HF 977

1st Unofficial Engrossment - 88th Legislature (2013 - 2014)

Posted on 04/02/2014 01:54 p.m.

1.1A bill for an act 1.2relating to business organizations; regulating the organization and operation of 1.3limited liability companies; enacting a revised uniform limited liability company 1.4act; providing conforming changes;amending Minnesota Statutes 2012, sections 1.548A.03, subdivision 4; 181.970, subdivision 2; 270C.721; 273.124, subdivision 1.68; 290.01, subdivision 3b; 302A.011, by adding subdivisions; 302A.115, 1.7subdivision 1; 302A.681; 302A.683; 302A.685; 302A.689; 302A.691; 308A.121, 1.8subdivision 1; 308B.801, subdivisions 1, 2, 5; 308B.805, subdivision 1; 1.9308B.835, subdivision 2; 317A.115, subdivision 2; 319B.02, subdivisions 3, 22; 1.10319B.10, subdivision 3; 321.0108; proposing coding for new law in Minnesota 1.11Statutes, chapter 302A; proposing coding for new law as Minnesota Statutes, 1.12chapter 322C; repealing Minnesota Statutes 2012, sections 302A.687; 322B.01; 1.13322B.02; 322B.03, subdivisions 1, 2, 3, 6, 6a, 7, 8, 10, 11, 12, 13, 14, 15, 17, 1.1417a, 17b, 18, 19, 19a, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 31a, 32, 33, 1.1534, 35, 36, 36a, 37, 38, 39, 40, 41, 41a, 42, 43, 44, 45, 45a, 46, 47, 48, 49, 50, 51; 1.16322B.04; 322B.10; 322B.105; 322B.11; 322B.115; 322B.12, subdivisions 1, 2, 1.173, 4, 5; 322B.125; 322B.13; 322B.135; 322B.14; 322B.145; 322B.15; 322B.155; 1.18322B.16; 322B.165; 322B.17; 322B.175; 322B.18; 322B.20; 322B.21; 322B.22; 1.19322B.23; 322B.30; 322B.303; 322B.306; 322B.31; 322B.313; 322B.316; 1.20322B.32; 322B.323; 322B.326; 322B.33; 322B.333; 322B.336; 322B.34; 1.21322B.343; 322B.346; 322B.348; 322B.35; 322B.353; 322B.356; 322B.36; 1.22322B.363, subdivisions 1, 2, 3, 4, 5, 6, 7; 322B.366, subdivision 1; 322B.37; 1.23322B.373; 322B.376; 322B.38; 322B.383; 322B.386; 322B.40; 322B.41; 1.24322B.42; 322B.43; 322B.50; 322B.51; 322B.52; 322B.53; 322B.54; 322B.55; 1.25322B.56; 322B.60; 322B.603; 322B.606; 322B.61; 322B.613; 322B.616; 1.26322B.62; 322B.623; 322B.626; 322B.63; 322B.633; 322B.636; 322B.64; 1.27322B.643; 322B.646; 322B.65; 322B.653; 322B.656; 322B.66; 322B.663; 1.28322B.666; 322B.67; 322B.673; 322B.676; 322B.679; 322B.68; 322B.683; 1.29322B.686; 322B.689; 322B.69; 322B.693; 322B.696; 322B.699; 322B.70; 1.30322B.71; 322B.72; 322B.73; 322B.74; 322B.75; 322B.755; 322B.76; 322B.77; 1.31322B.78; 322B.80; 322B.803; 322B.806; 322B.81; 322B.813; 322B.816, 1.32subdivisions 1, 2, 4, 5, 6; 322B.82; 322B.823; 322B.826; 322B.83; 322B.833; 1.33322B.836; 322B.84; 322B.843; 322B.846; 322B.85; 322B.853; 322B.856; 1.34322B.86; 322B.863; 322B.866; 322B.87; 322B.873, subdivisions 1, 4; 322B.876, 1.35subdivision 1; 322B.88; 322B.883; 322B.90; 322B.905; 322B.91, subdivisions 1.361, 2; 322B.915; 322B.92; 322B.925; 322B.93; 322B.935; 322B.94; 322B.945; 1.37322B.95; 322B.955; 322B.960, subdivisions 1, 4, 5; 322B.975. 1.38BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.1ARTICLE 1 2.2REVISED UNIFORM LIMITED LIABILITY COMPANY ACT 2.3GENERAL PROVISIONS 2.4    Section 1. new text begin [322C.0101] CITATION. new text end 2.5 new text begin This chapter may be cited as the "Minnesota Revised Uniform Limited Liability new text end 2.6 new text begin Company Act." new text end 2.7    Sec. 2. new text begin [322C.0102] DEFINITIONS. new text end 2.8     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 new text end 2.9 new text begin this section have the meanings given them. new text end 2.10     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 new text end 2.11 new text begin organization required by section 322C.0201. The term includes the articles of organization new text end 2.12 new text begin as amended or restated. new text end 2.13     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 new text end 2.14 new text begin board-managed limited liability company. new text end 2.15     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 new text end 2.16 new text begin liability company" means a limited liability company that qualifies as such under section new text end 2.17 new text begin 322C.0407, subdivision 1. new text end 2.18     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 new text end 2.19 new text begin limited liability company: new text end 2.20 new text begin (1) in order to become a member upon formation of the company and in accordance new text end 2.21 new text begin with an agreement between or among the persons that have agreed to become the initial new text end 2.22 new text begin members of the company; new text end 2.23 new text begin (2) in order to become a member after formation of the company and in accordance new text end 2.24 new text begin with an agreement between the person and the company; or new text end 2.25 new text begin (3) in the person's capacity as a member and in accordance with the operating new text end 2.26 new text begin agreement or an agreement between the member and the company. new text end 2.27     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 new text end 2.28 new text begin the subject of: new text end 2.29 new text begin (1) an order for relief under United States Code, title 12, or a successor statute new text end 2.30 new text begin of general application; or new text end 2.31 new text begin (2) a comparable order under federal, state, or foreign law governing insolvency. new text end 2.32     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 new text end 2.33 new text begin 322C.0405, subdivision 7, means a transfer of money or other property from a limited new text end 2.34 new text begin liability company to another person on account of a transferable interest. new text end 3.1     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 new text end 3.2 new text begin to be filed with the secretary of state under this chapter, means effective under section new text end 3.3 new text begin 322C.0205, subdivision 3. new text end 3.4     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 new text end 3.5 new text begin meeting the applicable requirements of this chapter, signed and accompanied by any new text end 3.6 new text begin required filing fees, has been delivered to the secretary of state. The secretary of state shall new text end 3.7 new text begin endorse on the original or an image thereof the word "Filed" and the month, day, and year new text end 3.8 new text begin of filing, record the document or an image thereof in the Office of the Secretary of State, new text end 3.9 new text begin and return a document or the image thereof to the person who delivered it for filing. new text end 3.10     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" new text end 3.11 new text begin means an unincorporated entity formed under the law of a jurisdiction other than this state new text end 3.12 new text begin and denominated by that law as a limited liability company. new text end 3.13     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 new text end 3.14 new text begin designated, of a board-managed limited liability company. new text end 3.15     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 new text end 3.16 new text begin phrase "foreign limited liability company," means an entity formed under this chapter. new text end 3.17     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 new text end 3.18 new text begin of a manager-managed limited liability company is responsible, alone or in concert with new text end 3.19 new text begin others, for performing the management functions stated in section 322C.0407, subdivision new text end 3.20 new text begin 3. new text end 3.21     new text begin Subd. 14. new text end new text begin Manager-managed limited liability company. new text end new text begin "Manager-managed new text end 3.22 new text begin limited liability company" means a limited liability company that qualifies as such under new text end 3.23 new text begin section 322C.0407, subdivision 1. new text end 3.24     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 new text end 3.25 new text begin limited liability company under section 322C.0401 and has not dissociated under section new text end 3.26 new text begin 322C.0602. new text end 3.27     new text begin Subd. 16. new text end new text begin Member-managed limited liability company. new text end new text begin "Member-managed new text end 3.28 new text begin limited liability company" means a limited liability company that is not a manager-managed new text end 3.29 new text begin limited liability company or a board-managed limited liability company. new text end 3.30     new text begin Subd. 17. new text end new text begin Operating agreement. new text end new text begin "Operating agreement" means the agreement, new text end 3.31 new text begin whether or not referred to as an operating agreement and whether oral, in a record, implied, new text end 3.32 new text begin or in any combination thereof, of all the members of a limited liability company, including new text end 3.33 new text begin a sole member, concerning the matters described in section 322C.0110, subdivision 1. The new text end 3.34 new text begin term includes the agreement as amended or restated. new text end 3.35     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 new text end 3.36 new text begin member under section 322C.0701, subdivision 1, clause (5), item (ii), means conduct: new text end 4.1 new text begin (1) engaged in by one or more: new text end 4.2 new text begin (i) members in a member-managed limited liability company or who are otherwise new text end 4.3 new text begin in control of any limited liability company; new text end 4.4 new text begin (ii) managers in a manager-managed limited liability company; or new text end 4.5 new text begin (iii) governors of a board-managed limited liability company; new text end 4.6 new text begin (2) that occurs with respect to the applicant member's capacity as: new text end 4.7 new text begin (i) a member, manager, or governor of a limited liability company; or new text end 4.8 new text begin (ii) an employee of a limited liability company with 35 or fewer members; and new text end 4.9 new text begin (3) that is unfairly prejudicial to the applicant member in a capacity listed in clause new text end 4.10 new text begin (2), because the conduct frustrated an expectation of the applicant member that: new text end 4.11 new text begin (i) is reasonable in light of the reasonable expectations of the other members; new text end 4.12 new text begin (ii) was material to the applicant's decision to become a member of the limited new text end 4.13 new text begin liability company or for a substantial time has been material during the member's new text end 4.14 new text begin continuing membership; new text end 4.15 new text begin (iii) was known to other members or that the other members had reason to know; and new text end 4.16 new text begin (iv) is not contrary to the operating agreement as applied consistently with the new text end 4.17 new text begin contractual obligation of good faith and fair dealing under section 322C.0409, subdivision new text end 4.18 new text begin 4. new text end 4.19 new text begin (b) For the purposes of paragraph (a), conduct: new text end 4.20 new text begin (1) includes words, action, inaction, and any combination of words, action, or new text end 4.21 new text begin inaction; and new text end 4.22 new text begin (2) is not oppressive solely by reason of a good faith disagreement as to the content, new text end 4.23 new text begin interpretation, or application of the company's operating agreement. new text end 4.24     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 new text end 4.25 new text begin 322C.0201 to form a limited liability company. new text end 4.26     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, new text end 4.27 new text begin trust, partnership, limited liability company, association, joint venture, public corporation, new text end 4.28 new text begin government or governmental subdivision, agency, or instrumentality, or any other legal or new text end 4.29 new text begin commercial entity. new text end 4.30     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 new text end 4.31 new text begin the principal executive office of a limited liability company or foreign limited liability new text end 4.32 new text begin company, whether or not the office is located in this state. new text end 4.33     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 new text end 4.34 new text begin medium or that is stored in an electronic or other medium and is retrievable in perceivable new text end 4.35 new text begin form. new text end 5.1     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 new text end 5.2 new text begin records" means that a certified copy of a statement meeting the applicable requirements new text end 5.3 new text begin of this chapter, including containing a legal description of the property affected by the new text end 5.4 new text begin statement, as filed with the secretary of state, has been recorded in the office of the county new text end 5.5 new text begin reorder in the county in which the real property affected by the statement is located or, if new text end 5.6 new text begin the real property is registered under chapter 508 or 508A, has been recorded in the office of new text end 5.7 new text begin the applicable registrar of titles and memorialized on the certificate of title for that property. new text end 5.8     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 5.9 new text begin (1) the office that a limited liability company is required to designate and maintain new text end 5.10 new text begin under section 322C.0113; or new text end 5.11 new text begin (2) the office that a foreign limited liability company is required to designate and new text end 5.12 new text begin maintain under sections 5.36 and 322C.0802. new text end 5.13     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 new text end 5.14 new text begin a record: new text end 5.15 new text begin (1) to execute or adopt a tangible symbol; or new text end 5.16 new text begin (2) to attach to or logically associate with the record an electronic symbol, sound, new text end 5.17 new text begin or process. new text end 5.18     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, new text end 5.19 new text begin Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject new text end 5.20 new text begin to the jurisdiction of the United States. new text end 5.21     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 new text end 5.22 new text begin sale, lease, mortgage, security interest, encumbrance, gift, and transfer by operation of law. new text end 5.23     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 new text end 5.24 new text begin originally associated with a person's capacity as a member, to receive distributions from a new text end 5.25 new text begin limited liability company in accordance with the operating agreement, whether or not the new text end 5.26 new text begin person remains a member or continues to own any part of the right. new text end 5.27     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 new text end 5.28 new text begin transferable interest has been transferred, whether or not the transferor is a member. new text end 5.29    Sec. 3. new text begin [322C.0103] KNOWLEDGE; NOTICE. new text end 5.30     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 5.31 new text begin (1) has actual knowledge of it; or new text end 5.32 new text begin (2) is deemed to know it under subdivision 4, clause (1), or law other than this chapter. new text end 5.33     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 5.34 new text begin (1) has reason to know the fact from all of the facts known to the person at the new text end 5.35 new text begin time in question; or new text end 6.1 new text begin (2) is deemed to have notice of the fact under subdivision 4, clause (2). new text end 6.2     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 new text end 6.3 new text begin reasonably required to inform the other person in ordinary course, whether or not the new text end 6.4 new text begin other person knows the fact. new text end 6.5     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 6.6 new text begin (1) to know of a limitation on authority to transfer real property as provided in new text end 6.7 new text begin section 322C.0302, subdivision 7; and new text end 6.8 new text begin (2) to have notice of a limited liability company's: new text end 6.9 new text begin (i) dissolution, 90 days after a statement of dissolution under section 322C.0702, new text end 6.10 new text begin subdivision 2, clause (2)(i), becomes effective; new text end 6.11 new text begin (ii) termination, 90 days after a statement of termination under section 322C.0702, new text end 6.12 new text begin subdivision 2, clause (2)(vi), becomes effective; and new text end 6.13 new text begin (iii) merger, conversion, or domestication, 90 days after articles of merger, new text end 6.14 new text begin conversion, or domestication under sections 322C.1001 to 322C.1015 become effective. new text end 6.15    Sec. 4. new text begin [322C.0104] NATURE, PURPOSE, AND DURATION OF LIMITED new text end 6.16 new text begin LIABILITY COMPANY. new text end 6.17     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 new text end 6.18 new text begin from its members. new text end 6.19     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 new text end 6.20 new text begin subject to section 322C.1101, which must comply with that section, a limited liability new text end 6.21 new text begin company may have any lawful purpose. new text end 6.22     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 6.23    Sec. 5. new text begin [322C.0105] POWERS. new text end 6.24     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 new text end 6.25 new text begin liability company has the capacity to sue and be sued in its own name and the power to do new text end 6.26 new text begin all things necessary or convenient to carry on its activities. new text end 6.27     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 new text end 6.28 new text begin member, the company lacks the capacity to do any act or carry on any activity except: new text end 6.29 new text begin (1) delivering to the secretary of state for filing a statement of change under section new text end 6.30 new text begin 322C.0114, an amendment to the certificate under section 322C.0202, a statement of new text end 6.31 new text begin correction under section 322C.0206, an annual report under section 322C.0208, and a new text end 6.32 new text begin statement of termination under section 322C.0702; new text end 6.33 new text begin (2) admitting a member under section 322C.0401; and new text end 6.34 new text begin (3) dissolving under section 322C.0701. new text end 7.1     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 new text end 7.2 new text begin member may ratify an act or activity that occurred when the company lacked capacity new text end 7.3 new text begin under subdivision 2. new text end 7.4    Sec. 6. new text begin [322C.0106] GOVERNING LAW. new text end 7.5 new text begin The law of this state governs: new text end 7.6 new text begin (1) the internal affairs of a limited liability company; and new text end 7.7 new text begin (2) the liability of a member as member, a manager as manager, and a governor as new text end 7.8 new text begin governor, for the debts, obligations, or other liabilities of a limited liability company. new text end 7.9    Sec. 7. new text begin [322C.0107] SUPPLEMENTAL PRINCIPLES OF LAW. new text end 7.10 new text begin Unless displaced by particular provisions of this chapter, the principles of law and new text end 7.11 new text begin equity supplement this chapter. new text end 7.12    Sec. 8. new text begin [322C.0108] LIMITED LIABILITY COMPANY NAME. new text end 7.13     new text begin Subdivision 1. new text end new text begin Requirements and prohibitions. new text end new text begin The limited liability company new text end 7.14 new text begin name must: new text end 7.15 new text begin (1) be in the English language or in any other language expressed in English letters new text end 7.16 new text begin or characters; new text end 7.17 new text begin (2) contain the words "limited liability company," or must contain the abbreviation new text end 7.18 new text begin "LLC" or, in the case of a limited liability company that is a professional firm subject to new text end 7.19 new text begin chapter 319B, must meet the requirements of section 319B.05 applicable to a limited new text end 7.20 new text begin liability company; new text end 7.21 new text begin (3) not contain the word "corporation" or "incorporated" and must not contain the new text end 7.22 new text begin abbreviation of either or both of these words; new text end 7.23 new text begin (4) not contain a word or phrase that indicates or implies that it is organized for a new text end 7.24 new text begin purpose other than a permitted purpose; and new text end 7.25 new text begin (5) be distinguishable upon the records in the Office of the Secretary of State new text end 7.26 new text begin from the name of each domestic limited liability company, limited liability partnership, new text end 7.27 new text begin corporation, and limited partnership, whether profit or nonprofit, and each foreign limited new text end 7.28 new text begin liability company, limited liability partnership, corporation, and limited partnership on new text end 7.29 new text begin file, authorized or registered to do business in this state at the time of filing, whether profit new text end 7.30 new text begin or nonprofit, and each name the right to which is, at the time of organization, reserved as new text end 7.31 new text begin provided for in sections 5.35, 302A.117, 317A.117, 321.0109, 322B.125, 322C.0109, or new text end 7.32 new text begin 333.001 to 333.54, unless there is filed with the articles of organization one of the following: new text end 8.1 new text begin (i) the written consent of the domestic limited liability company, limited liability new text end 8.2 new text begin partnership, corporation, or limited partnership or the foreign limited liability company, new text end 8.3 new text begin limited liability partnership, corporation, or limited partnership authorized or registered to new text end 8.4 new text begin do business in this state or the holder of a reserved name or a name filed by or registered new text end 8.5 new text begin with the secretary of state under sections 333.001 to 333.54 having a name that is not new text end 8.6 new text begin distinguishable; new text end 8.7 new text begin (ii) a certified copy of a final decree of a court in this state establishing the prior right new text end 8.8 new text begin of the applicant to the use of the name in this state; or new text end 8.9 new text begin (iii) the applicant's affidavit that the domestic or foreign limited liability company, new text end 8.10 new text begin domestic or foreign corporation, or domestic or foreign limited partnership with the new text end 8.11 new text begin name that is not distinguishable has been organized, incorporated, or on file in this new text end 8.12 new text begin state for at least three years prior to the affidavit, if it is a domestic limited liability new text end 8.13 new text begin company, corporation, or limited partnership, or has been authorized or registered to new text end 8.14 new text begin do business in this state for at least three years prior to the affidavit, if it is a foreign new text end 8.15 new text begin limited liability company, corporation, or limited partnership, or that the holder of a name new text end 8.16 new text begin filed or registered with the secretary of state under sections 333.001 to 333.54 filed new text end 8.17 new text begin or registered that name at least three years prior to the affidavit, that the domestic or new text end 8.18 new text begin foreign limited liability company, domestic or foreign corporation, or domestic or foreign new text end 8.19 new text begin limited partnership or holder has not during the three-year period before the affidavit filed new text end 8.20 new text begin any document with the secretary of state; that the applicant has mailed written notice new text end 8.21 new text begin to the domestic or foreign limited liability company, domestic or foreign corporation, new text end 8.22 new text begin or domestic or foreign limited partnership or the holder of a name filed or registered new text end 8.23 new text begin with the secretary of state under sections 333.001 to 333.54 by certified mail, return new text end 8.24 new text begin receipt requested, properly addressed to the registered office of the domestic or foreign new text end 8.25 new text begin limited liability company or domestic or foreign corporation or in care of the agent of the new text end 8.26 new text begin domestic or foreign limited partnership, or the address of the holder of a name filed or new text end 8.27 new text begin registered with the secretary of state under sections 333.001 to 333.54, shown in the new text end 8.28 new text begin records of the secretary of state, stating that the applicant intends to use a name that is new text end 8.29 new text begin not distinguishable and the notice has been returned to the applicant as undeliverable to new text end 8.30 new text begin the addressee of the domestic or foreign limited liability company, domestic or foreign new text end 8.31 new text begin corporation, or domestic or foreign limited partnership or holder of a name filed or new text end 8.32 new text begin registered with the secretary of state under sections 333.001 to 333.54; that the applicant, new text end 8.33 new text begin after diligent inquiry, has been unable to find any telephone listing for the domestic or new text end 8.34 new text begin foreign limited liability company, domestic or foreign corporation, or domestic or foreign new text end 8.35 new text begin limited partnership with the name that is not distinguishable in the county in which is new text end 8.36 new text begin located the registered office of the domestic or foreign limited liability company, domestic new text end 9.1 new text begin or foreign corporation, or domestic or foreign limited partnership shown in the records of new text end 9.2 new text begin the secretary of state or has been unable to find any telephone listing for the holder of a new text end 9.3 new text begin name filed or registered with the secretary of state under sections 333.001 to 333.54 new text end 9.4 new text begin in the county in which is located the address of the holder shown in the records of the new text end 9.5 new text begin secretary of state; and that the applicant has no knowledge that the domestic or foreign new text end 9.6 new text begin limited liability company, domestic or foreign corporation, or domestic or foreign limited new text end 9.7 new text begin partnership or holder of a name filed or registered with the secretary of state under sections new text end 9.8 new text begin 333.001 to 333.54 is currently engaged in business in this state. new text end 9.9     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 new text end 9.10 new text begin "distinguishable" from another name for purposes of this section and section 322C.0109. new text end 9.11     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 new text end 9.12 new text begin do not abrogate or limit the law of unfair competition or unfair practices, or sections new text end 9.13 new text begin 333.001 to 333.54, or the laws of the United States with respect to the right to acquire new text end 9.14 new text begin and protect copyrights, trade names, trademarks, service names, service marks, or any new text end 9.15 new text begin other rights to the exclusive use of names or symbols, or derogate the common law or new text end 9.16 new text begin the principles of equity. new text end 9.17     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 new text end 9.18 new text begin liability company that is the surviving organization in a merger with one or more other new text end 9.19 new text begin organizations, or that is the continuation of an organization following a conversion, or that new text end 9.20 new text begin is organized by the reorganization of one or more organizations, or that acquires by sale, new text end 9.21 new text begin lease, or other disposition to or exchange with an organization all or substantially all of the new text end 9.22 new text begin assets of another organization, including its name, may have the same name as that used in new text end 9.23 new text begin this state by any of the other organizations, if the other organization whose name is sought to new text end 9.24 new text begin be used was organized under the laws of, or is authorized to transact business in, this state. new text end 9.25     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 new text end 9.26 new text begin of this section does not affect or vitiate its limited liability company existence, but a court new text end 9.27 new text begin in this state may, upon application of the state or of a person interested or affected, enjoin new text end 9.28 new text begin the limited liability company from doing business under a name assumed in violation of new text end 9.29 new text begin this section, although its articles of organization may have been filed with the secretary of new text end 9.30 new text begin state and articles of organization issued. new text end 9.31    Sec. 9. new text begin [322C.0109] RESERVED NAME. new text end 9.32     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 new text end 9.33 new text begin a limited liability company, including an alternate name for a foreign limited liability new text end 9.34 new text begin company, by filing an application with the secretary of state. The application must state new text end 9.35 new text begin the name and address of the applicant and the name proposed to be reserved. If the new text end 10.1 new text begin secretary of state finds that the name applied for is available, it must be reserved for the new text end 10.2 new text begin applicant's exclusive use for a one-year period. new text end 10.3     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 new text end 10.4 new text begin may transfer the reservation to another person by filing with the secretary of state for filing new text end 10.5 new text begin a signed notice of the transfer which states the name and address of the transferee. new text end 10.6    Sec. 10. new text begin [322C.0110] OPERATING AGREEMENT; SCOPE, FUNCTION, AND new text end 10.7 new text begin LIMITATIONS. new text end 10.8     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 new text end 10.9 new text begin 2 and 3, the operating agreement governs: new text end 10.10 new text begin (1) relations among the members as members and between the members and the new text end 10.11 new text begin limited liability company; new text end 10.12 new text begin (2) the rights and duties under this chapter of a person in the capacity of manager or new text end 10.13 new text begin governor; new text end 10.14 new text begin (3) the activities of the company and the conduct of those activities; and new text end 10.15 new text begin (4) the means and conditions for amending the operating agreement. new text end 10.16     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 new text end 10.17 new text begin operating agreement does not otherwise provide for a matter described in subdivision 1, new text end 10.18 new text begin this chapter governs the matter. new text end 10.19     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 10.20 new text begin (1) vary a limited liability company's capacity under section 322C.0105 to sue and new text end 10.21 new text begin be sued in its own name; new text end 10.22 new text begin (2) vary the law applicable under section 322C.0106; new text end 10.23 new text begin (3) vary the power of the court under section 322C.0204; new text end 10.24 new text begin (4) subject to subdivisions 4 to 7, eliminate the duty of loyalty, the duty of care, or new text end 10.25 new text begin any other fiduciary duty; new text end 10.26 new text begin (5) subject to subdivisions 4 to 7, eliminate the contractual obligation of good faith new text end 10.27 new text begin and fair dealing under section 322C.0409, subdivision 4; new text end 10.28 new text begin (6) unreasonably restrict the duties and rights stated in section 322C.0410; new text end 10.29 new text begin (7) vary the power of a court to decree dissolution in the circumstances specified new text end 10.30 new text begin in section 322C.0701, subdivision 1, clauses (4) and (5); new text end 10.31 new text begin (8) vary the requirement to wind up a limited liability company's business as new text end 10.32 new text begin specified in section 322C.0702, subdivisions 1 and 2, clause (1); new text end 10.33 new text begin (9) unreasonably restrict the right of a member to maintain an action under sections new text end 10.34 new text begin 322C.0901 to 322C.0906; new text end 11.1 new text begin (10) restrict the right to approve a merger, conversion, or domestication under new text end 11.2 new text begin section 322C.1015 to a member that will have personal liability with respect to a surviving, new text end 11.3 new text begin converted, or domesticated organization; or new text end 11.4 new text begin (11) except as otherwise provided in section 322C.0112, subdivision 2, restrict the new text end 11.5 new text begin rights under this chapter of a person other than a member, manager, or governor. new text end 11.6     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 new text end 11.7 new text begin unreasonable, and without limiting the terms that may be included in an operating new text end 11.8 new text begin agreement, the operating agreement may: new text end 11.9 new text begin (1) restrict or eliminate the duty: new text end 11.10 new text begin (i) as required in section 322C.0409, subdivisions 2, clause (1), and 7, to account to new text end 11.11 new text begin the limited liability company and to hold as trustee for it any property, profit, or benefit new text end 11.12 new text begin derived by the member in the conduct or winding up of the company's business, from a new text end 11.13 new text begin use by the member of the company's property, or from the appropriation of a limited new text end 11.14 new text begin liability company opportunity; new text end 11.15 new text begin (ii) as required in section 322C.0409, subdivisions 2, clause (2), and 7, to refrain new text end 11.16 new text begin from dealing with the company in the conduct or winding up of the company's business as new text end 11.17 new text begin or on behalf of a party having an interest adverse to the company; and new text end 11.18 new text begin (iii) as required by section 322C.0409, subdivisions 2, clause (3), and 7, to refrain new text end 11.19 new text begin from competing with the company in the conduct of the company's business before the new text end 11.20 new text begin dissolution of the company; new text end 11.21 new text begin (2) identify specific types or categories of activities that do not violate the duty new text end 11.22 new text begin of loyalty; new text end 11.23 new text begin (3) alter the duty of care, except to authorize intentional misconduct or knowing new text end 11.24 new text begin violation of law; new text end 11.25 new text begin (4) alter any other fiduciary duty, including eliminating particular aspects of that new text end 11.26 new text begin duty; and new text end 11.27 new text begin (5) prescribe the standards by which to measure the performance of the contractual new text end 11.28 new text begin obligation of good faith and fair dealing under section 322C.0409, subdivision 4. new text end 11.29     new text begin Subd. 5. new text end new text begin Duty of loyalty, authorization and ratification of otherwise violative new text end 11.30 new text begin conduct. new text end new text begin The operating agreement may specify the method by which a specific act or new text end 11.31 new text begin transaction that would otherwise violate the duty of loyalty may be authorized or ratified by new text end 11.32 new text begin one or more disinterested and independent persons after full disclosure of all material facts. new text end 11.33     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 new text end 11.34 new text begin the operating agreement of a member-managed limited liability company expressly relieves new text end 11.35 new text begin a member of a responsibility that the member would otherwise have under this chapter and new text end 11.36 new text begin imposes the responsibility on one or more other members, the operating agreement may, new text end 12.1 new text begin to the benefit of the member that the operating agreement relieves of the responsibility, new text end 12.2 new text begin also eliminate or limit any fiduciary duty that would have pertained to the responsibility. new text end 12.3     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 new text end 12.4 new text begin eliminate the indemnification for a member, manager, or governor provided by section new text end 12.5 new text begin 322C.0408, subdivision 1, and may eliminate or limit a member's, manager's, or governor's new text end 12.6 new text begin liability to the limited liability company and members for money damages, except for: new text end 12.7 new text begin (1) breach of the duty of loyalty; new text end 12.8 new text begin (2) a financial benefit received by the member or manager to which the member or new text end 12.9 new text begin manager is not entitled; new text end 12.10 new text begin (3) a breach of a duty under section 322C.0406; new text end 12.11 new text begin (4) intentional infliction of harm on the company or a member; or new text end 12.12 new text begin (5) an intentional violation of criminal law. new text end 12.13     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 new text end 12.14 new text begin decide any claim under subdivision 4 that a term of an operating agreement is manifestly new text end 12.15 new text begin unreasonable. The court: new text end 12.16 new text begin (1) shall make its determination as of the time the challenged term became part of new text end 12.17 new text begin the operating agreement and by considering only circumstances existing at that time; and new text end 12.18 new text begin (2) may invalidate the term only if, in light of the purposes and