Engrossments
Introduction		Posted on 02/28/2013
1st Engrossment		Posted on 03/06/2014
2nd Engrossment		Posted on 04/07/2014

Unofficial Engrossments
1st Unofficial Engrossment		Posted on 04/02/2014

ARTICLE 1

REVISED UNIFORM LIMITED LIABILITY COMPANY ACT

GENERAL PROVISIONS

Section 1.

new text begin [322C.0101] CITATION.
new text end

new text begin This chapter may be cited as the "Minnesota Revised Uniform Limited Liability
Company Act."
new text end

Sec. 2.

new text begin [322C.0102] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin For purposes of this chapter, the terms defined in
this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Articles of organization. new text end

new text begin "Articles of organization" means the articles of
organization required by section 322C.0201. The term includes the articles of organization
as amended or restated.
new text end

new text begin Subd. 3. new text end

new text begin Board. new text end

new text begin "Board" mean the board of governors, however designated, of a
board-managed limited liability company.
new text end

new text begin Subd. 4. new text end

new text begin Board-managed limited liability company. new text end

new text begin "Board-managed limited
liability company" means a limited liability company that qualifies as such under section
322C.0407, subdivision 1.
new text end

new text begin Subd. 5. new text end

new text begin Contribution. new text end

new text begin "Contribution" means any benefit provided by a person to a
limited liability company:
new text end

new text begin (1) in order to become a member upon formation of the company and in accordance
with an agreement between or among the persons that have agreed to become the initial
members of the company;
new text end

new text begin (2) in order to become a member after formation of the company and in accordance
with an agreement between the person and the company; or
new text end

new text begin (3) in the person's capacity as a member and in accordance with the operating
agreement or an agreement between the member and the company.
new text end

new text begin Subd. 6. new text end

new text begin Debtor in bankruptcy. new text end

new text begin "Debtor in bankruptcy" means a person that is
the subject of:
new text end

new text begin (1) an order for relief under United States Code, title 12, or a successor statute
of general application; or
new text end

new text begin (2) a comparable order under federal, state, or foreign law governing insolvency.
new text end

new text begin Subd. 7. new text end

new text begin Distribution. new text end

new text begin "Distribution," except as otherwise provided in section
322C.0405, subdivision 7, means a transfer of money or other property from a limited
liability company to another person on account of a transferable interest.
new text end

new text begin Subd. 8. new text end

new text begin Effective. new text end

new text begin "Effective," with respect to a record required or permitted
to be filed with the secretary of state under this chapter, means effective under section
322C.0205, subdivision 3.
new text end

new text begin Subd. 9. new text end

new text begin Filed. new text end

new text begin "Filed" or "filed with the secretary of state" means that a document
meeting the applicable requirements of this chapter, signed and accompanied by any
required filing fees, has been delivered to the secretary of state. The secretary of state shall
endorse on the original or an image thereof the word "Filed" and the month, day, and year
of filing, record the document or an image thereof in the Office of the Secretary of State,
and return a document or the image thereof to the person who delivered it for filing.
new text end

new text begin Subd. 10. new text end

new text begin Foreign limited liability company. new text end

new text begin "Foreign limited liability company"
means an unincorporated entity formed under the law of a jurisdiction other than this state
and denominated by that law as a limited liability company.
new text end

new text begin Subd. 11. new text end

new text begin Governor. new text end

new text begin "Governor" means a member of the board, however
designated, of a board-managed limited liability company.
new text end

new text begin Subd. 12. new text end

new text begin Limited liability company. new text end

new text begin "Limited liability company," except in the
phrase "foreign limited liability company," means an entity formed under this chapter.
new text end

new text begin Subd. 13. new text end

new text begin Manager. new text end

new text begin "Manager" means a person that under the operating agreement
of a manager-managed limited liability company is responsible, alone or in concert with
others, for performing the management functions stated in section 322C.0407, subdivision
3.
new text end

new text begin Subd. 14. new text end

new text begin Manager-managed limited liability company. new text end

new text begin "Manager-managed
limited liability company" means a limited liability company that qualifies as such under
section 322C.0407, subdivision 1.
new text end

new text begin Subd. 15. new text end

new text begin Member. new text end

new text begin "Member" means a person that has become a member of a
limited liability company under section 322C.0401 and has not dissociated under section
322C.0602.
new text end

new text begin Subd. 16. new text end

new text begin Member-managed limited liability company. new text end

new text begin "Member-managed
limited liability company" means a limited liability company that is not a manager-managed
limited liability company or a board-managed limited liability company.
new text end

new text begin Subd. 17. new text end

new text begin Operating agreement. new text end

new text begin "Operating agreement" means the agreement,
whether or not referred to as an operating agreement and whether oral, in a record, implied,
or in any combination thereof, of all the members of a limited liability company, including
a sole member, concerning the matters described in section 322C.0110, subdivision 1. The
term includes the agreement as amended or restated.
new text end

new text begin Subd. 18. new text end

new text begin Oppressive. new text end

new text begin (a) "Oppressive," with respect to an application brought by a
member under section 322C.0701, subdivision 1, clause (5), item (ii), means conduct:
new text end

new text begin (1) engaged in by one or more:
new text end

new text begin (i) members in a member-managed limited liability company or who are otherwise
in control of any limited liability company;
new text end

new text begin (ii) managers in a manager-managed limited liability company; or
new text end

new text begin (iii) governors of a board-managed limited liability company;
new text end

new text begin (2) that occurs with respect to the applicant member's capacity as:
new text end

new text begin (i) a member, manager, or governor of a limited liability company; or
new text end

new text begin (ii) an employee of a limited liability company with 35 or fewer members; and
new text end

new text begin (3) that is unfairly prejudicial to the applicant member in a capacity listed in clause
(2), because the conduct frustrated an expectation of the applicant member that:
new text end

new text begin (i) is reasonable in light of the reasonable expectations of the other members;
new text end

new text begin (ii) was material to the applicant's decision to become a member of the limited
liability company or for a substantial time has been material during the member's
continuing membership;
new text end

new text begin (iii) was known to other members or that the other members had reason to know; and
new text end

new text begin (iv) is not contrary to the operating agreement as applied consistently with the
contractual obligation of good faith and fair dealing under section 322C.0409, subdivision
4.
new text end

new text begin (b) For the purposes of paragraph (a), conduct:
new text end

new text begin (1) includes words, action, inaction, and any combination of words, action, or
inaction; and
new text end

new text begin (2) is not oppressive solely by reason of a good faith disagreement as to the content,
interpretation, or application of the company's operating agreement.
new text end

new text begin Subd. 19. new text end

new text begin Organizer. new text end

new text begin "Organizer" means a person that acts under section
322C.0201 to form a limited liability company.
new text end

new text begin Subd. 20. new text end

new text begin Person. new text end

new text begin "Person" means an individual, corporation, business trust, estate,
trust, partnership, limited liability company, association, joint venture, public corporation,
government or governmental subdivision, agency, or instrumentality, or any other legal or
commercial entity.
new text end

new text begin Subd. 21. new text end

new text begin Principal place of business. new text end

new text begin "Principal place of business" means
the principal executive office of a limited liability company or foreign limited liability
company, whether or not the office is located in this state.
new text end

new text begin Subd. 22. new text end

new text begin Record. new text end

new text begin "Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is retrievable in perceivable
form.
new text end

new text begin Subd. 23. new text end

new text begin Recorded in the real property records. new text end

new text begin "Recorded in the real property
records" means that a certified copy of a statement meeting the applicable requirements
of this chapter, including containing a legal description of the property affected by the
statement, as filed with the secretary of state, has been recorded in the office of the county
reorder in the county in which the real property affected by the statement is located or, if
the real property is registered under chapter 508 or 508A, has been recorded in the office of
the applicable registrar of titles and memorialized on the certificate of title for that property.
new text end

new text begin Subd. 24. new text end

new text begin Registered office. new text end

new text begin "Registered office" means:
new text end

new text begin (1) the office that a limited liability company is required to designate and maintain
under section 322C.0113; or
new text end

new text begin (2) the office that a foreign limited liability company is required to designate and
maintain under sections 5.36 and 322C.0802.
new text end

new text begin Subd. 25. new text end

new text begin Sign. new text end

new text begin "Sign" means, with the present intent to authenticate or adopt
a record:
new text end

new text begin (1) to execute or adopt a tangible symbol; or
new text end

new text begin (2) to attach to or logically associate with the record an electronic symbol, sound,
or process.
new text end

new text begin Subd. 26. new text end

new text begin State. new text end

new text begin "State" means a state of the United States, the District of Columbia,
Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject
to the jurisdiction of the United States.
new text end

new text begin Subd. 27. new text end

new text begin Transfer. new text end

new text begin "Transfer" includes an assignment, conveyance, deed, bill of
sale, lease, mortgage, security interest, encumbrance, gift, and transfer by operation of law.
new text end

new text begin Subd. 28. new text end

new text begin Transferable interest. new text end

new text begin "Transferable interest" means the right, as
originally associated with a person's capacity as a member, to receive distributions from a
limited liability company in accordance with the operating agreement, whether or not the
person remains a member or continues to own any part of the right.
new text end

new text begin Subd. 29. new text end

new text begin Transferee. new text end

new text begin "Transferee" means a person to which all or part of a
transferable interest has been transferred, whether or not the transferor is a member.
new text end

Sec. 3.

new text begin [322C.0103] KNOWLEDGE; NOTICE.
new text end

new text begin Subdivision 1. new text end

new text begin Knowledge of facts. new text end

new text begin A person knows a fact when the person:
new text end

new text begin (1) has actual knowledge of it; or
new text end

new text begin (2) is deemed to know it under subdivision 4, clause (1), or law other than this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Notice of facts. new text end

new text begin A person has notice of a fact when the person:
new text end

new text begin (1) has reason to know the fact from all of the facts known to the person at the
time in question; or
new text end

new text begin (2) is deemed to have notice of the fact under subdivision 4, clause (2).
new text end

new text begin Subd. 3. new text end

new text begin Notification of facts. new text end

new text begin A person notifies another of a fact by taking steps
reasonably required to inform the other person in ordinary course, whether or not the
other person knows the fact.
new text end

new text begin Subd. 4. new text end

new text begin Constructive notice. new text end

new text begin A person that is not a member is deemed:
new text end

new text begin (1) to know of a limitation on authority to transfer real property as provided in
section 322C.0302, subdivision 7; and
new text end

new text begin (2) to have notice of a limited liability company's:
new text end

new text begin (i) dissolution, 90 days after a statement of dissolution under section 322C.0702,
subdivision 2, clause (2)(i), becomes effective;
new text end

new text begin (ii) termination, 90 days after a statement of termination under section 322C.0702,
subdivision 2, clause (2)(vi), becomes effective; and
new text end

new text begin (iii) merger, conversion, or domestication, 90 days after articles of merger,
conversion, or domestication under sections 322C.1001 to 322C.1015 become effective.
new text end

Sec. 4.

new text begin [322C.0104] NATURE, PURPOSE, AND DURATION OF LIMITED
LIABILITY COMPANY.
new text end

new text begin Subdivision 1. new text end

new text begin Separate entity. new text end

new text begin A limited liability company is an entity distinct
from its members.
new text end

new text begin Subd. 2. new text end

new text begin Permitted purposes. new text end

new text begin Except for a nonprofit limited liability company
subject to section 322C.1101, which must comply with that section, a limited liability
company may have any lawful purpose.
new text end

new text begin Subd. 3. new text end

new text begin Duration. new text end

new text begin A limited liability company has perpetual duration.
new text end

Sec. 5.

new text begin [322C.0105] POWERS.
new text end

new text begin Subdivision 1. new text end

new text begin Powers generally. new text end

new text begin Except as provided in subdivision 2, a limited
liability company has the capacity to sue and be sued in its own name and the power to do
all things necessary or convenient to carry on its activities.
new text end

new text begin Subd. 2. new text end

new text begin Shelf LLC. new text end

new text begin Until a limited liability company has or has had at least one
member, the company lacks the capacity to do any act or carry on any activity except:
new text end

new text begin (1) delivering to the secretary of state for filing a statement of change under section
322C.0114, an amendment to the certificate under section 322C.0202, a statement of
correction under section 322C.0206, an annual report under section 322C.0208, and a
statement of termination under section 322C.0702;
new text end

new text begin (2) admitting a member under section 322C.0401; and
new text end

new text begin (3) dissolving under section 322C.0701.
new text end

new text begin Subd. 3. new text end

new text begin Ratification. new text end

new text begin A limited liability company that has or has had at least one
member may ratify an act or activity that occurred when the company lacked capacity
under subdivision 2.
new text end

Sec. 6.

new text begin [322C.0106] GOVERNING LAW.
new text end

new text begin The law of this state governs:
new text end

new text begin (1) the internal affairs of a limited liability company; and
new text end

new text begin (2) the liability of a member as member, a manager as manager, and a governor as
governor, for the debts, obligations, or other liabilities of a limited liability company.
new text end

Sec. 7.

new text begin [322C.0107] SUPPLEMENTAL PRINCIPLES OF LAW.
new text end

new text begin Unless displaced by particular provisions of this chapter, the principles of law and
equity supplement this chapter.
new text end

Sec. 8.

new text begin [322C.0108] LIMITED LIABILITY COMPANY NAME.
new text end

new text begin Subdivision 1. new text end

new text begin Requirements and prohibitions. new text end

new text begin The limited liability company
name must:
new text end

new text begin (1) be in the English language or in any other language expressed in English letters
or characters;
new text end

new text begin (2) contain the words "limited liability company," or must contain the abbreviation
"LLC" or, in the case of a limited liability company that is a professional firm subject to
chapter 319B, must meet the requirements of section 319B.05 applicable to a limited
liability company;
new text end

new text begin (3) not contain the word "corporation" or "incorporated" and must not contain the
abbreviation of either or both of these words;
new text end

new text begin (4) not contain a word or phrase that indicates or implies that it is organized for a
purpose other than a permitted purpose; and
new text end

new text begin (5) be distinguishable upon the records in the Office of the Secretary of State
from the name of each domestic limited liability company, limited liability partnership,
corporation, and limited partnership, whether profit or nonprofit, and each foreign limited
liability company, limited liability partnership, corporation, and limited partnership on
file, authorized or registered to do business in this state at the time of filing, whether profit
or nonprofit, and each name the right to which is, at the time of organization, reserved as
provided for in sections 5.35, 302A.117, 317A.117, 321.0109, 322B.125, 322C.0109, or
333.001 to 333.54, unless there is filed with the articles of organization one of the following:
new text end

new text begin (i) the written consent of the domestic limited liability company, limited liability
partnership, corporation, or limited partnership or the foreign limited liability company,
limited liability partnership, corporation, or limited partnership authorized or registered to
do business in this state or the holder of a reserved name or a name filed by or registered
with the secretary of state under sections 333.001 to 333.54 having a name that is not
distinguishable;
new text end

new text begin (ii) a certified copy of a final decree of a court in this state establishing the prior right
of the applicant to the use of the name in this state; or
new text end

new text begin (iii) the applicant's affidavit that the domestic or foreign limited liability company,
domestic or foreign corporation, or domestic or foreign limited partnership with the
name that is not distinguishable has been organized, incorporated, or on file in this
state for at least three years prior to the affidavit, if it is a domestic limited liability
company, corporation, or limited partnership, or has been authorized or registered to
do business in this state for at least three years prior to the affidavit, if it is a foreign
limited liability company, corporation, or limited partnership, or that the holder of a name
filed or registered with the secretary of state under sections 333.001 to 333.54 filed
or registered that name at least three years prior to the affidavit, that the domestic or
foreign limited liability company, domestic or foreign corporation, or domestic or foreign
limited partnership or holder has not during the three-year period before the affidavit filed
any document with the secretary of state; that the applicant has mailed written notice
to the domestic or foreign limited liability company, domestic or foreign corporation,
or domestic or foreign limited partnership or the holder of a name filed or registered
with the secretary of state under sections 333.001 to 333.54 by certified mail, return
receipt requested, properly addressed to the registered office of the domestic or foreign
limited liability company or domestic or foreign corporation or in care of the agent of the
domestic or foreign limited partnership, or the address of the holder of a name filed or
registered with the secretary of state under sections 333.001 to 333.54, shown in the
records of the secretary of state, stating that the applicant intends to use a name that is
not distinguishable and the notice has been returned to the applicant as undeliverable to
the addressee of the domestic or foreign limited liability company, domestic or foreign
corporation, or domestic or foreign limited partnership or holder of a name filed or
registered with the secretary of state under sections 333.001 to 333.54; that the applicant,
after diligent inquiry, has been unable to find any telephone listing for the domestic or
foreign limited liability company, domestic or foreign corporation, or domestic or foreign
limited partnership with the name that is not distinguishable in the county in which is
located the registered office of the domestic or foreign limited liability company, domestic
or foreign corporation, or domestic or foreign limited partnership shown in the records of
the secretary of state or has been unable to find any telephone listing for the holder of a
name filed or registered with the secretary of state under sections 333.001 to 333.54
in the county in which is located the address of the holder shown in the records of the
secretary of state; and that the applicant has no knowledge that the domestic or foreign
limited liability company, domestic or foreign corporation, or domestic or foreign limited
partnership or holder of a name filed or registered with the secretary of state under sections
333.001 to 333.54 is currently engaged in business in this state.
new text end

new text begin Subd. 2. new text end

new text begin Determination. new text end

new text begin The secretary of state shall determine whether a name is
"distinguishable" from another name for purposes of this section and section 322C.0109.
new text end

new text begin Subd. 3. new text end

new text begin Other laws affecting use of names. new text end

new text begin This section and section 322C.0109
do not abrogate or limit the law of unfair competition or unfair practices, or sections
333.001 to 333.54, or the laws of the United States with respect to the right to acquire
and protect copyrights, trade names, trademarks, service names, service marks, or any
other rights to the exclusive use of names or symbols, or derogate the common law or
the principles of equity.
new text end

new text begin Subd. 4. new text end

new text begin Use of name by surviving or successor organization. new text end

new text begin A limited
liability company that is the surviving organization in a merger with one or more other
organizations, or that is the continuation of an organization following a conversion, or that
is organized by the reorganization of one or more organizations, or that acquires by sale,
lease, or other disposition to or exchange with an organization all or substantially all of the
assets of another organization, including its name, may have the same name as that used in
this state by any of the other organizations, if the other organization whose name is sought to
be used was organized under the laws of, or is authorized to transact business in, this state.
new text end

new text begin Subd. 5. new text end

new text begin Injunction. new text end

new text begin The use of a name by a limited liability company in violation
of this section does not affect or vitiate its limited liability company existence, but a court
in this state may, upon application of the state or of a person interested or affected, enjoin
the limited liability company from doing business under a name assumed in violation of
this section, although its articles of organization may have been filed with the secretary of
state and articles of organization issued.
new text end

Sec. 9.

new text begin [322C.0109] RESERVED NAME.
new text end

new text begin Subdivision 1. new text end

new text begin Procedure. new text end

new text begin A person may reserve the exclusive use of the name of
a limited liability company, including an alternate name for a foreign limited liability
company, by filing an application with the secretary of state. The application must state
the name and address of the applicant and the name proposed to be reserved. If the
secretary of state finds that the name applied for is available, it must be reserved for the
applicant's exclusive use for a one-year period.
new text end

new text begin Subd. 2. new text end

new text begin Transfer. new text end

new text begin The owner of a name reserved for a limited liability company
may transfer the reservation to another person by filing with the secretary of state for filing
a signed notice of the transfer which states the name and address of the transferee.
new text end

Sec. 10.

new text begin [322C.0110] OPERATING AGREEMENT; SCOPE, FUNCTION, AND
LIMITATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Operating agreement. new text end

new text begin Except as otherwise provided in subdivisions
2 and 3, the operating agreement governs:
new text end

new text begin (1) relations among the members as members and between the members and the
limited liability company;
new text end

new text begin (2) the rights and duties under this chapter of a person in the capacity of manager or
governor;
new text end

new text begin (3) the activities of the company and the conduct of those activities; and
new text end

new text begin (4) the means and conditions for amending the operating agreement.
new text end

new text begin Subd. 2. new text end

new text begin Default rules supplementing operating agreement. new text end

new text begin To the extent the
operating agreement does not otherwise provide for a matter described in subdivision 1,
this chapter governs the matter.
new text end

new text begin Subd. 3. new text end

new text begin Restrictions. new text end

new text begin An operating agreement may not:
new text end

new text begin (1) vary a limited liability company's capacity under section 322C.0105 to sue and
be sued in its own name;
new text end

new text begin (2) vary the law applicable under section 322C.0106;
new text end

new text begin (3) vary the power of the court under section 322C.0204;
new text end

new text begin (4) subject to subdivisions 4 to 7, eliminate the duty of loyalty, the duty of care, or
any other fiduciary duty;
new text end

new text begin (5) subject to subdivisions 4 to 7, eliminate the contractual obligation of good faith
and fair dealing under section 322C.0409, subdivision 4;
new text end

new text begin (6) unreasonably restrict the duties and rights stated in section 322C.0410;
new text end

new text begin (7) vary the power of a court to decree dissolution in the circumstances specified
in section 322C.0701, subdivision 1, clauses (4) and (5);
new text end

new text begin (8) vary the requirement to wind up a limited liability company's business as
specified in section 322C.0702, subdivisions 1 and 2, clause (1);
new text end

new text begin (9) unreasonably restrict the right of a member to maintain an action under sections
322C.0901 to 322C.0906;
new text end

new text begin (10) restrict the right to approve a merger, conversion, or domestication under
section 322C.1015 to a member that will have personal liability with respect to a surviving,
converted, or domesticated organization; or
new text end

new text begin (11) except as otherwise provided in section 322C.0112, subdivision 2, restrict the
rights under this chapter of a person other than a member, manager, or governor.
new text end

new text begin Subd. 4. new text end

new text begin Provisions particularly but not exclusively authorized. new text end

new text begin If not manifestly
unreasonable, and without limiting the terms that may be included in an operating
agreement, the operating agreement may:
new text end

new text begin (1) restrict or eliminate the duty:
new text end

new text begin (i) as required in section 322C.0409, subdivisions 2, clause (1), and 7, to account to
the limited liability company and to hold as trustee for it any property, profit, or benefit
derived by the member in the conduct or winding up of the company's business, from a
use by the member of the company's property, or from the appropriation of a limited
liability company opportunity;
new text end

new text begin (ii) as required in section 322C.0409, subdivisions 2, clause (2), and 7, to refrain
from dealing with the company in the conduct or winding up of the company's business as
or on behalf of a party having an interest adverse to the company; and
new text end

new text begin (iii) as required by section 322C.0409, subdivisions 2, clause (3), and 7, to refrain
from competing with the company in the conduct of the company's business before the
dissolution of the company;
new text end

new text begin (2) identify specific types or categories of activities that do not violate the duty
of loyalty;
new text end

new text begin (3) alter the duty of care, except to authorize intentional misconduct or knowing
violation of law;
new text end

new text begin (4) alter any other fiduciary duty, including eliminating particular aspects of that
duty; and
new text end

new text begin (5) prescribe the standards by which to measure the performance of the contractual
obligation of good faith and fair dealing under section 322C.0409, subdivision 4.
new text end

new text begin Subd. 5. new text end

new text begin Duty of loyalty, authorization and ratification of otherwise violative
conduct. new text end

new text begin The operating agreement may specify the method by which a specific act or
transaction that would otherwise violate the duty of loyalty may be authorized or ratified by
one or more disinterested and independent persons after full disclosure of all material facts.
new text end

new text begin Subd. 6. new text end

new text begin Eliminating fiduciary duty when responsibility eliminated. new text end

new text begin To the extent
the operating agreement of a member-managed limited liability company expressly relieves
a member of a responsibility that the member would otherwise have under this chapter and
imposes the responsibility on one or more other members, the operating agreement may,
to the benefit of the member that the operating agreement relieves of the responsibility,
also eliminate or limit any fiduciary duty that would have pertained to the responsibility.
new text end

new text begin Subd. 7. new text end

new text begin Indemnification and exculpation. new text end

new text begin The operating agreement may alter or
eliminate the indemnification for a member, manager, or governor provided by section
322C.0408, subdivision 1, and may eliminate or limit a member's, manager's, or governor's
liability to the limited liability company and members for money damages, except for:
new text end

new text begin (1) breach of the duty of loyalty;
new text end

new text begin (2) a financial benefit received by the member or manager to which the member or
manager is not entitled;
new text end

new text begin (3) a breach of a duty under section 322C.0406;
new text end

new text begin (4) intentional infliction of harm on the company or a member; or
new text end

new text begin (5) an intentional violation of criminal law.
new text end

new text begin Subd. 8. new text end

new text begin Determining whether term is manifestly unreasonable. new text end

new text begin The court shall
decide any claim under subdivision 4 that a term of an operating agreement is manifestly
unreasonable. The court:
new text end

new text begin (1) shall make its determination as of the time the challenged term became part of
the operating agreement and by considering only circumstances existing at that time; and
new text end

new text begin (2) may invalidate the term only if, in light of the purposes and activities of the
limited liability company, it is readily apparent that:
new text end

new text begin (i) the objective of the term is unreasonable; or
new text end

new text begin (ii) the term is an unreasonable means to achieve the provision's objective.
new text end

Sec. 11.

new text begin [322C.0111] OPERATING AGREEMENT; EFFECT ON LIMITED
LIABILITY COMPANY AND PERSONS BECOMING MEMBERS;
PREFORMATION AGREEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Company's assent not required. new text end

new text begin A limited liability company is
bound by and may enforce the operating agreement, whether or not the company has itself
manifested assent to the operating agreement.
new text end

new text begin Subd. 2. new text end

new text begin Deemed assent by all members. new text end

new text begin A person that becomes a member of a
limited liability company is deemed to assent to the operating agreement.
new text end

new text begin Subd. 3. new text end

new text begin Preformation agreement. new text end

new text begin Two or more persons intending to become the
initial members of a limited liability company may make an agreement providing that
upon the formation of the company the agreement will become the operating agreement.
One person intending to become the initial member of a limited liability company may
assent to terms providing that upon the formation of the company the terms will become
the operating agreement.
new text end

Sec. 12.

