1.1                          A bill for an act 
  1.2             relating to professional firms; modernizing and 
  1.3             standardizing the law regulating professional business 
  1.4             organizations; amending Minnesota Statutes 1996, 
  1.5             sections 13.99, subdivision 92e; 144A.43, subdivision 
  1.6             4; 322B.12, subdivision 1; 322B.92; 323.44, by adding 
  1.7             a subdivision; and 323.49, by adding a subdivision; 
  1.8             proposing coding for new law in Minnesota Statutes, 
  1.9             chapter 303; proposing coding for new law as Minnesota 
  1.10            Statutes, chapter 319B; repealing Minnesota Statutes 
  1.11            1996, sections 319A.01; 319A.02; 319A.03; 319A.04; 
  1.12            319A.05; 319A.06; 319A.07; 319A.08; 319A.09; 319A.10; 
  1.13            319A.11; 319A.12; 319A.13; 319A.14; 319A.15; 319A.16; 
  1.14            319A.17; 319A.18; 319A.19; 319A.20; 319A.21; and 
  1.15            319A.22. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17                             ARTICLE 1 
  1.18                         PROFESSIONAL FIRMS 
  1.19     Section 1.  [319B.01] [PROFESSIONAL FIRMS ACT; CITATION.] 
  1.20     Sections 319B.01 to 319B.12 may be cited as the "Minnesota 
  1.21  Professional Firms Act." 
  1.22     Sec. 2.  [319B.02] [DEFINITIONS.] 
  1.23     Subdivision 1.  [SCOPE.] For the purposes of sections 
  1.24  319B.01 to 319B.12, the terms defined in this section have the 
  1.25  meanings given them. 
  1.26     Subd. 2.  [BOARD.] "Board" means an agency of the state of 
  1.27  Minnesota which has jurisdiction to grant a license to furnish 
  1.28  professional services of a category within subdivision 19, 
  1.29  except that in the case of a professional firm that provides 
  1.30  legal services, "board" means the board of professional 
  2.1   responsibility. 
  2.2      Subd. 3.  [CERTIFICATE OF AUTHORITY.] "Certificate of 
  2.3   authority" means:  
  2.4      (1) with respect to a foreign firm that is a corporation, 
  2.5   the certificate of authority required under sections 303.01 to 
  2.6   303.24 and any notice filed under section 303.115 in connection 
  2.7   with that certificate; and 
  2.8      (2) with respect to a foreign firm that is a limited 
  2.9   liability company, the certificate of authority required under 
  2.10  sections 322B.905 to 322B.955 and any notice filed under section 
  2.11  322B.92, clause (3), in connection with that certificate. 
  2.12     Subd. 4.  [DISQUALIFIED.] "Disqualified" means to have a 
  2.13  license to provide pertinent professional services:  
  2.14     (1) suspended, unless by its terms the suspension will 
  2.15  automatically end less than 90 days after it takes effect; or 
  2.16     (2) revoked. 
  2.17     The disqualification occurs when the suspension or 
  2.18  revocation first takes effect. 
  2.19     Subd. 5.  [FIRM.] "Firm" includes a corporation, limited 
  2.20  liability company, and limited liability partnership, wherever 
  2.21  incorporated, organized, or registered. 
  2.22     Subd. 6.  [FOREIGN FIRM.] "Foreign firm" means a 
  2.23  corporation incorporated, limited liability company organized, 
  2.24  or limited liability partnership registered under the laws of a 
  2.25  state other than Minnesota. 
  2.26     Subd. 7.  [FOREIGN PROFESSIONAL FIRM.] "Foreign 
  2.27  professional firm" means a foreign firm that has in effect an 
  2.28  election under section 319B.04, subdivision 2. 
  2.29     Subd. 8.  [GENERALLY APPLICABLE GOVERNING LAW.] "Generally 
  2.30  applicable governing law" of a firm means: 
  2.31     (1) with respect to a firm that is a corporation, the state 
  2.32  statute under which the corporation is incorporated; 
  2.33     (2) with respect to a firm that is a limited liability 
  2.34  company, the state statute under which the limited liability 
  2.35  company is organized; and 
  2.36     (3) with respect to a firm that is a limited liability 
  3.1   partnership, the state statute under which the limited liability 
  3.2   partnership obtains its status as a limited liability 
  3.3   partnership; 
  3.4   plus any other law that is generally relevant to the structure, 
  3.5   governance, operations, or other internal affairs of the firm. 
  3.6      Subd. 9.  [GOVERNANCE AUTHORITY.] "Governance authority" 
  3.7   means the authority and responsibility to: 
  3.8      (1) determine important policies for a professional firm; 
  3.9      (2) superintend the professional firm's overall operations; 
  3.10  and 
  3.11     (3) maintain general, active management of and ultimate 
  3.12  control over all matters involving professional judgment. 
  3.13     Subd. 10.  [MINNESOTA FIRM.] "Minnesota firm" includes a 
  3.14  corporation organized under chapter 302A or 317A, limited 
  3.15  liability company organized under chapter 322B, and limited 
  3.16  liability partnership registered under section 323.44. 
  3.17     Subd. 11.  [MINNESOTA PROFESSIONAL FIRM.] "Minnesota 
  3.18  professional firm" means a Minnesota firm that has in effect an 
  3.19  election under section 319B.03, subdivision 2. 
  3.20     Subd. 12.  [ORGANIZATIONAL DOCUMENT.] "Organizational 
  3.21  document" means: 
  3.22     (1) with respect to a corporation organized under chapter 
  3.23  302A or 317A, that corporation's articles of incorporation; 
  3.24     (2) with respect to a limited liability company organized 
  3.25  under chapter 322B, that limited liability company's articles of 
  3.26  organization; and 
  3.27     (3) with respect to a limited liability partnership 
  3.28  registered under section 323.44, that limited liability 
  3.29  partnership's registration and any notice filed under section 
  3.30  323.44, subdivision 9, in connection with that registration. 
  3.31     Subd. 13.  [OWNER.] "Owner" means: 
  3.32     (1) with respect to a professional firm that is a 
  3.33  corporation, except a nonprofit corporation, an owner of shares 
  3.34  in the corporation; 
  3.35     (2) with respect to a professional firm that is a limited 
  3.36  liability company, a membership interest in the limited 
  4.1   liability company; and 
  4.2      (3) with respect to a professional firm that is a limited 
  4.3   liability partnership, a partnership interest. 
  4.4      Subd. 14.  [OWNERSHIP INTEREST.] "Ownership interest" means:
  4.5      (1) with respect to a professional firm that is a 
  4.6   corporation, except a nonprofit corporation, shares in the 
  4.7   corporation; 
  4.8      (2) with respect to a professional firm that is a limited 
  4.9   liability company, a membership interest in the limited 
  4.10  liability company; and 
  4.11     (3) with respect to a professional firm that is a limited 
  4.12  liability partnership, a partnership interest. 
  4.13     Subd. 15.  [PARTIAL RIGHT.] "Partial right" means a right 
  4.14  in or with respect to an ownership interest where the right is 
  4.15  by itself insufficient to make the right's holder an owner. 
  4.16     Subd. 16.  [PERTINENT PROFESSIONAL SERVICES.] "Pertinent 
  4.17  professional services" means, with respect to a professional 
  4.18  firm, the category or categories of professional services 
  4.19  specified by the firm in its election under section 319B.03, 
  4.20  subdivision 2, or 319B.04, subdivision 2. 
  4.21     Subd. 17.  [PROFESSIONAL.] "Professional" means a natural 
  4.22  person who is licensed by the laws of the state of Minnesota or 
  4.23  similar laws of another state to furnish one or more of the 
  4.24  categories of professional services listed in subdivision 19. 
  4.25     Subd. 18.  [PROFESSIONAL FIRM.] "Professional firm" means 
  4.26  both Minnesota professional firms and foreign professional firms.
