Limited Liability Company (LLC) A Limited Liability Company (LLC) combines flexibility with liability protection. It can have one or more owners, called members. Members may manage the company themselves or appoint a manager or board. Key features: • May have one or more members • Formed by filing Minnesota Limited Liability Company Articles of Organization with the Minnesota Secretary of State • Tax Options: • One-member LLCs are taxed as a sole proprietorship (unless electing corporate tax treatment). • Multi-member LLCs are taxed as a partnership (unless electing corporate status). • Governed by Minn. Stat. Chapter 322. • May be managed by the members, by a board of governors, or by a manager • Liability for business debts and obligations generally rests with the entity, not individual members. • All members may participate in active management without risking limited personal liability. Tax ID requirements: • LLCs taxed as partnerships or corporations must obtain their own federal and state tax ID numbers. • Single-member LLCs taxed as sole proprietorships generally do not need separate tax ID numbers unless they have employees or pay federal excise taxes. Other Forms of Organization Minnesota law provides for additional specialized business structures, including:
• Professional organizations • Cooperative associations • Business trusts • Certain variations of these forms
These entities are established and regulated by statute and involve complex legal, financial, and accounting issues. Professional guidance from attorneys and accountants is essential when considering these structures. Due to their specialized nature, they are not detailed in this Guide.
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