new text begin [322C.0112] OPERATING AGREEMENT; EFFECT ON THIRD
PARTIES AND RELATIONSHIP TO RECORDS EFFECTIVE ON BEHALF OF
LIMITED LIABILITY COMPANY.
new text end

new text begin Subdivision 1. new text end

new text begin Approval of third party. new text end

new text begin An operating agreement may specify
that its amendment requires the approval of a person that is not a party to the operating
agreement or the satisfaction of a condition. An amendment is ineffective if its adoption
does not include the required approval or satisfy the specified condition.
new text end

new text begin Subd. 2. new text end

new text begin Transferees and dissociated members. new text end

new text begin The obligations of a limited
liability company and its members to a person in the person's capacity as a transferee or
dissociated member are governed by the operating agreement. Subject only to any court
order issued under section 322C.0503, subdivision 2, clause (2), to effectuate a charging
order, an amendment to the operating agreement made after a person becomes a transferee
or dissociated member is effective with regard to any debt, obligation, or other liability of
the limited liability company or its members to the person in the person's capacity as a
transferee or dissociated member.
new text end

new text begin Subd. 3. new text end

new text begin Ineffective provisions. new text end

new text begin If a record that has been delivered by a limited
liability company to the secretary of state for filing and has become effective under
this chapter contains a provision that would be ineffective under section 322C.0110,
subdivision 3, if contained in the operating agreement, the provision is likewise ineffective
in the record.
new text end

new text begin Subd. 4. new text end

new text begin Conflicting provisions. new text end

new text begin Subject to subdivision 3, if a record that has been
delivered by a limited liability company to the secretary of state for filing and has become
effective under this chapter conflicts with a provision of the operating agreement:
new text end

new text begin (1) the operating agreement prevails as to members, dissociated members,
transferees, managers, and governors; and
new text end

new text begin (2) the record prevails as to other persons to the extent they reasonably rely on
the record.
new text end

Sec. 13.

new text begin [322C.0113] OFFICE AND AGENT FOR SERVICE OF PROCESS.
new text end

new text begin Every limited liability company shall have a registered office and may have a
registered agent, in the manner prescribed by section 5.36.
new text end

Sec. 14.

new text begin [322C.0114] CHANGE OF REGISTERED OFFICE OR AGENT FOR
SERVICE OF PROCESS.
new text end

new text begin Every limited liability company may change its registered office or change its
registered agent, and the agent may resign or change its business address or name, in the
manner prescribed by section 5.36.
new text end

Sec. 15.

new text begin [322C.0115] RESIGNATION OF AGENT FOR SERVICE OF PROCESS.
new text end

new text begin Every limited liability company registered agent may resign in the manner
prescribed by section 5.36.
new text end

Sec. 16.

new text begin [322C.0116] SERVICE OF PROCESS ON LIMITED LIABILITY
COMPANY.
new text end

new text begin Subdivision 1. new text end

new text begin Agent. new text end

new text begin An agent for service of process appointed by a limited liability
company or foreign limited liability company is an agent of the company for service of
any process, notice, or demand required or permitted by law to be served on the company.
new text end

new text begin Subd. 2. new text end

new text begin Secretary of state. new text end

new text begin If a limited liability company or foreign limited
liability company does not appoint or maintain an agent for service of process in this
state or the agent for service of process cannot with reasonable diligence be found at
the agent's street address, the secretary of state is an agent of the company upon whom
process, notice, or demand may be served.
new text end

new text begin Subd. 3. new text end

new text begin Record of service. new text end

new text begin A process, notice, or demand required or permitted by
law to be served upon a company may be served upon the secretary of state as provided
in section 5.25.
new text end

new text begin Subd. 4. new text end

new text begin Other law not affected. new text end

new text begin This section does not affect the right to serve
process, notice, or demand in any other manner provided by law.
new text end

Sec. 17.

new text begin [322C.0117] LEGAL RECOGNITION OF ELECTRONIC RECORDS
AND SIGNATURES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the words, terms, and
phrases defined in this subdivision have the meanings given them.
new text end

new text begin (b) "Electronic" means relating to technology having electrical, digital, magnetic,
wireless, optical, electromagnetic, or similar capabilities.
new text end

new text begin (c) "Electronic record" means a record created, generated, sent, communicated,
received, or stored by electronic means.
new text end

new text begin (d) "Electronic signature" means an electronic sound, symbol, or process attached
to or logically associated with a record and executed or adopted by a person with the
intent to sign the record.
new text end

new text begin Subd. 2. new text end

new text begin Electronic records and signatures. new text end

new text begin For purposes of this chapter:
new text end

new text begin (1) a record or signature may not be denied legal effect or enforceability solely
because it is in electronic form;
new text end

new text begin (2) a contract may not be denied legal effect or enforceability solely because an
electronic record was used in its formation;
new text end

new text begin (3) if a provision requires a record to be in writing, an electronic record satisfies
the requirement; and
new text end

new text begin (4) if a provision requires a signature, an electronic signature satisfies the requirement.
new text end

FORMATION; ARTICLES OF ORGANIZATION AND OTHER FILINGS

Sec. 18.

new text begin [322C.0201] FORMATION OF LIMITED LIABILITY COMPANY;
ARTICLES OF ORGANIZATION.
new text end

new text begin Subdivision 1. new text end

new text begin Organizers. new text end

new text begin One or more persons may act as organizers to form
a limited liability company by signing and filing with the secretary of state articles of
organization.
new text end

new text begin Subd. 2. new text end

new text begin Required contents of articles of organization. new text end

new text begin Articles of organization
must state:
new text end

new text begin (1) the name of the limited liability company, which must comply with section
322C.0108;
new text end

new text begin (2) the street address of the initial registered office and the name of the initial agent
for service of process of the company at the registered office; and
new text end

new text begin (3) the name and street address of each organizer.
new text end

new text begin Subd. 3. new text end

new text begin Optional contents of articles of organization. new text end

new text begin Subject to section
322C.0112, subdivision 3, articles of organization may also contain statements as to
matters other than those required by subdivision 2. However, a statement in articles of
organization is not effective as a statement of authority.
new text end

new text begin Subd. 4. new text end

new text begin Formation. new text end

new text begin (a) A limited liability company is formed when articles of
organization have been filed with the secretary of state.
new text end

new text begin (b) Except in a proceeding by this state to dissolve a limited liability company, the
filing of the articles of organization by the secretary of state is conclusive proof that the
organizer satisfied all conditions to the formation of a limited liability company.
new text end

new text begin (c) The formation of a limited liability company does not by itself cause any person
to become a member. However, this chapter does not preclude an agreement, made before
or after formation of a limited liability company, which provides that one or more persons
will become members, or acknowledging that one or more persons became members,
upon or otherwise in connection with the formation of the limited liability company.
new text end

Sec. 19.

new text begin [322C.0202] AMENDMENT OR RESTATEMENT OF ARTICLES OF
ORGANIZATION.
new text end

new text begin Subdivision 1. new text end

new text begin Timing of amendment. new text end

new text begin Articles of organization may be amended or
restated at any time.
new text end

new text begin Subd. 2. new text end

new text begin Amendment procedure. new text end

new text begin To amend its articles of organization, a limited
liability company must file with the secretary of state an amendment stating:
new text end

new text begin (1) the name of the company;
new text end

new text begin (2) the changes the amendment makes to the articles of organization as most recently
amended or restated; and
new text end

new text begin (3) a statement that the amendment was adopted pursuant to this chapter.
new text end

new text begin Subd. 3. new text end

new text begin Restatement. new text end

new text begin To restate its articles of organization, a limited liability
company must file with the secretary of state a restatement, designated as such in its
heading, stating:
new text end

new text begin (1) in the heading or an introductory paragraph, the company's present name; and
new text end

new text begin (2) the changes the restatement makes to the articles of organization as most recently
amended or restated.
new text end

new text begin Subd. 4. new text end

new text begin Date of effectuation. new text end

new text begin Subject to sections 322C.0112, subdivision 3, and
322C.0205, subdivision 3, an amendment to or restatement of articles of organization is
effective when filed with the secretary of state.
new text end

new text begin Subd. 5. new text end

new text begin Inaccurate information. new text end

new text begin If a member of a member-managed limited
liability company, a manager of a manager-managed limited liability company, or a
governor of a board-managed limited liability company, knows that any information in
articles of organization filed with the secretary of state was inaccurate when the articles
were filed or has become inaccurate owing to changed circumstances, the member,
manager, or governor shall promptly:
new text end

new text begin (1) cause the articles to be amended; or
new text end

new text begin (2) if appropriate, file with the secretary of state a change of registered office under
section 322C.0114.
new text end

Sec. 20.

new text begin [322C.0203] SIGNING OF RECORDS TO BE FILED WITH
SECRETARY OF STATE.
new text end

new text begin Subdivision 1. new text end

new text begin Signing requirements. new text end

new text begin A record filed with the secretary of state
pursuant to this chapter must be signed as follows:
new text end

new text begin (1) Except as otherwise provided in clauses (2) through (4), a record signed on behalf
of a limited liability company must be signed by a person authorized by the company.
new text end

new text begin (2) A limited liability company's initial articles of organization must be signed by
at least one person acting as an organizer.
new text end

new text begin (3) A notice under section 322C.0201, subdivision 5, clause (1), must be signed
by an organizer.
new text end

new text begin (4) A record filed on behalf of a dissolved limited liability company that has no
members must be signed by the person winding up the company's activities under section
322C.0702, subdivision 3, or a person appointed under section 322C.0702, subdivision 4,
to wind up those activities.
new text end

new text begin (5) A statement of denial by a person under section 322C.0303 must be signed
by that person.
new text end

new text begin (6) Any other record must be signed by the person on whose behalf the record is
filed with the secretary of state.
new text end

new text begin Subd. 2. new text end

new text begin Signing by agent. new text end

new text begin Any record filed under this chapter may be signed by an
agent pursuant to section 5.15.
new text end

Sec. 21.

new text begin [322C.0204] SIGNING AND FILING PURSUANT TO JUDICIAL
ORDER.
new text end

new text begin Subdivision 1. new text end

new text begin Process. new text end

new text begin If a person required by this chapter to sign a record or file
a record with the secretary of state does not do so, any other person that is aggrieved
may petition the appropriate court to order:
new text end

new text begin (1) the person to sign the record;
new text end

new text begin (2) the person to file the record with the secretary of state for filing; or
new text end

new text begin (3) the secretary of state to file the record unsigned.
new text end

new text begin Subd. 2. new text end

new text begin Joinder of limited liability company. new text end

new text begin If a petitioner under subdivision
1 is not the limited liability company or foreign limited liability company to which the
record pertains, the petitioner shall make the company a party to the action.
new text end

Sec. 22.

new text begin [322C.0205] FILING OF RECORDS WITH SECRETARY OF STATE;
EFFECTIVE TIME AND DATE.
new text end

new text begin Subdivision 1. new text end

new text begin Delivery requirements. new text end

new text begin A record authorized or required to be filed
with the secretary of state under this chapter must be captioned to describe the record's
purpose, be in a medium permitted by the secretary of state, and be delivered to the
secretary of state. If the filing fees have been paid, unless the secretary of state determines
that a record does not comply with the filing requirements of this chapter, the secretary
of state shall file the record and:
new text end

new text begin (1) for a statement of denial under section 322C.0303, send an image of the filed
statement and a receipt for the fees to the person on whose behalf the statement was
delivered for filing and to the limited liability company; and
new text end

new text begin (2) for all other records, send an image of the filed record to the person on whose
behalf the record was filed.
new text end

new text begin Subd. 2. new text end

new text begin Certified copy to requester. new text end

new text begin Upon request and payment of the requisite
fee, the secretary of state shall send to the requester a certified copy of a requested record.
new text end

new text begin Subd. 3. new text end

new text begin Effective date and time. new text end

new text begin Except as otherwise provided in sections
322C.0115, 322C.0201, subdivision 4, paragraph (a), and 322C.0206, a record filed with
the secretary of state under this chapter may specify an effective time and a delayed
effective date. Subject to sections 322C.0115, 322C.0201, subdivision 4, paragraph (a),
and 322C.0206, a record filed with the secretary of state is effective:
new text end

new text begin (1) if the record does not specify either an effective time or a delayed effective date,
on the date and at the time the record is filed as evidenced by the secretary of state's
endorsement of the date and time on the record;
new text end

new text begin (2) if the record specifies an effective time but not a delayed effective date, on the
date the record is filed at the time specified in the record;
new text end

new text begin (3) if the record specifies a delayed effective date but not an effective time, at 11:59
p.m. on the earlier of:
new text end

new text begin (i) the specified date; or
new text end

new text begin (ii) the 90th day after the record is filed; or
new text end

new text begin (4) if the record specifies an effective time and a delayed effective date, at the
specified time on the earlier of:
new text end

new text begin (i) the specified date; or
new text end

new text begin (ii) the 90th day after the record is filed.
new text end

Sec. 23.

new text begin [322C.0206] LIABILITY FOR INACCURATE INFORMATION IN
FILED RECORD.
new text end

new text begin Subdivision 1. new text end

new text begin Persons liable. new text end

new text begin If a record filed with the secretary of state under this
chapter contains inaccurate information, a person that suffers a loss by reliance on the
information may recover damages for the loss from:
new text end

new text begin (1) a person that signed the record, or caused another to sign it on the person's
behalf, and knew the information to be inaccurate at the time the record was signed; and
new text end

new text begin (2) subject to subdivision 2, a member of a member-managed limited liability
company or the manager of a manager-managed limited liability company, if:
new text end

new text begin (i) the record was filed with the secretary of state on behalf of the company; and
new text end

new text begin (ii) the member or manager had notice of the inaccuracy for a reasonably sufficient
time before the information was relied upon so that, before the reliance, the member or
manager reasonably could have:
new text end

new text begin (A) effected an amendment under section 322C.0202;
new text end

new text begin (B) filed a petition under section 322C.0204; or
new text end

new text begin (C) filed with the secretary of state a statement under section 5.36, subdivision 3, or
articles of correction under section 5.16.
new text end

new text begin Subd. 2. new text end

new text begin Excepted members. new text end

new text begin To the extent that the operating agreement of a
member-managed limited liability company expressly relieves a member of responsibility
for maintaining the accuracy of information contained in records filed with the secretary
of state under this chapter and imposes that responsibility on one or more other members,
the liability stated in subdivision 1, clause (2), applies to those other members and not to
the member that the operating agreement relieves of the responsibility.
new text end

new text begin Subd. 3. new text end

new text begin Penalty of perjury. new text end

new text begin An individual who signs a record authorized or
required to be filed under this chapter affirms under penalty of perjury that the information
stated in the record is accurate.
new text end

Sec. 24.

new text begin [322C.0207] CERTIFICATE OF EXISTENCE OR AUTHORIZATION.
new text end

new text begin The secretary of state, upon request and payment of the requisite fee, shall furnish to
any person a certificate of existence for a limited liability company pursuant to section 5.12.
new text end

Sec. 25.

new text begin [322C.0208] ANNUAL REPORT FOR SECRETARY OF STATE.
new text end

new text begin (a) The secretary of state may send annually to each limited liability company,
using the information provided by the limited liability company and foreign limited
liability company pursuant to section 5.002 or 5.34 or the articles of organization, a notice
announcing the need to file the annual renewal and informing the limited liability company
that the annual renewal may be filed online and that paper filings may also be made, and
informing the limited liability company that failing to file the annual renewal will result
in an administrative termination of the limited liability company or the revocation of
the authority of the limited liability company and foreign limited liability company to
do business in Minnesota.
new text end

new text begin (b) Each calendar year beginning in the calendar year following the calendar year in
which a limited liability company and foreign limited liability company files articles of
organization, a limited liability company and foreign limited liability company must file
with the secretary of state by December 31 of each calendar year a renewal containing the
items required by section 5.34.
new text end

RELATIONS OF MEMBERS, MANAGERS, AND GOVERNORS TO PERSONS
DEALING WITH LIMITED LIABILITY COMPANY

Sec. 26.

new text begin [322C.0301] NO AGENCY POWER OF MEMBER AS MEMBER.
new text end

new text begin Subdivision 1. new text end

new text begin No automatic agency. new text end

new text begin A member is not an agent of a limited liability
company solely by reason of being a member.
new text end

new text begin Subd. 2. new text end

new text begin Other law not affected. new text end

new text begin A person's status as a member does not prevent or
restrict law other than this chapter from imposing liability on a limited liability company
because of the person's conduct.
new text end

Sec. 27.

new text begin [322C.0302] STATEMENT OF AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Filing of statement with secretary of state; contents. new text end

new text begin A limited
liability company may file with the secretary of state a statement of authority. The
statement:
new text end

new text begin (1) must include the name of the company and the street address of its registered
office;
new text end

new text begin (2) with respect to any position that exists in or with respect to the company, may
state the authority, or limitations on the authority, of all persons holding the position to:
new text end

new text begin (i) execute an instrument transferring real property held in the name of the company;
or
new text end

new text begin (ii) enter into other transactions on behalf of, or otherwise act for or bind, the
company; and
new text end

new text begin (3) may state the authority, or limitations on the authority, of a specific person to:
new text end

new text begin (i) execute an instrument transferring real property held in the name of the company;
or
new text end

new text begin (ii) enter into other transactions on behalf of, or otherwise act for or bind, the
company.
new text end

new text begin Subd. 2. new text end

new text begin Amendment or cancellation of statement. new text end

new text begin To amend or cancel
a statement of authority filed with the secretary of state under section 322C.0205,
subdivision 1, a limited liability company must file with the secretary of state an
amendment or cancellation stating:
new text end

new text begin (1) the name of the company;
new text end

new text begin (2) the street address of the company's registered office;
new text end

new text begin (3) the caption of the statement being amended or canceled and the date the
statement being affected became effective; and
new text end

new text begin (4) the contents of the amendment or a declaration that the statement being affected
is canceled.
new text end

new text begin Subd. 3. new text end

new text begin Statements effective only as to nonmembers. new text end

new text begin A statement of authority
affects only the power of a person to bind a limited liability company to persons that are
not members.
new text end

new text begin Subd. 4. new text end

new text begin Limitations of authority. new text end

new text begin Subject to subdivision 3 and section 322C.0103,
subdivision 4, and except as otherwise provided in subdivisions 6, 7, and 8, a limitation on
the authority of a person or a position contained in an effective statement of authority is
not by itself evidence of knowledge or notice of the limitation by any person.
new text end

new text begin Subd. 5. new text end

new text begin Authority to transfer property other than real property. new text end

new text begin Subject to
subdivision 3, a grant of authority not pertaining to transfers of real property and contained
in an effective statement of authority is conclusive in favor of a person that gives value in
reliance on the grant, except to the extent that when the person gives value:
new text end

new text begin (1) the person has knowledge to the contrary;
new text end

new text begin (2) the statement has been canceled or restrictively amended under subdivision 2; or
new text end

new text begin (3) a limitation on the grant is contained in another statement of authority that
became effective after the statement containing the grant became effective.
new text end

new text begin Subd. 6. new text end

new text begin Authority to transfer real property. new text end

new text begin Subject to subdivision 3, an
effective statement of authority that grants authority to transfer real property held in the
name of the limited liability company, whether or not a certified copy of the statement is
recorded in the real property records, is conclusive in favor of a person that gives value in
reliance on the grant without knowledge to the contrary, except to the extent that when
the person gives value:
new text end

new text begin (1) the statement has been canceled or restrictively amended under subdivision 2
and a certified copy of the cancellation or restrictive amendment has been recorded in the
real property records; or
new text end

new text begin (2) a limitation on the grant is contained in another statement of authority that
became effective after the statement containing the grant became effective and a certified
copy of the later-effective statement is recorded in the real property records.
new text end

new text begin Subd. 7. new text end

new text begin Recording; constructive notice regarding real property. new text end

new text begin Subject to
subdivision 3, if a certified copy of an effective statement containing a limitation on
the authority to transfer real property held in the name of a limited liability company is
recorded in the real property records, all persons are deemed to know of the limitation.
new text end

new text begin Subd. 8. new text end

new text begin Statements of dissolution or termination. new text end

new text begin Subject to subdivision 9, an
effective statement of dissolution or termination is a cancellation of any filed statement
of authority for the purposes of subdivision 6 and is a limitation on authority for the
purposes of subdivision 7.
new text end

new text begin Subd. 9. new text end

new text begin Postdissolution statements. new text end

new text begin After a statement of dissolution becomes
effective, a limited liability company may file with the secretary of state and, if
appropriate, may record in the real property records, a statement of authority that is
designated as a postdissolution statement of authority. The statement operates as provided
in subdivisions 6 and 7.
new text end

new text begin Subd. 10. new text end

new text begin Statement of denial. new text end

new text begin An effective statement of denial operates as a
restrictive amendment under this section and may be recorded by certified copy in the real
property records for the purposes of subdivision 6, clause (1).
new text end

Sec. 28.

new text begin [322C.0303] STATEMENT OF DENIAL.
new text end

new text begin A person named in a filed statement of authority granting that person authority may
file with the secretary of state for filing a statement of denial that:
new text end

new text begin (1) provides the name of the limited liability company and the caption of the
statement of authority to which the statement of denial pertains; and
new text end

new text begin (2) denies the grant of authority.
new text end

Sec. 29.

new text begin [322C.0304] LIABILITY OF MEMBERS, MANAGERS, AND
GOVERNORS.
new text end

new text begin Subdivision 1. new text end

new text begin Liability shield for members, managers, and governors. new text end

new text begin The
debts, obligations, or other liabilities of a limited liability company, whether arising in
contract, tort, or otherwise:
new text end

new text begin (1) are solely the debts, obligations, or other liabilities of the company; and
new text end

new text begin (2) do not become the debts, obligations, or other liabilities of a member, manager,
or governor solely by reason of the member acting as a member, manager acting as a
manager, or governor acting as a governor.
new text end

new text begin Subd. 2. new text end

new text begin Effect of lack of formalities. new text end

new text begin The failure of a limited liability company to
observe formalities relating exclusively to the management of its internal affairs is not
a ground for imposing liability on the members, managers, or governors for the debts,
obligations, or other liabilities of the company.
new text end

new text begin Subd. 3. new text end

new text begin Piercing the veil. new text end

new text begin Except as relates to the failure of a limited liability
company to observe any formalities relating exclusively to the management of its internal
affairs, the case law that states the conditions and circumstances under which the corporate
veil of a corporation may be pierced under Minnesota law also applies to limited liability
companies.
new text end

RELATIONS OF MEMBERS TO EACH OTHER AND TO LIMITED
LIABILITY COMPANY

Sec. 30.

new text begin [322C.0401] BECOMING A MEMBER.
new text end

new text begin Subdivision 1. new text end

new text begin One initial member. new text end

new text begin If a limited liability company is to have only
one member upon formation, the person becomes a member as agreed by that person and
the organizer of the company. That person and the organizer may be, but need not be,
different persons. If different, the organizer acts on behalf of the initial member.
new text end

new text begin Subd. 2. new text end

new text begin Multiple initial members. new text end

new text begin If a limited liability company is to have more
than one member upon formation, those persons become members as agreed by the
persons before the formation of the company. The organizer acts on behalf of the persons
in forming the company and may be, but need not be, one of the persons.
new text end

new text begin Subd. 3. new text end

new text begin Shelf limited liability company. new text end

new text begin If a limited liability company is to have
no members upon formation, a person becomes an initial member of the limited liability
company with the consent of a majority of the organizers. The organizers may consent to
more than one person simultaneously becoming the company's initial members.
new text end

new text begin Subd. 4. new text end

new text begin Subsequent members. new text end

new text begin After a limited liability company has or has had at
least one member, a person becomes a member:
new text end

new text begin (1) as provided in the operating agreement;
new text end

new text begin (2) as the result of a transaction effective under sections 322C.1001 to 322C.1015;
new text end

new text begin (3) with the consent of all the members; or
new text end

new text begin (4) if, within 90 consecutive days after the company ceases to have any members:
new text end

new text begin (i) the last person to have been a member, or the legal representative of that person,
designates a person to become a member; and
new text end

new text begin (ii) the designated person consents to become a member.
new text end

new text begin Subd. 5. new text end

new text begin Neither transferable interest nor contribution required. new text end

new text begin A person may
become a member without acquiring a transferable interest and without making or being
obligated to make a contribution to the limited liability company.
new text end

Sec. 31.

new text begin [322C.0402] FORM OF CONTRIBUTION.
new text end

new text begin A contribution may consist of tangible or intangible property or other benefit to a
limited liability company, including money, services performed, promissory notes, other
agreements to contribute money or property, and contracts for services to be performed.
new text end

Sec. 32.

new text begin [322C.0403] LIABILITY FOR CONTRIBUTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Impracticability no excuse. new text end

new text begin A person's obligation to make a
contribution to a limited liability company is not excused by the person's death, disability,
or other inability to perform personally. If a person does not make a required contribution,
the person or the person's estate is obligated to contribute money equal to the value of the
part of the contribution which has not been made, at the option of the company.
new text end

new text begin Subd. 2. new text end

new text begin Creditor enforcement. new text end

new text begin A creditor of a limited liability company which
extends credit or otherwise acts in reliance on an obligation described in subdivision 1
may enforce the obligation.
new text end

Sec. 33.

new text begin [322C.0404] SHARING OF AND RIGHT TO DISTRIBUTIONS
BEFORE DISSOLUTION.
new text end

new text begin Subdivision 1. new text end

new text begin Equal distributions. new text end

new text begin Any distributions made by a limited liability
company before its dissolution and winding up must be in equal shares among members and
dissociated members, except to the extent necessary to comply with any transfer effective
under section 322C.0502 and any charging order in effect under section 322C.0503.
new text end

new text begin Subd. 2. new text end

new text begin Interim distributions. new text end

new text begin A person has a right to a distribution before the
dissolution and winding up of a limited liability company only if the company decides
to make an interim distribution. A person's dissociation does not entitle the person to
a distribution.
new text end

new text begin Subd. 3. new text end

new text begin Form of distributions. new text end

new text begin A person does not have a right to demand or receive
a distribution from a limited liability company in any form other than money. Except as
otherwise provided in section 322C.0707, subdivision 3, a limited liability company may
distribute an asset in kind if each part of the asset is fungible with each other part and each
person receives a percentage of the asset equal in value to the person's share of distributions.
new text end

new text begin Subd. 4. new text end

new text begin Parity with creditors. new text end

new text begin If a member or transferee becomes entitled to receive
a distribution, the member or transferee has the status of, and is entitled to all remedies
available to, a creditor of the limited liability company with respect to the distribution.
new text end

Sec. 34.