  4.27     Subd. 19.  [PROFESSIONAL SERVICES.] "Professional services" 
  4.28  means services of the type required to be furnished by a 
  4.29  professional under a license or certificate issued by the state 
  4.30  of Minnesota to practice medicine and surgery under sections 
  4.31  147.01 to 147.22, chiropractic under sections 148.01 to 148.105, 
  4.32  registered nursing under sections 148.171 to 148.285, optometry 
  4.33  under sections 148.52 to 148.62, psychology under sections 
  4.34  148.88 to 148.98, dentistry and dental hygiene under sections 
  4.35  150A.01 to 150A.12, pharmacy under sections 151.01 to 151.40, 
  4.36  podiatric medicine under sections 153.01 to 153.25, veterinary 
  5.1   medicine under sections 156.001 to 156.14, architecture, 
  5.2   engineering, surveying, landscape architecture, geoscience, and 
  5.3   certified interior design under sections 326.02 to 326.15, 
  5.4   accountancy under sections 326.17 to 326.229, or law under 
  5.5   sections 481.01 to 481.17, or under a license or certificate 
  5.6   issued by another state under similar laws. 
  5.7      Subd. 20.  [STATE.] "State" means a state of the United 
  5.8   States and the District of Columbia. 
  5.9      Subd. 21.  [STATEMENT OF QUALIFICATION.] "Statement of 
  5.10  qualification" means, with respect to a foreign firm that is a 
  5.11  limited liability partnership, the statement of qualification 
  5.12  required under section 323.49 and any notice filed under section 
  5.13  323.49, subdivision 9, in connection with that registration. 
  5.14     Subd. 22.  [UPDATE.] "Update" means: 
  5.15     (1) with respect to a Minnesota professional firm that is 
  5.16  either a Minnesota corporation or a Minnesota limited liability 
  5.17  company, amend the organizational document; 
  5.18     (2) with respect to a Minnesota professional firm that is a 
  5.19  Minnesota limited liability partnership, file a notice under 
  5.20  section 323.44, subdivision 9, in connection with the Minnesota 
  5.21  limited liability partnership's registration; 
  5.22     (3) with respect to a foreign professional firm that is a 
  5.23  foreign corporation, file a notice under section 303.115 in 
  5.24  connection with the foreign corporation's certificate of 
  5.25  authority; 
  5.26     (4) with respect to a foreign firm that is a limited 
  5.27  liability company, file a notice under section 322B.92, clause 
  5.28  (3), in connection with the foreign limited liability company's 
  5.29  certificate of authority; and 
  5.30     (5) with respect to a foreign professional firm that is a 
  5.31  foreign limited liability partnership, file a notice under 
  5.32  section 323.49, subdivision 9, in connection with the foreign 
  5.33  limited liability partnership's statement of qualification. 
  5.34     Sec. 3.  [319B.03] [AUTHORITY OF MINNESOTA FIRMS TO FURNISH 
  5.35  PROFESSIONAL SERVICES; ELECTION BY MINNESOTA FIRMS TO INVOKE THE 
  5.36  ACT.] 
  6.1      Subdivision 1.  [AUTHORITY UNDER THIS ACT AND UNDER OTHER 
  6.2   LAW.] (a) A Minnesota firm that has in effect an election under 
  6.3   subdivision 2 may furnish professional services within Minnesota 
  6.4   as provided in sections 319B.01 to 319B.12.  A Minnesota firm 
  6.5   may furnish professional services within Minnesota without 
  6.6   making an election under subdivision 2 only if: 
  6.7      (1) no Minnesota statute, Minnesota rule, or tenet of 
  6.8   Minnesota common law requires the Minnesota firm to make that 
  6.9   election in order to furnish professional services within 
  6.10  Minnesota; and 
  6.11     (2) no Minnesota statute, Minnesota rule, or tenet of 
  6.12  Minnesota common law precludes the Minnesota firm from 
  6.13  furnishing professional services within Minnesota in the absence 
  6.14  of that election. 
  6.15     (b) A Minnesota professional firm may provide professional 
  6.16  services and exercise the ancillary powers permitted under 
  6.17  section 319B.06, subdivision 1, paragraph (c), in another state 
  6.18  if:  
  6.19     (1) the Minnesota professional firm is authorized to 
  6.20  provide the services and exercise the powers within Minnesota; 
  6.21     (2) the Minnesota firm's organizational document does not 
  6.22  prohibit the Minnesota professional firm from providing the 
  6.23  services or exercising the powers in the other state; 
  6.24     (3) in the case of a Minnesota professional firm that is a 
  6.25  limited liability partnership, the partnership agreement does 
  6.26  not prohibit the Minnesota professional firm from providing the 
  6.27  services or exercising the powers in the other state; and 
  6.28     (4) the Minnesota professional firm complies with all 
  6.29  applicable laws of that other state regulating the furnishing of 
  6.30  professional services and exercising of ancillary powers in that 
  6.31  state. 
  6.32     Subd. 2.  [ELECTION TO INVOKE THIS ACT.] To elect to become 
  6.33  a Minnesota professional firm and be authorized to furnish 
  6.34  professional services according to sections 319B.01 to 319B.12, 
  6.35  a Minnesota firm must in its organizational document: 
  6.36     (1) state that the Minnesota firm elects to operate under 
  7.1   those sections; 
  7.2      (2) acknowledge that the Minnesota firm is subject to those 
  7.3   sections; and 
  7.4      (3) specify from the list stated in section 319B.02, 
  7.5   subdivision 19, the category or categories of professional 
  7.6   services the Minnesota firm is authorized to provide. 
  7.7      The statement, acknowledgment, and specification may be 
  7.8   made when a Minnesota firm initially files the organizational 
  7.9   document or may be added at a later time by updating that 
  7.10  document. 
  7.11     Subd. 3.  [RESCISSION AND AMENDMENT OF ELECTION.] (a) A 
  7.12  Minnesota professional firm may rescind its election by updating 
  7.13  its organizational document to delete the statement, 
  7.14  acknowledgment, and specification required by subdivision 2. 
  7.15     (b) A Minnesota professional firm may update its 
  7.16  organizational document to change the specification required by 
  7.17  subdivision 2, clause (3). 
  7.18     Subd. 4.  [RELATIONSHIP OF THIS ACT AND GENERALLY 
  7.19  APPLICABLE GOVERNING LAW.] If a Minnesota firm has an election 
  7.20  under subdivision 2 in effect and the Minnesota firm's generally 
  7.21  applicable governing law conflicts with sections 319B.01 to 
  7.22  319B.12, sections 319B.01 to 319B.12 govern. 
  7.23     Sec. 4.  [319B.04] [AUTHORITY OF FOREIGN FIRMS TO FURNISH 
  7.24  PROFESSIONAL SERVICES; ELECTION BY FOREIGN FIRMS TO INVOKE THE 
  7.25  ACT.] 
  7.26     Subdivision 1.  [AUTHORITY UNDER THIS ACT AND UNDER OTHER 
  7.27  LAW.] A foreign firm that has in effect an election under 
  7.28  subdivision 2 may furnish professional services within Minnesota 
  7.29  as provided in sections 319B.01 to 319B.12.  A foreign firm may 
  7.30  furnish professional services within Minnesota without making an 
  7.31  election under subdivision 2 only if: 
  7.32     (1) no Minnesota statute, Minnesota rule, or tenet of 
  7.33  Minnesota common law requires the foreign firm to make that 
  7.34  election in order to furnish professional services within 
  7.35  Minnesota; and 
  7.36     (2) no Minnesota statute, Minnesota rule, or tenet of 
  8.1   Minnesota common law precludes the foreign firm from furnishing 
  8.2   professional services within Minnesota in the absence of that 
  8.3   election. 
  8.4      Subd. 2.  [ELECTION TO INVOKE AUTHORITY UNDER THIS ACT.] To 
  8.5   elect to become a foreign professional firm and be authorized to 
  8.6   furnish professional services according to sections 319B.01 to 
  8.7   319B.12, a foreign firm must in its certificate of authority or 
  8.8   statement of qualification: 
  8.9      (1) state that the firm elects to operate under sections 
  8.10  319B.01 to 319B.12; 
  8.11     (2) acknowledge that the firm is subject to those sections; 
  8.12     (3) state that, to the extent its generally applicable 
  8.13  governing law conflicts or differs with those sections, the 
  8.14  foreign firm has made the necessary changes to the agreements 
  8.15  and other documents controlling its structure, governance, 
  8.16  operations, and internal affairs so as to comply with those 
  8.17  sections; and 
  8.18     (4) specify from the list stated in section 319B.02, 
  8.19  subdivision 19, the category or categories of professional 
  8.20  services the foreign firm is authorized to provide within 
  8.21  Minnesota. 
  8.22     The statements, acknowledgment, and specification may be 
  8.23  made when the foreign firm initially files for a certificate of 
  8.24  authority or statement of qualification or may be added at a 
  8.25  later time by updating that document. 
