Office of the Revisor of Statutes
Minnesota Session Laws - 1989, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1989
CHAPTER 304-H.F.No. 1203
An act relating to nonprofit corporations; providing
for the organization, operation, and dissolution of
nonprofit corporations; imposing penalties;
appropriating money; amending Minnesota Statutes 1988,
sections 8.31, subdivision 1; 52.09, by adding a
subdivision; 79A.09, subdivision 1; 257.03; 309.67;
319A.20; 354A.021, subdivision 2; and 469.144,
subdivision 1; proposing coding for new law as
Minnesota Statutes, chapter 317A; repealing Minnesota
Statutes 1988, sections 317.01 to 317.69.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
CITATION
Section 1. [317A.001] [CITATION.]
This chapter may be cited as the Minnesota nonprofit
corporation act.
DEFINITIONS
Sec. 2. [317A.011] [DEFINITIONS.]
Subdivision 1. [SCOPE.] For purposes of this chapter, the
terms in this section have the meanings given them, unless the
language or context clearly shows that a different meaning is
intended.
Subd. 2. [ADDRESS.] "Address" means mailing address,
including a zip code, except that in the case of a registered
office, address means the mailing address and the actual office
location, which may not be a post office box.
Subd. 3. [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 statement of
change of registered office, registered agent, or name of
registered agent, articles of merger, articles of consolidation,
articles of abandonment, and articles of dissolution. In the
case of a foreign corporation, the term includes documents
serving a similar function required to be filed with the
secretary of state or other officer of the corporation's state
of incorporation.
Subd. 4. [BOARD OF DIRECTORS.] "Board of directors" or
"board" means the group of persons vested with the general
management of the internal affairs of a corporation, regardless
of how they are identified.
Subd. 5. [BYLAWS.] "Bylaws" means the code adopted for the
regulation or management of the internal affairs of a
corporation, regardless of how designated.
Subd. 6. [CORPORATION.] "Corporation" means a corporation
that is governed by this chapter. A corporation may not:
(1) be formed for a purpose involving pecuniary gain to its
members, other than to members that are nonprofit organizations
or subdivisions, units, or agencies of the United States or a
state or local government; and
(2) pay dividends or other pecuniary remuneration, directly
or indirectly, to its members, other than to members that are
nonprofit organizations or subdivisions, units, or agencies of
the United States or a state or local government.
Subd. 7. [DIRECTOR.] "Director" means a member of the
board.
Subd. 8. [FILED WITH THE SECRETARY OF STATE.] "Filed with
the secretary of state" means that an original of a document
meeting the requirements of this chapter, signed, and
accompanied by a filing fee of $25, has been delivered to the
secretary of state of this state. The secretary of state shall
endorse on the original the word "Filed" and the month, day,
year, and time of filing, record the document in the office of
the secretary of state, and return the document to the person
who delivered it for filing.
Subd. 9. [FOREIGN CORPORATION.] "Foreign corporation"
means a corporation that is formed under laws other than the
laws of this state.
Subd. 10. [GOOD FAITH.] "Good faith" means honesty in
fact in the conduct of an act or transaction.
Subd. 11. [LEGAL REPRESENTATIVE.] "Legal representative"
means a person empowered to act for another person, including,
but not limited to, an agent, officer, partner, or associate of
an organization; a trustee of a trust; a personal
representative; a trustee in bankruptcy; or a receiver,
guardian, custodian, or conservator.
Subd. 12. [MEMBER.] "Member" means a person with
membership rights in a corporation under its articles or bylaws,
regardless of how the person is identified.
Subd. 13. [MEMBERS WITH VOTING RIGHTS.] "Members with
voting rights" or "voting members" means members or a class of
members that has voting rights with respect to the purpose or
matter involved.
Subd. 14. [NOTICE.] (a) "Notice" is given by a member of a
corporation to the corporation or an officer of the corporation
when in writing and mailed or delivered to the corporation or
the officer at the registered office of the corporation.
(b) Notice is given by the corporation to an officer,
member, or other person:
(1) when mailed to the person at an address designated by
the person, at the last known address of the person or, in the
case of an officer or member, at the address of the person in
the corporate records;
(2) when communicated to the person orally;
(3) when handed to the person;
(4) when left at the office of the person with a clerk or
other person in charge of the office, or if there is no one in
charge, when left in a conspicuous place in the office;
(5) if the person's office is closed or the person to be
notified has no office, when left at the dwelling or usual place
of abode of the person with a person of suitable age and
discretion residing in the house; or
(6) when the method is fair and reasonable when all the
circumstances are considered.
(c) Notice by mail is given when deposited in the United
States mail with sufficient postage. Notice is considered
received when it is given.
Subd. 15. [OFFICER.] "Officer" means a person elected,
appointed, or otherwise designated as an officer by the board,
and a person considered elected an officer under section 51.
