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Change of business structure

What is a business structure change?

A business structure change occurs when one legal business structure replaces another legal business structure to contract for and perform licensed work. These changes require applying for a new license for the new business entity.

  • A business structure changes when an individual/sole proprietor creates a limited liability company (LLC) or corporation to handle his/her licensed business/contractor activities.

  • A business structure changes when a business entity (i.e., corporation, LLC, partnership, LLP) is liquidated and the owner(s) revert to an individual/sole proprietor, or create a different legal business structure (i.e., corporation, LLC, partnership, LLP).

When changing a business structure, what must be done?

A business must first be licensed to contract for and perform the licensed work. This includes promoting, advertising, selling and contracting to perform work.

  1. Complete and submit a new application for the new business entity.

  1. File the applicable business documents with the Minnesota Secretary of State to establish its existence if it is a corporation, LLC, LLP or LP that is planning to conduct business in Minnesota. Individual proprietors and partnerships must register their assumed name if planning to conduct business in Minnesota in any name other than their true name(s).

  2. If a bond is required, then a new bond in the legal name of the new business entity must be submitted. 

  3. The insured name on liability insurance and workers compensation insurance policies must be in the legal name of the new business entity.

  4. Pay the license fee as indicated on the application form. Keep copies of all documents.

  5. Mail us the application with the appropriate fee as required for obtaining the business/contractor license or register a contractor's bond.

What happens to the current business/contractor license or certificate?

In most cases the license, certificate or registration becomes inactive and replaced by the new business structure. Exceptions are:

  • Plumbing contractors because the license number is held by the master plumber or restricted master plumber associated with the plumbing contractor.

  • Water conditioning contractors because the license number is held by the water conditioning contractor.

  • Certified pipelayers because there is no license number issued to businesses that file a plumbing contractor code compliance bond to install water and sewer lines external to building structures.

Licenses and certificates issued to business entities required to obtain and file a bond are inactivated and a new license or certificate issued to the new business entity.

Questions?

Contact us at dli.license@state.mn.us or 651-284-5034