Form a S-Corp in Minnesota
Everything you need to know about forming a S-Corp in Minnesota. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose and Reserve a Corporate Name
Search the Minnesota Secretary of State business name database to confirm your desired name is available and complies with state naming rules (must include 'Corporation,' 'Incorporated,' 'Inc.,' or similar designator). You may optionally reserve the name for 12 months for a $35 fee.
30 minutes
Appoint a Registered Agent
Designate a registered agent with a physical street address in Minnesota who is available during regular business hours to receive legal documents and official notices on behalf of the corporation. This can be an individual Minnesota resident or a registered commercial agent service.
1-2 hours
File Articles of Incorporation
Prepare and file Articles of Incorporation with the Minnesota Secretary of State, including the corporate name, registered agent information, number of authorized shares, incorporator details, and a statement of purpose. File online at the SOS website or by mail for the $155 fee.
1-2 hours
Create Corporate Bylaws
Draft internal bylaws governing how the corporation will operate, including rules for shareholder meetings, voting procedures, officer roles, and board of directors responsibilities. While not filed with the state, bylaws are legally important and required for corporate governance under Minnesota law.
2-4 hours
What's Next After Filing
Once your S-Corp is officially formed, you'll want to complete these important steps:
- •Hold Organizational Meeting and Issue Stock — Conduct the initial organizational meeting of the board of directors to adopt bylaws, elect officers, authorize issuance of stock, and handle other initial corporate matters. Issue stock certificates to shareholders; S-Corp eligibility requires no more than 100 shareholders and only one class of stock.
- •Obtain EIN and Elect S-Corp Status with the IRS — Apply for a federal Employer Identification Number (EIN) from the IRS at no cost, then file IRS Form 2553 (Election by a Small Business Corporation) to elect S-Corporation tax treatment. This form must be filed within 2 months and 15 days of incorporation, or by March 15 of the tax year for which the election is to be effective.
- •Register for Minnesota State Taxes and Obtain Licenses — Register with the Minnesota Department of Revenue for applicable state taxes, including Minnesota corporate franchise tax (even as an S-Corp, Minnesota imposes a minimum franchise tax). Obtain any required local or professional business licenses and open a dedicated corporate bank account.
Advantages
- ✓Pass-through taxation avoids federal double taxation, with income and losses reported on shareholders' personal returns
- ✓Shareholders who are active employees can reduce self-employment tax liability by paying themselves a reasonable salary and taking remaining profits as distributions
- ✓Provides limited liability protection, shielding shareholders' personal assets from corporate debts and legal judgments
- ✓Enhanced credibility with customers, vendors, and investors compared to sole proprietorships or partnerships
- ✓Perpetual existence — the corporation continues regardless of ownership changes or shareholder death
Considerations
- •Strict IRS eligibility restrictions: limited to 100 shareholders, only U.S. citizens/permanent residents as shareholders, and only one class of stock allowed
- •Minnesota imposes its own franchise tax and requires S-Corp shareholders to pay Minnesota individual income tax on passed-through income, adding state tax complexity
- •More administrative burden than an LLC, including mandatory bylaws, board meetings, meeting minutes, stock records, and strict corporate formalities to maintain liability protection
Annual Obligations
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