Subd. 16. [ORGANIZATION.] "Organization" means a domestic
or foreign business or nonprofit corporation, partnership,
limited partnership, joint venture, association, trust, estate,
enterprise, or other legal or commercial entity.
Subd. 17. [REGISTERED OFFICE.] "Registered office" means
the place in this state designated in the articles of a
corporation as the registered office of the corporation.
Subd. 18. [RELATED ORGANIZATION.] "Related organization"
means an organization that controls, is controlled by, or is
under common control with, another corporation. Control exists
if an organization:
(1) owns, directly or indirectly, at least 50 percent of
the stock ownership or membership interests of another
organization;
(2) has the right, directly or indirectly, to elect,
appoint, or remove 50 percent or more of the voting members of
the governing body of another organization; or
(3) has the power, directly or indirectly, to direct or
cause the direction of the management and policies of another
organization, whether through the ownership of voting interests,
by contract, or otherwise.
Subd. 19. [SIGNED.] (a) "Signed" means that the signature
of a person is written on a document, as provided in section
645.44, subdivision 14. A document required by this chapter to
be filed with the secretary of state must be signed by a person
authorized to do so by this chapter, the articles or bylaws, or
a resolution approved by the affirmative vote of the required
proportion or number of the directors, or the required
proportion or number of members with voting rights, if any.
(b) A signature on a document not required by this chapter
to be filed with the secretary of state may be a facsimile
affixed, engraved, printed, placed, stamped with indelible ink,
or in any other manner reproduced on the document.
Subd. 20. [WRITTEN ACTION.] "Written action" means a
written document signed by all of the persons required to take
the action. The term also means the counterparts of a written
document signed by any of the persons taking the action. A
counterpart is the action of the persons signing it, and all the
counterparts are one written action by all of the persons
signing them.
APPLICATION
Sec. 3. [317A.021] [APPLICATION AND ELECTION.]
Subdivision 1. [ELECTION BY CHAPTER 300, 309, OR 315
CORPORATIONS.] A corporation incorporated under chapter 300,
309, or 315 that has not later become governed by chapter 317
may elect to be governed by this chapter.
Subd. 2. [ELECTION BY CHAPTER 317 CORPORATIONS.] On or
after August 1, 1989, and before January 1, 1991, a corporation
incorporated under chapter 317 may elect to become governed by
this chapter.
Subd. 3. [CONFORMING ARTICLES OF ELECTING
CORPORATIONS.] If the articles of an electing corporation
include a provision prohibited by this chapter, omit a provision
required by this chapter, or are inconsistent with this chapter,
the electing corporation shall amend its articles to conform to
the requirements of this chapter. The appropriate provisions of
the corporation's articles or bylaws or the law by which it was
governed before the effective date of the election made under
this section control the manner of adoption of the amendment.
Subd. 4. [METHOD OF ELECTION.] An election by a
corporation to become governed by this chapter must be made by
resolution approved by the affirmative vote of the members with
voting rights of the same proportion that is required for
amendment of the articles of the corporation before the
election. If there are no members with voting rights, the
corporation must elect to be governed by this chapter by a
resolution adopted by a majority vote of the directors entitled
to vote at a special meeting of the board, with proper notice
given. The resolution, articles of amendment, if required, and
a certified copy of corporate documents previously filed with
the county recorder that would be filed with the secretary of
state under this chapter, must be filed with the secretary of
state and are effective upon filing. If an amendment of the
articles is not required, the resolution must state that the
articles of the corporation conform to the requirements of this
chapter.
Subd. 5. [EFFECT OF ELECTION UPON BYLAWS.] Upon filing an
election under subdivision 4, provisions of the bylaws that are
consistent with this chapter remain or become effective and
provisions of the bylaws that are inconsistent with this chapter
are not effective.
Subd. 6. [CHOICE OF INCORPORATION UNTIL JANUARY 1,
1990.] From August 1, 1989, to December 31, 1990, a corporation
may be incorporated under this chapter or under chapter 317.
Subd. 7. [NONELECTING NONPROFIT CORPORATIONS SUBJECT TO
THIS CHAPTER AS OF JANUARY 1, 1991.] A corporation in existence
on January 1, 1991, that is within the scope of this chapter and
incorporated under another statute of this state, other than a
corporation incorporated under chapter 300, 309, or 315 that has
not later become governed by chapter 317, is governed by this
chapter as of January 1, 1991, as though the corporation had
been incorporated under this chapter. The provisions of the
articles and bylaws of the corporation that may be included in
the articles or bylaws under this chapter remain in effect. The
provisions of the articles and bylaws of the corporation that
are inconsistent with this chapter are not effective as of
January 1, 1991. Provisions required by this chapter to be
contained in the articles that do not appear in the articles are
read into them as a matter of law.
Subd. 8. [INCORPORATION AFTER JANUARY 1, 1991.] On and
after January 1, 1991, a corporation that is within the scope of
this chapter may be incorporated only under this chapter.
