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HF 3076

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 1st Engrossment

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A bill for an act
relating to business organizations; regulating business corporations; clarifying
terms; updating terminology to include new forms of business activity; including
references to limited liability companies and their governance attributes where
appropriate; regulating limited liability companies; clarifying terms; amending
Minnesota Statutes 2004, sections 302A.011, subdivisions 7, 8, 12, 21, 25,
28, 31, 41, 45, 46, 58, by adding subdivisions; 302A.111, subdivision 3, by
adding a subdivision; 302A.115, subdivisions 1, 5; 302A.135, by adding a
subdivision; 302A.241, by adding a subdivision; 302A.401, subdivision 3;
302A.417, subdivision 7; 302A.441, subdivision 1; 302A.447, subdivision 1;
302A.461, subdivision 2; 302A.471, subdivisions 1, 3, 4; 302A.553, subdivision
1; 302A.601, subdivisions 1, 2; 302A.611, subdivision 1; 302A.613, subdivisions
1, 2; 302A.621, subdivisions 1, 2, 3, 5, 6, by adding a subdivision; 302A.626,
subdivision 1; 302A.661, subdivisions 1, 4; 322B.03, subdivisions 6, 12, 19a, 20,
23, 28, 36a, 45a; 322B.115, subdivision 3, by adding a subdivision; 322B.12,
subdivision 1; 322B.15, by adding a subdivision; 322B.23; 322B.31, subdivision
2; 322B.35, subdivision 1; 322B.63, subdivision 1; 322B.66, by adding a
subdivision; 322B.686, subdivision 2; 322B.70, subdivisions 1, 2; 322B.71,
subdivision 1; 322B.72; 322B.74; 322B.75, subdivisions 2, 3; 322B.755,
subdivision 3; 322B.76; 322B.77, subdivisions 1, 4; 322B.80, subdivision
1; Minnesota Statutes 2005 Supplement, sections 302A.011, subdivision 4;
322B.02; proposing coding for new law in Minnesota Statutes, chapters 302A;
322B; repealing Minnesota Statutes 2004, section 302A.011, subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

BUSINESS CORPORATIONS

Section 1.

Minnesota Statutes 2005 Supplement, section 302A.011, subdivision 4,
is amended to read:


Subd. 4.

Articles.

"Articles" means, in the case of a corporation incorporated under
or governed by this chapter, articles of incorporation, articles of amendment, a resolution
of election to become governed by this chapter, a demand retaining the two-thirds majority
for shareholder approval of certain transactions, a statement of change of registered office,
registered agent, or name of registered agent, a statement establishing or fixing the rights
and preferences of a class or series of shares, a statement of cancellation of authorized
shares, articles of merger, new text beginarticles of conversion, new text endarticles of abandonment, and articles of
dissolution. In the case of a foreign corporation, the term includes all documents serving a
similar function required to be filed with the secretary of state or other officer of the
new text begin foreign new text endcorporation's state of incorporation. In the case of a corporation formed under
chapter 300, the term means the certificate of incorporation.

Sec. 2.

Minnesota Statutes 2004, section 302A.011, subdivision 7, is amended to read:


Subd. 7.

Constituent corporation.

"Constituent corporation" means a corporation
or a foreign corporation that:

(1) in a merger is either the surviving corporation or a new text begindomestic or foreign
new text end corporation that is merged into the surviving organization; or

(2) in an exchange is either the acquiring deleted text begincorporationdeleted text endnew text begin organization new text end or a corporation
whose shares are acquired by the acquiring organization.

Sec. 3.

Minnesota Statutes 2004, section 302A.011, subdivision 8, is amended to read:


Subd. 8.

Corporationnew text begin; domestic corporationnew text end.

"Corporation" new text beginor "domestic
corporation"
new text endmeans a corporation, other than a foreign corporation, organized for profit
and incorporated under or governed by this chapter.

Sec. 4.

Minnesota Statutes 2004, section 302A.011, subdivision 12, is amended to read:


Subd. 12.

Foreign corporation.

"Foreign corporation" means deleted text begina corporationdeleted text endnew text begin an
organization
new text end organized for profit that is incorporated under laws other than the laws of
this state for a purpose or purposes for which a corporation may be incorporated under
this chapter.

Sec. 5.

Minnesota Statutes 2004, section 302A.011, subdivision 21, is amended to read:


Subd. 21.

Parent.

"Parent" of a specified corporation means deleted text begina corporation
or a foreign corporation
deleted text endnew text begin an organization new text end that directly, or indirectly through related
organizations, owns more than 50 percent of the voting power of the shares new text beginor other
ownership interests
new text endentitled to vote for directors new text begin or other members of the governing body
new text end of the specified deleted text begincorporationdeleted text endnew text begin organizationnew text end.

Sec. 6.

Minnesota Statutes 2004, section 302A.011, subdivision 25, is amended to read:


Subd. 25.

Related organization.

"Related organization" of a specified corporation
means:

(1) a parent or subsidiary of the specified corporation;

(2) another subsidiary of a parent of the specified corporation;

(3) a limited liability company owning, directly or indirectly, more than 50 percent
of the voting power of the shares entitled to vote for directors of the specified corporation;

(4) a limited liability company having more than 50 percent of the voting power of
its membership interests entitled to vote for deleted text begingovernorsdeleted text endnew text begin members of its governing body
new text end owned directly or indirectly by the specified corporation;

(5) a limited liability company having more than 50 percent of the voting power of
its membership interests entitled to vote for deleted text begingovernorsdeleted text endnew text begin members of its governing body
new text end owned directly or indirectly either (i) by a parent of the specified corporation or (ii) a
limited liability company owning, directly or indirectly, more than 50 percent of the voting
power of the shares entitled to vote for directors of the specified corporation; or

(6) a corporation having more than 50 percent of the voting power of its shares
entitled to vote for deleted text begindirectordeleted text endnew text begin directors new text end owned directly or indirectly by a limited liability
company owning, directly or indirectly, more than 50 percent of the voting power of the
shares entitled to vote for directors of the specified corporation.

Sec. 7.

Minnesota Statutes 2004, section 302A.011, subdivision 28, is amended to read:


Subd. 28.

Share.

"Share" means one of the units, however designated, into which
the shareholders' deleted text beginproprietarydeleted text endnew text begin ownership new text end interests in a corporation are divided.

Sec. 8.

Minnesota Statutes 2004, section 302A.011, subdivision 31, is amended to read:


Subd. 31.

Subsidiary.

"Subsidiary" of a specified deleted text begincorporationdeleted text endnew text begin organization new text end means
deleted text begin a corporation or a foreign corporationdeleted text endnew text begin an organization new text end having more than 50 percent of
the voting power of its shares new text beginor other ownership interests new text endentitled to vote for directors
new text begin or other members of the governing body of the organization new text endowned directly, or indirectly
through related organizations, by the specified deleted text begincorporationdeleted text endnew text begin organizationnew text end.

Sec. 9.

Minnesota Statutes 2004, section 302A.011, subdivision 41, is amended to read:


Subd. 41.

Beneficial owner; beneficial ownership.

(a) "Beneficial owner,"
when used with respect to shares or other securities, includes, but is not limited to, any
person who, directly or indirectly through any written or oral agreement, arrangement,
relationship, understanding, or otherwise, has or shares the power to vote, or direct the
voting of, the shares or securities or has or shares the power to dispose of, or direct the
disposition of, the shares or securities, except that:

(1) a person shall not be deemed the beneficial owner of shares or securities tendered
pursuant to a tender or exchange offer made by the person or any of the person's affiliates
or associates until the tendered shares or securities are accepted for purchase or exchange;
and

(2) a person shall not be deemed the beneficial owner of shares or securities with
respect to which the person has the power to vote or direct the voting arising solely from a
revocable proxy given in response to a proxy solicitation required to be made and made in
accordance with the applicable rules and regulations under the Securities Exchange Act of
1934 and is not then reportable under that act on a Schedule 13D or comparable report, or,
if the corporation is not subject to the rules and regulations under the Securities Exchange
Act of 1934, would have been required to be made and would not have been reportable if
the corporation had been subject to the rules and regulations.

(b) "Beneficial ownership" includes, but is not limited to, the right to acquire shares
or securities through the exercise of options, warrants, or rights, or the conversion of
convertible securities, or otherwise. The shares or securities subject to the options,
warrants, rights, or conversion privileges held by a person shall be deemed to be
outstanding for the purpose of computing the percentage of outstanding shares or securities
of the class or series owned by the person, but shall not be deemed to be outstanding for
the purpose of computing the percentage of the class or series owned by any other person.
A person shall be deemed the beneficial owner of shares and securities beneficially owned
by any relative or spouse of the person or any relative of the spouse, residing in the home
of the person, any trust or estate in which the person owns ten percent or more of the
total beneficial interest or serves as trustee or executor or in a similar fiduciary capacity,
any deleted text begincorporation or entitydeleted text endnew text begin organization new text end in which the person owns ten percent or more of
the equity, and any affiliate of the person.

(c) When two or more persons act or agree to act as a partnership, limited
partnership, syndicate, or other group for the purposes of acquiring, owning, or voting
shares or other securities of a corporation, all members of the partnership, syndicate, or
other group are deemed to constitute a "person" and to have acquired beneficial ownership,
as of the date they first so act or agree to act together, of all shares or securities of the
corporation beneficially owned by the person.

Sec. 10.

Minnesota Statutes 2004, section 302A.011, subdivision 45, is amended to
read:


Subd. 45.

Associate.

"Associate," when used to indicate a relationship with any
person, means any of the following:

(1) any deleted text begincorporation ordeleted text end organization of which the person is an officer or partner or is,
directly or indirectly, the beneficial owner of ten percent or more of any class or series of
shares entitled to vote or other equity interest;

(2) any trust or estate in which the person has a substantial beneficial interest or as to
which the person serves as trustee or executor or in a similar fiduciary capacity;

(3) any relative or spouse of the person, or any relative of the spouse, residing in
the home of the person.

Sec. 11.

Minnesota Statutes 2004, section 302A.011, subdivision 46, is amended to
read:


Subd. 46.

Business combination.