activities of the new text end 12.19 new text begin limited liability company, it is readily apparent that: new text end 12.20 new text begin (i) the objective of the term is unreasonable; or new text end 12.21 new text begin (ii) the term is an unreasonable means to achieve the provision's objective. new text end 12.22    Sec. 11. new text begin [322C.0111] OPERATING AGREEMENT; EFFECT ON LIMITED new text end 12.23 new text begin LIABILITY COMPANY AND PERSONS BECOMING MEMBERS; new text end 12.24 new text begin PREFORMATION AGREEMENT. new text end 12.25     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 new text end 12.26 new text begin bound by and may enforce the operating agreement, whether or not the company has itself new text end 12.27 new text begin manifested assent to the operating agreement. new text end 12.28     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 new text end 12.29 new text begin limited liability company is deemed to assent to the operating agreement. new text end 12.30     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 new text end 12.31 new text begin initial members of a limited liability company may make an agreement providing that new text end 12.32 new text begin upon the formation of the company the agreement will become the operating agreement. new text end 12.33 new text begin One person intending to become the initial member of a limited liability company may new text end 12.34 new text begin assent to terms providing that upon the formation of the company the terms will become new text end 12.35 new text begin the operating agreement. new text end 13.1    Sec. 12. new text begin [322C.0112] OPERATING AGREEMENT; EFFECT ON THIRD new text end 13.2 new text begin PARTIES AND RELATIONSHIP TO RECORDS EFFECTIVE ON BEHALF OF new text end 13.3 new text begin LIMITED LIABILITY COMPANY. new text end 13.4     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 new text end 13.5 new text begin that its amendment requires the approval of a person that is not a party to the operating new text end 13.6 new text begin agreement or the satisfaction of a condition. An amendment is ineffective if its adoption new text end 13.7 new text begin does not include the required approval or satisfy the specified condition. new text end 13.8     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 new text end 13.9 new text begin liability company and its members to a person in the person's capacity as a transferee or new text end 13.10 new text begin dissociated member are governed by the operating agreement. Subject only to any court new text end 13.11 new text begin order issued under section 322C.0503, subdivision 2, clause (2), to effectuate a charging new text end 13.12 new text begin order, an amendment to the operating agreement made after a person becomes a transferee new text end 13.13 new text begin or dissociated member is effective with regard to any debt, obligation, or other liability of new text end 13.14 new text begin the limited liability company or its members to the person in the person's capacity as a new text end 13.15 new text begin transferee or dissociated member. new text end 13.16     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 new text end 13.17 new text begin liability company to the secretary of state for filing and has become effective under new text end 13.18 new text begin this chapter contains a provision that would be ineffective under section 322C.0110, new text end 13.19 new text begin subdivision 3, if contained in the operating agreement, the provision is likewise ineffective new text end 13.20 new text begin in the record. new text end 13.21     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 new text end 13.22 new text begin delivered by a limited liability company to the secretary of state for filing and has become new text end 13.23 new text begin effective under this chapter conflicts with a provision of the operating agreement: new text end 13.24 new text begin (1) the operating agreement prevails as to members, dissociated members, new text end 13.25 new text begin transferees, managers, and governors; and new text end 13.26 new text begin (2) the record prevails as to other persons to the extent they reasonably rely on new text end 13.27 new text begin the record. new text end 13.28    Sec. 13. new text begin [322C.0113] OFFICE AND AGENT FOR SERVICE OF PROCESS. new text end 13.29 new text begin Every limited liability company shall have a registered office and may have a new text end 13.30 new text begin registered agent, in the manner prescribed by section 5.36. new text end 13.31    Sec. 14. new text begin [322C.0114] CHANGE OF REGISTERED OFFICE OR AGENT FOR new text end 13.32 new text begin SERVICE OF PROCESS. new text end 14.1 new text begin Every limited liability company may change its registered office or change its new text end 14.2 new text begin registered agent, and the agent may resign or change its business address or name, in the new text end 14.3 new text begin manner prescribed by section 5.36. new text end 14.4    Sec. 15. new text begin [322C.0115] RESIGNATION OF AGENT FOR SERVICE OF PROCESS. new text end 14.5 new text begin Every limited liability company registered agent may resign in the manner new text end 14.6 new text begin prescribed by section 5.36. new text end 14.7    Sec. 16. new text begin [322C.0116] SERVICE OF PROCESS ON LIMITED LIABILITY new text end 14.8 new text begin COMPANY. new text end 14.9     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 new text end 14.10 new text begin company or foreign limited liability company is an agent of the company for service of new text end 14.11 new text begin any process, notice, or demand required or permitted by law to be served on the company. new text end 14.12     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 new text end 14.13 new text begin liability company does not appoint or maintain an agent for service of process in this new text end 14.14 new text begin state or the agent for service of process cannot with reasonable diligence be found at new text end 14.15 new text begin the agent's street address, the secretary of state is an agent of the company upon whom new text end 14.16 new text begin process, notice, or demand may be served. new text end 14.17     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 new text end 14.18 new text begin law to be served upon a company may be served upon the secretary of state as provided new text end 14.19 new text begin in section 5.25. new text end 14.20     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 new text end 14.21 new text begin process, notice, or demand in any other manner provided by law. new text end 14.22    Sec. 17. new text begin [322C.0117] LEGAL RECOGNITION OF ELECTRONIC RECORDS new text end 14.23 new text begin AND SIGNATURES. new text end 14.24     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 new text end 14.25 new text begin phrases defined in this subdivision have the meanings given them. new text end 14.26 new text begin (b) "Electronic" means relating to technology having electrical, digital, magnetic, new text end 14.27 new text begin wireless, optical, electromagnetic, or similar capabilities. new text end 14.28 new text begin (c) "Electronic record" means a record created, generated, sent, communicated, new text end 14.29 new text begin received, or stored by electronic means. new text end 14.30 new text begin (d) "Electronic signature" means an electronic sound, symbol, or process attached new text end 14.31 new text begin to or logically associated with a record and executed or adopted by a person with the new text end 14.32 new text begin intent to sign the record. new text end 14.33     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 15.1 new text begin (1) a record or signature may not be denied legal effect or enforceability solely new text end 15.2 new text begin because it is in electronic form; new text end 15.3 new text begin (2) a contract may not be denied legal effect or enforceability solely because an new text end 15.4 new text begin electronic record was used in its formation; new text end 15.5 new text begin (3) if a provision requires a record to be in writing, an electronic record satisfies new text end 15.6 new text begin the requirement; and new text end 15.7 new text begin (4) if a provision requires a signature, an electronic signature satisfies the requirement. new text end 15.8FORMATION; ARTICLES OF ORGANIZATION AND OTHER FILINGS 15.9    Sec. 18. new text begin [322C.0201] FORMATION OF LIMITED LIABILITY COMPANY; new text end 15.10 new text begin ARTICLES OF ORGANIZATION. new text end 15.11     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 new text end 15.12 new text begin a limited liability company by signing and filing with the secretary of state articles of new text end 15.13 new text begin organization. new text end 15.14     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 new text end 15.15 new text begin must state: new text end 15.16 new text begin (1) the name of the limited liability company, which must comply with section new text end 15.17 new text begin 322C.0108; new text end 15.18 new text begin (2) the street address of the initial registered office and the name of the initial agent new text end 15.19 new text begin for service of process of the company at the registered office; and new text end 15.20 new text begin (3) the name and street address of each organizer. new text end 15.21     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 new text end 15.22 new text begin 322C.0112, subdivision 3, articles of organization may also contain statements as to new text end 15.23 new text begin matters other than those required by subdivision 2. However, a statement in articles of new text end 15.24 new text begin organization is not effective as a statement of authority. new text end 15.25     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 new text end 15.26 new text begin organization have been filed with the secretary of state. new text end 15.27 new text begin (b) Except in a proceeding by this state to dissolve a limited liability company, the new text end 15.28 new text begin filing of the articles of organization by the secretary of state is conclusive proof that the new text end 15.29 new text begin organizer satisfied all conditions to the formation of a limited liability company. new text end 15.30 new text begin (c) The formation of a limited liability company does not by itself cause any person new text end 15.31 new text begin to become a member. However, this chapter does not preclude an agreement, made before new text end 15.32 new text begin or after formation of a limited liability company, which provides that one or more persons new text end 15.33 new text begin will become members, or acknowledging that one or more persons became members, new text end 15.34 new text begin upon or otherwise in connection with the formation of the limited liability company. new text end 16.1    Sec. 19. new text begin [322C.0202] AMENDMENT OR RESTATEMENT OF ARTICLES OF new text end 16.2 new text begin ORGANIZATION. new text end 16.3     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 new text end 16.4 new text begin restated at any time. new text end 16.5     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 new text end 16.6 new text begin liability company must file with the secretary of state an amendment stating: new text end 16.7 new text begin (1) the name of the company; new text end 16.8 new text begin (2) the changes the amendment makes to the articles of organization as most recently new text end 16.9 new text begin amended or restated; and new text end 16.10 new text begin (3) a statement that the amendment was adopted pursuant to this chapter. new text end 16.11     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 new text end 16.12 new text begin company must file with the secretary of state a restatement, designated as such in its new text end 16.13 new text begin heading, stating: new text end 16.14 new text begin (1) in the heading or an introductory paragraph, the company's present name; and new text end 16.15 new text begin (2) the changes the restatement makes to the articles of organization as most recently new text end 16.16 new text begin amended or restated. new text end 16.17     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 new text end 16.18 new text begin 322C.0205, subdivision 3, an amendment to or restatement of articles of organization is new text end 16.19 new text begin effective when filed with the secretary of state. new text end 16.20     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 new text end 16.21 new text begin liability company, a manager of a manager-managed limited liability company, or a new text end 16.22 new text begin governor of a board-managed limited liability company, knows that any information in new text end 16.23 new text begin articles of organization filed with the secretary of state was inaccurate when the articles new text end 16.24 new text begin were filed or has become inaccurate owing to changed circumstances, the member, new text end 16.25 new text begin manager, or governor shall promptly: new text end 16.26 new text begin (1) cause the articles to be amended; or new text end 16.27 new text begin (2) if appropriate, file with the secretary of state a change of registered office under new text end 16.28 new text begin section 322C.0114. new text end 16.29    Sec. 20. new text begin [322C.0203] SIGNING OF RECORDS TO BE FILED WITH new text end 16.30 new text begin SECRETARY OF STATE. new text end 16.31     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 new text end 16.32 new text begin pursuant to this chapter must be signed as follows: new text end 16.33 new text begin (1) Except as otherwise provided in clauses (2) through (4), a record signed on behalf new text end 16.34 new text begin of a limited liability company must be signed by a person authorized by the company. new text end 17.1 new text begin (2) A limited liability company's initial articles of organization must be signed by new text end 17.2 new text begin at least one person acting as an organizer. new text end 17.3 new text begin (3) A notice under section 322C.0201, subdivision 5, clause (1), must be signed new text end 17.4 new text begin by an organizer. new text end 17.5 new text begin (4) A record filed on behalf of a dissolved limited liability company that has no new text end 17.6 new text begin members must be signed by the person winding up the company's activities under section new text end 17.7 new text begin 322C.0702, subdivision 3, or a person appointed under section 322C.0702, subdivision 4, new text end 17.8 new text begin to wind up those activities. new text end 17.9 new text begin (5) A statement of denial by a person under section 322C.0303 must be signed new text end 17.10 new text begin by that person. new text end 17.11 new text begin (6) Any other record must be signed by the person on whose behalf the record is new text end 17.12 new text begin filed with the secretary of state. new text end 17.13     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 new text end 17.14 new text begin agent pursuant to section 5.15. new text end 17.15    Sec. 21. new text begin [322C.0204] SIGNING AND FILING PURSUANT TO JUDICIAL new text end 17.16 new text begin ORDER. new text end 17.17     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 new text end 17.18 new text begin a record with the secretary of state does not do so, any other person that is aggrieved new text end 17.19 new text begin may petition the appropriate court to order: new text end 17.20 new text begin (1) the person to sign the record; new text end 17.21 new text begin (2) the person to file the record with the secretary of state for filing; or new text end 17.22 new text begin (3) the secretary of state to file the record unsigned. new text end 17.23     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 new text end 17.24 new text begin 1 is not the limited liability company or foreign limited liability company to which the new text end 17.25 new text begin record pertains, the petitioner shall make the company a party to the action. new text end 17.26    Sec. 22. new text begin [322C.0205] FILING OF RECORDS WITH SECRETARY OF STATE; new text end 17.27 new text begin EFFECTIVE TIME AND DATE. new text end 17.28     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 new text end 17.29 new text begin with the secretary of state under this chapter must be captioned to describe the record's new text end 17.30 new text begin purpose, be in a medium permitted by the secretary of state, and be delivered to the new text end 17.31 new text begin secretary of state. If the filing fees have been paid, unless the secretary of state determines new text end 17.32 new text begin that a record does not comply with the filing requirements of this chapter, the secretary new text end 17.33 new text begin of state shall file the record and: new text end 18.1 new text begin (1) for a statement of denial under section 322C.0303, send an image of the filed new text end 18.2 new text begin statement and a receipt for the fees to the person on whose behalf the statement was new text end 18.3 new text begin delivered for filing and to the limited liability company; and new text end 18.4 new text begin (2) for all other records, send an image of the filed record to the person on whose new text end 18.5 new text begin behalf the record was filed. new text end 18.6     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 new text end 18.7 new text begin fee, the secretary of state shall send to the requester a certified copy of a requested record. new text end 18.8     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 new text end 18.9 new text begin 322C.0115, 322C.0201, subdivision 4, paragraph (a), and 322C.0206, a record filed with new text end 18.10 new text begin the secretary of state under this chapter may specify an effective time and a delayed new text end 18.11 new text begin effective date. Subject to sections 322C.0115, 322C.0201, subdivision 4, paragraph (a), new text end 18.12 new text begin and 322C.0206, a record filed with the secretary of state is effective: new text end 18.13 new text begin (1) if the record does not specify either an effective time or a delayed effective date, new text end 18.14 new text begin on the date and at the time the record is filed as evidenced by the secretary of state's new text end 18.15 new text begin endorsement of the date and time on the record; new text end 18.16 new text begin (2) if the record specifies an effective time but not a delayed effective date, on the new text end 18.17 new text begin date the record is filed at the time specified in the record; new text end 18.18 new text begin (3) if the record specifies a delayed effective date but not an effective time, at 11:59 new text end 18.19 new text begin p.m. on the earlier of: new text end 18.20 new text begin (i) the specified date; or new text end 18.21 new text begin (ii) the 90th day after the record is filed; or new text end 18.22 new text begin (4) if the record specifies an effective time and a delayed effective date, at the new text end 18.23 new text begin specified time on the earlier of: new text end 18.24 new text begin (i) the specified date; or new text end 18.25 new text begin (ii) the 90th day after the record is filed. new text end 18.26    Sec. 23. new text begin [322C.0206] LIABILITY FOR INACCURATE INFORMATION IN new text end 18.27 new text begin FILED RECORD. new text end 18.28     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 new text end 18.29 new text begin chapter contains inaccurate information, a person that suffers a loss by reliance on the new text end 18.30 new text begin information may recover damages for the loss from: new text end 18.31 new text begin (1) a person that signed the record, or caused another to sign it on the person's new text end 18.32 new text begin behalf, and knew the information to be inaccurate at the time the record was signed; and new text end 18.33 new text begin (2) subject to subdivision 2, a member of a member-managed limited liability new text end 18.34 new text begin company or the manager of a manager-managed limited liability company, if: new text end 18.35 new text begin (i) the record was filed with the secretary of state on behalf of the company; and new text end 19.1 new text begin (ii) the member or manager had notice of the inaccuracy for a reasonably sufficient new text end 19.2 new text begin time before the information was relied upon so that, before the reliance, the member or new text end 19.3 new text begin manager reasonably could have: new text end 19.4 new text begin (A) effected an amendment under section 322C.0202; new text end 19.5 new text begin (B) filed a petition under section 322C.0204; or new text end 19.6 new text begin (C) filed with the secretary of state a statement under section 5.36, subdivision 3, or new text end 19.7 new text begin articles of correction under section 5.16. new text end 19.8     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 new text end 19.9 new text begin member-managed limited liability company expressly relieves a member of responsibility new text end 19.10 new text begin for maintaining the accuracy of information contained in records filed with the secretary new text end 19.11 new text begin of state under this chapter and imposes that responsibility on one or more other members, new text end 19.12 new text begin the liability stated in subdivision 1, clause (2), applies to those other members and not to new text end 19.13 new text begin the member that the operating agreement relieves of the responsibility. new text end 19.14     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 new text end 19.15 new text begin required to be filed under this chapter affirms under penalty of perjury that the information new text end 19.16 new text begin stated in the record is accurate. new text end 19.17    Sec. 24. new text begin [322C.0207] CERTIFICATE OF EXISTENCE OR AUTHORIZATION. new text end 19.18 new text begin The secretary of state, upon request and payment of the requisite fee, shall furnish to new text end 19.19 new text begin any person a certificate of existence for a limited liability company pursuant to section 5.12. new text end 19.20    Sec. 25. new text begin [322C.0208] ANNUAL REPORT FOR SECRETARY OF STATE. new text end 19.21 new text begin (a) The secretary of state may send annually to each limited liability company, new text end 19.22 new text begin using the information provided by the limited liability company and foreign limited new text end 19.23 new text begin liability company pursuant to section 5.002 or 5.34 or the articles of organization, a notice new text end 19.24 new text begin announcing the need to file the annual renewal and informing the limited liability company new text end 19.25 new text begin that the annual renewal may be filed online and that paper filings may also be made, and new text end 19.26 new text begin informing the limited liability company that failing to file the annual renewal will result new text end 19.27 new text begin in an administrative termination of the limited liability company or the revocation of new text end 19.28 new text begin the authority of the limited liability company and foreign limited liability company to new text end 19.29 new text begin do business in Minnesota. new text end 19.30 new text begin (b) Each calendar year beginning in the calendar year following the calendar year in new text end 19.31 new text begin which a limited liability company and foreign limited liability company files articles of new text end 19.32 new text begin organization, a limited liability company and foreign limited liability company must file new text end 19.33 new text begin with the secretary of state by December 31 of each calendar year a renewal containing the new text end 19.34 new text begin items required by section 5.34. new text end 20.1RELATIONS OF MEMBERS, MANAGERS, AND GOVERNORS TO PERSONS 20.2DEALING WITH LIMITED LIABILITY COMPANY 20.3    Sec. 26. new text begin [322C.0301] NO AGENCY POWER OF MEMBER AS MEMBER. new text end 20.4     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 new text end 20.5 new text begin company solely by reason of being a member. new text end 20.6     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 new text end 20.7 new text begin restrict law other than this chapter from imposing liability on a limited liability company new text end 20.8 new text begin because of the person's conduct. new text end 20.9    Sec. 27. new text begin [322C.0302] STATEMENT OF AUTHORITY. new text end 20.10     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 new text end 20.11 new text begin liability company may file with the secretary of state a statement of authority. The new text end 20.12 new text begin statement: new text end 20.13 new text begin (1) must include the name of the company and the street address of its registered new text end 20.14 new text begin office; new text end 20.15 new text begin (2) with respect to any position that exists in or with respect to the company, may new text end 20.16 new text begin state the authority, or limitations on the authority, of all persons holding the position to: new text end 20.17 new text begin (i) execute an instrument transferring real property held in the name of the company; new text end 20.18 new text begin or new text end 20.19 new text begin (ii) enter into other transactions on behalf of, or otherwise act for or bind, the new text end 20.20 new text begin company; and new text end 20.21 new text begin (3) may state the authority, or limitations on the authority, of a specific person to: new text end 20.22 new text begin (i) execute an instrument transferring real property held in the name of the company; new text end 20.23 new text begin or new text end 20.24 new text begin (ii) enter into other transactions on behalf of, or otherwise act for or bind, the new text end 20.25 new text begin company. new text end 20.26     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 new text end 20.27 new text begin a statement of authority filed with the secretary of state under section 322C.0205, new text end 20.28 new text begin subdivision 1, a limited liability company must file with the secretary of state an new text end 20.29 new text begin amendment or cancellation stating: new text end 20.30 new text begin (1) the name of the company; new text end 20.31 new text begin (2) the street address of the company's registered office; new text end 20.32 new text begin (3) the caption of the statement being amended or canceled and the date the new text end 20.33 new text begin statement being affected became effective; and new text end 21.1 new text begin (4) the contents of the amendment or a declaration that the statement being affected new text end 21.2 new text begin is canceled. new text end 21.3     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 new text end 21.4 new text begin affects only the power of a person to bind a limited liability company to persons that are new text end 21.5 new text begin not members. new text end 21.6     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, new text end 21.7 new text begin subdivision 4, and except as otherwise provided in subdivisions 6, 7, and 8, a limitation on new text end 21.8 new text begin the authority of a person or a position contained in an effective statement of authority is new text end 21.9 new text begin not by itself evidence of knowledge or notice of the limitation by any person. new text end 21.10     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 new text end 21.11 new text begin subdivision 3, a grant of authority not pertaining to transfers of real property and contained new text end 21.12 new text begin in an effective statement of authority is conclusive in favor of a person that gives value in new text end 21.13 new text begin reliance on the grant, except to the extent that when the person gives value: new text end 21.14 new text begin (1) the person has knowledge to the contrary; new text end 21.15 new text begin (2) the statement has been canceled or restrictively amended under subdivision 2; or new text end 21.16 new text begin (3) a limitation on the grant is contained in another statement of authority that new text end 21.17 new text begin became effective after the statement containing the grant became effective. new text end 21.18     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 new text end 21.19 new text begin effective statement of authority that grants authority to transfer real property held in the new text end 21.20 new text begin name of the limited liability company, whether or not a certified copy of the statement is new text end 21.21 new text begin recorded in the real property records, is conclusive in favor of a person that gives value in new text end 21.22 new text begin reliance on the grant without knowledge to the contrary, except to the extent that when new text end 21.23 new text begin the person gives value: new text end 21.24 new text begin (1) the statement has been canceled or restrictively amended under subdivision 2 new text end 21.25 new text begin and a certified copy of the cancellation or restrictive amendment has been recorded in the new text end 21.26 new text begin real property records; or new text end 21.27 new text begin (2) a limitation on the grant is contained in another statement of authority that new text end 21.28 new text begin became effective after the statement containing the grant became effective and a certified new text end 21.29 new text begin copy of the later-effective statement is recorded in the real property records. new text end 21.30     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 new text end 21.31 new text begin subdivision 3, if a certified copy of an effective statement containing a limitation on new text end 21.32 new text begin the authority to transfer real property held in the name of a limited liability company is new text end 21.33 new text begin recorded in the real property records, all persons are deemed to know of the limitation. new text end 21.34     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 new text end 21.35 new text begin effective statement of dissolution or termination is a cancellation of any filed statement new text end 22.1 new text begin of authority for the purposes of subdivision 6 and is a limitation on authority for the new text end 22.2 new text begin purposes of subdivision 7. new text end 22.3     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 new text end 22.4 new text begin effective, a limited liability company may file with the secretary of state and, if new text end 22.5 new text begin appropriate, may record in the real property records, a statement of authority that is new text end 22.6 new text begin designated as a postdissolution statement of authority. The statement operates as provided new text end 22.7 new text begin in subdivisions 6 and 7. new text end 22.8     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 new text end 22.9 new text begin restrictive amendment under this section and may be recorded by certified copy in the real new text end 22.10 new text begin property records for the purposes of subdivision 6, clause (1). new text end 22.11    Sec. 28. new text begin [322C.0303] STATEMENT OF DENIAL. new text end 22.12 new text begin A person named in a filed statement of authority granting that person authority may new text end 22.13 new text begin file with the secretary of state for filing a statement of denial that: new text end 22.14 new text begin (1) provides the name of the limited liability company and the caption of the new text end 22.15 new text begin statement of authority to which the statement of denial pertains; and new text end 22.16 new text begin (2) denies the grant of authority. new text end 22.17    Sec. 29. new text begin [322C.0304] LIABILITY OF MEMBERS, MANAGERS, AND new text end 22.18 new text begin GOVERNORS. new text end 22.19     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 new text end 22.20 new text begin debts, obligations, or other liabilities of a limited liability company, whether arising in new text end 22.21 new text begin contract, tort, or otherwise: new text end 22.22 new text begin (1) are solely the debts, obligations, or other liabilities of the company; and new text end 22.23 new text begin (2) do not become the debts, obligations, or other liabilities of a member, manager, new text end 22.24 new text begin or governor solely by reason of the member acting as a member, manager acting as a new text end 22.25 new text begin manager, or governor acting as a governor. new text end 22.26     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 new text end 22.27 new text begin observe formalities relating exclusively to the management of its internal affairs is not new text end 22.28 new text begin a ground for imposing liability on the members, managers, or governors for the debts, new text end 22.29 new text begin obligations, or other liabilities of the company. new text end 22.30     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 new text end 22.31 new text begin company to observe any formalities relating exclusively to the management of its internal new text end 22.32 new text begin affairs, the case law that states the conditions and circumstances under which the corporate new text end 22.33 new text begin veil of a corporation may be pierced under Minnesota law also applies to limited liability new text end 22.34 new text begin companies. new text end 23.1RELATIONS OF MEMBERS TO EACH OTHER AND TO LIMITED 23.2LIABILITY COMPANY 23.3    Sec. 30. new text begin [322C.0401] BECOMING A MEMBER. new text end 23.4     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 new text end 23.5 new text begin one member upon formation, the person becomes a member as agreed by that person and new text end 23.6 new text begin the organizer of the company. That person and the organizer may be, but need not be, new text end 23.7 new text begin different persons. If different, the organizer acts on behalf of the initial member. new text end 23.8     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 new text end 23.9 new text begin than one member upon formation, those persons become members as agreed by the new text end 23.10 new text begin persons before the formation of the company. The organizer acts on behalf of the persons new text end 23.11 new text begin in forming the company and may be, but need not be, one of the persons. new text end 23.12     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 new text end 23.13 new text begin no members upon formation, a person becomes an initial member of the limited liability new text end 23.14 new text begin company with the consent of a majority of the organizers. The organizers may consent to new text end 23.15 new text begin more than one person simultaneously becoming the company's initial members. new text end 23.16     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 new text end 23.17 new text begin least one member, a person becomes a member: new text end 23.18 new text begin (1) as provided in the operating agreement; new text end 23.19 new text begin (2) as the result of a transaction effective under sections 322C.1001 to 322C.1015; new text end 23.20 new text begin (3) with the consent of all the members; or new text end 23.21 new text begin (4) if, within 90 consecutive days after the company ceases to have any members: new text end 23.22 new text begin (i) the last person to have been a member, or the legal representative of that person, new text end 23.23 new text begin designates a person to become a member; and new text end 23.24 new text begin (ii) the designated person consents to become a member. new text end 23.25     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 new text end 23.26 new text begin become a member without acquiring a transferable interest and without making or being new text end 23.27 new text begin obligated to make a contribution to the limited liability company. new text end 23.28    Sec. 31. new text begin [322C.0402] FORM OF CONTRIBUTION. new text end 23.29 new text begin A contribution may consist of tangible or intangible property or other benefit to a new text end 23.30 new text begin limited liability company, including money, services performed, promissory notes, other new text end 23.31 new text begin agreements to contribute money or property, and contracts for services to be performed. new text end 23.32    Sec. 32. new text begin [322C.0403] LIABILITY FOR CONTRIBUTIONS. new text end 24.1     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 new text end 24.2 new text begin contribution to a limited liability company is not excused by the person's death, disability, new text end 24.3 new text begin or other inability to perform personally. If a person does not make a required contribution, new text end 24.4 new text begin the person or the person's estate is obligated to contribute money equal to the value of the new text end 24.5 new text begin part of the contribution which has not been made, at the option of the company. new text end 24.6     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 new text end 24.7 new text begin extends credit or otherwise acts in reliance on an obligation described in subdivision 1 new text end 24.8 new text begin may enforce the obligation. new text end 24.9    Sec. 33. new text begin [322C.0404] SHARING OF AND RIGHT TO DISTRIBUTIONS new text end 24.10 new text begin BEFORE DISSOLUTION. new text end 24.11     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 new text end 24.12 new text begin company before its dissolution and winding up must be in equal shares among members and new text end 24.13 new text begin dissociated members, except to the extent necessary to comply with any transfer effective new text end 24.14 new text begin under section 322C.0502 and any charging order in effect under section 322C.0503. new text end 24.15     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 new text end 24.16 new text begin dissolution and winding up of a limited liability company only if the company decides new text end 24.17 new text begin to make an interim distribution. A person's dissociation does not entitle the person to new text end 24.18 new text begin a distribution. new text end 24.19     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 new text end 24.20 new text begin a distribution from a limited liability company in any form other than money. Except as new text end 24.21 new