Subd. 9. [APPLICABILITY OF OTHER LAWS.] (a) Except as
provided in paragraphs (b) and (c), chapters 300, 316, 317, and
556 do not apply to corporations.
(b) Sections 300.60, 300.61, and 300.63 apply to
corporations.
(c) This subdivision does not affect the applicability of
chapter 300 to a corporation that elected to reject Laws 1951,
chapter 500, sections 1 to 25.
Sec. 4. [317A.031] [TRANSITION; CONTINUATION OF LEGAL
ACTS.]
The continuation or completion of an act by a corporation
that is not incorporated under, but has become governed by, this
chapter, and the continuation or performance of an executed or
wholly or partially executory contract, conveyance, or transfer
to or by the corporation, is valid if otherwise lawful before
the corporation became governed by this chapter. The act may be
continued, completed, enforced, or ended as required or
permitted by a statute applicable before the date on which the
corporation became governed by this chapter.
Sec. 5. [317A.041] [RESERVATION OF RIGHT.]
The state reserves the right to amend or repeal this
chapter. A corporation governed by this chapter is subject to
this reserved right.
Sec. 6. [317A.051] [SCOPE OF CHAPTER.]
Subdivision 1. [GENERAL.] This chapter does not apply to
cooperative associations, public cemetery corporations and
associations, and private cemeteries.
Subd. 2. [RELIGIOUS CORPORATIONS.] This chapter does not
apply to a religious corporation authorized by chapter 315
unless it is formed under this chapter or elects to be governed
by this chapter as provided in section 3. Regardless of whether
it is formed or elects to be governed by this chapter, a
religious corporation may elect to be governed by sections 84 to
93 without electing to come under the entire chapter. If a
religious corporation elects to be governed by sections 84 to
93, it shall file its documents with the county recorder of the
county where its registered office is located instead of the
secretary of state.
Sec. 7. [317A.061] [FOREIGN NONPROFIT CORPORATIONS;
SECTIONS APPLICABLE.]
Subdivision 1. [GENERAL.] Except for this section and
section 91 concerning merger or consolidation, this chapter does
not apply to foreign nonprofit corporations.
Subd. 2. [SECTIONS APPLICABLE.] (a) Except as provided in
paragraph (b), a foreign nonprofit corporation is subject to
chapter 303. Unless it complies with chapter 303, a foreign
corporation may not transact business in this state.
(b) Sections 303.02, subdivision 2, 303.07, 303.14, 303.16,
subdivision 2, clauses (6) and (7), and 303.22, do not apply to
foreign nonprofit corporations.
INCORPORATION; ARTICLES
Sec. 8. [317A.101] [PURPOSES.]
A corporation may be incorporated under this chapter for
any lawful purpose, unless another statute requires
incorporation for a purpose under a different law. Unless
otherwise limited in its articles, a corporation has a general
purpose of engaging in any lawful activity. A corporation
engaging in conduct that is regulated by another statute is
subject to the limitations of the other statute.
Sec. 9. [317A.105] [INCORPORATORS.]
One or more adult natural persons may act as incorporators
of a corporation by filing articles of incorporation for the
corporation with the secretary of state.
Sec. 10. [317A.111] [ARTICLES.]
Subdivision 1. [REQUIRED PROVISIONS.] The articles of
incorporation must contain:
(1) the name of the corporation;
(2) the address of the registered office of the corporation
and the name of its registered agent, if any, at that address;
(3) the name and address of each incorporator; and
(4) a statement that the corporation is organized under
this chapter.
Subd. 2. [STATUTORY PROVISIONS THAT MAY BE MODIFIED ONLY
IN ARTICLES.] The following provisions govern a corporation
unless modified in the articles:
(1) a corporation has a general purpose of engaging in any
lawful activity (section 8);
(2) the power to initially adopt, amend, or repeal the
bylaws is vested in the board (section 26);
(3) cumulative voting for directors is prohibited (section
34);
(4) a written action by the board taken without a meeting
must be signed by all directors (section 42); and
(5) members are of one class (section 56).