"Business combination," when used in reference
to any issuing public corporation and any interested shareholder of the issuing public
corporation, means any of the following:

(a) any merger of the issuing public corporation or any subsidiary of the issuing
public corporation with (1) the interested shareholder or (2) any other deleted text begindomestic or foreign
corporation
deleted text endnew text begin organization new text end (whether or not itself an interested shareholder of the issuing
public corporation) that is, or after the merger would be, an affiliate or associate of the
interested shareholder, but excluding deleted text begin(1)deleted text endnew text begin(i)new text end the merger of a wholly-owned subsidiary of
the issuing public corporation into the issuing public corporation, deleted text begin(2)deleted text endnew text begin(ii)new text end the merger of
two or more wholly-owned subsidiaries of the issuing public corporation, or deleted text begin(3)deleted text endnew text begin(iii)new text end the
merger of deleted text begina corporationdeleted text endnew text begin an organizationnew text end, other than an interested shareholder or an affiliate
or associate of an interested shareholder, with a wholly-owned subsidiary of the issuing
public corporation pursuant to which the surviving deleted text begincorporationdeleted text endnew text begin organizationnew text end, immediately
after the merger, becomes a wholly-owned subsidiary of the issuing public corporation;

(b) any exchange, pursuant to a plan of exchange under section 302A.601,
subdivision 2
, or a comparable statute of any other state or jurisdiction, of shares or other
securities of the issuing public corporation or any subsidiary of the issuing corporation
or money, or other property for shares, other securities, money, or property of (1) the
interested shareholder or (2) any other deleted text begindomestic or foreign corporationdeleted text endnew text begin organization
new text end (whether or not itself an interested shareholder of the issuing public corporation) that is, or
after the exchange would be, an affiliate or associate of the interested shareholder, but
excluding the exchange of shares of a new text begindomestic or foreign new text endcorporation, other than an
interested shareholder or an affiliate or associate of an interested shareholder, pursuant to
which the new text begindomestic or foreign new text endcorporation, immediately after the exchange, becomes a
wholly-owned subsidiary of the issuing public corporation;

(c) any sale, lease, exchange, mortgage, pledge, transfer, or other disposition (in a
single transaction or a series of transactions), other than sales of goods or services in the
ordinary course of business or redemptions pursuant to section 302A.671, subdivision
6
, to or with the interested shareholder or any affiliate or associate of the interested
shareholder, other than to or with the issuing public corporation or a wholly-owned
subsidiary of the issuing public corporation, of assets of the issuing public corporation
or any subsidiary of the issuing public corporation (1) having an aggregate market value
equal to ten percent or more of the aggregate market value of all the assets, determined on
a consolidated basis, of the issuing public corporation, (2) having an aggregate market
value equal to ten percent or more of the aggregate market value of all the outstanding
shares of the issuing public corporation, or (3) representing ten percent or more of the
earning power or net income, determined on a consolidated basis, of the issuing public
corporation except a cash dividend or distribution paid or made pro rata to all shareholders
of the issuing public corporation;

(d) the issuance or transfer by the issuing public corporation or any subsidiary of
the issuing public corporation (in a single transaction or a series of transactions) of any
shares ofnew text begin, or other ownership interests in, new text end the issuing public corporation or any subsidiary
of the issuing public corporation that have an aggregate market value equal to five percent
or more of the aggregate market value of all the outstanding shares of the issuing public
corporation to the interested shareholder or any affiliate or associate of the interested
shareholder, except pursuant to the exercise of warrants or rights to purchase shares
offered, or a dividend or distribution paid or made, pro rata to all shareholders of the
issuing public corporation other than for the purpose, directly or indirectly, of facilitating
or effecting a subsequent transaction that would have been a business combination if the
dividend or distribution had not been made;

(e) the adoption of any plan or proposal for the liquidation or dissolution of the
issuing public corporation, or any reincorporation of the issuing public corporation in
another state or jurisdiction, proposed by or on behalf of, or pursuant to any written or oral
agreement, arrangement, relationship, understanding, or otherwise with, the interested
shareholder or any affiliate or associate of the interested shareholder;

(f) any reclassification of securities (including without limitation any share
dividend or split, reverse share split, or other distribution of shares in respect of shares),
recapitalization of the issuing public corporation, merger of the issuing public corporation
with any subsidiary of the issuing public corporation, exchange of shares of the issuing
public corporation with any subsidiary of the issuing public corporation, or other
transaction (whether or not with or into or otherwise involving the interested shareholder),
proposed by or on behalf of, or pursuant to any written or oral agreement, arrangement,
relationship, understanding, or otherwise with, the interested shareholder or any affiliate
or associate of the interested shareholder, that has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class or series of shares
entitled to vote, or securities that are exchangeable for, convertible into, or carry a right
to acquire shares entitled to vote, of the issuing public corporation or any subsidiary
of the issuing public corporation that is, directly or indirectly, owned by the interested
shareholder or any affiliate or associate of the interested shareholder, except as a result of
immaterial changes due to fractional share adjustments;

(g) any receipt by the interested shareholder or any affiliate or associate of the
interested shareholder of the benefit, directly or indirectly (except proportionately as a
shareholder of the issuing public corporation), of any loans, advances, guarantees, pledges,
or other financial assistance, or any tax credits or other tax advantages provided by or
through the issuing public corporation or any subsidiary of the issuing public corporation.

Sec. 12.

Minnesota Statutes 2004, section 302A.011, subdivision 58, is amended to
read:


Subd. 58.

Ownership interests.

"Ownership interests" means shares in the case of a
corporation or foreign corporation deleted text beginanddeleted text endnew text begin, new text end membership interests in the case of a deleted text begindomestic or
foreign
deleted text end limited liability companynew text begin, and governance or transferable interests in the case of
any other organization
new text end.

Sec. 13.

Minnesota Statutes 2004, section 302A.011, is amended by adding a
subdivision to read:


new text begin Subd. 65. new text end

new text begin Governing body. new text end

new text begin "Governing body" means the body of an organization
selected by its owners that has the ultimate power to determine the organization's policies
and control its activities. The governing body of a domestic corporation is its board of
directors, and the governing body of a domestic limited liability company is its board
of governors.
new text end

Sec. 14.

Minnesota Statutes 2004, section 302A.011, is amended by adding a
subdivision to read:


new text begin Subd. 66. new text end

new text begin Limited liability company. new text end

new text begin "Limited liability company" means either a
domestic or a foreign limited liability company, unless specified otherwise in this chapter.
new text end

Sec. 15.

Minnesota Statutes 2004, section 302A.111, subdivision 3, is amended to read:


Subd. 3.

Statutory provisions that may be modified either in articles or in
bylaws.

The following provisions govern a corporation unless modified either in the
articles or in the bylaws:

(a) directors serve for an indefinite term that expires at the next regular meeting of
shareholders (section 302A.207);

(b) the compensation of directors is fixed by the board (section 302A.211);

(c) a certain method must be used for removal of directors (section 302A.223);

(d) a certain method must be used for filling board vacancies (section 302A.225);

(e) if the board fails to select a place for a board meeting, it must be held at the
principal executive office (section 302A.231, subdivision 1);

(f) the notice of a board meeting need not state the purpose of the meeting (section
302A.231, subdivision 3);

(g) a majority of the board is a quorum for a board meeting (section 302A.235);

(h) a committee shall consist of one or more persons, who need not be directors,
appointed by affirmative vote of a majority of the directors present (section 302A.241,
subdivision 2)new text begin, and a committee may create one or more subcommittees, each consisting
of one or more members of the committee, and may delegate to a subcommittee any or all
of the authority of the committee (section 302A.241, subdivision 2a)
new text end
;

(i) the board may establish a special litigation committee (section 302A.241);

(j) the chief executive officer and chief financial officer have specified duties, until
the board determines otherwise (section 302A.305);

(k) officers may delegate some or all of their duties and powers, if not prohibited by
the board from doing so (section 302A.351);

(l) the deleted text beginboarddeleted text endnew text begin corporation new text end may establish uncertificated shares (section 302A.417,
subdivision 7)
;

(m) regular meetings of shareholders need not be held, unless demanded by a
shareholder under certain conditions (section 302A.431);

(n) in all instances where a specific minimum notice period has not otherwise been
fixed by law, not less than ten-days notice is required for a meeting of shareholders
(section 302A.435, subdivision 2);

(o) the number of shares required for a quorum at a shareholders' meeting is
a majority of the voting power of the shares entitled to vote at the meeting (section
302A.443);

(p) the board may fix a date up to 60 days before the date of a shareholders' meeting
as the date for the determination of the holders of shares entitled to notice of and entitled
to vote at the meeting (section 302A.445, subdivision 1);

(q) indemnification of certain persons is required (section 302A.521); and

(r) the board may authorize, and the corporation may make, distributions not
prohibited, limited, or restricted by an agreement (section 302A.551, subdivision 1).

Sec. 16.

Minnesota Statutes 2004, section 302A.111, is amended by adding a
subdivision to read:


new text begin Subd. 7. new text end

new text begin Dependence on facts outside of the articles. new text end

new text begin Except for provisions
included pursuant to subdivision 1, any provision of the articles may:
new text end

new text begin (a) be made dependent upon facts ascertainable outside the articles, but only if the
manner in which the facts operate upon the provision is clearly and expressly set forth
in the articles; and
new text end

new text begin (b) incorporate by reference some or all of the terms of any agreements, contracts, or
other arrangements entered into by the corporation, but only if the corporation retains at
its principal executive office a copy of the agreements, contracts, or other arrangements
or the portions incorporated by reference.
new text end

Sec. 17.

Minnesota Statutes 2004, section 302A.115, subdivision 1, is amended to read:


Subdivision 1.

Requirements; prohibitions.

The corporate name:

(a) Shall be in the English language or in any other language expressed in English
letters or characters;

(b) Shall contain the word "corporation," "incorporated," or "limited," or shall
contain an abbreviation of one or more of these words, or the word "company" or the
abbreviation "Co." if that word or abbreviation is not immediately preceded by the word
"and" or the character "&";

(c) Shall not contain a word or phrase that indicates or implies that it is incorporated
for a purpose other than a legal business purpose;

(d) Shall be distinguishable upon the records in the Office of the Secretary of
State from the name of each domestic corporation, limited partnership, limited liability
partnership, and limited liability company, whether profit or nonprofit, and each foreign
corporation, limited partnership, limited liability partnership, and limited liability
company authorized or registered to do business in this state, whether profit or nonprofit,
and each name the right to which is, at the time of incorporation, reserved as provided
for in sections 302A.117, 321.0109, 322B.125, or 333.001 to 333.54, unless there is
filed with the articles one of the following:

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

(2) A certified copy of a final decree of a court in this state establishing the prior
right of the applicant to the use of the name in this state; or

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

Sec. 18.