new text begin [322C.0405] LIMITATIONS ON DISTRIBUTION.
new text end

new text begin Subdivision 1. new text end

new text begin Distribution restrictions. new text end

new text begin A limited liability company may not
make a distribution if after the distribution:
new text end

new text begin (1) the company would not be able to pay its debts as they become due in the
ordinary course of the company's activities; or
new text end

new text begin (2) the company's total assets would be less than the sum of its total liabilities plus
the amount that would be needed, if the company were to be dissolved, wound up, and
terminated at the time of the distribution, to satisfy the preferential rights upon dissolution,
winding up, and termination of members whose preferential rights are superior to those of
persons receiving the distribution.
new text end

new text begin Subd. 2. new text end

new text begin Basis for decision. new text end

new text begin A limited liability company may base a determination
that a distribution is not prohibited under subdivision 1 on financial statements prepared
on the basis of accounting practices and principles that are reasonable in the circumstances
or on a fair valuation or other method that is reasonable under the circumstances.
new text end

new text begin Subd. 3. new text end

new text begin Effect of distribution. new text end

new text begin Except as otherwise provided in subdivision 6, the
effect of a distribution under subdivision 1 is measured:
new text end

new text begin (1) in the case of a distribution by purchase, redemption, or other acquisition of a
transferable interest in the company, as of the date money or other property is transferred
or debt incurred by the company; and
new text end

new text begin (2) in all other cases, as of the date:
new text end

new text begin (i) the distribution is authorized, if the payment occurs within 120 days after that
date; or
new text end

new text begin (ii) the payment is made, if the payment occurs more than 120 days after the
distribution is authorized.
new text end

new text begin Subd. 4. new text end

new text begin Equivalent to unsecured creditors. new text end

new text begin A limited liability company's
indebtedness to a member incurred by reason of a distribution made according to this
section is at parity with the company's indebtedness to its general, unsecured creditors.
new text end

new text begin Subd. 5. new text end

new text begin Exclusion from calculated indebtedness. new text end

new text begin A limited liability company's
indebtedness, including indebtedness issued in connection with or as part of a distribution,
is not a liability for purposes of subdivision 1 if the terms of the indebtedness provide that
payment of principal and interest are made only to the extent that a distribution could
be made to members under this section.
new text end

new text begin Subd. 6. new text end

new text begin Indebtedness as distribution. new text end

new text begin If indebtedness is issued as a distribution,
each payment of principal or interest on the indebtedness is treated as a distribution, the
effect of which is measured on the date the payment is made.
new text end

new text begin Subd. 7. new text end

new text begin Compensation not distribution. new text end

new text begin In subdivision 1, "distribution" does not
include amounts constituting reasonable compensation for present or past services or
reasonable payments made in the ordinary course of business under a bona fide retirement
plan or other benefits program.
new text end

Sec. 35.

new text begin [322C.0406] LIABILITY FOR IMPROPER DISTRIBUTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Personal liability for decision makers. new text end

new text begin Except as otherwise
provided in subdivision 2, if a member of a member-managed limited liability
company, manager of a manager-managed limited liability company, or governor of a
board-managed limited liability company consents to a distribution made in violation of
section 322C.0405 and in consenting to the distribution fails to comply with section
322C.0409, the member, manager, or governor is personally liable to the company for
the amount of the distribution that exceeds the amount that could have been distributed
without the violation of section 322C.0405.
new text end

new text begin Subd. 2. new text end

new text begin Liability exception. new text end

new text begin To the extent the operating agreement of a
member-managed limited liability company expressly relieves a member of the authority
and responsibility to consent to distributions and imposes that authority and responsibility
on one or more other members, the liability stated in subdivision 1 applies to the other
members and not the member that the operating agreement relieves of authority and
responsibility.
new text end

new text begin Subd. 3. new text end

new text begin Liability of recipients. new text end

new text begin A person that receives a distribution knowing that
the distribution to that person was made in violation of section 322C.0405 is personally
liable to the limited liability company but only to the extent that the distribution received
by the person exceeded the amount that could have been properly paid under section
322C.0405.
new text end

new text begin Subd. 4. new text end

new text begin Impleading. new text end

new text begin A person against which an action is commenced because the
person is liable under subdivision 1 may:
new text end

new text begin (1) implead any other person that is subject to liability under subdivision 1 and seek
to compel pro rata contribution from the person in that action to the extent of the person's
liability as provided in section 322C.0406, subdivision 1; and
new text end

new text begin (2) implead any person that received a distribution in violation of section 322C.0405
and seek to compel contribution from the person in the amount by which the distribution
received by the person exceeded the amount that could have been properly paid under
section 322C.0405.
new text end

new text begin Subd. 5. new text end

new text begin Statute of limitations. new text end

new text begin An action under this section is barred if not
commenced within two years after the distribution.
new text end

Sec. 36.

new text begin [322C.0407] MANAGEMENT OF LIMITED LIABILITY COMPANY.
new text end

new text begin Subdivision 1. new text end

new text begin Member-managed default. new text end

new text begin A limited liability company is a
member-managed limited liability company unless the operating agreement:
new text end

new text begin (1) expressly provides that:
new text end

new text begin (i) the company is or will be "manager-managed" or "board-managed";
new text end

new text begin (ii) the company is or will be "managed by managers" or "managed by a board"; or
new text end

new text begin (iii) management of the company is or will be "vested in managers" or "vested
in a board"; or
new text end

new text begin (2) includes words of similar import.
new text end

new text begin Subd. 2. new text end

new text begin Member-managed company rules. new text end

new text begin In a member-managed limited
liability company, the following rules apply:
new text end

new text begin (1) The management and conduct of the company are vested in the members.
new text end

new text begin (2) Each member has equal rights in the management and conduct of the company's
activities.
new text end

new text begin (3) A difference arising among members as to a matter in the ordinary course of the
activities of the company may be decided by a majority of the members.
new text end

new text begin (4) An act outside the ordinary course of the activities of the company may be
undertaken only with the consent of all members.
new text end

new text begin (5) The operating agreement may be amended only with the consent of all members.
new text end

new text begin Subd. 3. new text end

new text begin Manager-managed company rules. new text end

new text begin In a manager-managed limited
liability company, the following rules apply:
new text end

new text begin (1) Except as otherwise expressly provided in this chapter, any matter relating to the
activities of the company is decided exclusively by the managers.
new text end

new text begin (2) Each manager has equal rights in the management and conduct of the activities
of the company.
new text end

new text begin (3) A difference arising among managers as to a matter in the ordinary course of the
activities of the company may be decided by a majority of the managers.
new text end

new text begin (4) The consent of all members is required to:
new text end

new text begin (i) sell, lease, exchange, or otherwise dispose of all, or substantially all, of the
company's property, with or without the good will, outside the ordinary course of the
company's activities;
new text end

new text begin (ii) approve a merger, conversion, or domestication under sections 322C.1001 to
322C.1015;
new text end

new text begin (iii) undertake any other act outside the ordinary course of the company's activities;
and
new text end

new text begin (iv) amend the operating agreement.
new text end

new text begin (5) A manager may be chosen at any time by the consent of a majority of the
members and remains a manager until a successor has been chosen, unless the manager
at an earlier time resigns, is removed, or dies, or, in the case of a manager that is not
an individual, terminates. A manager may be removed at any time by the consent of a
majority of the members without notice or cause.
new text end

new text begin (6) A person need not be a member to be a manager, but the dissociation of a
member that is also a manager removes the person as a manager. If a person that is both a
manager and a member ceases to be a manager, that cessation does not by itself dissociate
the person as a member.
new text end

new text begin (7) A person's ceasing to be a manager does not discharge any debt, obligation, or
other liability to the limited liability company or members which the person incurred
while a manager.
new text end

new text begin Subd. 4. new text end

new text begin Board-managed company rules. new text end

new text begin In a board-managed limited liability
company, the following rules apply:
new text end

new text begin (1) The activities and affairs of a limited liability company are to be managed by and
under the direction of a board of governors, which shall consist of one or more governors
as determined by members holding a majority of the voting power of the members. Except
as specifically stated in this subdivision and section 322C.0204, subdivision 5:
new text end

new text begin (i) the board acts only through an act of the board;
new text end

new text begin (ii) no individual governor has any right or power to act for the limited liability
company; and
new text end

new text begin (iii) only officers, managers, or other agents designated by the board or through a
process approved by the board have the right to act for the limited liability company, and
that right extends only to the extent consistent with the terms of the designation.
new text end

new text begin (2) A governor must be a natural person. A person need not be a member to be a
governor, but the dissociation of a member who is also a governor disqualifies the person
as a governor. If a person who is both a governor and a member ceases to be a governor,
that cessation does not by itself dissociate the person as a member. A person's ceasing
to be a governor does not discharge any debt, obligation, or other liability to the limited
liability company or members which the person incurred while a governor.
new text end

new text begin (3) The method of election and any additional qualifications for governors will
be as determined by members holding a majority of the voting power of the members.
Governors are elected by a plurality of the voting power present and entitled to vote on the
election of governors at a duly called or held meeting at which a quorum is present.
new text end

new text begin (4) A member may waive notice of a meeting for the election of governors. A
member's waiver of notice under this clause is effective whether given before, at, or after
the meeting, and whether given in a record, orally, or by attendance. Attendance by a
member at a meeting for election of governors is a waiver of notice of that meeting,
except where the member objects at the beginning of the meeting to the transaction of
business because the meeting is not lawfully called or convened and does not participate
in the meeting after the objection.
new text end

new text begin (5) Once elected, a governor holds office for the term for which the governor
was elected and until a successor is elected, or until the earlier death, resignation,
disqualification, or removal of the governor. A governor may resign at any time. A
governor may be removed at any time, without cause and without advance notice, by a
majority of the voting power of all of the members. The existence of vacancies does not
affect the power of the board to function if at least one governor remains in office.
new text end

new text begin (6) When a vacancy occurs, the limited liability company shall immediately notify
all members in a record of the vacancy, stating the cause of the vacancy and the date the
notice is sent. Within 30 days of that date, the members may fill the vacancy in the same
method the members may elect governors under clause (3). If the vacancy is not filled
by the members under this clause, the vacancy may be filled by the affirmative vote of a
majority of the remaining governors, even though less than a quorum.
new text end

new text begin (7) The board shall meet from time to time as determined by members holding a
majority of the voting power of the members, at a place decided by the board. If the day
or date, time, and place of a board of governors meeting have been provided in a board
resolution, or announced at a previous meeting of the board of governors, no notice is
required. Notice of an adjourned meeting need not be given other than by announcement
at the meeting at which adjournment is taken. If notice is required for a meeting, notice
shall be made in the manner stated in clause (8).
new text end

new text begin (8) A governor may call a board meeting by giving at least ten days' notice in a
record to all governors of the date, time, and place of the meeting. The notice need not
state the purpose of the meeting. As to each governor, the notice is effective when given.
new text end

new text begin (i) Notice may be:
new text end

new text begin (A) mailed to the governor at an address designated by the person or at the last
known address of the person;
new text end

new text begin (B) deposited with a nationally recognized overnight delivery service for overnight
delivery or, if overnight delivery to the governor is not available, for delivery as promptly
as practicable to the governor at an address designated by the governor or at the last
known address of the governor;
new text end

new text begin (C) communicated to the governor orally;
new text end

new text begin (D) handed to the governor;
new text end

new text begin (E) given by facsimile communication, electronic mail, or any other form of
electronic communication, if the governor has consented in a record to receive notice
by such means; or
new text end

new text begin (F) by any other means determined by members holding a majority of the voting
power of the members.
new text end

new text begin (ii) The notice is deemed given if by:
new text end

new text begin (A) mail, when deposited in the United States mail with sufficient postage affixed;
new text end

new text begin (B) by deposit for delivery, when deposited for delivery as provided in item (i),
subitem (B), with delivery charges prepaid or otherwise provided for by the sender;
new text end

new text begin (C) facsimile communication, when directed to a telephone number at which the
governor has consented in a record to receive notice;
new text end

new text begin (D) electronic mail, when directed to an electronic mail address at which the
governor has consented in a record to receive notice; and
new text end

new text begin (E) any other form of electronic communication by which the governor has
consented in a record to receive notice, when directed to the governor.
new text end

new text begin (9) A governor may waive notice of a meeting of the board of governors. A waiver
of notice by a governor entitled to notice is effective whether given before, at, or after the
meeting, and whether given in a record, orally, or by attendance. Attendance by a governor
at a meeting is a waiver of notice of that meeting, except where the governor objects at the
beginning of the meeting to the transaction of business because the meeting is not lawfully
called or convened and does not participate in the meeting after the objection.
new text end

new text begin (10) A majority of the governors currently holding office is a quorum for the
transaction of business. When a quorum is present at a duly called or held meeting of
the board, the vote of a majority of the directors present constitutes an act of the board.
If a quorum is present when a duly called or held meeting is convened, the governors
present may continue to transact business until adjournment, even though the withdrawal
of a number of governors originally present leaves less than the proportion or number
otherwise required for a quorum.
new text end

new text begin (11) Any meeting among governors may be conducted solely by one or more means
of remote communication through which all of the governors may participate with each
other during the meeting, if the number of governors participating in the meeting would
be sufficient to constitute a quorum. Participation in a meeting by that means constitutes
presence in person at the meeting.
new text end

new text begin (12) A governor may participate in a board of governors meeting by means of
remote communication, through which the governor, other governors so participating, and
all governors physically present at the meeting may participate with each other during
the meeting. Participation in a meeting by that means constitutes presence in person
at the meeting.
new text end

new text begin (13) An action required or permitted to be taken at a board meeting may be taken
by written action signed by the number of governors that would be required to take the
same action at a meeting of the board of governors at which all governors were present.
The written action is effective when signed by the required number of governors, unless a
different effective time is provided in the written action. When written action is permitted
to be taken by less than all governors, all governors must be notified immediately of its
text and effective date. Failure to provide the notice does not invalidate the written action.
A governor who does not sign or consent to the written action has no liability for the
action or actions taken by the written action.
new text end

new text begin (14) If the board designates a person as "chief manager," "president," "chief
executive officer," "CEO," or another title of similar import, that person shall:
new text end

new text begin (i) serve as an agent of the limited liability company at the will of the board, without
prejudice to any rights the person may have under a contract with the limited liability
company;
new text end

new text begin (ii) have general active management of the business of the limited liability company,
subject to the supervision and control of the board;
new text end

new text begin (iii) see that all orders and resolutions of the board of governors are carried into effect;
new text end

new text begin (iv) sign and deliver in the name of the limited liability company any deeds,
mortgages, bonds, contracts, or other instruments pertaining to the business of the limited
liability company, except in cases in which the authority to sign and deliver is required by
law to be exercised by another person or is expressly delegated by the board of governors
to some other officer or agent of the limited liability company;
new text end

new text begin (v) maintain records of and, whenever necessary, certify all proceedings of the
board of governors and the members; and
new text end

new text begin (vi) perform other duties prescribed by the board of governors.
new text end

new text begin (15) If the board designates a person as "treasurer," "chief financial officer," "CFO,"
or another title of similar import, that person shall:
new text end

new text begin (ii) keep accurate financial records for the limited liability company;
new text end

new text begin (iii) deposit all money, drafts, and checks in the name of and to the credit of the limited
liability company in the banks and depositories designated by the board of governors;
new text end

new text begin (iv) endorse for deposit all notes, checks, and drafts received by the limited liability
company as ordered by the board of governors, making proper vouchers for them;
new text end

new text begin (v) disburse limited liability company funds and issue checks and drafts in the name
of the limited liability company, as ordered by the board of governors;
new text end

new text begin (vi) give to the chief executive officer and the board of governors, whenever
requested, an account of all transactions by the chief financial officer and of the financial
condition of the limited liability company; and
new text end

new text begin (vii) perform other duties prescribed by the board of governors or by the chief
executive officer.
new text end

new text begin (16) The consent of all members is required to:
new text end

new text begin (ii) approve a merger, conversion, or domestication under sections 322C.1001 to
322C.1015; and
new text end

new text begin (iii) amend the operating agreement.
new text end

new text begin (17) For purposes of this subdivision, each member possesses voting power in
proportion to the member's interest in then current profits of the limited liability company
and a majority of the voting power of the members is a quorum at a meeting of the members.
new text end

new text begin Subd. 5. new text end

new text begin Member consent. new text end

new text begin Any member may demand a meeting of the members to
take action requiring consent of members under this chapter upon not less than 20 days'
notice to each member in a record of the date and time of the meeting. Any meeting
held upon member notice shall be held at the limited liability company's principal
place of business if located within this state, and at the registered office if the principal
place of business is not located within the state. Any action requiring the consent of
members under this chapter may be taken or approved without a meeting by the written
consent of the members holding the voting power required to take such action at a duly
called meeting at which all members were present. A member may appoint a proxy or
other agent to consent or otherwise act for the member by signing an appointing record,
personally or by the member's agent.
new text end

new text begin Subd. 6. new text end

new text begin Impact of dissolution. new text end

new text begin The dissolution of a limited liability company does
not affect the applicability of this section. However, a person that wrongfully causes
dissolution of the company loses the right to participate in management in any capacity.
new text end

new text begin Subd. 7. new text end

new text begin Remuneration. new text end

new text begin This chapter does not entitle a member to remuneration
for services performed for a member-managed limited liability company, except for
reasonable compensation for services rendered in winding up the activities of the company.
new text end

Sec. 37.

new text begin [322C.0408] INDEMNIFICATION AND INSURANCE.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms defined in this
subdivision have the meanings given them.
new text end

new text begin (b) "Limited liability company" includes a domestic or foreign limited liability
company that was the predecessor of the limited liability company referred to in this
section in a merger or other transaction in which the predecessor's existence ceased upon
consummation of the transaction.
new text end

new text begin (c) "Official capacity" means (1) with respect to a member of a member-managed
company, a manager of a manager-managed company, or a governor of a board-managed
company, actions taken in that capacity, (2) with respect to a person other than a member
of a member-managed company, a manager of a manager-managed company, or a
governor of a board-managed company, the elective or appointive office or position
held by a manager or officer, member of a committee of the board of governors, the
employment relationship undertaken by an employee of the limited liability company, or
the scope of the services provided by members of the limited liability company who
provide services to the limited liability company, and (3) with respect to a governor,
manager, member, or employee of the limited liability company who, while a member,
governor, manager, or employee of the limited liability company, is or was serving at
the request of the limited liability company or whose duties in that position involve or
involved service as a governor, director, manager, officer, member, partner, trustee,
employee, or agent of another organization or employee benefit plan, the position of that
person as a governor, director, manager, officer, member, partner, trustee, employee, or
agent, as the case may be, of the other organization or employee benefit plan.
new text end

new text begin (d) "Proceeding" means a threatened, pending, or completed civil, criminal,
administrative, arbitration, or investigative proceeding, including a proceeding by or in
the right of the limited liability company.
new text end

new text begin (e) "Special legal counsel" means counsel who has not in the preceding five years
(1) represented the limited liability company or a related organization in a capacity other
than special legal counsel, or (2) represented a member, governor, manager, member of a
committee of the board of governors, or employee, or other person whose indemnification
is in issue.
new text end

new text begin Subd. 2. new text end

new text begin Indemnification. new text end

new text begin (a) Subject to the provisions of subdivision 4, a limited
liability company shall indemnify a person made or threatened to be made a party to a
proceeding by reason of the former or present official capacity of the person against
judgments, penalties, fines, including, without limitation, excise taxes assessed against the
person with respect to an employee benefit plan, settlements, and reasonable expenses,
including attorney fees and disbursements, incurred by the person in connection with the
proceeding, if, with respect to the acts or omissions of the person complained of in the
proceeding, the person:
new text end

new text begin (1) has not been indemnified by another organization or employee benefit plan for
the same judgments, penalties, fines, including, without limitation, excise taxes assessed
against the person with respect to an employee benefit plan, settlements, and reasonable
expenses, including attorney fees and disbursements, incurred by the person in connection
with the proceeding with respect to the same acts or omissions;
new text end

new text begin (2) acted in good faith;
new text end

new text begin (3) received no improper personal benefit and complied with the duties stated in
sections 322C.0405 and 322C.0409, if applicable;
new text end

new text begin (4) in the case of a criminal proceeding, had no reasonable cause to believe the
conduct was unlawful; and
new text end

new text begin (5) in the case of acts or omissions occurring in the official capacity described in
subdivision 1, paragraph (c), clause (1) or (2), reasonably believed that the conduct was
in the best interests of the limited liability company, or in the case of acts or omissions
occurring in the official capacity described in subdivision 1, paragraph (c), clause (3),
reasonably believed that the conduct was not opposed to the best interests of the limited
liability company. If the person's acts or omissions complained of in the proceeding relate
to conduct as a director, officer, trustee, employee, or agent of an employee benefit plan,
the conduct is not considered to be opposed to the best interests of the limited liability
company if the person reasonably believed that the conduct was in the best interests of the
participants or beneficiaries of the employee benefit plan.
new text end

new text begin (b) The termination of a proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent does not, of itself, establish that the
person did not meet the criteria set forth in this subdivision.
new text end

new text begin Subd. 3. new text end

new text begin Advances. new text end

new text begin Subject to the provisions of subdivision 4, if a person is made
or threatened to be made a party to a proceeding, the person is entitled, upon written
request to the limited liability company, to payment or reimbursement by the limited
liability company of reasonable expenses, including attorney fees and disbursements,
incurred by the person in advance of the final disposition of the proceeding:
new text end

new text begin (1) upon receipt by the limited liability company of a written affirmation by the
person of a good faith belief that the criteria for indemnification in subdivision 2 have
been satisfied and a written undertaking by the person to repay all amounts so paid or
reimbursed by the limited liability company, if it is ultimately determined that the criteria
for indemnification have not been satisfied; and
new text end

new text begin (2) after a determination that the facts then known to those making the determination
would not preclude indemnification under this section.
new text end

new text begin The written undertaking required by clause (1) is an unlimited general obligation of
the person making it, but need not be secured and shall be accepted without reference to
financial ability to make the repayment.
new text end

new text begin Subd. 4. new text end

new text begin Prohibition or limit on indemnification or advances. new text end

new text begin The articles of
organization or the operating agreement either may prohibit indemnification or advances of
expenses otherwise required by this section or may impose conditions on indemnification
or advances of expenses in addition to the conditions contained in subdivisions 2 and 3
including, without limitation, monetary limits on indemnification or advances of expenses,
if the conditions apply equally to all persons or to all persons within a given class. A
prohibition or limit on indemnification or advances may not apply to or affect the right
of a person to indemnification or advances of expenses with respect to any acts or
omissions of the person occurring before the effective date of a provision in the articles of
organization, a member control agreement, or the date of adoption of a provision in the
bylaws establishing the prohibition or limit on indemnification or advances.
new text end

new text begin Subd. 5. new text end

new text begin Reimbursement to witnesses. new text end

new text begin This section does not require, or limit the
ability of, a limited liability company to reimburse expenses, including attorney fees
and disbursements, incurred by a person in connection with an appearance as a witness
in a proceeding at a time when the person has not been made or threatened to be made
a party to a proceeding.
new text end

new text begin Subd. 6. new text end

new text begin Determination of eligibility. new text end

new text begin (a) All determinations whether
indemnification of a person is required because the criteria in subdivision 2 have been
satisfied and whether a person is entitled to payment or reimbursement of expenses in
advance of the final disposition of a proceeding as provided in subdivision 3 must be made:
new text end

new text begin (1) in a board-managed limited liability company:
new text end

new text begin (i) by the board of governors by a majority of a quorum, provided that governors
who are, at the time, parties to the proceeding shall not be counted for determining either
a majority or the presence of a quorum;
new text end

new text begin (ii) if a quorum under item (i) cannot be obtained, by a majority of a committee of
the board of governors, consisting solely of two or more governors not at the time parties
to the proceeding, duly designated to act in the matter by a majority of the full board of
governors including governors who are parties; and
new text end

new text begin (iii) if a determination is not made under item (i) or (ii), by special legal counsel,
selected either by a majority of the board of governors or a committee by vote pursuant
to item (i) or (ii) or, if the requisite quorum of the full board of governors cannot be
obtained and the committee cannot be established, by a majority of the full board of
governors including governors who are parties;
new text end

new text begin (2) in all other cases, by the affirmative vote of the members, with each member
having voting power in proportion to the member's interest in then current profits of the
limited liability company, but the membership interests held by parties to the proceeding
must not be counted in determining the presence of a quorum and are not considered to be
present and entitled to vote on the determination; or
new text end

new text begin (3) if an adverse determination is made under clauses (1) or (2), or if no
determination is made under clauses (1) or (2) within 60 days after (i) the later to occur
of the termination of a proceeding or a written request for indemnification to the limited
liability company or (ii) a written request for an advance of expenses, as the case may be,
by a court in this state, which may be the same court in which the proceeding involving
the person's liability took place, upon application of the person and any notice the
court requires. The person seeking indemnification or payment or reimbursement of
expenses pursuant to this clause has the burden of establishing that the person is entitled to
indemnification or payment or reimbursement of expenses.
new text end

new text begin (b) With respect to a person who is not, and was not at the time of the acts or
omissions complained of in the proceedings, a member, governor, manager, or person
possessing, directly or indirectly, the power to direct or cause the direction of the
management or policies of the limited liability company, the determination whether
indemnification of this person is required because the criteria set forth in subdivision 2
have been satisfied and whether this person is entitled to payment or reimbursement of
expenses in advance of the final disposition of a proceeding as provided in subdivision 3
may be made (i) in a board-managed limited liability company, by an annually appointed
committee of the board of governors, having at least one member who is a governor, which
committee shall report at least annually to the board of governors concerning its actions
and (ii) in all other cases by a committee appointed annually by the members, having at
least one committee member who is a member of the limited liability company, which
committee shall report at least annually to the board of governors concerning its actions.
new text end

new text begin Subd. 7. new text end

new text begin Insurance. new text end

new text begin A limited liability company may purchase and maintain
insurance on behalf of a member, manager, or governor of the company against liability
asserted against or incurred by the member, manager, or governor in that capacity or
arising from that status even if, under section 322C.0110, subdivision 7, the operating
agreement could not eliminate or limit the person's liability to the company for the conduct
giving rise to the liability and whether or not the limited liability company would have
been required to indemnify the person against the liability under this section.
new text end

new text begin Subd. 8. new text end

new text begin Disclosure. new text end

new text begin A limited liability company that indemnifies or advances
expenses to a person according to this section in connection with a proceeding by or on
behalf of the limited liability company shall report to the members in writing the amount
of the indemnification or advance and to whom and on whose behalf it was paid not
later than the next meeting of members.
new text end

new text begin Subd. 9. new text end

new text begin Indemnification of other persons. new text end

new text begin Nothing in this section must be
construed to limit the power of the limited liability company to indemnify persons other
than a governor, manager, member, employee, or member of a committee of the board
of the limited liability company, by contract or otherwise.
new text end

Sec. 38.