  8.26     Subd. 3.  [RESCISSION AND AMENDMENT OF ELECTION.] (a) A 
  8.27  foreign firm may rescind its election by updating its 
  8.28  certificate of authority or statement of qualification to delete 
  8.29  the statements, acknowledgment, and specification required by 
  8.30  subdivision 2. 
  8.31     (b) A foreign firm may update its certificate of authority 
  8.32  or statement of qualification to change the specification 
  8.33  required by subdivision 2, clause (4). 
  8.34     Sec. 5.  [319B.05] [FIRM NAME.] 
  8.35     Subdivision 1.  [NO IMPLICATION OF SUPERIORITY.] The name 
  8.36  of a professional firm must not imply or be used to imply 
  9.1   superiority. 
  9.2      Subd. 2.  [REQUIRED NAME ENDINGS.] The name of a 
  9.3   professional firm must end: 
  9.4      (1) in the case of a corporation, with any one of the 
  9.5   following phrases, words, or abbreviations:  "Professional 
  9.6   Corporation"; "Professional Service Corporation"; "Service 
  9.7   Corporation"; "Professional Association"; "Chartered"; 
  9.8   "Limited"; "P.C."; "P.S.C."; "S.C."; "P.A."; or "Ltd."; 
  9.9      (2) in the case of a limited liability company, with any 
  9.10  one of the following phrases or abbreviations:  "Professional 
  9.11  Limited Liability Company"; "Limited Liability Company"; 
  9.12  "P.L.L.C."; "P.L.C."; or "L.L.C."; or 
  9.13     (3) in the case of a limited liability partnership, with 
  9.14  any one of the following phrases or abbreviations:  
  9.15  "Professional Limited Liability Partnership"; "Limited Liability 
  9.16  Partnership"; "P.L.L.P."; or "L.L.P." 
  9.17     A permitted abbreviation may include or omit periods. 
  9.18     Sec. 6.  [319B.06] [FURNISHING SERVICES.] 
  9.19     Subdivision 1.  [CATEGORIES OF SERVICE.] (a) A professional 
  9.20  firm may provide professional services within Minnesota in one 
  9.21  of the categories listed in section 319B.02, subdivision 19, if: 
  9.22     (1) the professional firm's election under section 319B.03, 
  9.23  subdivision 2, or 319B.04, subdivision 2, specifies that 
  9.24  category; and 
  9.25     (2) each of the professional firm's owners meet the 
  9.26  requirements of section 319B.07 with regard to that category. 
  9.27     (b) A professional firm may provide professional services 
  9.28  within Minnesota in more than one of the categories listed in 
  9.29  section 319B.02, subdivision 19, if:  
  9.30     (1) the professional firm's election under section 319B.03, 
  9.31  subdivision 2, or 319B.04, subdivision 2, specifies those 
  9.32  categories; 
  9.33     (2) each of the professional firm's owners meet the 
  9.34  requirements of section 319B.07 with regard to at least one of 
  9.35  those categories; and 
  9.36     (3) the relevant licensing statutes, as listed in section 
 10.1   319B.02, subdivision 19, or rules in effect under those 
 10.2   statutes, specifically authorize those categories of services to 
 10.3   be practiced in combination. 
 10.4      (c) A professional firm may exercise any powers accorded it 
 10.5   by its generally applicable governing law, so long as the 
 10.6   professional firm exercises those powers solely to provide the 
 10.7   pertinent professional services or to accomplish tasks ancillary 
 10.8   to providing those services. 
 10.9      (d) A professional firm may not conduct any other business 
 10.10  or provide any other services beyond those authorized in this 
 10.11  subdivision, either within or outside of Minnesota. 
 10.12     (e) A professional firm may not adopt, implement, or follow 
 10.13  a policy, procedure, or practice that would give a board grounds 
 10.14  for disciplinary action against a professional who follows, 
 10.15  agrees to, or acquiesces in the policy, procedure, or practice. 
 10.16     Subd. 2.  [MANNER OF FURNISHING SERVICES.] (a) A 
 10.17  professional firm may furnish professional services within 
 10.18  Minnesota only through professionals licensed or otherwise 
 10.19  authorized by the state of Minnesota to furnish the pertinent 
 10.20  professional services.  Firm owners who are properly licensed 
 10.21  professionals may provide professional services on a 
 10.22  professional firm's behalf, and a professional firm may also 
 10.23  hire or retain properly licensed professionals as employees, 
 10.24  nonemployee agents, or independent contractors to furnish 
 10.25  professional services on the professional firm's behalf. 
 10.26     (b) If a professional firm is authorized under subdivision 
 10.27  1, paragraph (b), to furnish more than one category of 
 10.28  professional services, a professional furnishing professional 
 10.29  services on behalf of the professional firm is required to be 
 10.30  licensed or authorized only with respect to the category or 
 10.31  categories of services which the professional actually furnishes.
 10.32     Subd. 3.  [RELATIONSHIP TO PERSON SERVED.] (a) Sections 
 10.33  319B.01 to 319B.12 do not alter any law applicable to the 
 10.34  relationship between a person furnishing professional services 
 10.35  and a person receiving the professional services, including 
 10.36  liability arising out of the professional services and the 
 11.1   confidential relationship and privilege of communications 
 11.2   between the person furnishing professional services and the 
 11.3   person receiving the professional services. 
 11.4      (b) Sections 319B.01 to 319B.12 do not alter any law 
 11.5   applicable to the relationship between a professional firm 
 11.6   furnishing professional services and a person receiving the 
 11.7   professional services, including liability arising out of the 
 11.8   professional services and the confidential relationship and 
 11.9   privilege of communications between the professional firm 
 11.10  furnishing professional services and the person receiving the 
 11.11  professional services. 
 11.12     (c) Whether a Minnesota professional firm's owners and 
 11.13  persons who control, manage, or act for the firm are personally 
 11.14  liable for the firm's debts and obligations is determined 
 11.15  according to the firm's generally applicable governing law. 
 11.16     Sec. 7.  [319B.07] [OWNERSHIP INTERESTS.] 
 11.17     Subdivision 1.  [OWNERSHIP OF INTERESTS 
 11.18  RESTRICTED.] Ownership interests in a professional firm may not 
 11.19  be owned or held, either directly or indirectly, except by any 
 11.20  of the following: 
 11.21     (1) professionals who, with respect to at least one 
 11.22  category of the pertinent professional services, are licensed 
 11.23  and not disqualified; 
 11.24     (2) general partnerships, other than limited liability 
 11.25  partnerships, authorized to furnish at least one category of the 
 11.26  professional firm's pertinent professional services; 
 11.27     (3) other professional firms authorized to furnish at least 
 11.28  one category of the professional firm's pertinent professional 
 11.29  services; 
 11.30     (4) a voting trust established with respect to some or all 
 11.31  of the ownership interests in the professional firm, if (i) the 
 11.32  professional firm's generally applicable governing law permits 
 11.33  the establishment of voting trusts, and (ii) all the voting 
 11.34  trustees and all the holders of beneficial interests in the 
 11.35  trust are professionals licensed to furnish at least one 
 11.36  category of the pertinent professional services; and 
 12.1      (5) an employee stock ownership plan as defined in section 
 12.2   4975(e)(7) of the Internal Revenue Code of 1986, as amended, if 
 12.3   (i) all the voting trustees of the plan are professionals 
 12.4   licensed to furnish at least one category of the pertinent 
 12.5   professional services, and (ii) the ownership interests are not 
 12.6   directly issued to anyone other than professionals licensed to 
 12.7   furnish at least one category of the pertinent professional 
 12.8   services. 
 12.9      Subd. 2.  [ISSUANCE AND TRANSFER OF OWNERSHIP INTERESTS 
 12.10  RESTRICTED.] A professional firm may not sell, grant, give, 
 12.11  allocate, issue, or otherwise transfer an ownership interest 
 12.12  except to persons who meet the requirements of subdivision 1.  
 12.13  No owner may transfer an ownership interest except to persons 
 12.14  who meet the requirements of subdivision 1.  These restrictions 
 12.15  apply regardless of whether a purported sale, grant, gift, 
 12.16  allocation, issuance, or other transfer: 
 12.17     (1) is voluntary or involuntary; 
 12.18     (2) constitutes a present transfer or an undertaking to 
 12.19  make future transfer or to allow the transferee to cause a 
 12.20  future transfer to occur; or 
 12.21     (3) is permanent or subject to defeasement. 
