In addition to obtaining the certificate of authority, a foreign corporation must obtain a Minnesota tax identification number from the Department of Revenue. If the corporation will have employees in Minnesota, it also must obtain a Minnesota employer withholding tax number and an unemployment insurance employer account number and arrange for workers’ compensation insurance. The procedure for obtaining these numbers is described in the section of this Guide on business taxes and the Checklist for Hiring an Employee. Foreign corporations also must obtain any state and local business licenses necessary to conduct business operations. Information on business license requirements may be obtained from the Small Business Assistance Office at the address and telephone number provided in the Resource Directory section of this Guide. Finally, the Minnesota Department of Revenue has the power to order the Secretary of State to revoke a foreign corporation’s certificate of authority to do business in Minnesota if that corporation “fails to comply with any tax laws” administered by the Department of Revenue.
FORMING A MINNESOTA LIMITED LIABILITY COMPANY
A Limited Liability Company is a form of business organization with limited liability characteristics of a corporation and the ability to be treated for tax purposes as a sole proprietorship (or disregarded entity), partnership or corporation. (It will be treated for tax purposes as a sole proprietorship (or disregarded entity), if there is a single member, or as a partnership, if there are multiple members, unless it affirmatively elects to be taxed as a corporation.) The formation and operation of a Minnesota Limited Liability Company is governed by Minn. Stat. Chapter 322C. In the case of a Limited Liability Company that is taxed as a partnership or disregarded entity, business income and losses of the Limited Liability Company are passed through to the owners of the business and are taxed to the owner’s individual tax rate. As with a corporation, liability for business debts and obligations generally rests with the entity rather than with individual owners. A Limited Liability Company that is taxed as a pass-through entity is not subject to many of the restrictions that apply to S corporations, such as a maximum of 100 shareholders, a single class of stock, and limited types of non-individual shareholders. All members of a Limited Liability Company may participate in the active management of the company without risking loss of limited personal liability. For a Limited Liability Company that elects to be taxed as a corporation, it will be taxed as a C corporation unless it qualifies and elects to be taxed as an S corporation. As of 2009, when a single-member Limited Liability Company that is taxed as a disregarded entity fails to pay federal unemployment taxes, the Limited Liability Company, not the owner is now liable. ARTICLES OF ORGANIZATION A Limited Liability Company is formed by filing Minnesota Limited Liability Company Articles of Organization with the Secretary of State and paying the filing fee. Minimum requirements for the articles of organization are provided on an articles of organization form available from the
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