Minnesota Statutes 2004, section 302A.115, subdivision 5, is amended to read:


Subd. 5.

Use of name by successor corporation.

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

Sec. 19.

Minnesota Statutes 2004, section 302A.135, is amended by adding a
subdivision to read:


new text begin Subd. 7. new text end

new text begin Change of corporate name. new text end

new text begin An amendment that only changes a
corporation's corporate name may be authorized by a resolution approved by the board
and may, but need not, be submitted to and approved by the shareholders as provided in
subdivisions 2, 3, and 4.
new text end

Sec. 20.

Minnesota Statutes 2004, section 302A.241, is amended by adding a
subdivision to read:


new text begin Subd. 2a. new text end

new text begin Subcommittees. new text end

new text begin Unless otherwise provided in the articles, the bylaws, or
the resolution of the board establishing the committee, a committee may create one or
more subcommittees, each consisting of one or more members of the committee, and may
delegate to a subcommittee any or all of the authority of the committee. In this chapter,
unless the language or context clearly indicates that a different meaning is intended, any
reference to a committee is deemed to include a subcommittee, and any reference to a
committee member is deemed to include a subcommittee member.
new text end

Sec. 21.

Minnesota Statutes 2004, section 302A.401, subdivision 3, is amended to read:


Subd. 3.

Procedure for fixing terms.

(a) Subject to any restrictions in the articles,
the power granted in subdivision 2 may be exercised by a resolution or resolutions
approved by the affirmative vote of the directors required by section 302A.237 establishing
a class or series, setting forth the designation of the class or series, and fixing the relative
rights and preferences of the class or series. deleted text beginAny of the rights and preferences of a class or
series established in the articles or by resolution of the directors:
deleted text end

deleted text begin (1) may be made dependent upon facts ascertainable outside the articles, or outside
the resolution or resolutions establishing the class or series, provided that the manner in
which the facts operate upon the rights and preferences of the class or series is clearly
and expressly set forth in the articles or in the resolution or resolutions establishing the
class or series; and
deleted text end

deleted text begin (2) may incorporate by reference some or all of the terms of any agreements,
contracts, or other arrangements entered into by the issuing corporation in connection
with the establishment of the class or series if the corporation retains at its principal
executive office a copy of the agreements, contracts, or other arrangements or the portions
incorporated by reference.
deleted text end

(b) A statement setting forth the name of the corporation and the text of the resolution
and certifying the adoption of the resolution and the date of adoption shall be filed with the
secretary of state before the issuance of any shares for which the resolution creates rights
or preferences not set forth in the articles; provided, however, where the shareholders have
received notice of the creation of shares with rights or preferences not set forth in the
articles before the issuance of the shares, the statement may be filed any time within one
year after the issuance of the shares. The resolution is effective when the statement has
been filed with the secretary of state; or, if it is not required to be filed with the secretary of
state before the issuance of shares, on the date of its adoption by the directors.

(c) Filing a statement with the secretary of state in accordance with paragraph
(b) is not considered an amendment of the articles for purposes of sections 302A.135,
302A.137, and 302A.471. Filing an amendment of such a statement with the secretary
of state is considered an amendment of the articles for purposes of sections 302A.135,
302A.137, and 302A.471.

Sec. 22.

Minnesota Statutes 2004, section 302A.417, subdivision 7, is amended to read:


Subd. 7.

Uncertificated shares.

Unless uncertificated shares are prohibited by the
articles or bylaws, a deleted text beginresolution approved by the affirmative vote of a majority of the
directors present
deleted text endnew text begin corporation new text end may provide that some or all of any or all classes and series
of its shares will be uncertificated shares. deleted text beginThe resolutiondeleted text endnew text begin Such an action new text end does not apply to
shares represented by a certificate until the certificate is surrendered to the corporation.
Within a reasonable time after the issuance or transfer of uncertificated shares, the
corporation shall send to the new shareholder the information required by this section to
be stated on certificates. This information is not required to be sent to the new shareholder
by a publicly held corporation that has adopted a system of issuance, recordation, and
transfer of its shares by electronic or other means not involving an issuance of certificates
if the system complies with section 17A of the Securities Exchange Act of 1934. Except
as otherwise expressly provided by statute, the rights and obligations of the holders of
certificated and uncertificated shares of the same class and series are identical.

Sec. 23.

new text begin [302A.439] CONTRACTUAL REQUIREMENT TO SUBMIT MATTER
TO SHAREHOLDERS.
new text end

new text begin A corporation may agree to submit a matter to its shareholders whether or not the
board of directors determines, at any time after approving the matter, that the matter is no
longer advisable and recommends that shareholders reject it.
new text end

Sec. 24.

Minnesota Statutes 2004, section 302A.441, subdivision 1, is amended to read:


Subdivision 1.

Method.

An action required or permitted to be taken at a meeting of
the shareholders may be taken without a meeting by written action signed, or consented
to by authenticated electronic communication, by all of the shareholders entitled to
vote on that action. The articles of a corporation that is not a publicly held corporation
may provide that any action may be taken by written action signed, or consented to by
authenticated electronic communication, by shareholders having voting power equal
to the voting power that would be required to take the same action at a meeting of the
shareholders at which all shareholders were presentnew text begin, but in no event may written action be
taken by holders of less than a majority of the voting power of all shares entitled to vote
on that action
new text end. After the adoption of the initial articles, an amendment to the articles to
permit written action to be taken by less than all shareholders requires the approval of
all of the shareholders entitled to vote on the amendment.

Sec. 25.

Minnesota Statutes 2004, section 302A.447, subdivision 1, is amended to read:


Subdivision 1.

Shares held by other corporation.

Shares of a corporation
registered in the name of another domestic or foreign corporation may be voted by the chief
executive officer or another legal representative of that new text begindomestic or foreign new text endcorporation.

Sec. 26.

Minnesota Statutes 2004, section 302A.461, subdivision 2, is amended to read:


Subd. 2.

Other documents required.

A corporation shall keep at its principal
executive office, or, if its principal executive office is outside of this state, shall make
available at its registered office within ten days after receipt by an officer of the
corporation of a written demand for them made by a person described in subdivision
4, originals or copies of:

(a) records of all proceedings of shareholders for the last three years;

(b) records of all proceedings of the board for the last three years;

(c) its articles and all amendments currently in effect;

(d) its bylaws and all amendments currently in effect;

(e) financial statements required by section 302A.463 and the financial statement for
the most recent interim period prepared in the course of the operation of the corporation for
distribution to the shareholders or to a governmental agency as a matter of public record;

(f) reports made to shareholders generally within the last three years;

(g) a statement of the names and usual business addresses of its directors and
principal officers;

(h) voting trust agreements described in section 302A.453;

(i) shareholder control agreements described in section 302A.457; and

(j) a copy of agreements, contracts, or other arrangements or portions of them
incorporated by reference under section deleted text begin302A.401, subdivision 3deleted text endnew text begin 302A.111, subdivision 7new text end.

Sec. 27.

Minnesota Statutes 2004, section 302A.471, subdivision 1, is amended to read:


Subdivision 1.

Actions creating rights.

A shareholder of a corporation may dissent
from, and obtain payment for the fair value of the shareholder's shares in the event of, any
of the following corporate actions:

(a) unless otherwise provided in the articles, an amendment of the articles that
materially and adversely affects the rights or preferences of the shares of the dissenting
shareholder in that it:

(1) alters or abolishes a preferential right of the shares;

(2) creates, alters, or abolishes a right in respect of the redemption of the shares,
including a provision respecting a sinking fund for the redemption or repurchase of the
shares;

(3) alters or abolishes a preemptive right of the holder of the shares to acquire shares,
securities other than shares, or rights to purchase shares or securities other than shares;

(4) excludes or limits the right of a shareholder to vote on a matter, or to cumulate
votes, except as the right may be excluded or limited through the authorization or issuance
of securities of an existing or new class or series with similar or different voting rights;
except that an amendment to the articles of an issuing public corporation that provides that
section 302A.671 does not apply to a control share acquisition does not give rise to the
right to obtain payment under this section; or

(5) eliminates the right to obtain payment under this subdivision;

(b) a sale, lease, transfer, or other disposition of property and assets of the
corporation that requires shareholder approval under section 302A.661, subdivision 2, but
not including a disposition in dissolution described in section 302A.725, subdivision 2, or a
disposition pursuant to an order of a court, or a disposition for cash on terms requiring that
all or substantially all of the net proceeds of disposition be distributed to the shareholders
in accordance with their respective interests within one year after the date of disposition;

(c) a plan of merger, whether under this chapter or under chapter 322B, to which the
corporation is a constituent organization, except as provided in subdivision 3, and except
for a plan of merger adopted under section 302A.626;

(d) a plan of exchange, whether under this chapter or under chapter 322B, to which
the corporation is a party as the corporation whose shares will be acquired by the acquiring
deleted text begin corporationdeleted text endnew text begin organizationnew text end, except as provided in subdivision 3;

(e) a plan of conversion adopted by the corporation; or

(f) any other corporate action taken pursuant to a shareholder vote with respect to
which the articles, the bylaws, or a resolution approved by the board directs that dissenting
shareholders may obtain payment for their shares.

Sec. 28.

Minnesota Statutes 2004, section 302A.471, subdivision 3, is amended to read:


Subd. 3.

Rights not to apply.

(a) Unless the articles, the bylaws, or a resolution
approved by the board otherwise provide, the right to obtain payment under this section
does not apply to a shareholder of (1) the surviving corporation in a merger with respect
to shares of the shareholder that are not entitled to be voted on the merger and are not
canceled or exchanged in the merger or (2) the corporation whose shares will be acquired
by the acquiring deleted text begincorporationdeleted text endnew text begin organization new text end in a plan of exchange with respect to shares
of the shareholder that are not entitled to be voted on the plan of exchange and are not
exchanged in the plan of exchange.

(b) If a date is fixed according to section 302A.445, subdivision 1, for the
determination of shareholders entitled to receive notice of and to vote on an action
described in subdivision 1, only shareholders as of the date fixed, and beneficial owners
as of the date fixed who hold through shareholders, as provided in subdivision 2, may
exercise dissenters' rights.