new text begin [322C.0409] STANDARDS OF CONDUCT FOR MEMBERS,
MANAGERS, AND GOVERNORS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope of duties. new text end

new text begin A member of a member-managed limited liability
company owes to the company and, subject to section 322C.0901, subdivision 2, the other
members the fiduciary duties of loyalty and care stated in subdivisions 2 and 3.
new text end

new text begin Subd. 2. new text end

new text begin Duty of loyalty. new text end

new text begin The duty of loyalty of a member in a member-managed
limited liability company includes the duties:
new text end

new text begin (1) to account to the company and to hold as trustee for it any property, profit, or
benefit derived by the member:
new text end

new text begin (i) in the conduct or winding up of the company's activities;
new text end

new text begin (ii) from a use by the member of the company's property; or
new text end

new text begin (iii) from the appropriation of a limited liability company opportunity;
new text end

new text begin (2) to refrain from dealing with the company in the conduct or winding up of
the company's activities as or on behalf of a person having an interest adverse to the
company; and
new text end

new text begin (3) to refrain from competing with the company in the conduct of the company's
activities before the dissolution of the company.
new text end

new text begin Subd. 3. new text end

new text begin Duty of care. new text end

new text begin Subject to the business judgment rule, the duty of care of a
member of a member-managed limited liability company in the conduct and winding up
of the company's activities is to act with the care that a person in a like position would
reasonably exercise under similar circumstances and in a manner the member reasonably
believes to be in the best interests of the company. In discharging this duty, a member
may rely in good faith on opinions, reports, statements, or other information provided by
another person that the member reasonably believes is a competent and reliable source
for the information.
new text end

new text begin Subd. 4. new text end

new text begin Contractual obligation of good faith and fair dealing. new text end

new text begin A member in
a limited liability company shall discharge the member's duties and exercise any rights
under this chapter or under the operating agreement consistently with the contractual
obligation of good faith and fair dealing, including acting in a manner, in light of the
operating agreement, that is honest, fair, and reasonable.
new text end

new text begin Subd. 5. new text end

new text begin Fairness defense. new text end

new text begin It is a defense to a claim under subdivision 2, clause
(2), and any comparable claim in equity or at common law that the transaction was fair
to the limited liability company.
new text end

new text begin Subd. 6. new text end

new text begin Authorization and ratification. new text end

new text begin All of the members of a member-managed
limited liability company or a manager-managed limited liability company may authorize
or ratify, after full disclosure of all material facts, a specific act or transaction that
otherwise would violate the duty of loyalty.
new text end

new text begin Subd. 7. new text end

new text begin Manager-managed company rules. new text end

new text begin In a manager-managed limited
liability company, the following rules apply:
new text end

new text begin (1) Subdivisions 1, 2, 3, and 5 apply to the manager or managers and not the members.
new text end

new text begin (2) The duty stated under subdivision 2, clause (3), continues until winding up
is completed.
new text end

new text begin (3) Subdivision 4 applies to the members and managers.
new text end

new text begin (4) Subdivision 6 applies only to the members.
new text end

new text begin (5) A member does not have any fiduciary duty to the company or to any other
member solely by reason of being a member.
new text end

new text begin Subd. 8. new text end

new text begin Board-managed company rules. new text end

new text begin In a board-managed limited liability
company, the following rules apply:
new text end

new text begin (1) Subdivisions 1, 2, 3, and 5 apply to the governors and not the members.
new text end

new text begin (2) The duty stated under subdivision 2, clause (3), continues until winding up
is completed.
new text end

new text begin (3) Subdivision 4 applies to the members and governors.
new text end

new text begin (4) Subdivision 6 applies only to the members.
new text end

new text begin (5) A member does not have any fiduciary duty to the company or to any other
member solely by reason of being a member.
new text end

Sec. 39.

new text begin [322C.0410] RIGHT OF MEMBERS, MANAGERS, GOVERNORS,
AND DISSOCIATED MEMBERS TO INFORMATION.
new text end

new text begin Subdivision 1. new text end

new text begin Member-managed company rules. new text end

new text begin In a member-managed limited
liability company, the following rules apply:
new text end

new text begin (1) On reasonable notice, a member may inspect and copy during regular business
hours, at a reasonable location specified by the company, any record maintained by the
company regarding the company's activities, financial condition, and other circumstances,
to the extent the information is material to the member's rights and duties under the
operating agreement or this chapter.
new text end

new text begin (2) The company shall furnish to each member:
new text end

new text begin (i) without demand, any information concerning the company's activities, financial
condition, and other circumstances which the company knows and is material to the
proper exercise of the member's rights and duties under the operating agreement or this
chapter, except to the extent the company can establish that it reasonably believes the
member already knows the information; and
new text end

new text begin (ii) on demand, any other information concerning the company's activities, financial
condition, and other circumstances, except to the extent the demand or information
demanded is unreasonable or otherwise improper under the circumstances.
new text end

new text begin (3) The duty to furnish information under clause (2) also applies to each member to
the extent the member knows any of the information described in clause (2).
new text end

new text begin Subd. 2. new text end

new text begin Manager-managed and board-managed company rules. new text end

new text begin In a
manager-managed limited liability company, the following rules apply:
new text end

new text begin (1) The informational rights stated in subdivision 1 and the duty stated in subdivision
1, clause (3), apply to the managers or governors and not the members.
new text end

new text begin (2) During regular business hours and at a reasonable location specified by the
company, a member may obtain from the company and inspect and copy full information
regarding the activities, financial condition, and other circumstances of the company as
is just and reasonable if:
new text end

new text begin (i) the member seeks the information for a purpose material to the member's interest
as a member;
new text end

new text begin (ii) the member makes a demand in a record received by the company, describing
with reasonable particularity the information sought and the purpose for seeking the
information; and
new text end

new text begin (iii) the information sought is directly connected to the member's purpose.
new text end

new text begin (3) Within ten days after receiving a demand pursuant to clause (2), item (ii), the
company shall in a record inform the member that made the demand:
new text end

new text begin (i) of the information that the company will provide in response to the demand and
when and where the company will provide the information; and
new text end

new text begin (ii) if the company declines to provide any demanded information, the company's
reasons for declining.
new text end

new text begin (4) Whenever this chapter or an operating agreement provides for a member to give
or withhold consent to a matter, before the consent is given or withheld, the company
shall, without demand, provide the member with all information that is known to the
company and is material to the member's decision.
new text end

new text begin Subd. 3. new text end

new text begin Dissociated member access. new text end

new text begin On ten days' demand made in a record
received by a limited liability company, a dissociated member may have access to
information to which the person was entitled while a member if the information pertains to
the period during which the person was a member, the person seeks the information in
good faith, and the person satisfies the requirements imposed on a member by subdivision
2, clause (2). The company shall respond to a demand made pursuant to this subdivision
in the manner provided in subdivision 2, clause (3).
new text end

new text begin Subd. 4. new text end

new text begin Access costs. new text end

new text begin A limited liability company may charge a person that makes
a demand under this section the reasonable costs of copying, limited to the costs of labor
and material.
new text end

new text begin Subd. 5. new text end

new text begin Agent use. new text end

new text begin A member or dissociated member may exercise rights under
this section through an agent or, in the case of an individual under legal disability, a
legal representative. Any restriction or condition imposed by the operating agreement or
under subdivision 7 applies both to the agent or legal representative and the member
or dissociated member.
new text end

new text begin Subd. 6. new text end

new text begin Transferee excluded. new text end

new text begin The rights under this section do not extend to a
person as transferee.
new text end

new text begin Subd. 7. new text end

new text begin Reasonable restrictions to access. new text end

new text begin In addition to any restriction or
condition stated in its operating agreement, a limited liability company, as a matter within
the ordinary course of its activities, may impose reasonable restrictions and conditions on
access to and use of information to be furnished under this section, including designating
information confidential and imposing nondisclosure and safeguarding obligations on
the recipient. In a dispute concerning the reasonableness of a restriction under this
subdivision, the company has the burden of proving reasonableness.
new text end

TRANSFERABLE INTERESTS AND RIGHTS OF TRANSFEREES
AND CREDITORS

Sec. 40.

new text begin [322C.0501] NATURE OF TRANSFERABLE INTEREST.
new text end

new text begin A transferable interest is personal property.
new text end

Sec. 41.

new text begin [322C.0502] TRANSFER OF TRANSFERABLE INTEREST.
new text end

new text begin Subdivision 1. new text end

new text begin Transfers. new text end

new text begin A transfer, in whole or in part, of a transferable interest:
new text end

new text begin (1) is permissible;
new text end

new text begin (2) does not by itself cause a member's dissociation or a dissolution and winding up
of the limited liability company's activities; and
new text end

new text begin (3) subject to section 322C.0504, does not entitle the transferee to:
new text end

new text begin (i) participate in the management or conduct of the company's activities; or
new text end

new text begin (ii) except as otherwise provided in subdivision 3, have access to records or other
information concerning the company's activities.
new text end

new text begin Subd. 2. new text end

new text begin Transferee right to distributions. new text end

new text begin A transferee has the right to receive,
in accordance with the transfer, distributions to which the transferor would otherwise
be entitled.
new text end

new text begin Subd. 3. new text end

new text begin Transferee right to an account. new text end

new text begin In a dissolution and winding up of
a limited liability company, a transferee is entitled to an account of the company's
transactions only from the date of dissolution.
new text end

new text begin Subd. 4. new text end

new text begin Evidence of interest. new text end

new text begin A transferable interest may be evidenced by a
certificate of the interest issued by the limited liability company in a record, and, subject
to this section, the interest represented by the certificate may be transferred by a transfer of
the certificate.
new text end

new text begin Subd. 5. new text end

new text begin Company notice required. new text end

new text begin A limited liability company need not give
effect to a transferee's rights under this section until the company has notice of the transfer.
new text end

new text begin Subd. 6. new text end

new text begin Violative transfers ineffective. new text end

new text begin A transfer of a transferable interest in
violation of a restriction on transfer contained in the operating agreement is ineffective as
to a person having notice of the restriction at the time of transfer.
new text end

new text begin Subd. 7. new text end

new text begin Rights retained. new text end

new text begin Except as otherwise provided in section 322C.0602,
clause (4), item (ii), when a member transfers a transferable interest, the transferor retains
the rights of a member other than the interest in distributions transferred and retains all
duties and obligations of a member.
new text end

new text begin Subd. 8. new text end

new text begin Transferee liability. new text end

new text begin When a member transfers a transferable interest to a
person that becomes a member with respect to the transferred interest, the transferee is
liable for the member's obligations under sections 322C.0403 and 322C.0406, subdivision
3, known to the transferee when the transferee becomes a member.
new text end

Sec. 42.

new text begin [322C.0503] CHARGING ORDER.
new text end

new text begin Subdivision 1. new text end

new text begin Charging order against transferable interest. new text end

new text begin On application
by a judgment creditor of a member or transferee, a court may enter a charging order
against the transferable interest of the judgment debtor for the unsatisfied amount of the
judgment. A charging order constitutes a lien on a judgment debtor's transferable interest
and requires the limited liability company to pay over to the person to which the charging
order was issued any distribution that would otherwise be paid to the judgment debtor.
new text end

new text begin Subd. 2. new text end

new text begin Charging order effectuation. new text end

new text begin To the extent necessary to effectuate the
collection of distributions pursuant to a charging order in effect under subdivision 1,
the court may:
new text end

new text begin (1) appoint a receiver of the distributions subject to the charging order, with the
power to make all inquiries the judgment debtor might have made; and
new text end

new text begin (2) make all other orders necessary to give effect to the charging order.
new text end

new text begin Subd. 3. new text end

new text begin Foreclosure and sale. new text end

new text begin Upon a showing that distributions under a charging
order will not pay the judgment debt within a reasonable time, the court may foreclose
the lien and order the sale of the transferable interest. The purchaser at the foreclosure
sale obtains only the transferable interest, does not thereby become a member, and is
subject to section 322C.0502.
new text end

new text begin Subd. 4. new text end

new text begin Extinguishing charging order. new text end

new text begin At any time before foreclosure under
subdivision 3, the member or transferee whose transferable interest is subject to a charging
order under subdivision 1 may extinguish the charging order by satisfying the judgment
and filing a certified copy of the satisfaction with the court that issued the charging order.
new text end

new text begin Subd. 5. new text end

new text begin Succession to rights of judgment creditor. new text end

new text begin At any time before
foreclosure under subdivision 3, a limited liability company or one or more members
whose transferable interests are not subject to the charging order may pay to the judgment
creditor the full amount due under the judgment and thereby succeed to the rights of the
judgment creditor, including the charging order.
new text end

new text begin Subd. 6. new text end

new text begin Exemption laws applicable. new text end

new text begin This chapter does not deprive any member or
transferee of the benefit of any exemption laws applicable to the member's or transferee's
transferable interest.
new text end

new text begin Subd. 7. new text end

new text begin Exclusive remedy. new text end

new text begin This section provides the exclusive remedy by which a
person seeking to enforce a judgment against a member or transferee may, in the capacity
of judgment creditor, satisfy the judgment from the judgment debtor's transferable interest.
new text end

Sec. 43.

new text begin [322C.0504] POWER OF PERSONAL REPRESENTATIVE OF
DECEASED MEMBER.
new text end

new text begin If a member dies, the deceased member's personal representative or other legal
representative may exercise the rights of a transferee provided in section 322C.0502,
subdivision 3, and, for the purposes of settling the estate, the rights of a current member
under section 322C.0410.
new text end

MEMBER'S DISSOCIATION

Sec. 44.

new text begin [322C.0601] MEMBER'S POWER TO DISSOCIATE; WRONGFUL
DISSOCIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Power to dissociate. new text end

new text begin A person has the power to dissociate as a
member at any time, rightfully or wrongfully, by withdrawing as a member by express
will under section 322C.0602, clause (1).
new text end

new text begin Subd. 2. new text end

new text begin Wrongful dissociation. new text end

new text begin A person's dissociation from a limited liability
company is wrongful only if the dissociation:
new text end

new text begin (1) is in breach of an express provision of the operating agreement; or
new text end

new text begin (2) occurs before the termination of the company and:
new text end

new text begin (i) the person withdraws as a member by express will;
new text end

new text begin (ii) the person is expelled as a member by judicial order under section 322C.0602,
clause (5);
new text end

new text begin (iii) the person is dissociated under section 322C.0602, clause (7), item (i), by
becoming a debtor in bankruptcy; or
new text end

new text begin (iv) in the case of a person that is not a trust other than a business trust, an estate,
or an individual, the person is expelled or otherwise dissociated as a member because it
willfully dissolved or terminated.
new text end

new text begin Subd. 3. new text end

new text begin Liability for wrongful dissociation. new text end

new text begin A person that wrongfully dissociates
as a member is liable to the limited liability company and, subject to section 322C.0901,
to the other members for damages caused by the dissociation. The liability is in addition
to any other debt, obligation, or other liability of the member to the company or the other
members.
new text end

Sec. 45.

new text begin [322C.0602] EVENTS CAUSING DISSOCIATION.
new text end

new text begin A person is dissociated as a member from a limited liability company when:
new text end

new text begin (1) the company has notice of the person's express will to withdraw as a member,
but, if the person specified a withdrawal date later than the date the company had notice,
on that later date;
new text end

new text begin (2) an event stated in the operating agreement as causing the person's dissociation
occurs;
new text end

new text begin (3) the person is expelled as a member pursuant to the operating agreement;
new text end

new text begin (4) the person is expelled as a member by the unanimous consent of the other
members if:
new text end

new text begin (i) it is unlawful to carry on the company's activities with the person as a member;
new text end

new text begin (ii) there has been a transfer of all of the person's transferable interest in the
company, other than:
new text end

new text begin (A) a transfer for security purposes; or
new text end

new text begin (B) a charging order in effect under section 322C.0503 which has not been foreclosed;
new text end

new text begin (iii) the person is a corporation and, within 90 days after the company notifies the
person that it will be expelled as a member because the person has filed a certificate of
dissolution or the equivalent, its charter has been revoked, or its right to conduct business
has been suspended by the jurisdiction of its incorporation, the certificate of dissolution
has not been revoked or its charter or right to conduct business has not been reinstated; or
new text end

new text begin (iv) the person is a limited liability company or partnership that has been dissolved
and whose business is being wound up;
new text end

new text begin (5) on application by the company, the person is expelled as a member by judicial
order because the person:
new text end

new text begin (i) has engaged, or is engaging, in wrongful conduct that has adversely and
materially affected, or will adversely and materially affect, the company's activities;
new text end

new text begin (ii) has willfully or persistently committed, or is willfully and persistently
committing, a material breach of the operating agreement or the person's duties or
obligations under section 322C.0409; or
new text end

new text begin (iii) has engaged, or is engaging, in conduct relating to the company's activities which
makes it not reasonably practicable to carry on the activities with the person as a member;
new text end

new text begin (6) in the case of a person who is an individual:
new text end

new text begin (i) the person dies; or
new text end

new text begin (ii) in a member-managed limited liability company:
new text end

new text begin (A) a guardian or general conservator for the person is appointed; or
new text end

new text begin (B) there is a judicial order that the person has otherwise become incapable of
performing the person's duties as a member under this chapter or the operating agreement;
new text end

new text begin (7) in a member-managed limited liability company, the person:
new text end

new text begin (i) becomes a debtor in bankruptcy;
new text end

new text begin (ii) executes an assignment for the benefit of creditors; or
new text end

new text begin (iii) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or
liquidator of the person or of all or substantially all of the person's property;
new text end

new text begin (8) in the case of a person that is a trust or is acting as a member by virtue of being a
trustee of a trust, the trust's entire transferable interest in the company is distributed;
new text end

new text begin (9) in the case of a person that is an estate or is acting as a member by virtue of
being a personal representative of an estate, the estate's entire transferable interest in the
company is distributed;
new text end

new text begin (10) in the case of a member that is not an individual, partnership, limited liability
company, corporation, trust, or estate, the termination of the member;
new text end

new text begin (11) the company participates in a merger under sections 322C.1001 to 322C.1015, if:
new text end

new text begin (i) the company is not the surviving entity; or
new text end

new text begin (ii) otherwise as a result of the merger, the person ceases to be a member;
new text end

new text begin (12) the company participates in a conversion under sections 322C.1001 to
322C.1015;
new text end

new text begin (13) the company participates in a domestication under sections 322C.1001 to
322C.1015, if, as a result of the domestication, the person ceases to be a member; or
new text end

new text begin (14) the company terminates.
new text end

Sec. 46.

new text begin [322C.0603] EFFECT OF PERSON'S DISSOCIATION AS MEMBER.
new text end

new text begin Subdivision 1. new text end

new text begin Effect of dissociation. new text end

new text begin When a person is dissociated as a member of
a limited liability company:
new text end

new text begin (1) the person's right to participate as a member in the management and conduct of
the company's activities terminates;
new text end

new text begin (2) if the company is member-managed, the person's fiduciary duties as a member
end with regard to matters arising and events occurring after the person's dissociation; and
new text end

new text begin (3) subject to sections 322C.0504 and 322C.1001 to 322C.1015, any transferable
interest owned by the person immediately before dissociation in the person's capacity as
a member is owned by the person solely as a transferee.
new text end

new text begin Subd. 2. new text end

new text begin No discharge. new text end

new text begin A person's dissociation as a member of a limited liability
company does not of itself discharge the person from any debt, obligation, or other
liability to the company or the other members that the person incurred while a member.
new text end

DISSOLUTION AND WINDING UP

Sec. 47.

new text begin [322C.0701] EVENTS CAUSING DISSOLUTION.
new text end

new text begin Subdivision 1. new text end

new text begin Dissolution events. new text end

new text begin A limited liability company is dissolved, and its
activities must be wound up, upon the occurrence of any of the following:
new text end

new text begin (1) an event or circumstance that the operating agreement states causes dissolution;
new text end

new text begin (2) the consent of all the members;
new text end

new text begin (3) following the admission of the initial member or members, the passage of 90
consecutive days during which the company has no members;
new text end

new text begin (4) on application by a member, the entry by appropriate court of an order dissolving
the company on the grounds that:
new text end

new text begin (i) the conduct of all or substantially all of the company's activities is unlawful; or
new text end

new text begin (ii) it is not reasonably practicable to carry on the company's activities in conformity
with the articles of organization and the operating agreement;
new text end

new text begin (5) on application by a member, the entry by appropriate court of an order dissolving
the company on the grounds that the managers, governors, or those members in control of
the company:
new text end

new text begin (i) have acted, are acting, or will act in a manner that is illegal or fraudulent; or
new text end

new text begin (ii) have acted or are acting in a manner that is oppressive and was, is, or will be
directly harmful to the applicant; or
new text end

new text begin (6) on application by the attorney general in an action commenced pursuant to
section 322C.0708, the entry by appropriate court of an order dissolving the company on
grounds specified in 322C.0708.
new text end

new text begin Subd. 2. new text end

new text begin Alternative remedies. new text end

new text begin In a proceeding brought under subdivision 1, clause
(5), the court may order a remedy other than dissolution, which may include the sale for
fair value of all membership interests a member owns in a limited liability company to
the limited liability company or one or more of the other members. A remedy other than
dissolution may be ordered in any case where that remedy would be appropriate under all
the facts and circumstances of the case.
new text end

new text begin Subd. 3. new text end

new text begin Venue. new text end

new text begin A proceeding brought under subdivision 1, clause (5), must
be brought in a court within the county in which the registered office of the limited
liability company is located. It is not necessary to make members parties to the action or
proceeding unless relief is sought against them personally.
new text end

Sec. 48.

new text begin [322C.0702] WINDING UP.
new text end

new text begin Subdivision 1. new text end

new text begin Winding up required. new text end

new text begin A dissolved limited liability company shall
wind up its activities, and the company continues after dissolution only for the purpose
of winding up.
new text end

new text begin Subd. 2. new text end

new text begin Winding up process. new text end

new text begin In winding up its activities, a limited liability
company:
new text end

new text begin (1) shall discharge the company's debts, obligations, or other liabilities, settle and
close the company's activities, and marshal and distribute the assets of the company; and
new text end

new text begin (2) may:
new text end

new text begin (i) file with the secretary of state a statement of dissolution stating the name of the
company and that the company is dissolved;
new text end

new text begin (ii) preserve the company activities and property as a going concern for a reasonable
time;
new text end

new text begin (iii) prosecute and defend actions and proceedings, whether civil, criminal, or
administrative;
new text end

new text begin (iv) transfer the company's property;
new text end

new text begin (v) settle disputes by mediation or arbitration;
new text end

new text begin (vi) file with the secretary of state a statement of termination stating the name of the
company and that the company is terminated; and
new text end

new text begin (vii) perform other acts necessary or appropriate to the winding up.
new text end

new text begin Subd. 3. new text end

new text begin Winding up by legal representative. new text end

new text begin If a dissolved limited liability
company has no members, the legal representative of the last person to have been a
member may wind up the activities of the company. If the person does so, the person has
the powers of a sole manager under section 322C.0407, subdivision 3, and is deemed to be
a manager for the purposes of section 322C.0304, subdivision 1, clause (2).
new text end

new text begin Subd. 4. new text end

new text begin Winding up by person other than legal representative. new text end

new text begin If the legal
representative under subdivision 3 declines or fails to wind up the company's activities, a
person may be appointed to do so by the consent of transferees owning a majority of the
rights to receive distributions as transferees at the time the consent is to be effective. A
person appointed under this subdivision:
new text end

new text begin (1) has the powers of a sole manager under section 322C.0407, subdivision 3, and
is deemed to be a manager for the purposes of section 322C.0304, subdivision 1, clause
(2); and
new text end

new text begin (2) shall promptly file with the secretary of state an amendment to the company's
articles of organization to:
new text end

new text begin (i) state that the company has no members;
new text end

new text begin (ii) state that the person has been appointed pursuant to this subdivision to wind up
the company; and
new text end

new text begin (iii) provide the street address of the person.
new text end

new text begin Subd. 5. new text end

new text begin Judicial supervision. new text end

new text begin The appropriate court may order judicial supervision
of the winding up of a dissolved limited liability company, including the appointment of a
person to wind up the company's activities:
new text end

new text begin (1) on application of a member, if the applicant establishes good cause;
new text end

new text begin (2) on the application of a transferee, if:
new text end

new text begin (i) the company does not have any members;
new text end

new text begin (ii) the legal representative of the last person to have been a member declines or fails
to wind up the company's activities; and
new text end

new text begin (iii) within a reasonable time following the dissolution a person has not been
appointed pursuant to subdivision 4; or
new text end

new text begin (3) in connection with a proceeding under section 322C.0701, subdivision 1, clause
(4) or (5).
new text end

Sec. 49.

new text begin [322C.0703] KNOWN CLAIMS AGAINST DISSOLVED LIMITED
LIABILITY COMPANY.
new text end

new text begin Subdivision 1. new text end

new text begin Notice of known claims. new text end

new text begin Except as otherwise provided in
subdivision 4, a dissolved limited liability company may give notice of a known claim
under subdivision 2 that has the effect as provided in subdivision 3.
new text end

new text begin Subd. 2. new text end

new text begin Notice requirements. new text end

new text begin A dissolved limited liability company may in a
record notify its known claimants of the dissolution. The notice must:
new text end

new text begin (1) specify the information required to be included in a claim;
new text end

new text begin (2) provide a mailing address to which the claim is to be sent;
new text end

new text begin (3) state the deadline for receipt of the claim, which may not be less than 120 days
after the date the notice is received by the claimant; and
new text end

new text begin (4) state that the claim will be barred if not received by the deadline.
new text end

new text begin Subd. 3. new text end

new text begin Claims barred. new text end

new text begin A claim against a dissolved limited liability company is
barred if the requirements of subdivision 2 are met and:
new text end

new text begin (1) the claim is not received by the specified deadline; or
new text end

new text begin (2) if the claim is timely received but rejected by the company:
new text end

new text begin (i) the company causes the claimant to receive a notice in a record stating that the
claim is rejected and will be barred unless the claimant commences an action against the
company to enforce the claim within 90 days after the claimant receives the notice; and
new text end

new text begin (ii) the claimant does not commence the required action within the 90 days.
new text end

new text begin Subd. 4. new text end

new text begin Bar limitation. new text end

new text begin This section does not apply to a claim based on an event
occurring after the effective date of dissolution or a liability that on that date is contingent.
new text end

Sec. 50.

