How to Move an LLC to Minnesota

There are many reasons why a business owner may want to move an LLC to Minnesota. This article discusses the use of domestication, known in some states as LLC conversion, to transfer an LLC to Minnesota.

What is Minnesota LLC Domestication?

Minnesota domestication is a legal procedure that allows an out-of-state LLC to change its state of organization to Minnesota.¹ An LLC’s state of organization—also called its domicile—is the company’s legal home state. The law of an LLC’s state of organization primarily governs the company. Thus, an out-of-state LLC that domesticates to Minnesota becomes a Minnesota LLC governed by the Minnesota Revised Uniform Limited Liability Company Act.²

In some states, the statutory procedure that changes an LLC’s state of organization is called a conversion. The conversion process in those states typically lets a business change its state of organization or change its entity type. A business’s entity type is its fundamental form—for example, an LLC, a corporation, or a partnership.

Minnesota has two separate procedures that accomplish these goals:

• A Minnesota domestication changes an LLC’s state of organization. For example, an Illinois LLC can complete a domestication to become a Minnesota LLC.
• A Minnesota conversion changes a business’s entity type.³ For example, a Minnesota corporation can complete a domestication to become a Minnesota LLC.

Why Transfer an LLC to Minnesota?

A Minnesota LLC domestication may be a good idea for an LLC owner who relocates to Minnesota. Or, an LLC owner who lives in another state may want the LLC to be governed by Minnesota law. Any of the following reasons could support a domestication to Minnesota.

• Reduced reporting. A Minnesota LLC domestication may let the company reduce the time and fees it spends on annual reporting. The LLC will not have to file annual reports in the original state if it will no longer do business there. Minnesota charges no annual reporting fee to LLCs, so a domestication could potentially reduce the business’s annual reporting fees to zero.
• Business owner convenience. An LLC owner moving to Minnesota may want to bring along the business. An LLC domestication allows the business to be governed by the law of the owner’s new state—which is often more convenient that balancing two states’ laws.
• Geographic advantages. A move to Minnesota may be a good idea if Minnesota is a hub for businesses in the company’s field. For example, many businesses in the medical technology field are located in Minnesota. Owners who move an LLC’s principal office to Minnesota may prefer to have the LLC’s principal location also be its domicile state.
• Legal benefits. An out-of-state LLC may want to transfer to Minnesota if Minnesota law is better for the company than the original state’s law. Minnesota’s LLC law may allow for more flexible management or be a better fit for how the members want to distribute profits and losses.
• Lower overall tax burden. Minnesota is generally considered a high-tax state. Even so, an LLC that domesticates to Minnesota may still save on taxes if it ends up paying in fewer states. The LLC’s original state will no longer tax the business if a Minnesota domestication ends the connection—or taxable nexus—between the company and the original state.
• Improved professional relationships. Every state has its own business laws and tax rules. A company hiring a lawyer, accountant, or other professional must find someone with experience in the correct state’s system. Owners who live in Minnesota will have a relatively easy time finding local professionals who are familiar with Minnesota law. Thus, a Minnesota LLC domestication may make hiring a lawyer or accountant easier for the company.

What are the Benefits of Minnesota LLC Domestication?

The Minnesota LLC domestication process is the best approach for most out-of-state LLCs that want to officially move to Minnesota. Other methods tend to be more expensive and more disruptive to the business. Domestication offers the following practical advantages:

• Minimal business disruption. An out-of-state LLC that domesticates to Minnesota can continue operating as normal throughout the process. Day-to-day activities can continue as usual, and employees remain employed—with no break in the employment relationship.
• Consistent business identity. An out-of-state LLC that domesticates to Minnesota is still the same company after the domestication.⁴ It becomes a Minnesota LLC but remains the same entity with the same history. The Minnesota LLC uses the same Employer Identification Number (EIN) and continues to be the same taxpayer. Changing an existing business’s EIN often causes tax problems and administrative confusion.
• Same bank accounts. There is no need for an LLC that domesticates to Minnesota to change its bank accounts. The Minnesota LLC is the same company that it was before the domestication, so it can continue using the same accounts.⁵
• Consistent business relationships. A Minnesota LLC domestication does not interfere with the company’s existing business relationships or agreements. Contracts are still valid and effective, and the company has the same rights and obligations.⁶
• Avoid dissolution and foreign registration. The LLC domestication process does not dissolve the LLC or otherwise require winding up.⁷ It exists as the same company, so it avoids the complicated dissolution process. The Minnesota LLC also need not register as a foreign LLC in its original state unless it intends to keep doing business there.

What LLCs can Convert to Minnesota LLCs?

An out-of-state LLC can domesticate to Minnesota only if its current state has a statutory procedure for changing an LLC’s domicile state.⁸ Some states call the process domestication (like Minnesota). Some states—including Michigan and Wisconsin—use the name conversion.⁹ There are other states, though, that do not authorize LLCs to change their domiciles. An LLC organized in a state without the right statutory procedure cannot domesticate to Minnesota.