(c) Notwithstanding subdivision 1, the right to obtain payment under this section,
other than in connection with a plan of merger adopted under section 302A.621, is limited
in accordance with the following provisions:

(1) The right to obtain payment under this section is not available for the holders
of shares of any class or series of shares that is listed on the New York Stock Exchange
or the American Stock Exchange or designated as a national market deleted text beginsystem deleted text endsecurity on
deleted text begin an interdealer quotation system by the National Association of Securities Dealers, Inc.deleted text endnew text begin
the Nasdaq Stock Market.
new text end

(2) The applicability of clause (1) is determined as of:

(i) the record date fixed to determine the shareholders entitled to receive notice of,
and to vote at, the meeting of shareholders to act upon the corporate action described
in subdivision 1; or

(ii) the day before the effective date of corporate action described in subdivision
1 if there is no meeting of shareholders.

(3) Clause (1) is not applicable, and the right to obtain payment under this section is
available pursuant to subdivision 1, for the holders of any class or series of shares who
are required by the terms of the corporate action described in subdivision 1 to accept for
such shares anything other than shares, or cash in lieu of fractional shares, of any class
or any series of shares of deleted text beginthedeleted text endnew text begin a domestic or foreign new text end corporation, or any other deleted text beginproprietarydeleted text endnew text begin
ownership
new text end interest of any other deleted text beginentitydeleted text endnew text begin organizationnew text end, that satisfies the standards set forth in
clause (1) at the time the corporate action becomes effective.

Sec. 29.

Minnesota Statutes 2004, section 302A.471, subdivision 4, is amended to read:


Subd. 4.

Other rights.

The shareholders of a corporation who have a right under
this section to obtain payment for their sharesnew text begin, or who would have the right to obtain
payment for their shares absent the exception set forth in paragraph (c) of subdivision 3,
new text end do not have a right at law or in equity to have a corporate action described in subdivision 1
set aside or rescinded, except when the corporate action is fraudulent with regard to the
complaining shareholder or the corporation.

Sec. 30.

Minnesota Statutes 2004, section 302A.553, subdivision 1, is amended to read:


Subdivision 1.

When permitted; status of shares.

(a) A corporation may acquire
its own shares, subject to section 302A.551 and subdivision 3.

(b) If a corporation acquires its own shares, then any of the acquired shares that are
not pledged by the corporation as security for the future payment of some or all of the
purchase price for the shares constitute authorized but unissued shares of the corporation,
unless the articles provide that they shall not be reissued. If the articles prohibit reissue,
the number of authorized shares reduced by the number of shares acquired.

(c) If a corporation pledges acquired shares as security for future payment of all or
part of the purchase price for the shares and reissues the pledged shares in its own name;
then

(1) the shares must continue to be issued and outstanding except for voting and
determination of a quorum, and the shares are not considered to be present and entitled to
vote at any meeting of shareholders;

(2) the corporation may not vote or exercise any other rights of a shareholder with
respect to the pledged shares, but the pledgee shall have any rights, other than the right to
vote, with respect to the shares to which the pledgee is entitled to new text beginby new text endcontract;

(3) if the pledge is foreclosed, the corporation shall reissue and deliver the pledged
shares to or at the direction of the pledgee; and

(4) shares which are released from a pledge have the status specified in paragraph (b).

Sec. 31.

Minnesota Statutes 2004, section 302A.601, subdivision 1, is amended to read:


Subdivision 1.

Merger.

deleted text beginAny twodeleted text endnew text begin A corporation may merge with one new text end or more
new text begin domestic or foreign new text endcorporations deleted text beginmay mergedeleted text end, resulting in a single new text begindomestic or foreign
new text end corporation, with or without a business purpose, pursuant to a plan of merger approved in
the manner provided in sections 302A.611 to 302A.651.

Sec. 32.

Minnesota Statutes 2004, section 302A.601, subdivision 2, is amended to read:


Subd. 2.

Exchange.

A corporation may acquire all of the outstanding shares of one
or more classes or series of another new text begindomestic or foreign new text endcorporation pursuant to a plan
of exchange approved in the manner provided in sections 302A.611 to 302A.615, and
302A.631 to 302A.651.

Sec. 33.

Minnesota Statutes 2004, section 302A.611, subdivision 1, is amended to read:


Subdivision 1.

Contents of plan.

A plan of merger or exchange shall contain:

(a) The names of the constituent organizations proposing to merge or participate in
an exchange, and:

(1) in the case of a merger, the name of the surviving organization;

(2) in the case of an exchange, the name of the acquiring organization;

(b) The terms and conditions of the proposed merger or exchange;

(c)(1) In the case of a merger, the manner and basis of converting the ownership
interests of the constituent organizations into securities ofnew text begin, or other ownership interests
in,
new text end the surviving organization or of any other organization, or, in whole or in part, into
money or other property; or

(2) In the case of an exchange, the manner and basis of exchanging the shares to be
acquired for securities ofnew text begin, or other ownership interests in, new text end the acquiring organization or
any other organization or, in whole or part, into money or other property;

(d) In the case of a merger, a statement of any amendments to the articles of
incorporation or organization of the surviving organization proposed as part of the merger;
and

(e) Any other provisions with respect to the proposed merger or exchange that are
deemed necessary or desirable.

Sec. 34.

Minnesota Statutes 2004, section 302A.613, subdivision 1, is amended to read:


Subdivision 1.

Board approval; notice to shareholders.

A resolution containing
the plan of merger or exchange shall be approved by the affirmative vote of a majority
of the directors present at a meeting of the board of each constituent corporation and
shall then be submitted at a regular or a special meeting to the shareholders of (i) each
constituent corporation, in the case of a plan of merger, and (ii) the corporation whose
shares will be acquired by the acquiring organization in the exchange, in the case of a plan
of exchange. deleted text beginThe plan of merger or exchange may require that it be submitted to the
shareholders whether or not the board of directors determines at any time after the board of
directors' initial approval of the plan that the plan is no longer advisable and recommends
that the shareholders reject it.
deleted text end If shareholders holding any class or series of stock of the
corporation are entitled to vote on the plan of merger or exchange pursuant to this section,
written notice shall be given to every shareholder of a corporation, whether or not entitled
to vote at the meeting, not less than 14 days nor more than 60 days before the meeting,
in the manner provided in section 302A.435 for notice of meetings of shareholders. The
written notice shall state that a purpose of the meeting is to consider the proposed plan
of merger or exchange. A copy or short description of the plan of merger or exchange
shall be included in or enclosed with the notice. If the merger or exchange is with a
domestic or foreign limited liability company, the plan of merger or exchange must also
be approved in the manner required by the laws of the state under which the limited
liability company is organized.

Sec. 35.

Minnesota Statutes 2004, section 302A.613, subdivision 2, is amended to read:


Subd. 2.

Approval by owners.

(a) At the meeting a vote of the owners shall be
taken on the proposed plan. The plan of merger or exchange is adopted when approved
by the affirmative vote of the holders of a majority of the voting power of all shares
entitled to vote and, if the merger or exchange is with a domestic or foreign limited
liability company, when approved in the manner required by the laws of the state under
which the limited liability company is organized. Except as provided in paragraph (b),
a class or series of shares of the corporation is entitled to vote as a class or series if any
provision of the plan would, if contained in a proposed amendment to the articles, entitle
the class or series of shares to vote as a class or series and, in the case of an exchange, if
the class or series is included in the exchange.

(b) A class or series of shares of the corporation is not entitled to vote as a class or
series deleted text beginsolely because the plan of merger or exchange effects a cancellation or exchange of
the shares of the class or series
deleted text end if the plan of merger or exchange effects a cancellation
or exchange of all shares of the corporation of all classes and series that are outstanding
immediately prior to the merger or exchange and shareholders of shares of that class
or series are entitled to obtain payment for the fair value of their shares under section
302A.471new text begin, or would have the right to obtain payment for their shares absent the exception
set forth in paragraph (c) of section 302A.471, subdivision 3,
new text end
in the event of the merger or
exchange.

Sec. 36.

Minnesota Statutes 2004, section 302A.621, subdivision 1, is amended to read:


Subdivision 1.

When authorized; contents of plan.

deleted text beginA parent owningdeleted text endnew text begin If either the
parent or the subsidiary is a domestic corporation, a parent that is a domestic or foreign
corporation or limited liability company owning
new text end at least 90 percent of the outstanding
shares of each class and series of a subsidiary new text beginthat is a domestic or foreign corporation
or limited liability company
new text enddirectly, or indirectly through related organizations, other
than classes or series that, absent this section, would otherwise not be entitled to vote
on the merger, may merge the subsidiary into itself or into any other subsidiary at least
90 percent of the outstanding shares of each class and series of which is owned by the
parent directly, or indirectly through related organizations, other than classes or series that,
absent this section, would otherwise not be entitled to vote on the merger, without a vote
of the shareholders new text beginor other owners new text endof itself or any subsidiary or may merge itself, or itself
and one or more of the subsidiaries, into one of the subsidiaries under this section. A
resolution approved by the affirmative vote of a majority of the directors new text beginor other members
of the governing body
new text endof the parent present shall set forth a plan of merger that contains:

(1) the name of the subsidiary or subsidiaries, the name of the parent and the name
of the surviving deleted text begincorporationdeleted text endnew text begin organizationnew text end;

(2) the manner and basis of converting the shares new text beginor other ownership interests new text endof
the subsidiary or subsidiaries or parent into securities new text beginor other ownership interests new text endof the
parent, subsidiary, or of another corporation or, in whole or in part, into money or other
property;

(3) if the parent is a constituent deleted text begincorporationdeleted text endnew text begin organization new text end but is not the surviving
deleted text begin corporationdeleted text endnew text begin organization new text end in the merger, a provision for the pro rata issuance of shares new text beginor
other ownership interests
new text endof the surviving deleted text begincorporationdeleted text endnew text begin organization new text end to the holders of shares
new text begin or other ownership interests new text endof the parent on surrender of any certificates for shares new text begin or
other ownership interests
new text endof the parent; and

(4) if the surviving deleted text begincorporationdeleted text endnew text begin organization new text end is a subsidiary, a statement of any
amendments to the articles of the surviving deleted text begincorporationdeleted text endnew text begin organization new text end that will be part
of the merger.

deleted text begin If the parent is a constituent corporation and the surviving corporation in the merger,
it may change its corporate name, without a vote of its shareholders, by the inclusion of a
provision to that effect in the resolution of merger setting forth the plan of merger that is
approved by the affirmative vote of a majority of the directors of the parent present. Upon
the effective date of the merger, the name of the parent shall be changed.
deleted text end

deleted text begin If the parent is a constituent corporation but is not the surviving corporation in the
merger, the resolution is not effective unless it is also approved by the affirmative vote of
the holders of a majority of the voting power of all shares of the parent entitled to vote at
a regular or special meeting held in accordance with section if the parent is a
domestic corporation or in accordance with the laws under which it is incorporated if the
parent is a foreign corporation.
deleted text end

Sec. 37.