new text begin [322C.0704] OTHER CLAIMS AGAINST DISSOLVED LIMITED
LIABILITY COMPANY.
new text end

new text begin Subdivision 1. new text end

new text begin Publication of notice. new text end

new text begin A dissolved limited liability company may
publish notice of its dissolution and request persons having claims against the company
to present them according to the notice.
new text end

new text begin Subd. 2. new text end

new text begin Published notice requirements. new text end

new text begin The notice authorized by subdivision 1
must:
new text end

new text begin (1) be published at least once in a newspaper of general circulation in the county or
counties in this state in which the dissolved limited liability company's principal office is
located or, if it has none in this state, in the county or counties in which the company's
registered office is or was last located;
new text end

new text begin (2) describe the information required to be contained in a claim and provide a
mailing address to which the claim is to be sent; and
new text end

new text begin (3) state that a claim against the company is barred unless an action to enforce the
claim is commenced within five years after publication of the notice.
new text end

new text begin Subd. 3. new text end

new text begin Claims barred. new text end

new text begin If a dissolved limited liability company publishes a notice
according to subdivision 2, unless the claimant commences an action to enforce the claim
against the company within five years after the publication date of the notice, the claim of
each of the following claimants is barred:
new text end

new text begin (1) a claimant that did not receive notice in a record under section 322C.0703;
new text end

new text begin (2) a claimant whose claim was timely sent to the company but not acted on; and
new text end

new text begin (3) a claimant whose claim is contingent at, or based on an event occurring after,
the effective date of dissolution.
new text end

new text begin Subd. 4. new text end

new text begin Claims enforcement. new text end

new text begin A claim not barred under this section may be
enforced:
new text end

new text begin (1) against a dissolved limited liability company, to the extent of its undistributed
assets; and
new text end

new text begin (2) if assets of the company have been distributed after dissolution, against a member
or transferee to the extent of that person's proportionate share of the claim or of the assets
distributed to the member or transferee after dissolution, whichever is less, but a person's
total liability for all claims under this clause does not exceed the total amount of assets
distributed to the person after dissolution.
new text end

Sec. 51.

new text begin [322C.0705] ADMINISTRATIVE TERMINATION.
new text end

new text begin (a) A domestic limited liability company that has not filed a renewal pursuant to
this section is administratively terminated. The secretary of state shall issue a certificate
of administrative termination which must be filed in the Office of the Secretary of State.
The secretary of state must also make available in an electronic format the names of
the terminated limited liability companies.
new text end

new text begin (b) A non-Minnesota limited liability company that has not filed a renewal pursuant to
this section shall have its authority to do business in Minnesota revoked pursuant to section
322C.0806. The secretary of state must issue a certificate of revocation which must be filed
in the Office of the Secretary of State. The secretary of state must also make available in
an electronic format the names of the revoked non-Minnesota limited liability companies.
new text end

Sec. 52.

new text begin [322C.0706] REINSTATEMENT FOLLOWING ADMINISTRATIVE
DISSOLUTION.
new text end

new text begin (a) If a limited liability company is administratively terminated or has its authority to
do business in Minnesota revoked, it may retroactively reinstate its existence or authority
to do business by filing a single annual renewal and paying a $25 fee.
new text end

new text begin (b) For a domestic limited liability company, filing the annual renewal with the
secretary of state:
new text end

new text begin (1) returns the limited liability company to active status as of the date of the
administrative termination;
new text end

new text begin (2) validates contracts or other acts within the authority of the articles, and the
limited liability company is liable for those contracts or acts; and
new text end

new text begin (3) restores to the limited liability company all assets and rights of the limited
liability company and its members to the extent they were held by the limited liability
company and its members before the administrative termination occurred, except to the
extent that assets or rights were affected by acts occurring after the termination, sold, or
otherwise distributed after that time.
new text end

new text begin (c) For a non-Minnesota limited liability company, filing the annual renewal restores
the limited liability company's ability to do business in Minnesota and the rights and
privileges that accompany that authority.
new text end

Sec. 53.

new text begin [322C.0707] DISTRIBUTION OF ASSETS IN WINDING UP LIMITED
LIABILITY COMPANY'S ACTIVITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Application of assets to discharge obligations. new text end

new text begin In winding up its
activities, a limited liability company must apply its assets to discharge its obligations to
creditors, including members that are creditors.
new text end

new text begin Subd. 2. new text end

new text begin Distributions of surplus. new text end

new text begin After a limited liability company complies
with subdivision 1, any surplus must be distributed in the following order, subject to any
charging order in effect under section 322C.0503:
new text end

new text begin (1) to each person owning a transferable interest that reflects contributions made by
a member and not previously returned, an amount equal to the value of the unreturned
contributions; and
new text end

new text begin (2) in equal shares among members and dissociated members, except to the extent
necessary to comply with any transfer effective under section 322C.0502.
new text end

new text begin Subd. 3. new text end

new text begin Proportionate distribution. new text end

new text begin If a limited liability company does not have
sufficient surplus to comply with subdivision 2, clause (1), any surplus must be distributed
among the owners of transferable interests in proportion to the value of their respective
unreturned contributions.
new text end

new text begin Subd. 4. new text end

new text begin Form of distribution. new text end

new text begin All distributions made under subdivisions 2 and 3
must be paid in money.
new text end

Sec. 54.

new text begin [322C.0708] ACTION BY ATTORNEY GENERAL.
new text end

new text begin Subdivision 1. new text end

new text begin When permitted. new text end

new text begin A limited liability company may be involuntarily
dissolved, wound up, and terminated by a decree of a court in this state in an action filed
by the attorney general when it is established that:
new text end

new text begin (1) the articles of organization were procured through fraud;
new text end

new text begin (2) the limited liability company was organized for a purpose not permitted by
this chapter;
new text end

new text begin (3) the limited liability company failed to comply with the requirements essential to
organization under this chapter;
new text end

new text begin (4) the limited liability company has flagrantly violated a provision of this chapter,
has violated a provision of this chapter more than once, or has violated more than one
provision of this chapter; or
new text end

new text begin (5) the limited liability company has acted, or failed to act, in a manner that constitutes
surrender or abandonment of the limited liability company privileges or enterprise.
new text end

new text begin Subd. 2. new text end

new text begin Notice to limited liability company and correction. new text end

new text begin An action must not
be commenced under this section until 30 days after notice to the limited liability company
by the attorney general of the reason for the filing of the action. If the reason for filing the
action is an act that the limited liability company has done, or omitted to do, and the act or
omission may be corrected by an amendment of the articles of organization, a member
control agreement, or the bylaws or by performance of or abstention from the act, the
attorney general shall give the limited liability company 30 additional days in which to
effect the correction before filing the action.
new text end

FOREIGN LIMITED LIABILITY COMPANIES

Sec. 55.

new text begin [322C.0801] GOVERNING LAW.
new text end

new text begin Subdivision 1. new text end

new text begin Scope of foreign law. new text end

new text begin The law of the state or other jurisdiction under
which a foreign limited liability company is formed governs:
new text end

new text begin (1) the internal affairs of the company; and
new text end

new text begin (2) the liability of a member as member, a manager as manager, and a governor as
governor for the debts, obligations, or other liabilities of the company.
new text end

new text begin Subd. 2. new text end

new text begin Restriction on denial of certificate of authority. new text end

new text begin A foreign limited liability
company may not be denied a certificate of authority by reason of any difference between
the law of the jurisdiction under which the company is formed and the law of this state.
new text end

new text begin Subd. 3. new text end

new text begin No increase in foreign company's powers. new text end

new text begin A certificate of authority does
not authorize a foreign limited liability company to engage in any business or exercise any
power that a limited liability company may not engage in or exercise in this state.
new text end

Sec. 56.

new text begin [322C.0802] APPLICATION FOR CERTIFICATE OF AUTHORITY.
new text end

new text begin Before transacting business in this state, a foreign limited liability company shall
obtain a certificate of authority to transact business in this state by filing an application
with the secretary of state together with a total fee of $185. The application must state:
new text end

new text begin (1) the name of the company and any alternate name adopted pursuant to section
322C.0805, subdivision 1;
new text end

new text begin (2) the name of the state or other jurisdiction under whose law the company is formed;
new text end

new text begin (3) a statement that the foreign limited liability company has complied with the
organizational laws in the jurisdiction under whose laws the company is formed;
new text end

new text begin (4) the street address of the company's principal place of business and, if the law of
the jurisdiction under which the company is formed requires the company to maintain an
office in that jurisdiction, the street address of the required office; and
new text end

new text begin (5) the name and street address of the company's initial registered office and agent
for service of process in this state.
new text end

Sec. 57.

new text begin [322C.0803] TRANSACTIONS NOT CONSTITUTING TRANSACTING
BUSINESS.
new text end

new text begin Subdivision 1. new text end

new text begin Activities not constituting transacting business. new text end

new text begin A foreign limited
liability company shall not be considered to be transacting business in this state for the
purposes of this chapter solely by reason of carrying on in this state any one or more of
the following, including:
new text end

new text begin (1) maintaining or defending any action or suit or any administrative or arbitration
proceeding, or effecting the settlement thereof or the settlement of claims or disputes;
new text end

new text begin (2) holding meetings of its managers, governors, or members or carrying on other
activities concerning its internal affairs;
new text end

new text begin (3) maintaining bank accounts;
new text end

new text begin (4) maintaining offices or agencies for the transfer, exchange, and registration of
its securities, or appointing and maintaining trustees or depositaries with relation to its
securities;
new text end

new text begin (5) holding title to and managing real or personal property, or any interest therein,
situated in this state, as executor of the will or administrator of the estate of any decedent,
as trustee of any trust, or as guardian of any person or conservator of any person's estate;
new text end

new text begin (6) making, participating in, or investing in loans or creating, as borrower or lender,
or otherwise acquiring indebtedness or mortgages or other security interests in real or
personal property;
new text end

new text begin (7) securing or collecting its debts or enforcing any rights in property securing
them; or
new text end

new text begin (8) conducting an isolated transaction completed within a period of 30 days and not
in the course of a number of repeated transactions of like nature.
new text end

new text begin Subd. 2. new text end

new text begin Property ownership. new text end

new text begin For purposes of sections 322C.0801 to 322C.0809,
the ownership in this state of income-producing real property or tangible personal
property, other than property excluded under subdivision 1, constitutes transacting
business in this state.
new text end

new text begin Subd. 3. new text end

new text begin Limitations. new text end

new text begin This section does not apply in determining the contacts
or activities that may subject a foreign limited liability company to service of process,
taxation, or regulation under law of this state other than this chapter.
new text end

Sec. 58.

new text begin [322C.0804] FILING OF CERTIFICATE OF AUTHORITY.
new text end

new text begin Unless the secretary of state determines that an application for a certificate of
authority does not comply with the filing requirements of this chapter, the secretary of
state, upon payment of all filing fees, shall file the application of a foreign limited liability
company; prepare, sign, and file a certificate of authority to transact business in this state;
and send an image of the filed certificate to the company or its representative.
new text end

Sec. 59.

new text begin [322C.0805] NONCOMPLYING NAME OF FOREIGN LIMITED
LIABILITY COMPANY.
new text end

new text begin Subdivision 1. new text end

new text begin Noncomplying name. new text end

new text begin A foreign limited liability company whose
name does not comply with section 322C.0108 may not obtain a certificate of authority
until it adopts, for the purpose of transacting business in this state, an alternate name
that complies with section 322C.0108. A foreign limited liability company that adopts
an alternate name under this subdivision and obtains a certificate of authority with the
alternate name need not comply with section 333.01. After obtaining a certificate of
authority with an alternate name, a foreign limited liability company shall transact business
in this state under the alternate name unless the company is authorized under section
333.01 to transact business in this state under another name. A foreign limited liability
company may adopt an alternate name even if its name complies with section 322C.0108.
new text end

new text begin Subd. 2. new text end

new text begin Change in name. new text end

new text begin If a foreign limited liability company authorized to
transact business in this state changes its name to one that does not comply with section
322C.0108, it may not thereafter transact business in this state until it complies with
subdivision 1 and obtains an amended certificate of authority.
new text end

Sec. 60.

new text begin [322C.0806] REVOCATION OF CERTIFICATE OF AUTHORITY.
new text end

new text begin (a) The certificate of authority of a foreign limited liability company to transact
business in this state shall be revoked by the secretary of state if it fails:
new text end

new text begin (1) to pay any fee due under the provisions of this chapter;
new text end

new text begin (2) to designate a registered agent when a vacancy occurs in that office, or when the
appointed registered agent resigns or becomes disqualified or incapacitated;
new text end

new text begin (3) to file certificates of merger or name change, as required in section 322C.0805,
subdivision 2; or
new text end

new text begin (4) to file an annual renewal.
new text end

new text begin (b) On finding that a default has occurred under paragraph (a), clauses (1) to (3),
the secretary of state shall notify the foreign limited liability company that the default
exists and that its certificate of authority will be revoked unless the default shall be cured
within 30 days.
new text end

new text begin (c)(1) The secretary of state shall revoke the certificate of authority of a foreign
limited liability company that is in default under paragraph (a), clause (4), for failure to
file an annual renewal under section 5.34.
new text end

new text begin (2) The secretary of state shall revoke the certificate of authority of a foreign limited
liability company that is in default under paragraph (a), clauses (1) to (3), if the default
is not cured within the time provided under paragraph (b); provided that for good cause
shown the secretary of state may extend the 30-day period from time to time, but in no
event may the aggregate of all extensions granted exceed 180 days or the period of time of
any applicable extension granted by the Department of Revenue for filing the income tax
return of the corporation, whichever is greater.
new text end

new text begin (d)(1) Upon revoking the certificate of authority of a foreign limited liability company
because of a default under paragraph (a), clauses (1) to (3), the secretary of state shall:
new text end

new text begin (i) issue a certificate of revocation; and
new text end

new text begin (ii) provide a notice of the revocation to the foreign limited liability company.
new text end

new text begin (2) Upon revoking the certificate of authority of a foreign limited liability company
because of a default under paragraph (a), clause (4), the secretary of state shall issue a
certificate of revocation, and the certificate must be filed in the Office of the Secretary of
State. No further notice to the foreign limited liability company is required.
new text end

new text begin (3) The secretary of state shall also make the names of the revoked foreign limited
liability companies available in an electronic format.
new text end

new text begin (e) Upon the issuance of such certificate of revocation, the authority of the foreign
limited liability company to transact business in this state shall cease.
new text end

Sec. 61.

new text begin [322C.0807] WITHDRAWAL OF FOREIGN LIMITED LIABILITY
COMPANY.
new text end

new text begin (a) If a foreign limited liability company holding a certificate of authority desires to
withdraw, it shall file with the secretary of state an application for withdrawal.
new text end

new text begin (b) The application for withdrawal shall set forth:
new text end

new text begin (1) the name of the foreign limited liability company corporation and the state or
country under the laws of which it is organized;
new text end

new text begin (2) that it has no property located in this state and has ceased to transact business
therein;
new text end

new text begin (3) that its governing body has duly determined to surrender its authority to transact
business in this state;
new text end

new text begin (4) that it revokes the authority of its registered agent in this state to accept service
of process;
new text end

new text begin (5) the address to which the secretary of state shall mail a copy of any process against
the foreign limited liability company that may be served upon the secretary of state;
new text end

new text begin (6) that it will pay to the commissioner of management and budget the amount of
any additional license fees properly found by the secretary of state to be then due from
such foreign limited liability company; and
new text end

new text begin (7) additional information required or demanded to enable the secretary of state
to determine the additional license fees, if any, payable by the foreign limited liability
company.
new text end

new text begin (c) The application for withdrawal shall be executed on behalf of the foreign limited
liability company pursuant to section 322C.0203.
new text end

new text begin (d) The application for withdrawal shall be delivered to the secretary of state. Upon
receiving and examining the same, and upon finding that it conforms to the provisions of
this chapter, the secretary of state shall, when all license fees, filing fees, and other charges
have been paid as required by law, file the same and shall issue and record a certificate
of withdrawal. Upon the issuance of the certificate, the authority of the foreign limited
liability company to transact business in this state shall cease.
new text end

new text begin (e) The filing with the secretary of state by the corporation of a certificate of
dissolution, or a certificate of merger if the foreign limited liability company is not the
surviving limited liability company from the proper officer of the state or country under
the laws of which the foreign limited liability company is organized, constitutes a valid
application of withdrawal and the authority of the foreign limited liability company to
transact business in this state shall cease upon filing of the certificate.
new text end

Sec. 62.

new text begin [322C.0808] EFFECT OF FAILURE TO HAVE CERTIFICATE OF
AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Certificate of authority required. new text end

new text begin A foreign limited liability
company transacting business in this state may not maintain an action or proceeding in
this state unless it has a certificate of authority to transact business in this state.
new text end

new text begin Subd. 2. new text end

new text begin Actions not affected. new text end

new text begin The failure of a foreign limited liability company
to have a certificate of authority to transact business in this state does not impair the
validity of a contract or act of the company or prevent the company from defending an
action or proceeding in this state.
new text end

new text begin Subd. 3. new text end

new text begin Limitation on liability. new text end

new text begin A member, manager, or governor of a foreign
limited liability company is not liable for the debts, obligations, or other liabilities of the
company solely because the company transacted business in this state without a certificate
of authority.
new text end

new text begin Subd. 4. new text end

new text begin Secretary of state as agent. new text end

new text begin If a foreign limited liability company
transacts business in this state without a certificate of authority or cancels its certificate of
authority, it appoints the secretary of state as its agent for service of process for rights of
action arising out of the transaction of business in this state.
new text end

Sec. 63.

new text begin [322C.0809] ACTION BY ATTORNEY GENERAL.
new text end

new text begin The attorney general may maintain an action to enjoin a foreign limited liability
company from transacting business in this state in violation of sections 322C.0801 to
322C.0809.
new text end

ACTIONS BY MEMBERS

Sec. 64.

new text begin [322C.0901] DIRECT ACTION BY MEMBER.
new text end

new text begin Subdivision 1. new text end

new text begin Direct actions allowed. new text end

new text begin Subject to subdivision 2, a member may
maintain a direct action against another member, a manager, a governor, or the limited
liability company to enforce the member's rights and otherwise protect the member's
interests, including rights and interests under the operating agreement or this chapter or
arising independently of the membership relationship.
new text end

new text begin Subd. 2. new text end

new text begin Action requirements. new text end

new text begin A member maintaining a direct action under this
section must plead and prove an actual or threatened injury that is not solely the result of
an injury suffered or threatened to be suffered by the limited liability company.
new text end

Sec. 65.

new text begin [322C.0902] DERIVATIVE ACTION.
new text end

new text begin A member may maintain a derivative action to enforce a right of a limited liability
company if:
new text end

new text begin (1) the member first makes a demand on the other members in a member-managed
limited liability company, the managers of a manager-managed limited liability company,
or the board of governors of a board-managed limited liability company requesting that
they cause the company to bring an action to enforce the right, and the member or board
does not bring the action within a reasonable time; or
new text end

new text begin (2) a demand under clause (1) would be futile.
new text end

Sec. 66.

new text begin [322C.0903] PROPER PLAINTIFF.
new text end

new text begin Subdivision 1. new text end

new text begin Member status required. new text end

new text begin Except as otherwise provided in
subdivision 2, a derivative action under section 322C.0902 may be maintained only by a
person that is a member at the time the action is commenced and remains a member
while the action continues.
new text end

new text begin Subd. 2. new text end

new text begin Effect of plaintiff death. new text end

new text begin If the sole plaintiff in a derivative action dies
while the action is pending, the court may permit another member of the limited liability
company to be substituted as plaintiff.
new text end

Sec. 67.

new text begin [322C.0904] PLEADING.
new text end

new text begin In a derivative action under section 322C.0902, the complaint must state with
particularity:
new text end

new text begin (1) the date and content of the plaintiff's demand and the response to the demand by
the other members, managers, or board of governors; or
new text end

new text begin (2) if a demand has not been made, the reasons a demand under section 322C.0902,
clause (1), would be futile.
new text end

Sec. 68.

new text begin [322C.0905] SPECIAL LITIGATION COMMITTEE.
new text end

new text begin Subdivision 1. new text end

new text begin Committee authorization. new text end

new text begin If a limited liability company is named
as or made a party in a derivative proceeding, the company may appoint a special
litigation committee to investigate the claims asserted in the proceeding and determine
whether pursuing the action is in the best interests of the company. If the company
appoints a special litigation committee, on motion by the committee made in the name
of the company, except for good cause shown, the court shall stay discovery for the time
reasonably necessary to permit the committee to make its investigation. This subdivision
does not prevent the court from enforcing a person's right to information under section
322C.0410 or, for good cause shown, granting extraordinary relief in the form of a
temporary restraining order or preliminary injunction.
new text end

new text begin Subd. 2. new text end

new text begin Committee composition. new text end

new text begin A special litigation committee may be composed
of one or more disinterested and independent individuals, who may be members.
new text end

new text begin Subd. 3. new text end

new text begin Requirements for appointment of committee. new text end

new text begin A special litigation
committee may be appointed:
new text end

new text begin (1) in a member-managed limited liability company:
new text end

new text begin (i) by the consent of a majority of the members not named as defendants or plaintiffs
in the proceeding; and
new text end

new text begin (ii) if all members are named as defendants or plaintiffs in the proceeding, by a
majority of the members named as defendants;
new text end

new text begin (2) in a manager-managed limited liability company:
new text end

new text begin (i) by a majority of the managers not named as defendants or plaintiffs in the
proceeding; and
new text end

new text begin (ii) if all managers are named as defendants or plaintiffs in the proceeding, by a
majority of the managers named as defendants; and
new text end

new text begin (3) in a board-managed limited liability company:
new text end

new text begin (i) by a majority of governors not named as defendants or plaintiffs in the
proceeding; and
new text end

new text begin (ii) if all governors are named as defendants or plaintiffs in the proceeding, by a
majority of the governors named as defendants.
new text end

new text begin Subd. 4. new text end

new text begin Determinations of committee. new text end

new text begin After appropriate investigation, a special
litigation committee may determine that it is in the best interests of the limited liability
company that the proceeding:
new text end

new text begin (1) continue under the control of the plaintiff;
new text end

new text begin (2) continue under the control of the committee;
new text end

new text begin (3) be settled on terms approved by the committee; or
new text end

new text begin (4) be dismissed.
new text end

new text begin Subd. 5. new text end

new text begin Committee procedures. new text end

new text begin After making a determination under subdivision
4, a special litigation committee shall file with the court a statement of its determination
and its report supporting its determination, giving notice to the plaintiff. The court shall
determine whether the members of the committee were disinterested and independent
and whether the committee conducted its investigation and made its recommendation
in good faith, independently, and with reasonable care, with the committee having the
burden of proof. If the court finds that the members of the committee were disinterested
and independent and that the committee acted in good faith, independently, and with
reasonable care, the court shall enforce the determination of the committee. Otherwise,
the court shall dissolve the stay of discovery entered under subdivision 1 and allow the
action to proceed under the direction of the plaintiff.
new text end

Sec. 69.

new text begin [322C.0906] PROCEEDS AND EXPENSES.
new text end

new text begin Subdivision 1. new text end

new text begin Ownership of proceeds. new text end

new text begin Except as otherwise provided in
subdivision 2:
new text end

new text begin (1) any proceeds or other benefits of a derivative action under section 322C.0902,
whether by judgment, compromise, or settlement, belong to the limited liability company
and not to the plaintiff; and
new text end

new text begin (2) if the plaintiff receives any proceeds, the plaintiff shall remit them immediately
to the company.
new text end

new text begin Subd. 2. new text end

new text begin Expenses awarded. new text end

new text begin If a derivative action under section 322C.0902 is
successful in whole or in part, the court may award the plaintiff reasonable expenses,
including reasonable attorney fees and costs, from the recovery of the limited liability
company.
new text end

MERGER, CONVERSION, AND DOMESTICATION

Sec. 70.

new text begin [322C.1001] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of sections 322C.1001 to 322C.1015, the
terms defined in this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Constituent limited liability company. new text end

new text begin "Constituent limited liability
company" means a constituent organization that is a limited liability company.
new text end

new text begin Subd. 3. new text end

new text begin Constituent organization. new text end

new text begin "Constituent organization" means an
organization that is party to a merger or exchange.
new text end

new text begin Subd. 4. new text end

new text begin Converted organization. new text end

new text begin "Converted organization" means the
organization into which a converting organization converts pursuant to sections 322C.1007
to 322C.1010.
new text end

new text begin Subd. 5. new text end

new text begin Converting limited liability company. new text end

new text begin "Converting limited liability
company" means a converting organization that is a limited liability company.
new text end

new text begin Subd. 6. new text end

new text begin Converting organization. new text end

new text begin "Converting organization" means an
organization that converts into another organization pursuant to section 322C.1007.
new text end

new text begin Subd. 7. new text end

new text begin Domesticated company. new text end

new text begin "Domesticated company" means the company
that exists after a domesticating foreign limited liability company or limited liability
company effects a domestication pursuant to sections 322C.1011 to 322C.1014.
new text end

new text begin Subd. 8. new text end

new text begin Domesticating company. new text end

new text begin "Domesticating company" means the company
that effects a domestication pursuant to sections 322C.1011 to 322C.1014.
new text end

new text begin Subd. 9. new text end

new text begin Governing statute. new text end

new text begin "Governing statute" means the statute that governs
an organization's internal affairs.
new text end

new text begin Subd. 10. new text end

new text begin Organization. new text end

new text begin "Organization" means a general partnership, including
a limited liability partnership, limited partnership, including a limited liability limited
partnership, limited liability company, business trust, corporation, or any other person
having a governing statute. The term includes a domestic or foreign organization
regardless of whether organized for profit.
new text end

new text begin Subd. 11. new text end

new text begin Organizational documents. new text end

new text begin "Organizational documents" means:
new text end

new text begin (1) for a domestic or foreign general partnership, its partnership agreement;
new text end

new text begin (2) for a limited partnership or foreign limited partnership, its certificate of limited
partnership and partnership agreement;
new text end

new text begin (3) for a domestic or foreign limited liability company, its certificate or articles of
organization and operating agreement, or comparable records as provided in its governing
statute;
new text end

new text begin (4) for a business trust, its agreement of trust and declaration of trust;
new text end

new text begin (5) for a domestic or foreign corporation for profit, its articles of incorporation,
bylaws, and other agreements among its shareholders which are authorized by its
governing statute, or comparable records as provided in its governing statute; and
new text end

new text begin (6) for any other organization, the basic records that create the organization and
determine its internal governance and the relations among the persons that own it, have an
interest in it, or are members of it.
new text end

new text begin Subd. 12. new text end

new text begin Personal liability. new text end

new text begin "Personal liability" means liability for a debt,
obligation, or other liability of an organization which is imposed on a person that co-owns,
has an interest in, or is a member of the organization:
new text end

new text begin (1) by the governing statute solely by reason of the person co-owning, having an
interest in, or being a member of the organization; or
new text end

new text begin (2) by the organization's organizational documents under a provision of the governing
statute authorizing those documents to make one or more specified persons liable for all or
specified debts, obligations, or other liabilities of the organization solely by reason of the
person or persons co-owning, having an interest in, or being a member of the organization.
new text end

new text begin Subd. 13. new text end

new text begin Surviving organization. new text end

new text begin "Surviving organization" means an organization
into which one or more other organizations are merged whether the organization preexisted
the merger or was created by the merger.
new text end