 12.22     Subd. 3.  [ISSUANCE AND TRANSFER OF PARTIAL RIGHTS 
 12.23  RESTRICTED.] (a) Except as permitted by this paragraph, no 
 12.24  professional firm may sell, grant, give, allocate, issue, or 
 12.25  otherwise transfer a partial right.  Unless prohibited by its 
 12.26  generally applicable governing law or some provision of a 
 12.27  document or agreement permitted by its generally applicable 
 12.28  governing law, a professional firm may: 
 12.29     (1) subject to section 319B.08, subdivision 3, sell, grant, 
 12.30  give, allocate, issue, or otherwise transfer an option to 
 12.31  acquire an entire ownership interest to a person who meets the 
 12.32  requirements of subdivision 1; and 
 12.33     (2) subject to its licensing law, undertake to make 
 12.34  payments, in the nature of separation, retirement, or death 
 12.35  benefits, on account of a former owner who has died, become 
 12.36  disqualified, or for any other reason has ceased to be an owner. 
 13.1      (b) Except as permitted by this paragraph, no owner may 
 13.2   transfer any partial right.  Unless prohibited by the 
 13.3   professional firm's generally applicable governing law or some 
 13.4   provision of a document or agreement authorized by the 
 13.5   professional firm's generally applicable governing law, an owner 
 13.6   may, subject to section 319B.09: 
 13.7      (1) enter into an agreement with other owners of the 
 13.8   professional firm regarding voting rights and other aspects of 
 13.9   management; and 
 13.10     (2) grant a proxy to a person who meets the requirements of 
 13.11  subdivision 1. 
 13.12     (c) Except as permitted by paragraphs (a) and (b), no 
 13.13  person may hold or transfer a partial right.  These restrictions 
 13.14  apply regardless of whether a purported transfer:  
 13.15     (1) is voluntary or involuntary; 
 13.16     (2) constitutes a present transfer or an undertaking to 
 13.17  make a future transfer or to allow the transferee to cause a 
 13.18  future transfer to occur; or 
 13.19     (3) is permanent or subject to defeasement. 
 13.20     Subd. 4.  [IMPROPER ISSUANCE AND TRANSFERS VOID.] A sale, 
 13.21  grant, gift, allocation, issuance, undertaking, creation, 
 13.22  pledge, or other transfer in violation of this section is void. 
 13.23     Subd. 5.  [FURTHER TRANSFER RESTRICTIONS PERMITTED.] If 
 13.24  permitted by its generally applicable governing law, a 
 13.25  professional firm may further restrict the transfer of ownership 
 13.26  interests and partial rights. 
 13.27     Subd. 6.  [NONAPPLICATION OF SECURITIES REGULATION 
 13.28  PROVISIONS.] Chapter 80A does not apply to or govern a 
 13.29  transaction relating to an ownership interest of a professional 
 13.30  firm. 
 13.31     Sec. 8.  [319B.08] [EFFECT OF DEATH OR DISQUALIFICATION OF 
 13.32  OWNER.] 
 13.33     Subdivision 1.  [ACQUISITION OF INTERESTS OR AUTOMATIC LOSS 
 13.34  OF PROFESSIONAL FIRM STATUS.] (a) If an owner dies or becomes 
 13.35  disqualified to practice all the pertinent professional 
 13.36  services, then either: 
 14.1      (1) within 90 days after the death or the beginning of the 
 14.2   disqualification, all of that owner's ownership interest must be 
 14.3   acquired by the professional firm, by persons permitted by 
 14.4   section 319B.07 to own the ownership interest, or by some 
 14.5   combination; or 
 14.6      (2) at the end of the 90-day period, the firm's election 
 14.7   under section 319B.03, subdivision 2, or 319B.04, subdivision 2, 
 14.8   is automatically rescinded, the firm loses its status as a 
 14.9   professional firm, and the authority created by that election 
 14.10  and status terminates.  
 14.11     An acquisition satisfies clause (1) if all right and title 
 14.12  to the deceased or disqualified owner's interest are acquired 
 14.13  before the end of the 90-day period, even if some or all of the 
 14.14  consideration is paid after the end of the 90-day period.  
 14.15  However, payment cannot be secured in any way that violates 
 14.16  sections 319B.01 to 319B.12. 
 14.17     (b) If automatic rescission does occur under paragraph (a), 
 14.18  the firm must immediately and accordingly update its 
 14.19  organizational document, certificate of authority, or statement 
 14.20  of qualification.  Even without that updating, however, the 
 14.21  rescission, loss of status, and termination of authority 
 14.22  provided by paragraph (a) occur automatically at the end of the 
 14.23  90-day period. 
 14.24     Subd. 2.  [TERMS OF ACQUISITION.] (a) If: 
 14.25     (1) an owner dies or becomes disqualified to practice all 
 14.26  the pertinent professional services; 
 14.27     (2) the professional firm has in effect a mechanism, valid 
 14.28  according to the professional firm's generally applicable 
 14.29  governing law, to effect a purchase of the deceased or 
 14.30  disqualified owner's ownership interest so as to satisfy 
 14.31  subdivision 1, paragraph (a), clause (1); and 
 14.32     (3) the professional firm does not agree with the 
 14.33  disqualified owner or the representative of the deceased owner 
 14.34  to set aside the mechanism, 
 14.35  then that mechanism applies. 
 14.36     (b) If: 
 15.1      (1) an owner dies or becomes disqualified to practice all 
 15.2   the pertinent professional services; 
 15.3      (2) the professional firm has in effect no mechanism as 
 15.4   described in paragraph (a), or has agreed as mentioned in 
 15.5   paragraph (a), clause (3), to set aside that mechanism; and 
 15.6      (3) consistent with its generally applicable governing law, 
 15.7   the professional firm agrees with the disqualified owner or the 
 15.8   representative of the deceased owner, before the end of the 
 15.9   90-day period, to an arrangement to effect a purchase of the 
 15.10  deceased or disqualified owner's ownership interest so as to 
 15.11  satisfy subdivision 1, paragraph (a), clause (1), 
 15.12  then that arrangement applies. 
 15.13     (c) If: 
 15.14     (1) an owner of a Minnesota professional firm dies or 
 15.15  becomes disqualified to practice all the pertinent professional 
 15.16  services; 
 15.17     (2) the Minnesota professional firm does not have in effect 
 15.18  a mechanism as described in paragraph (a); 
 15.19     (3) the Minnesota professional firm does not make an 
 15.20  arrangement as described in paragraph (b); and 
 15.21     (4) no provision or tenet of the Minnesota professional 
 15.22  firm's generally applicable governing law and no provision of 
 15.23  any document or agreement authorized by the Minnesota 
 15.24  professional firm's generally applicable governing law expressly 
 15.25  precludes an acquisition under this paragraph, 
 15.26  then the firm may acquire the deceased or disqualified owner's 
 15.27  ownership interest as stated in this paragraph.  To act under 
 15.28  this paragraph, the Minnesota professional firm must within 90 
 15.29  days after the death or beginning of the disqualification tender 
 15.30  to the representative of the deceased owner's estate or to the 
 15.31  disqualified owner the fair value of the owner's ownership 
 15.32  interest, as determined by the Minnesota professional firm's 
 15.33  governance authority.  That price must be at least the book 
 15.34  value, as determined in accordance with the Minnesota 
 15.35  professional firm's regular method of accounting, as of the end 
 15.36  of the month immediately preceding the death or loss of 
 16.1   license.  The tender must be unconditional and may not attempt 
 16.2   to have the recipient waive any rights provided in this 
 16.3   section.  If the Minnesota professional firm tenders a price 
 16.4   under this paragraph within the 90-day period, the deceased or 
 16.5   disqualified owner's ownership interest immediately transfers to 
 16.6   the Minnesota professional firm regardless of any dispute as to 
 16.7   the fairness of the price.  A disqualified owner or 
 16.8   representative of the deceased owner's estate who disputes the 
 16.9   fairness of the tendered price may take the tendered price and 
 16.10  bring suit in district court seeking additional payment.  The 
 16.11  suit must be commenced within one year after the payment is 
 16.12  tendered.  A Minnesota professional firm may agree with a 
 16.13  disqualified owner or the representative of a deceased owner's 
 16.14  estate to delay all or part of the payment due under this 
 16.15  paragraph, but all right and title to the owner's ownership 
 16.16  interests must be acquired before the end of the 90-day period 
 16.17  and payment may not be secured in any way that violates sections 
 16.18  319B.01 to 319B.12. 