Subd. 3. [STATUTORY PROVISIONS THAT MAY BE MODIFIED IN
ARTICLES OR BYLAWS.] The following provisions govern a
corporation unless modified in the articles or bylaws:
(1) a certain method must be used for amending the articles
(section 17);
(2) a corporation has perpetual duration and certain powers
(section 22);
(3) a certain method must be used for the members to adopt,
amend, or repeal existing bylaws (section 26);
(4) a director holds office until expiration of the
director's term and election of a successor (section 30);
(5) the term of a director filling a vacancy expires at the
end of the term the director is filling (section 30);
(6) the compensation of directors is fixed by the board
(section 32);
(7) a certain method must be used for removal of directors
(section 36);
(8) a certain method must be used for filling board
vacancies (section 38);
(9) board meetings must be held at least once per year and
if the board fails to select a place for a board meeting, it
must be held at the registered office (section 39);
(10) a director may call a board meeting, and the notice of
the meeting need not state the purpose of the meeting (section
39);
(11) a majority of the board is a quorum (section 40);
(12) the affirmative vote of the majority of directors
present is required for board action (section 41);
(13) a committee consists of one or more persons, who need
not be directors, appointed by the board (section 43);
(14) the president and treasurer have certain duties, until
the board determines otherwise (section 48);
(15) officers may delegate some or all of their duties and
powers, if not prohibited by the board from doing so (section
54);
(16) a corporation does not have members (section 56);
(17) the board may determine the consideration required to
admit members (section 56);
(18) all members are entitled to vote and have equal rights
and preferences in matters not otherwise provided for by the
board or members (section 56);
(19) memberships may not be transferred (section 58);
(20) a corporation with voting members must hold a regular
meeting of voting members annually (section 64);
(21) if a specific minimum notice period has not been fixed
by law, at least five days' notice is required for a meeting of
members (section 67);
(22) the board may fix a date up to 60 days before the date
of a members meeting as the date for determination of the
members entitled to notice of and entitled to vote at the
meeting (section 68);
(23) each member has one vote (section 70);
(24) the affirmative vote of the majority of members with
voting rights present and entitled to vote is required for
action of the members, unless this chapter or the articles or
bylaws require a greater vote or voting by class (section 71);
(25) members may take action at a meeting by voice or
ballot, by unanimous action without a meeting, by mailed ballot,
or by electronic communication (section 71);
(26) the number of members required for a quorum is ten
percent of the members entitled to vote (section 75);
(27) certain procedures govern acceptance of member acts
(section 77); and
(28) indemnification of certain persons is required
(section 83).
Subd. 4. [OPTIONAL PROVISIONS; SPECIFIC SUBJECTS.] The
following provisions relating to the management or regulation of
the affairs of a corporation may be included in the articles or,
except for naming members of the first board or fixing a greater
than majority director or member vote, in the bylaws:
(1) the first board of directors may be named in the
articles (section 25);
(2) additional qualifications for directors may be imposed
(section 29);
(3) terms of directors may be staggered (section 30);
(4) the day or date, time, and place of board meetings may
be fixed (section 39);
(5) in addition to the president, authority to sign and
deliver certain documents may be delegated to an officer or
agent of the corporation (section 48);
(6) additional officers may be designated (section 49);
(7) additional powers, rights, duties, and responsibilities
may be given to officers (section 49);
(8) a method for filling vacant offices may be specified
(section 53);
(9) membership criteria and procedures for admission may be
established (section 56);
(10) membership terms may be fixed (section 56);
(11) a corporation may levy dues, assessments, or fees on
members (section 59);
(12) a corporation may buy memberships (section 62);
(13) a corporation may have delegates with some or all the
authority of members (section 63);
(14) the day or date, time, and place of regular member
meetings or the place of special meetings may be fixed (section
64);
(15) certain persons may be authorized to call special
meetings of members (section 65);
(16) notices of special member meetings may be required to
contain certain information (section 65);
(17) a larger than majority vote may be required for member
action (section 71);
(18) members may vote by proxy (section 76); and
(19) members may enter into voting agreements (section 78).
Subd. 5. [OPTIONAL PROVISIONS; GENERALLY.] The articles
may contain other provisions consistent with law relating to the
management or regulation of the affairs of the corporation.
Subd. 6. [POWERS NEED NOT BE STATED.] It is not necessary
to state the corporate powers granted by this chapter in the
articles.
Subd. 7. [SUBSTANTIVE LAW CONTROLS.] If there is a
conflict between subdivision 2, 3, or 4 and another section of
this chapter, the other section controls.
Sec. 11. [317A.113] [PRIVATE FOUNDATIONS; PROVISIONS
CONSIDERED CONTAINED IN ARTICLES.]
Subdivision 1. [PROVISIONS REQUIRED.] The articles of
incorporation of a corporation that is a private foundation as
defined in section 509(a) of the Internal Revenue Code of 1986
and an instrument governing the use, retention, or disposition
by the corporation of its income or property must contain the
provisions contained in this section. If the articles and
instrument do not contain these provisions, they are considered
to have incorporated the language in clauses (1) to (5) with the
same effect as though the language was set forth verbatim.
Except as provided in subdivision 2, these provisions govern the
corporation as to the use, retention, and disposition of its
income and property regardless of provisions of the articles or
instrument or other law of this state to the contrary:
(1) the corporation shall distribute for each of its
taxable years amounts at least sufficient to avoid liability for
the tax imposed by section 4942(a) of the Internal Revenue Code
of 1986;
(2) the corporation may not engage in an act of
"self-dealing" as defined in section 4941(d) of the Internal
Revenue Code of 1986 that would give rise to liability for the
tax imposed by section 4941(a) of the Internal Revenue Code of
1986;
(3) the corporation may not retain "excess business
holdings" as defined in section 4943(c) of the Internal Revenue
Code of 1986 that would give rise to liability for the tax
imposed by section 4943(a) of the Internal Revenue Code of 1986;
(4) the corporation may not make investments that would
jeopardize the carrying out of the exempt purposes of the
corporation, within the meaning of section 4944 of the Internal
Revenue Code of 1986, so as to give rise to liability for the
tax imposed by section 4944(a) of the Internal Revenue Code of
1986; and
(5) the corporation may not make a "taxable expenditure" as
defined in section 4945(d) of the Internal Revenue Code of 1986
that would give rise to liability for the tax imposed by section
4945(a) of the Internal Revenue Code of 1986.