text begin otherwise provided in section 322C.0707, subdivision 3, a limited liability company may new text end 24.22 new text begin distribute an asset in kind if each part of the asset is fungible with each other part and each new text end 24.23 new text begin person receives a percentage of the asset equal in value to the person's share of distributions. new text end 24.24     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 new text end 24.25 new text begin a distribution, the member or transferee has the status of, and is entitled to all remedies new text end 24.26 new text begin available to, a creditor of the limited liability company with respect to the distribution. new text end 24.27    Sec. 34. new text begin [322C.0405] LIMITATIONS ON DISTRIBUTION. new text end 24.28     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 new text end 24.29 new text begin make a distribution if after the distribution: new text end 24.30 new text begin (1) the company would not be able to pay its debts as they become due in the new text end 24.31 new text begin ordinary course of the company's activities; or new text end 24.32 new text begin (2) the company's total assets would be less than the sum of its total liabilities plus new text end 24.33 new text begin the amount that would be needed, if the company were to be dissolved, wound up, and new text end 24.34 new text begin terminated at the time of the distribution, to satisfy the preferential rights upon dissolution, new text end 25.1 new text begin winding up, and termination of members whose preferential rights are superior to those of new text end 25.2 new text begin persons receiving the distribution. new text end 25.3     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 new text end 25.4 new text begin that a distribution is not prohibited under subdivision 1 on financial statements prepared new text end 25.5 new text begin on the basis of accounting practices and principles that are reasonable in the circumstances new text end 25.6 new text begin or on a fair valuation or other method that is reasonable under the circumstances. new text end 25.7     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 new text end 25.8 new text begin effect of a distribution under subdivision 1 is measured: new text end 25.9 new text begin (1) in the case of a distribution by purchase, redemption, or other acquisition of a new text end 25.10 new text begin transferable interest in the company, as of the date money or other property is transferred new text end 25.11 new text begin or debt incurred by the company; and new text end 25.12 new text begin (2) in all other cases, as of the date: new text end 25.13 new text begin (i) the distribution is authorized, if the payment occurs within 120 days after that new text end 25.14 new text begin date; or new text end 25.15 new text begin (ii) the payment is made, if the payment occurs more than 120 days after the new text end 25.16 new text begin distribution is authorized. new text end 25.17     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 new text end 25.18 new text begin indebtedness to a member incurred by reason of a distribution made according to this new text end 25.19 new text begin section is at parity with the company's indebtedness to its general, unsecured creditors. new text end 25.20     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 new text end 25.21 new text begin indebtedness, including indebtedness issued in connection with or as part of a distribution, new text end 25.22 new text begin is not a liability for purposes of subdivision 1 if the terms of the indebtedness provide that new text end 25.23 new text begin payment of principal and interest are made only to the extent that a distribution could new text end 25.24 new text begin be made to members under this section. new text end 25.25     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, new text end 25.26 new text begin each payment of principal or interest on the indebtedness is treated as a distribution, the new text end 25.27 new text begin effect of which is measured on the date the payment is made. new text end 25.28     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 new text end 25.29 new text begin include amounts constituting reasonable compensation for present or past services or new text end 25.30 new text begin reasonable payments made in the ordinary course of business under a bona fide retirement new text end 25.31 new text begin plan or other benefits program. new text end 25.32    Sec. 35. new text begin [322C.0406] LIABILITY FOR IMPROPER DISTRIBUTIONS. new text end 25.33     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 new text end 25.34 new text begin provided in subdivision 2, if a member of a member-managed limited liability new text end 25.35 new text begin company, manager of a manager-managed limited liability company, or governor of a new text end 26.1 new text begin board-managed limited liability company consents to a distribution made in violation of new text end 26.2 new text begin section 322C.0405 and in consenting to the distribution fails to comply with section new text end 26.3 new text begin 322C.0409, the member, manager, or governor is personally liable to the company for new text end 26.4 new text begin the amount of the distribution that exceeds the amount that could have been distributed new text end 26.5 new text begin without the violation of section 322C.0405. new text end 26.6     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 new text end 26.7 new text begin member-managed limited liability company expressly relieves a member of the authority new text end 26.8 new text begin and responsibility to consent to distributions and imposes that authority and responsibility new text end 26.9 new text begin on one or more other members, the liability stated in subdivision 1 applies to the other new text end 26.10 new text begin members and not the member that the operating agreement relieves of authority and new text end 26.11 new text begin responsibility. new text end 26.12     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 new text end 26.13 new text begin the distribution to that person was made in violation of section 322C.0405 is personally new text end 26.14 new text begin liable to the limited liability company but only to the extent that the distribution received new text end 26.15 new text begin by the person exceeded the amount that could have been properly paid under section new text end 26.16 new text begin 322C.0405. new text end 26.17     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 new text end 26.18 new text begin person is liable under subdivision 1 may: new text end 26.19 new text begin (1) implead any other person that is subject to liability under subdivision 1 and seek new text end 26.20 new text begin to compel pro rata contribution from the person in that action to the extent of the person's new text end 26.21 new text begin liability as provided in section 322C.0406, subdivision 1; and new text end 26.22 new text begin (2) implead any person that received a distribution in violation of section 322C.0405 new text end 26.23 new text begin and seek to compel contribution from the person in the amount by which the distribution new text end 26.24 new text begin received by the person exceeded the amount that could have been properly paid under new text end 26.25 new text begin section 322C.0405. new text end 26.26     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 new text end 26.27 new text begin commenced within two years after the distribution. new text end 26.28    Sec. 36. new text begin [322C.0407] MANAGEMENT OF LIMITED LIABILITY COMPANY. new text end 26.29     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 new text end 26.30 new text begin member-managed limited liability company unless the operating agreement: new text end 26.31 new text begin (1) expressly provides that: new text end 26.32 new text begin (i) the company is or will be "manager-managed" or "board-managed"; new text end 26.33 new text begin (ii) the company is or will be "managed by managers" or "managed by a board"; or new text end 26.34 new text begin (iii) management of the company is or will be "vested in managers" or "vested new text end 26.35 new text begin in a board"; or new text end 27.1 new text begin (2) includes words of similar import. new text end 27.2     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 new text end 27.3 new text begin liability company, the following rules apply: new text end 27.4 new text begin (1) The management and conduct of the company are vested in the members. new text end 27.5 new text begin (2) Each member has equal rights in the management and conduct of the company's new text end 27.6 new text begin activities. new text end 27.7 new text begin (3) A difference arising among members as to a matter in the ordinary course of the new text end 27.8 new text begin activities of the company may be decided by a majority of the members. new text end 27.9 new text begin (4) An act outside the ordinary course of the activities of the company may be new text end 27.10 new text begin undertaken only with the consent of all members. new text end 27.11 new text begin (5) The operating agreement may be amended only with the consent of all members. new text end 27.12     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 new text end 27.13 new text begin liability company, the following rules apply: new text end 27.14 new text begin (1) Except as otherwise expressly provided in this chapter, any matter relating to the new text end 27.15 new text begin activities of the company is decided exclusively by the managers. new text end 27.16 new text begin (2) Each manager has equal rights in the management and conduct of the activities new text end 27.17 new text begin of the company. new text end 27.18 new text begin (3) A difference arising among managers as to a matter in the ordinary course of the new text end 27.19 new text begin activities of the company may be decided by a majority of the managers. new text end 27.20 new text begin (4) The consent of all members is required to: new text end 27.21 new text begin (i) sell, lease, exchange, or otherwise dispose of all, or substantially all, of the new text end 27.22 new text begin company's property, with or without the good will, outside the ordinary course of the new text end 27.23 new text begin company's activities; new text end 27.24 new text begin (ii) approve a merger, conversion, or domestication under sections 322C.1001 to new text end 27.25 new text begin 322C.1015; new text end 27.26 new text begin (iii) undertake any other act outside the ordinary course of the company's activities; new text end 27.27 new text begin and new text end 27.28 new text begin (iv) amend the operating agreement. new text end 27.29 new text begin (5) A manager may be chosen at any time by the consent of a majority of the new text end 27.30 new text begin members and remains a manager until a successor has been chosen, unless the manager new text end 27.31 new text begin at an earlier time resigns, is removed, or dies, or, in the case of a manager that is not new text end 27.32 new text begin an individual, terminates. A manager may be removed at any time by the consent of a new text end 27.33 new text begin majority of the members without notice or cause. new text end 27.34 new text begin (6) A person need not be a member to be a manager, but the dissociation of a new text end 27.35 new text begin member that is also a manager removes the person as a manager. If a person that is both a new text end 28.1 new text begin manager and a member ceases to be a manager, that cessation does not by itself dissociate new text end 28.2 new text begin the person as a member. new text end 28.3 new text begin (7) A person's ceasing to be a manager does not discharge any debt, obligation, or new text end 28.4 new text begin other liability to the limited liability company or members which the person incurred new text end 28.5 new text begin while a manager. new text end 28.6     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 new text end 28.7 new text begin company, the following rules apply: new text end 28.8 new text begin (1) The activities and affairs of a limited liability company are to be managed by and new text end 28.9 new text begin under the direction of a board of governors, which shall consist of one or more governors new text end 28.10 new text begin as determined by members holding a majority of the voting power of the members. Except new text end 28.11 new text begin as specifically stated in this subdivision and section 322C.0204, subdivision 5: new text end 28.12 new text begin (i) the board acts only through an act of the board; new text end 28.13 new text begin (ii) no individual governor has any right or power to act for the limited liability new text end 28.14 new text begin company; and new text end 28.15 new text begin (iii) only officers, managers, or other agents designated by the board or through a new text end 28.16 new text begin process approved by the board have the right to act for the limited liability company, and new text end 28.17 new text begin that right extends only to the extent consistent with the terms of the designation. new text end 28.18 new text begin (2) A governor must be a natural person. A person need not be a member to be a new text end 28.19 new text begin governor, but the dissociation of a member who is also a governor disqualifies the person new text end 28.20 new text begin as a governor. If a person who is both a governor and a member ceases to be a governor, new text end 28.21 new text begin that cessation does not by itself dissociate the person as a member. A person's ceasing new text end 28.22 new text begin to be a governor does not discharge any debt, obligation, or other liability to the limited new text end 28.23 new text begin liability company or members which the person incurred while a governor. new text end 28.24 new text begin (3) The method of election and any additional qualifications for governors will new text end 28.25 new text begin be as determined by members holding a majority of the voting power of the members. new text end 28.26 new text begin Governors are elected by a plurality of the voting power present and entitled to vote on the new text end 28.27 new text begin election of governors at a duly called or held meeting at which a quorum is present. new text end 28.28 new text begin (4) A member may waive notice of a meeting for the election of governors. A new text end 28.29 new text begin member's waiver of notice under this clause is effective whether given before, at, or after new text end 28.30 new text begin the meeting, and whether given in a record, orally, or by attendance. Attendance by a new text end 28.31 new text begin member at a meeting for election of governors is a waiver of notice of that meeting, new text end 28.32 new text begin except where the member objects at the beginning of the meeting to the transaction of new text end 28.33 new text begin business because the meeting is not lawfully called or convened and does not participate new text end 28.34 new text begin in the meeting after the objection. new text end 28.35 new text begin (5) Once elected, a governor holds office for the term for which the governor new text end 28.36 new text begin was elected and until a successor is elected, or until the earlier death, resignation, new text end 29.1 new text begin disqualification, or removal of the governor. A governor may resign at any time. A new text end 29.2 new text begin governor may be removed at any time, without cause and without advance notice, by a new text end 29.3 new text begin majority of the voting power of all of the members. The existence of vacancies does not new text end 29.4 new text begin affect the power of the board to function if at least one governor remains in office. new text end 29.5 new text begin (6) When a vacancy occurs, the limited liability company shall immediately notify new text end 29.6 new text begin all members in a record of the vacancy, stating the cause of the vacancy and the date the new text end 29.7 new text begin notice is sent. Within 30 days of that date, the members may fill the vacancy in the same new text end 29.8 new text begin method the members may elect governors under clause (3). If the vacancy is not filled new text end 29.9 new text begin by the members under this clause, the vacancy may be filled by the affirmative vote of a new text end 29.10 new text begin majority of the remaining governors, even though less than a quorum. new text end 29.11 new text begin (7) The board shall meet from time to time as determined by members holding a new text end 29.12 new text begin majority of the voting power of the members, at a place decided by the board. If the day new text end 29.13 new text begin or date, time, and place of a board of governors meeting have been provided in a board new text end 29.14 new text begin resolution, or announced at a previous meeting of the board of governors, no notice is new text end 29.15 new text begin required. Notice of an adjourned meeting need not be given other than by announcement new text end 29.16 new text begin at the meeting at which adjournment is taken. If notice is required for a meeting, notice new text end 29.17 new text begin shall be made in the manner stated in clause (8). new text end 29.18 new text begin (8) A governor may call a board meeting by giving at least ten days' notice in a new text end 29.19 new text begin record to all governors of the date, time, and place of the meeting. The notice need not new text end 29.20 new text begin state the purpose of the meeting. As to each governor, the notice is effective when given. new text end 29.21 new text begin (i) Notice may be: new text end 29.22 new text begin (A) mailed to the governor at an address designated by the person or at the last new text end 29.23 new text begin known address of the person; new text end 29.24 new text begin (B) deposited with a nationally recognized overnight delivery service for overnight new text end 29.25 new text begin delivery or, if overnight delivery to the governor is not available, for delivery as promptly new text end 29.26 new text begin as practicable to the governor at an address designated by the governor or at the last new text end 29.27 new text begin known address of the governor; new text end 29.28 new text begin (C) communicated to the governor orally; new text end 29.29 new text begin (D) handed to the governor; new text end 29.30 new text begin (E) given by facsimile communication, electronic mail, or any other form of new text end 29.31 new text begin electronic communication, if the governor has consented in a record to receive notice new text end 29.32 new text begin by such means; or new text end 29.33 new text begin (F) by any other means determined by members holding a majority of the voting new text end 29.34 new text begin power of the members. new text end 29.35 new text begin (ii) The notice is deemed given if by: new text end 29.36 new text begin (A) mail, when deposited in the United States mail with sufficient postage affixed; new text end 30.1 new text begin (B) by deposit for delivery, when deposited for delivery as provided in item (i), new text end 30.2 new text begin subitem (B), with delivery charges prepaid or otherwise provided for by the sender; new text end 30.3 new text begin (C) facsimile communication, when directed to a telephone number at which the new text end 30.4 new text begin governor has consented in a record to receive notice; new text end 30.5 new text begin (D) electronic mail, when directed to an electronic mail address at which the new text end 30.6 new text begin governor has consented in a record to receive notice; and new text end 30.7 new text begin (E) any other form of electronic communication by which the governor has new text end 30.8 new text begin consented in a record to receive notice, when directed to the governor. new text end 30.9 new text begin (9) A governor may waive notice of a meeting of the board of governors. A waiver new text end 30.10 new text begin of notice by a governor entitled to notice is effective whether given before, at, or after the new text end 30.11 new text begin meeting, and whether given in a record, orally, or by attendance. Attendance by a governor new text end 30.12 new text begin at a meeting is a waiver of notice of that meeting, except where the governor objects at the new text end 30.13 new text begin beginning of the meeting to the transaction of business because the meeting is not lawfully new text end 30.14 new text begin called or convened and does not participate in the meeting after the objection. new text end 30.15 new text begin (10) A majority of the governors currently holding office is a quorum for the new text end 30.16 new text begin transaction of business. When a quorum is present at a duly called or held meeting of new text end 30.17 new text begin the board, the vote of a majority of the directors present constitutes an act of the board. new text end 30.18 new text begin If a quorum is present when a duly called or held meeting is convened, the governors new text end 30.19 new text begin present may continue to transact business until adjournment, even though the withdrawal new text end 30.20 new text begin of a number of governors originally present leaves less than the proportion or number new text end 30.21 new text begin otherwise required for a quorum. new text end 30.22 new text begin (11) Any meeting among governors may be conducted solely by one or more means new text end 30.23 new text begin of remote communication through which all of the governors may participate with each new text end 30.24 new text begin other during the meeting, if the number of governors participating in the meeting would new text end 30.25 new text begin be sufficient to constitute a quorum. Participation in a meeting by that means constitutes new text end 30.26 new text begin presence in person at the meeting. new text end 30.27 new text begin (12) A governor may participate in a board of governors meeting by means of new text end 30.28 new text begin remote communication, through which the governor, other governors so participating, and new text end 30.29 new text begin all governors physically present at the meeting may participate with each other during new text end 30.30 new text begin the meeting. Participation in a meeting by that means constitutes presence in person new text end 30.31 new text begin at the meeting. new text end 30.32 new text begin (13) An action required or permitted to be taken at a board meeting may be taken new text end 30.33 new text begin by written action signed by the number of governors that would be required to take the new text end 30.34 new text begin same action at a meeting of the board of governors at which all governors were present. new text end 30.35 new text begin The written action is effective when signed by the required number of governors, unless a new text end 30.36 new text begin different effective time is provided in the written action. When written action is permitted new text end 31.1 new text begin to be taken by less than all governors, all governors must be notified immediately of its new text end 31.2 new text begin text and effective date. Failure to provide the notice does not invalidate the written action. new text end 31.3 new text begin A governor who does not sign or consent to the written action has no liability for the new text end 31.4 new text begin action or actions taken by the written action. new text end 31.5 new text begin (14) If the board designates a person as "chief manager," "president," "chief new text end 31.6 new text begin executive officer," "CEO," or another title of similar import, that person shall: new text end 31.7 new text begin (i) serve as an agent of the limited liability company at the will of the board, without new text end 31.8 new text begin prejudice to any rights the person may have under a contract with the limited liability new text end 31.9 new text begin company; new text end 31.10 new text begin (ii) have general active management of the business of the limited liability company, new text end 31.11 new text begin subject to the supervision and control of the board; new text end 31.12 new text begin (iii) see that all orders and resolutions of the board of governors are carried into effect; new text end 31.13 new text begin (iv) sign and deliver in the name of the limited liability company any deeds, new text end 31.14 new text begin mortgages, bonds, contracts, or other instruments pertaining to the business of the limited new text end 31.15 new text begin liability company, except in cases in which the authority to sign and deliver is required by new text end 31.16 new text begin law to be exercised by another person or is expressly delegated by the board of governors new text end 31.17 new text begin to some other officer or agent of the limited liability company; new text end 31.18 new text begin (v) maintain records of and, whenever necessary, certify all proceedings of the new text end 31.19 new text begin board of governors and the members; and new text end 31.20 new text begin (vi) perform other duties prescribed by the board of governors. new text end 31.21 new text begin (15) If the board designates a person as "treasurer," "chief financial officer," "CFO," new text end 31.22 new text begin or another title of similar import, that person shall: new text end 31.23 new text begin (i) serve as an agent of the limited liability company at the will of the board, without new text end 31.24 new text begin prejudice to any rights the person may have under a contract with the limited liability new text end 31.25 new text begin company; new text end 31.26 new text begin (ii) keep accurate financial records for the limited liability company; new text end 31.27 new text begin (iii) deposit all money, drafts, and checks in the name of and to the credit of the limited new text end 31.28 new text begin liability company in the banks and depositories designated by the board of governors; new text end 31.29 new text begin (iv) endorse for deposit all notes, checks, and drafts received by the limited liability new text end 31.30 new text begin company as ordered by the board of governors, making proper vouchers for them; new text end 31.31 new text begin (v) disburse limited liability company funds and issue checks and drafts in the name new text end 31.32 new text begin of the limited liability company, as ordered by the board of governors; new text end 31.33 new text begin (vi) give to the chief executive officer and the board of governors, whenever new text end 31.34 new text begin requested, an account of all transactions by the chief financial officer and of the financial new text end 31.35 new text begin condition of the limited liability company; and new text end 32.1 new text begin (vii) perform other duties prescribed by the board of governors or by the chief new text end 32.2 new text begin executive officer. new text end 32.3 new text begin (16) The consent of all members is required to: new text end 32.4 new text begin (i) sell, lease, exchange, or otherwise dispose of all, or substantially all, of the new text end 32.5 new text begin company's property, with or without the good will, outside the ordinary course of the new text end 32.6 new text begin company's activities; new text end 32.7 new text begin (ii) approve a merger, conversion, or domestication under sections 322C.1001 to new text end 32.8 new text begin 322C.1015; and new text end 32.9 new text begin (iii) amend the operating agreement. new text end 32.10 new text begin (17) For purposes of this subdivision, each member possesses voting power in new text end 32.11 new text begin proportion to the member's interest in then current profits of the limited liability company new text end 32.12 new text begin and a majority of the voting power of the members is a quorum at a meeting of the members. new text end 32.13     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 new text end 32.14 new text begin take action requiring consent of members under this chapter upon not less than 20 days' new text end 32.15 new text begin notice to each member in a record of the date and time of the meeting. Any meeting new text end 32.16 new text begin held upon member notice shall be held at the limited liability company's principal new text end 32.17 new text begin place of business if located within this state, and at the registered office if the principal new text end 32.18 new text begin place of business is not located within the state. Any action requiring the consent of new text end 32.19 new text begin members under this chapter may be taken or approved without a meeting by the written new text end 32.20 new text begin consent of the members holding the voting power required to take such action at a duly new text end 32.21 new text begin called meeting at which all members were present. A member may appoint a proxy or new text end 32.22 new text begin other agent to consent or otherwise act for the member by signing an appointing record, new text end 32.23 new text begin personally or by the member's agent. new text end 32.24     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 new text end 32.25 new text begin not affect the applicability of this section. However, a person that wrongfully causes new text end 32.26 new text begin dissolution of the company loses the right to participate in management in any capacity. new text end 32.27     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 new text end 32.28 new text begin for services performed for a member-managed limited liability company, except for new text end 32.29 new text begin reasonable compensation for services rendered in winding up the activities of the company. new text end 32.30    Sec. 37. new text begin [322C.0408] INDEMNIFICATION AND INSURANCE. new text end 32.31     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 new text end 32.32 new text begin subdivision have the meanings given them. new text end 32.33 new text begin (b) "Limited liability company" includes a domestic or foreign limited liability new text end 32.34 new text begin company that was the predecessor of the limited liability company referred to in this new text end 33.1 new text begin section in a merger or other transaction in which the predecessor's existence ceased upon new text end 33.2 new text begin consummation of the transaction. new text end 33.3 new text begin (c) "Official capacity" means (1) with respect to a member of a member-managed new text end 33.4 new text begin company, a manager of a manager-managed company, or a governor of a board-managed new text end 33.5 new text begin company, actions taken in that capacity, (2) with respect to a person other than a member new text end 33.6 new text begin of a member-managed company, a manager of a manager-managed company, or a new text end 33.7 new text begin governor of a board-managed company, the elective or appointive office or position new text end 33.8 new text begin held by a manager or officer, member of a committee of the board of governors, the new text end 33.9 new text begin employment relationship undertaken by an employee of the limited liability company, or new text end 33.10 new text begin the scope of the services provided by members of the limited liability company who new text end 33.11 new text begin provide services to the limited liability company, and (3) with respect to a governor, new text end 33.12 new text begin manager, member, or employee of the limited liability company who, while a member, new text end 33.13 new text begin governor, manager, or employee of the limited liability company, is or was serving at new text end 33.14 new text begin the request of the limited liability company or whose duties in that position involve or new text end 33.15 new text begin involved service as a governor, director, manager, officer, member, partner, trustee, new text end 33.16 new text begin employee, or agent of another organization or employee benefit plan, the position of that new text end 33.17 new text begin person as a governor, director, manager, officer, member, partner, trustee, employee, or new text end 33.18 new text begin agent, as the case may be, of the other organization or employee benefit plan. new text end 33.19 new text begin (d) "Proceeding" means a threatened, pending, or completed civil, criminal, new text end 33.20 new text begin administrative, arbitration, or investigative proceeding, including a proceeding by or in new text end 33.21 new text begin the right of the limited liability company. new text end 33.22 new text begin (e) "Special legal counsel" means counsel who has not in the preceding five years new text end 33.23 new text begin (1) represented the limited liability company or a related organization in a capacity other new text end 33.24 new text begin than special legal counsel, or (2) represented a member, governor, manager, member of a new text end 33.25 new text begin committee of the board of governors, or employee, or other person whose indemnification new text end 33.26 new text begin is in issue. new text end 33.27     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 new text end 33.28 new text begin liability company shall indemnify a person made or threatened to be made a party to a new text end 33.29 new text begin proceeding by reason of the former or present official capacity of the person against new text end 33.30 new text begin judgments, penalties, fines, including, without limitation, excise taxes assessed against the new text end 33.31 new text begin person with respect to an employee benefit plan, settlements, and reasonable expenses, new text end 33.32 new text begin including attorney fees and disbursements, incurred by the person in connection with the new text end 33.33 new text begin proceeding, if, with respect to the acts or omissions of the person complained of in the new text end 33.34 new text begin proceeding, the person: new text end 33.35 new text begin (1) has not been indemnified by another organization or employee benefit plan for new text end 33.36 new text begin the same judgments, penalties, fines, including, without limitation, excise taxes assessed new text end 34.1 new text begin against the person with respect to an employee benefit plan, settlements, and reasonable new text end 34.2 new text begin expenses, including attorney fees and disbursements, incurred by the person in connection new text end 34.3 new text begin with the proceeding with respect to the same acts or omissions; new text end 34.4 new text begin (2) acted in good faith; new text end 34.5 new text begin (3) received no improper personal benefit and complied with the duties stated in new text end 34.6 new text begin sections 322C.0405 and 322C.0409, if applicable; new text end 34.7 new text begin (4) in the case of a criminal proceeding, had no reasonable cause to believe the new text end 34.8 new text begin conduct was unlawful; and new text end 34.9 new text begin (5) in the case of acts or omissions occurring in the official capacity described in new text end 34.10 new text begin subdivision 1, paragraph (c), clause (1) or (2), reasonably believed that the conduct was new text end 34.11 new text begin in the best interests of the limited liability company, or in the case of acts or omissions new text end 34.12 new text begin occurring in the official capacity described in subdivision 1, paragraph (c), clause (3), new text end 34.13 new text begin reasonably believed that the conduct was not opposed to the best interests of the limited new text end 34.14 new text begin liability company. If the person's acts or omissions complained of in the proceeding relate new text end 34.15 new text begin to conduct as a director, officer, trustee, employee, or agent of an employee benefit plan, new text end 34.16 new text begin the conduct is not considered to be opposed to the best interests of the limited liability new text end 34.17 new text begin company if the person reasonably believed that the conduct was in the best interests of the new text end 34.18 new text begin participants or beneficiaries of the employee benefit plan. new text end 34.19 new text begin (b) The termination of a proceeding by judgment, order, settlement, conviction, or new text end 34.20 new text begin upon a plea of nolo contendere or its equivalent does not, of itself, establish that the new text end 34.21 new text begin person did not meet the criteria set forth in this subdivision. new text end 34.22     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 new text end 34.23 new text begin or threatened to be made a party to a proceeding, the person is entitled, upon written new text end 34.24 new text begin request to the limited liability company, to payment or reimbursement by the limited new text end 34.25 new text begin liability company of reasonable expenses, including attorney fees and disbursements, new text end 34.26 new text begin incurred by the person in advance of the final disposition of the proceeding: new text end 34.27 new text begin (1) upon receipt by the limited liability company of a written affirmation by the new text end 34.28 new text begin person of a good faith belief that the criteria for indemnification in subdivision 2 have new text end 34.29 new text begin been satisfied and a written undertaking by the person to repay all amounts so paid or new text end 34.30 new text begin reimbursed by the limited liability company, if it is ultimately determined that the criteria new text end 34.31 new text begin for indemnification have not been satisfied; and new text end 34.32 new text begin (2) after a determination that the facts then known to those making the determination new text end 34.33 new text begin would not preclude indemnification under this section. new text end 34.34 new text begin The written undertaking required by clause (1) is an unlimited general obligation of new text end 34.35 new text begin the person making it, but need not be secured and shall be accepted without reference to new text end 34.36 new text begin financial ability to make the repayment. new text end 35.1     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 new text end 35.2 new text begin organization or the operating agreement either may prohibit indemnification or advances of new text end 35.3 new text begin expenses otherwise required by this section or may impose conditions on indemnification new text end 35.4 new text begin or advances of expenses in addition to the conditions contained in subdivisions 2 and 3 new text end 35.5 new text begin