How to Start an Assisted Living Facility in Minnesota: MDH License, Dementia Care Category and Fees

If you want to learn how to start an assisted living business in Minnesota, begin with the license that matters most. The facility itself is licensed by the Minnesota Department of Health (MDH) under Minnesota Statutes chapter 144G, a requirement in effect since August 1, 2021. Forming an LLC with the Minnesota Secretary of State gives your company legal existence, but that filing is not a license and does not authorize you to care for residents.

This guide walks through the steps in the order most owners need them: the MDH license and its two categories, the fees, the Secretary of State filings, tax registration, local approvals, and the naming and advertising rules that start in 2027. Minnesota has no general statewide business license, so most of your permits come from different agencies, depending on what the business does.

What You Need Before You Start

Gather these items before you sign a lease or send any application fee. Each one comes up with MDH, the Secretary of State, the Department of Revenue, or your city.

• A zoned site. Get written confirmation from the city or county planning office that the building can be used for this purpose before you commit to a lease or purchase.
• A floor plan. Show resident rooms, bathrooms, common areas, the kitchen, and any secured dementia care unit. The plan determines which license category you need.
• A budget. Cover build-out, staffing, insurance, the MDH fee, and enough operating reserve to carry the facility while occupancy builds.
• A federal Employer Identification Number (EIN) from the IRS, needed for payroll and for opening a business bank account.
• Your entity documents. Draft the Articles of Organization and confirm the name is available in the Secretary of State's Business Search.
• Operating policies. Draft admission, service plan, emergency, medication, and staffing policies. MDH reviews how you will operate, not only what you intend to do.
• Insurance quotes. Get liability and property quotes early. If you plan a secured dementia care unit, ask carriers to price that exposure separately.
• Advisors. Line up a Minnesota attorney and a CPA. A free Small Business Development Center (SBDC) advisor can review your plan as well.

Step 1: Confirm the License Category

Chapter 144G covers assisted living facilities and recognizes two license categories:

• Assisted living facility, the standard category.
• Assisted living facility with dementia care, which is required for any secured dementia care unit (Minn. Stat. 144G.10, subdivisions 1 and 2).

Treat the category as a design decision made now, not a paperwork decision made later. If the building will include a secured unit, plan for the dementia care category from the first application. Ask MDH before construction whether a change in category after licensure would require a new application or a change request, because that answer affects your schedule and budget.

Step 2: Budget the MDH License Fees

The license fee is set under Minn. Stat. 144.122. It has a base amount plus a per-resident amount. The fee is nonrefundable, so a withdrawn or denied application does not return the money.

Category	Base fee	Per-resident fee	Example at 20 residents	Example at 40 residents
Assisted living facility	$2,000	$125	$4,500	$7,000
Assisted living facility with dementia care	$3,000	$150	$6,000	$9,000

The example totals are simple arithmetic on the published base and per-resident amounts. Before you finalize the budget, check with MDH how the resident count is set for the fee, such as licensed capacity, so the number you budget for matches the number MDH will charge.

Step 3: Form the Company With the Secretary of State

Most owners form a limited liability company. The formation document is Articles of Organization under Minnesota Statutes chapter 322C. The filing fee is $155 online or in person, where the filing is expedited, or $135 by mail, where it is not. The Secretary of State does not publish a guaranteed turnaround in business days, so plan for variable processing time, and file online if your opening date is fixed.

Your LLC name must include the words "limited liability company" or the abbreviation "LLC." It may not include "corporation" or "incorporated" or their abbreviations, and it must be distinguishable on the state's records from every other entity on file (Minn. Stat. 322C.0108). If you need time to decide, a name reservation costs $55 and lasts 12 months, renewable in 12-month periods.

Forming an LLC does not require a newspaper publication. You will file an Annual Renewal each year. It costs $0 and is due December 31. If it is missed, the LLC can be terminated or revoked without further notice (Minn. Stat. 322C.0705). Reinstatement costs $65 by mail or $85 online or in person on the current fee schedule, so the cheaper path is to file on time.

A corporation is the other option, filed as Articles of Incorporation under Minnesota Statutes chapter 302A at the same $155 filing fee. Choosing between them is a tax and liability question, so it belongs with your attorney and CPA.

Step 4: File an Assumed Name If You Need One

If the facility will operate under a name other than your LLC's legal name, file a Certificate of Assumed Name under Minnesota Statutes chapter 333. The fee is $50 online or in person, or $30 by mail. The certificate is filed with the Secretary of State's Business Services office.

Filing is only half of it. The certificate must be published for two consecutive issues in the legal notices section of a qualified legal newspaper in the county where your principal place of business is located. Failure to publish may make the certificate invalid. Renewal is required annually, at no charge. Forms and details are at the Secretary of State's assumed name page.

Step 5: Register for Taxes Before Taxable Sales

Tax registration is not a license, but you must complete it before making taxable sales. Register with the Minnesota Department of Revenue for a Minnesota tax ID and a Sales and Use Tax account using the new business registration service. The state sales tax rate is 6.875 percent, and local taxes can be added on top. Ask the Department of Revenue which of your services and charges are taxable, because the answer is not something to guess.