Sec. 71.

new text begin [322C.1002] MERGER; EXCHANGE.
new text end

new text begin Subdivision 1. new text end

new text begin Prerequisites for merger. new text end

new text begin A limited liability company may merge
with one or more other constituent organizations pursuant to this section, sections
322C.1003 to 322C.1005, and a plan of merger if:
new text end

new text begin (1) the governing statute of each of the other organizations authorizes the merger;
new text end

new text begin (2) the merger is not prohibited by the law of a jurisdiction that enacted any of the
governing statutes; and
new text end

new text begin (3) each of the other organizations complies with its governing statute in effecting
the merger.
new text end

new text begin Subd. 2. new text end

new text begin Prerequisites for exchange. new text end

new text begin A limited liability company may engage in
an exchange with one or more other constituent organizations pursuant to this section by
which one of the constituent organizations acquires all of the ownership interests of one or
more classes or series of another constituent organization pursuant to this section, sections
322C.1003 to 322C.1005, and a plan of exchange if:
new text end

new text begin (1) the governing statute of each of the other constituent organizations authorizes
the exchange;
new text end

new text begin (2) the exchange is not prohibited by the law of a jurisdiction that enacted any of the
governing statutes; and
new text end

new text begin (3) each of the other constituent organizations complies with its governing statute in
effecting the exchange.
new text end

new text begin Subd. 3. new text end

new text begin Plan of merger or exchange. new text end

new text begin A plan of merger or exchange must be in a
record and must include:
new text end

new text begin (1) the name and form of each constituent organization and:
new text end

new text begin (i) in the case of a merger, the name and form of the surviving organization and, if
the surviving organization is to be created by the merger, a statement to that effect; and
new text end

new text begin (ii) in the case of an exchange, the name of the acquiring organization;
new text end

new text begin (2)(i) in the case of a merger, the terms and conditions of the merger, including the
manner and basis for converting the interests in each constituent organization into any
combination of money, interests in the surviving organization, and other consideration; and
new text end

new text begin (ii) in the case of an exchange, the terms and conditions of the exchange, including
the manner and basis of exchanging the ownership interests to be acquired for securities
of, or other ownership interests in, the acquiring organization or any other organization or,
in whole or part, for money or other property;
new text end

new text begin (3) in the case of a merger, if the surviving organization is to be created by the merger,
the surviving organization's organizational documents that are proposed to be in a record;
new text end

new text begin (4) in the case of a merger, if the surviving organization is not to be created by
the merger, any amendments to be made by the merger to the surviving organization's
organizational documents that are, or are proposed to be, in a record; and
new text end

new text begin (5) any other provisions with respect to the proposed merger or exchange that are
considered necessary or desirable.
new text end

Sec. 72.

new text begin [322C.1003] ACTION ON PLAN OF MERGER OR EXCHANGE BY
CONSTITUENT LIMITED LIABILITY COMPANY.
new text end

new text begin Subdivision 1. new text end

new text begin Member consent required. new text end

new text begin Subject to section 322C.1015, a plan
of merger or exchange must be consented to by all the members of a constituent limited
liability company.
new text end

new text begin Subd. 2. new text end

new text begin Amendment of plan or abandonment of merger or exchange. new text end

new text begin Subject to
section 322C.1015 and any contractual rights, after a merger or exchange is approved, and
at any time before the merger or exchange becomes effective according to this chapter,
a constituent limited liability company may amend the plan or abandon the merger or
exchange:
new text end

new text begin (1) as provided in the plan; or
new text end

new text begin (2) except as otherwise prohibited in the plan, with the same consent as was required
to approve the plan.
new text end

Sec. 73.

new text begin [322C.1004] FILINGS REQUIRED FOR MERGER OR EXCHANGE;
EFFECTIVE DATE AND TIME.
new text end

new text begin Subdivision 1. new text end

new text begin Articles of merger or exchange. new text end

new text begin After each constituent organization
has approved a merger or exchange, articles of merger or exchange must be signed on
behalf of:
new text end

new text begin (1) each constituent limited liability company, as provided in section 322C.0203,
subdivision 1; and
new text end

new text begin (2) each other constituent organization, as provided in its governing statute.
new text end

new text begin Subd. 2. new text end

new text begin Contents of articles of merger. new text end

new text begin Articles of merger under this section
must include:
new text end

new text begin (1) the name and form of each constituent organization and the jurisdiction of its
governing statute;
new text end

new text begin (2) the name and form of the surviving organization, the jurisdiction of its governing
statute, and, if the surviving organization is created by the merger, a statement to that effect;
new text end

new text begin (3) the date the merger is effective under the governing statute of the surviving
organization;
new text end

new text begin (4) if the surviving organization is to be created by the merger:
new text end

new text begin (i) if it will be a limited liability company, the company's articles of organization; or
new text end

new text begin (ii) if it will be an organization other than a limited liability company, the
organizational document that creates the organization that is in a public record;
new text end

new text begin (5) if the surviving organization preexists the merger, any amendments provided
for in the plan of merger for the organizational document that created the organization
that are in a public record;
new text end

new text begin (6) a statement as to each constituent organization that the merger was approved as
required by the organization's governing statute;
new text end

new text begin (7) if the surviving organization is a foreign organization not authorized to transact
business in this state, the street address of an office that the secretary of state may use for
the purposes of section 322C.1005, subdivision 2; and
new text end

new text begin (8) any additional information required by the governing statute of any constituent
organization.
new text end

new text begin Subd. 3. new text end

new text begin Contents of articles of exchange. new text end

new text begin Articles of exchange under this section
must include:
new text end

new text begin (1) the name and form of each constituent organization and the jurisdiction of its
governing statute;
new text end

new text begin (2) the manner and basis of exchanging the ownership interests to be acquired for
securities of, or other ownership interests in, the acquiring organization or any other
organization or, in whole or part, for money or other property;
new text end

new text begin (3) the date the exchange is effective under the governing statute of the acquiring
organization;
new text end

new text begin (4) a statement as to each constituent organization that the exchange was approved
as required by the organization's governing statute; and
new text end

new text begin (5) any additional information required by the governing statute of any constituent
organization.
new text end

new text begin Subd. 4. new text end

new text begin Delivery of articles of merger or exchange. new text end

new text begin Each constituent limited
liability company shall file the articles of merger, together with a total fee of $60, with the
Office of the Secretary of State.
new text end

new text begin Subd. 5. new text end

new text begin Effective date and time of merger or exchange. new text end

new text begin (a) A merger becomes
effective under sections 322C.1001 to 322C.1015:
new text end

new text begin (1) if the surviving organization is a limited liability company, upon the later of:
new text end

new text begin (i) compliance with subdivision 4; or
new text end

new text begin (ii) subject to section 322C.0205, subdivision 3, such effective time as is specified in
the articles of merger; or
new text end

new text begin (2) if the surviving organization is not a limited liability company, as provided by
the governing statute of the surviving organization.
new text end

new text begin (b) An exchange becomes effective under sections 322C.1001 to 322C.1015 upon
the later of:
new text end

new text begin (1) compliance with subdivision 4; or
new text end

new text begin (2) subject to section 322C.0205, subdivision 3, such effective time as is specified in
the articles of exchange.
new text end

Sec. 74.

new text begin [322C.1005] EFFECT OF MERGER.
new text end

new text begin Subdivision 1. new text end

new text begin Effect on constituent organizations. new text end

new text begin When a merger becomes
effective:
new text end

new text begin (1) the surviving organization continues or comes into existence;
new text end

new text begin (2) each constituent organization that merges into the surviving organization ceases
to exist as a separate entity;
new text end

new text begin (3) all property owned by each constituent organization that ceases to exist vests in
the surviving organization;
new text end

new text begin (4) all debts, obligations, or other liabilities of each constituent organization
that ceases to exist continue as debts, obligations, or other liabilities of the surviving
organization;
new text end

new text begin (5) an action or proceeding pending by or against any constituent organization that
ceases to exist may be continued as if the merger had not occurred;
new text end

new text begin (6) except as prohibited by other law, all of the rights, privileges, immunities,
powers, and purposes of each constituent organization that ceases to exist vest in the
surviving organization;
new text end

new text begin (7) except as otherwise provided in the plan of merger, the terms and conditions
of the plan of merger take effect;
new text end

new text begin (8) except as otherwise agreed, if a constituent limited liability company ceases
to exist, the merger does not dissolve the limited liability company for the purposes of
sections 322C.0701 to 322C.0707;
new text end

new text begin (9) if the surviving organization is created by the merger:
new text end

new text begin (i) if it is a limited liability company, the articles of organization become effective; or
new text end

new text begin (ii) if it is an organization other than a limited liability company, the organizational
document that creates the organization becomes effective; and
new text end

new text begin (10) if the surviving organization preexisted the merger, any amendments provided
for in the articles of merger or the organizational document that created the organization
become effective.
new text end

new text begin Subd. 2. new text end

new text begin Foreign organization. new text end

new text begin A surviving organization that is a foreign
organization consents to the jurisdiction of the courts of this state to enforce any debt,
obligation, or other liability owed by a constituent organization if before the merger the
constituent organization was subject to suit in this state on the debt, obligation, or other
liability. A surviving organization that is a foreign organization and not authorized
to transact business in this state appoints the secretary of state as its agent for service
of process for the purposes of enforcing a debt, obligation, or other liability under this
subdivision. Service on the secretary of state under this subdivision must be made in the
same manner and has the same consequences as in section 322C.0116, subdivisions 3 and 4.
new text end

Sec. 75.

new text begin [322C.1006] EFFECT OF EXCHANGE.
new text end

new text begin When an exchange becomes effective, the membership interests in a limited liability
company to be exchanged under the terms of the plan are considered to be exchanged.
The members owning those membership interests are entitled only to the ownership
interests, securities, money, or other property into which those membership interests have
been converted or for which those membership interests have been exchanged according
to the plan.
new text end

Sec. 76.

new text begin [322C.1007] CONVERSION.
new text end

new text begin Subdivision 1. new text end

new text begin Conversion requirements. new text end

new text begin An organization other than a limited
liability company, a foreign limited liability company, a nonprofit corporation, or an
organization owning assets irrevocably dedicated to a charitable purpose, may convert
to a limited liability company other than a nonprofit limited liability company, and a
limited liability company other than a nonprofit limited liability company may convert to
an organization other than a foreign limited liability company pursuant to this section,
sections 322C.1008 to 322C.1010, and a plan of conversion if:
new text end

new text begin (1) the other organization's governing statute authorizes the conversion;
new text end

new text begin (2) the conversion is not prohibited by the law of the jurisdiction that enacted the
other organization's governing statute or other law of this state; and
new text end

new text begin (3) the other organization complies with its governing statute in effecting the
conversion.
new text end

new text begin Subd. 2. new text end

new text begin Contents of plan of conversion. new text end

new text begin A plan of conversion must be in a record
and must include:
new text end

new text begin (1) the name and form of the organization before conversion;
new text end

new text begin (2) the name and form of the organization after conversion;
new text end

new text begin (3) the terms and conditions of the conversion, including the manner and basis
for converting interests in the converting organization into any combination of money,
interests in the converted organization, and other consideration; and
new text end

new text begin (4) the organizational documents of the converted organization that are, or are
proposed to be, in a record.
new text end

Sec. 77.

new text begin [322C.1008] ACTION ON PLAN OF CONVERSION BY CONVERTING
LIMITED LIABILITY COMPANY.
new text end

new text begin Subdivision 1. new text end

new text begin Member consent required. new text end

new text begin Subject to section 322C.1015, a plan
of conversion must be consented to by all the members of a converting limited liability
company.
new text end

new text begin Subd. 2. new text end

new text begin Amendment of plan or abandonment of conversion. new text end

new text begin Subject to section
322C.1015 and any contractual rights, after a conversion is approved, and at any time
before articles of conversion are delivered to the secretary of state for filing under section
322C.1009, a converting limited liability company may amend the plan or abandon the
conversion:
new text end

new text begin (1) as provided in the plan; or
new text end

new text begin (2) except as otherwise prohibited in the plan, by the same consent as was required
to approve the plan.
new text end

Sec. 78.

new text begin [322C.1009] FILINGS REQUIRED FOR CONVERSION; EFFECTIVE
DATE AND TIME.
new text end

new text begin Subdivision 1. new text end

new text begin Articles of conversion. new text end

new text begin After a plan of conversion is approved:
new text end

new text begin (1) a converting limited liability company shall file articles of conversion with the
secretary of state, together with a total fee of $60, which articles of conversion must be
signed as provided in section 322C.0203, subdivision 1, and must include:
new text end

new text begin (i) a statement that the limited liability company has been converted into another
organization;
new text end

new text begin (ii) the name and form of the organization and the jurisdiction of its governing statute;
new text end

new text begin (iii) the time the conversion is effective under the governing statute of the converted
organization;
new text end

new text begin (iv) a statement that the conversion was approved as required by this chapter;
new text end

new text begin (v) a statement that the conversion was approved as required by the governing
statute of the converted organization; and
new text end

new text begin (vi) if the converted organization is a foreign organization not authorized to transact
business in this state, the street address of an office that the secretary of state may use for
the purposes of section 322C.1010, subdivision 3; and
new text end

new text begin (2) if the converting organization is not a converting limited liability company, the
converting organization shall file with the secretary of state articles of organization, which
must include, in addition to the information required by section 322C.0201, subdivision 2:
new text end

new text begin (i) a statement that the converted organization was converted from another
organization;
new text end

new text begin (ii) the name and form of that converting organization and the jurisdiction of its
governing statute; and
new text end

new text begin (iii) a statement that the conversion was approved in a manner that complied with
the converting organization's governing statute.
new text end

new text begin Subd. 2. new text end

new text begin Effective date and time of conversion. new text end

new text begin A conversion becomes effective:
new text end

new text begin (1) if the converted organization is a limited liability company, when the articles
of organization takes effect; and
new text end

new text begin (2) if the converted organization is not a limited liability company, as provided by
the governing statute of the converted organization.
new text end

Sec. 79.

new text begin [322C.1010] EFFECT OF CONVERSION.
new text end

new text begin Subdivision 1. new text end

new text begin Same entity. new text end

new text begin An organization that has been converted pursuant to
sections 322C.1007 to 322C.1009 is for all purposes the same entity that existed before
the conversion.
new text end

new text begin Subd. 2. new text end

new text begin Effect on converting organization. new text end

new text begin When a conversion takes effect:
new text end

new text begin (1) all property owned by the converting organization remains vested in the
converted organization;
new text end

new text begin (2) all debts, obligations, or other liabilities of the converting organization continue
as debts, obligations, or other liabilities of the converted organization;
new text end

new text begin (3) an action or proceeding pending by or against the converting organization may
be continued as if the conversion had not occurred;
new text end

new text begin (4) except as prohibited by law other than this chapter, all of the rights, privileges,
immunities, powers, and purposes of the converting organization remain vested in the
converted organization;
new text end

new text begin (5) except as otherwise provided in the plan of conversion, the terms and conditions
of the plan of conversion take effect; and
new text end

new text begin (6) except as otherwise agreed, the conversion does not dissolve a converting limited
liability company for the purposes of sections 322C.0701 to 322C.0707.
new text end

new text begin Subd. 3. new text end

new text begin Foreign organization. new text end

new text begin A converted organization that is a foreign
organization consents to the jurisdiction of the courts of this state to enforce any debt,
obligation, or other liability for which the converting limited liability company is liable
if, before the conversion, the converting limited liability company was subject to suit in
this state on the debt, obligation, or other liability. A converted organization that is a
foreign organization and not authorized to transact business in this state appoints the
secretary of state as its agent for service of process for purposes of enforcing a debt,
obligation, or other liability under this subdivision. Service on the secretary of state under
this subdivision must be made in the same manner and has the same consequences as in
section 322C.0116, subdivisions 3 and 4.
new text end

Sec. 80.

new text begin [322C.1011] DOMESTICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Foreign limited liability company. new text end

new text begin A foreign limited liability
company may become a limited liability company pursuant to this section, sections
322C.1011 to 322C.1013, and a plan of domestication if:
new text end

new text begin (1) the foreign limited liability company's governing statute authorizes the
domestication;
new text end

new text begin (2) the domestication is not prohibited by the law of the jurisdiction that enacted
the governing statute; and
new text end

new text begin (3) the foreign limited liability company complies with its governing statute in
effecting the domestication.
new text end

new text begin Subd. 2. new text end

new text begin Domestic limited liability company. new text end

new text begin A limited liability company may
become a foreign limited liability company pursuant to this section, sections 322C.1011 to
322C.1013, and a plan of domestication if:
new text end

new text begin (1) the foreign limited liability company's governing statute authorizes the
domestication;
new text end

new text begin (2) the domestication is not prohibited by the law of the jurisdiction that enacted
the governing statute; and
new text end

new text begin (3) the foreign limited liability company complies with its governing statute in
effecting the domestication.
new text end

new text begin Subd. 3. new text end

new text begin Plan of domestication. new text end

new text begin A plan of domestication must be in a record
and must include:
new text end

new text begin (1) the name of the domesticating company before domestication and the jurisdiction
of its governing statute;
new text end

new text begin (2) the name of the domesticated company after domestication and the jurisdiction
of its governing statute;
new text end

new text begin (3) the terms and conditions of the domestication, including the manner and basis
for converting interests in the domesticating company into any combination of money,
interests in the domesticated company, and other consideration; and
new text end

new text begin (4) the organizational documents of the domesticated company that are, or are
proposed to be, in a record.
new text end

Sec. 81.

new text begin [322C.1012] ACTION ON PLAN OF DOMESTICATION BY
DOMESTICATING LIMITED LIABILITY COMPANY.
new text end

new text begin Subdivision 1. new text end

new text begin Consent required. new text end

new text begin A plan of domestication must be consented to:
new text end

new text begin (1) by all the members, subject to section 322C.1015, if the domesticating company
is a limited liability company; and
new text end

new text begin (2) as provided in the domesticating company's governing statute, if the company is
a foreign limited liability company.
new text end

new text begin Subd. 2. new text end

new text begin Amendment of plan or abandonment of domestication. new text end

new text begin Subject to any
contractual rights, after a domestication is approved, and at any time before articles of
domestication are filed with the secretary of state under section 322C.1013, a domesticating
limited liability company may amend the plan or abandon the domestication:
new text end

new text begin (1) as provided in the plan; or
new text end

new text begin (2) except as otherwise prohibited in the plan, by the same consent as was required
to approve the plan.
new text end

Sec. 82.

new text begin [322C.1013] FILINGS REQUIRED FOR DOMESTICATION;
EFFECTIVE DATE.
new text end

new text begin Subdivision 1. new text end

new text begin Articles of domestication. new text end

new text begin After a plan of domestication is approved,
a domesticating company shall file with the secretary of state articles of domestication,
together with a total fee of $60, which articles of domestication must include:
new text end

new text begin (1) a statement, as the case may be, that the company has been domesticated from or
into another jurisdiction;
new text end

new text begin (2) the name of the domesticating company and the jurisdiction of its governing
statute;
new text end

new text begin (3) the name of the domesticated company and the jurisdiction of its governing statute;
new text end

new text begin (4) the date the domestication is effective under the governing statute of the
domesticated company;
new text end

new text begin (5) if the domesticating company was a limited liability company, a statement that
the domestication was approved as required by this chapter;
new text end

new text begin (6) if the domesticating company was a foreign limited liability company, a
statement that the domestication was approved as required by the governing statute of
the other jurisdiction; and
new text end

new text begin (7) if the domesticated company was a foreign limited liability company not
authorized to transact business in this state, the street address of an office that the secretary
of state may use for the purposes of section 322C.1014, subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Effective date of domestication. new text end

new text begin A domestication becomes effective:
new text end

new text begin (1) when the articles of organization takes effect, if the domesticated company is
a limited liability company; and
new text end

new text begin (2) according to the governing statute of the domesticated company, if the
domesticated organization is a foreign limited liability company.
new text end

Sec. 83.

new text begin [322C.1014] EFFECT OF DOMESTICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Effect on domesticating company. new text end

new text begin When a domestication takes
effect:
new text end

new text begin (1) the domesticated company is for all purposes the company that existed before
the domestication;
new text end

new text begin (2) all property owned by the domesticating company remains vested in the
domesticated company;
new text end

new text begin (3) all debts, obligations, or other liabilities of the domesticating company continue
as debts, obligations, or other liabilities of the domesticated company;
new text end

new text begin (4) an action or proceeding pending by or against a domesticating company may be
continued as if the domestication had not occurred;
new text end

new text begin (5) except as prohibited by other law, all of the rights, privileges, immunities, powers,
and purposes of the domesticating company remain vested in the domesticated company;
new text end

new text begin (6) except as otherwise provided in the plan of domestication, the terms and
conditions of the plan of domestication take effect; and
new text end

new text begin (7) except as otherwise agreed, the domestication does not dissolve a domesticating
limited liability company for the purposes of sections 322C.0701 to 322C.0707.
new text end

new text begin Subd. 2. new text end

new text begin Foreign company. new text end

new text begin A domesticated company that is a foreign limited
liability company consents to the jurisdiction of the courts of this state to enforce any
debt, obligation, or other liability owed by the domesticating company if, before the
domestication, the domesticating company was subject to suit in this state on the debt,
obligation, or other liability. A domesticated company that is a foreign limited liability
company and not authorized to transact business in this state appoints the secretary of state
as its agent for service of process for purposes of enforcing a debt, obligation, or other
liability under this subdivision. Service on the secretary of state under this subdivision
must be made in the same manner and has the same consequences as in section 322C.0116,
subdivisions 3 and 4.
new text end

new text begin Subd. 3. new text end

new text begin Foreign jurisdiction. new text end

new text begin If a limited liability company has adopted and
approved a plan of domestication under section 322C.1011 providing for the company to
be domesticated in a foreign jurisdiction, a statement surrendering the company's articles
of organization must be filed with the secretary of state setting forth:
new text end

new text begin (1) the name of the company;
new text end

new text begin (2) a statement that the articles of organization is being surrendered in connection
with the domestication of the company in a foreign jurisdiction;
new text end

new text begin (3) a statement that the domestication was approved as required by this chapter; and
new text end

new text begin (4) the jurisdiction of formation of the domesticated foreign limited liability company.
new text end

Sec. 84.

new text begin [322C.1015] RESTRICTIONS ON APPROVAL OF MERGERS,
EXCHANGES, CONVERSIONS, AND DOMESTICATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Personality liability of member. new text end

new text begin If a member of a constituent,
converting, or domesticating limited liability company will have personal liability with
respect to a surviving, constituent, converted, or domesticated organization, approval or
amendment of a plan of merger, exchange, conversion, or domestication is ineffective
without the consent of the member, unless:
new text end

new text begin (1) the company's operating agreement provides for approval of a merger, exchange,
conversion, or domestication with the consent of fewer than all the members; and
new text end

new text begin (2) the member has consented to the provision of the operating agreement.
new text end

new text begin Subd. 2. new text end

new text begin Consent. new text end

new text begin A member does not give the consent required by subdivision 1
merely by consenting to a provision of the operating agreement that permits the operating
agreement to be amended with the consent of fewer than all the members.
new text end

Sec. 85.

new text begin [322C.1101] NONPROFIT LIMITED LIABILITY COMPANIES.
new text end

new text begin Subdivision 1. new text end

new text begin Status as nonprofit limited liability company. new text end

new text begin A limited liability
company is a nonprofit limited liability company if it is organized under or governed by
this chapter and its articles of organization state that it is a nonprofit limited liability
company governed by this section. The status of a nonprofit limited liability company
under this chapter is not determinative of its tax treatment.
new text end

new text begin Subd. 2. new text end

new text begin Limitations on pecuniary gain and distributions to members. new text end

new text begin A
nonprofit limited liability company may not:
new text end

new text begin (1) be formed for a purpose involving pecuniary gain to its members, other than to
members that are nonprofit organizations or subdivisions, units, or agencies of the United
States or a state or local government; or
new text end

new text begin (2) pay dividends, make distributions, or pay other pecuniary remuneration, directly
or indirectly, to its members, other than to members that are nonprofit organizations or
subdivisions, units, or agencies of the United States or a state or local government.
new text end

new text begin Subd. 3. new text end

new text begin Limitations on persons who may be members. new text end

new text begin A natural person may not
be a member of, or own any transferable interest in, a nonprofit limited liability company.
new text end

new text begin Subd. 4. new text end

new text begin Purposes; conduct. new text end

new text begin (a) Subject to subdivision 2:
new text end

new text begin (1) a nonprofit limited liability company may be organized under this chapter for
any lawful purpose, unless another statute requires incorporation or organization for a
purpose under a different law; and
new text end

new text begin (2) a nonprofit limited liability company has a general purpose of engaging in any
lawful activity unless otherwise limited in its articles of organization.
new text end

new text begin (b) A nonprofit limited liability company engaging in conduct that is regulated by
another statute is subject to the limitations of the other statute.
new text end

new text begin Subd. 5. new text end

new text begin Management; provisions of chapter 317A applicable to nonprofit
limited liability companies. new text end

new text begin (a) A nonprofit limited liability company must be
board-managed. The business and affairs of a nonprofit limited liability company must be
managed by or under the direction of a board of governors, which will have such powers
as are usually exercised by the board of directors of a nonprofit corporation governed by
chapter 317A. All governors will be entitled to vote and have equal rights and preferences
except as otherwise provided in the articles of organization or operating agreement. The
members of the first board may be named in the articles of organization, designated, or
appointed pursuant to the articles of organization, or elected by the organizer.
new text end

new text begin (b) A nonprofit limited liability company must have one or more natural persons
acting as officers and exercising the functions of the offices of president and treasurer,
however designated. The officers have such powers as are usually exercised by similar
officers of a nonprofit corporation governed by chapter 317A. The board shall elect
or appoint officers, except to the extent that the articles of organization or operating
agreement provide that the members may elect or appoint officers.
new text end

new text begin (c) Section 317A.161, subdivision 11, applies to a nonprofit limited liability
company as if it were a nonprofit corporation governed by chapter 317A. Section
317A.251 applies to a governor of a nonprofit limited liability company as if the governor
were a director of a nonprofit corporation, and section 322C.409 does not apply.
new text end

new text begin (d) Section 317A.255 applies to, and with regard to, a governor of a nonprofit limited
liability company as if the governor were a director of a nonprofit corporation.
new text end

new text begin (e) Section 317A.257 applies to a person who serves without compensation as
a governor of a nonprofit limited liability company, manager, member, or agent of a
nonprofit limited liability company as if such person were serving without compensation
as a director, officer, member, or agent of a nonprofit corporation.
new text end

new text begin (f) Section 317A.671 regarding the diversion of certain assets applies to a nonprofit
limited liability company as if it were a nonprofit corporation governed by chapter 317A.
new text end

new text begin (g) Section 317A.735 regarding the distribution of assets on dissolution applies to
a nonprofit limited liability company as if it were a nonprofit corporation governed by
chapter 317A.
new text end

new text begin (h) Section 317A.751 regarding judicial intervention applies to a nonprofit limited
liability company as if it were a nonprofit corporation governed by chapter 317A.
new text end

new text begin Subd. 6. new text end

new text begin Notice to and authority of attorney general. new text end

new text begin The attorney general has
the same authority and powers with regard to a nonprofit limited liability company as the
attorney general has with regard to a corporation governed by chapter 317A, including but
not limited to sections 317A.811 and 317A.813.
new text end