including, without limitation, monetary limits on indemnification or advances of expenses, new text end 35.6 new text begin if the conditions apply equally to all persons or to all persons within a given class. A new text end 35.7 new text begin prohibition or limit on indemnification or advances may not apply to or affect the right new text end 35.8 new text begin of a person to indemnification or advances of expenses with respect to any acts or new text end 35.9 new text begin omissions of the person occurring before the effective date of a provision in the articles of new text end 35.10 new text begin organization, a member control agreement, or the date of adoption of a provision in the new text end 35.11 new text begin bylaws establishing the prohibition or limit on indemnification or advances. new text end 35.12     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 new text end 35.13 new text begin ability of, a limited liability company to reimburse expenses, including attorney fees new text end 35.14 new text begin and disbursements, incurred by a person in connection with an appearance as a witness new text end 35.15 new text begin in a proceeding at a time when the person has not been made or threatened to be made new text end 35.16 new text begin a party to a proceeding. new text end 35.17     new text begin Subd. 6. new text end new text begin Determination of eligibility. new text end new text begin (a) All determinations whether new text end 35.18 new text begin indemnification of a person is required because the criteria in subdivision 2 have been new text end 35.19 new text begin satisfied and whether a person is entitled to payment or reimbursement of expenses in new text end 35.20 new text begin advance of the final disposition of a proceeding as provided in subdivision 3 must be made: new text end 35.21 new text begin (1) in a board-managed limited liability company: new text end 35.22 new text begin (i) by the board of governors by a majority of a quorum, provided that governors new text end 35.23 new text begin who are, at the time, parties to the proceeding shall not be counted for determining either new text end 35.24 new text begin a majority or the presence of a quorum; new text end 35.25 new text begin (ii) if a quorum under item (i) cannot be obtained, by a majority of a committee of new text end 35.26 new text begin the board of governors, consisting solely of two or more governors not at the time parties new text end 35.27 new text begin to the proceeding, duly designated to act in the matter by a majority of the full board of new text end 35.28 new text begin governors including governors who are parties; and new text end 35.29 new text begin (iii) if a determination is not made under item (i) or (ii), by special legal counsel, new text end 35.30 new text begin selected either by a majority of the board of governors or a committee by vote pursuant new text end 35.31 new text begin to item (i) or (ii) or, if the requisite quorum of the full board of governors cannot be new text end 35.32 new text begin obtained and the committee cannot be established, by a majority of the full board of new text end 35.33 new text begin governors including governors who are parties; new text end 35.34 new text begin (2) in all other cases, by the affirmative vote of the members, with each member new text end 35.35 new text begin having voting power in proportion to the member's interest in then current profits of the new text end 35.36 new text begin limited liability company, but the membership interests held by parties to the proceeding new text end 36.1 new text begin must not be counted in determining the presence of a quorum and are not considered to be new text end 36.2 new text begin present and entitled to vote on the determination; or new text end 36.3 new text begin (3) if an adverse determination is made under clauses (1) or (2), or if no new text end 36.4 new text begin determination is made under clauses (1) or (2) within 60 days after (i) the later to occur new text end 36.5 new text begin of the termination of a proceeding or a written request for indemnification to the limited new text end 36.6 new text begin liability company or (ii) a written request for an advance of expenses, as the case may be, new text end 36.7 new text begin by a court in this state, which may be the same court in which the proceeding involving new text end 36.8 new text begin the person's liability took place, upon application of the person and any notice the new text end 36.9 new text begin court requires. The person seeking indemnification or payment or reimbursement of new text end 36.10 new text begin expenses pursuant to this clause has the burden of establishing that the person is entitled to new text end 36.11 new text begin indemnification or payment or reimbursement of expenses. new text end 36.12 new text begin (b) With respect to a person who is not, and was not at the time of the acts or new text end 36.13 new text begin omissions complained of in the proceedings, a member, governor, manager, or person new text end 36.14 new text begin possessing, directly or indirectly, the power to direct or cause the direction of the new text end 36.15 new text begin management or policies of the limited liability company, the determination whether new text end 36.16 new text begin indemnification of this person is required because the criteria set forth in subdivision 2 new text end 36.17 new text begin have been satisfied and whether this person is entitled to payment or reimbursement of new text end 36.18 new text begin expenses in advance of the final disposition of a proceeding as provided in subdivision 3 new text end 36.19 new text begin may be made (i) in a board-managed limited liability company, by an annually appointed new text end 36.20 new text begin committee of the board of governors, having at least one member who is a governor, which new text end 36.21 new text begin committee shall report at least annually to the board of governors concerning its actions new text end 36.22 new text begin and (ii) in all other cases by a committee appointed annually by the members, having at new text end 36.23 new text begin least one committee member who is a member of the limited liability company, which new text end 36.24 new text begin committee shall report at least annually to the board of governors concerning its actions. new text end 36.25     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 new text end 36.26 new text begin insurance on behalf of a member, manager, or governor of the company against liability new text end 36.27 new text begin asserted against or incurred by the member, manager, or governor in that capacity or new text end 36.28 new text begin arising from that status even if, under section 322C.0110, subdivision 7, the operating new text end 36.29 new text begin agreement could not eliminate or limit the person's liability to the company for the conduct new text end 36.30 new text begin giving rise to the liability and whether or not the limited liability company would have new text end 36.31 new text begin been required to indemnify the person against the liability under this section. new text end 36.32     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 new text end 36.33 new text begin expenses to a person according to this section in connection with a proceeding by or on new text end 36.34 new text begin behalf of the limited liability company shall report to the members in writing the amount new text end 36.35 new text begin of the indemnification or advance and to whom and on whose behalf it was paid not new text end 36.36 new text begin later than the next meeting of members. new text end 37.1     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 new text end 37.2 new text begin construed to limit the power of the limited liability company to indemnify persons other new text end 37.3 new text begin than a governor, manager, member, employee, or member of a committee of the board new text end 37.4 new text begin of the limited liability company, by contract or otherwise. new text end 37.5    Sec. 38. new text begin [322C.0409] STANDARDS OF CONDUCT FOR MEMBERS, new text end 37.6 new text begin MANAGERS, AND GOVERNORS. new text end 37.7     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 new text end 37.8 new text begin company owes to the company and, subject to section 322C.0901, subdivision 2, the other new text end 37.9 new text begin members the fiduciary duties of loyalty and care stated in subdivisions 2 and 3. new text end 37.10     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 new text end 37.11 new text begin limited liability company includes the duties: new text end 37.12 new text begin (1) to account to the company and to hold as trustee for it any property, profit, or new text end 37.13 new text begin benefit derived by the member: new text end 37.14 new text begin (i) in the conduct or winding up of the company's activities; new text end 37.15 new text begin (ii) from a use by the member of the company's property; or new text end 37.16 new text begin (iii) from the appropriation of a limited liability company opportunity; new text end 37.17 new text begin (2) to refrain from dealing with the company in the conduct or winding up of new text end 37.18 new text begin the company's activities as or on behalf of a person having an interest adverse to the new text end 37.19 new text begin company; and new text end 37.20 new text begin (3) to refrain from competing with the company in the conduct of the company's new text end 37.21 new text begin activities before the dissolution of the company. new text end 37.22     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 new text end 37.23 new text begin member of a member-managed limited liability company in the conduct and winding up new text end 37.24 new text begin of the company's activities is to act with the care that a person in a like position would new text end 37.25 new text begin reasonably exercise under similar circumstances and in a manner the member reasonably new text end 37.26 new text begin believes to be in the best interests of the company. In discharging this duty, a member new text end 37.27 new text begin may rely in good faith on opinions, reports, statements, or other information provided by new text end 37.28 new text begin another person that the member reasonably believes is a competent and reliable source new text end 37.29 new text begin for the information. new text end 37.30     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 new text end 37.31 new text begin a limited liability company shall discharge the member's duties and exercise any rights new text end 37.32 new text begin under this chapter or under the operating agreement consistently with the contractual new text end 37.33 new text begin obligation of good faith and fair dealing, including acting in a manner, in light of the new text end 37.34 new text begin operating agreement, that is honest, fair, and reasonable. new text end 38.1     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 new text end 38.2 new text begin (2), and any comparable claim in equity or at common law that the transaction was fair new text end 38.3 new text begin to the limited liability company. new text end 38.4     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 new text end 38.5 new text begin limited liability company or a manager-managed limited liability company may authorize new text end 38.6 new text begin or ratify, after full disclosure of all material facts, a specific act or transaction that new text end 38.7 new text begin otherwise would violate the duty of loyalty. new text end 38.8     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 new text end 38.9 new text begin liability company, the following rules apply: new text end 38.10 new text begin (1) Subdivisions 1, 2, 3, and 5 apply to the manager or managers and not the members. new text end 38.11 new text begin (2) The duty stated under subdivision 2, clause (3), continues until winding up new text end 38.12 new text begin is completed. new text end 38.13 new text begin (3) Subdivision 4 applies to the members and managers. new text end 38.14 new text begin (4) Subdivision 6 applies only to the members. new text end 38.15 new text begin (5) A member does not have any fiduciary duty to the company or to any other new text end 38.16 new text begin member solely by reason of being a member. new text end 38.17     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 new text end 38.18 new text begin company, the following rules apply: new text end 38.19 new text begin (1) Subdivisions 1, 2, 3, and 5 apply to the governors and not the members. new text end 38.20 new text begin (2) The duty stated under subdivision 2, clause (3), continues until winding up new text end 38.21 new text begin is completed. new text end 38.22 new text begin (3) Subdivision 4 applies to the members and governors. new text end 38.23 new text begin (4) Subdivision 6 applies only to the members. new text end 38.24 new text begin (5) A member does not have any fiduciary duty to the company or to any other new text end 38.25 new text begin member solely by reason of being a member. new text end 38.26    Sec. 39. new text begin [322C.0410] RIGHT OF MEMBERS, MANAGERS, GOVERNORS, new text end 38.27 new text begin AND DISSOCIATED MEMBERS TO INFORMATION. new text end 38.28     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 new text end 38.29 new text begin liability company, the following rules apply: new text end 38.30 new text begin (1) On reasonable notice, a member may inspect and copy during regular business new text end 38.31 new text begin hours, at a reasonable location specified by the company, any record maintained by the new text end 38.32 new text begin company regarding the company's activities, financial condition, and other circumstances, new text end 38.33 new text begin to the extent the information is material to the member's rights and duties under the new text end 38.34 new text begin operating agreement or this chapter. new text end 38.35 new text begin (2) The company shall furnish to each member: new text end 39.1 new text begin (i) without demand, any information concerning the company's activities, financial new text end 39.2 new text begin condition, and other circumstances which the company knows and is material to the new text end 39.3 new text begin proper exercise of the member's rights and duties under the operating agreement or this new text end 39.4 new text begin chapter, except to the extent the company can establish that it reasonably believes the new text end 39.5 new text begin member already knows the information; and new text end 39.6 new text begin (ii) on demand, any other information concerning the company's activities, financial new text end 39.7 new text begin condition, and other circumstances, except to the extent the demand or information new text end 39.8 new text begin demanded is unreasonable or otherwise improper under the circumstances. new text end 39.9 new text begin (3) The duty to furnish information under clause (2) also applies to each member to new text end 39.10 new text begin the extent the member knows any of the information described in clause (2). new text end 39.11     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 new text end 39.12 new text begin manager-managed limited liability company, the following rules apply: new text end 39.13 new text begin (1) The informational rights stated in subdivision 1 and the duty stated in subdivision new text end 39.14 new text begin 1, clause (3), apply to the managers or governors and not the members. new text end 39.15 new text begin (2) During regular business hours and at a reasonable location specified by the new text end 39.16 new text begin company, a member may obtain from the company and inspect and copy full information new text end 39.17 new text begin regarding the activities, financial condition, and other circumstances of the company as new text end 39.18 new text begin is just and reasonable if: new text end 39.19 new text begin (i) the member seeks the information for a purpose material to the member's interest new text end 39.20 new text begin as a member; new text end 39.21 new text begin (ii) the member makes a demand in a record received by the company, describing new text end 39.22 new text begin with reasonable particularity the information sought and the purpose for seeking the new text end 39.23 new text begin information; and new text end 39.24 new text begin (iii) the information sought is directly connected to the member's purpose. new text end 39.25 new text begin (3) Within ten days after receiving a demand pursuant to clause (2), item (ii), the new text end 39.26 new text begin company shall in a record inform the member that made the demand: new text end 39.27 new text begin (i) of the information that the company will provide in response to the demand and new text end 39.28 new text begin when and where the company will provide the information; and new text end 39.29 new text begin (ii) if the company declines to provide any demanded information, the company's new text end 39.30 new text begin reasons for declining. new text end 39.31 new text begin (4) Whenever this chapter or an operating agreement provides for a member to give new text end 39.32 new text begin or withhold consent to a matter, before the consent is given or withheld, the company new text end 39.33 new text begin shall, without demand, provide the member with all information that is known to the new text end 39.34 new text begin company and is material to the member's decision. new text end 39.35     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 new text end 39.36 new text begin received by a limited liability company, a dissociated member may have access to new text end 40.1 new text begin information to which the person was entitled while a member if the information pertains to new text end 40.2 new text begin the period during which the person was a member, the person seeks the information in new text end 40.3 new text begin good faith, and the person satisfies the requirements imposed on a member by subdivision new text end 40.4 new text begin 2, clause (2). The company shall respond to a demand made pursuant to this subdivision new text end 40.5 new text begin in the manner provided in subdivision 2, clause (3). new text end 40.6     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 new text end 40.7 new text begin a demand under this section the reasonable costs of copying, limited to the costs of labor new text end 40.8 new text begin and material. new text end 40.9     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 new text end 40.10 new text begin this section through an agent or, in the case of an individual under legal disability, a new text end 40.11 new text begin legal representative. Any restriction or condition imposed by the operating agreement or new text end 40.12 new text begin under subdivision 7 applies both to the agent or legal representative and the member new text end 40.13 new text begin or dissociated member. new text end 40.14     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 new text end 40.15 new text begin person as transferee. new text end 40.16     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 new text end 40.17 new text begin condition stated in its operating agreement, a limited liability company, as a matter within new text end 40.18 new text begin the ordinary course of its activities, may impose reasonable restrictions and conditions on new text end 40.19 new text begin access to and use of information to be furnished under this section, including designating new text end 40.20 new text begin information confidential and imposing nondisclosure and safeguarding obligations on new text end 40.21 new text begin the recipient. In a dispute concerning the reasonableness of a restriction under this new text end 40.22 new text begin subdivision, the company has the burden of proving reasonableness. new text end 40.23TRANSFERABLE INTERESTS AND RIGHTS OF TRANSFEREES 40.24AND CREDITORS 40.25    Sec. 40. new text begin [322C.0501] NATURE OF TRANSFERABLE INTEREST. new text end 40.26 new text begin A transferable interest is personal property. new text end 40.27    Sec. 41. new text begin [322C.0502] TRANSFER OF TRANSFERABLE INTEREST. new text end 40.28     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 40.29 new text begin (1) is permissible; new text end 40.30 new text begin (2) does not by itself cause a member's dissociation or a dissolution and winding up new text end 40.31 new text begin of the limited liability company's activities; and new text end 40.32 new text begin (3) subject to section 322C.0504, does not entitle the transferee to: new text end 40.33 new text begin (i) participate in the management or conduct of the company's activities; or new text end 41.1 new text begin (ii) except as otherwise provided in subdivision 3, have access to records or other new text end 41.2 new text begin information concerning the company's activities. new text end 41.3     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, new text end 41.4 new text begin in accordance with the transfer, distributions to which the transferor would otherwise new text end 41.5 new text begin be entitled. new text end 41.6     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 new text end 41.7 new text begin a limited liability company, a transferee is entitled to an account of the company's new text end 41.8 new text begin transactions only from the date of dissolution. new text end 41.9     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 new text end 41.10 new text begin certificate of the interest issued by the limited liability company in a record, and, subject new text end 41.11 new text begin to this section, the interest represented by the certificate may be transferred by a transfer of new text end 41.12 new text begin the certificate. new text end 41.13     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 new text end 41.14 new text begin effect to a transferee's rights under this section until the company has notice of the transfer. new text end 41.15     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 new text end 41.16 new text begin violation of a restriction on transfer contained in the operating agreement is ineffective as new text end 41.17 new text begin to a person having notice of the restriction at the time of transfer. new text end 41.18     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, new text end 41.19 new text begin clause (4), item (ii), when a member transfers a transferable interest, the transferor retains new text end 41.20 new text begin the rights of a member other than the interest in distributions transferred and retains all new text end 41.21 new text begin duties and obligations of a member. new text end 41.22     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 new text end 41.23 new text begin person that becomes a member with respect to the transferred interest, the transferee is new text end 41.24 new text begin liable for the member's obligations under sections 322C.0403 and 322C.0406, subdivision new text end 41.25 new text begin 3, known to the transferee when the transferee becomes a member. new text end 41.26    Sec. 42. new text begin [322C.0503] CHARGING ORDER. new text end 41.27     new text begin Subdivision 1. new text end new text begin Charging order against transferable interest. new text end new text begin On application new text end 41.28 new text begin by a judgment creditor of a member or transferee, a court may enter a charging order new text end 41.29 new text begin against the transferable interest of the judgment debtor for the unsatisfied amount of the new text end 41.30 new text begin judgment. A charging order constitutes a lien on a judgment debtor's transferable interest new text end 41.31 new text begin and requires the limited liability company to pay over to the person to which the charging new text end 41.32 new text begin order was issued any distribution that would otherwise be paid to the judgment debtor. new text end 41.33     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 new text end 41.34 new text begin collection of distributions pursuant to a charging order in effect under subdivision 1, new text end 41.35 new text begin the court may: new text end 42.1 new text begin (1) appoint a receiver of the distributions subject to the charging order, with the new text end 42.2 new text begin power to make all inquiries the judgment debtor might have made; and new text end 42.3 new text begin (2) make all other orders necessary to give effect to the charging order. new text end 42.4     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 new text end 42.5 new text begin order will not pay the judgment debt within a reasonable time, the court may foreclose new text end 42.6 new text begin the lien and order the sale of the transferable interest. The purchaser at the foreclosure new text end 42.7 new text begin sale obtains only the transferable interest, does not thereby become a member, and is new text end 42.8 new text begin subject to section 322C.0502. new text end 42.9     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 new text end 42.10 new text begin subdivision 3, the member or transferee whose transferable interest is subject to a charging new text end 42.11 new text begin order under subdivision 1 may extinguish the charging order by satisfying the judgment new text end 42.12 new text begin and filing a certified copy of the satisfaction with the court that issued the charging order. new text end 42.13     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 new text end 42.14 new text begin foreclosure under subdivision 3, a limited liability company or one or more members new text end 42.15 new text begin whose transferable interests are not subject to the charging order may pay to the judgment new text end 42.16 new text begin creditor the full amount due under the judgment and thereby succeed to the rights of the new text end 42.17 new text begin judgment creditor, including the charging order. new text end 42.18     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 new text end 42.19 new text begin transferee of the benefit of any exemption laws applicable to the member's or transferee's new text end 42.20 new text begin transferable interest. new text end 42.21     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 new text end 42.22 new text begin person seeking to enforce a judgment against a member or transferee may, in the capacity new text end 42.23 new text begin of judgment creditor, satisfy the judgment from the judgment debtor's transferable interest. new text end 42.24    Sec. 43. new text begin [322C.0504] POWER OF PERSONAL REPRESENTATIVE OF new text end 42.25 new text begin DECEASED MEMBER. new text end 42.26 new text begin If a member dies, the deceased member's personal representative or other legal new text end 42.27 new text begin representative may exercise the rights of a transferee provided in section 322C.0502, new text end 42.28 new text begin subdivision 3, and, for the purposes of settling the estate, the rights of a current member new text end 42.29 new text begin under section 322C.0410. new text end 42.30MEMBER'S DISSOCIATION 42.31    Sec. 44. new text begin [322C.0601] MEMBER'S POWER TO DISSOCIATE; WRONGFUL new text end 42.32 new text begin DISSOCIATION. new text end 43.1     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 new text end 43.2 new text begin member at any time, rightfully or wrongfully, by withdrawing as a member by express new text end 43.3 new text begin will under section 322C.0602, clause (1). new text end 43.4     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 new text end 43.5 new text begin company is wrongful only if the dissociation: new text end 43.6 new text begin (1) is in breach of an express provision of the operating agreement; or new text end 43.7 new text begin (2) occurs before the termination of the company and: new text end 43.8 new text begin (i) the person withdraws as a member by express will; new text end 43.9 new text begin (ii) the person is expelled as a member by judicial order under section 322C.0602, new text end 43.10 new text begin clause (5); new text end 43.11 new text begin (iii) the person is dissociated under section 322C.0602, clause (7), item (i), by new text end 43.12 new text begin becoming a debtor in bankruptcy; or new text end 43.13 new text begin (iv) in the case of a person that is not a trust other than a business trust, an estate, new text end 43.14 new text begin or an individual, the person is expelled or otherwise dissociated as a member because it new text end 43.15 new text begin willfully dissolved or terminated. new text end 43.16     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 new text end 43.17 new text begin as a member is liable to the limited liability company and, subject to section 322C.0901, new text end 43.18 new text begin to the other members for damages caused by the dissociation. The liability is in addition new text end 43.19 new text begin to any other debt, obligation, or other liability of the member to the company or the other new text end 43.20 new text begin members. new text end 43.21    Sec. 45. new text begin [322C.0602] EVENTS CAUSING DISSOCIATION. new text end 43.22 new text begin A person is dissociated as a member from a limited liability company when: new text end 43.23 new text begin (1) the company has notice of the person's express will to withdraw as a member, new text end 43.24 new text begin but, if the person specified a withdrawal date later than the date the company had notice, new text end 43.25 new text begin on that later date; new text end 43.26 new text begin (2) an event stated in the operating agreement as causing the person's dissociation new text end 43.27 new text begin occurs; new text end 43.28 new text begin (3) the person is expelled as a member pursuant to the operating agreement; new text end 43.29 new text begin (4) the person is expelled as a member by the unanimous consent of the other new text end 43.30 new text begin members if: new text end 43.31 new text begin (i) it is unlawful to carry on the company's activities with the person as a member; new text end 43.32 new text begin (ii) there has been a transfer of all of the person's transferable interest in the new text end 43.33 new text begin company, other than: new text end 43.34 new text begin (A) a transfer for security purposes; or new text end 43.35 new text begin (B) a charging order in effect under section 322C.0503 which has not been foreclosed; new text end 44.1 new text begin (iii) the person is a corporation and, within 90 days after the company notifies the new text end 44.2 new text begin person that it will be expelled as a member because the person has filed a certificate of new text end 44.3 new text begin dissolution or the equivalent, its charter has been revoked, or its right to conduct business new text end 44.4 new text begin has been suspended by the jurisdiction of its incorporation, the certificate of dissolution new text end 44.5 new text begin has not been revoked or its charter or right to conduct business has not been reinstated; or new text end 44.6 new text begin (iv) the person is a limited liability company or partnership that has been dissolved new text end 44.7 new text begin and whose business is being wound up; new text end 44.8 new text begin (5) on application by the company, the person is expelled as a member by judicial new text end 44.9 new text begin order because the person: new text end 44.10 new text begin (i) has engaged, or is engaging, in wrongful conduct that has adversely and new text end 44.11 new text begin materially affected, or will adversely and materially affect, the company's activities; new text end 44.12 new text begin (ii) has willfully or persistently committed, or is willfully and persistently new text end 44.13 new text begin committing, a material breach of the operating agreement or the person's duties or new text end 44.14 new text begin obligations under section 322C.0409; or new text end 44.15 new text begin (iii) has engaged, or is engaging, in conduct relating to the company's activities which new text end 44.16 new text begin makes it not reasonably practicable to carry on the activities with the person as a member; new text end 44.17 new text begin (6) in the case of a person who is an individual: new text end 44.18 new text begin (i) the person dies; or new text end 44.19 new text begin (ii) in a member-managed limited liability company: new text end 44.20 new text begin (A) a guardian or general conservator for the person is appointed; or new text end 44.21 new text begin (B) there is a judicial order that the person has otherwise become incapable of new text end 44.22 new text begin performing the person's duties as a member under this chapter or the operating agreement; new text end 44.23 new text begin (7) in a member-managed limited liability company, the person: new text end 44.24 new text begin (i) becomes a debtor in bankruptcy; new text end 44.25 new text begin (ii) executes an assignment for the benefit of creditors; or new text end 44.26 new text begin (iii) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or new text end 44.27 new text begin liquidator of the person or of all or substantially all of the person's property; new text end 44.28 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 new text end 44.29 new text begin trustee of a trust, the trust's entire transferable interest in the company is distributed; new text end 44.30 new text begin (9) in the case of a person that is an estate or is acting as a member by virtue of new text end 44.31 new text begin being a personal representative of an estate, the estate's entire transferable interest in the new text end 44.32 new text begin company is distributed; new text end 44.33 new text begin (10) in the case of a member that is not an individual, partnership, limited liability new text end 44.34 new text begin company, corporation, trust, or estate, the termination of the member; new text end 44.35 new text begin (11) the company participates in a merger under sections 322C.1001 to 322C.1015, if: new text end 44.36 new text begin (i) the company is not the surviving entity; or new text end 45.1 new text begin (ii) otherwise as a result of the merger, the person ceases to be a member; new text end 45.2 new text begin (12) the company participates in a conversion under sections 322C.1001 to new text end 45.3 new text begin 322C.1015; new text end 45.4 new text begin (13) the company participates in a domestication under sections 322C.1001 to new text end 45.5 new text begin 322C.1015, if, as a result of the domestication, the person ceases to be a member; or new text end 45.6 new text begin (14) the company terminates. new text end 45.7    Sec. 46. new text begin [322C.0603] EFFECT OF PERSON'S DISSOCIATION AS MEMBER. new text end 45.8     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 new text end 45.9 new text begin a limited liability company: new text end 45.10 new text begin (1) the person's right to participate as a member in the management and conduct of new text end 45.11 new text begin the company's activities terminates; new text end 45.12 new text begin (2) if the company is member-managed, the person's fiduciary duties as a member new text end 45.13 new text begin end with regard to matters arising and events occurring after the person's dissociation; and new text end 45.14 new text begin (3) subject to sections 322C.0504 and 322C.1001 to 322C.1015, any transferable new text end 45.15 new text begin interest owned by the person immediately before dissociation in the person's capacity as new text end 45.16 new text begin a member is owned by the person solely as a transferee. new text end 45.17     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 new text end 45.18 new text begin company does not of itself discharge the person from any debt, obligation, or other new text end 45.19 new text begin liability to the company or the other members that the person incurred while a member. new text end 45.20DISSOLUTION AND WINDING UP 45.21    Sec. 47. new text begin [322C.0701] EVENTS CAUSING DISSOLUTION. new text end 45.22     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 new text end 45.23 new text begin activities must be wound up, upon the occurrence of any of the following: new text end 45.24 new text begin (1) an event or circumstance that the operating agreement states causes dissolution; new text end 45.25 new text begin (2) the consent of all the members; new text end 45.26 new text begin (3) following the admission of the initial member or members, the passage of 90 new text end 45.27 new text begin consecutive days during which the company has no members; new text end 45.28 new text begin (4) on application by a member, the entry by appropriate court of an order dissolving new text end 45.29 new text begin the company on the grounds that: new text end 45.30 new text begin (i) the conduct of all or substantially all of the company's activities is unlawful; or new text end 45.31 new text begin (ii) it is not reasonably practicable to carry on the company's activities in conformity new text end 45.32 new text begin with the articles of organization and the operating agreement; new text end 46.1 new text begin (5) on application by a member, the entry by appropriate court of an order dissolving new text end 46.2 new text begin the company on the grounds that the managers, governors, or those members in control of new text end 46.3 new text begin the company: new text end 46.4 new text begin (i) have acted, are acting, or will act in a manner that is illegal or fraudulent; or new text end 46.5 new text begin (ii) have acted or are acting in a manner that is oppressive and was, is, or will be new text end 46.6 new text begin directly harmful to the applicant; or new text end 46.7 new text begin (6) on application by the attorney general in an action commenced pursuant to new text end 46.8 new text begin section 322C.0708, the entry by appropriate court of an order dissolving the company on new text end 46.9 new text begin grounds specified in 322C.0708. new text end 46.10     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 new text end 46.11 new text begin (5), the court may order a remedy other than dissolution, which may include the sale for new text end 46.12 new text begin fair value of all membership interests a member owns in a limited liability company to new text end 46.13 new text begin the limited liability company or one or more of