Subd. 2. [EXCEPTION.] Subdivision 1 does not apply to a
corporation if a court of competent jurisdiction determines that
the application would be contrary to the terms of an instrument
described in subdivision 1 and that the instrument may not
properly be changed to conform to subdivision 1.
Subd. 3. [FUTURE REFERENCES.] A reference in subdivision 1
to a particular section of the Internal Revenue Code of 1986
includes the corresponding provision of a future United States
Internal Revenue law.
Subd. 4. [APPLICATION.] This section applies to all
corporations that could be governed by this chapter,
notwithstanding sections 3 and 6.
Subd. 5. [RIGHTS RESERVED.] This section does not impair
the rights and powers of the attorney general or the courts of
this state with respect to a corporation.
Sec. 12. [317A.115] [CORPORATE NAME.]
Subdivision 1. [REQUIREMENTS.] (a) The corporate name must
be in the English language or in another language expressed in
English letters or characters.
(b) A corporate name may not contain a word or phrase that
shows or implies that it may not be incorporated under this
chapter.
(c) A corporate name need not contain the word
"corporation," "incorporated," "company," or "limited," or an
abbreviation of one of these words.
Subd. 2. [USE OF DECEPTIVELY SIMILAR NAME.] (a) A
corporate name may not be the same as, or deceptively similar
to, the name of a domestic corporation or limited partnership, a
foreign corporation or limited partnership authorized or
registered to do business in this state, whether profit or
nonprofit, or a name the right to which is, at the time of
incorporation, reserved, registered, or provided for in section
13, 302A.117, 322A.03, or sections 333.001 to 333.54, unless one
of the following is filed with the articles:
(1) the written consent of the organization having the same
or a deceptively similar name;
(2) a certified copy of a final decree of a court in this
state establishing the prior right of the applicant to use its
corporate name in this state; or
(3) an affidavit of nonuse of the kind required by section
302A.115, subdivision 1, paragraph (d), clause (3).
(b) The secretary of state shall determine whether a name
is deceptively similar for purposes of this section and section
13.
(c) This subdivision does not affect the right of a
corporation existing on January 1, 1991, or a foreign
corporation authorized to do business in this state on that
date, to use its corporate name.
Subd. 3. [OTHER LAWS AFFECTING USE OF NAMES.] This section
and sections 13 and 121, subdivision 2, do not abrogate or limit
the law of unfair competition or unfair practices, sections
333.001 to 333.54, the laws of the United States with respect to
the right to acquire and protect copyrights, trade names,
trademarks, service names, service marks, or other rights to the
exclusive use of names or symbols, nor derogate the common law
or the principles of equity.
Subd. 4. [USE OF NAME BY SUCCESSOR CORPORATION.] A
corporation that is merged with another domestic or foreign
corporation, that is incorporated by the reorganization of one
or more domestic or foreign corporations, or that acquires by
sale, lease, or other disposition to or exchange with a domestic
corporation all or substantially all of the assets of another
domestic or foreign corporation, including its name, may have
the same name as that used in this state by any of the other
corporations, if the other corporation was incorporated under
the laws of, or is authorized to transact business in, this
state.
Subd. 5. [EFFECT OF WRONGFUL USE; INJUNCTION.] The use of
a name by a corporation in violation of this section does not
affect or impair its corporate existence, but a court in this
state may, upon application of the state or of an interested or
affected person, enjoin the corporation from doing business
under a name assumed in violation of this section, although its
articles may have been filed with the secretary of state and a
certificate of incorporation issued.
Sec. 13. [317A.117] [RESERVED NAME.]
Subdivision 1. [WHO MAY RESERVE.] A corporate name
permitted by section 12 may be reserved in the records of the
secretary of state by:
(1) a person doing business in this state under that name
or a name deceptively similar to that name;
(2) a person intending to incorporate under this chapter;
(3) a domestic corporation intending to change its name;
(4) a foreign corporation intending to make application for
a certificate of authority to transact business in this state;
(5) a foreign corporation authorized to transact business
in this state and intending to change its name;
(6) a person intending to incorporate a foreign corporation
and intending to have the foreign corporation make application
for a certificate of authority to transact business in this
state; or
(7) a foreign corporation doing business under that name or
a name deceptively similar to that name in a state other than
this state and not described in clauses (4) to (6).
