Contact an attorney in this area
JUX Law Firm
901 Marquette Ave. Suite 1675
Minneapolis, MN 55402
A corporation may be a good fit for the business you are trying to form. If you are worried about your future financials being affected by problems with the new business, a Corporation would protect you from being held responsible for all future debts of the business. If your business acquires significant debt, it will not affect the owner’s personal assets. Therefore, a Corporation best protect your personal assets. In addition, if an owner develops significant personal debt, it will not affect the business.
Typically, corporations are a better option for larger businesses while LLCs are better for smaller ones. Other advantages to a corporation are: there are more possibilities for tax-free benefits on things like life insurance from the company also, when going public investors are more used to buying stock rather than how an LLC would go about making securities available to the public.
Forming a Minnesota Business Corporation
A corporation is a separate legal entity that is owned by one or more shareholders. The shareholders elect a board of directors which is responsible for the management and control of the corporation. As a separate legal entity, the corporation is responsible for the debts and obligations of the business. In most cases the shareholders are insulated from personal liability for claims against the corporation.
A corporation is formed according to the laws of the state in which it is organized. In Minnesota the business corporation statute is Minnesota Statutes Chapter 302A. The following material describes the process for incorporating a business in Minnesota and some of the post-incorporation issues faced by new corporations. The formation of a state bank or trust company with the Minnesota Department of Commerce is beyond the scope of this publication. Other issues are described in posts of this blog on choosing the form of business organization, business taxes, and issues for employers.
Corporate Formation Services
Articles of Organization
The articles of organization are created for a limited liability company or corporation by the owner and filed with the state in order to form a business. The business does not legally exist until the articles are filed.
Bylaws are developed during the creation of a business in order to set up rules that direct how the business will function. They are created by the founder(s) of the business and should account for several topics pertaining to the business.
Anyone can form a Corporation for any lawful purpose. The Corporation does not exist until the Minnesota Secretary of State reviews and approves the articles of incorporation. The fees are the same as an LLC above.
Corporations file as a separate entity from the owners. The form used is an 1120 and the corporation pays for the taxes on the business itself.