the other members. A remedy other than new text end 46.14 new text begin dissolution may be ordered in any case where that remedy would be appropriate under all new text end 46.15 new text begin the facts and circumstances of the case. new text end 46.16     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 new text end 46.17 new text begin be brought in a court within the county in which the registered office of the limited new text end 46.18 new text begin liability company is located. It is not necessary to make members parties to the action or new text end 46.19 new text begin proceeding unless relief is sought against them personally. new text end 46.20    Sec. 48. new text begin [322C.0702] WINDING UP. new text end 46.21     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 new text end 46.22 new text begin wind up its activities, and the company continues after dissolution only for the purpose new text end 46.23 new text begin of winding up. new text end 46.24     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 new text end 46.25 new text begin company: new text end 46.26 new text begin (1) shall discharge the company's debts, obligations, or other liabilities, settle and new text end 46.27 new text begin close the company's activities, and marshal and distribute the assets of the company; and new text end 46.28 new text begin (2) may: new text end 46.29 new text begin (i) file with the secretary of state a statement of dissolution stating the name of the new text end 46.30 new text begin company and that the company is dissolved; new text end 46.31 new text begin (ii) preserve the company activities and property as a going concern for a reasonable new text end 46.32 new text begin time; new text end 46.33 new text begin (iii) prosecute and defend actions and proceedings, whether civil, criminal, or new text end 46.34 new text begin administrative; new text end 46.35 new text begin (iv) transfer the company's property; new text end 47.1 new text begin (v) settle disputes by mediation or arbitration; new text end 47.2 new text begin (vi) file with the secretary of state a statement of termination stating the name of the new text end 47.3 new text begin company and that the company is terminated; and new text end 47.4 new text begin (vii) perform other acts necessary or appropriate to the winding up. new text end 47.5     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 new text end 47.6 new text begin company has no members, the legal representative of the last person to have been a new text end 47.7 new text begin member may wind up the activities of the company. If the person does so, the person has new text end 47.8 new text begin the powers of a sole manager under section 322C.0407, subdivision 3, and is deemed to be new text end 47.9 new text begin a manager for the purposes of section 322C.0304, subdivision 1, clause (2). new text end 47.10     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 new text end 47.11 new text begin representative under subdivision 3 declines or fails to wind up the company's activities, a new text end 47.12 new text begin person may be appointed to do so by the consent of transferees owning a majority of the new text end 47.13 new text begin rights to receive distributions as transferees at the time the consent is to be effective. A new text end 47.14 new text begin person appointed under this subdivision: new text end 47.15 new text begin (1) has the powers of a sole manager under section 322C.0407, subdivision 3, and new text end 47.16 new text begin is deemed to be a manager for the purposes of section 322C.0304, subdivision 1, clause new text end 47.17 new text begin (2); and new text end 47.18 new text begin (2) shall promptly file with the secretary of state an amendment to the company's new text end 47.19 new text begin articles of organization to: new text end 47.20 new text begin (i) state that the company has no members; new text end 47.21 new text begin (ii) state that the person has been appointed pursuant to this subdivision to wind up new text end 47.22 new text begin the company; and new text end 47.23 new text begin (iii) provide the street address of the person. new text end 47.24     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 new text end 47.25 new text begin of the winding up of a dissolved limited liability company, including the appointment of a new text end 47.26 new text begin person to wind up the company's activities: new text end 47.27 new text begin (1) on application of a member, if the applicant establishes good cause; new text end 47.28 new text begin (2) on the application of a transferee, if: new text end 47.29 new text begin (i) the company does not have any members; new text end 47.30 new text begin (ii) the legal representative of the last person to have been a member declines or fails new text end 47.31 new text begin to wind up the company's activities; and new text end 47.32 new text begin (iii) within a reasonable time following the dissolution a person has not been new text end 47.33 new text begin appointed pursuant to subdivision 4; or new text end 47.34 new text begin (3) in connection with a proceeding under section 322C.0701, subdivision 1, clause new text end 47.35 new text begin (4) or (5). new text end 48.1    Sec. 49. new text begin [322C.0703] KNOWN CLAIMS AGAINST DISSOLVED LIMITED new text end 48.2 new text begin LIABILITY COMPANY. new text end 48.3     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 new text end 48.4 new text begin subdivision 4, a dissolved limited liability company may give notice of a known claim new text end 48.5 new text begin under subdivision 2 that has the effect as provided in subdivision 3. new text end 48.6     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 new text end 48.7 new text begin record notify its known claimants of the dissolution. The notice must: new text end 48.8 new text begin (1) specify the information required to be included in a claim; new text end 48.9 new text begin (2) provide a mailing address to which the claim is to be sent; new text end 48.10 new text begin (3) state the deadline for receipt of the claim, which may not be less than 120 days new text end 48.11 new text begin after the date the notice is received by the claimant; and new text end 48.12 new text begin (4) state that the claim will be barred if not received by the deadline. new text end 48.13     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 new text end 48.14 new text begin barred if the requirements of subdivision 2 are met and: new text end 48.15 new text begin (1) the claim is not received by the specified deadline; or new text end 48.16 new text begin (2) if the claim is timely received but rejected by the company: new text end 48.17 new text begin (i) the company causes the claimant to receive a notice in a record stating that the new text end 48.18 new text begin claim is rejected and will be barred unless the claimant commences an action against the new text end 48.19 new text begin company to enforce the claim within 90 days after the claimant receives the notice; and new text end 48.20 new text begin (ii) the claimant does not commence the required action within the 90 days. new text end 48.21     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 new text end 48.22 new text begin occurring after the effective date of dissolution or a liability that on that date is contingent. new text end 48.23    Sec. 50. new text begin [322C.0704] OTHER CLAIMS AGAINST DISSOLVED LIMITED new text end 48.24 new text begin LIABILITY COMPANY. new text end 48.25     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 new text end 48.26 new text begin publish notice of its dissolution and request persons having claims against the company new text end 48.27 new text begin to present them according to the notice. new text end 48.28     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 new text end 48.29 new text begin must: new text end 48.30 new text begin (1) be published at least once in a newspaper of general circulation in the county or new text end 48.31 new text begin counties in this state in which the dissolved limited liability company's principal office is new text end 48.32 new text begin located or, if it has none in this state, in the county or counties in which the company's new text end 48.33 new text begin registered office is or was last located; new text end 48.34 new text begin (2) describe the information required to be contained in a claim and provide a new text end 48.35 new text begin mailing address to which the claim is to be sent; and new text end 49.1 new text begin (3) state that a claim against the company is barred unless an action to enforce the new text end 49.2 new text begin claim is commenced within five years after publication of the notice. new text end 49.3     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 new text end 49.4 new text begin according to subdivision 2, unless the claimant commences an action to enforce the claim new text end 49.5 new text begin against the company within five years after the publication date of the notice, the claim of new text end 49.6 new text begin each of the following claimants is barred: new text end 49.7 new text begin (1) a claimant that did not receive notice in a record under section 322C.0703; new text end 49.8 new text begin (2) a claimant whose claim was timely sent to the company but not acted on; and new text end 49.9 new text begin (3) a claimant whose claim is contingent at, or based on an event occurring after, new text end 49.10 new text begin the effective date of dissolution. new text end 49.11     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 new text end 49.12 new text begin enforced: new text end 49.13 new text begin (1) against a dissolved limited liability company, to the extent of its undistributed new text end 49.14 new text begin assets; and new text end 49.15 new text begin (2) if assets of the company have been distributed after dissolution, against a member new text end 49.16 new text begin or transferee to the extent of that person's proportionate share of the claim or of the assets new text end 49.17 new text begin distributed to the member or transferee after dissolution, whichever is less, but a person's new text end 49.18 new text begin total liability for all claims under this clause does not exceed the total amount of assets new text end 49.19 new text begin distributed to the person after dissolution. new text end 49.20    Sec. 51. new text begin [322C.0705] ADMINISTRATIVE TERMINATION. new text end 49.21 new text begin (a) A domestic limited liability company that has not filed a renewal pursuant to new text end 49.22 new text begin this section is administratively terminated. The secretary of state shall issue a certificate new text end 49.23 new text begin of administrative termination which must be filed in the Office of the Secretary of State. new text end 49.24 new text begin The secretary of state must also make available in an electronic format the names of new text end 49.25 new text begin the terminated limited liability companies. new text end 49.26 new text begin (b) A non-Minnesota limited liability company that has not filed a renewal pursuant to new text end 49.27 new text begin this section shall have its authority to do business in Minnesota revoked pursuant to section new text end 49.28 new text begin 322C.0806. The secretary of state must issue a certificate of revocation which must be filed new text end 49.29 new text begin in the Office of the Secretary of State. The secretary of state must also make available in new text end 49.30 new text begin an electronic format the names of the revoked non-Minnesota limited liability companies. new text end 49.31    Sec. 52. new text begin [322C.0706] REINSTATEMENT FOLLOWING ADMINISTRATIVE new text end 49.32 new text begin DISSOLUTION. new text end 50.1 new text begin (a) If a limited liability company is administratively terminated or has its authority to new text end 50.2 new text begin do business in Minnesota revoked, it may retroactively reinstate its existence or authority new text end 50.3 new text begin to do business by filing a single annual renewal and paying a $25 fee. new text end 50.4 new text begin (b) For a domestic limited liability company, filing the annual renewal with the new text end 50.5 new text begin secretary of state: new text end 50.6 new text begin (1) returns the limited liability company to active status as of the date of the new text end 50.7 new text begin administrative termination; new text end 50.8 new text begin (2) validates contracts or other acts within the authority of the articles, and the new text end 50.9 new text begin limited liability company is liable for those contracts or acts; and new text end 50.10 new text begin (3) restores to the limited liability company all assets and rights of the limited new text end 50.11 new text begin liability company and its members to the extent they were held by the limited liability new text end 50.12 new text begin company and its members before the administrative termination occurred, except to the new text end 50.13 new text begin extent that assets or rights were affected by acts occurring after the termination, sold, or new text end 50.14 new text begin otherwise distributed after that time. new text end 50.15 new text begin (c) For a non-Minnesota limited liability company, filing the annual renewal restores new text end 50.16 new text begin the limited liability company's ability to do business in Minnesota and the rights and new text end 50.17 new text begin privileges that accompany that authority. new text end 50.18    Sec. 53. new text begin [322C.0707] DISTRIBUTION OF ASSETS IN WINDING UP LIMITED new text end 50.19 new text begin LIABILITY COMPANY'S ACTIVITIES. new text end 50.20     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 new text end 50.21 new text begin activities, a limited liability company must apply its assets to discharge its obligations to new text end 50.22 new text begin creditors, including members that are creditors. new text end 50.23     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 new text end 50.24 new text begin with subdivision 1, any surplus must be distributed in the following order, subject to any new text end 50.25 new text begin charging order in effect under section 322C.0503: new text end 50.26 new text begin (1) to each person owning a transferable interest that reflects contributions made by new text end 50.27 new text begin a member and not previously returned, an amount equal to the value of the unreturned new text end 50.28 new text begin contributions; and new text end 50.29 new text begin (2) in equal shares among members and dissociated members, except to the extent new text end 50.30 new text begin necessary to comply with any transfer effective under section 322C.0502. new text end 50.31     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 new text end 50.32 new text begin sufficient surplus to comply with subdivision 2, clause (1), any surplus must be distributed new text end 50.33 new text begin among the owners of transferable interests in proportion to the value of their respective new text end 50.34 new text begin unreturned contributions. new text end 51.1     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 new text end 51.2 new text begin must be paid in money. new text end 51.3    Sec. 54. new text begin [322C.0708] ACTION BY ATTORNEY GENERAL. new text end 51.4     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 new text end 51.5 new text begin dissolved, wound up, and terminated by a decree of a court in this state in an action filed new text end 51.6 new text begin by the attorney general when it is established that: new text end 51.7 new text begin (1) the articles of organization were procured through fraud; new text end 51.8 new text begin (2) the limited liability company was organized for a purpose not permitted by new text end 51.9 new text begin this chapter; new text end 51.10 new text begin (3) the limited liability company failed to comply with the requirements essential to new text end 51.11 new text begin organization under this chapter; new text end 51.12 new text begin (4) the limited liability company has flagrantly violated a provision of this chapter, new text end 51.13 new text begin has violated a provision of this chapter more than once, or has violated more than one new text end 51.14 new text begin provision of this chapter; or new text end 51.15 new text begin (5) the limited liability company has acted, or failed to act, in a manner that constitutes new text end 51.16 new text begin surrender or abandonment of the limited liability company privileges or enterprise. new text end 51.17     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 new text end 51.18 new text begin be commenced under this section until 30 days after notice to the limited liability company new text end 51.19 new text begin by the attorney general of the reason for the filing of the action. If the reason for filing the new text end 51.20 new text begin action is an act that the limited liability company has done, or omitted to do, and the act or new text end 51.21 new text begin omission may be corrected by an amendment of the articles of organization, a member new text end 51.22 new text begin control agreement, or the bylaws or by performance of or abstention from the act, the new text end 51.23 new text begin attorney general shall give the limited liability company 30 additional days in which to new text end 51.24 new text begin effect the correction before filing the action. new text end 51.25FOREIGN LIMITED LIABILITY COMPANIES 51.26    Sec. 55. new text begin [322C.0801] GOVERNING LAW. new text end 51.27     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 new text end 51.28 new text begin which a foreign limited liability company is formed governs: new text end 51.29 new text begin (1) the internal affairs of the company; and new text end 51.30 new text begin (2) the liability of a member as member, a manager as manager, and a governor as new text end 51.31 new text begin governor for the debts, obligations, or other liabilities of the company. new text end 51.32     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 new text end 51.33 new text begin company may not be denied a certificate of authority by reason of any difference between new text end 51.34 new text begin the law of the jurisdiction under which the company is formed and the law of this state. new text end 52.1     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 new text end 52.2 new text begin not authorize a foreign limited liability company to engage in any business or exercise any new text end 52.3 new text begin power that a limited liability company may not engage in or exercise in this state. new text end 52.4    Sec. 56. new text begin [322C.0802] APPLICATION FOR CERTIFICATE OF AUTHORITY. new text end 52.5 new text begin Before transacting business in this state, a foreign limited liability company shall new text end 52.6 new text begin obtain a certificate of authority to transact business in this state by filing an application new text end 52.7 new text begin with the secretary of state together with a total fee of $185. The application must state: new text end 52.8 new text begin (1) the name of the company and any alternate name adopted pursuant to section new text end 52.9 new text begin 322C.0805, subdivision 1; new text end 52.10 new text begin (2) the name of the state or other jurisdiction under whose law the company is formed; new text end 52.11 new text begin (3) a statement that the foreign limited liability company has complied with the new text end 52.12 new text begin organizational laws in the jurisdiction under whose laws the company is formed; new text end 52.13 new text begin (4) the street address of the company's principal place of business and, if the law of new text end 52.14 new text begin the jurisdiction under which the company is formed requires the company to maintain an new text end 52.15 new text begin office in that jurisdiction, the street address of the required office; and new text end 52.16 new text begin (5) the name and street address of the company's initial registered office and agent new text end 52.17 new text begin for service of process in this state. new text end 52.18    Sec. 57. new text begin [322C.0803] TRANSACTIONS NOT CONSTITUTING TRANSACTING new text end 52.19 new text begin BUSINESS. new text end 52.20     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 new text end 52.21 new text begin liability company shall not be considered to be transacting business in this state for the new text end 52.22 new text begin purposes of this chapter solely by reason of carrying on in this state any one or more of new text end 52.23 new text begin the following, including: new text end 52.24 new text begin (1) maintaining or defending any action or suit or any administrative or arbitration new text end 52.25 new text begin proceeding, or effecting the settlement thereof or the settlement of claims or disputes; new text end 52.26 new text begin (2) holding meetings of its managers, governors, or members or carrying on other new text end 52.27 new text begin activities concerning its internal affairs; new text end 52.28 new text begin (3) maintaining bank accounts; new text end 52.29 new text begin (4) maintaining offices or agencies for the transfer, exchange, and registration of new text end 52.30 new text begin its securities, or appointing and maintaining trustees or depositaries with relation to its new text end 52.31 new text begin securities; new text end 52.32 new text begin (5) holding title to and managing real or personal property, or any interest therein, new text end 52.33 new text begin situated in this state, as executor of the will or administrator of the estate of any decedent, new text end 52.34 new text begin as trustee of any trust, or as guardian of any person or conservator of any person's estate; new text end 53.1 new text begin (6) making, participating in, or investing in loans or creating, as borrower or lender, new text end 53.2 new text begin or otherwise acquiring indebtedness or mortgages or other security interests in real or new text end 53.3 new text begin personal property; new text end 53.4 new text begin (7) securing or collecting its debts or enforcing any rights in property securing new text end 53.5 new text begin them; or new text end 53.6 new text begin (8) conducting an isolated transaction completed within a period of 30 days and not new text end 53.7 new text begin in the course of a number of repeated transactions of like nature. new text end 53.8     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, new text end 53.9 new text begin the ownership in this state of income-producing real property or tangible personal new text end 53.10 new text begin property, other than property excluded under subdivision 1, constitutes transacting new text end 53.11 new text begin business in this state. new text end 53.12     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 new text end 53.13 new text begin or activities that may subject a foreign limited liability company to service of process, new text end 53.14 new text begin taxation, or regulation under law of this state other than this chapter. new text end 53.15    Sec. 58. new text begin [322C.0804] FILING OF CERTIFICATE OF AUTHORITY. new text end 53.16 new text begin Unless the secretary of state determines that an application for a certificate of new text end 53.17 new text begin authority does not comply with the filing requirements of this chapter, the secretary of new text end 53.18 new text begin state, upon payment of all filing fees, shall file the application of a foreign limited liability new text end 53.19 new text begin company; prepare, sign, and file a certificate of authority to transact business in this state; new text end 53.20 new text begin and send an image of the filed certificate to the company or its representative. new text end 53.21    Sec. 59. new text begin [322C.0805] NONCOMPLYING NAME OF FOREIGN LIMITED new text end 53.22 new text begin LIABILITY COMPANY. new text end 53.23     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 new text end 53.24 new text begin name does not comply with section 322C.0108 may not obtain a certificate of authority new text end 53.25 new text begin until it adopts, for the purpose of transacting business in this state, an alternate name new text end 53.26 new text begin that complies with section 322C.0108. A foreign limited liability company that adopts new text end 53.27 new text begin an alternate name under this subdivision and obtains a certificate of authority with the new text end 53.28 new text begin alternate name need not comply with section 333.01. After obtaining a certificate of new text end 53.29 new text begin authority with an alternate name, a foreign limited liability company shall transact business new text end 53.30 new text begin in this state under the alternate name unless the company is authorized under section new text end 53.31 new text begin 333.01 to transact business in this state under another name. A foreign limited liability new text end 53.32 new text begin company may adopt an alternate name even if its name complies with section 322C.0108. new text end 53.33     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 new text end 53.34 new text begin transact business in this state changes its name to one that does not comply with section new text end 54.1 new text begin 322C.0108, it may not thereafter transact business in this state until it complies with new text end 54.2 new text begin subdivision 1 and obtains an amended certificate of authority. new text end 54.3    Sec. 60. new text begin [322C.0806] REVOCATION OF CERTIFICATE OF AUTHORITY. new text end 54.4 new text begin (a) The certificate of authority of a foreign limited liability company to transact new text end 54.5 new text begin business in this state shall be revoked by the secretary of state if it fails: new text end 54.6 new text begin (1) to pay any fee due under the provisions of this chapter; new text end 54.7 new text begin (2) to designate a registered agent when a vacancy occurs in that office, or when the new text end 54.8 new text begin appointed registered agent resigns or becomes disqualified or incapacitated; new text end 54.9 new text begin (3) to file certificates of merger or name change, as required in section 322C.0805, new text end 54.10 new text begin subdivision 2; or new text end 54.11 new text begin (4) to file an annual renewal. new text end 54.12 new text begin (b) On finding that a default has occurred under paragraph (a), clauses (1) to (3), new text end 54.13 new text begin the secretary of state shall notify the foreign limited liability company that the default new text end 54.14 new text begin exists and that its certificate of authority will be revoked unless the default shall be cured new text end 54.15 new text begin within 30 days. new text end 54.16 new text begin (c)(1) The secretary of state shall revoke the certificate of authority of a foreign new text end 54.17 new text begin limited liability company that is in default under paragraph (a), clause (4), for failure to new text end 54.18 new text begin file an annual renewal under section 5.34. new text end 54.19 new text begin (2) The secretary of state shall revoke the certificate of authority of a foreign limited new text end 54.20 new text begin liability company that is in default under paragraph (a), clauses (1) to (3), if the default new text end 54.21 new text begin is not cured within the time provided under paragraph (b); provided that for good cause new text end 54.22 new text begin shown the secretary of state may extend the 30-day period from time to time, but in no new text end 54.23 new text begin event may the aggregate of all extensions granted exceed 180 days or the period of time of new text end 54.24 new text begin any applicable extension granted by the Department of Revenue for filing the income tax new text end 54.25 new text begin return of the corporation, whichever is greater. new text end 54.26 new text begin (d)(1) Upon revoking the certificate of authority of a foreign limited liability company new text end 54.27 new text begin because of a default under paragraph (a), clauses (1) to (3), the secretary of state shall: new text end 54.28 new text begin (i) issue a certificate of revocation; and new text end 54.29 new text begin (ii) provide a notice of the revocation to the foreign limited liability company. new text end 54.30 new text begin (2) Upon revoking the certificate of authority of a foreign limited liability company new text end 54.31 new text begin because of a default under paragraph (a), clause (4), the secretary of state shall issue a new text end 54.32 new text begin certificate of revocation, and the certificate must be filed in the Office of the Secretary of new text end 54.33 new text begin State. No further notice to the foreign limited liability company is required. new text end 54.34 new text begin (3) The secretary of state shall also make the names of the revoked foreign limited new text end 54.35 new text begin liability companies available in an electronic format. new text end 55.1 new text begin (e) Upon the issuance of such certificate of revocation, the authority of the foreign new text end 55.2 new text begin limited liability company to transact business in this state shall cease. new text end 55.3    Sec. 61. new text begin [322C.0807] WITHDRAWAL OF FOREIGN LIMITED LIABILITY new text end 55.4 new text begin COMPANY. new text end 55.5 new text begin (a) If a foreign limited liability company holding a certificate of authority desires to new text end 55.6 new text begin withdraw, it shall file with the secretary of state an application for withdrawal. new text end 55.7 new text begin (b) The application for withdrawal shall set forth: new text end 55.8 new text begin (1) the name of the foreign limited liability company corporation and the state or new text end 55.9 new text begin country under the laws of which it is organized; new text end 55.10 new text begin (2) that it has no property located in this state and has ceased to transact business new text end 55.11 new text begin therein; new text end 55.12 new text begin (3) that its governing body has duly determined to surrender its authority to transact new text end 55.13 new text begin business in this state; new text end 55.14 new text begin (4) that it revokes the authority of its registered agent in this state to accept service new text end 55.15 new text begin of process; new text end 55.16 new text begin (5) the address to which the secretary of state shall mail a copy of any process against new text end 55.17 new text begin the foreign limited liability company that may be served upon the secretary of state; new text end 55.18 new text begin (6) that it will pay to the commissioner of management and budget the amount of new text end 55.19 new text begin any additional license fees properly found by the secretary of state to be then due from new text end 55.20 new text begin such foreign limited liability company; and new text end 55.21 new text begin (7) additional information required or demanded to enable the secretary of state new text end 55.22 new text begin to determine the additional license fees, if any, payable by the foreign limited liability new text end 55.23 new text begin company. new text end 55.24 new text begin (c) The application for withdrawal shall be executed on behalf of the foreign limited new text end 55.25 new text begin liability company pursuant to section 322C.0203. new text end 55.26 new text begin (d) The application for withdrawal shall be delivered to the secretary of state. Upon new text end 55.27 new text begin receiving and examining the same, and upon finding that it conforms to the provisions of new text end 55.28 new text begin this chapter, the secretary of state shall, when all license fees, filing fees, and other charges new text end 55.29 new text begin have been paid as required by law, file the same and shall issue and record a certificate new text end 55.30 new text begin of withdrawal. Upon the issuance of the certificate, the authority of the foreign limited new text end 55.31 new text begin liability company to transact business in this state shall cease. new text end 55.32 new text begin (e) The filing with the secretary of state by the corporation of a certificate of new text end 55.33 new text begin dissolution, or a certificate of merger if the foreign limited liability company is not the new text end 55.34 new text begin surviving limited liability company from the proper officer of the state or country under new text end 55.35 new text begin the laws of which the foreign limited liability company is organized, constitutes a valid new text end 56.1 new text begin application of withdrawal and the authority of the foreign limited liability company to new text end 56.2 new text begin transact business in this state shall cease upon filing of the certificate. new text end 56.3    Sec. 62. new text begin [322C.0808] EFFECT OF FAILURE TO HAVE CERTIFICATE OF new text end 56.4 new text begin AUTHORITY. new text end 56.5     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 new text end 56.6 new text begin company transacting business in this state may not maintain an action or proceeding in new text end 56.7 new text begin this state unless it has a certificate of authority to transact business in this state. new text end 56.8     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 new text end 56.9 new text begin to have a certificate of authority to transact business in this state does not impair the new text end 56.10 new text begin validity of a contract or act of the company or prevent the company from defending an new text end 56.11 new text begin action or proceeding in this state. new text end 56.12     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 new text end 56.13 new text begin limited liability company is not liable for the debts, obligations, or other liabilities of the new text end 56.14 new text begin company solely because the company transacted business in this state without a certificate new text end 56.15 new text begin of authority. new text end 56.16     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 new text end 56.17 new text begin transacts business in this state without a certificate of authority or cancels its certificate of new text end 56.18 new text begin authority, it appoints the secretary of state as its agent for service of process for rights of new text end 56.19 new text begin action arising out of the transaction of business in this state. new text end 56.20    Sec. 63. new text begin [322C.0809] ACTION BY ATTORNEY GENERAL. new text end 56.21 new text begin The attorney general may maintain an action to enjoin a foreign limited liability new text end 56.22 new text begin company from transacting business in this state in violation of sections 322C.0801 to new text end 56.23 new text begin 322C.0809. new text end 56.24ACTIONS BY MEMBERS 56.25    Sec. 64. new text begin [322C.0901] DIRECT ACTION BY MEMBER. new text end 56.26     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 new text end 56.27 new text begin maintain a direct action against another member, a manager, a governor, or the limited new text end 56.28 new text begin liability company to enforce the member's rights and otherwise protect the member's new text end 56.29 new text begin interests, including rights and interests under the operating agreement or this chapter or new text end 56.30 new text begin arising independently of the membership relationship. new text end 56.31     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 new text end 56.32 new text begin section must plead and prove an actual or threatened injury that is not solely the result of new text end 56.33 new text begin an injury suffered or threatened to be suffered by the limited liability company. new text end 57.1    Sec. 65. new text begin [322C.0902] DERIVATIVE ACTION. new text end 57.2 new text begin A member may maintain a derivative action to enforce a right of a limited liability new text end 57.3 new text begin company if: new text end 57.4 new text begin (1) the member first makes a demand on the other members in a member-managed new text end 57.5 new text begin limited liability company, the managers of a manager-managed limited liability company, new text end 57.6 new text begin or the board of governors of a board-managed limited liability company requesting that new text end 57.7 new text begin they cause the company to bring an action to enforce the right, and the member or board new text end 57.8 new text begin does not bring the action within a reasonable time; or new text end 57.9 new text begin (2) a demand under clause (1) would be futile. new text end 57.10    Sec. 66. new text begin [322C.0903] PROPER PLAINTIFF. new text end 57.11     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 new text end 57.12 new text begin subdivision 2, a derivative action under section 322C.0902 may be maintained only by a new text end 57.13 new text begin person that is a member at the time the action is commenced and remains a member new text end 57.14 new text begin while the action continues. new text end 57.15     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 new text end 57.16 new text begin while the action is pending, the court may permit another member of the limited liability new text end 57.17 new text begin company to be substituted as plaintiff. new text end 57.18    Sec. 67. new text begin [322C.0904] PLEADING. new text end 57.19 new text begin In a derivative action under section 322C.0902, the complaint must state with new text end 57.20 new text begin particularity: new text end 57.21 new text begin (1) the date and content of the plaintiff's demand and the response to the demand by new text end 57.22 new text begin the other members, managers, or board of governors; or new text end 57.23 new text begin (2) if a demand has not been made, the reasons a demand under section 322C.0902, new text end 57.24 new text begin clause (1), would be futile. new text end 57.25    Sec. 68. new text begin [322C.0905] SPECIAL LITIGATION COMMITTEE. new text end 57.26     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 new text end 57.27 new text begin as or made a party in a derivative proceeding, the company may appoint a special new text end 57.28 new text begin litigation committee to investigate the claims asserted in the proceeding and determine new text end 57.29 new text begin whether pursuing the action is in