Minnesota Statutes 2004, section 302A.621, subdivision 2, is amended to read:


Subd. 2.

Notice to shareholders of subsidiary.

deleted text beginNoticedeleted text endnew text begin If the subsidiary is a
domestic corporation, notice
new text end of the action, including a copy of the plan of merger, shall
be given to each shareholder, other than the parent and any subsidiary, of each new text beginsuch
new text end subsidiary that is a constituent corporation in the merger before, or within ten days after,
the effective date of the merger.

Sec. 38.

Minnesota Statutes 2004, section 302A.621, is amended by adding a
subdivision to read:


new text begin Subd. 2a. new text end

new text begin Approval of parent's shareholders; when required. new text end

new text begin (a)
Notwithstanding subdivision 1:
new text end

new text begin (1) if the parent is a domestic corporation and the conditions of section 302A.613,
subdivision 3, are not met with respect to the parent, then the resolution is not effective
unless it is also approved by the affirmative vote of the holders of a majority of the voting
power of all shares of the parent entitled to vote at a regular or special meeting held in
accordance with section 302A.613; and
new text end

new text begin (2) if the parent is a limited liability company or a foreign corporation and not the
surviving organization in the merger, then the resolution is not effective unless it is also
approved in accordance with the laws under which the parent is organized or incorporated.
new text end

new text begin (b) Notwithstanding paragraph (a), if the parent is a constituent corporation and the
surviving corporation in the merger, it may change its corporate name, without shareholder
approval, by the inclusion of a provision to that effect in the resolution of merger setting
forth the plan of merger that is approved by the affirmative vote of a majority of the
directors of the parent present. Upon the effective date of the merger, the parent's
corporate name shall be changed.
new text end

Sec. 39.

Minnesota Statutes 2004, section 302A.621, subdivision 3, is amended to read:


Subd. 3.

Articles of merger; contents of articles.

Articles of merger shall be
prepared that contain:

(1) the plan of merger;

(2) the number of outstanding shares new text beginor other ownership interests new text endof each class and
series of each subsidiary that is a constituent deleted text begincorporationdeleted text endnew text begin organization new text end in the merger, other
than the classes or series that, absent this section, would otherwise not be entitled to vote
on the merger, and the number of shares of each class and series new text beginor other ownership
interests
new text endof the subsidiary or subsidiaries, other than classes or series that, absent this
section, would otherwise not be entitled to vote on the merger, owned by the parent
directly, or indirectly through related organizations; and

(3) a statement that the plan of merger has been approved by the parent under this
section.

Sec. 40.

Minnesota Statutes 2004, section 302A.621, subdivision 5, is amended to read:


Subd. 5.

Certificate.

The secretary of state shall issue a certificate of merger to the
parent or its legal representative or, if the parent is a constituent deleted text begincorporationdeleted text endnew text begin organization
new text end but is not the surviving deleted text begincorporationdeleted text endnew text begin organization new text end in the merger, to the surviving deleted text begincorporationdeleted text endnew text begin
organization
new text end or its legal representative.

Sec. 41.

Minnesota Statutes 2004, section 302A.621, subdivision 6, is amended to read:


Subd. 6.

Rights of dissenting shareholders.

In the event all of the stock of one or
more domestic subsidiaries that is a constituent deleted text beginparty todeleted text endnew text begin corporation in new text end a merger under
this section is not owned by the parent directly, or indirectly through related deleted text begincorporationsdeleted text endnew text begin
organizations
new text end, immediately prior to the merger, the shareholders of each deleted text begindomesticdeleted text end
subsidiary new text beginthat is a domestic corporation new text endhave dissenters' rights under sections 302A.471
(without regard to section 302A.471, subdivision 3) and 302A.473. If the parent is a
constituent corporation but is not the surviving corporation in the merger, and the articles
of incorporation of the surviving corporation immediately after the merger differ from the
articles of incorporation of the parent immediately prior to the merger in a manner that
would entitle a shareholder of the parent to dissenters' rights under section 302A.471,
subdivision 1
, paragraph (a), if the articles of incorporation of the surviving corporation
constituted an amendment to the articles of incorporation of the parent, that shareholder
of the parent has dissenters' rights as provided under sections 302A.471 and 302A.473.
Except as provided in this subdivision, sections 302A.471 and 302A.473 do not apply
to any merger effected under this section.

Sec. 42.

Minnesota Statutes 2004, section 302A.626, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

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

(b) "Holding company" means the corporation that is or becomes the direct parent of
the surviving corporation of a merger accomplished under this section.

(c) "Parent constituent corporation" means the parent new text begincorporation new text endthat merges with
or into the subsidiary constituent corporation.

(d) "Subsidiary constituent corporation" means the subsidiary new text begincorporation new text endthat the
parent constituent corporation merges with or into in the merger.

Sec. 43.

Minnesota Statutes 2004, section 302A.661, subdivision 1, is amended to read:


Subdivision 1.

Shareholder approval; when not required.

A corporation may, by
affirmative vote of a majority of the directors present, upon those terms and conditions
and for those considerations, which may be money, securities, or other instruments for
the payment of money or other property, as the board deems expedient, and without
shareholder approval:

(1) sell, lease, transfer, or otherwise dispose of all or substantially all of its property
and assets in the usual and regular course of its business;

(2) grant a security interest in all or substantially all of its property and assets
whether or not in the usual and regular course of its business; or

(3) transfer any or all of its property to deleted text begina corporationdeleted text endnew text begin an organization new text end all the shares
new text begin or other ownership interests new text endof which are owned by the corporation.

Sec. 44.

Minnesota Statutes 2004, section 302A.661, subdivision 4, is amended to read:


Subd. 4.

Transferee liability.

The transferee is liable for the debts, obligations,
and liabilities of the transferor only to the extent provided in the contract or agreement
between the transferee and the transferor or to the extent provided by this chapter or other
statutes of this state.new text begin A disposition of all or substantially all of a corporation's property
and assets under this section is not considered to be a merger or a de facto merger pursuant
to this chapter or otherwise. The transferee shall not be liable solely because it is deemed
to be a continuation of the transferor.
new text end

Sec. 45. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, section 302A.011, subdivision 2, new text end new text begin is repealed.
new text end

Sec. 46. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 45 are effective August 1, 2006.
new text end

ARTICLE 2

LIMITED LIABILITY COMPANIES

Section 1.

Minnesota Statutes 2005 Supplement, section 322B.02, is amended to read:


322B.02 LAWS NOT TO APPLY.

Sections 222.19, 222.23, and chapters 301, 316, and 556 do not apply to a limited
liability company organized under new text beginor governed by new text endthis chapter.

Sec. 2.

Minnesota Statutes 2004, section 322B.03, subdivision 6, is amended to read:


Subd. 6.

Articles or articles of organization.

"Articles" or "articles of
organization" means, in the case of a limited liability company organized under new text beginor
governed by
new text endthis chapter, articles of organization, articles of amendment, a statement of
change of registered office, registered agent, or name of registered agent, a statement
establishing or fixing the rights and preferences of a class or series of membership
interests, articles of merger, articles of new text beginconversion, articles of new text endabandonment, and articles
of termination. In the case of a foreign limited liability company, the term includes all
documents serving a similar function required to be filed with the secretary of state or
other state office of the new text beginforeign new text endlimited liability company's state of organization.

Sec. 3.

Minnesota Statutes 2004, section 322B.03, subdivision 12, is amended to read:


Subd. 12.

Constituent organization.

"Constituent organization" means a limited
liability company or a new text beginforeign limited liability company or a domestic new text endcorporation or a
foreign corporation that:

(1) in a merger is either the surviving organization or an organization that is merged
into the surviving organization; or

(2) in an exchange is either the acquiring organization or an organization whose
securities are acquired by the acquiring organization.

Sec. 4.

Minnesota Statutes 2004, section 322B.03, subdivision 19a, is amended to read:


Subd. 19a.

Foreign corporation.

"Foreign corporation" means deleted text begina corporationdeleted text endnew text begin an
organization
new text end organized for profit that is incorporated under laws other than the laws of
this state for a purpose or purposes for which a corporation may be incorporated under
chapter 302A.

Sec. 5.

Minnesota Statutes 2004, section 322B.03, subdivision 20, is amended to read:


Subd. 20.

Foreign limited liability company.

"Foreign limited liability company"
means a limited liability company organized for profit that is organized under new text beginor governed
by
new text endlaws other than the laws of this state for a purpose or purposes for which a limited
liability company may be organized under this chapter.

Sec. 6.

Minnesota Statutes 2004, section 322B.03, subdivision 23, is amended to read:


Subd. 23.

Governing deleted text beginboarddeleted text endnew text begin bodynew text end.

deleted text begin"Governing board" means the board of
governors in the case of a
deleted text endnew text begin "Governing body" means the body of an organization that has
been charged with managing or directing the management of the business and affairs of
the organization and which, if not the owners themselves, is responsible directly to the
owners of the organization. In the case of a domestic
new text end limited liability company deleted text beginand the
board of directors
deleted text endnew text begin, the governing body is the board of governors, and new text end in the case of a
new text begin domestic new text endcorporationnew text begin the governing body is the board of directorsnew text end.

Sec. 7.

Minnesota Statutes 2004, section 322B.03, subdivision 28, is amended to read:


Subd. 28.

Limited liability companynew text begin; domestic limited liability companynew text end.

"Limited liability company" new text beginor "domestic limited liability company" new text endmeans a limited
liability company, other than a foreign limited liability company, organized under new text beginor
governed by
new text endthis chapter.

Sec. 8.

Minnesota Statutes 2004, section 322B.03, subdivision 36a, is amended to read:


Subd. 36a.

Parent.

"Parent" of a specified deleted text beginlimited liability company means a
limited liability company or a foreign limited liability company
deleted text endnew text begin organization means an
organization
new text end that directly or indirectly through related organizations owns more than
50 percent of the voting power of the membership interestsnew text begin, shares, or other ownership
interests
new text end entitled to vote for governorsnew text begin, directors, or other members of the governing bodynew text end
of the specified deleted text beginlimited liability companydeleted text endnew text begin organizationnew text end.