MISCELLANEOUS PROVISIONS

Sec. 86.

new text begin [322C.1201] UNIFORMITY OF APPLICATION AND
CONSTRUCTION.
new text end

new text begin In applying and construing this uniform act, consideration must be given to the need
to promote uniformity of the law with respect to its subject matter among states that enact it.
new text end

Sec. 87.

new text begin [322C.1202] RELATION TO ELECTRONIC SIGNATURES IN
GLOBAL AND NATIONAL COMMERCE ACT.
new text end

new text begin This chapter modifies, limits, and supersedes the federal Electronic Signatures in
Global and National Commerce Act, United States Code, title 15, section 7001 et seq., but
does not modify, limit, or supersede section 101(c) of that act, United States Code, title 15,
section 7001(c), or authorize electronic delivery of any of the notices described in section
103(b) of that act, United States Code, title 15, section 7003(b).
new text end

Sec. 88.

new text begin [322C.1203] SAVINGS CLAUSE.
new text end

new text begin This chapter does not affect an action commenced, proceeding brought, or right
accrued before this chapter takes effect.
new text end

Sec. 89.

new text begin [322C.1204] APPLICATION TO EXISTING RELATIONSHIPS.
new text end

new text begin Subdivision 1. new text end

new text begin Before January 1, 2018. new text end

new text begin (a) On or after August 1, 2015, a limited
liability company may not be formed under chapter 322B.
new text end

new text begin (b) Before January 1, 2018, this chapter governs only:
new text end

new text begin (1) a limited liability company formed on or after August 1, 2015; and
new text end

new text begin (2) except as otherwise provided in subdivision 3, a limited liability company
formed before August 1, 2015, which elects, in the manner provided in its operating
agreement or bylaw for amending the operating agreement, to be subject to this chapter.
new text end

new text begin Subd. 2. new text end

new text begin On or after January 1, 2018. new text end

new text begin Except as otherwise provided in subdivision
3, on and after January 1, 2018, this chapter governs all limited liability companies.
new text end

new text begin Subd. 3. new text end

new text begin Application to existing company. new text end

new text begin For the purposes of applying this
chapter to a limited liability company formed before August 1, 2015:
new text end

new text begin (1) the company's articles of organization are deemed to be the company's articles
of organization; and
new text end

new text begin (2) for the purposes of applying section 322C.0102, subdivision 10, and subject
to section 322C.0112, subdivision 4, language in the articles of organization, bylaws,
operating agreement, and/or member control agreement of a limited liability company
formed before August 1, 2015, that becomes subject to this chapter will operate as if
that language were in the operating agreement of the limited liability company when it
becomes subject to this chapter.
new text end

Sec. 90.

new text begin [322C.1205] STATE INTERESTED IN PROCEEDING.
new text end

new text begin If it appears at any stage of a proceeding in a court in this state that the state is, or is
likely to be, interested in the proceeding or that it is a matter of general public interest,
the court shall order that a copy of the complaint or petition be served upon the attorney
general in the same manner prescribed for serving a summons in a civil action. The
attorney general shall intervene in a proceeding when the attorney general determines that
the public interest requires it, whether or not the attorney general has been served.
new text end

Sec. 91. new text begin REPEALER; EFFECTIVE DATE.
new text end

new text begin Minnesota Statutes 2012, sections 322B.01; 322B.02; 322B.03, subdivisions 1, 2, 3,
6, 6a, 7, 8, 10, 11, 12, 13, 14, 15, 17, 17a, 17b, 18, 19, 19a, 20, 21, 22, 23, 24, 25, 26, 27,
28, 29, 30, 31, 31a, 32, 33, 34, 35, 36, 36a, 37, 38, 39, 40, 41, 41a, 42, 43, 44, 45, 45a,
46, 47, 48, 49, 50, and 51; 322B.04; 322B.10; 322B.105; 322B.11; 322B.115; 322B.12,
subdivisions 1, 2, 3, 4, and 5; 322B.125; 322B.13; 322B.135; 322B.14; 322B.145;
322B.15; 322B.155; 322B.16; 322B.165; 322B.17; 322B.175; 322B.18; 322B.20;
322B.21; 322B.22; 322B.23; 322B.30; 322B.303; 322B.306; 322B.31; 322B.313;
322B.316; 322B.32; 322B.323; 322B.326; 322B.33; 322B.333; 322B.336; 322B.34;
322B.343; 322B.346; 322B.348; 322B.35; 322B.353; 322B.356; 322B.36; 322B.363,
subdivisions 1, 2, 3, 4, 5, 6, and 7; 322B.366, subdivision 1; 322B.37; 322B.373;
322B.376; 322B.38; 322B.383; 322B.386; 322B.40; 322B.41; 322B.42; 322B.43;
322B.50; 322B.51; 322B.52; 322B.53; 322B.54; 322B.55; 322B.56; 322B.60; 322B.603;
322B.606; 322B.61; 322B.613; 322B.616; 322B.62; 322B.623; 322B.626; 322B.63;
322B.633; 322B.636; 322B.64; 322B.643; 322B.646; 322B.65; 322B.653; 322B.656;
322B.66; 322B.663; 322B.666; 322B.67; 322B.673; 322B.676; 322B.679; 322B.68;
322B.683; 322B.686; 322B.689; 322B.69; 322B.693; 322B.696; 322B.699; 322B.70;
322B.71; 322B.72; 322B.73; 322B.74; 322B.75; 322B.755; 322B.76; 322B.77; 322B.78;
322B.80; 322B.803; 322B.806; 322B.81; 322B.813; 322B.816, subdivisions 1, 2, 4, 5, and
6; 322B.82; 322B.823; 322B.826; 322B.83; 322B.833; 322B.836; 322B.84; 322B.843;
322B.846; 322B.85; 322B.853; 322B.856; 322B.86; 322B.863; 322B.866; 322B.87;
322B.873, subdivisions 1 and 4; 322B.876, subdivision 1; 322B.88; 322B.883; 322B.90;
322B.905; 322B.91, subdivisions 1 and 2; 322B.915; 322B.92; 322B.925; 322B.93;
322B.935; 322B.94; 322B.945; 322B.95; 322B.955; 322B.960, subdivisions 1, 4, and
5; and 322B.975, new text end new text begin are repealed effective January 1, 2018.
new text end

Sec. 92. new text begin EFFECTIVE DATE.
new text end

new text begin Except as otherwise provided, this article is effective August 1, 2015.
new text end

ARTICLE 2

CONFORMING CHANGES

Section 1.

Minnesota Statutes 2012, section 48A.03, subdivision 4, is amended to read:

Subd. 4.

Requirements for consolidated new text begin or merged new text end companies.

When two or
more trust companies have been or are consolidated under sections 49.34 to 49.41, or, in
the case of a limited liability companydeleted text begin ,deleted text end new text begin that has been or is merged undernew text end sections 322B.70
to 322B.75new text begin or 322C.1001 to 322C.1005 and 322C.1015new text end , the capital of the consolidated
new text begin or mergednew text end trust company is considered substituted for the capital of the several trust
companies entering into the consolidationnew text begin or mergernew text end , and the aggregate of the securities
of these trust companies on deposit with the commissioner of management and budget,
according to this section, must be increased or diminished accordingly.

Sec. 2.

Minnesota Statutes 2012, section 181.970, subdivision 2, is amended to read:

Subd. 2.

Exception.

Subdivision 1 does not apply to:

(1) employees of the state or a municipality governed by section 3.736 or 466.07;

(2) employees who are subject to a contract or other agreement governing
indemnification rights;

(3) employees and employers who are governed by indemnification provisions under
section 302A.521, 317A.521, deleted text begin ordeleted text end 322B.699new text begin , or 322C.0408new text end , or similar laws of this state or
another state specifically governing indemnification of employees of business or nonprofit
corporations, limited liability companies, or other legal entities; or

(4) indemnification rights for a particular liability specifically governed by other law.

Sec. 3.

Minnesota Statutes 2012, section 270C.721, is amended to read:

270C.721 REVOCATION OF CERTIFICATES OF AUTHORITY TO DO
BUSINESS IN THIS STATE.

When a foreign corporation authorized to do business in this state under chapter
303, or a foreign limited liability company or partnership authorized to do business in
this state under chapter 322Bnew text begin or 322Cnew text end , fails to comply with a law administered by the
commissioner that imposes a tax, the commissioner may serve the secretary of state with
a certified copy of an order finding such failure to comply. The secretary of state, upon
receipt of the order, shall revoke the deleted text begin certificate ofdeleted text end authority to do business in this state,
and shall reinstate the deleted text begin certificatedeleted text end new text begin entitynew text end under section 303.19 deleted text begin ordeleted text end new text begin ;new text end 322B.960, subdivision 6deleted text begin ,deleted text end new text begin ;
or 322C.0706new text end only when the corporation or limited liability company or partnership has
obtained from the commissioner an order finding that the corporation or limited liability
company or partnership is in compliance with such law. An order requiring revocation
of a certificate shall not be issued unless the commissioner gives the corporation or
limited liability company or partnership 30 days' written notice of the proposed order,
specifying the violations of law, and affording an opportunity to request a contested case
hearing under chapter 14.

Sec. 4.

Minnesota Statutes 2012, section 273.124, subdivision 8, is amended to read:

Subd. 8.

Homestead owned by or leased to family farm corporation, joint farm
venture, limited liability company, or partnership.

(a) Each family farm corporation;
each joint family farm venture; and each limited liability company or partnership which
operates a family farm; is entitled to class 1b under section 273.13, subdivision 22,
paragraph (b), or class 2a assessment for one homestead occupied by a shareholder,
member, or partner thereof who is residing on the land, and actively engaged in farming of
the land owned by the family farm corporation, joint family farm venture, limited liability
company, or partnership. Homestead treatment applies even if legal title to the property is
in the name of the family farm corporation, joint family farm venture, limited liability
company, or partnership, and not in the name of the person residing on it.

"Family farm corporation," "family farm," and "partnership operating a family
farm" have the meanings given in section 500.24, except that the number of allowable
shareholders, members, or partners under this subdivision shall not exceed 12. "Limited
liability company" has the meaning contained in sections 322B.03, subdivision 28,new text begin or
322C.0102, subdivision 12,new text end and 500.24, subdivision 2, paragraphs (l) and (m). "Joint
family farm venture" means a cooperative agreement among two or more farm enterprises
authorized to operate a family farm under section 500.24.

(b) In addition to property specified in paragraph (a), any other residences owned
by family farm corporations, joint family farm ventures, limited liability companies,
or partnerships described in paragraph (a) which are located on agricultural land and
occupied as homesteads by its shareholders, members, or partners who are actively
engaged in farming on behalf of that corporation, joint farm venture, limited liability
company, or partnership must also be assessed as class 2a property or as class 1b property
under section 273.13.

(c) Agricultural property that is owned by a member, partner, or shareholder of a
family farm corporation or joint family farm venture, limited liability company operating
a family farm, or by a partnership operating a family farm and leased to the family farm
corporation, limited liability company, partnership, or joint farm venture, as defined in
paragraph (a), is eligible for classification as class 1b or class 2a under section 273.13, if
the owner is actually residing on the property, and is actually engaged in farming the land
on behalf of that corporation, joint farm venture, limited liability company, or partnership.
This paragraph applies without regard to any legal possession rights of the family farm
corporation, joint family farm venture, limited liability company, or partnership under
the lease.

(d) Nonhomestead agricultural property that is owned by a family farm corporation,
joint farm venture, limited liability company, or partnership; and located not farther than
four townships or cities, or combination thereof, from agricultural land that is owned, and
used for the purposes of a homestead by an individual who is a shareholder, member,
or partner of the corporation, venture, company, or partnership; is entitled to receive
the first tier homestead class rate on any remaining market value in the first homestead
class tier that is in excess of the market value of the shareholder's, member's, or partner's
class 2 agricultural homestead property, if the owner, or someone acting on the owner's
behalf notifies the county assessor by July 1 that the property may be eligible under this
paragraph for the current assessment year, for taxes payable in the following year. As used
in this paragraph, "agricultural property" means property classified as 2a under section
273.13, along with any contiguous property classified as 2b under section 273.13, if the
contiguous 2a and 2b properties are under the same ownership.

Sec. 5.

Minnesota Statutes 2012, section 290.01, subdivision 3b, is amended to read:

Subd. 3b.

Limited liability company.

For purposes of this chapter and chapter
289A, a limited liability companydeleted text begin , including a nonprofit limited liability company under
section 322B.975,deleted text end that is formed under either the laws of this state or under similar laws
of another state, will be treated as an entity similar to its treatment for federal income
tax purposes.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2015.
new text end

Sec. 6.

Minnesota Statutes 2012, section 302A.011, is amended by adding a
subdivision to read:

new text begin Subd. 67. new text end

new text begin Converting corporation. new text end

new text begin "Converting corporation" means a converting
organization that is a corporation.
new text end

Sec. 7.

Minnesota Statutes 2012, section 302A.011, is amended by adding a
subdivision to read:

new text begin Subd. 68. new text end

new text begin Organizational documents. new text end

new text begin "Organizational documents" means:
new text end

new text begin (1) for a domestic or foreign general partnership, its partnership agreement;
new text end

new text begin (2) for a limited partnership or foreign limited partnership, its certificate of limited
partnership and partnership agreement;
new text end

new text begin (3) for a domestic or foreign limited liability company, its certificate or articles
of organization and operating agreement, or comparable documents as provided in its
governing statute;
new text end

new text begin (4) for a business trust, its agreement of trust and declaration of trust;
new text end

new text begin (5) for a domestic or foreign corporation for profit, its articles of incorporation,
bylaws, and other agreements among its shareholders that are authorized by its governing
statute, or comparable documents as provided in its governing statute; and
new text end

new text begin (6) for any other organization, the basic agreements or other documents that create
the organization and determine its internal governance and the relations among the persons
that own it, have an interest in it, or are members of it.
new text end

Sec. 8.

Minnesota Statutes 2012, section 302A.011, is amended by adding a
subdivision to read:

new text begin Subd. 69. new text end

new text begin Personal liability. new text end

new text begin "Personal liability" means liability for a debt,
obligation, or other liability of an organization that is imposed on a person that co-owns,
has an interest in, or is a member of the organization.
new text end

new text begin (1) by the governing statute solely by reason of the person co-owning, having an
interest in, or being a member of the organization; or
new text end

Sec. 9.

Minnesota Statutes 2012, section 302A.115, subdivision 1, is amended to read:

Subdivision 1.

Requirements; prohibitions.

The corporate name:

(a) Shall be in the English language or in any other language expressed in English
letters or characters;

(b) Shall contain the word "corporation," "incorporated," or "limited," or shall
contain an abbreviation of one or more of these words, or the word "company" or the
abbreviation "Co." if that word or abbreviation is not immediately preceded by the word
"and" or the character "&";

(c) Shall not contain a word or phrase that indicates or implies that it is incorporated
for a purpose other than a legal business purpose;

(d) Shall be distinguishable upon the records in the Office of the Secretary of
State from the name of each domestic corporation, limited partnership, limited liability
partnership, and limited liability company, whether profit or nonprofit, and each foreign
corporation, limited partnership, limited liability partnership, and limited liability company
on file, authorized or registered to do business in this state at the time of filing, whether
profit or nonprofit, and each name the right to which is, at the time of incorporation,
reserved as provided for in sections 5.35, 302A.117, 321.0109, 322B.125new text begin , 322C.0109new text end , or
333.001 to 333.54, unless there is filed with the articles one of the following:

(1) The written consent of the domestic corporation, limited partnership, limited
liability partnership, or limited liability company, or the foreign corporation, limited
partnership, limited liability partnership, or limited liability company authorized or
registered to do business in this state or the holder of a reserved name or a name filed by
or registered with the secretary of state under sections 333.001 to 333.54 having a name
that is not distinguishable;

(2) A certified copy of a final decree of a court in this state establishing the prior
right of the applicant to the use of the name in this state; or

(3) The applicant's affidavit that the domestic or foreign corporation, limited
partnership, or limited liability company with the name that is not distinguishable has
been incorporated or on file in this state for at least three years prior to the affidavit, if it
is a domestic corporation, limited partnership, or limited liability company, or has been
authorized or registered to do business in this state for at least three years prior to the
affidavit, if it is a foreign corporation, limited partnership, or limited liability company,
or that the holder of a name filed or registered with the secretary of state under sections
333.001 to 333.54 filed or registered that name at least three years prior to the affidavit;
that the domestic or foreign corporation, limited partnership, or limited liability company
or holder has not during the three-year period before the affidavit filed any document with
the secretary of state; that the applicant has mailed written notice to the domestic or
foreign corporation, limited partnership, or limited liability company or the holder of a
name filed or registered with the secretary of state under sections 333.001 to 333.54 by
certified mail, return receipt requested, properly addressed to the registered office of the
domestic or foreign corporation or limited liability company or in care of the agent of the
limited partnership, or the address of the holder of a name filed or registered with the
secretary of state under sections 333.001 to 333.54, shown in the records of the secretary
of state, stating that the applicant intends to use a name that is not distinguishable and the
notice has been returned to the applicant as undeliverable to the addressee domestic or
foreign corporation, limited partnership, limited liability company, or holder of a name
filed or registered with the secretary of state under sections 333.001 to 333.54; that the
applicant, after diligent inquiry, has been unable to find any telephone listing for the
domestic or foreign corporation, limited partnership, or limited liability company with
the name that is not distinguishable in the county in which is located the registered office
of the domestic or foreign corporation, limited partnership, or limited liability company
shown in the records of the secretary of state or has been unable to find any telephone
listing for the holder of a name filed or registered with the secretary of state under sections
333.001 to 333.54 in the county in which is located the address of the holder shown in
the records of the secretary of state; and that the applicant has no knowledge that the
domestic or foreign corporation, limited partnership, limited liability company, or holder
of a name filed or registered with the secretary of state under sections 333.001 to 333.54 is
currently engaged in business in this state.

Sec. 10.

Minnesota Statutes 2012, section 302A.681, is amended to read:

302A.681 CONVERSIONdeleted text begin OF CORPORATIONS AND LIMITED LIABILITY
COMPANIESdeleted text end .

Subdivision 1.

deleted text begin Conversions authorizeddeleted text end new text begin Authorizationnew text end .

deleted text begin A corporation may
become a domestic limited liability company, and a domestic limited liability company
may become a deleted text end new text begin An organization, other than a corporation, a foreign corporation, a nonprofit
corporation, or an organization owning assets irrevocably dedicated to a charitable
purpose, may convert to a corporation, and a corporation may convert to an organization
other than a foreign new text end corporation, in each case pursuant to a plan of conversiondeleted text begin .deleted text end new text begin approved
in the manner provided in sections 302A.681 to 302A.692, if:
new text end

new text begin (1) the other organization's governing statute authorizes the conversion; and
new text end

new text begin (2) the other organization complies with its governing statute and organizational
documents in effecting the conversion.
new text end

deleted text begin Subd. 2. deleted text end

deleted text begin Certain definitions. deleted text end

deleted text begin (a) For purposes of sections 302A.681 to 302A.691,
the words, terms, and phrases in paragraphs (b) to (h) have the meanings given them.
deleted text end

deleted text begin (b) "Articles of organization" has the same meaning as it does under section
322B.03, subdivision 6.
deleted text end

deleted text begin (c) "Board of governors" has the same meaning as it does under section 322B.03,
subdivision 7.
deleted text end

deleted text begin (d) "Class," when used with reference to membership interests, has the same
meaning as it does under section 322B.03, subdivision 10.
deleted text end

deleted text begin (e) "Governor" has the same meaning as it does under section 322B.03, subdivision
24.
deleted text end

deleted text begin (f) "Member" has the same meaning as it does under section 322B.03, subdivision 30.
deleted text end

deleted text begin (g) "Membership interest" has the same meaning as it does under section 322B.03,
subdivision 31.
deleted text end

deleted text begin (h) "Series," when used with reference to membership interests, has the same
meaning as it does under section 322B.03, subdivision 44.
deleted text end

Sec. 11.

Minnesota Statutes 2012, section 302A.683, is amended to read:

302A.683 PLAN OF CONVERSION.

A plan of conversion must contain:

(1) the namenew text begin , form, and jurisdiction of the governing statutenew text end of the converting
organizationnew text begin before conversionnew text end ;

(2) the namenew text begin , form, and jurisdiction of the governing statutenew text end of the converted
organizationnew text begin after conversionnew text end ;

(3) deleted text begin whether the converted organization is a corporation or a limited liability company;
deleted text end

deleted text begin (4)deleted text end the terms and conditions of the deleted text begin proposeddeleted text end conversiondeleted text begin ;deleted text end new text begin ,
new text end

deleted text begin (5)deleted text end new text begin including new text end the manner and basis deleted text begin ofdeleted text end new text begin fornew text end converting deleted text begin each ownership interest in the
converting organization into ownershipdeleted text end interests in the deleted text begin converteddeleted text end new text begin convertingnew text end organization
deleted text begin or, in whole or in part, into money or other property;deleted text end new text begin into any combination of money,
interests in the converted organization, and other consideration;
new text end

deleted text begin (6) a copy of the proposed articles of incorporation or articles of organizationdeleted text end new text begin (4) the
organizational documentsnew text end of the converted organization; and

deleted text begin (7)deleted text end new text begin (5)new text end any other provisions with respect to the deleted text begin proposeddeleted text end conversion that are deemed
necessary or desirable.

Sec. 12.

Minnesota Statutes 2012, section 302A.685, is amended to read:

302A.685 deleted text begin PLAN APPROVALdeleted text end new text begin ACTION ON PLAN OF CONVERSION BY
CONVERTING CORPORATIONnew text end .

Subdivision 1.

Board approval; notice to owners.

deleted text begin Adeleted text end new text begin If the converting organization
is a corporation, anew text end resolution containing the plan of conversion must be approved by the
affirmative vote of a majority of the directors deleted text begin or governorsdeleted text end present at a meeting of the
new text begin converting corporation's new text end board of directors deleted text begin or the board of governors of the converting
organizationdeleted text end and must then be submitted at a regular or a special meeting deleted text begin to the owners
deleted text end of the converting deleted text begin organizationdeleted text end new text begin corporation's shareholdersnew text end . Written notice must be given
to every deleted text begin ownerdeleted text end new text begin shareholdernew text end of the converting deleted text begin organizationdeleted text end new text begin corporationnew text end , whether or not
entitled to vote at the meeting, not less than 14 days nor more than 60 days before
the meeting, in the manner provided in section 302A.435 deleted text begin for notice of a meeting of
shareholders or in the manner provided in section 322B.34 for notice of a meeting of
membersdeleted text end . The written notice must state that a purpose of the meeting is to consider the
proposed plan of conversion. A copy or short description of the plan of conversion must
be included in or enclosed with the notice.

Subd. 2.

Approval by deleted text begin ownersdeleted text end new text begin shareholdersnew text end .

At the meeting, a vote of the deleted text begin owners
deleted text end new text begin shareholdersnew text end must be taken on the proposed plan. The plan of conversion is adopted when
approved by the affirmative vote of the holders of a majority of the voting power of all
shares deleted text begin or membership interestsdeleted text end entitled to vote. A class or series of shares deleted text begin or membership
interestsdeleted text end is entitled to vote as a class or series on the approval of the plan.

Sec. 13.

new text begin [302A.6871] FILINGS REQUIRED BY CONVERTING
CORPORATION.
new text end

new text begin After a plan of conversion is approved by a converting corporation, the converting
corporation must cause articles of conversion to be filed with the secretary of state. The
articles of conversion must be signed on behalf of the converting corporation and must
include:
new text end

new text begin (1) the plan of conversion;
new text end

new text begin (2) a statement that the converting corporation has been converted into the converted
organization;
new text end

new text begin (3) the name and form of the converted organization and the jurisdiction of its
governing statute;
new text end

new text begin (4) a statement that the conversion was approved as required by this chapter;
new text end

new text begin (5) a statement that the conversion was approved as required by the governing
statute of the converted organization; and
new text end

new text begin (6) if the converted organization is a foreign organization not authorized to transact
business in this state, the street address of an office which the secretary of state may use
for the purposes of section 302A.691, subdivision 3.
new text end

Sec. 14.

new text begin [302A.688] FILINGS REQUIRED WHEN CORPORATION IS
CONVERTED ORGANIZATION.
new text end

new text begin If the converting organization is not a corporation, the converting organization
must cause articles of conversion to be filed with the secretary of state. The articles of
conversion must be signed on behalf of the converting organization and must include, in
addition to the information required by section 302A.111, subdivision 1:
new text end

new text begin (1) the plan of conversion;
new text end

new text begin (2) a statement that the converted organization has been converted from the
converting organization;
new text end

new text begin (3) the name and form of the converting organization and the jurisdiction of its
governing statute; and
new text end

new text begin (4) a statement that the conversion was approved as required by the governing
statute of the converting organization.
new text end

Sec. 15.

Minnesota Statutes 2012, section 302A.689, is amended to read:

302A.689 ABANDONMENT OF CONVERSION.

Subdivision 1.

By shareholders or plan.

After a plan of conversion has been
approved by the deleted text begin ownersdeleted text end new text begin shareholdersnew text end entitled to vote on the approval of the plan as
provided in section 302A.685, and before the effective date of the plan, it may be
abandonednew text begin by a converting corporationnew text end :

(1) if the deleted text begin owners of the converting organizationdeleted text end new text begin shareholdersnew text end entitled to vote on the
approval of the plan as provided in section 302A.685 have approved the abandonment at a
meeting by the affirmative vote of the holders of a majority of the voting power of the
shares deleted text begin or membership interestsdeleted text end entitled to vote;

(2) if the plan itself provides for abandonment and all conditions for abandonment
set forth in the plan are met; or

(3) pursuant to subdivision 2.