the best interests of the company. If the company new text end 57.30 new text begin appoints a special litigation committee, on motion by the committee made in the name new text end 57.31 new text begin of the company, except for good cause shown, the court shall stay discovery for the time new text end 57.32 new text begin reasonably necessary to permit the committee to make its investigation. This subdivision new text end 57.33 new text begin does not prevent the court from enforcing a person's right to information under section new text end 58.1 new text begin 322C.0410 or, for good cause shown, granting extraordinary relief in the form of a new text end 58.2 new text begin temporary restraining order or preliminary injunction. new text end 58.3     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 new text end 58.4 new text begin of one or more disinterested and independent individuals, who may be members. new text end 58.5     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 new text end 58.6 new text begin committee may be appointed: new text end 58.7 new text begin (1) in a member-managed limited liability company: new text end 58.8 new text begin (i) by the consent of a majority of the members not named as defendants or plaintiffs new text end 58.9 new text begin in the proceeding; and new text end 58.10 new text begin (ii) if all members are named as defendants or plaintiffs in the proceeding, by a new text end 58.11 new text begin majority of the members named as defendants; new text end 58.12 new text begin (2) in a manager-managed limited liability company: new text end 58.13 new text begin (i) by a majority of the managers not named as defendants or plaintiffs in the new text end 58.14 new text begin proceeding; and new text end 58.15 new text begin (ii) if all managers are named as defendants or plaintiffs in the proceeding, by a new text end 58.16 new text begin majority of the managers named as defendants; and new text end 58.17 new text begin (3) in a board-managed limited liability company: new text end 58.18 new text begin (i) by a majority of governors not named as defendants or plaintiffs in the new text end 58.19 new text begin proceeding; and new text end 58.20 new text begin (ii) if all governors are named as defendants or plaintiffs in the proceeding, by a new text end 58.21 new text begin majority of the governors named as defendants. new text end 58.22     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 new text end 58.23 new text begin litigation committee may determine that it is in the best interests of the limited liability new text end 58.24 new text begin company that the proceeding: new text end 58.25 new text begin (1) continue under the control of the plaintiff; new text end 58.26 new text begin (2) continue under the control of the committee; new text end 58.27 new text begin (3) be settled on terms approved by the committee; or new text end 58.28 new text begin (4) be dismissed. new text end 58.29     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 new text end 58.30 new text begin 4, a special litigation committee shall file with the court a statement of its determination new text end 58.31 new text begin and its report supporting its determination, giving notice to the plaintiff. The court shall new text end 58.32 new text begin determine whether the members of the committee were disinterested and independent new text end 58.33 new text begin and whether the committee conducted its investigation and made its recommendation new text end 58.34 new text begin in good faith, independently, and with reasonable care, with the committee having the new text end 58.35 new text begin burden of proof. If the court finds that the members of the committee were disinterested new text end 58.36 new text begin and independent and that the committee acted in good faith, independently, and with new text end 59.1 new text begin reasonable care, the court shall enforce the determination of the committee. Otherwise, new text end 59.2 new text begin the court shall dissolve the stay of discovery entered under subdivision 1 and allow the new text end 59.3 new text begin action to proceed under the direction of the plaintiff. new text end 59.4    Sec. 69. new text begin [322C.0906] PROCEEDS AND EXPENSES. new text end 59.5     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 new text end 59.6 new text begin subdivision 2: new text end 59.7 new text begin (1) any proceeds or other benefits of a derivative action under section 322C.0902, new text end 59.8 new text begin whether by judgment, compromise, or settlement, belong to the limited liability company new text end 59.9 new text begin and not to the plaintiff; and new text end 59.10 new text begin (2) if the plaintiff receives any proceeds, the plaintiff shall remit them immediately new text end 59.11 new text begin to the company. new text end 59.12     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 new text end 59.13 new text begin successful in whole or in part, the court may award the plaintiff reasonable expenses, new text end 59.14 new text begin including reasonable attorney fees and costs, from the recovery of the limited liability new text end 59.15 new text begin company. new text end 59.16MERGER, CONVERSION, AND DOMESTICATION 59.17    Sec. 70. new text begin [322C.1001] DEFINITIONS. new text end 59.18     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 new text end 59.19 new text begin terms defined in this section have the meanings given them. new text end 59.20     new text begin Subd. 2. new text end new text begin Constituent limited liability company. new text end new text begin "Constituent limited liability new text end 59.21 new text begin company" means a constituent organization that is a limited liability company. new text end 59.22     new text begin Subd. 3. new text end new text begin Constituent organization. new text end new text begin "Constituent organization" means an new text end 59.23 new text begin organization that is party to a merger or exchange. new text end 59.24     new text begin Subd. 4. new text end new text begin Converted organization. new text end new text begin "Converted organization" means the new text end 59.25 new text begin organization into which a converting organization converts pursuant to sections 322C.1007 new text end 59.26 new text begin to 322C.1010. new text end 59.27     new text begin Subd. 5. new text end new text begin Converting limited liability company. new text end new text begin "Converting limited liability new text end 59.28 new text begin company" means a converting organization that is a limited liability company. new text end 59.29     new text begin Subd. 6. new text end new text begin Converting organization. new text end new text begin "Converting organization" means an new text end 59.30 new text begin organization that converts into another organization pursuant to section 322C.1007. new text end 59.31     new text begin Subd. 7. new text end new text begin Domesticated company. new text end new text begin "Domesticated company" means the company new text end 59.32 new text begin that exists after a domesticating foreign limited liability company or limited liability new text end 59.33 new text begin company effects a domestication pursuant to sections 322C.1011 to 322C.1014. new text end 60.1     new text begin Subd. 8. new text end new text begin Domesticating company. new text end new text begin "Domesticating company" means the company new text end 60.2 new text begin that effects a domestication pursuant to sections 322C.1011 to 322C.1014. new text end 60.3     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 new text end 60.4 new text begin an organization's internal affairs. new text end 60.5     new text begin Subd. 10. new text end new text begin Organization. new text end new text begin "Organization" means a general partnership, including new text end 60.6 new text begin a limited liability partnership, limited partnership, including a limited liability limited new text end 60.7 new text begin partnership, limited liability company, business trust, corporation, or any other person new text end 60.8 new text begin having a governing statute. The term includes a domestic or foreign organization new text end 60.9 new text begin regardless of whether organized for profit. new text end 60.10     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 60.11 new text begin (1) for a domestic or foreign general partnership, its partnership agreement; new text end 60.12 new text begin (2) for a limited partnership or foreign limited partnership, its certificate of limited new text end 60.13 new text begin partnership and partnership agreement; new text end 60.14 new text begin (3) for a domestic or foreign limited liability company, its certificate or articles of new text end 60.15 new text begin organization and operating agreement, or comparable records as provided in its governing new text end 60.16 new text begin statute; new text end 60.17 new text begin (4) for a business trust, its agreement of trust and declaration of trust; new text end 60.18 new text begin (5) for a domestic or foreign corporation for profit, its articles of incorporation, new text end 60.19 new text begin bylaws, and other agreements among its shareholders which are authorized by its new text end 60.20 new text begin governing statute, or comparable records as provided in its governing statute; and new text end 60.21 new text begin (6) for any other organization, the basic records that create the organization and new text end 60.22 new text begin determine its internal governance and the relations among the persons that own it, have an new text end 60.23 new text begin interest in it, or are members of it. new text end 60.24     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, new text end 60.25 new text begin obligation, or other liability of an organization which is imposed on a person that co-owns, new text end 60.26 new text begin has an interest in, or is a member of the organization: new text end 60.27 new text begin (1) by the governing statute solely by reason of the person co-owning, having an new text end 60.28 new text begin interest in, or being a member of the organization; or new text end 60.29 new text begin (2) by the organization's organizational documents under a provision of the governing new text end 60.30 new text begin statute authorizing those documents to make one or more specified persons liable for all or new text end 60.31 new text begin specified debts, obligations, or other liabilities of the organization solely by reason of the new text end 60.32 new text begin person or persons co-owning, having an interest in, or being a member of the organization. new text end 60.33     new text begin Subd. 13. new text end new text begin Surviving organization. new text end new text begin "Surviving organization" means an organization new text end 60.34 new text begin into which one or more other organizations are merged whether the organization preexisted new text end 60.35 new text begin the merger or was created by the merger. new text end 61.1    Sec. 71. new text begin [322C.1002] MERGER; EXCHANGE. new text end 61.2     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 new text end 61.3 new text begin with one or more other constituent organizations pursuant to this section, sections new text end 61.4 new text begin 322C.1003 to 322C.1005, and a plan of merger if: new text end 61.5 new text begin (1) the governing statute of each of the other organizations authorizes the merger; new text end 61.6 new text begin (2) the merger is not prohibited by the law of a jurisdiction that enacted any of the new text end 61.7 new text begin governing statutes; and new text end 61.8 new text begin (3) each of the other organizations complies with its governing statute in effecting new text end 61.9 new text begin the merger. new text end 61.10     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 new text end 61.11 new text begin an exchange with one or more other constituent organizations pursuant to this section by new text end 61.12 new text begin which one of the constituent organizations acquires all of the ownership interests of one or new text end 61.13 new text begin more classes or series of another constituent organization pursuant to this section, sections new text end 61.14 new text begin 322C.1003 to 322C.1005, and a plan of exchange if: new text end 61.15 new text begin (1) the governing statute of each of the other constituent organizations authorizes new text end 61.16 new text begin the exchange; new text end 61.17 new text begin (2) the exchange is not prohibited by the law of a jurisdiction that enacted any of the new text end 61.18 new text begin governing statutes; and new text end 61.19 new text begin (3) each of the other constituent organizations complies with its governing statute in new text end 61.20 new text begin effecting the exchange. new text end 61.21     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 new text end 61.22 new text begin record and must include: new text end 61.23 new text begin (1) the name and form of each constituent organization and: new text end 61.24 new text begin (i) in the case of a merger, the name and form of the surviving organization and, if new text end 61.25 new text begin the surviving organization is to be created by the merger, a statement to that effect; and new text end 61.26 new text begin (ii) in the case of an exchange, the name of the acquiring organization; new text end 61.27 new text begin (2)(i) in the case of a merger, the terms and conditions of the merger, including the new text end 61.28 new text begin manner and basis for converting the interests in each constituent organization into any new text end 61.29 new text begin combination of money, interests in the surviving organization, and other consideration; and new text end 61.30 new text begin (ii) in the case of an exchange, the terms and conditions of the exchange, including new text end 61.31 new text begin the manner and basis of exchanging the ownership interests to be acquired for securities new text end 61.32 new text begin of, or other ownership interests in, the acquiring organization or any other organization or, new text end 61.33 new text begin in whole or part, for money or other property; new text end 61.34 new text begin (3) in the case of a merger, if the surviving organization is to be created by the merger, new text end 61.35 new text begin the surviving organization's organizational documents that are proposed to be in a record; new text end 62.1 new text begin (4) in the case of a merger, if the surviving organization is not to be created by new text end 62.2 new text begin the merger, any amendments to be made by the merger to the surviving organization's new text end 62.3 new text begin organizational documents that are, or are proposed to be, in a record; and new text end 62.4 new text begin (5) any other provisions with respect to the proposed merger or exchange that are new text end 62.5 new text begin considered necessary or desirable. new text end 62.6    Sec. 72. new text begin [322C.1003] ACTION ON PLAN OF MERGER OR EXCHANGE BY new text end 62.7 new text begin CONSTITUENT LIMITED LIABILITY COMPANY. new text end 62.8     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 new text end 62.9 new text begin of merger or exchange must be consented to by all the members of a constituent limited new text end 62.10 new text begin liability company. new text end 62.11     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 new text end 62.12 new text begin section 322C.1015 and any contractual rights, after a merger or exchange is approved, and new text end 62.13 new text begin at any time before the merger or exchange becomes effective according to this chapter, new text end 62.14 new text begin a constituent limited liability company may amend the plan or abandon the merger or new text end 62.15 new text begin exchange: new text end 62.16 new text begin (1) as provided in the plan; or new text end 62.17 new text begin (2) except as otherwise prohibited in the plan, with the same consent as was required new text end 62.18 new text begin to approve the plan. new text end 62.19    Sec. 73. new text begin [322C.1004] FILINGS REQUIRED FOR MERGER OR EXCHANGE; new text end 62.20 new text begin EFFECTIVE DATE AND TIME. new text end 62.21     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 new text end 62.22 new text begin has approved a merger or exchange, articles of merger or exchange must be signed on new text end 62.23 new text begin behalf of: new text end 62.24 new text begin (1) each constituent limited liability company, as provided in section 322C.0203, new text end 62.25 new text begin subdivision 1; and new text end 62.26 new text begin (2) each other constituent organization, as provided in its governing statute. new text end 62.27     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 new text end 62.28 new text begin must include: new text end 62.29 new text begin (1) the name and form of each constituent organization and the jurisdiction of its new text end 62.30 new text begin governing statute; new text end 62.31 new text begin (2) the name and form of the surviving organization, the jurisdiction of its governing new text end 62.32 new text begin statute, and, if the surviving organization is created by the merger, a statement to that effect; new text end 62.33 new text begin (3) the date the merger is effective under the governing statute of the surviving new text end 62.34 new text begin organization; new text end 63.1 new text begin (4) if the surviving organization is to be created by the merger: new text end 63.2 new text begin (i) if it will be a limited liability company, the company's articles of organization; or new text end 63.3 new text begin (ii) if it will be an organization other than a limited liability company, the new text end 63.4 new text begin organizational document that creates the organization that is in a public record; new text end 63.5 new text begin (5) if the surviving organization preexists the merger, any amendments provided new text end 63.6 new text begin for in the plan of merger for the organizational document that created the organization new text end 63.7 new text begin that are in a public record; new text end 63.8 new text begin (6) a statement as to each constituent organization that the merger was approved as new text end 63.9 new text begin required by the organization's governing statute; new text end 63.10 new text begin (7) if the surviving organization is a foreign organization not authorized to transact new text end 63.11 new text begin business in this state, the street address of an office that the secretary of state may use for new text end 63.12 new text begin the purposes of section 322C.1005, subdivision 2; and new text end 63.13 new text begin (8) any additional information required by the governing statute of any constituent new text end 63.14 new text begin organization. new text end 63.15     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 new text end 63.16 new text begin must include: new text end 63.17 new text begin (1) the name and form of each constituent organization and the jurisdiction of its new text end 63.18 new text begin governing statute; new text end 63.19 new text begin (2) the manner and basis of exchanging the ownership interests to be acquired for new text end 63.20 new text begin securities of, or other ownership interests in, the acquiring organization or any other new text end 63.21 new text begin organization or, in whole or part, for money or other property; new text end 63.22 new text begin (3) the date the exchange is effective under the governing statute of the acquiring new text end 63.23 new text begin organization; new text end 63.24 new text begin (4) a statement as to each constituent organization that the exchange was approved new text end 63.25 new text begin as required by the organization's governing statute; and new text end 63.26 new text begin (5) any additional information required by the governing statute of any constituent new text end 63.27 new text begin organization. new text end 63.28     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 new text end 63.29 new text begin liability company shall file the articles of merger, together with a total fee of $60, with the new text end 63.30 new text begin Office of the Secretary of State. new text end 63.31     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 new text end 63.32 new text begin effective under sections 322C.1001 to 322C.1015: new text end 63.33 new text begin (1) if the surviving organization is a limited liability company, upon the later of: new text end 63.34 new text begin (i) compliance with subdivision 4; or new text end 63.35 new text begin (ii) subject to section 322C.0205, subdivision 3, such effective time as is specified in new text end 63.36 new text begin the articles of merger; or new text end 64.1 new text begin (2) if the surviving organization is not a limited liability company, as provided by new text end 64.2 new text begin the governing statute of the surviving organization. new text end 64.3 new text begin (b) An exchange becomes effective under sections 322C.1001 to 322C.1015 upon new text end 64.4 new text begin the later of: new text end 64.5 new text begin (1) compliance with subdivision 4; or new text end 64.6 new text begin (2) subject to section 322C.0205, subdivision 3, such effective time as is specified in new text end 64.7 new text begin the articles of exchange. new text end 64.8    Sec. 74. new text begin [322C.1005] EFFECT OF MERGER. new text end 64.9     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 new text end 64.10 new text begin effective: new text end 64.11 new text begin (1) the surviving organization continues or comes into existence; new text end 64.12 new text begin (2) each constituent organization that merges into the surviving organization ceases new text end 64.13 new text begin to exist as a separate entity; new text end 64.14 new text begin (3) all property owned by each constituent organization that ceases to exist vests in new text end 64.15 new text begin the surviving organization; new text end 64.16 new text begin (4) all debts, obligations, or other liabilities of each constituent organization new text end 64.17 new text begin that ceases to exist continue as debts, obligations, or other liabilities of the surviving new text end 64.18 new text begin organization; new text end 64.19 new text begin (5) an action or proceeding pending by or against any constituent organization that new text end 64.20 new text begin ceases to exist may be continued as if the merger had not occurred; new text end 64.21 new text begin (6) except as prohibited by other law, all of the rights, privileges, immunities, new text end 64.22 new text begin powers, and purposes of each constituent organization that ceases to exist vest in the new text end 64.23 new text begin surviving organization; new text end 64.24 new text begin (7) except as otherwise provided in the plan of merger, the terms and conditions new text end 64.25 new text begin of the plan of merger take effect; new text end 64.26 new text begin (8) except as otherwise agreed, if a constituent limited liability company ceases new text end 64.27 new text begin to exist, the merger does not dissolve the limited liability company for the purposes of new text end 64.28 new text begin sections 322C.0701 to 322C.0707; new text end 64.29 new text begin (9) if the surviving organization is created by the merger: new text end 64.30 new text begin (i) if it is a limited liability company, the articles of organization become effective; or new text end 64.31 new text begin (ii) if it is an organization other than a limited liability company, the organizational new text end 64.32 new text begin document that creates the organization becomes effective; and new text end 64.33 new text begin (10) if the surviving organization preexisted the merger, any amendments provided new text end 64.34 new text begin for in the articles of merger or the organizational document that created the organization new text end 64.35 new text begin become effective. new text end 65.1     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 new text end 65.2 new text begin organization consents to the jurisdiction of the courts of this state to enforce any debt, new text end 65.3 new text begin obligation, or other liability owed by a constituent organization if before the merger the new text end 65.4 new text begin constituent organization was subject to suit in this state on the debt, obligation, or other new text end 65.5 new text begin liability. A surviving organization that is a foreign organization and not authorized new text end 65.6 new text begin to transact business in this state appoints the secretary of state as its agent for service new text end 65.7 new text begin of process for the purposes of enforcing a debt, obligation, or other liability under this new text end 65.8 new text begin subdivision. Service on the secretary of state under this subdivision must be made in the new text end 65.9 new text begin same manner and has the same consequences as in section 322C.0116, subdivisions 3 and 4. new text end 65.10    Sec. 75. new text begin [322C.1006] EFFECT OF EXCHANGE. new text end 65.11 new text begin When an exchange becomes effective, the membership interests in a limited liability new text end 65.12 new text begin company to be exchanged under the terms of the plan are considered to be exchanged. new text end 65.13 new text begin The members owning those membership interests are entitled only to the ownership new text end 65.14 new text begin interests, securities, money, or other property into which those membership interests have new text end 65.15 new text begin been converted or for which those membership interests have been exchanged according new text end 65.16 new text begin to the plan. new text end 65.17    Sec. 76. new text begin [322C.1007] CONVERSION. new text end 65.18     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 new text end 65.19 new text begin liability company, a foreign limited liability company, a nonprofit corporation, or an new text end 65.20 new text begin organization owning assets irrevocably dedicated to a charitable purpose, may convert new text end 65.21 new text begin to a limited liability company other than a nonprofit limited liability company, and a new text end 65.22 new text begin limited liability company other than a nonprofit limited liability company may convert to new text end 65.23 new text begin an organization other than a foreign limited liability company pursuant to this section, new text end 65.24 new text begin sections 322C.1008 to 322C.1010, and a plan of conversion if: new text end 65.25 new text begin (1) the other organization's governing statute authorizes the conversion; new text end 65.26 new text begin (2) the conversion is not prohibited by the law of the jurisdiction that enacted the new text end 65.27 new text begin other organization's governing statute or other law of this state; and new text end 65.28 new text begin (3) the other organization complies with its governing statute in effecting the new text end 65.29 new text begin conversion. new text end 65.30     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 new text end 65.31 new text begin and must include: new text end 65.32 new text begin (1) the name and form of the organization before conversion; new text end 65.33 new text begin (2) the name and form of the organization after conversion; new text end 66.1 new text begin (3) the terms and conditions of the conversion, including the manner and basis new text end 66.2 new text begin for converting interests in the converting organization into any combination of money, new text end 66.3 new text begin interests in the converted organization, and other consideration; and new text end 66.4 new text begin (4) the organizational documents of the converted organization that are, or are new text end 66.5 new text begin proposed to be, in a record. new text end 66.6    Sec. 77. new text begin [322C.1008] ACTION ON PLAN OF CONVERSION BY CONVERTING new text end 66.7 new text begin LIMITED LIABILITY COMPANY. new text end 66.8     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 new text end 66.9 new text begin of conversion must be consented to by all the members of a converting limited liability new text end 66.10 new text begin company. new text end 66.11     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 new text end 66.12 new text begin 322C.1015 and any contractual rights, after a conversion is approved, and at any time new text end 66.13 new text begin before articles of conversion are delivered to the secretary of state for filing under section new text end 66.14 new text begin 322C.1009, a converting limited liability company may amend the plan or abandon the new text end 66.15 new text begin conversion: new text end 66.16 new text begin (1) as provided in the plan; or new text end 66.17 new text begin (2) except as otherwise prohibited in the plan, by the same consent as was required new text end 66.18 new text begin to approve the plan. new text end 66.19    Sec. 78. new text begin [322C.1009] FILINGS REQUIRED FOR CONVERSION; EFFECTIVE new text end 66.20 new text begin DATE AND TIME. new text end 66.21     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 66.22 new text begin (1) a converting limited liability company shall file articles of conversion with the new text end 66.23 new text begin secretary of state, together with a total fee of $60, which articles of conversion must be new text end 66.24 new text begin signed as provided in section 322C.0203, subdivision 1, and must include: new text end 66.25 new text begin (i) a statement that the limited liability company has been converted into another new text end 66.26 new text begin organization; new text end 66.27 new text begin (ii) the name and form of the organization and the jurisdiction of its governing statute; new text end 66.28 new text begin (iii) the time the conversion is effective under the governing statute of the converted new text end 66.29 new text begin organization; new text end 66.30 new text begin (iv) a statement that the conversion was approved as required by this chapter; new text end 66.31 new text begin (v) a statement that the conversion was approved as required by the governing new text end 66.32 new text begin statute of the converted organization; and new text end 67.1 new text begin (vi) if the converted organization is a foreign organization not authorized to transact new text end 67.2 new text begin business in this state, the street address of an office that the secretary of state may use for new text end 67.3 new text begin the purposes of section 322C.1010, subdivision 3; and new text end 67.4 new text begin (2) if the converting organization is not a converting limited liability company, the new text end 67.5 new text begin converting organization shall file with the secretary of state articles of organization, which new text end 67.6 new text begin must include, in addition to the information required by section 322C.0201, subdivision 2: new text end 67.7 new text begin (i) a statement that the converted organization was converted from another new text end 67.8 new text begin organization; new text end 67.9 new text begin (ii) the name and form of that converting organization and the jurisdiction of its new text end 67.10 new text begin governing statute; and new text end 67.11 new text begin (iii) a statement that the conversion was approved in a manner that complied with new text end 67.12 new text begin the converting organization's governing statute. new text end 67.13     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 67.14 new text begin (1) if the converted organization is a limited liability company, when the articles new text end 67.15 new text begin of organization takes effect; and new text end 67.16 new text begin (2) if the converted organization is not a limited liability company, as provided by new text end 67.17 new text begin the governing statute of the converted organization. new text end 67.18    Sec. 79. new text begin [322C.1010] EFFECT OF CONVERSION. new text end 67.19     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 new text end 67.20 new text begin sections 322C.1007 to 322C.1009 is for all purposes the same entity that existed before new text end 67.21 new text begin the conversion. new text end 67.22     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 67.23 new text begin (1) all property owned by the converting organization remains vested in the new text end 67.24 new text begin converted organization; new text end 67.25 new text begin (2) all debts, obligations, or other liabilities of the converting organization continue new text end 67.26 new text begin as debts, obligations, or other liabilities of the converted organization; new text end 67.27 new text begin (3) an action or proceeding pending by or against the converting organization may new text end 67.28 new text begin be continued as if the conversion had not occurred; new text end 67.29 new text begin (4) except as prohibited by law other than this chapter, all of the rights, privileges, new text end 67.30 new text begin immunities, powers, and purposes of the converting organization remain vested in the new text end 67.31 new text begin converted organization; new text end 67.32 new text begin (5) except as otherwise provided in the plan of conversion, the terms and conditions new text end 67.33 new text begin of the plan of conversion take effect; and new text end 67.34 new text begin (6) except as otherwise agreed, the conversion does not dissolve a converting limited new text end 67.35 new text begin liability company for the purposes of sections 322C.0701 to 322C.0707. new text end 68.1     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 new text end 68.2 new text begin organization consents to the jurisdiction of the courts of this state to enforce any debt, new text end 68.3 new text begin obligation, or other liability for which the converting limited liability company is liable new text end 68.4 new text begin if, before the conversion, the converting limited liability company was subject to suit in new text end 68.5 new text begin this state on the debt, obligation, or other liability. A converted organization that is a new text end 68.6 new text begin foreign organization and not authorized to transact business in this state appoints the new text end 68.7 new text begin secretary of state as its agent for service of process for purposes of enforcing a debt, new text end 68.8 new text begin obligation, or other liability under this subdivision. Service on the secretary of state under new text end 68.9 new text begin this subdivision must be made in the same manner and has the same consequences as in new text end 68.10 new text begin section 322C.0116, subdivisions 3 and 4. new text end 68.11    Sec. 80. new text begin [322C.1011] DOMESTICATION. new text end 68.12     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 new text end 68.13 new text begin company may become a limited liability company pursuant to this section, sections new text end 68.14 new text begin 322C.1011 to 322C.1013, and a plan of domestication if: new text end 68.15 new text begin (1) the foreign limited liability company's governing statute authorizes the new text end 68.16 new text begin domestication; new text end 68.17 new text begin (2) the domestication is not prohibited by the law of the jurisdiction that enacted new text end 68.18 new text begin the governing statute; and new text end 68.19 new text begin (3) the foreign limited liability company complies with its governing statute in new text end 68.20 new text begin effecting the domestication. new text end 68.21     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 new text end 68.22 new text begin become a foreign limited liability company pursuant to this section, sections 322C.1011 to new text end 68.23 new text begin 322C.1013, and a plan of domestication if: new text end 68.24 new text begin (1) the foreign limited liability company's governing statute authorizes the new text end 68.25 new text begin domestication; new text end 68.26 new text begin (2) the domestication is not prohibited by the law of the jurisdiction that enacted new text end 68.27 new text begin the governing statute; and new text end 68.28 new text begin (3) the foreign limited liability company complies with its governing statute in new text end 68.29 new text begin effecting the domestication. new text end 68.30     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 new text end 68.31 new text begin and must include: new text end 68.32 new text begin (1) the name of the domesticating company before domestication and the jurisdiction new text end 68.33 new text begin of its governing statute; new text end 68.34 new text begin (2) the name of the domesticated company after domestication and the jurisdiction new text end 68.35 new text begin of its governing statute; new text end 69.1 new text begin (3) the terms and conditions of the domestication, including the manner and basis new text end 69.2 new text begin for converting interests in the domesticating company into any combination of money, new text end 69.3 new text begin interests in the domesticated company, and other consideration; and new text end 69.4 new text begin (4) the organizational documents of the domesticated company that are, or are new text end 69.5 new text begin proposed to be, in a record. new text end 69.6    Sec. 81. new text begin [322C.1012] ACTION ON PLAN OF DOMESTICATION BY new text end 69.7 new text begin DOMESTICATING LIMITED LIABILITY COMPANY. new text end 69.8     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 69.9 new text begin (1) by all the members, subject to section 322C.1015, if the domesticating company new text end 69.10 new text begin is a limited liability company; and new text end 69.11 new text begin (2) as provided in the domesticating company's governing statute, if the company is new text end 69.12 new text begin a foreign limited liability company. new text end 69.13     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 new text end 69.14 new text begin contractual rights, after a domestication is approved, and at any time before articles of new text end 69.15 new text begin domestication are filed with the secretary of state under section 322C.1013, a domesticating new text end 69.16 new text begin limited liability company may amend the plan or abandon the domestication: new text end 69.17 new text begin (1) as provided