,
starting a small business in mn white shirt picture
emmanuel betinis signature image starting business checking account

Emmanuel Betinis
Minnesota Community Banking Specialist
StartingASmallBusinessInMinnesota.com Founder