Subd. 2.

By board.

A plan of conversion may be abandonednew text begin by a converting
corporationnew text end , before the effective date of the plan, by a resolution of the board of directors
deleted text begin or the board of governorsdeleted text end of the converting deleted text begin organization abandoning the plan of
conversiondeleted text end new text begin corporationnew text end approved by the affirmative vote of a majority of the directors deleted text begin or
governorsdeleted text end present.

Subd. 3.

Filing of articles.

If articles of conversion have been filed with the
secretary of state, but have not yet become effective, the converting deleted text begin organization shall
deleted text end new text begin corporation mustnew text end file with the secretary of state articles of abandonment that contain:

(1) the name of the converting deleted text begin organizationdeleted text end new text begin corporationnew text end ;

(2) the provision of this section under which the plan is abandoned; and

(3) if the plan is abandoned under subdivision 2, the text of the resolution
abandoning the plan.

Sec. 16.

Minnesota Statutes 2012, section 302A.691, is amended to read:

302A.691 EFFECTIVE DATE OR TIME OF CONVERSION; EFFECT.

Subdivision 1.

Effective date or time.

A conversion is effective when the articles
of conversion are filed with the secretary of state or on a later date or at a later time
specified in the articles of conversion.

Subd. 2.

Effect on organization.

(a) A converted organization is for all purposes the
same organization as the converting organization, having been incorporated deleted text begin ordeleted text end new text begin ,new text end organizednew text begin ,
or formednew text end on the date that the converting organization was originally incorporated deleted text begin ordeleted text end new text begin ,
new text end organizednew text begin , or formednew text end .

(b) When a conversion becomes effective:

(1) deleted text begin if the converted organization is a corporation, the converted organization has
all the rights, privileges, immunities, and powers, and is subject to all the duties and
liabilities, of a corporation incorporated under this chapter;
deleted text end

deleted text begin (2) if the converted organization is a limited liability company, the converted
organization has all the rights, privileges, immunities, and powers, and is subject to all the
duties and liabilities, of a limited liability company organized under chapter 322B;
deleted text end

deleted text begin (3)deleted text end all property owned by the converting organization remains vested in the
converted organization;

deleted text begin (4)deleted text end new text begin (2)new text end all debts, liabilities, and other obligations of the converting organization
continue as obligations of the converted organization;

deleted text begin (5)deleted text end new text begin (3)new text end an action or proceeding pending by or against the converting organization
may be continued as if the conversion had not occurred; and

deleted text begin (6)deleted text end new text begin (4)new text end all rights, privileges, immunities, and powers of the converting organization
remain vested in the converted organization.

Subd. 3.

deleted text begin Effect on shareholders or members. deleted text end new text begin Foreign organization. new text end

deleted text begin When
a conversion becomes effective, each share or membership interest in the converting
organization is deemed to be converted into shares or membership interests in the converted
organization or, in whole or in part, into money or other property to be received under the
plan by the shareholders or the members, subject to any dissenters' rights under section
302A.471, in the case of shareholders of the converting organization, or section 322B.383,
in the case of members of the converting organization.deleted text end new text begin A converted organization that is a
foreign organization consents to the jurisdiction of the courts of this state to enforce any
debt, obligation, or other liability for which the converting corporation is liable if, before
the conversion, the converting corporation was subject to suit in this state on the debt,
obligation, or other liability. A converted organization that is a foreign organization and
not authorized to transact business in this state appoints the secretary of state as its agent
for service of process for purposes of enforcing a debt, obligation, or other liability under
this subdivision. Service on the secretary of state under this subdivision must be made in
the same manner and has the same consequences as in section 5.25, subdivisions 4 and 5.
new text end

Sec. 17.

new text begin [302A.692] RESTRICTIONS ON APPROVAL OF CONVERSIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Personal liability of shareholder. new text end

new text begin If a shareholder of a converting
corporation will have personal liability with respect to a converted organization, approval
or amendment of a plan of conversion is ineffective without the consent of the shareholder,
unless:
new text end

new text begin (1) a shareholder control agreement of the converting corporation provides for
approval of a conversion with the consent of fewer than all the members; and
new text end

new text begin (2) the shareholder has consented to the provision of the shareholder control
agreement.
new text end

new text begin Subd. 2. new text end

new text begin Consent. new text end

new text begin A shareholder does not give the consent required by subdivision
1 merely by consenting to a provision of a shareholder control agreement that permits
the shareholder control agreement to be amended with the consent of fewer than all
shareholders.
new text end

Sec. 18.

Minnesota Statutes 2012, section 308A.121, subdivision 1, is amended to read:

Subdivision 1.

Name.

The name of a cooperative must distinguish the cooperative
upon the records in the Office of the Secretary of State from the name of a domestic
corporation, whether profit or nonprofit, or a limited partnership, or a foreign corporation
or a limited partnership, whether profit or nonprofit, a limited liability company, whether
domestic or foreign, a limited liability partnership, whether domestic or foreign, on file,
authorized or registered to do business in this state at the time of filing or a name the
right to which is, at the time of incorporation, reserved or provided for in sections 5.35,
302A.117, 317A.117, 321.0109, 322B.125new text begin , 322C.0109new text end , or 333.001 to 333.54.

Sec. 19.

Minnesota Statutes 2012, section 308B.801, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

Unless otherwise prohibited, cooperatives organized
under the laws of this state, including cooperatives organized under this chapter or chapter
308A, may merge or consolidate with each other, a Minnesota limited liability company
under the provisions of section 322B.755new text begin or sections 322C.1001 to 322C.1015new text end , or
other business entities organized under the laws of another state by complying with the
provisions of this section and the law of the state where the surviving or new business
entity will exist. A cooperative may not merge or consolidate with a business entity
organized under the laws of this state, other than a cooperative organized under chapter
308A, unless the law governing the business entity expressly authorizes merger or
consolidation with a cooperative. This subdivision does not authorize a foreign business
entity to do any act not authorized by the law governing the foreign business entity.

Sec. 20.

Minnesota Statutes 2012, section 308B.801, subdivision 2, is amended to read:

Subd. 2.

Plan.

To initiate a merger or consolidation of a cooperative, a written plan
of merger or consolidation shall be prepared by the board or by a committee selected by
the board to prepare a plan. The plan shall state:

(1) the names of the constituent domestic cooperatives, the name of any Minnesota
limited liability company that is a party to the merger, to the extent authorized under
section 322B.755new text begin or sections 322C.1001 to 322C.1005 and 322C.1015new text end , and any foreign
business entities;

(2) the name of the surviving or new domestic cooperative, Minnesota limited liability
company as required by section 322B.755new text begin or 322C.1002new text end , or other foreign business entity;

(3) the manner and basis of converting membership or ownership interests of the
constituent domestic cooperatives, the surviving Minnesota limited liability company as
provided in section 322B.755new text begin or 322C.1002new text end , or foreign business entities into membership
or ownership interests in the surviving or new domestic cooperative, the surviving
Minnesota limited liability company as authorized in section 322B.755new text begin or 322C.1002new text end , or
foreign business entity;

(4) the terms of the merger or consolidation;

(5) the proposed effect of the consolidation or merger on the members and patron
members of each constituent domestic cooperative; and

(6) for a consolidation, the plan shall contain the articles of the entity or organizational
documents to be filed with the state in which the entity is organized or, if the surviving
organization is a Minnesota limited liability company, the articles of organization.

Sec. 21.

Minnesota Statutes 2012, section 308B.801, subdivision 5, is amended to read:

Subd. 5.

Effect of merger.

For a merger that does not involve a Minnesota limited
liability company, the following shall apply to the effect of a merger:

(a) After the effective date, the domestic cooperative, Minnesota limited liability
company, if party to the plan, and any foreign business entity that is a party to the plan
become a single entity. For a merger, the surviving business entity is the business entity
designated in the plan. For a consolidation, the new domestic cooperative, the Minnesota
limited liability company, if any, and any foreign business entity is the business entity
provided for in the plan. Except for the surviving or new domestic cooperative, Minnesota
limited liability company, or foreign business entity, the separate existence of each merged
or consolidated domestic or foreign business entity that is a party to the plan ceases on the
effective date of the merger or consolidation.

(b) The surviving or new domestic cooperative, Minnesota limited liability company,
or foreign business entity possesses all of the rights and property of each of the merged
or consolidated business entities and is responsible for all their obligations. The title
to property of the merged or consolidated domestic cooperative or foreign business
entity is vested in the surviving or new domestic cooperative, Minnesota limited liability
company, or foreign business entity without reversion or impairment of the title caused
by the merger or consolidation.

(c) If a merger involves a Minnesota limited liability company, this subdivision is
subject to the provisions of section 322B.755new text begin or 322C.1002new text end .

Sec. 22.

Minnesota Statutes 2012, section 308B.805, subdivision 1, is amended to read:

Subdivision 1.

When authorized; contents of plan.

(a) For purposes of this section,
"subsidiary" means a domestic cooperative, a Minnesota limited liability company, or
a foreign cooperative, and "cooperative" means a domestic cooperative. A Minnesota
limited liability company may only participate in a merger under this section to the extent
authorized under section 322B.755new text begin or 322C.1002new text end . A parent domestic cooperative or a
subsidiary that is a domestic cooperative may complete the merger of a subsidiary as
provided in this section, provided however, if either the parent or the subsidiary is a business
entity organized under the laws of this state, the merger of the subsidiary is not authorized
under this section unless the law governing the business entity expressly authorizes merger
with a cooperative. A parent cooperative owning at least 90 percent of the outstanding
ownership interests of each class and series of a subsidiary directly, or indirectly through
related organizations, other than classes or series that, absent this section, would otherwise
not be entitled to vote on the merger, may merge the subsidiary into itself or into any other
subsidiary at least 90 percent of the outstanding ownership interests of each class and
series of which is owned by the parent cooperative directly, or indirectly through related
organizations, other than classes or series that, absent this section, would otherwise not be
entitled to vote on the merger, without a vote of the members of itself or any subsidiary or
may merge itself, or itself and one or more of the subsidiaries, into one of the subsidiaries
under this section. A resolution approved by the affirmative vote of a majority of the
directors of the parent cooperative present shall set forth a plan of merger that contains:

(1) the name of the subsidiary or subsidiaries, the name of the parent, and the name
of the surviving cooperative;

(2) the manner and basis of converting the membership interests of the subsidiary or
subsidiaries or parent into securities of the parent, subsidiary, or of another cooperative
or, in the whole or in part, into money or other property;

(3) if the parent is a constituent cooperative but is not the surviving cooperative in
the merger, a provision for the pro rata issuance of membership interests of the surviving
cooperative to the holders of membership interests of the parent on surrender of any
certificates for shares of the parent; and

(4) if the surviving cooperative is a subsidiary, a statement of any amendments to the
articles of the surviving cooperative that will be part of the merger.

(b) If the parent is a constituent cooperative and the surviving cooperative in the
merger, it may change its cooperative name, without a vote of its members, by the
inclusion of a provision to that effect in the resolution of merger setting forth the plan of
merger that is approved by the affirmative vote of a majority of the directors of the parent
present. Upon the effective date of the merger, the name of the parent shall be changed.

(c) If the parent is a constituent cooperative but is not the surviving cooperative in the
merger, the resolution is not effective unless it is also approved by the affirmative vote of the
holders of a majority of the voting power of all membership interests of the parent entitled
to vote at a regular or special meeting if the parent is a cooperative, or in accordance with
the laws under which it is organized if the parent is a foreign business entity or cooperative.

Sec. 23.

Minnesota Statutes 2012, section 308B.835, subdivision 2, is amended to read:

Subd. 2.

Generally.

(a) A merger may be abandoned:

(1) if the members of each of the constituent domestic cooperatives entitled to vote
on the approval of the plan have approved the abandonment at a meeting by the affirmative
vote of the holders of a majority of the voting power of the membership interests entitled
to vote; if the merger is with a domestic cooperative and a Minnesota limited liability
company or foreign business entity, if abandonment is approved in such manner as may be
required by section 322B.755new text begin or 322C.1003new text end for the involvement of a Minnesota limited
liability company, or for a foreign business entity by the laws of the state under which
the foreign business entity is organized; and the members of a constituent domestic
cooperative are not entitled to vote on the approval of the plan, the board of the constituent
domestic cooperative has approved the abandonment by the affirmative vote of a majority
of the directors present;

(2) if the plan itself provides for abandonment and all conditions for abandonment
set forth in the plan are met; or

(3) under paragraph (b).

(b) A plan of merger may be abandoned before the effective date of the plan by a
resolution of the board of any constituent domestic cooperative abandoning the plan of
merger approved by the affirmative vote of a majority of the directors present, subject
to the contract rights of any other person under the plan. If a plan of merger is with a
domestic or foreign business entity, the plan of merger may be abandoned before the
effective date of the plan by a resolution of the foreign business entity adopted according
to the laws of the state under which the foreign business entity is organized, subject to
the contract rights of any other person under the plan. If the plan of merger is with
a Minnesota limited liability company, the plan of merger may be abandoned by the
Minnesota limited liability company as provided in section 322B.755new text begin or 322C.1003new text end ,
subject to the contractual rights of any other person under the plan.

(c) If articles of merger have been filed with the secretary of state, but have not
yet become effective, the constituent organizations, in the case of abandonment under
paragraph (a), clause (1), the constituent organizations or any one of them, in the case
of abandonment under paragraph (a), clause (2), or the abandoning organization in the
case of abandonment under paragraph (b), shall file with the secretary of state articles of
abandonment that contain:

(1) the names of the constituent organizations;

(2) the provisions of this section under which the plan is abandoned; and

(3) if the plan is abandoned under paragraph (b), the text of the resolution
abandoning the plan.

Sec. 24.

Minnesota Statutes 2012, section 317A.115, subdivision 2, is amended to read:

Subd. 2.

Name must be distinguishable.

(a) A corporate name must be
distinguishable upon the records in the Office of the Secretary of State from the name of a
domestic corporation or limited partnership, a foreign corporation or limited partnership,
whether profit or nonprofit, a limited liability company, whether domestic or foreign,
on file, authorized to do business in this state at the time of filing, a limited liability
partnership, whether domestic or foreign, or a name the right to which is, at the time of
incorporation, reserved, registered, or provided for in section 5.35, 317A.117, 302A.117,
321.0109, 322B.125new text begin or 322C.0109new text end , or sections 333.001 to 333.54, unless one of the
following is filed with the articles:

(1) the written consent of the organization having the name that is not distinguishable;

(2) a certified copy of a final decree of a court in this state establishing the prior right
of the applicant to use its corporate name in this state; or

(3) an affidavit of nonuse of the kind required by section 302A.115, subdivision 1,
paragraph (d), clause (3).

(b) The secretary of state shall determine whether a name is distinguishable from
another name for purposes of this section and section 317A.117.

(c) This subdivision does not affect the right of a corporation existing on January
1, 1991, or a foreign corporation authorized to do business in this state on that date, to
use its corporate name.

Sec. 25.

Minnesota Statutes 2012, section 319B.02, subdivision 3, is amended to read:

Subd. 3.

Certificate of authority.

"Certificate of authority" means:

(1) with respect to a foreign firm that is a corporation, the certificate of authority
required under sections 303.01 to 303.24 and any notice filed under section 303.115 in
connection with that certificate; and

(2) with respect to a foreign firm that is a limited liability company, the certificate
of authority deleted text begin required underdeleted text end new text begin referred to innew text end sections 322B.905 to 322B.955new text begin or 322C.802
to 322C.804new text end and any notice filed under section 322B.92, clause (3), in connection with
that certificate.

Sec. 26.

Minnesota Statutes 2012, section 319B.02, subdivision 22, is amended to read:

Subd. 22.

Update.

"Update" means:

(1) with respect to a Minnesota professional firm that is either a Minnesota
corporation or a Minnesota limited liability company, amend the organizational document;

(2) with respect to a foreign professional firm that is a foreign corporation, file a notice
under section 303.115 in connection with the foreign corporation's certificate of authority;

(3) with respect to a foreign firm that is a limited liability company, file deleted text begin a notice
under section 322B.92, clause (3), in connection with the foreign limited liability
company'sdeleted text end new text begin an amendednew text end certificate of authority;

(4) with respect to a Minnesota professional firm that is a limited liability partnership
and has an effective statement of qualification under section 323A.1001, amend that
statement of qualification; and

(5) with respect to a foreign professional firm that is a limited liability partnership
and has an effective statement of foreign qualification under section 323A.1102, amend
that statement of foreign qualification.

Sec. 27.

Minnesota Statutes 2012, section 319B.10, subdivision 3, is amended to read:

Subd. 3.

Filings with secretary of state.

(a) For a Minnesota professional firm
involved in a merger, the document filed with the secretary of state to effectuate the
merger must state whether that Minnesota professional firm will survive the merger, and
if so, whether that Minnesota professional firm will remain a Minnesota professional
firm once the merger takes effect.

(b) For a foreign professional firm involved in a merger, the certificate filed with the
secretary of state under section 303.11 deleted text begin ordeleted text end new text begin ,new text end 322B.92new text begin , or 322C.1004new text end must be accompanied
by a statement as to whether that foreign firm will survive the merger, and if so, whether
that foreign professional firm will remain a foreign professional firm once the merger
takes effect.

Sec. 28.

Minnesota Statutes 2012, section 321.0108, is amended to read:

321.0108 NAME.

(a) The name of a limited partnership may contain the name of any partner.

(b) The name of a limited partnership that is not a limited liability limited partnership
must contain the phrase "limited partnership" or the abbreviation "L.P." or "LP" and may
not contain the phrase "limited liability limited partnership" or the abbreviation "LLLP"
or "L.L.L.P."

(c) Except as provided in section 321.1206(e)(1), the name of a limited liability
limited partnership must contain the phrase "limited liability limited partnership" or the
abbreviation "LLLP" or "L.L.L.P." and must not otherwise contain the abbreviation
"L.P." or "LP."

(d) The limited partnership name shall not contain a word or phrase that indicates or
implies that it is formed for a purpose other than a legal purpose.

(e) The limited partnership name shall be distinguishable upon the records in the
Office of the Secretary of State from the name of each domestic corporation, limited
partnership, limited liability partnership, and limited liability company, whether profit or
nonprofit, and each foreign corporation, limited partnership, limited liability partnership,
and limited liability company on file, authorized or registered to do business in this state
at the time of filing, whether profit or nonprofit, and each name the right to which is, at
the time of formation, reserved as provided for in sections 5.35, 302A.117, 322A.03,
322B.125new text begin , 322C.0109new text end , or 333.001 to 333.54, unless there is filed with the certificate of
limited partnership one of the following:

(1) the written consent of the domestic corporation, limited partnership, limited
liability partnership, or limited liability company, or the foreign corporation, limited
partnership, limited liability partnership, or limited liability company authorized or
registered to do business in this state or the holder of a reserved name or a name filed by
or registered with the secretary of state under sections 333.001 to 333.54 having a name
that is not distinguishable;

(2) a certified copy of a final decree of a court in this state establishing the prior right
of the applicant to the use of the name in this state; or

(3) the applicant's affidavit that the corporation, limited partnership, or limited
liability company with the name that is not distinguishable has been incorporated or on file
in this state for at least three years prior to the affidavit, if it is a domestic corporation,
limited partnership, or limited liability company, or has been authorized or registered to
do business in this state for at least three years prior to the affidavit, if it is a foreign
corporation, limited partnership, or limited liability company, or that the holder of a name
filed or registered with the secretary of state under sections 333.001 to 333.54 filed or
registered that name at least three years prior to the affidavit; that the corporation, limited
partnership, or limited liability company or holder has not during the three-year period
before the affidavit filed any document with the secretary of state; that the applicant has
mailed written notice to the corporation, limited partnership, or limited liability company
or the holder of a name filed or registered with the secretary of state under sections
333.001 to 333.54 by certified mail, return receipt requested, properly addressed to the
registered office of the corporation or limited liability company or in care of the agent of
the limited partnership, or the address of the holder of a name filed or registered with the
secretary of state under sections 333.001 to 333.54, shown in the records of the secretary
of state, stating that the applicant intends to use a name that is not distinguishable and the
notice has been returned to the applicant as undeliverable to the addressee corporation,
limited partnership, limited liability company, or holder of a name filed or registered
with the secretary of state under sections 333.001 to 333.54; that the applicant, after
diligent inquiry, has been unable to find any telephone listing for the corporation, limited
partnership, or limited liability company with the name that is not distinguishable in the
county in which is located the registered office of the corporation, limited partnership, or
limited liability company shown in the records of the secretary of state or has been unable
to find any telephone listing for the holder of a name filed or registered with the secretary
of state under sections 333.001 to 333.54 in the county in which is located the address
of the holder shown in the records of the secretary of state; and that the applicant has no
knowledge that the corporation, limited partnership, limited liability company, or holder
of a name filed or registered with the secretary of state under sections 333.001 to 333.54 is
currently engaged in business in this state.

(f) The secretary of state shall determine whether a name is distinguishable from
another name for purposes of this section and section 321.0109.

(g) This section and section 321.0109 do not abrogate or limit the law of unfair
competition or unfair practices; nor sections 333.001 to 333.54; nor the laws of the United
States with respect to the right to acquire and protect copyrights, trade names, trademarks,
service names, service marks, or any other rights to the exclusive use of names or symbols;
nor derogate the common law or the principles of equity.

(h) A limited partnership that is the surviving organization in a merger with one
or more other organizations, or that is formed by the reorganization of one or more
organizations, or that acquires by sale, lease, or other disposition to or exchange with an
organization all or substantially all of the assets of another organization, including its
name, may have the same name as that used in this state by any of the other organizations,
if the other organization whose name is sought to be used was organized under the laws
of, or is authorized to transact business in, this state.

(i) The use of a name by a limited partnership in violation of this section does not
affect or vitiate its existence, but a court in this state may, upon application of the state or
of a person interested or affected, enjoin the limited partnership from doing business under
a name assumed in violation of this section, although its certificate of limited partnership
may have been filed with the secretary of state and a certificate of formation issued.

Sec. 29. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin The revisor of statutes shall remove the references to sections of Minnesota Statutes,
chapter 322B, in the sections amended in this article and elsewhere in Minnesota Statutes
and make any necessary related changes.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 30. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 302A.687, new text end new text begin is repealed.
new text end

Sec. 31. new text begin EFFECTIVE DATE.
new text end

new text begin Except as otherwise provided, this article is effective August 1, 2015.
new text end

HF 977

Bill Text Versions

Current Version - 2nd Engrossment

ARTICLE 1

REVISED UNIFORM LIMITED LIABILITY COMPANY ACT

GENERAL PROVISIONS

Section 1.

new text begin [322C.0101] CITATION. new text end

Sec. 2.

new text begin [322C.0102] DEFINITIONS. new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin Subd. 2. new text end

new text begin Articles of organization. new text end

new text begin Subd. 3. new text end

new text begin Board. new text end

new text begin Subd. 4. new text end

new text begin Board-managed limited liability company. new text end

new text begin Subd. 5. new text end

new text begin Contribution. new text end

new text begin Subd. 6. new text end

new text begin Debtor in bankruptcy. new text end

new text begin Subd. 7. new text end

new text begin Distribution. new text end

new text begin Subd. 8. new text end

new text begin Effective. new text end

new text begin Subd. 9. new text end

new text begin Filed. new text end

new text begin Subd. 10. new text end

new text begin Foreign limited liability company. new text end

new text begin Subd. 11. new text end

new text begin Governor. new text end

new text begin Subd. 12. new text end

new text begin Limited liability company. new text end

new text begin Subd. 13. new text end

new text begin Manager. new text end

new text begin Subd. 14. new text end

new text begin Manager-managed limited liability company. new text end

new text begin Subd. 15. new text end

new text begin Member. new text end

new text begin Subd. 16. new text end

new text begin Member-managed limited liability company. new text end

new text begin Subd. 17. new text end

new text begin Operating agreement. new text end

new text begin Subd. 18. new text end

new text begin Oppressive. new text end

new text begin Subd. 19. new text end

new text begin Organizer. new text end

new text begin Subd. 20. new text end

new text begin Person. new text end

new text begin Subd. 21. new text end

new text begin Principal place of business. new text end

new text begin Subd. 22. new text end

new text begin Record. new text end

new text begin Subd. 23. new text end

new text begin Recorded in the real property records. new text end

new text begin Subd. 24. new text end

new text begin Registered office. new text end

new text begin Subd. 25. new text end

new text begin Sign. new text end

new text begin Subd. 26. new text end

new text begin State. new text end

new text begin Subd. 27. new text end

new text begin Transfer. new text end

new text begin Subd. 28. new text end

new text begin Transferable interest. new text end

new text begin Subd. 29. new text end

new text begin Transferee. new text end

Sec. 3.

new text begin [322C.0103] KNOWLEDGE; NOTICE. new text end

new text begin Subdivision 1. new text end

new text begin Knowledge of facts. new text end

new text begin Subd. 2. new text end

new text begin Notice of facts. new text end

new text begin Subd. 3. new text end

new text begin Notification of facts. new text end

new text begin Subd. 4. new text end

new text begin Constructive notice. new text end

Sec. 4.

new text begin [322C.0104] NATURE, PURPOSE, AND DURATION OF LIMITED LIABILITY COMPANY. new text end

new text begin [322C.0101] CITATION.
new text end

new text begin [322C.0102] DEFINITIONS.
new text end

new text begin [322C.0103] KNOWLEDGE; NOTICE.
new text end

new text begin [322C.0104] NATURE, PURPOSE, AND DURATION OF LIMITED
LIABILITY COMPANY.
new text end

new text begin [322C.0105] POWERS.
new text end

new text begin [322C.0106] GOVERNING LAW.
new text end

new text begin [322C.0107] SUPPLEMENTAL PRINCIPLES OF LAW.
new text end

new text begin [322C.0108] LIMITED LIABILITY COMPANY NAME.
new text end

new text begin [322C.0109] RESERVED NAME.
new text end

new text begin [322C.0110] OPERATING AGREEMENT; SCOPE, FUNCTION, AND
LIMITATIONS.
new text end

new text begin Duty of loyalty, authorization and ratification of otherwise violative
conduct. new text end

new text begin [322C.0111] OPERATING AGREEMENT; EFFECT ON LIMITED
LIABILITY COMPANY AND PERSONS BECOMING MEMBERS;
PREFORMATION AGREEMENT.
new text end

new text begin [322C.0112] OPERATING AGREEMENT; EFFECT ON THIRD
PARTIES AND RELATIONSHIP TO RECORDS EFFECTIVE ON BEHALF OF
LIMITED LIABILITY COMPANY.
new text end