Subd. 2. [METHOD OF RESERVATION.] The reservation must be
made by filing with the secretary of state a request that the
name be reserved. If the name is available for reservation by
the applicant, the secretary of state shall reserve the name for
the applicant for 12 months. The reservation may be renewed for
successive 12-month periods.
Subd. 3. [TRANSFER OF RESERVATION.] The right to a
corporate name reserved under this section may be transferred to
another person by or on behalf of the applicant for whom the
name was reserved by filing with the secretary of state a notice
of the transfer and specifying the name and address of the
transferee.
Sec. 14. [317A.121] [REGISTERED OFFICE; REGISTERED AGENT.]
Subdivision 1. [REGISTERED OFFICE.] A corporation shall
continuously maintain a registered office in this state. A
registered office need not be the same as the principal place of
business of the corporation.
Subd. 2. [REGISTERED AGENT.] A corporation may designate
in its articles a registered agent. The registered agent may be
a natural person residing in this state, a domestic corporation,
or a foreign corporation authorized to transact business in this
state. The registered agent must maintain an office that is
identical with the registered office.
Sec. 15. [317A.123] [CHANGE OF REGISTERED OFFICE OR
REGISTERED AGENT; CHANGE OF NAME OF REGISTERED AGENT.]
Subdivision 1. [STATEMENT.] A corporation may change its
registered office, designate or change its registered agent, or
state a change in the name of its registered agent, by filing
with the secretary of state a statement containing:
(1) the name of the corporation;
(2) if the address of its registered office is to be
changed, the new address of its registered office;
(3) if its registered agent is to be designated or changed,
the name of its new registered agent;
(4) if the name of its registered agent is to be changed,
the name of its registered agent as changed;
(5) a statement that the address of its registered office
and the address of the office of its registered agent, as
changed, will be identical; and
(6) a statement that the change of registered office or
registered agent was authorized by resolution approved by the
board.
Subd. 2. [RESIGNATION OF AGENT.] A registered agent of a
corporation may resign by filing with the secretary of state a
signed written notice of resignation, including a statement that
a signed copy of the notice has been given to the corporation at
its registered office. The appointment of the agent ends 30
days after the notice is filed with the secretary of state.
Subd. 3. [CHANGE OF ADDRESS OR NAME OF AGENT.] If the
address or name of a registered agent changes, the agent shall
change the address of the registered office or the name of the
registered agent of a corporation represented by that agent by
filing with the secretary of state the statement required in
subdivision 1, except that it need be signed only by the
registered agent, need not be responsive to subdivision 1,
clause (3) or (6), and must state that a copy of the statement
has been mailed to the corporation.
Sec. 16. [317A.131] [AMENDMENT OF ARTICLES.]
The articles of a corporation may be amended to include or
modify a provision that is required or permitted to appear in
the articles or to omit a provision not required to be included
in the articles. When articles are amended to restate them, the
name and address of each incorporator may be omitted. Unless
otherwise provided in this chapter, the articles may be amended
or modified only under sections 17 and 18.
Sec. 17. [317A.133] [PROCEDURE FOR AMENDMENT OF ARTICLES.]
Subdivision 1. [APPROVAL BY INCORPORATORS OR BOARD.] A
majority of incorporators may amend the articles by written
action if no directors are named in the original articles, if no
directors have been elected, and if there are no members with
voting rights. A majority of directors may amend the articles
if there are no members with voting rights, if members with
voting rights have authorized the board to amend the articles
under subdivision 3, or if the amendment merely restates the
existing articles, as amended. An amendment restating the
existing articles may, but need not, be submitted to and
approved by the members as provided in subdivision 2.
Subd. 2. [APPROVAL BY BOARD AND MEMBERS WITH VOTING
RIGHTS.] Amendments to the articles must be approved by a
majority of the directors and a majority of the members with
voting rights. If an amendment is initiated by the directors,
proper notice of the proposed amendment must precede a member
meeting at which the amendment will be considered and must
include the substance of the proposed amendment. If an
amendment is proposed and approved by the members, the members
may demand a special board meeting within 60 days for
consideration of the proposed amendment if a regular board
meeting would not occur within 60 days.
Subd. 3. [APPROVAL BY BOARD WHERE MEMBERS HAVE VOTING
RIGHTS.] (a) A majority of members with voting rights may
authorize the board of directors, subject to paragraph (c), to
exercise from time to time the power of amendment of the
articles without member approval.
(b) When the members have authorized the board of directors
to amend the articles, the board of directors, by a majority
vote, unless the articles, bylaws, or the members' resolution
authorizing the board action require a greater vote, may amend
the articles at a meeting of the board. Notice of the meeting
and of the proposed amendment must be given.
(c) A majority of members with voting rights voting at a
meeting duly called for the purpose, may prospectively revoke
the authority of the board to exercise the power of the members
to amend the articles.
Subd. 4. [RESTRICTION OF APPROVAL METHODS.] Articles or
bylaws may require greater than majority approval by either the
board or voting members for an action under this section and may
limit or prohibit the use of mail ballots by voting members.