in the plan; or new text end 69.18 new text begin (2) except as otherwise prohibited in the plan, by the same consent as was required new text end 69.19 new text begin to approve the plan. new text end 69.20    Sec. 82. new text begin [322C.1013] FILINGS REQUIRED FOR DOMESTICATION; new text end 69.21 new text begin EFFECTIVE DATE. new text end 69.22     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, new text end 69.23 new text begin a domesticating company shall file with the secretary of state articles of domestication, new text end 69.24 new text begin together with a total fee of $60, which articles of domestication must include: new text end 69.25 new text begin (1) a statement, as the case may be, that the company has been domesticated from or new text end 69.26 new text begin into another jurisdiction; new text end 69.27 new text begin (2) the name of the domesticating company and the jurisdiction of its governing new text end 69.28 new text begin statute; new text end 69.29 new text begin (3) the name of the domesticated company and the jurisdiction of its governing statute; new text end 69.30 new text begin (4) the date the domestication is effective under the governing statute of the new text end 69.31 new text begin domesticated company; new text end 69.32 new text begin (5) if the domesticating company was a limited liability company, a statement that new text end 69.33 new text begin the domestication was approved as required by this chapter; new text end 70.1 new text begin (6) if the domesticating company was a foreign limited liability company, a new text end 70.2 new text begin statement that the domestication was approved as required by the governing statute of new text end 70.3 new text begin the other jurisdiction; and new text end 70.4 new text begin (7) if the domesticated company was a foreign limited liability company not new text end 70.5 new text begin authorized to transact business in this state, the street address of an office that the secretary new text end 70.6 new text begin of state may use for the purposes of section 322C.1014, subdivision 2. new text end 70.7     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 70.8 new text begin (1) when the articles of organization takes effect, if the domesticated company is new text end 70.9 new text begin a limited liability company; and new text end 70.10 new text begin (2) according to the governing statute of the domesticated company, if the new text end 70.11 new text begin domesticated organization is a foreign limited liability company. new text end 70.12    Sec. 83. new text begin [322C.1014] EFFECT OF DOMESTICATION. new text end 70.13     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 new text end 70.14 new text begin effect: new text end 70.15 new text begin (1) the domesticated company is for all purposes the company that existed before new text end 70.16 new text begin the domestication; new text end 70.17 new text begin (2) all property owned by the domesticating company remains vested in the new text end 70.18 new text begin domesticated company; new text end 70.19 new text begin (3) all debts, obligations, or other liabilities of the domesticating company continue new text end 70.20 new text begin as debts, obligations, or other liabilities of the domesticated company; new text end 70.21 new text begin (4) an action or proceeding pending by or against a domesticating company may be new text end 70.22 new text begin continued as if the domestication had not occurred; new text end 70.23 new text begin (5) except as prohibited by other law, all of the rights, privileges, immunities, powers, new text end 70.24 new text begin and purposes of the domesticating company remain vested in the domesticated company; new text end 70.25 new text begin (6) except as otherwise provided in the plan of domestication, the terms and new text end 70.26 new text begin conditions of the plan of domestication take effect; and new text end 70.27 new text begin (7) except as otherwise agreed, the domestication does not dissolve a domesticating new text end 70.28 new text begin limited liability company for the purposes of sections 322C.0701 to 322C.0707. new text end 70.29     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 new text end 70.30 new text begin liability company consents to the jurisdiction of the courts of this state to enforce any new text end 70.31 new text begin debt, obligation, or other liability owed by the domesticating company if, before the new text end 70.32 new text begin domestication, the domesticating company was subject to suit in this state on the debt, new text end 70.33 new text begin obligation, or other liability. A domesticated company that is a foreign limited liability new text end 70.34 new text begin company and not authorized to transact business in this state appoints the secretary of state new text end 70.35 new text begin as its agent for service of process for purposes of enforcing a debt, obligation, or other new text end 71.1 new text begin liability under this subdivision. Service on the secretary of state under this subdivision new text end 71.2 new text begin must be made in the same manner and has the same consequences as in section 322C.0116, new text end 71.3 new text begin subdivisions 3 and 4. new text end 71.4     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 new text end 71.5 new text begin approved a plan of domestication under section 322C.1011 providing for the company to new text end 71.6 new text begin be domesticated in a foreign jurisdiction, a statement surrendering the company's articles new text end 71.7 new text begin of organization must be filed with the secretary of state setting forth: new text end 71.8 new text begin (1) the name of the company; new text end 71.9 new text begin (2) a statement that the articles of organization is being surrendered in connection new text end 71.10 new text begin with the domestication of the company in a foreign jurisdiction; new text end 71.11 new text begin (3) a statement that the domestication was approved as required by this chapter; and new text end 71.12 new text begin (4) the jurisdiction of formation of the domesticated foreign limited liability company. new text end 71.13    Sec. 84. new text begin [322C.1015] RESTRICTIONS ON APPROVAL OF MERGERS, new text end 71.14 new text begin EXCHANGES, CONVERSIONS, AND DOMESTICATIONS. new text end 71.15     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, new text end 71.16 new text begin converting, or domesticating limited liability company will have personal liability with new text end 71.17 new text begin respect to a surviving, constituent, converted, or domesticated organization, approval or new text end 71.18 new text begin amendment of a plan of merger, exchange, conversion, or domestication is ineffective new text end 71.19 new text begin without the consent of the member, unless: new text end 71.20 new text begin (1) the company's operating agreement provides for approval of a merger, exchange, new text end 71.21 new text begin conversion, or domestication with the consent of fewer than all the members; and new text end 71.22 new text begin (2) the member has consented to the provision of the operating agreement. new text end 71.23     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 new text end 71.24 new text begin merely by consenting to a provision of the operating agreement that permits the operating new text end 71.25 new text begin agreement to be amended with the consent of fewer than all the members. new text end 71.26    Sec. 85. new text begin [322C.1101] NONPROFIT LIMITED LIABILITY COMPANIES. new text end 71.27     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 new text end 71.28 new text begin company is a nonprofit limited liability company if it is organized under or governed by new text end 71.29 new text begin this chapter and its articles of organization state that it is a nonprofit limited liability new text end 71.30 new text begin company governed by this section. The status of a nonprofit limited liability company new text end 71.31 new text begin under this chapter is not determinative of its tax treatment. new text end 71.32     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 new text end 71.33 new text begin nonprofit limited liability company may not: new text end 72.1 new text begin (1) be formed for a purpose involving pecuniary gain to its members, other than to new text end 72.2 new text begin members that are nonprofit organizations or subdivisions, units, or agencies of the United new text end 72.3 new text begin States or a state or local government; or new text end 72.4 new text begin (2) pay dividends, make distributions, or pay other pecuniary remuneration, directly new text end 72.5 new text begin or indirectly, to its members, other than to members that are nonprofit organizations or new text end 72.6 new text begin subdivisions, units, or agencies of the United States or a state or local government. new text end 72.7     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 new text end 72.8 new text begin be a member of, or own any transferable interest in, a nonprofit limited liability company. new text end 72.9     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 72.10 new text begin (1) a nonprofit limited liability company may be organized under this chapter for new text end 72.11 new text begin any lawful purpose, unless another statute requires incorporation or organization for a new text end 72.12 new text begin purpose under a different law; and new text end 72.13 new text begin (2) a nonprofit limited liability company has a general purpose of engaging in any new text end 72.14 new text begin lawful activity unless otherwise limited in its articles of organization. new text end 72.15 new text begin (b) A nonprofit limited liability company engaging in conduct that is regulated by new text end 72.16 new text begin another statute is subject to the limitations of the other statute. new text end 72.17     new text begin Subd. 5. new text end new text begin Management; provisions of chapter 317A applicable to nonprofit new text end 72.18 new text begin limited liability companies. new text end new text begin (a) A nonprofit limited liability company must be new text end 72.19 new text begin board-managed. The business and affairs of a nonprofit limited liability company must be new text end 72.20 new text begin managed by or under the direction of a board of governors, which will have such powers new text end 72.21 new text begin as are usually exercised by the board of directors of a nonprofit corporation governed by new text end 72.22 new text begin chapter 317A. All governors will be entitled to vote and have equal rights and preferences new text end 72.23 new text begin except as otherwise provided in the articles of organization or operating agreement. The new text end 72.24 new text begin members of the first board may be named in the articles of organization, designated, or new text end 72.25 new text begin appointed pursuant to the articles of organization, or elected by the organizer. new text end 72.26 new text begin (b) A nonprofit limited liability company must have one or more natural persons new text end 72.27 new text begin acting as officers and exercising the functions of the offices of president and treasurer, new text end 72.28 new text begin however designated. The officers have such powers as are usually exercised by similar new text end 72.29 new text begin officers of a nonprofit corporation governed by chapter 317A. The board shall elect new text end 72.30 new text begin or appoint officers, except to the extent that the articles of organization or operating new text end 72.31 new text begin agreement provide that the members may elect or appoint officers. new text end 72.32 new text begin (c) Section 317A.161, subdivision 11, applies to a nonprofit limited liability new text end 72.33 new text begin company as if it were a nonprofit corporation governed by chapter 317A. Section new text end 72.34 new text begin 317A.251 applies to a governor of a nonprofit limited liability company as if the governor new text end 72.35 new text begin were a director of a nonprofit corporation, and section 322C.409 does not apply. new text end 73.1 new text begin (d) Section 317A.255 applies to, and with regard to, a governor of a nonprofit limited new text end 73.2 new text begin liability company as if the governor were a director of a nonprofit corporation. new text end 73.3 new text begin (e) Section 317A.257 applies to a person who serves without compensation as new text end 73.4 new text begin a governor of a nonprofit limited liability company, manager, member, or agent of a new text end 73.5 new text begin nonprofit limited liability company as if such person were serving without compensation new text end 73.6 new text begin as a director, officer, member, or agent of a nonprofit corporation. new text end 73.7 new text begin (f) Section 317A.671 regarding the diversion of certain assets applies to a nonprofit new text end 73.8 new text begin limited liability company as if it were a nonprofit corporation governed by chapter 317A. new text end 73.9 new text begin (g) Section 317A.735 regarding the distribution of assets on dissolution applies to new text end 73.10 new text begin a nonprofit limited liability company as if it were a nonprofit corporation governed by new text end 73.11 new text begin chapter 317A. new text end 73.12 new text begin (h) Section 317A.751 regarding judicial intervention applies to a nonprofit limited new text end 73.13 new text begin liability company as if it were a nonprofit corporation governed by chapter 317A. new text end 73.14     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 new text end 73.15 new text begin the same authority and powers with regard to a nonprofit limited liability company as the new text end 73.16 new text begin attorney general has with regard to a corporation governed by chapter 317A, including but new text end 73.17 new text begin not limited to sections 317A.811 and 317A.813. new text end 73.18MISCELLANEOUS PROVISIONS 73.19    Sec. 86. new text begin [322C.1201] UNIFORMITY OF APPLICATION AND new text end 73.20 new text begin CONSTRUCTION. new text end 73.21 new text begin In applying and construing this uniform act, consideration must be given to the need new text end 73.22 new text begin to promote uniformity of the law with respect to its subject matter among states that enact it. new text end 73.23    Sec. 87. new text begin [322C.1202] RELATION TO ELECTRONIC SIGNATURES IN new text end 73.24 new text begin GLOBAL AND NATIONAL COMMERCE ACT. new text end 73.25 new text begin This chapter modifies, limits, and supersedes the federal Electronic Signatures in new text end 73.26 new text begin Global and National Commerce Act, United States Code, title 15, section 7001 et seq., but new text end 73.27 new text begin does not modify, limit, or supersede section 101(c) of that act, United States Code, title 15, new text end 73.28 new text begin section 7001(c), or authorize electronic delivery of any of the notices described in section new text end 73.29 new text begin 103(b) of that act, United States Code, title 15, section 7003(b). new text end 73.30    Sec. 88. new text begin [322C.1203] SAVINGS CLAUSE. new text end 73.31 new text begin This chapter does not affect an action commenced, proceeding brought, or right new text end 73.32 new text begin accrued before this chapter takes effect. new text end 74.1    Sec. 89. new text begin [322C.1204] APPLICATION TO EXISTING RELATIONSHIPS. new text end 74.2     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 new text end 74.3 new text begin liability company may not be formed under chapter 322B. new text end 74.4 new text begin (b) Before January 1, 2018, this chapter governs only: new text end 74.5 new text begin (1) a limited liability company formed on or after August 1, 2015; and new text end 74.6 new text begin (2) except as otherwise provided in subdivision 3, a limited liability company new text end 74.7 new text begin formed before August 1, 2015, which elects, in the manner provided in its operating new text end 74.8 new text begin agreement or bylaw for amending the operating agreement, to be subject to this chapter. new text end 74.9     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 new text end 74.10 new text begin 3, on and after January 1, 2018, this chapter governs all limited liability companies. new text end 74.11     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 new text end 74.12 new text begin chapter to a limited liability company formed before August 1, 2015: new text end 74.13 new text begin (1) the company's articles of organization are deemed to be the company's articles new text end 74.14 new text begin of organization; and new text end 74.15 new text begin (2) for the purposes of applying section 322C.0102, subdivision 10, and subject new text end 74.16 new text begin to section 322C.0112, subdivision 4, language in the articles of organization, bylaws, new text end 74.17 new text begin operating agreement, and/or member control agreement of a limited liability company new text end 74.18 new text begin formed before August 1, 2015, that becomes subject to this chapter will operate as if new text end 74.19 new text begin that language were in the operating agreement of the limited liability company when it new text end 74.20 new text begin becomes subject to this chapter. new text end 74.21    Sec. 90. new text begin [322C.1205] STATE INTERESTED IN PROCEEDING. new text end 74.22 new text begin If it appears at any stage of a proceeding in a court in this state that the state is, or is new text end 74.23 new text begin likely to be, interested in the proceeding or that it is a matter of general public interest, new text end 74.24 new text begin the court shall order that a copy of the complaint or petition be served upon the attorney new text end 74.25 new text begin general in the same manner prescribed for serving a summons in a civil action. The new text end 74.26 new text begin attorney general shall intervene in a proceeding when the attorney general determines that new text end 74.27 new text begin the public interest requires it, whether or not the attorney general has been served. new text end 74.28    Sec. 91. new text begin REPEALER; EFFECTIVE DATE. new text end 74.29 new text begin Minnesota Statutes 2012, sections 322B.01; 322B.02; 322B.03, subdivisions 1, 2, 3, new text end 74.30 new text begin 6, 6a, 7, 8, 10, 11, 12, 13, 14, 15, 17, 17a, 17b, 18, 19, 19a, 20, 21, 22, 23, 24, 25, 26, 27, new text end 74.31 new text begin 28, 29, 30, 31, 31a, 32, 33, 34, 35, 36, 36a, 37, 38, 39, 40, 41, 41a, 42, 43, 44, 45, 45a, new text end 74.32 new text begin 46, 47, 48, 49, 50, and 51; 322B.04; 322B.10; 322B.105; 322B.11; 322B.115; 322B.12, new text end 74.33 new text begin subdivisions 1, 2, 3, 4, and 5; 322B.125; 322B.13; 322B.135; 322B.14; 322B.145; new text end 74.34 new text begin 322B.15; 322B.155; 322B.16; 322B.165; 322B.17; 322B.175; 322B.18; 322B.20; new text end 75.1 new text begin 322B.21; 322B.22; 322B.23; 322B.30; 322B.303; 322B.306; 322B.31; 322B.313; new text end 75.2 new text begin 322B.316; 322B.32; 322B.323; 322B.326; 322B.33; 322B.333; 322B.336; 322B.34; new text end 75.3 new text begin 322B.343; 322B.346; 322B.348; 322B.35; 322B.353; 322B.356; 322B.36; 322B.363, new text end 75.4 new text begin subdivisions 1, 2, 3, 4, 5, 6, and 7; 322B.366, subdivision 1; 322B.37; 322B.373; new text end 75.5 new text begin 322B.376; 322B.38; 322B.383; 322B.386; 322B.40; 322B.41; 322B.42; 322B.43; new text end 75.6 new text begin 322B.50; 322B.51; 322B.52; 322B.53; 322B.54; 322B.55; 322B.56; 322B.60; 322B.603; new text end 75.7 new text begin 322B.606; 322B.61; 322B.613; 322B.616; 322B.62; 322B.623; 322B.626; 322B.63; new text end 75.8 new text begin 322B.633; 322B.636; 322B.64; 322B.643; 322B.646; 322B.65; 322B.653; 322B.656; new text end 75.9 new text begin 322B.66; 322B.663; 322B.666; 322B.67; 322B.673; 322B.676; 322B.679; 322B.68; new text end 75.10 new text begin 322B.683; 322B.686; 322B.689; 322B.69; 322B.693; 322B.696; 322B.699; 322B.70; new text end 75.11 new text begin 322B.71; 322B.72; 322B.73; 322B.74; 322B.75; 322B.755; 322B.76; 322B.77; 322B.78; new text end 75.12 new text begin 322B.80; 322B.803; 322B.806; 322B.81; 322B.813; 322B.816, subdivisions 1, 2, 4, 5, and new text end 75.13 new text begin 6; 322B.82; 322B.823; 322B.826; 322B.83; 322B.833; 322B.836; 322B.84; 322B.843; new text end 75.14 new text begin 322B.846; 322B.85; 322B.853; 322B.856; 322B.86; 322B.863; 322B.866; 322B.87; new text end 75.15 new text begin 322B.873, subdivisions 1 and 4; 322B.876, subdivision 1; 322B.88; 322B.883; 322B.90; new text end 75.16 new text begin 322B.905; 322B.91, subdivisions 1 and 2; 322B.915; 322B.92; 322B.925; 322B.93; new text end 75.17 new text begin 322B.935; 322B.94; 322B.945; 322B.95; 322B.955; 322B.960, subdivisions 1, 4, and new text end 75.18 new text begin 5; and 322B.975, new text end new text begin are repealed effective January 1, 2018. new text end 75.19    Sec. 92. new text begin EFFECTIVE DATE. new text end 75.20 new text begin Except as otherwise provided, this article is effective August 1, 2015. new text end 75.21ARTICLE 2 75.22CONFORMING CHANGES 75.23    Section 1. Minnesota Statutes 2012, section 48A.03, subdivision 4, is amended to read: 75.24    Subd. 4. Requirements for consolidated new text begin or merged new text end companies. When two or 75.25more trust companies have been or are consolidated under sections 49.34 to 49.41, or, in 75.26the case of a limited liability company, new text begin that has been or is merged under new text end sections 322B.70 75.27to 322B.75 new text begin or 322C.1001 to 322C.1005 and 322C.1015 new text end , the capital of the consolidated 75.28 new text begin or merged new text end trust company is considered substituted for the capital of the several trust 75.29companies entering into the consolidation new text begin or merger new text end , and the aggregate of the securities 75.30of these trust companies on deposit with the commissioner of management and budget, 75.31according to this section, must be increased or diminished accordingly. 75.32    Sec. 2. Minnesota Statutes 2012, section 181.970, subdivision 2, is amended to read: 75.33    Subd. 2. Exception. Subdivision 1 does not apply to: 76.1(1) employees of the state or a municipality governed by section 3.736 or 466.07; 76.2(2) employees who are subject to a contract or other agreement governing 76.3indemnification rights; 76.4(3) employees and employers who are governed by indemnification provisions under 76.5section 302A.521, 317A.521, or 322B.699 new text begin , or 322C.0408 new text end , or similar laws of this state or 76.6another state specifically governing indemnification of employees of business or nonprofit 76.7corporations, limited liability companies, or other legal entities; or 76.8(4) indemnification rights for a particular liability specifically governed by other law. 76.9    Sec. 3. Minnesota Statutes 2012, section 270C.721, is amended to read: 76.10270C.721 REVOCATION OF CERTIFICATES OF AUTHORITY TO DO 76.11BUSINESS IN THIS STATE. 76.12When a foreign corporation authorized to do business in this state under chapter 76.13303, or a foreign limited liability company or partnership authorized to do business in 76.14this state under chapter 322B new text begin or 322C new text end , fails to comply with a law administered by the 76.15commissioner that imposes a tax, the commissioner may serve the secretary of state with 76.16a certified copy of an order finding such failure to comply. The secretary of state, upon 76.17receipt of the order, shall revoke the certificate of authority to do business in this state, 76.18and shall reinstate the certificate new text begin entity new text end under section 303.19 or new text begin ; new text end 322B.960, subdivision 6, new text begin ; new text end 76.19 new text begin or 322C.0706 new text end only when the corporation or limited liability company or partnership has 76.20obtained from the commissioner an order finding that the corporation or limited liability 76.21company or partnership is in compliance with such law. An order requiring revocation 76.22of a certificate shall not be issued unless the commissioner gives the corporation or 76.23limited liability company or partnership 30 days' written notice of the proposed order, 76.24specifying the violations of law, and affording an opportunity to request a contested case 76.25hearing under chapter 14. 76.26    Sec. 4. Minnesota Statutes 2012, section 273.124, subdivision 8, is amended to read: 76.27    Subd. 8. Homestead owned by or leased to family farm corporation, joint farm 76.28venture, limited liability company, or partnership. (a) Each family farm corporation; 76.29each joint family farm venture; and each limited liability company or partnership which 76.30operates a family farm; is entitled to class 1b under section 273.13, subdivision 22, 76.31paragraph (b), or class 2a assessment for one homestead occupied by a shareholder, 76.32member, or partner thereof who is residing on the land, and actively engaged in farming of 76.33the land owned by the family farm corporation, joint family farm venture, limited liability 76.34company, or partnership. Homestead treatment applies even if legal title to the property is 77.1in the name of the family farm corporation, joint family farm venture, limited liability 77.2company, or partnership, and not in the name of the person residing on it. 77.3"Family farm corporation," "family farm," and "partnership operating a family 77.4farm" have the meanings given in section 500.24, except that the number of allowable 77.5shareholders, members, or partners under this subdivision shall not exceed 12. "Limited 77.6liability company" has the meaning contained in sections 322B.03, subdivision 28, new text begin or new text end 77.7 new text begin 322C.0102, subdivision 12, new text end and 500.24, subdivision 2, paragraphs (l) and (m). "Joint 77.8family farm venture" means a cooperative agreement among two or more farm enterprises 77.9authorized to operate a family farm under section 500.24. 77.10(b) In addition to property specified in paragraph (a), any other residences owned 77.11by family farm corporations, joint family farm ventures, limited liability companies, 77.12or partnerships described in paragraph (a) which are located on agricultural land and 77.13occupied as homesteads by its shareholders, members, or partners who are actively 77.14engaged in farming on behalf of that corporation, joint farm venture, limited liability 77.15company, or partnership must also be assessed as class 2a property or as class 1b property 77.16under section 273.13. 77.17(c) Agricultural property that is owned by a member, partner, or shareholder of a 77.18family farm corporation or joint family farm venture, limited liability company operating 77.19a family farm, or by a partnership operating a family farm and leased to the family farm 77.20corporation, limited liability company, partnership, or joint farm venture, as defined in 77.21paragraph (a), is eligible for classification as class 1b or class 2a under section 273.13, if 77.22the owner is actually residing on the property, and is actually engaged in farming the land 77.23on behalf of that corporation, joint farm venture, limited liability company, or partnership. 77.24This paragraph applies without regard to any legal possession rights of the family farm 77.25corporation, joint family farm venture, limited liability company, or partnership under 77.26the lease. 77.27(d) Nonhomestead agricultural property that is owned by a family farm corporation, 77.28joint farm venture, limited liability company, or partnership; and located not farther than 77.29four townships or cities, or combination thereof, from agricultural land that is owned, and 77.30used for the purposes of a homestead by an individual who is a shareholder, member, 77.31or partner of the corporation, venture, company, or partnership; is entitled to receive 77.32the first tier homestead class rate on any remaining market value in the first homestead 77.33class tier that is in excess of the market value of the shareholder's, member's, or partner's 77.34class 2 agricultural homestead property, if the owner, or someone acting on the owner's 77.35behalf notifies the county assessor by July 1 that the property may be eligible under this 77.36paragraph for the current assessment year, for taxes payable in the following year. As used 78.1in this paragraph, "agricultural property" means property classified as 2a under section 78.2273.13 , along with any contiguous property classified as 2b under section 273.13, if the 78.3contiguous 2a and 2b properties are under the same ownership. 78.4    Sec. 5. Minnesota Statutes 2012, section 290.01, subdivision 3b, is amended to read: 78.5    Subd. 3b. Limited liability company. For purposes of this chapter and chapter 78.6289A, a limited liability company, including a nonprofit limited liability company under 78.7section , that is formed under either the laws of this state or under similar laws 78.8of another state, will be treated as an entity similar to its treatment for federal income 78.9tax purposes. 78.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2015. new text end 78.11    Sec. 6. Minnesota Statutes 2012, section 302A.011, is amended by adding a 78.12subdivision to read: 78.13     new text begin Subd. 67. new text end new text begin Converting corporation. new text end new text begin "Converting corporation" means a converting new text end 78.14 new text begin organization that is a corporation. new text end 78.15    Sec. 7. Minnesota Statutes 2012, section 302A.011, is amended by adding a 78.16subdivision to read: 78.17     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 78.18 new text begin (1) for a domestic or foreign general partnership, its partnership agreement; new text end 78.19 new text begin (2) for a limited partnership or foreign limited partnership, its certificate of limited new text end 78.20 new text begin partnership and partnership agreement; new text end 78.21 new text begin (3) for a domestic or foreign limited liability company, its certificate or articles new text end 78.22 new text begin of organization and operating agreement, or comparable documents as provided in its new text end 78.23 new text begin governing statute; new text end 78.24 new text begin (4) for a business trust, its agreement of trust and declaration of trust; new text end 78.25 new text begin (5) for a domestic or foreign corporation for profit, its articles of incorporation, new text end 78.26 new text begin bylaws, and other agreements among its shareholders that are authorized by its governing new text end 78.27 new text begin statute, or comparable documents as provided in its governing statute; and new text end 78.28 new text begin (6) for any other organization, the basic agreements or other documents that create new text end 78.29 new text begin the organization and determine its internal governance and the relations among the persons new text end 78.30 new text begin that own it, have an interest in it, or are members of it. new text end 78.31    Sec. 8. Minnesota Statutes 2012, section 302A.011, is amended by adding a 78.32subdivision to read: 79.1     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, new text end 79.2 new text begin obligation, or other liability of an organization that is imposed on a person that co-owns, new text end 79.3 new text begin has an interest in, or is a member of the organization. new text end 79.4 new text begin (1) by the governing statute solely by reason of the person co-owning, having an new text end 79.5 new text begin interest in, or being a member of the organization; or new text end 79.6 new text begin (2) by the organization's organizational documents under a provision of the governing new text end 79.7 new text begin statute authorizing those documents to make one or more specified persons liable for all or new text end 79.8 new text begin specified debts, obligations, or other liabilities of the organization solely by reason of the new text end 79.9 new text begin person or persons co-owning, having an interest in, or being a member of the organization. new text end 79.10    Sec. 9. Minnesota Statutes 2012, section 302A.115, subdivision 1, is amended to read: 79.11    Subdivision 1. Requirements; prohibitions. The corporate name: 79.12(a) Shall be in the English language or in any other language expressed in English 79.13letters or characters; 79.14(b) Shall contain the word "corporation," "incorporated," or "limited," or shall 79.15contain an abbreviation of one or more of these words, or the word "company" or the 79.16abbreviation "Co." if that word or abbreviation is not immediately preceded by the word 79.17"and" or the character "&"; 79.18(c) Shall not contain a word or phrase that indicates or implies that it is incorporated 79.19for a purpose other than a legal business purpose; 79.20(d) Shall be distinguishable upon the records in the Office of the Secretary of 79.21State from the name of each domestic corporation, limited partnership, limited liability 79.22partnership, and limited liability company, whether profit or nonprofit, and each foreign 79.23corporation, limited partnership, limited liability partnership, and limited liability company 79.24on file, authorized or registered to do business in this state at the time of filing, whether 79.25profit or nonprofit, and each name the right to which is, at the time of incorporation, 79.26reserved as provided for in sections 5.35, 302A.117, 321.0109, 322B.125 new text begin , 322C.0109 new text end , or 79.27333.001 to 333.54, unless there is filed with the articles one of the following: 79.28(1) The written consent of the domestic corporation, limited partnership, limited 79.29liability partnership, or limited liability company, or the foreign corporation, limited 79.30partnership, limited liability partnership, or limited liability company authorized or 79.31registered to do business in this state or the holder of a reserved name or a name filed by 79.32or registered with the secretary of state under sections 333.001 to 333.54 having a name 79.33that is not distinguishable; 79.34(2) A certified copy of a final decree of a court in this state establishing the prior 79.35right of the applicant to the use of the name in this state; or 80.1(3) The applicant's affidavit that the domestic or foreign corporation, limited 80.2partnership, or limited liability company with the name that is not distinguishable has 80.3been incorporated or on file in this state for at least three years prior to the affidavit, if it 80.4is a domestic corporation, limited partnership, or limited liability company, or has been 80.5authorized or registered to do business in this state for at least three years prior to the 80.6affidavit, if it is a foreign corporation, limited partnership, or limited liability company, 80.7or that the holder of a name filed or registered with the secretary of state under sections 80.8333.001 to 333.54 filed or registered that name at least three years prior to the affidavit; 80.9that the domestic or foreign corporation, limited partnership, or limited liability company 80.10or holder has not during the three-year period before the affidavit filed any document with 80.11the secretary of state; that the applicant has mailed written notice to the domestic or 80.12foreign corporation, limited partnership, or limited liability company or the holder of a 80.13name filed or registered with the secretary of state under sections 333.001 to 333.54 by 80.14certified mail, return receipt requested, properly addressed to the registered office of the 80.15domestic or foreign corporation or limited liability company or in care of the agent of the 80.16limited partnership, or the address of the holder of a name filed or registered with the 80.17secretary of state under sections 333.001 to 333.54, shown in the records of the secretary 80.18of state, stating that the applicant intends to use a name that is not distinguishable and the 80.19notice has been returned to the applicant as undeliverable to the addressee domestic or 80.20foreign corporation, limited partnership, limited liability company, or holder of a name 80.21filed or registered with the secretary of state under sections 333.001 to 333.54; that the 80.22applicant, after diligent inquiry, has been unable to find any telephone listing for the 80.23domestic or foreign corporation, limited partnership, or limited liability company with 80.24the name that is not distinguishable in the county in which is located the registered office 80.25of the domestic or foreign corporation, limited partnership, or limited liability company 80.26shown in the records of the secretary of state or has been unable to find any telephone 80.27listing for the holder of a name filed or registered with the secretary of state under sections 80.28333.001 to 333.54 in the county in which is located the address of the holder shown in 80.29the records of the secretary of state; and that the applicant has no knowledge that the 80.30domestic or foreign corporation, limited partnership, limited liability company, or holder 80.31of a name filed or registered with the secretary of state under sections 333.001 to 333.54 is 80.32currently engaged in business in this state. 80.33    Sec. 10. Minnesota Statutes 2012, section 302A.681, is amended to read: 80.34302A.681 CONVERSION OF CORPORATIONS AND LIMITED LIABILITY 80.35COMPANIES. 81.1    Subdivision 1. Conversions authorized new text begin Authorization new text end . A corporation may 81.2become a domestic limited liability company, and a domestic limited liability company 81.3may become a new text begin An organization, other than a corporation, a foreign corporation, a nonprofit new text end 81.4 new text begin corporation, or an organization owning assets irrevocably dedicated to a charitable new text end 81.5 new text begin purpose, may convert to a corporation, and a corporation may convert to an organization new text end 81.6 new text begin other than a foreign new text end corporation, in each case pursuant to a plan of conversion. new text begin approved new text end 81.7 new text begin in the manner provided in sections 302A.681 to 302A.692, if: new text end 81.8 new text begin (1) the other organization's governing statute authorizes the conversion; and new text end 81.9 new text begin (2) the other organization complies with its governing statute and organizational new text end 81.10 new text begin documents in effecting the conversion. new text end 81.11    Subd. 2. Certain definitions. (a) For purposes of sections to , 81.12the words, terms, and phrases in paragraphs (b) to (h) have the meanings given them. 81.13(b) "Articles of organization" has the same meaning as it does under section 81.14322B.03, subdivision 6. 