An LLC formed in a state that allows domestication should also verify that its business is lawful for Minnesota LLCs. Minnesota lets LLCs engage in any lawful business.¹⁰ But an LLC engaged in a business that is lawful in its current state—but unlawful in Minnesota—is unlikely to benefit from a Minnesota LLC domestication.

Minnesota Professional LLCs

LLCs organized in some states cannot provide professional services—which generally means services that may be offered only by professionals with a state-issued license or registration.¹¹ Minnesota allows LLCs to offer professional services—but only if the LLC elects to become a “professional firm.”¹² Minnesota LLCs that are professional firms—called professional LLCs or PLLCs—are governed by Minnesota’s LLC law and also by the Minnesota Professional Firms Act.¹³

Minnesota law includes a list of services that qualify as professional services—such as medicine and surgery, nursing, professional counseling, engineering, and certified interior design.¹⁴ Before domesticating to Minnesota, an out-of-state LLC that offers professional services should verify:

• That the company has or can acquire all necessary licenses; and
• That the company can comply with all requirements of the Minnesota Professional Firms Act.

How Much Does Minnesota LLC Domestication Cost?

An out-of-state LLC’s total cost for a domestication to Minnesota will include service-provider costs, filing fees, and registered office fees (if applicable).

Service-Provider Costs

A service-provider that an LLC hires to handle a Minnesota domestication will charge for the labor involved in managing the procedure. The service-provider’s work includes time spent reviewing information; preparing domestication documents; communicating with the business owners; and submitting documents to state agencies. Service-provider rates vary between providers and may depend on the nature of the domestication and the level of support requested.

Filing Fees

An out-of-state LLC that domesticates to Minnesota pays filing fees to the Minnesota Secretary of State’s office and to the equivalent office in the LLC’s current state. Minnesota charges a $60.00 fee for the domestication documents. The fee increases to $80.00 for expedited processing if the domestication documents are filed in person.

The domesticating LLC will also pay a filing fee to the current state for submitting that state’s equivalent of the articles of domestication.

Registered Office Fees

Minnesota requires all LLCs to have a registered office on file with the secretary of state.¹⁵ The LLC’s registered office must be physically located in Minnesota.¹⁶ The Minnesota Secretary of State and other state agencies send service of process and other important communications to the LLC to its registered office. Minnesota does not require Minnesota LLCs to have a registered agent, but a company can name a registered agent if it wishes to do so.

An LLC without a Minnesota street address can meet the requirement by hiring a commercial registered agent with an office in the state. Commercial registered agents also provide a consistent, long-term notice address and help keep important official communications uniform. A domesticating LLC that decides to hire a Minnesota commercial registered agent will incur a yearly fee of around $50.00 – $150.00.

How Long Does Minnesota LLC Domestication Take?

Minnesota’s LLC domestication process includes several steps. The total time needed to complete a domestication depends on how long each party takes to complete each step. Factors include:

• The LLC members’ or managers’ time needed to provide information to the document preparer;
• The document preparer’s time needed to acquire the information and prepare the domestication documents;
• The members’ or managers’ time needed to review, approve, and sign the domestication documents;
• The service provider’s time needed to receive the completed documents and file documents with state agencies; and
• The processing time taken by the Minnesota Secretary of State’s Office and the current state’s equivalent office.

The Minnesota Secretary of State’s Office offers expedited processing for domestication documents filed in person.¹⁷ Processing usually take around 3-5 business days.

What Laws Govern Minnesota LLC Domestication?

An LLC domestication to Minnesota must be carried out in compliance with Minnesota law and with the law of the LLC’s current state. Domestication documents must meet both states’ requirements, so their content depends in part on where the LLC is currently organized.

Under Minnesota’s LLC domestication law, the other state (the LLC’s current state) determines whether the domestication is possible and how the members or managers must approve the plan of domestication.¹⁸ The current state will also control the precise content of any documents filed in that state and any additional domestication requirements for LLCs leaving the state.

Minnesota law decides the effective date and legal effects in Minnesota of a domestication to Minnesota.¹⁹ Whenever both states’ laws address an aspect of the domestication, the LLC must be sure to comply with both states’ rules. For example, a plan of domestication must include everything Minnesota requires and everything the current state requires.²⁰

What is the Minnesota LLC Domestication Process?

The Minnesota LLC domestication process consists of two components: document preparation and administrative tasks.

Document Preparation

An out-of-state LLC’s domestication to Minnesota requires careful preparation of multiple domestication documents. The domestication documents must comply with all applicable requirements of either state.

• Plan of Domestication. A Plan of Domestication that is designed to comply with the requirements of both Minnesota law and the law of the state that the LLC is moving from.
• Minnesota Articles of Domestication. The Minnesota Articles of Domestication with all information and any related documents needed for filing with the Business Services office of the Minnesota Secretary of State.
• Domestication Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, certificate of conversion, or a similar term.²¹
• Minnesota Articles of Organization. The Minnesota Articles of Organization for filing with the Business Services office of the Secretary of State.
• Minnesota Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as a Minnesota LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Domestication. A resolution approving the transaction and adopting the Minnesota organizational documents as the LLC’s governing documents.