 16.19     Subd. 3.  [EXPIRATION OF FIRM-ISSUED OPTION ON DEATH OR 
 16.20  DISQUALIFICATION OF HOLDER.] If the holder of an option issued 
 16.21  under section 319B.07, subdivision 3, paragraph (a), clause (1), 
 16.22  dies or becomes disqualified, the option automatically expires. 
 16.23     Subd. 4.  [NO EFFECT ON PARTNERSHIP DISSOLUTION.] This 
 16.24  section does not change the effect of sections 323.28 and 
 16.25  323.30, under which the dissociation of a partner from a limited 
 16.26  liability partnership causes the dissolution of that partnership.
 16.27     Sec. 9.  [319B.09] [GOVERNANCE.] 
 16.28     Subdivision 1.  [GOVERNANCE AUTHORITY.] (a) Except as 
 16.29  stated in paragraph (b), a professional firm's governance 
 16.30  authority must rest with one or more professionals, each of whom 
 16.31  is licensed to furnish at least one category of the pertinent 
 16.32  professional services. 
 16.33     (b) In a Minnesota professional firm organized under 
 16.34  chapter 317A and in a foreign professional firm organized under 
 16.35  the nonprofit corporation statute of another state, at least one 
 16.36  individual possessing governance authority must be a 
 17.1   professional licensed to furnish at least one category of the 
 17.2   pertinent professional services. 
 17.3      (c) Individuals who possess governance authority within a 
 17.4   professional firm may delegate administrative and operational 
 17.5   matters to others.  No decision entailing the exercise of 
 17.6   professional judgment may be delegated or assigned to anyone who 
 17.7   is not a professional licensed to practice the professional 
 17.8   services involved in the decision. 
 17.9      (d) An individual whose license to practice any pertinent 
 17.10  professional services is revoked or suspended may not, during 
 17.11  the time the revocation or suspension is in effect, possess or 
 17.12  exercise governance authority, hold a position with governance 
 17.13  authority, or take part in any decision or other action 
 17.14  constituting an exercise of governance authority.  Nothing in 
 17.15  this chapter prevents a board from further terminating, 
 17.16  restricting, limiting, qualifying, or imposing conditions on an 
 17.17  individual's governance role as board disciplinary action. 
 17.18     Subd. 2.  [VOTING AND MANAGEMENT RIGHTS RESTRICTED.] (a) 
 17.19  The restrictions stated in section 319B.07 apply to the holding 
 17.20  and exercise of:  
 17.21     (1) any proxy relating to the voting right of any ownership 
 17.22  interest in a professional firm; and 
 17.23     (2) any other right to vote or participate in the 
 17.24  management of a professional firm where the right derives from 
 17.25  or is on account of an ownership interest in the professional 
 17.26  firm.  
 17.27     Except as stated in paragraphs (b) and (c), this paragraph 
 17.28  applies to rights a representative of a deceased or incompetent 
 17.29  owner might otherwise have. 
 17.30     (b) If a Minnesota professional firm is deciding whether to 
 17.31  rescind its election under section 319B.03, subdivision 3, the 
 17.32  representative of a deceased or incompetent owner has authority 
 17.33  to vote the deceased or incompetent owner's ownership interest 
 17.34  on that issue to the same extent the owner would have had the 
 17.35  right to vote but for the death or incompetency. 
 17.36     (c) If a foreign professional firm is deciding whether to 
 18.1   rescind its election under section 319B.04, subdivision 3, and 
 18.2   the foreign professional firm's generally applicable governing 
 18.3   law provides the representative of a deceased or incompetent 
 18.4   owner authority to vote the deceased or incompetent owner's 
 18.5   ownership interest on that issue, nothing in sections 319B.01 to 
 18.6   319B.12 limits the representative's authority. 
 18.7      Sec. 10.  [319B.10] [MERGERS AND OTHER REORGANIZATIONS.] 
 18.8      Subdivision 1.  [REORGANIZATION PERMITTED.] A professional 
 18.9   firm may enter into a merger, consolidation, exchange of 
 18.10  ownership interests, conversion, or any other reorganization 
 18.11  permitted by its generally applicable governing law. 
 18.12     Subd. 2.  [EFFECT ON PARTICIPATING PROFESSIONAL FIRM.] (a) 
 18.13  If a professional firm participates in and survives a 
 18.14  reorganization but the reorganization causes the surviving firm 
 18.15  to be out of compliance with section 319B.07 or 319B.09, or both:
 18.16     (1) the surviving firm's election under section 319B.03, 
 18.17  subdivision 2, or 319B.04, subdivision 2, is automatically 
 18.18  rescinded; 
 18.19     (2) the surviving firm immediately loses its status as a 
 18.20  professional firm and the authority created by that election and 
 18.21  status terminates; and 
 18.22     (3) the surviving firm must immediately and accordingly 
 18.23  update its organizational document, certificate of authority, or 
 18.24  statement of qualification.  Even without that amendment, 
 18.25  however, the rescission, loss of status, and termination of 
 18.26  authority occur automatically when the reorganization takes 
 18.27  effect. 
 18.28     (b) If, before a reorganization takes effect, the 90-day 
 18.29  deadline established in section 319B.07, subdivision 1, has been 
 18.30  triggered but has not yet elapsed with regard to an ownership 
 18.31  interest in a professional firm participating in the 
 18.32  reorganization, the surviving firm is not out of compliance with 
 18.33  sections 319B.07 and 319B.09 merely because the reorganization 
 18.34  accords a comparable ownership interest in the surviving firm to 
 18.35  the disqualified owner or the representative of the deceased 
 18.36  owner's estate.  The original 90-day deadline applies to the 
 19.1   comparable ownership interest and the surviving firm. 
 19.2      Subd. 3.  [FILINGS WITH SECRETARY OF STATE.] (a) For a 
 19.3   Minnesota professional firm involved in a merger, the document 
 19.4   filed with the secretary of state to effectuate the merger must 
 19.5   state whether that Minnesota professional firm will survive the 
 19.6   merger, and if so, whether that Minnesota professional firm will 
 19.7   remain a Minnesota professional firm once the merger takes 
 19.8   effect. 
 19.9      (b) For a foreign professional firm involved in a merger, 
 19.10  the certificate filed with the secretary of state under section 
 19.11  303.11 or 322B.92 must be accompanied by a statement as to 
 19.12  whether that foreign firm will survive the merger, and if so, 
 19.13  whether that foreign professional firm will remain a foreign 
 19.14  professional firm once the merger takes effect. 
 19.15     Subd. 4.  [STATUS OF NEWLY CREATED FIRM.] If a 
 19.16  reorganization involves the creation of a new firm, that firm 
 19.17  may make an election under section 319B.03, subdivision 2, or 
 19.18  319B.04, subdivision 2, and become a professional firm if the 
 19.19  firm meets the requirements of sections 319B.01 to 319B.12. 
 19.20     Sec. 11.  [319B.11] [PROFESSIONAL REGULATION.] 
 19.21     Subdivision 1.  [BOARDS' POWERS.] Each board may make 
 19.22  whatever rules are necessary to carry out sections 319B.01 to 
 19.23  319B.12.  Except as stated in this section, nothing in sections 
 19.24  319B.01 to 319B.12 restricts or limits in any manner the 
 19.25  authority or duty of a board with respect to persons furnishing 
 19.26  professional services within the jurisdiction of the board, even 
 19.27  if the person is an owner, director, governor, officer, manager, 
 19.28  employee, agent, or independent contractor of a professional 
 19.29  firm and furnishes professional services through that firm. 
 19.30     Subd. 2.  [LIABILITY SHIELD.] (a) Except as stated in 
 19.31  paragraph (b), no board may directly or indirectly require a 
 19.32  person providing professional services through a professional 
 19.33  firm to assume greater liability for the firm's debts and 
 19.34  obligations than is contemplated by section 319B.06, subdivision 
 19.35  3. 
 19.36     (b) Paragraph (a) does not prevent the board from requiring 
 20.1   a professional to assume personal liability for specified 
 20.2   obligations or categories of obligations as a term or 
 20.3   requirement of board disciplinary or corrective action 
 20.4   concerning the professional. 
