Starting Your Own Business

How to become incorporated in Minnesota 


Choosing a name for your new business is an important step when starting a company.  You must ensure that your business name is unique in Minnesota.  Check your business name at the following website to ensure that it's unique and not already in use. 

http://da.sos.state.mn.us/minnesota/corp_inquiry-find.asp?:Norder_item_type_id=10 


Opening a business in Minnesota requires a Federal Employee Identification Number (FEIN). 

This process involves an application with the IRS. Below is the link to the application page of the IRS. 

https://sa1.www4.irs.gov/modiein/individual/index.jsp 


To obtain a Business ID number from the State, you will need your new FEIN to complete the application. The cost to open a business can be paid on-line or in person at the Secretary of State Office. Below is the link to the Office of the Secretary of State for Minnesota to file on-line. You can request expedited service and receive your State Business ID# instantly. 

http://expressservices.sos.state.mn.us/ 


You can also file your business application in person or download the forms and fax them directly to the State. Below is the physical address for the Minnesota Office of the Secretary of State. 


Business Services Counter (8 a.m. – 4 p.m., M–F)* 


FILE IN-PERSON OR MAIL TO:


Office of the Secretary of State

Retirement Systems of Minnesota Building

60 Empire Drive, Suite 100

St Paul, MN 55103 map

Phone Lines: (9 a.m. - 4 p.m., M-F)*

Metro Area 651-296-2803; Greater MN 1-877-551-6767



Email: business.services@state.mn.us

Fax: 651-297-7067 


You will need your new Federal and State ID numbers to open a small business bank account. 


How to become incorporated in Wisconsin


Choosing a name for your new business is an important step when starting a company.  You must ensure that your business name is unique in Wisconsin.  Check your business name at the following website to ensure that it's unique and not already in use. 

https://www.wdfi.org/apps/CorpSearch/Search.aspx 


Opening a business in Wisconsin requires a Federal Employee Identification Number (FEIN). 

This process involves an application with the IRS. Below is the link to the application page of the IRS. 

https://sa1.www4.irs.gov/modiein/individual/index.jsp 


To obtain a Business ID number from the State, you will need your new FEIN to complete the application. The cost to open a business can be paid on-line or in person at the Secretary of State Office. Below is the link to the Office of the Secretary of State for Wisconsin to file on-line. You can request expedited service and receive your State Business ID# instantly. 

https://www.wdfi.org/apps/CorpFormation/ 


You will need your new Federal and State ID numbers to open a small business bank account. 


How You Can Benefit from a Corporation


Regardless of their size, all businesses can benefit from incorporating. Advantages of forming a corporation include:

• S Corporation. An “S” Corporation is the way to determine you are operating as a true independent contractor. The State of Minnesota looks at an LLC company as an employee. Operating an S- corporation does require more rigorous tax filings than a LLC. This will assure you are operating your business properly. Consult your tax adviser.

• Personal asset protection. Corporations allow owners to separate and protect their personal assets. In a properly structured and managed company, owners should have limited liability for business debts and obligations.

• Additional credibility. Adding "Inc." after your business name can add instant authority. Consumers, vendors, and partners may prefer to do business with an incorporated company.

• Name protection. In most states, other businesses may not file your exact corporate name in the same state.

• Perpetual existence. Corporations continue to exist, even if ownership or management changes. Sole proprietorships and partnerships end if an owner dies or leaves the business.

• Tax flexibility. Profit and loss typically pass through an LLC and get reported on the personal income tax returns of owners, An INC can avoid double taxation of corporate profits and dividends by electing Subchapter S tax status.

• Deductible expenses. Corporations may deduct normal business expenses, like salaries, before they allocate income to owners.  


How to Open a Small Business Bank Account


 Opening a Business Bank Account

Part of having a business identity is to keep your business finances separate from your personal finances. The Internal Revenue Service (IRS) requires it. There's just no better way to do that than to open a business checking account. Since your checks will be coming in under your business name, it is imperative that you set up a small business account (SBA) immediately.

Opening a SBA provides two functions; it separates personal finances from business finances, and it allows your business to establish credit.

Opening a SBA requires a FEIN, State business ID#, and legal authority. The first two, you must have prior to opening a SBA. The third will be established by the institution you choose.

It is always best to start your search with your current financial institution. Find out if they offer a SBA program, and closely inspect the program for fees and charges. Your current institution might not meet the specific needs of your business. It will only benefit you to explore other options in order to define the best SBA for your business.

Business Bank Accounts and Credit Unions

Many credit unions also offer business accounts, typically at lower rates than commercial banks. In some states, you don't have to be an employer or a member of an organization to join. You only have to be a resident in the state where the credit union is chartered. Credit unions do not typically offer free checking, so it is important to have your personal account with the same institution to transfer funds for free.