Subd. 5. [APPROVAL OF CLASS.] The articles or bylaws may
provide that an amendment also must be approved by the members
of a class.
Sec. 18. [317A.139] [ARTICLES OF AMENDMENT.]
When an amendment has been adopted, articles of amendment
must be prepared that contain:
(1) the name of the corporation;
(2) the amendment adopted;
(3) with respect to an amendment restating the articles, a
statement that the amendment correctly sets forth without change
the corresponding provisions of the articles as previously
amended, if the amendment was approved only by the board; and
(4) a statement that the amendment has been adopted under
this chapter.
Sec. 19. [317A.141] [EFFECT OF AMENDMENT.]
Subdivision 1. [EFFECT ON CAUSE OF ACTION.] An amendment
does not affect an existing cause of action in favor of or
against the corporation, a pending suit to which the corporation
is a party, nor the existing rights of persons other than
members.
Subd. 2. [EFFECT OF CHANGE OF NAME.] If the corporate name
is changed by the amendment, a suit brought by or against the
corporation under its former name does not abate for that reason.
Subd. 3. [EFFECT OF AMENDMENTS RESTATING ARTICLES.] When
effective under section 20, an amendment restating the articles
in their entirety supersedes the original articles and
amendments to the original articles.
Sec. 20. [317A.151] [FILING; EFFECTIVE DATE OF ARTICLES.]
Subdivision 1. [FILING REQUIRED.] Articles of
incorporation and articles of amendment must be filed with the
secretary of state.
Subd. 2. [EFFECTIVE DATE.] Articles of incorporation are
effective and corporate existence begins when the articles of
incorporation are filed with the secretary of state accompanied
by a payment of $60, which includes a $35 incorporation fee in
addition to the $25 filing fee required by section 2,
subdivision 9. Articles of amendment are effective when filed
with the secretary of state or at another time within 31 days
after filing if the articles of amendment so provide.
Sec. 21. [317A.155] [PRESUMPTION; CERTIFICATE OF
INCORPORATION.]
When the articles of incorporation have been filed with the
secretary of state and the required fee has been paid to the
secretary of state, it is presumed that conditions precedent
required to be performed by the incorporators have been complied
with and that the corporation has been incorporated, and the
secretary of state shall issue a certificate of incorporation to
the corporation. This presumption does not apply against this
state in a proceeding to cancel or revoke the certificate of
incorporation or to compel the involuntary dissolution of the
corporation.
POWERS
Sec. 22. [317A.161] [POWERS.]
Subdivision 1. [GENERALLY; LIMITATIONS.] A corporation has
the powers in this section, subject to limitations provided in
applicable federal or state law or in its articles or bylaws.
Subd. 2. [DURATION.] A corporation has perpetual duration.
Subd. 3. [LEGAL CAPACITY.] A corporation may sue and be
sued, and participate in a legal, administrative, or arbitration
proceeding, in its corporate name.
Subd. 4. [PROPERTY OWNERSHIP.] A corporation may buy,
lease, acquire, own, hold, improve, use, and deal in and with,
real or personal property, or an interest in property, wherever
located.
Subd. 5. [PROPERTY DISPOSITION.] A corporation may sell,
convey, mortgage, create a security interest in, lease,
exchange, transfer, or dispose of all or a part of its real or
personal property, or an interest in property, wherever located.
Subd. 6. [TRADING IN SECURITIES; OBLIGATIONS.] A
corporation may buy, subscribe for, acquire, own, hold, vote,
use, employ, sell, exchange, mortgage, lend, create a security
interest in, dispose of, use, and deal in and with, securities
or other interests in, or obligations of, a person or direct or
indirect obligations of a domestic or foreign government or
instrumentality.
Subd. 7. [CONTRACTS; MORTGAGES.] A corporation may make
contracts and incur liabilities, borrow money, issue its
securities, and secure its obligations by mortgage of or
creation of a security interest in its property, franchises and
income.
Subd. 8. [INVESTMENT.] A corporation may invest and
reinvest its funds.
Subd. 9. [HOLDING PROPERTY AS SECURITY.] A corporation may
take and hold real and personal property, whether or not of a
kind sold or otherwise dealt in by the corporation, as security
for the payment of money loaned, advanced, or invested.
Subd. 10. [LOCATION.] A corporation may conduct its
business, carry on its operations, have offices, and exercise
the powers granted by this chapter anywhere in the universe.
Subd. 11. [DONATIONS.] A corporation may make donations
for religious, scientific, educational, or charitable purposes,
and for other purposes consistent with law, that further the
corporate interest.
Subd. 12. [PENSIONS; BENEFITS.] A corporation may pay
pensions, retirement allowances, and compensation for past
services and establish employee or incentive benefit plans,
trusts, and provisions for the benefit of its officers,
directors, employees, and agents and their families, dependents,
and beneficiaries. It may indemnify and buy insurance for a
fiduciary of an employee benefit and incentive plan, trust, or
provision.