 20.5      Subd. 3.  [FILING OF ORGANIZATIONAL DOCUMENT AND REPORT 
 20.6   INFORMATION.] (a) No professional firm may furnish professional 
 20.7   services within Minnesota until the firm files with each board 
 20.8   having jurisdiction over the pertinent professional services: 
 20.9      (1) a copy of the firm's organizational document, 
 20.10  certificate of authority, or statement of qualification; 
 20.11     (2) a report containing the same information as required by 
 20.12  subdivision 4; and 
 20.13     (3) except as stated in paragraph (b), a fee of $100. 
 20.14     (b) If a firm has previously been organized under sections 
 20.15  319A.01 to 319A.22, that firm is not required to pay the filing 
 20.16  fee under paragraph (a).  
 20.17     Subd. 4.  [ANNUAL REPORT.] (a) Every professional firm must 
 20.18  file annually on or before January 1 with the board or boards 
 20.19  having jurisdiction over the pertinent professional services a 
 20.20  report containing the following: 
 20.21     (1) the name and address of the professional firm; 
 20.22     (2) the contents of any amendment made to the firm's 
 20.23  organizational document, certificate of authority, or statement 
 20.24  of qualification since the filing of the most recent report 
 20.25  under subdivision 3 or this subdivision; 
 20.26     (3) a designation of the position or positions within the 
 20.27  firm that have governance authority; 
 20.28     (4) the name and address of each owner of an ownership 
 20.29  interest and each person occupying a position with governance 
 20.30  authority; 
 20.31     (5) a statement as to whether all employees, agents, and 
 20.32  independent contractors furnishing professional services within 
 20.33  Minnesota on behalf of the professional firm are professionals 
 20.34  authorized to furnish at least one category of the pertinent 
 20.35  professional services; 
 20.36     (6) except in the case of a professional firm that is 
 21.1   organized under chapter 317A or the nonprofit corporation 
 21.2   statute of another state, a statement as to whether all owners 
 21.3   and persons occupying a position with governance authority are 
 21.4   professionals authorized to furnish at least one category of the 
 21.5   pertinent professional services; 
 21.6      (7) in the case of a professional firm that is organized 
 21.7   under chapter 317A or the nonprofit corporation statute of 
 21.8   another state, a statement as to whether at least one person 
 21.9   occupying a position with governance authority is a professional 
 21.10  authorized to furnish at least one category of the pertinent 
 21.11  professional services; and 
 21.12     (8) any additional information as the board may by rule 
 21.13  prescribe as appropriate to assist in determining whether a 
 21.14  professional firm is complying with sections 319B.01 to 319B.12. 
 21.15     The statement required by clauses (5), (6), and (7) must be 
 21.16  made and signed under oath by a professional who is an owner or 
 21.17  employee of the professional firm, licensed in at least one 
 21.18  category of the pertinent professional services and duly 
 21.19  authorized to make the statement on behalf of the professional 
 21.20  firm. 
 21.21     (b) For filing each annual report under paragraph (a), each 
 21.22  firm must pay a fee of $25 to each board with which the report 
 21.23  is filed. 
 21.24     Subd. 5.  [REPORT OF OWNER'S DEATH OR DISQUALIFICATION.] (a)
 21.25  Except as stated in paragraph (b), within 30 days after the 
 21.26  death or disqualification of an owner, the professional firm 
 21.27  must report the death or disqualification to each board having 
 21.28  jurisdiction over any of the pertinent professional services. 
 21.29     (b) A professional firm need not report a disqualification 
 21.30  to a board which took the action that caused the 
 21.31  disqualification. 
 21.32     Subd. 6.  [EXAMINATION BY BOARD.] (a) A board, or an 
 21.33  employee or agent designated by a board, may inspect at all 
 21.34  reasonable times all books and records of a professional firm 
 21.35  and may summon and examine under oath the owners, directors, 
 21.36  governors, officers, managers, persons occupying a position with 
 22.1   governance authority, and employees of the firm in all matters 
 22.2   concerning the operations of the professional firm that are 
 22.3   governed by sections 319B.01 to 319B.12, the rules of the board, 
 22.4   or the professional firm's generally applicable governing law.  
 22.5   This subdivision does not authorize anyone to have access to or 
 22.6   to compel anyone to testify with respect to books, records, or 
 22.7   information of any type subject to a privilege recognized by law.
 22.8      (b) Any information obtained by a board as a result of an 
 22.9   examination authorized by paragraph (a) is confidential, immune 
 22.10  from subpoena, and inadmissible as evidence at a trial, hearing, 
 22.11  or proceeding before a court, board, or commissioner except a 
 22.12  proceeding under subdivision 8. 
 22.13     (c) A professional firm subject to an examination under 
 22.14  paragraph (a) may request in writing that the board under whose 
 22.15  authority the examination is being or has been conducted provide 
 22.16  the professional firm with a copy of all or any specified parts 
 22.17  of the sworn testimony taken or received during the examination 
 22.18  as well as all or any specified exhibits provided as part of 
 22.19  that testimony.  The board must comply promptly with the request 
 22.20  and may charge the requesting firm the reasonable cost of making 
 22.21  and providing the copies. 
 22.22     Subd. 7.  [STATUS OF INFORMATION.] Except as stated in 
 22.23  subdivision 6, information filed by a professional firm under 
 22.24  this section is public data under chapter 13. 
 22.25     Subd. 8.  [INVOLUNTARY DISSOLUTION AND RESCISSION OF 
 22.26  PROFESSIONAL FIRM STATUS.] A board, through the attorney 
 22.27  general, may institute proceedings in a district court of this 
 22.28  state or a contested case proceeding under chapter 14 to 
 22.29  involuntarily rescind a professional firm's election under 
 22.30  section 319B.03, subdivision 2, or 319B.04, subdivision 2, to 
 22.31  impose restrictions or conditions on that election or to 
 22.32  reprimand the professional firm due to a violation of sections 
 22.33  319B.01 to 319B.12, the relevant licensing statute as listed in 
 22.34  section 319B.02, subdivision 19, or the rules of the board.  A 
 22.35  board, through the attorney general, may institute proceedings 
 22.36  in a district court of this state to have a Minnesota 
 23.1   professional firm involuntarily dissolved, or a foreign 
 23.2   professional firm's certificate of authority or statement of 
 23.3   qualification revoked on those grounds, as well as on any other 
 23.4   grounds provided by Minnesota law.  A board may seek reprimands, 
 23.5   restrictions, conditions, involuntary rescission, and, as 
 23.6   appropriate, dissolution or revocation within a single 
 23.7   proceeding in a district court of this state.  After a court 
 23.8   enters a decree imposing rescission, dissolution, or revocation 
 23.9   upon a professional firm, a board shall cause a certified copy 
 23.10  of the decree to be filed with the secretary of state.  The 
 23.11  secretary of state shall not charge a fee for filing the 
 23.12  decree.  A board's claim against a professional firm for 
 23.13  involuntary dissolution or revocation does not abate simply 
 23.14  because the professional firm has rescinded its election under 
 23.15  section 319B.03, subdivision 2, or 319B.04, subdivision 2.  A 
 23.16  voluntary rescission does abate a board's claim to obtain 
 23.17  reprimands, restrictions, conditions, or involuntary rescission. 
 23.18     Subd. 9.  [FEES.] All fees paid under this section are for 
 23.19  the board to which they are due. 
 23.20     Sec. 12.  [319B.12] [TRANSITION PROVISIONS.] 
 23.21     Subdivision 1.  [SPECIAL DEFINITIONS.] As used in this 
 23.22  section: 
 23.23     (1) "professional corporation" has the meaning given in 
 23.24  section 319A.02, subdivision 4; 
 23.25     (2) "foreign professional corporation" has the meaning 
 23.26  given in 319A.02, subdivision 5; and 
 23.27     (3) "corporation" has the meaning given in section 319A.02, 
 23.28  subdivision 7. 
 23.29     Subd. 2.  [NEW USE OF CHAPTER 319A PRECLUDED.] Beginning 
 23.30  July 1, 1997, no Minnesota firm may organize under chapter 319A 
 23.31  and no foreign firm may begin to operate under chapter 319A. 