Administrative Tasks

An LLC that has prepared written domestication documents that satisfy both states’ requirements must next complete several administrative steps to make the Minnesota domestication official.

• Conduct preliminary name search. Check the official records of the Business Services office of the Secretary of State to determine whether the LLC’s name is available in Minnesota. (If the name is unavailable, a slight name change may be required to complete the domestication.)
• Obtain signatures on the Articles of Domestication. The Articles of Domestication must be signed by the required parties. The Minnesota Secretary of State allows the Articles of Domestication to be e-signed.
• Obtain signatures on the Articles of Organization. The Articles of Organization must be signed by the required parties. The Minnesota Secretary of State allows the Articles of Organization to be e-signed.
• File the Articles of Domestication. File the Articles of Domestication with the Business Services office of the Secretary of State. The Secretary of State requires the Articles of Domestication to be filed by mail or in person (no e-filing).
• File the Articles of Organization. File the Articles of Organization with the Business Services of the Secretary of State. The Articles of Organization should be filed alongside the Articles of Domestication as an attachment.
• File domestication documents with prior state. File the domestication documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

What is the Legal Effect of Minnesota LLC Conversion?

The Minnesota LLC domestication process officially changes an out-of-state LLC into a Minnesota LLC. After completing the process, the Minnesota LLC is for all purposes the same entity from before the domestication.²² The legal effects of a domestication—which are designed to minimize disruption—are as follows:

• Governing law. After domestication, the LLC is a Minnesota LLC, and the Minnesota Revised Uniform Limited Liability Company Act primarily governs the company. The new Minnesota articles of organization and operating agreement take effect and bind the company and members. ²³
• Company assets. The Minnesota LLC owns all the same real estate and other assets that the out-of-state LLC owned before domestication.²⁴ There is no need to sign deeds or transfer assets.
• Company liabilities. The Minnesota LLC has all the same liabilities and owes all the same debts and taxes from prior to the domestication.²⁵ Domestication does not affect members’ limited liability.
• Legal cases. Legal or administrative proceedings move forward as if the domestication had not occurred.²⁶ Domestication has no effect on the status of proceedings. If the Minnesota LLC’s legal name changed during the domestication, the new name is updated for the prior name.
• Ownership interests. Domestication does not alter members’ ownership interests in the LLC unless the members expressly agreed otherwise in the plan of domestication.²⁷
• No dissolution. Domestication is not a dissolution of the company and does not trigger any requirement to dissolve the company or distribute assets unless the members decide otherwise in the plan of domestication.²⁸

1. Minn. Stat. § 322C.1011(1).
2. Minn. Stat. §§ 322C.0101, et. seq.
3. Minn. Stat. § 322C.1007.
4. Minn. Stat. § 322C.1014.1(1).
5. Minn. Stat. § 322C.1014.1(2).
6. Minn. Stat. §§ 322C.1014.1(2)-(5).
7. Minn. Stat. § 322C.1014.1(7).
8. Minn. Stat. § 322C.1011(1).
9. See MCL 450.4708(1); Wisc. Stat. §§ 183.1041(1)-(2).
10. Minn. Stat. § 322C.0104(1).
11. Minn. Stat. § 319B.02(19).
12. Minn. Stat. § 319B.03(03).
13. Minn. Stat. §§ 319B.01, et. seq.
14. Minn. Stat. § 319B.02(19).
15. Minn. Stat. § 322C.0113.
16. Minn. Stat. § 5.36.
17. Expedited processing is also available for online filings, but domestication documents cannot be filed online.
18. Minn. Stat. §§ 322C.1011(1); 322C.1012(1).
19. Minn. Stat. §§ 322C.1013(2); 322C.1014.
20. See Minn. Stat. § 322C.1011(3).
21. Fourteen states use the term articles of domestication to refer to the document that must be filed with the state to approve the domestication: Iowa, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, North Dakota, South Dakota, Utah, Vermont, Virginia, Wisconsin, Wyoming, and Indiana. The corresponding document may be called a statement of domestication (Alaska, Arizona, Connecticut, Idaho, Illinois, Mississippi, and Pennsylvania); articles of conversion (Florida, Nevada, North Carolina, Oregon, and Washington) or certificate of conversion (California, Delaware, Georgia, Michigan, Ohio, and Texas). It may also be called a statement of conversion (Colorado, Maine), certificate of domestication (Kansas), request for conversion (Louisiana), or statement/plan of domestication (District of Columbia).
22. Minn. Stat. § 322C.1014.1(1).
23. Minn. Stat. § 322C.1014.1(6).
24. Minn. Stat. § 322C.1014.1(2).
25. Minn. Stat. § 322C.1014.1(3).
26. Minn. Stat. § 322C.1014.1(4).
27. Minn. Stat. § 322C.1011(3).
28. Minn. Stat. § 322C.1014.1(7).