Sec. 9.

Minnesota Statutes 2004, section 322B.03, subdivision 45a, is amended to read:


Subd. 45a.

Subsidiary.

"Subsidiary" of a specified deleted text beginlimited liability company means
a limited liability company or a foreign limited liability company having
deleted text endnew text begin organization
means an organization of which
new text end more than 50 percent of the voting power of its
membership interestsnew text begin, shares, or other ownership interestsnew text end entitled to vote for governorsnew text begin,
directors, or other members of the governing body of the organization is
new text end owned directly
or indirectly through related organizations by the specified deleted text beginlimited liability companydeleted text endnew text begin
organization
new text end.

Sec. 10.

Minnesota Statutes 2004, section 322B.115, subdivision 3, is amended to read:


Subd. 3.

Statutory provisions that may be modified either in articles of
organization, a member control agreement, or in the bylaws.

The following provisions
govern a limited liability company unless modified in the articles of organization, a
member control agreement under section 322B.37 or in the bylaws:

(1) governors serve for an indefinite term that expires at the next regular meeting
of members (section 322B.616);

(2) the compensation of governors is fixed by the board of governors (section
322B.623);

(3) a certain method must be used for removal of governors (section 322B.636);

(4) a certain method must be used for filling board of governor vacancies (section
322B.64);

(5) if the board of governors fails to select a place for a board meeting, it must be
held at the principal executive office (section 322B.643, subdivision 1);

(6) the notice of a board of governors meeting need not state the purpose of the
meeting (section 322B.643, subdivision 3);

(7) a majority of the board of governors is a quorum for a board meeting (section
322B.65);

(8) a committee consists of one or more persons, who need not be governors,
appointed by affirmative vote of a majority of the governors present (section 322B.66,
subdivision 2)
new text begin, and a committee may create one or more subcommittees, each consisting
of one or more members of the committee, and may delegate to the subcommittee any or
all of the authority of the committee (section 322B.66, subdivision 3)
new text end;

(9) the board may establish a special litigation committee (section 322B.66);

(10) the chief manager and treasurer have specified duties, until the board of
governors determines otherwise (section 322B.673);

(11) managers may delegate some or all of their duties and powers, if not prohibited
by the board of governors from doing so (section 322B.689);

(12) regular meetings of members need not be held, unless demanded by a member
under certain conditions (section 322B.333);

(13) in all instances where a specific minimum notice period has not otherwise been
fixed by law, not less than ten days' notice is required for a meeting of members (section
322B.34, subdivision 2);

(14) for a quorum at a members' meeting there is required a majority of the voting
power of the membership interests entitled to vote at the meeting (section 322B.353);

(15) the board of governors may fix a date up to 60 days before the date of a
members' meeting as the date for the determination of the members entitled to notice of
and entitled to vote at the meeting (section 322B.356, subdivision 1);

(16) indemnification of certain persons is required (section 322B.699);

(17) the board of governors may authorize, and the limited liability company
may make, distributions not prohibited, limited, or restricted by an agreement (section
322B.54, subdivision 1); and

(18) members have no right to interim distributions except as provided through the
bylaws or an act of the board of governors (section 322B.51).

Sec. 11.

Minnesota Statutes 2004, section 322B.115, is amended by adding a
subdivision to read:


new text begin Subd. 7. new text end

new text begin Dependence on facts outside the articles. new text end

new text begin Except for provisions included
pursuant to subdivision 1, any provision of the articles of organization may:
new text end

new text begin (1) be made dependent upon facts ascertainable outside the articles, but only if the
manner in which the facts operate upon the provision is clearly and expressly set forth
in the articles; and
new text end

new text begin (2) incorporate by reference some or all of the terms of any agreements, contracts, or
other arrangements entered into by the corporation, but only if the corporation retains at
its principal executive office a copy of the agreements, contracts, or other arrangements
or the portions incorporated by reference.
new text end

Sec. 12.

Minnesota Statutes 2004, section 322B.12, subdivision 1, is amended to read:


Subdivision 1.

Requirements and prohibitions.

The limited liability company
name must:

(1) be in the English language or in any other language expressed in English letters
or characters;

(2) contain the words "limited liability company," or must contain the abbreviation
"LLC" or, in the case of an organization formed pursuant to chapter 319B, must meet the
requirements of section 319B.05 applicable to a limited liability company;

(3) not contain the word corporation or incorporated and must not contain the
abbreviation of either or both of these words;

(4) not contain a word or phrase that indicates or implies that it is organized for a
purpose other than a legal business purpose; and

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

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

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

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

Sec. 13.

Minnesota Statutes 2004, section 322B.15, is amended by adding a
subdivision to read:


new text begin Subd. 6. new text end

new text begin Change of limited liability company name. new text end

new text begin An amendment that only
changes a limited liability company's limited liability company name may be authorized
by a resolution approved by the board and may, but need not, be submitted to and approved
by the members as provided in subdivisions 2, 3, and 4.
new text end

Sec. 14.

Minnesota Statutes 2004, section 322B.23, is amended to read:


322B.23 TRANSACTION OF BUSINESS OUTSIDE MINNESOTA.

By enacting this chapter the Minnesota legislature recognizes the limited liability
company as an important and constructive form of business organization. The legislature
understands that:

(1) businesses organized under new text beginor governed by new text endthis chapter will often transact
business in other states;

(2) for businesses organized under new text beginor governed by new text endthis chapter to function effectively
and for this chapter to be a useful enactment, this chapter must be accorded the same
comity and full faith and credit that states typically accord to each other's corporate
laws; and

(3) specifically, it is essential that other states recognize both the legal existence of
limited liability companies deleted text beginformeddeleted text endnew text begin organizednew text end under new text beginor governed by new text endthis chapter and the
legal status of all members of these limited liability companies.

The legislature therefore specifically seeks that, subject to any reasonable
registration requirements, other states extend to this chapter the same full faith and credit
under section 1 of Article IV of the Constitution of the United States, and the same comity,
that Minnesota extends to statutes that other states enact to provide for the establishment
and operation of business organizations.

Sec. 15.

Minnesota Statutes 2004, section 322B.31, subdivision 2, is amended to read:


Subd. 2.

Effect of assignment of financial rights.

An assignment of a member's
financial rights entitles the assignee to receive, to the extent assigned, only the share of
profits and losses and the distributions to which the assignor would otherwise be entitled.
An assignment of a member's financial rights does not dissolve the limited liability
company and does not entitle or empower the assignee to become a member, to exercise
any governance rights, to receive any notices from the limited liability company, or to
cause dissolution. deleted text beginThe assignment may not allow the assignee to control the member's
exercise of governance rights.
deleted text end

Sec. 16.

new text begin [322B.348] CONTRACTUAL REQUIREMENT TO SUBMIT MATTER
TO MEMBERS.
new text end

new text begin A limited liability company may agree to submit a matter to its members whether
or not the board determines, at any time after approving the matter, that the matter is no
longer advisable and recommends that members reject it.
new text end

Sec. 17.

Minnesota Statutes 2004, section 322B.35, subdivision 1, is amended to read:


Subdivision 1.

Method.

An action required or permitted to be taken at a meeting
of the members may be taken by written action signed, or consented to by authenticated
electronic communication, by all of the members. If the articles or a member control
agreement so provide, any action may be taken by written action signed, or consented
to by authenticated electronic communication, by the members who own voting power
equal to the voting power that would be required to take the same action at a meeting of
the members at which all members were presentnew text begin, but in no event may written action be
taken by members holding less than a majority of the voting power of all membership
interests entitled to vote on the action
new text end. After the adoption of the initial articles or the first
making of a member control agreement, an amendment to the articles or to a member
control agreement to permit written action to be taken by less than all members requires
the approval of all the members entitled to vote on the amendment.

Sec. 18.

Minnesota Statutes 2004, section 322B.63, subdivision 1, is amended to read:


Subdivision 1.

Required vote.

Unless otherwise provided in the articlesnew text begin or a
member control agreement
new text end, governors are elected by a plurality of the voting power of
the membership interests present and entitled to vote on the election of governors at
a meeting at which a quorum is present.

Sec. 19.

Minnesota Statutes 2004, section 322B.66, is amended by adding a
subdivision to read:


new text begin Subd. 7. new text end

new text begin Subcommittees. new text end

new text begin Unless otherwise provided in the articles, the bylaws,
a member control agreement, or the resolution of the board establishing the committee,
a committee may create one or more subcommittees, each consisting of one or more
members of the committee, and may delegate to a subcommittee any or all of the authority
of the committee. In this chapter, unless the language or context clearly indicates that
a different meaning is intended, any reference to a committee is deemed to include
a subcommittee, and any reference to a committee member is deemed to include a
subcommittee member.
new text end

Sec. 20.

Minnesota Statutes 2004, section 322B.686, subdivision 2, is amended to read:


Subd. 2.

Removal.

new text beginUnless otherwise provided in the articles of organization, the
bylaws, or a member control agreement,
new text enda manager may be removed at any time, with
or without cause, by a resolution approved by the affirmative vote of a majority of the
governors presentdeleted text begin, subject to the provisions of adeleted text endnew text begin. The articles of organization, the bylaws,
or the
new text end member control agreementdeleted text begin. Thedeleted text endnew text begin may provide other manners of removing a manager.new text end
Removal is without prejudice to any contractual rights of the manager.

Sec. 21.

Minnesota Statutes 2004, section 322B.70, subdivision 1, is amended to read:


Subdivision 1.

Merger.

With or without a business purpose, a limited liability
company may mergenew text begin withnew text end:

(1) deleted text beginwith anotherdeleted text endnew text begin one or morenew text end limited liability deleted text begincompanydeleted text endnew text begin companiesnew text end pursuant to a plan
of merger approved in the manner provided in sections 322B.71 to 322B.75;

(2) deleted text beginwith adeleted text endnew text begin one or morenew text end domestic deleted text begincorporationdeleted text endnew text begin corporationsnew text end under a plan of merger
approved in the manner provided in sections 322B.71 to 322B.75deleted text begin, and in chapter 302Adeleted text end;

(3) deleted text beginwith anydeleted text endnew text begin one or morenew text end foreign deleted text begincorporationdeleted text endnew text begin corporationsnew text end or foreign limited liability
deleted text begin companydeleted text endnew text begin companiesnew text end pursuant to a plan of merger approved in the manner provided in
deleted text begin sectiondeleted text end new text beginsections 322B.71 to 322B.75 and new text end322B.76; and

(4) deleted text beginwithdeleted text end one or more cooperatives organized under chapter 308A or 308B, in the
manner provided by and subject to the limitations in deleted text beginsectiondeleted text end new text beginsections 322B.71 to 322B.75
and
new text end322B.755
.