 23.32     Subd. 3.  [EARLY ELECTION INTO THIS CHAPTER BY CHAPTER 319A 
 23.33  ORGANIZATIONS.] (a) At any time before January 1, 1999, a 
 23.34  professional corporation organized under chapter 319A and a 
 23.35  foreign professional corporation governed by chapter 319A may 
 23.36  elect to be governed by sections 319B.01 to 319B.12.  To make 
 24.1   that election, the professional corporation or foreign 
 24.2   professional corporation must: 
 24.3      (1) comply with section 319B.03, subdivision 2, or 319B.04, 
 24.4   subdivision 2, whichever is applicable; and 
 24.5      (2) amend, to the extent necessary to comply with sections 
 24.6   319B.01 to 319B.12, its organizational document, certificate of 
 24.7   authority, or statement of qualification, as well as any 
 24.8   agreements and other documents controlling the corporation's 
 24.9   structure, governance, operations, and internal affairs. 
 24.10     (b) Regardless of the date an electing professional 
 24.11  corporation or foreign professional corporation actually makes 
 24.12  its election under this subdivision, the electing professional 
 24.13  corporation or foreign professional corporation may make the 
 24.14  election effective as of January 1, 1997.  Except as allowed by 
 24.15  this paragraph, an election under this subdivision is effective 
 24.16  on the date the electing professional corporation or foreign 
 24.17  professional corporation complies with paragraph (a). 
 24.18     (c) The law and documents that govern the structure, 
 24.19  governance, operations, and other internal affairs of a 
 24.20  professional corporation or foreign professional corporation 
 24.21  when the corporation is deciding whether, when, and as of when 
 24.22  to make an election under this subdivision control the manner of 
 24.23  making those decisions. 
 24.24     Subd. 4.  [ALL USE OF CHAPTER 319A ENDED; DEEMED ELECTION 
 24.25  FOR MINNESOTA PROFESSIONAL FIRMS.] (a) Beginning January 1, 1999:
 24.26     (1) no professional corporation may operate under chapter 
 24.27  319A and no foreign professional corporation may operate under 
 24.28  chapter 319A; and 
 24.29     (2) chapter 319A ceases to apply to professional 
 24.30  corporations and foreign professional corporations. 
 24.31     (b) On January 1, 1999, a Minnesota professional 
 24.32  corporation that has not elected to be governed by sections 
 24.33  319B.01 to 319B.12 will be considered to have made that 
 24.34  election, and the professional corporation's purposes, as stated 
 24.35  under section 319A.03, clause (2), will be considered to be the 
 24.36  specification required by section 319B.03, subdivision 2, clause 
 25.1   (3). 
 25.2      Subd. 5.  [ACTS DURING TRANSITION.] The continuation or 
 25.3   completion of an act by a professional firm that had been a 
 25.4   professional corporation or foreign professional corporation but 
 25.5   elected to become a professional firm governed by this chapter 
 25.6   and the continuation or performance of any executed or wholly or 
 25.7   partially executory contract, conveyance, or transfer to or by 
 25.8   the professional firm shall, if otherwise lawful before the 
 25.9   professional firm became governed by this chapter, remain valid, 
 25.10  and may be continued, completed, consummated, enforced, or 
 25.11  terminated as required or as permitted by a statute applicable 
 25.12  to the contract, conveyance, or transfer before the effective 
 25.13  date of this chapter. 
 25.14     Sec. 13.  [EFFECTIVE DATE.] 
 25.15     Article 1 is effective January 1, 1997. 
 25.16                             ARTICLE 2 
 25.17                       CONFORMING AMENDMENTS
 25.18     Section 1.  Minnesota Statutes 1996, section 13.99, 
 25.19  subdivision 92e, is amended to read: 
 25.20     Subd. 92e.  [PROFESSIONAL CORPORATIONS OR FIRMS.] Access to 
 25.21  records of a professional corporation held by a licensing board 
 25.22  under section 319A.17 or records of a professional firm held by 
 25.23  a licensing board under section 319B.11 is governed by that 
 25.24  section. 
 25.25     Sec. 2.  Minnesota Statutes 1996, section 144A.43, 
 25.26  subdivision 4, is amended to read: 
 25.27     Subd. 4.  [HOME CARE PROVIDER.] "Home care provider" means 
 25.28  an individual, organization, association, corporation, unit of 
 25.29  government, or other entity that is regularly engaged in the 
 25.30  delivery, directly or by contractual arrangement, of home care 
 25.31  services for a fee.  At least one home care service must be 
 25.32  provided directly, although additional home care services may be 
 25.33  provided by contractual arrangements.  "Home care provider" 
 25.34  includes a hospice program defined in section 144A.48.  "Home 
 25.35  care provider" does not include: 
 25.36     (1) any home care or nursing services conducted by and for 
 26.1   the adherents of any recognized church or religious denomination 
 26.2   for the purpose of providing care and services for those who 
 26.3   depend upon spiritual means, through prayer alone, for healing; 
 26.4      (2) an individual who only provides services to a relative; 
 26.5      (3) an individual not connected with a home care provider 
 26.6   who provides assistance with home management services or 
 26.7   personal care needs if the assistance is provided primarily as a 
 26.8   contribution and not as a business; 
 26.9      (4) an individual not connected with a home care provider 
 26.10  who shares housing with and provides primarily housekeeping or 
 26.11  homemaking services to an elderly or disabled person in return 
 26.12  for free or reduced-cost housing; 
 26.13     (5) an individual or agency providing home-delivered meal 
 26.14  services; 
 26.15     (6) an agency providing senior companion services and other 
 26.16  older American volunteer programs established under the Domestic 
 26.17  Volunteer Service Act of 1973, Public Law Number 98-288; 
 26.18     (7) an employee of a nursing home licensed under this 
 26.19  chapter who provides emergency services to individuals residing 
 26.20  in an apartment unit attached to the nursing home; 
 26.21     (8) a member of a professional corporation organized under 
 26.22  sections 319A.01 to 319A.22 or chapter 319B that does not 
 26.23  regularly offer or provide home care services as defined in 
 26.24  subdivision 3; 
 26.25     (9) the following organizations established to provide 
 26.26  medical or surgical services that do not regularly offer or 
 26.27  provide home care services as defined in subdivision 3:  a 
 26.28  business trust organized under sections 318.01 to 318.04, a 
 26.29  nonprofit corporation organized under chapter 317A, a 
 26.30  partnership organized under chapter 323, or any other entity 
 26.31  determined by the commissioner; 
 26.32     (10) an individual or agency that provides medical supplies 
 26.33  or durable medical equipment, except when the provision of 
 26.34  supplies or equipment is accompanied by a home care service; 
 26.35     (11) an individual licensed under chapter 147; or 
 26.36     (12) an individual who provides home care services to a 
 27.1   person with a developmental disability who lives in a place of 
 27.2   residence with a family, foster family, or primary caregiver. 
 27.3      Sec. 3.  [303.115] [FOREIGN PROFESSIONAL FIRM FILINGS.] 
 27.4      When a foreign corporation uses chapter 319B to elect 
 27.5   professional firm status, rescind that status, or change the 
 27.6   specification of professional services required under section 
 27.7   319B.04, the foreign corporation must file with the secretary of 
 27.8   state a notice which:  
 27.9      (1) states the election, rescission, or change in 
 27.10  specification; 
 27.11     (2) had been approved in accordance with the foreign 
 27.12  corporation's generally applicable governing law, as that term 
 27.13  is defined in section 319B.02, subdivision 8; and 
 27.14     (3) has been signed on behalf of the foreign corporation. 
