This twenty-fifth edition of A Guide to Starting a Business in Minnesota, like its predecessors, is intended to provide a concise, summary discussion of the major issues faced by those starting a business in Minnesota.

This edition of the Guide contains three major sections: the narrative text; a Resource Directory, which provides addresses and telephone numbers of organizations referenced in the text; and the Directory of Licenses and Permits, which lists all business licenses and permits required by the State of Minnesota, the state agency which issues or administers the license or permit, and a telephone number for obtaining more information. Topics presented in the narrative text are presented in the order in which the new business owner typically must address them. Note that a business that will have operations or a physical presence (with the possible inclusion of an Internet presence) in another state should check with the government authorities in that state to obtain information on licensing, tax and other issues. We hope this organization is useful.

While no one publication can answer every question for every kind of proposed business, this Guide does respond to the questions and concerns most frequently raised. While it tries to be both timely and comprehensive, this Guide is not intended as a final statement on any one subject. In particular, users should be aware that the formal legal requirements for business start-up and operations may change from time to time. Specific updates and additional information may be obtained from the many sources listed.

Before engaging in any business venture, it is advisable to seek both legal counsel and advice from an accountant. Both professionals can advise you as to the best course you might take in establishing your business. The information provided in this Guide is not intended to replace that kind of advice and assistance.

We would like to thank Millie Caballero and Mark Simmer for their numerous contributions to the compilation of this Guide. We would like to thank Eileen Quam for her work on the expanded index.

Charles A. Schaffer
Madeline Harris

Download A Guide to Starting a Business in Minnesota

PDF format, 1.26MB, 368Pages. Twenty-fifth Edition, January 2007

Copyright © 2007, Minnesota Department of Employment and Economic Development
ISBN 1-888404-45-0

Preface ............................................................. ii
Choosing the Form of Business Organization.................. 1
Tax and Non-Tax Considerations ................. 1
Naming the Business Entity ........... 29
Forming a Sole Proprietorship........... 36
Forming a Partnership ........................................ 36
Forming a Minnesota Business Corporation ........... 41
Forming a Minnesota Limited Liability Company ........ 47
Special Types of Business Organizations ....................... 53
Secretary of State Fee Schedule...................... 60
Regulatory Considerations ...................... 63
Securities Registration.................. 63
Franchise Registration........................ 68
Evaluating A Business Opportunity ............... 70
Business Licenses and Permits............... 73
Environmental Protection Programs............. 75
Access to the Regulatory Process .......... 93
Intellectual Property Protection.............. 96
Basic Types of Intellectual Property Protection............ 96
Patent Protection.............. 96
Practical Considerations .............. 103
Trademark Protection.......... 110
Copyright Protection............. 115
Trade Secret Protection.............. 117
Commonly Asked Questions Concerning Intellectual Property ...... 118
Patent Depository Library ....... 122
Business Plan................................ 124
Accounting for the New Business............. 129
Basic Accounting Principles ...................... 129
Income Forecasting Techniques.............. 131
Business Grants..................... 135
Business Loans.................... 135
Public Sources of Financing – Federal Programs ............. 138
Public Sources of Financing – State Programs......... 149
Public Sources of Financing – Local Programs.......... 154
Private Sources of Funds ............... 154
Insurance................. 156

Issues for Employers ............................ 160
Who is an Employee?.................... 160
Employment Agreements............ 165
Labor Standards.......................... 167
Rest Breaks and Leave Time..................... 183
Employee Testing and Background Checks............... 188
Employment of Minors.............. 192
Protection of Employees Who Report Violations of Law ......... 195
Human Rights ............................ 196
Immigration Law Compliance............ 203
Occupational Safety and Health.............. 205
Workers’ Compensation ................. 211
Employee Benefits ...................... 218
Plant Closings........................ 221
Poster Requirements.................. 222
Checklist for Hiring an Employee................ 223
Business Taxes....................................... 233
Business Income Tax Returns.............. 237
Sales and Use Tax....................... 244
FICA Tax........................... 250
Income Tax Withholding....... 251
Successor Liability for Certain Taxes When a Business or its Assets are Transferred ..258
Revocation or Prevention of License Issuance or Renewal ........... 258
Unemployment Taxes........... 259
Other Taxes ............................. 266
Federal Tax Requirements ......................... 268
State of Minnesota Tax Requirements................... 269
Sources of Information and Assistance ...... 271
State Programs ............................. 271
Minnesota Small Business Assistance Office ................ 271
Small Business Development Centers..................... 272
Minnesota Trade Office ......................... 273
Employment and Training Programs.............. 274
Minnesota Extension Service............... 276
Minnesota Job Skills Partnership........... 276
Dislocated Worker Programs................... 277
Government Procurement Assistance............ 277
Accounting and Tax Assistance ............ 282
Libraries .......................285
Additional Sources of Assistance .................... 286
Specialized Legal Research and Assistance.................... 286
Management Assistance for Minority Businesses............ 287
Incubators......................... 287
Inventors Resources.............................287
Minnesota Technical Assistance Program ............... 287
Minnesota State Colleges and Universities (MNSCU) .......... 288
Regional Development Commissions...................288
Trade Information Center ..........289
SCORE Offices ................ 289
Business Planning Center ............. 290

Resource Directory ............... 291
Cooperatives.................. 292
Environmental.................. 292
Export Assistance........ 292
Financing, Federal Sources........... 292
Financing, State Sources ................................ 294
Financing, Local Sources........... 295
Financing, Private Sources 296
Government, Federal............................. 298
Government, State ................... 301
Government, Regional ................. 308
Insurance 309
Inventors .............. 309
Job Services and Job Training................ 309
Legal Assistance.................... 311
Libraries ............. 312
Local Assistance for Small Businesses ...... 316
Management Assistance, General ................... 317
Management Assistance for Minority Businesses................... 319
Procurement Assistance/Purchasing/Certification Assistance........... 320
Tax and Accounting Assistance ........... 322
Additional Resources....................... 323
Directory of Licenses and Permits ............ 325
Index .............. 351

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