81.15(c) "Board of governors" has the same meaning as it does under section 322B.03, 81.16subdivision 7 . 81.17(d) "Class," when used with reference to membership interests, has the same 81.18meaning as it does under section 322B.03, subdivision 10. 81.19(e) "Governor" has the same meaning as it does under section 322B.03, subdivision 81.2024 . 81.21(f) "Member" has the same meaning as it does under section 322B.03, subdivision 30. 81.22(g) "Membership interest" has the same meaning as it does under section 322B.03, 81.23subdivision 31 . 81.24(h) "Series," when used with reference to membership interests, has the same 81.25meaning as it does under section 322B.03, subdivision 44. 81.26    Sec. 11. Minnesota Statutes 2012, section 302A.683, is amended to read: 81.27302A.683 PLAN OF CONVERSION. 81.28A plan of conversion must contain: 81.29(1) the name new text begin , form, and jurisdiction of the governing statute new text end of the converting 81.30organization new text begin before conversion new text end ; 81.31(2) the name new text begin , form, and jurisdiction of the governing statute new text end of the converted 81.32organization new text begin after conversion new text end ; 81.33(3) whether the converted organization is a corporation or a limited liability company; 81.34(4) the terms and conditions of the proposed conversion; new text begin , new text end 82.1(5) new text begin including new text end the manner and basis of new text begin for new text end converting each ownership interest in the 82.2converting organization into ownership interests in the converted new text begin converting new text end organization 82.3or, in whole or in part, into money or other property; new text begin into any combination of money, new text end 82.4 new text begin interests in the converted organization, and other consideration; new text end 82.5(6) a copy of the proposed articles of incorporation or articles of organization new text begin (4) the new text end 82.6 new text begin organizational documents new text end of the converted organization; and 82.7(7) new text begin (5) new text end any other provisions with respect to the proposed conversion that are deemed 82.8necessary or desirable. 82.9    Sec. 12. Minnesota Statutes 2012, section 302A.685, is amended to read: 82.10302A.685 PLAN APPROVAL new text begin ACTION ON PLAN OF CONVERSION BY new text end 82.11 new text begin CONVERTING CORPORATION new text end . 82.12    Subdivision 1. Board approval; notice to owners. A new text begin If the converting organization new text end 82.13 new text begin is a corporation, a new text end resolution containing the plan of conversion must be approved by the 82.14affirmative vote of a majority of the directors or governors present at a meeting of the 82.15 new text begin converting corporation's new text end board of directors or the board of governors of the converting 82.16organization and must then be submitted at a regular or a special meeting to the owners 82.17 of the converting organization new text begin corporation's shareholders new text end . Written notice must be given 82.18to every owner new text begin shareholder new text end of the converting organization new text begin corporation new text end , whether or not 82.19entitled to vote at the meeting, not less than 14 days nor more than 60 days before 82.20the meeting, in the manner provided in section 302A.435 for notice of a meeting of 82.21shareholders or in the manner provided in section for notice of a meeting of 82.22members. The written notice must state that a purpose of the meeting is to consider the 82.23proposed plan of conversion. A copy or short description of the plan of conversion must 82.24be included in or enclosed with the notice. 82.25    Subd. 2. Approval by owners new text begin shareholders new text end . At the meeting, a vote of the owners 82.26 new text begin shareholders new text end must be taken on the proposed plan. The plan of conversion is adopted when 82.27approved by the affirmative vote of the holders of a majority of the voting power of all 82.28shares or membership interests entitled to vote. A class or series of shares or membership 82.29interests is entitled to vote as a class or series on the approval of the plan. 82.30    Sec. 13. new text begin [302A.6871] FILINGS REQUIRED BY CONVERTING new text end 82.31 new text begin CORPORATION. new text end 82.32 new text begin After a plan of conversion is approved by a converting corporation, the converting new text end 82.33 new text begin corporation must cause articles of conversion to be filed with the secretary of state. The new text end 83.1 new text begin articles of conversion must be signed on behalf of the converting corporation and must new text end 83.2 new text begin include: new text end 83.3 new text begin (1) the plan of conversion; new text end 83.4 new text begin (2) a statement that the converting corporation has been converted into the converted new text end 83.5 new text begin organization; new text end 83.6 new text begin (3) the name and form of the converted organization and the jurisdiction of its new text end 83.7 new text begin governing statute; new text end 83.8 new text begin (4) a statement that the conversion was approved as required by this chapter; new text end 83.9 new text begin (5) a statement that the conversion was approved as required by the governing new text end 83.10 new text begin statute of the converted organization; and new text end 83.11 new text begin (6) if the converted organization is a foreign organization not authorized to transact new text end 83.12 new text begin business in this state, the street address of an office which the secretary of state may use new text end 83.13 new text begin for the purposes of section 302A.691, subdivision 3. new text end 83.14    Sec. 14. new text begin [302A.688] FILINGS REQUIRED WHEN CORPORATION IS new text end 83.15 new text begin CONVERTED ORGANIZATION. new text end 83.16 new text begin If the converting organization is not a corporation, the converting organization new text end 83.17 new text begin must cause articles of conversion to be filed with the secretary of state. The articles of new text end 83.18 new text begin conversion must be signed on behalf of the converting organization and must include, in new text end 83.19 new text begin addition to the information required by section 302A.111, subdivision 1: new text end 83.20 new text begin (1) the plan of conversion; new text end 83.21 new text begin (2) a statement that the converted organization has been converted from the new text end 83.22 new text begin converting organization; new text end 83.23 new text begin (3) the name and form of the converting organization and the jurisdiction of its new text end 83.24 new text begin governing statute; and new text end 83.25 new text begin (4) a statement that the conversion was approved as required by the governing new text end 83.26 new text begin statute of the converting organization. new text end 83.27    Sec. 15. Minnesota Statutes 2012, section 302A.689, is amended to read: 83.28302A.689 ABANDONMENT OF CONVERSION. 83.29    Subdivision 1. By shareholders or plan. After a plan of conversion has been 83.30approved by the owners new text begin shareholders new text end entitled to vote on the approval of the plan as 83.31provided in section 302A.685, and before the effective date of the plan, it may be 83.32abandoned new text begin by a converting corporation new text end : 83.33(1) if the owners of the converting organization new text begin shareholders new text end entitled to vote on the 83.34approval of the plan as provided in section 302A.685 have approved the abandonment at a 84.1meeting by the affirmative vote of the holders of a majority of the voting power of the 84.2shares or membership interests entitled to vote; 84.3(2) if the plan itself provides for abandonment and all conditions for abandonment 84.4set forth in the plan are met; or 84.5(3) pursuant to subdivision 2. 84.6    Subd. 2. By board. A plan of conversion may be abandoned new text begin by a converting new text end 84.7 new text begin corporation new text end , before the effective date of the plan, by a resolution of the board of directors 84.8or the board of governors of the converting organization abandoning the plan of 84.9conversion new text begin corporation new text end approved by the affirmative vote of a majority of the directors or 84.10governors present. 84.11    Subd. 3. Filing of articles. If articles of conversion have been filed with the 84.12secretary of state, but have not yet become effective, the converting organization shall 84.13 new text begin corporation must new text end file with the secretary of state articles of abandonment that contain: 84.14(1) the name of the converting organization new text begin corporation new text end ; 84.15(2) the provision of this section under which the plan is abandoned; and 84.16(3) if the plan is abandoned under subdivision 2, the text of the resolution 84.17abandoning the plan. 84.18    Sec. 16. Minnesota Statutes 2012, section 302A.691, is amended to read: 84.19302A.691 EFFECTIVE DATE OR TIME OF CONVERSION; EFFECT. 84.20    Subdivision 1. Effective date or time. A conversion is effective when the articles 84.21of conversion are filed with the secretary of state or on a later date or at a later time 84.22specified in the articles of conversion. 84.23    Subd. 2. Effect on organization. (a) A converted organization is for all purposes the 84.24same organization as the converting organization, having been incorporated or new text begin , new text end organized new text begin , new text end 84.25 new text begin or formed new text end on the date that the converting organization was originally incorporated or new text begin , new text end 84.26 organized new text begin , or formed new text end . 84.27(b) When a conversion becomes effective: 84.28(1) if the converted organization is a corporation, the converted organization has 84.29all the rights, privileges, immunities, and powers, and is subject to all the duties and 84.30liabilities, of a corporation incorporated under this chapter; 84.31(2) if the converted organization is a limited liability company, the converted 84.32organization has all the rights, privileges, immunities, and powers, and is subject to all the 84.33duties and liabilities, of a limited liability company organized under chapter 322B; 84.34(3) all property owned by the converting organization remains vested in the 84.35converted organization; 85.1(4) new text begin (2) new text end all debts, liabilities, and other obligations of the converting organization 85.2continue as obligations of the converted organization; 85.3(5) new text begin (3) new text end an action or proceeding pending by or against the converting organization 85.4may be continued as if the conversion had not occurred; and 85.5(6) new text begin (4) new text end all rights, privileges, immunities, and powers of the converting organization 85.6remain vested in the converted organization. 85.7    Subd. 3. Effect on shareholders or members. new text begin Foreign organization. new text end When 85.8a conversion becomes effective, each share or membership interest in the converting 85.9organization is deemed to be converted into shares or membership interests in the converted 85.10organization or, in whole or in part, into money or other property to be received under the 85.11plan by the shareholders or the members, subject to any dissenters' rights under section 85.12, in the case of shareholders of the converting organization, or section , 85.13in the case of members of the converting organization. new text begin A converted organization that is a new text end 85.14 new text begin foreign organization consents to the jurisdiction of the courts of this state to enforce any new text end 85.15 new text begin debt, obligation, or other liability for which the converting corporation is liable if, before new text end 85.16 new text begin the conversion, the converting corporation was subject to suit in this state on the debt, new text end 85.17 new text begin obligation, or other liability. A converted organization that is a foreign organization and new text end 85.18 new text begin not authorized to transact business in this state appoints the secretary of state as its agent new text end 85.19 new text begin for service of process for purposes of enforcing a debt, obligation, or other liability under new text end 85.20 new text begin this subdivision. Service on the secretary of state under this subdivision must be made in new text end 85.21 new text begin the same manner and has the same consequences as in section 5.25, subdivisions 4 and 5. new text end 85.22    Sec. 17. new text begin [302A.692] RESTRICTIONS ON APPROVAL OF CONVERSIONS. new text end 85.23     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 new text end 85.24 new text begin corporation will have personal liability with respect to a converted organization, approval new text end 85.25 new text begin or amendment of a plan of conversion is ineffective without the consent of the shareholder, new text end 85.26 new text begin unless: new text end 85.27 new text begin (1) a shareholder control agreement of the converting corporation provides for new text end 85.28 new text begin approval of a conversion with the consent of fewer than all the members; and new text end 85.29 new text begin (2) the shareholder has consented to the provision of the shareholder control new text end 85.30 new text begin agreement. new text end 85.31     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 new text end 85.32 new text begin 1 merely by consenting to a provision of a shareholder control agreement that permits new text end 85.33 new text begin the shareholder control agreement to be amended with the consent of fewer than all new text end 85.34 new text begin shareholders. new text end 86.1    Sec. 18. Minnesota Statutes 2012, section 308A.121, subdivision 1, is amended to read: 86.2    Subdivision 1. Name. The name of a cooperative must distinguish the cooperative 86.3upon the records in the Office of the Secretary of State from the name of a domestic 86.4corporation, whether profit or nonprofit, or a limited partnership, or a foreign corporation 86.5or a limited partnership, whether profit or nonprofit, a limited liability company, whether 86.6domestic or foreign, a limited liability partnership, whether domestic or foreign, on file, 86.7authorized or registered to do business in this state at the time of filing or a name the 86.8right to which is, at the time of incorporation, reserved or provided for in sections 5.35, 86.9302A.117 , 317A.117, 321.0109, 322B.125 new text begin , 322C.0109 new text end , or 333.001 to 333.54. 86.10    Sec. 19. Minnesota Statutes 2012, section 308B.801, subdivision 1, is amended to read: 86.11    Subdivision 1. Authorization. Unless otherwise prohibited, cooperatives organized 86.12under the laws of this state, including cooperatives organized under this chapter or chapter 86.13308A, may merge or consolidate with each other, a Minnesota limited liability company 86.14under the provisions of section 322B.755 new text begin or sections 322C.1001 to 322C.1015 new text end , or 86.15other business entities organized under the laws of another state by complying with the 86.16provisions of this section and the law of the state where the surviving or new business 86.17entity will exist. A cooperative may not merge or consolidate with a business entity 86.18organized under the laws of this state, other than a cooperative organized under chapter 86.19308A, unless the law governing the business entity expressly authorizes merger or 86.20consolidation with a cooperative. This subdivision does not authorize a foreign business 86.21entity to do any act not authorized by the law governing the foreign business entity. 86.22    Sec. 20. Minnesota Statutes 2012, section 308B.801, subdivision 2, is amended to read: 86.23    Subd. 2. Plan. To initiate a merger or consolidation of a cooperative, a written plan 86.24of merger or consolidation shall be prepared by the board or by a committee selected by 86.25the board to prepare a plan. The plan shall state: 86.26(1) the names of the constituent domestic cooperatives, the name of any Minnesota 86.27limited liability company that is a party to the merger, to the extent authorized under 86.28section 322B.755 new text begin or sections 322C.1001 to 322C.1005 and 322C.1015 new text end , and any foreign 86.29business entities; 86.30(2) the name of the surviving or new domestic cooperative, Minnesota limited liability 86.31company as required by section 322B.755 new text begin or 322C.1002 new text end , or other foreign business entity; 86.32(3) the manner and basis of converting membership or ownership interests of the 86.33constituent domestic cooperatives, the surviving Minnesota limited liability company as 86.34provided in section 322B.755 new text begin or 322C.1002 new text end , or foreign business entities into membership 87.1or ownership interests in the surviving or new domestic cooperative, the surviving 87.2Minnesota limited liability company as authorized in section 322B.755 new text begin or 322C.1002 new text end , or 87.3foreign business entity; 87.4(4) the terms of the merger or consolidation; 87.5(5) the proposed effect of the consolidation or merger on the members and patron 87.6members of each constituent domestic cooperative; and 87.7(6) for a consolidation, the plan shall contain the articles of the entity or organizational 87.8documents to be filed with the state in which the entity is organized or, if the surviving 87.9organization is a Minnesota limited liability company, the articles of organization. 87.10    Sec. 21. Minnesota Statutes 2012, section 308B.801, subdivision 5, is amended to read: 87.11    Subd. 5. Effect of merger. For a merger that does not involve a Minnesota limited 87.12liability company, the following shall apply to the effect of a merger: 87.13(a) After the effective date, the domestic cooperative, Minnesota limited liability 87.14company, if party to the plan, and any foreign business entity that is a party to the plan 87.15become a single entity. For a merger, the surviving business entity is the business entity 87.16designated in the plan. For a consolidation, the new domestic cooperative, the Minnesota 87.17limited liability company, if any, and any foreign business entity is the business entity 87.18provided for in the plan. Except for the surviving or new domestic cooperative, Minnesota 87.19limited liability company, or foreign business entity, the separate existence of each merged 87.20or consolidated domestic or foreign business entity that is a party to the plan ceases on the 87.21effective date of the merger or consolidation. 87.22(b) The surviving or new domestic cooperative, Minnesota limited liability company, 87.23or foreign business entity possesses all of the rights and property of each of the merged 87.24or consolidated business entities and is responsible for all their obligations. The title 87.25to property of the merged or consolidated domestic cooperative or foreign business 87.26entity is vested in the surviving or new domestic cooperative, Minnesota limited liability 87.27company, or foreign business entity without reversion or impairment of the title caused 87.28by the merger or consolidation. 87.29(c) If a merger involves a Minnesota limited liability company, this subdivision is 87.30subject to the provisions of section 322B.755 new text begin or 322C.1002 new text end . 87.31    Sec. 22. Minnesota Statutes 2012, section 308B.805, subdivision 1, is amended to read: 87.32    Subdivision 1. When authorized; contents of plan. (a) For purposes of this section, 87.33"subsidiary" means a domestic cooperative, a Minnesota limited liability company, or 87.34a foreign cooperative, and "cooperative" means a domestic cooperative. A Minnesota 88.1limited liability company may only participate in a merger under this section to the extent 88.2authorized under section 322B.755 new text begin or 322C.1002 new text end . A parent domestic cooperative or a 88.3subsidiary that is a domestic cooperative may complete the merger of a subsidiary as 88.4provided in this section, provided however, if either the parent or the subsidiary is a business 88.5entity organized under the laws of this state, the merger of the subsidiary is not authorized 88.6under this section unless the law governing the business entity expressly authorizes merger 88.7with a cooperative. A parent cooperative owning at least 90 percent of the outstanding 88.8ownership interests of each class and series of a subsidiary directly, or indirectly through 88.9related organizations, other than classes or series that, absent this section, would otherwise 88.10not be entitled to vote on the merger, may merge the subsidiary into itself or into any other 88.11subsidiary at least 90 percent of the outstanding ownership interests of each class and 88.12series of which is owned by the parent cooperative directly, or indirectly through related 88.13organizations, other than classes or series that, absent this section, would otherwise not be 88.14entitled to vote on the merger, without a vote of the members of itself or any subsidiary or 88.15may merge itself, or itself and one or more of the subsidiaries, into one of the subsidiaries 88.16under this section. A resolution approved by the affirmative vote of a majority of the 88.17directors of the parent cooperative present shall set forth a plan of merger that contains: 88.18(1) the name of the subsidiary or subsidiaries, the name of the parent, and the name 88.19of the surviving cooperative; 88.20(2) the manner and basis of converting the membership interests of the subsidiary or 88.21subsidiaries or parent into securities of the parent, subsidiary, or of another cooperative 88.22or, in the whole or in part, into money or other property; 88.23(3) if the parent is a constituent cooperative but is not the surviving cooperative in 88.24the merger, a provision for the pro rata issuance of membership interests of the surviving 88.25cooperative to the holders of membership interests of the parent on surrender of any 88.26certificates for shares of the parent; and 88.27(4) if the surviving cooperative is a subsidiary, a statement of any amendments to the 88.28articles of the surviving cooperative that will be part of the merger. 88.29(b) If the parent is a constituent cooperative and the surviving cooperative in the 88.30merger, it may change its cooperative name, without a vote of its members, by the 88.31inclusion of a provision to that effect in the resolution of merger setting forth the plan of 88.32merger that is approved by the affirmative vote of a majority of the directors of the parent 88.33present. Upon the effective date of the merger, the name of the parent shall be changed. 88.34(c) If the parent is a constituent cooperative but is not the surviving cooperative in the 88.35merger, the resolution is not effective unless it is also approved by the affirmative vote of the 88.36holders of a majority of the voting power of all membership interests of the parent entitled 89.1to vote at a regular or special meeting if the parent is a cooperative, or in accordance with 89.2the laws under which it is organized if the parent is a foreign business entity or cooperative. 89.3    Sec. 23. Minnesota Statutes 2012, section 308B.835, subdivision 2, is amended to read: 89.4    Subd. 2. Generally. (a) A merger may be abandoned: 89.5(1) if the members of each of the constituent domestic cooperatives entitled to vote 89.6on the approval of the plan have approved the abandonment at a meeting by the affirmative 89.7vote of the holders of a majority of the voting power of the membership interests entitled 89.8to vote; if the merger is with a domestic cooperative and a Minnesota limited liability 89.9company or foreign business entity, if abandonment is approved in such manner as may be 89.10required by section 322B.755 new text begin or 322C.1003 new text end for the involvement of a Minnesota limited 89.11liability company, or for a foreign business entity by the laws of the state under which 89.12the foreign business entity is organized; and the members of a constituent domestic 89.13cooperative are not entitled to vote on the approval of the plan, the board of the constituent 89.14domestic cooperative has approved the abandonment by the affirmative vote of a majority 89.15of the directors present; 89.16(2) if the plan itself provides for abandonment and all conditions for abandonment 89.17set forth in the plan are met; or 89.18(3) under paragraph (b). 89.19(b) A plan of merger may be abandoned before the effective date of the plan by a 89.20resolution of the board of any constituent domestic cooperative abandoning the plan of 89.21merger approved by the affirmative vote of a majority of the directors present, subject 89.22to the contract rights of any other person under the plan. If a plan of merger is with a 89.23domestic or foreign business entity, the plan of merger may be abandoned before the 89.24effective date of the plan by a resolution of the foreign business entity adopted according 89.25to the laws of the state under which the foreign business entity is organized, subject to 89.26the contract rights of any other person under the plan. If the plan of merger is with 89.27a Minnesota limited liability company, the plan of merger may be abandoned by the 89.28Minnesota limited liability company as provided in section 322B.755 new text begin or 322C.1003 new text end , 89.29subject to the contractual rights of any other person under the plan. 89.30(c) If articles of merger have been filed with the secretary of state, but have not 89.31yet become effective, the constituent organizations, in the case of abandonment under 89.32paragraph (a), clause (1), the constituent organizations or any one of them, in the case 89.33of abandonment under paragraph (a), clause (2), or the abandoning organization in the 89.34case of abandonment under paragraph (b), shall file with the secretary of state articles of 89.35abandonment that contain: 90.1(1) the names of the constituent organizations; 90.2(2) the provisions of this section under which the plan is abandoned; and 90.3(3) if the plan is abandoned under paragraph (b), the text of the resolution 90.4abandoning the plan. 90.5    Sec. 24. Minnesota Statutes 2012, section 317A.115, subdivision 2, is amended to read: 90.6    Subd. 2. Name must be distinguishable. (a) A corporate name must be 90.7distinguishable upon the records in the Office of the Secretary of State from the name of a 90.8domestic corporation or limited partnership, a foreign corporation or limited partnership, 90.9whether profit or nonprofit, a limited liability company, whether domestic or foreign, 90.10on file, authorized to do business in this state at the time of filing, a limited liability 90.11partnership, whether domestic or foreign, or a name the right to which is, at the time of 90.12incorporation, reserved, registered, or provided for in section 5.35, 317A.117, 302A.117, 90.13321.0109 , 322B.125 new text begin or 322C.0109 new text end , or sections 333.001 to 333.54, unless one of the 90.14following is filed with the articles: 90.15(1) the written consent of the organization having the name that is not distinguishable; 90.16(2) a certified copy of a final decree of a court in this state establishing the prior right 90.17of the applicant to use its corporate name in this state; or 90.18(3) an affidavit of nonuse of the kind required by section 302A.115, subdivision 1, 90.19paragraph (d), clause (3). 90.20(b) The secretary of state shall determine whether a name is distinguishable from 90.21another name for purposes of this section and section 317A.117. 90.22(c) This subdivision does not affect the right of a corporation existing on January 90.231, 1991, or a foreign corporation authorized to do business in this state on that date, to 90.24use its corporate name. 90.25    Sec. 25. Minnesota Statutes 2012, section 319B.02, subdivision 3, is amended to read: 90.26    Subd. 3. Certificate of authority. "Certificate of authority" means: 90.27(1) with respect to a foreign firm that is a corporation, the certificate of authority 90.28required under sections 303.01 to 303.24 and any notice filed under section 303.115 in 90.29connection with that certificate; and 90.30(2) with respect to a foreign firm that is a limited liability company, the certificate 90.31of authority required under new text begin referred to in new text end sections 322B.905 to 322B.955 new text begin or 322C.802 new text end 90.32 new text begin to 322C.804 new text end and any notice filed under section 322B.92, clause (3), in connection with 90.33that certificate. 91.1    Sec. 26. Minnesota Statutes 2012, section 319B.02, subdivision 22, is amended to read: 91.2    Subd. 22. Update. "Update" means: 91.3(1) with respect to a Minnesota professional firm that is either a Minnesota 91.4corporation or a Minnesota limited liability company, amend the organizational document; 91.5(2) with respect to a foreign professional firm that is a foreign corporation, file a notice 91.6under section 303.115 in connection with the foreign corporation's certificate of authority; 91.7(3) with respect to a foreign firm that is a limited liability company, file a notice 91.8under section , clause (3), in connection with the foreign limited liability 91.9company's new text begin an amended new text end certificate of authority; 91.10(4) with respect to a Minnesota professional firm that is a limited liability partnership 91.11and has an effective statement of qualification under section 323A.1001, amend that 91.12statement of qualification; and 91.13(5) with respect to a foreign professional firm that is a limited liability partnership 91.14and has an effective statement of foreign qualification under section 323A.1102, amend 91.15that statement of foreign qualification. 91.16    Sec. 27. Minnesota Statutes 2012, section 319B.10, subdivision 3, is amended to read: 91.17    Subd. 3. Filings with secretary of state. (a) For a Minnesota professional firm 91.18involved in a merger, the document filed with the secretary of state to effectuate the 91.19merger must state whether that Minnesota professional firm will survive the merger, and 91.20if so, whether that Minnesota professional firm will remain a Minnesota professional 91.21firm once the merger takes effect. 91.22(b) For a foreign professional firm involved in a merger, the certificate filed with the 91.23secretary of state under section 303.11 or new text begin , new text end 322B.92 new text begin , or 322C.1004 new text end must be accompanied 91.24by a statement as to whether that foreign firm will survive the merger, and if so, whether 91.25that foreign professional firm will remain a foreign professional firm once the merger 91.26takes effect. 91.27    Sec. 28. Minnesota Statutes 2012, section 321.0108, is amended to read: 91.28321.0108 NAME. 91.29(a) The name of a limited partnership may contain the name of any partner. 91.30(b) The name of a limited partnership that is not a limited liability limited partnership 91.31must contain the phrase "limited partnership" or the abbreviation "L.P." or "LP" and may 91.32not contain the phrase "limited liability limited partnership" or the abbreviation "LLLP" 91.33or "L.L.L.P." 92.1(c) Except as provided in section 321.1206(e)(1), the name of a limited liability 92.2limited partnership must contain the phrase "limited liability limited partnership" or the 92.3abbreviation "LLLP" or "L.L.L.P." and must not otherwise contain the abbreviation 92.4"L.P." or "LP." 92.5(d) The limited partnership name shall not contain a word or phrase that indicates or 92.6implies that it is formed for a purpose other than a legal purpose. 92.7(e) The limited partnership name shall be distinguishable upon the records in the 92.8Office of the Secretary of State from the name of each domestic corporation, limited 92.9partnership, limited liability partnership, and limited liability company, whether profit or 92.10nonprofit, and each foreign corporation, limited partnership, limited liability partnership, 92.11and limited liability company on file, authorized or registered to do business in this state 92.12at the time of filing, whether profit or nonprofit, and each name the right to which is, at 92.13the time of formation, reserved as provided for in sections 5.35, 302A.117, 322A.03, 92.14322B.125 new text begin , 322C.0109 new text end , or 333.001 to 333.54, unless there is filed with the certificate of 92.15limited partnership one of the following: 92.16(1) the written consent of the domestic corporation, limited partnership, limited 92.17liability partnership, or limited liability company, or the foreign corporation, limited 92.18partnership, limited liability partnership, or limited liability company authorized or 92.19registered to do business in this state or the holder of a reserved name or a name filed by 92.20or registered with the secretary of state under sections 333.001 to 333.54 having a name 92.21that is not distinguishable; 92.22(2) a certified copy of a final decree of a court in this state establishing the prior right 92.23of the applicant to the use of the name in this state; or 92.24(3) the applicant's affidavit that the corporation, limited partnership, or limited 92.25liability company with the name that is not distinguishable has been incorporated or on file 92.26in this state for at least three years prior to the affidavit, if it is a domestic corporation, 92.27limited partnership, or limited liability company, or has been authorized or registered to 92.28do business in this state for at least three years prior to the affidavit, if it is a foreign 92.29corporation, limited partnership, or limited liability company, or that the holder of a name 92.30filed or registered with the secretary of state under sections 333.001 to 333.54 filed or 92.31registered that name at least three years prior to the affidavit; that the corporation, limited 92.32partnership, or limited liability company or holder has not during the three-year period 92.33before the affidavit filed any document with the secretary of state; that the applicant has 92.34mailed written notice to the corporation, limited partnership, or limited liability company 92.35or the holder of a name filed or registered with the secretary of state under sections 92.36333.001 to 333.54 by certified mail, return receipt requested, properly addressed to the 93.1registered office of the corporation or limited liability company or in care of the agent of 93.2the limited partnership, or the address of the holder of a name filed or registered with the 93.3secretary of state under sections 333.001 to 333.54, shown in the records of the secretary 93.4of state, stating that the applicant intends to use a name that is not distinguishable and the 93.5notice has been returned to the applicant as undeliverable to the addressee corporation, 93.6limited partnership, limited liability company, or holder of a name filed or registered 93.7with the secretary of state under sections 333.001 to 333.54; that the applicant, after 93.8diligent inquiry, has been unable to find any telephone listing for the corporation, limited 93.9partnership, or limited liability company with the name that is not distinguishable in the 93.10county in which is located the registered office of the corporation, limited partnership, or 93.11limited liability company shown in the records of the secretary of state or has been unable 93.12to find any telephone listing for the holder of a name filed or registered with the secretary 93.13of state under sections 333.001 to 333.54 in the county in which is located the address 93.14of the holder shown in the records of the secretary of state; and that the applicant has no 93.15knowledge that the corporation, limited partnership, limited liability company, or holder 93.16of a name filed or registered with the secretary of state under sections 333.001 to 333.54 is 93.17currently engaged in business in this state. 93.18(f) The secretary of state shall determine whether a name is distinguishable from 93.19another name for purposes of this section and section 321.0109. 93.20(g) This section and section 321.0109 do not abrogate or limit the law of unfair 93.21competition or unfair practices; nor sections 333.001 to 333.54; nor the laws of the United 93.22States with respect to the right to acquire and protect copyrights, trade names, trademarks, 93.23service names, service marks, or any other rights to the exclusive use of names or symbols; 93.24nor derogate the common law or the principles of equity. 93.25(h) A limited partnership that is the surviving organization in a merger with one 93.26or more other organizations, or that is formed by the reorganization of one or more 93.27organizations, or that acquires by sale, lease, or other disposition to or exchange with an 93.28organization all or substantially all of the assets of another organization, including its 93.29name, may have the same name as that used in this state by any of the other organizations, 93.30if the other organization whose name is sought to be used was organized under the laws 93.31of, or is authorized to transact business in, this state. 93.32(i) The use of a name by a limited partnership in violation of this section does not 93.33affect or vitiate its existence, but a court in this state may, upon application of the state or 93.34of a person interested or affected, enjoin the limited partnership from doing business under 93.35a name assumed in violation of this section, although its certificate of limited partnership 93.36may have been filed with the secretary of state and a certificate of formation issued. 94.1    Sec. 29. new text begin REVISOR'S INSTRUCTION. new text end 94.2 new text begin The revisor of statutes shall remove the references to sections of Minnesota Statutes, new text end 94.3 new text begin chapter 322B, in the sections amended in this article and elsewhere in Minnesota Statutes new text end 94.4 new text begin and make any necessary related changes. new text end 94.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2018. new text end 94.6    Sec. 30. new text begin REPEALER. new text end 94.7 new text begin Minnesota Statutes 2012, section 302A.687, new text end new text begin is repealed. new text end 94.8    Sec. 31. new text begin EFFECTIVE DATE. new text end 94.9 new text begin Except as otherwise provided, this article is effective August 1, 2015. new text end