More Business Banking Accounts

You may also want to establish a savings account for your home business in order to earn interest on accumulated funds that you may need later to pay bills, such as your estimated taxes. Once you've established a working relationship with your business banking partner, you may also want to apply for a credit card in your business name. A business credit card can help when you're short on funds and suddenly need equipment, fuel or inventory.

As you extend your relationship with your business banker you'll have a source to contact in the event your need to borrow money to run or grow your business. Business bankers may also offer other valuable services, such as credit card and payment processing for your small business.

Below are links to some of the banks that offer SBA:

Wells Fargo
https://www.wellsfargo.com/biz/

Affinity Plus
http://www.affinityplus.org/additionalresources/businessservices/businessproducts/businesschecking.aspx

TCF Bank
http://www.tcfbank.com/SmallBusiness/sb_checking_free_small_business_checking.jsp

US Bank
http://www.usbank.com/en/SmallBusHome.cfm  


Insurance Information


Insurance needed for a corporation will vary with the type of business, and particular requirements may be found by checking with your state's business regulatory office or website. When you've determined what is required, check with your attorney, accountant or insurance risk manager to ensure that the insurance coverage you purchase is sufficient.


1. Liability Insurance - General and product liability insurance covers accidents, negligence and injury to customers caused by your service, product or employees. If you do not sell, install or manufacture potentially harmful products, general liability insurance will suffice. This basic type of insurance protects your business and its assets in any number of situations, but it is prudent to consult with your attorney to determine specific potential risks.


2. Vehicle Insurance - Any vehicle used for business must be insured under the business. Business liability coverage may cover certain losses due to litigation or negligence claims in case of a motor vehicle accident, but it may not cover damage to the vehicles, property or injury to persons involved. If you drive commercially, commercial vehicle insurance, in the business name, is required. Personal insurance policies do not always cover accidents when a vehicle is used for business purposes. It is important that you have the right vehicle coverage to meet the business need.


3. Property Insurance - Every business needs some form of property insurance, even if it isn't mandated in your state. Real estate property insurance if you own the building or business property insurance for renters will cover losses to equipment, merchandise and property due to fire, theft, accidents and certain other events.


4. Employee Insurance - States require certain companies with employees to carry other types of insurance. Unemployment insurance and workers' compensation insurance are the most commonly mandated, with some states requiring additional employee disability insurance. The health care reform law passed in 2010 will affect employers in different ways depending in the number of employees. It is important that you assess your particular situation, keep abreast of the reform law and apply it to your insurance offerings as mandated.


Required & Suggestions for Your Courier Business


There are many aspects to running a successful business. For example, you need to be compliant with the Department of Transportation (DOT). DOT is not only a great guide to running a safe business it is the law. Compiling as many tools around you will help your business operate more effectively. Therefore, we have listed some of the required and suggested Tools & Documentation to operating your courier business.

Requirements:

• Must be friendly and have excellent communication skills
• Must be self-motivated, hard-working, and know the Twin Cities
• Must meet vehicle requirements
   o Most courier companies require a late model, preferred color and size of vehicle.
     They must be clear of body or paint damage.
     The DOT requires your company to have permanent operating authority signs
     (In most cases the courier company name) on the doors of the vehicle.
     Inspections will be made in accordance with DOT standards.
• Must be 23 or older
• Must have a valid Minnesota or Wisconsin Driver's License
• Must have a valid DOT Health Examination Card
• Must have a reasonably clean Motor Vehicle Record
• Must pass a criminal background check
• No DOT reportable accidents (accidents while driving a CMV)
• Must sign a release for 3 years of previous employment history check
• Owner/operators will need to be Incorporated
• Mounted Fire extinguisher
• Emergency Reflective triangles (3)

Suggested:

• Two Wheeler Dolly
• Map Book of Twin City Metro (Kings, Hudson)
• State Map
• GPS
• Cell Phone
• Hard Hat / Safety Vest / Protective Eye Glasses
• Steel Towed Boots
• Moving Blankets
• Pallet Jack
• Securing Equipment
    Bunge Cords
    Ratchet Straps
    Load Bars
    Rope
• Sunglasses
• Clip board and writing utensils
• Gloves
• Spare Fuses for you vehicle
• General Tool Set
• Washer Fluid

DISCLAIMER

Information in this website is intended to provide readers with a general overview of insurance and should not be relied upon for any planning purposes. It is not intended to constitute any form of legal or accounting advice and companies considering incorporation should at all times enlist the services of experienced professional companies. Any tax matters should be referred to a professional tax accounting firm, tax attorney or the U.S. Internal Revenue Service. 

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