 27.15     Sec. 4.  Minnesota Statutes 1996, section 322B.12, 
 27.16  subdivision 1, is amended to read: 
 27.17     Subdivision 1.  [REQUIREMENTS AND PROHIBITIONS.] The 
 27.18  limited liability company name must: 
 27.19     (1) be in the English language or in any other language 
 27.20  expressed in English letters or characters; 
 27.21     (2) contain the words "limited liability company," or must 
 27.22  contain the abbreviation "LLC" or, in the case of an 
 27.23  organization formed pursuant to section 319A.03 or chapter 319B, 
 27.24  must meet the requirements of section 319A.07 or 319B.05 
 27.25  applicable to a limited liability company; 
 27.26     (3) not contain the word corporation or incorporated and 
 27.27  must not contain the abbreviation of either or both of these 
 27.28  words; 
 27.29     (4) not contain a word or phrase that indicates or implies 
 27.30  that it is organized for a purpose other than a legal business 
 27.31  purpose; and 
 27.32     (5) be distinguishable upon the records in the office of 
 27.33  the secretary of state from the name of each domestic limited 
 27.34  liability company, limited liability partnership, corporation, 
 27.35  and limited partnership, whether profit or nonprofit, and each 
 27.36  foreign limited liability company, limited liability 
 28.1   partnership, corporation, and limited partnership authorized or 
 28.2   registered to do business in this state, whether profit or 
 28.3   nonprofit, and each name the right to which is, at the time of 
 28.4   organization, reserved as provided for in sections 302A.117, 
 28.5   317A.117, 322A.03, 322B.125, or 333.001 to 333.54, unless there 
 28.6   is filed with the articles of organization one of the following: 
 28.7      (i) the written consent of the domestic limited liability 
 28.8   company, limited liability partnership, corporation, or limited 
 28.9   partnership or the foreign limited liability company, limited 
 28.10  liability partnership, corporation, or limited partnership 
 28.11  authorized or registered to do business in this state or the 
 28.12  holder of a reserved name or a name filed by or registered with 
 28.13  the secretary of state under sections 333.001 to 333.54 having a 
 28.14  name that is not distinguishable; 
 28.15     (ii) a certified copy of a final decree of a court in this 
 28.16  state establishing the prior right of the applicant to the use 
 28.17  of the name in this state; or 
 28.18     (iii) the applicant's affidavit that the limited liability 
 28.19  company, corporation, or limited partnership with the name that 
 28.20  is not distinguishable has been organized, incorporated, or on 
 28.21  file in this state for at least three years prior to the 
 28.22  affidavit, if it is a domestic limited liability company, 
 28.23  corporation, or limited partnership, or has been authorized or 
 28.24  registered to do business in this state for at least three years 
 28.25  prior to the affidavit, if it is a foreign limited liability 
 28.26  company, corporation, or limited partnership, or that the holder 
 28.27  of a name filed or registered with the secretary of state under 
 28.28  sections 333.001 to 333.54 filed or registered that name at 
 28.29  least three years prior to the affidavit, that the limited 
 28.30  liability company, corporation, or limited partnership or holder 
 28.31  has not during the three-year period filed any document with the 
 28.32  secretary of state; that the applicant has mailed written notice 
 28.33  to the limited liability company, corporation, or limited 
 28.34  partnership or the holder of a name filed or registered with the 
 28.35  secretary of state under sections 333.001 to 333.54 by certified 
 28.36  mail, return receipt requested, properly addressed to the 
 29.1   registered office of the limited liability company or 
 29.2   corporation or in care of the agent of the limited partnership, 
 29.3   or the address of the holder of a name filed or registered with 
 29.4   the secretary of state under sections 333.001 to 333.54, shown 
 29.5   in the records of the secretary of state, stating that the 
 29.6   applicant intends to use a name that is not distinguishable and 
 29.7   the notice has been returned to the applicant as undeliverable 
 29.8   to the addressee limited liability company, corporation, or 
 29.9   limited partnership or holder of a name filed or registered with 
 29.10  the secretary of state under sections 333.001 to 333.54; that 
 29.11  the applicant, after diligent inquiry, has been unable to find 
 29.12  any telephone listing for the limited liability company, 
 29.13  corporation, or limited partnership with the name that is not 
 29.14  distinguishable in the county in which is located the registered 
 29.15  office of the limited liability company, corporation, or limited 
 29.16  partnership shown in the records of the secretary of state or 
 29.17  has been unable to find any telephone listing for the holder of 
 29.18  a name filed or registered with the secretary of state under 
 29.19  sections 333.001 to 333.54 in the county in which is located the 
 29.20  address of the holder shown in the records of the secretary of 
 29.21  state; and that the applicant has no knowledge that the limited 
 29.22  liability company, corporation, or limited partnership or holder 
 29.23  of a name filed or registered with the secretary of state under 
 29.24  sections 333.001 to 333.54 is currently engaged in business in 
 29.25  this state. 
 29.26     Sec. 5.  Minnesota Statutes 1996, section 322B.92, is 
 29.27  amended to read: 
 29.28     322B.92 [AMENDMENTS TO THE CERTIFICATE OF AUTHORITY.] 
 29.29     If any statement in the application for a certificate of 
 29.30  authority by a foreign limited liability company was false when 
 29.31  made or any arrangements or other facts described have changed, 
 29.32  making the application inaccurate in any respect, the foreign 
 29.33  limited liability company shall promptly file with the secretary 
 29.34  of state: 
 29.35     (1) in the case of a change in its name, a termination or a 
 29.36  merger, a certificate to that effect authenticated by the proper 
 30.1   officer of the state or country under the laws of which the 
 30.2   foreign limited liability company is organized; or 
 30.3      (2) in the case of a change in the name or address of the 
 30.4   registered agent required to be maintained by section 322B.925, 
 30.5   an amendment to the certificate of authority signed by an 
 30.6   authorized person.; or 
 30.7      (3) in the case of an election, rescission, or change in 
 30.8   the specification of professional services under section 
 30.9   319B.04, a notice which: 
 30.10     (1) states the election, rescission, or change in 
 30.11  specification; 
 30.12     (2) has been approved in accordance with the foreign 
 30.13  limited liability company's generally applicable governing law, 
 30.14  as that term is defined in section 319B.02, subdivision 8; and 
 30.15     (3) has been signed on behalf of the foreign limited 
 30.16  liability company.  
 30.17     The fee for filing the document is the same as for filing 
 30.18  an amendment. 
 30.19     Sec. 6.  Minnesota Statutes 1996, section 323.44, is 
 30.20  amended by adding a subdivision to read: 
 30.21     Subd. 9.  [CHAPTER 319B ELECTION.] When a limited liability 
 30.22  partnership uses chapter 319B to elect professional firm status, 
 30.23  rescind that status, or change the specification of professional 
 30.24  services required under section 319B.04, the limited liability 
 30.25  partnership must file with the secretary of state a notice which:
 30.26     (1) states the election, rescission, or change in 
 30.27  specification; 
 30.28     (2) has been approved by the limited liability partnership 
 30.29  according to its generally applicable governing law, as that 
 30.30  term is defined in section 319B.02, subdivision 8; and 
 30.31     (3) has been signed on behalf of the limited liability 
 30.32  partnership.  
 30.33     The fee for filing the document is $35. 
 30.34     Sec. 7.  Minnesota Statutes 1996, section 323.49, is 
 30.35  amended by adding a subdivision to read: 
 30.36     Subd. 9.  [CHAPTER 319B ELECTION.] When a foreign limited 
 31.1   liability partnership uses chapter 319B to elect professional 
 31.2   firm status, rescind that status, or change the specification of 
 31.3   professional services required under section 319B.04, the 
 31.4   foreign limited liability partnership must file with the 
 31.5   secretary of state a notice which: 
 31.6      (1) states the election, rescission, or change in 
 31.7   specification; 
 31.8      (2) has been approved by the foreign limited liability 
 31.9   partnership according to its generally applicable governing law, 
 31.10  as that term is defined in section 319B.02, subdivision 8; and 
 31.11     (3) has been signed on behalf of the foreign limited 
 31.12  liability partnership.  
 31.13     The fee for filing the document is $35. 
 31.14     Sec. 8.  [REVISOR INSTRUCTION.] 
 31.15     In Minnesota Statutes 2000, the revisor of statutes shall 
 31.16  remove the following words and references: 
 31.17     (1) in section 13.99, subdivision 92e, remove "records of a 
 31.18  professional corporation held by a licensing board under section 
 31.19  319A.17 or"; 
 31.20     (2) in section 144A.43, subdivision 4, remove "sections 
 31.21  319A.01 to 319A.22 or"; and 
 31.22     (3) in section 322B.12, subdivision 1, remove "section 
 31.23  319A.03 or" and "section 319A.07 or". 
 31.24     Sec. 9.  [REPEALER.] 
 31.25     Minnesota Statutes 1996, sections 319A.01; 319A.02; 
 31.26  319A.03; 319A.04; 319A.05; 319A.06; 319A.07; 319A.08; 319A.09; 
 31.27  319A.10; 319A.11; 319A.12; 319A.13; 319A.14; 319A.15; 319A.16; 
 31.28  319A.17; 319A.18; 319A.19; 319A.20; 319A.21; and 319A.22, are 
 31.29  repealed. 
 31.30     Sec. 10.  [EFFECTIVE DATE.] 
 31.31     Sections 1 to 7 are effective the day following final 
 31.32  enactment. 
 31.33     Section 9 is effective January 1, 1999.