Sec. 22.

Minnesota Statutes 2004, section 322B.70, subdivision 2, is amended to read:


Subd. 2.

Exchange.

(a) A limited liability company may acquire all of the
ownership interests of one or more classes or series of another new text begindomestic or foreign new text endlimited
liability company pursuant to a plan of exchange approved in the manner provided in
sections 322B.71 to 322B.75.

(b) A limited liability company may acquire all of the ownership interests of one or
more classes or series of a domestic new text beginor foreign new text endcorporation pursuant to a plan of exchange
approved in the manner provided in sections 322B.71 to 322B.75deleted text begin, and in chapter 302Adeleted text end.

(c) A domestic corporation may acquire all of the ownership interests of one or more
classes or series of a limited liability company pursuant to a plan of exchange approved in
the manner provided in sections 322B.71 to 322B.75deleted text begin, and in chapter 302Adeleted text end.

(d) A foreign corporation or foreign limited liability company may acquire all of
the ownership interests of one or more classes or series of a limited liability company
pursuant to a plan of exchange approved in the manner provided in deleted text beginsectiondeleted text endnew text begin sections
322B.71 to 322B.75 and
new text end 322B.76.

Sec. 23.

Minnesota Statutes 2004, section 322B.71, subdivision 1, is amended to read:


Subdivision 1.

Contents of plan.

A plan of merger or exchange must contain:

(1) the name of the limited liability company and each other constituent organization
proposing to merge or participate in an exchange, and:

(i) in the case of a merger, the name of the surviving organization, which may be the
limited liability company or deleted text beginthe otherdeleted text endnew text begin anothernew text end constituent organization; or

(ii) in the case of an exchange, the name of the acquiring organization;

(2) the terms and conditions of the proposed merger or exchange;

(3)(i) in the case of a merger, the manner and basis of converting the ownership
interests of the constituent organizations into securities ofnew text begin, or other ownership interests
in,
new text end the surviving organization or of any other organization, or, in whole or in part, into
money or other property; or

(ii) in the case of an exchange, the manner and basis of exchanging the ownership
interests to be acquired for securities ofnew text begin, or other ownership interests in, new text end the acquiring
organization or any other organization or, in whole or part, for money or other property;

(4) in the case of a merger, a statement of any amendments to the articles of
organization or articles of incorporation, as the case may be, of the surviving organization
proposed as part of the merger; and

(5) any other provisions with respect to the proposed merger or exchange that are
considered necessary or desirable.

Sec. 24.

Minnesota Statutes 2004, section 322B.72, is amended to read:


322B.72 PLAN APPROVALnew text begin BY LIMITED LIABILITY COMPANYnew text end.

Subdivision 1.

deleted text beginGoverningdeleted text end Board new text beginof governors new text endapproval and notice to deleted text beginownersdeleted text endnew text begin
members
new text end.

A resolution containing the plan of merger or exchange must be approved
by the affirmative vote of a majority of the board members present at a meeting of the
deleted text begin governingdeleted text end board of new text begingovernors of new text endeach constituent organization new text beginthat is a limited liability
company
new text endand must then be submitted at a regular or a special meeting to the deleted text beginowners of:
deleted text end

deleted text begin (1) each constituent organization, in the case of a plan of merger; and
deleted text end

deleted text begin (2) the organization whose ownership interests will be acquired by the acquiring
organization in the exchange, in the case of a plan of exchange.
deleted text end

deleted text begin The plan of merger or exchange may require that it be submitted to the owners whether
or not the governing board determines at any time after the governing board's initial
approval of the plan that the plan is no longer advisable and recommends that the owners
reject it. If owners
deleted text endnew text begin members of the limited liability company. If membersnew text end owning any
class or series of deleted text beginownershipdeleted text endnew text begin membershipnew text end interest deleted text beginof an organizationdeleted text endnew text begin in the limited liability
company
new text end are entitled to vote on the plan of merger or exchange pursuant to this section,
written notice must be given to every deleted text beginowner of that organizationdeleted text endnew text begin member of the limited
liability company
new text end, whether or not entitled to vote at the meeting, not less than 14 days
nor more than 60 days before the meeting, in the manner provided in section deleted text begin302A.435
for notice of meetings of shareholders in the case of a domestic corporation and in the
manner provided in section
deleted text end 322B.34 deleted text beginfor notice of meetings of members in the case of a
limited liability company
deleted text end. The written notice must state that a purpose of the meeting is to
consider the proposed plan of merger or exchange. A copy or short description of the plan
of merger or exchange must be included in or enclosed with the notice.

Subd. 2.

Approval by deleted text beginownersdeleted text endnew text begin membersnew text end.

(a) At the meeting a vote of the deleted text beginownersdeleted text endnew text begin
members
new text end must be taken on the proposed plan. The plan of merger or exchange is adopted
when approved by the affirmative vote of the owners of a majority of the voting power
of all deleted text beginownershipdeleted text endnew text begin membershipnew text end interests entitled to vote. Except as provided in paragraph
(b) or a member control agreement, a class or series of deleted text beginownershipdeleted text endnew text begin membershipnew text end interests
of the deleted text beginorganizationdeleted text endnew text begin limited liability companynew text end is entitled to vote as a class or series if any
provision of the plan would, if contained in a proposed amendment to the articles of
organizationnew text begin,new text end entitle the class or series of deleted text beginownershipdeleted text endnew text begin membershipnew text end interests to vote as a class
or series and, in the case of an exchange, if the class or series is included in the exchange.

(b) A class or series of deleted text beginownershipdeleted text endnew text begin membershipnew text end interests of the deleted text beginorganizationdeleted text endnew text begin limited
liability company
new text end is not entitled to vote as a class or series deleted text beginsolely because the plan of
merger or exchange effects a cancellation or exchange of the ownership interests of the
class or series
deleted text end if the plan of merger or exchange effects a cancellation or exchange of
all deleted text beginownershipdeleted text endnew text begin membershipnew text end interests of the deleted text beginorganizationdeleted text endnew text begin limited liability companynew text end of all
classes and series that are existing immediately before the merger or exchange and owners
of deleted text beginownershipdeleted text endnew text begin membershipnew text end interests of that class or series are entitled to obtain payment
for the fair value of their deleted text beginownershipdeleted text endnew text begin membershipnew text end interests under section 322B.383 in the
event of the merger or exchange.

Subd. 3.

Approval by new text beginother new text endconstituent deleted text begindomestic corporationdeleted text endnew text begin organizationsnew text end.

If
new text begin a constituent organization in new text endthe merger or exchange is deleted text beginwith a domestic corporationdeleted text endnew text begin an
organization other than a limited liability company
new text end, the plan of merger or exchange must
also be approved in the manner provided deleted text beginin chapter 302Adeleted text endnew text begin for in the statute that governs
that constituent organization
new text end.

Sec. 25.

Minnesota Statutes 2004, section 322B.74, is amended to read:


322B.74 ABANDONMENTnew text begin BY LIMITED LIABILITY COMPANYnew text end.

Subdivision 1.

By deleted text beginownersdeleted text endnew text begin membersnew text end or plan.

After a plan of merger or exchange
has been approved by the deleted text beginownersdeleted text endnew text begin membersnew text end entitled to vote on the approval of the plan
as provided in section 322B.72, and before the effective date of the plan, it may be
abandoned:

(1) if the deleted text beginowners of ownership interestsdeleted text endnew text begin membersnew text end of each deleted text beginof thedeleted text endnew text begin limited liability
company that is a
new text end constituent deleted text beginorganizationsdeleted text endnew text begin organization who hold membership interestsnew text end
entitled to vote on the approval of the plan as provided in section 322B.72 deleted text beginhave approveddeleted text endnew text begin
approve
new text end the abandonment at a meeting by the affirmative vote of the owners of a majority
of the voting power of the deleted text beginownershipdeleted text endnew text begin membershipnew text end interests entitled to vote and, if the
deleted text begin owners ofdeleted text endnew text begin members of a limited liability company that isnew text end a constituent organization are
not entitled to vote on the approval of the plan under section 322B.72, the deleted text begingoverningdeleted text end
board of new text begingovernors of new text endthat limited liability company has approved the abandonment by
the affirmative vote of a majority of the board members present, and the abandonment
has been approved in the manner provided deleted text beginin chapter 302A by anydeleted text endnew text begin for in the statute that
governs each
new text end constituent organization that is deleted text begina domestic corporationdeleted text endnew text begin not a limited liability
company
new text end;

(2) if the plan itself provides for abandonment and all conditions for abandonment
set forth in the plan are met; or

(3) pursuant to subdivision 2.

Subd. 2.

By the deleted text begingoverningdeleted text end boardnew text begin of governorsnew text end.

A plan of merger or exchange
may be abandoned, before the effective date of the plan, by a resolution deleted text beginof the governing
board of any constituent organization that is a limited liability company abandoning
deleted text endnew text begin
that abandons
new text end the plan of merger or exchange new text beginand is new text endapproved by the deleted text beginaffirmative vote
of a majority of the board members present
deleted text endnew text begin board of governors of any limited liability
company that is a constituent
new text end, subject to the contract rights of any other person under
the plan. deleted text beginAbandonment by the board of a constituent organization that is a domestic
corporation may be accomplished as provided in chapter 302A.
deleted text end

Subd. 3.

Filing of articles.

If articles of merger or exchange have been filed with
the secretary of state, but have not yet become effective, the constituent organizations, in
the case of abandonment under subdivision 1, clause (1), the constituent organizations
or any one of them, in the case of abandonment under subdivision 1, clause (2), or the
abandoning organization in the case of abandonment under subdivision 2, shall file with
the secretary of state articles of abandonment that contain:

(1) the names of the constituent organizations;

(2) the provision of this section under which the plan is abandoned; and

(3) if the plan is abandoned under subdivision 2, the text of the resolution new text beginthat was
new text end approved by the deleted text beginaffirmative vote of a majority of the board members presentdeleted text endnew text begin board of
governors
new text end abandoning the plan.

Sec. 26.

Minnesota Statutes 2004, section 322B.75, subdivision 2, is amended to read:


Subd. 2.

Effect on constituent organizations.

