This article provides three key state business startup requirements for self-employed sole proprietors and general partners who run residential house cleaning businesses. Information from the Secretary of State, the Minnesota Department of Revenue and selected city and county government sources were used to research this article.
Be aware that sole proprietor and general partner startup requirements in this state are always changing. Some requirements even vary from county to county. It is important that you call or visit your local county or city government to find out local requirements for residential house cleaning businesses and home-based businesses. This article is not intended to be exhaustive or a substitute for qualified legal or tax advice.
Business Name Registration
Sole proprietors and general partners who want a business name that does not include the owner(s) full names (for example, Janice Smith’s Cleaning Service or Martha Harris and Tom Graham’s Maid Service) need to find out whether the name they want to use is available in the state of Minnesota. Start with a statewide corporate business name search to avoid legal problems and customer confusion.
Then do an online search for names similar to the one you plan to use. For example, if you want to use the name, Crystal Clean Maid Service, do simple Google searches for “Crystal Clean Maid Service+Minnesota” plus Crystal Clean Maid Service+your county” and “Crystal Clean Maid Service+your town or city”. Search beyond the first page of results. Go at least five pages deep into the search results to see if the name you want or similar names are being used in your state, county or city.
Sole proprietors and partnerships that conduct business in Minnesota under a name that is different from the full, true name of each business owner must register the name of the business by filing a Certificate of Assumed Name or DBA (“doing business as” name) with the Secretary of State.
After registering an Assumed Name or DBA with the state, businesses must publish the Certificate Of Assumed Name in two (2) back to back issues of the legal notices section of a qualified legal newspaper in the county where the business is based. After publication, the newspaper will return an affidavit of publication which should be kept by the business as proof of publication. Find a qualified Legal Newspaper in Minnesota.
In the state of Minnesota, filing a Certificate Of Assumed Name does not guarantee a business sole rights to the use of that name. Other businesses in the county and state may also register the same assumed name. Registered businesses are expected to legally defend their trade names.
Business License Registration
Sole proprietors and general partners do not have to apply for a state business license in Minnesota. Residential house cleaning businesses should check with the local city clerk’s office for licensing requirements. Find a city clerk.
In Minnesota, a general partnership is created when two or more owners form an oral or written agreement to start a business together. General partners are not required to file any documents with the Secretary of State. It is advisable for general partners to file a Certificate Of Assumed Name or DBA in the county where the business is based. A written partnership agreement drawn up by a lawyer is important for both or all partners. Partnership agreements do not have to be filed with the state.
Sole proprietors and general partners may apply for an Employer Identification Number (EIN) from the IRS even if they do not plan to hire employees. Getting an EIN may make it easier to open a bank account and reduce your risk of identity theft. You can apply for an EIN online. In addition, some business registration forms will require a NAICS business classification number for the house cleaning industry.
Business Tax Registration
All businesses in Minnesota require a Minnesota Tax ID number. You must contact the Minnesota Department of Revenue to register.
Residential house cleaning services are taxed by the state. Certain services are not taxable (if separately stated on the customer invoice) :
• washing dishes
• dusting knick-knacks
• making beds
• picking up
• room straightening
Housecleaning contracts that include both taxable and nontaxable services are taxed on the full amount unless the nontaxable services are listed separately. More information about taxes on cleaning services.
Sole proprietors and general partners pay tax on business income to the state of Minnesota through their personal state tax return. Sole proprietors and general partners are responsible for paying estimated self-employment income taxes in Minnesota (on Form M1) similar to the way self employment taxes are paid to the federal government. Get more information about estimated tax requirements by calling the Minnesota Department of Revenue at (651) 296-3781 or toll free (800) 652-9094.
Minnesota general partnerships that file a Federal Partnership Return Form 1065, may need to file state income tax Form M3. Get more information from a CPA or qualified tax preparer to find out if your partnership must file those returns.
Selected Minnesota City Licenses
Bloomington Business License: The city of Bloomington does not require a business license for cleaning services.
Brooklyn Park Business License: The city of Brooklyn Park does not require a business license for cleaning services.
Duluth Business License: The city of Duluth does not require a business license for cleaning services.
Maple Grove Business License: https://www.maplegrovemn.gov/services/licenses-and-permits/business
Minneapolis Business License: The city of Minneapolis does not require a business license for cleaning services.
Plymouth Business License: The city of Plymouth does not require a business license for cleaning services.
Rochester Business License: https://www.rochestermn.gov/departments/city-clerk/licenses-and-permits
St. Paul Business License: The city of St. Paul does not require a business license for cleaning services.