On income tax, an LLC taxed as a partnership or disregarded entity passes income to its owners, who pay Minnesota individual income tax at graduated rates of 5.35 to 9.85 percent. An LLC that files federally as a C corporation pays the 9.8 percent corporation franchise tax. A separate minimum fee under Minn. Stat. 290.0922 applies to C corporations, S corporations and partnerships, with single member LLCs reporting only on the member's individual return exempt. For 2026, the minimum fee starts at $0 below $1,280,000 of Minnesota property, payroll and sales and rises in brackets to $12,830. Confirm where your entity falls with your CPA.

Step 6: Clear Zoning and Local Requirements

Minnesota has 87 counties, about 853 cities and about 1,780 townships. Your city, county or township controls zoning, and some cities add their own licensing or inspection steps. Minneapolis and Saint Paul license by category and neither issues a general business license, so the approvals you need depend on the category of the business and the local code.

Ask the local planning and building office for the full list of approvals before you buy or lease the building. Typical questions cover residential care zoning, occupancy classification, building and fire inspections, and signage. Get the answers in writing where you can.

A licensed assisted living facility does not also need a separate boarding, lodging or food license (Minn. Stat. 144G.10, subdivision 3). Do not pay for duplicate permits on that basis without asking MDH and your city what they still require. For other activities, search the state's central lookup at License Minnesota, which lets you browse by topic, agency or an A to Z index.

Step 7: Apply to MDH for the License

Call or write to the MDH Health Regulation Division early, before you finalize the lease. Ask four questions: the license term, the steps for a provisional license if one applies, any limit on new facilities in your area, and the order of steps, including whether an inspection happens before a license is issued. The MDH main site is at health.state.mn.us. Confirm the current application forms there, because forms and processes change.

When you submit the application, include the base fee and the per-resident fee for the capacity you request. Keep a copy of everything you send. Because the fee is nonrefundable, a complete and accurate application saves money as well as time.

Step 8: Plan Your Name and Advertising Now

Two rules shape your branding. First, a facility name may not include "home care" or "nursing home" (Minn. Stat. 144G.10, subdivision 5). Second, starting January 1, 2027, only licensed facilities may use the phrase "assisted living" in advertising. Build your website, brochures, listings and signage on the 2027 rule from the start, so you do not reprint materials at opening.

Expected Results

A complete application, a clear license category, and early contact with the agencies may help you move toward an opening date with fewer surprises. Results depend on the building, the local market, staffing, and how quickly residents move in. This guide cannot promise a specific timeline, license outcome, occupancy level or financial return. Treat the figures here as a starting point, and confirm each one with the agency that sets it.

Common Mistakes to Avoid

• Treating the LLC as the license. The Secretary of State filing makes the company legal. The MDH license lets it provide care.
• Building a secured unit before choosing the category. A secured dementia care unit requires the dementia care category, which carries a higher base fee and per-resident fee.
• Budgeting the MDH fee as one number. Model the base fee and the per-resident amount separately, and confirm the resident count with MDH.
• Using "home care" or "nursing home" in the name. Choose a neutral name and check it against the Secretary of State records and the naming rule before you order signs.
• Assuming a separate food or lodging license is needed. A licensed facility does not need a separate boarding, lodging or food license under 144G.10, subdivision 3. Confirm this with MDH and your city.
• Skipping the DBA publication. A certificate that is not published may be invalid, even after the state accepts the filing.
• Missing the December 31 Annual Renewal. The renewal costs $0, but a missed filing leads to termination or revocation and a reinstatement fee.
• Signing a lease before zoning is confirmed. A lease for a building that cannot be used for residential care is an expensive mistake.

Tips From the Filing Desk

• Ask MDH for a pre-application conversation before you commit to a building, and write down who you spoke with and what they said.
• File the Articles of Organization online so the expedited processing is included in the $155 fee.
• Put the annual calendar in one place: the December 31 Annual Renewal, the DBA renewal, the sales tax filing schedule, and the MDH license renewal date once MDH confirms it.
• Use the free SBDC advisors at the Minnesota SBDC network to review your plan and budget before you meet with lenders.
• If you need federal small business guidance, the SBA Minnesota district page lists local resources.

Official Resources

• Minnesota Secretary of State: sos.mn.gov
• Business search and online filing (Business Filings Online, MBLS): mblsportal.sos.mn.gov
• Minnesota Department of Revenue: revenue.state.mn.us
• Minnesota Department of Health: health.state.mn.us
• License Minnesota: mn.gov/elicense

Important Disclaimer

This article is informational content, not legal, tax, or licensing advice. Fees, deadlines and rules change, and the figures above reflect the verified sources at the time of writing. Confirm every fee, term and requirement with the agency named, and consult a qualified Minnesota attorney and CPA before you sign a lease, form an entity, or file an application.