When a merger becomes effective:

(1) the constituent organizations become a single entity, the surviving limited
liability company or corporation, as the case may be;

(2) the separate existence of all constituent organizations except the surviving
organization ceases;

(3) as to any limited liability company that was a constituent organization and is not
the surviving organization, the articles of merger serve as the articles of termination, and,
unless previously filed, the notice of dissolution;

(4)(i) if the surviving organization is a limited liability company, the surviving
limited liability company has all the rights, privileges, immunities, and powers, and is
subject to all the duties and liabilities of a limited liability company deleted text beginorganizeddeleted text end under
this chapter; and

(ii) if the surviving organization is deleted text begina domestic corporationdeleted text endnew text begin not a limited liability
company
new text end, the surviving deleted text begindomestic corporationdeleted text end new text beginorganization new text endhas all the rights, privileges,
immunities, and powers, and is subject to all the duties and liabilities of deleted text begina domestic
corporation organized under chapter 302A
deleted text endnew text begin the organization under its governing lawnew text end;

(5) the surviving organization, whether a limited liability company deleted text beginordeleted text endnew text begin, a foreign
limited liability company,
new text end a domestic deleted text beginordeleted text endnew text begin corporation, anew text end foreign corporation, new text beginor a
cooperative organized under chapter 308A or 308B,
new text endpossesses all the rights, privileges,
immunities, and franchises, of a public as well as of a private nature, of each of the
constituent organizations. All property, real, personal, and mixed, and all debts due on any
account, including subscriptions to shares and contribution agreements, as the case may
be, and all other choses in action, and every other interest of or belonging to or due to each
of the constituent organizations vests in the surviving organization without any further
act or deed. Confirmatory deeds, assignments, or similar instruments to accomplish that
vesting may be signed and delivered at any time in the name of a constituent organization
by its current officers or managers, as the case may be, or, if the organization no longer
exists, by its last officers or managers, as the case may be. The title to any real estate or
any interest in real estate vested in any of the constituent organizations does not revert
nor in any way become impaired by reason of the merger;

(6) the surviving organization is responsible and liable for all the liabilities and
obligations of each of the constituent organizations. A claim of or against or a pending
proceeding by or against a constituent organization may be prosecuted as if the merger
had not taken place, or the surviving organization may be substituted in the place of the
constituent organization. Neither the rights of creditors nor any liens upon the property of
a constituent organization are impaired by the merger; and

(7) the articles of organization or articles of incorporation, as the case may be, of
the surviving organization are considered to be amended to the extent that changes in its
articles, if any, are contained in the plan of merger.

Sec. 27.

Minnesota Statutes 2004, section 322B.75, subdivision 3, is amended to read:


Subd. 3.

Effect on deleted text beginownersdeleted text endnew text begin membersnew text end.

When a merger or exchange becomes
effective, the deleted text beginownershipdeleted text endnew text begin membershipnew text end interests new text beginin a limited liability company new text endto be
converted or exchanged under the terms of the plan cease to exist in the case of a merger,
or are considered to be exchanged in the case of an exchange. The deleted text beginowners ofdeleted text endnew text begin members
owning
new text end those deleted text beginownershipdeleted text endnew text begin membershipnew text end interests are entitled only to the new text beginownership interests,
new text end securities, money, or other property into which those deleted text beginownershipdeleted text endnew text begin membershipnew text end interests
have been converted or for which those deleted text beginownershipdeleted text endnew text begin membershipnew text end interests have been
exchanged in accordance with the plan, subject to any dissenters' rights under section
deleted text begin 302A.471 ordeleted text end 322B.383deleted text begin, as the case may bedeleted text end.

Sec. 28.

Minnesota Statutes 2004, section 322B.755, subdivision 3, is amended to read:


Subd. 3.

Abandonment.

Section 308B.835 governs the abandonment by a
domestic cooperative of a merger authorized by this section. deleted text beginSection 322B.74 governs the
abandonment by a limited liability company of a merger authorized by this section, except
that for the purposes of a merger authorized by this section:
deleted text end

deleted text begin (1) the term "constituent organization" as used in section deleted text begin322B.74, subdivision 1deleted text end,
clause (1), does not include a domestic cooperative;
deleted text end

deleted text begin (2) the requirement stated in section deleted text begin322B.74, subdivision 1deleted text end, clause (1), as to a
domestic corporation does not apply and instead the abandonment must have been
approved by the domestic cooperative in the manner provided in chapter 308B;
deleted text end

deleted text begin (3) the reference in section deleted text begin322B.74, subdivision 2deleted text end, to a domestic corporation does
not apply and instead the abandonment by the domestic cooperative may be accomplished
as provided in chapter 308B; and
deleted text end

deleted text begin (4) the term "constituent organization" as used in section deleted text begin322B.74, subdivision 3deleted text end,
includes a domestic cooperative.
deleted text end

Sec. 29.

Minnesota Statutes 2004, section 322B.76, is amended to read:


322B.76 MERGER OR EXCHANGE WITH FOREIGN CORPORATIONnew text begin OR
A FOREIGN LIMITED LIABILITY COMPANY
new text end.

Subdivision 1.

When permitted.

A limited liability company may merge with
or participate in an exchange with a foreign corporation or a foreign limited liability
company by following the procedures set forth in this section, if:

(1) with respect to a merger, the merger is permitted by the laws of the state under
which the foreign corporation or foreign limited liability company is incorporated or
organized; and

(2) with respect to an exchange, the organization whose ownership interests will be
acquired is either a limited liability company or a domestic corporation, whether or not
the exchange is permitted by the laws of the state under which the foreign corporation or
foreign limited liability company is incorporated or organized.

Subd. 2.

Laws applicable before transaction.

Each limited liability company shall
comply with the provisions of sections 322B.70 to 322B.76 with respect to the merger or
exchange of ownership interests of organizations and each foreign corporation or foreign
limited liability company shall comply with the applicable provisions of the laws under
which it was incorporated or organized or by which it is governed.

Subd. 3.

Surviving domestic limited liability company.

If the surviving
organization in a merger will be a domestic limited liability company, it shall comply with
all the provisions of this chapter.

Subd. 4.

Surviving foreign corporation or foreign limited liability company.

If the surviving organization in a merger will be a foreign corporation or foreign limited
liability company and will transact business in this state, it shall comply, as the case may
be, with the provisions of chapter 303 with respect to foreign corporations or with the
provisions of this chapter with respect to foreign limited liability companies. In every case
the surviving foreign corporation or foreign limited liability company shall file with the
secretary of state:

(1) an agreement that it may be served with process in this state in a proceeding for
the enforcement of an obligation of a constituent organization and in a proceeding for the
enforcement of the rights of a dissenting owner of an ownership interest of a constituent
organization against the surviving foreign corporation or foreign limited liability company;

(2) an irrevocable appointment of the secretary of state as its agent to accept service
of process in any proceeding, and an address to which process may be forwarded; and

(3) an agreement that it will promptly pay to deleted text beginthedeleted text endnew text begin anynew text end dissenting deleted text beginowners of an
ownership interests
deleted text endnew text begin membersnew text end of each constituent domestic limited liability company
deleted text begin and constituent domestic corporationdeleted text end the amount, if any, to which they are entitled under
section deleted text begin302A.473 ordeleted text end 322B.386deleted text begin, as the case may bedeleted text end.

Sec. 30.

Minnesota Statutes 2004, section 322B.77, subdivision 1, is amended to read:


Subdivision 1.

Member approval and when not required.

A limited liability
company may, by affirmative vote of a majority of the governors present, upon those
terms and conditions and for those considerations, which may be money, securities, or
other instruments for the payment of money or other property, as the board of governors
considers expedient, and without member approval:

(1) sell, lease, transfer, or otherwise dispose of all or substantially all of its property
and assets in the usual and regular course of its business;

(2) grant a security interest in all or substantially all of its property and assets
whether or not in the usual and regular course of its business; or

(3) transfer any or all of its property to deleted text begina corporationdeleted text endnew text begin an organizationnew text end all the deleted text beginsharesdeleted text endnew text begin
ownership interests
new text end of which are owned by the limited liability company.

Sec. 31.

Minnesota Statutes 2004, section 322B.77, subdivision 4, is amended to read:


Subd. 4.

Transferee liability.

The transferee is liable for the debts, obligations,
and liabilities of the transferor only to the extent provided in the contract or agreement
between the transferee and the transferor or to the extent provided by this chapter or
other statutes of this state.new text begin A disposition of all or substantially all of a limited liability
company's properties and assets under this section is not considered to be a merger or a
de facto merger pursuant to this chapter or otherwise. The transferee is not liable solely
because it is deemed to be a continuation of the transferor.
new text end

Sec. 32.

Minnesota Statutes 2004, section 322B.80, subdivision 1, is amended to read:


Subdivision 1.

Dissolution events.

A limited liability company dissolves upon the
occurrence of any of the following events:

(1) when the period, if any, fixed in the articles of organization for the duration of
the limited liability company expires, or if the limited liability company's term expires
pursuant to section 322B.20, subdivision 2, paragraph (a);

(2) by order of a court pursuant to sections 322B.833 and 322B.843;

(3) by action of the organizers pursuant to section 322B.803;

(4) by action of the members pursuant to section 322B.806;

(5)(i) for limited liability companies whose existence begins before August 1, 1999,
except as otherwise provided in the articles deleted text beginof organizationdeleted text end or a member control agreement,
upon the occurrence of an event that terminates the continued membership of a member in
the limited liability company, but the limited liability company is not dissolved and is not
required to be wound up by reason of any event that terminates the continued membership
of a member if (A) there is at least one remaining member and the existence and business
of the limited liability company is continued by the consent of all the remaining members
obtained no later than 90 days after the termination of the continued membership, or (B) if
the membership of the last or sole member terminates and the legal representative of that
last or sole member causes the limited liability company to admit at least one member;

(ii) for limited liability companies whose existence begins on or after August 1,
1999, upon the occurrence of an event that terminates the continued membership of a
member in the limited liability company, but only if: (A) the articles of organization or a
member control agreement specifically provide that the termination causes dissolution
and in that event only as provided in the articles or member control agreement; or (B) if
the membership of the last or sole member terminates and the legal representative of that
last or sole member does not cause the limited liability company to admit at least one
member within 180 days after the termination;

(6) a merger in which the limited liability company is not the surviving organization;
or

(7) when terminated by the secretary of state according to section 322B.960.

Sec. 33. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 32 are effective August 1, 2006.
new text end