Subd. 13. [PARTICIPATIONS.] (a) A corporation may
participate in the promotion, organization, management, and
operation of an organization or in a transaction, undertaking,
or arrangement that the participating corporation would have
power to conduct by itself, whether or not the participation
involves sharing or delegation of control.
(b) A corporation may participate with others in a
corporation, partnership, limited partnership, joint venture,
trust, or other association of any kind that the participating
corporation would have power to conduct by itself, whether or
not the participation involves sharing or delegation of control.
Subd. 14. [INSURANCE.] A corporation may provide for its
benefit life insurance and other insurance with respect to the
services of its officers, directors, employees, and agents.
Subd. 15. [CORPORATE SEAL.] A corporation may have, alter
at pleasure, and use a corporate seal as provided in section 23.
Subd. 16. [BYLAWS.] A corporation may adopt, amend, and
repeal bylaws relating to the management of the business or the
regulation of the affairs of the corporation as provided in
section 26.
Subd. 17. [COMMITTEES.] A corporation may establish
committees of the board of directors, elect or appoint persons
to the committees, define their duties, and fix their
compensation as provided in section 43.
Subd. 18. [OFFICERS; EMPLOYEES; AGENTS.] A corporation may
elect or appoint officers, employees, and agents of the
corporation, define their duties, and fix their compensation as
provided in sections 47 to 55.
Subd. 19. [LOANS; GUARANTIES; SURETIES.] A corporation may
lend money to, guarantee an obligation of, become a surety for,
or otherwise financially assist persons as provided in section
81.
Subd. 20. [ADVANCES.] A corporation may make advances to
its directors, officers, and employees and those of its
subsidiaries as provided in section 82.
Subd. 21. [INDEMNIFICATION.] A corporation shall indemnify
those persons identified in section 83 against certain expenses
and liabilities only as provided in section 83 and may indemnify
other persons.
Subd. 22. [ASSUMED NAMES.] A corporation may conduct all
or part of its business under one or more assumed names as
provided in sections 333.001 to 333.06.
Subd. 23. [MAY TAKE AND HOLD TRUST PROPERTY.] A
corporation may take, receive, and hold real and personal
property, including the principal and interest of money or other
fund, that is given, conveyed, bequeathed, devised to or vested
in the corporation in trust where the corporation or a related
organization has a vested or contingent interest in the trust.
Subd. 24. [MAY INVEST TRUST PROPERTY.] Except where the
trust instrument prescribes otherwise, a corporation may invest
trust property or its proceeds in accordance with section
501.125.
Subd. 25. [MEMBERSHIP.] A corporation may be a member of
another foreign or domestic nonprofit corporation.
Subd. 26. [DISSOLUTION.] A corporation may dissolve and
wind up.
Subd. 27. [MERGER AND CONSOLIDATION.] A corporation may
merge and consolidate with other domestic or foreign nonprofit
corporations organized for related purposes.
Subd. 28. [OTHER POWERS.] A corporation has other powers
necessary or convenient to effect a lawful purpose for which the
corporation is incorporated.
Sec. 23. [317A.163] [CORPORATE SEAL.]
Subdivision 1. [SEAL NOT REQUIRED.] A corporation may, but
need not, have a corporate seal. The use or nonuse of a
corporate seal does not affect the validity, recordability, or
enforceability of a document or act. If a corporation has a
corporate seal, the use of the seal by the corporation on a
document is not necessary.
Subd. 2. [REQUIRED WORDS; USE.] If a corporation has a
corporate seal, the seal may consist of a mechanical imprinting
device, or a rubber stamp with a facsimile of the seal affixed
on it, or a facsimile or reproduction of either. The seal may
include a part or all of the name of the corporation and a
combination, derivation, or abbreviation of either or both of
the phrases "a Minnesota Nonprofit Corporation" and "Corporate
Seal." If a corporation has a corporate seal, it or a facsimile
of it may be affixed, engraved, printed, placed, stamped with
indelible ink, or in any other manner reproduced on any document.
Sec. 24. [317A.165] [EFFECT OF LACK OF POWER; ULTRA
VIRES.]
Subdivision 1. [GENERAL.] Except as provided in this
section, the doing, continuing, or performing by a corporation
of an act, or an executed or wholly or partially executory
contract, conveyance, or transfer to or by the corporation, if
otherwise lawful, is not invalid because the corporation was
without the power under this chapter or its articles or bylaws
to do, continue, or perform the act, contract, conveyance, or
transfer.
Subd. 2. [ACTION BY MEMBER.] At least 50 members with
voting rights or ten percent of the members with voting rights,
whichever is less, may bring an action against the corporation
to enjoin the doing, continuing, or performing of an
unauthorized act, contract, conveyance, or transfer. If the
unauthorized act, continuation, or performance sought to be
enjoined is being, or to be, performed or made pursuant to a
contract to which the corporation is a party, the court may, if
just and reasonable in the circumstances, set aside and enjoin
the performance of the contract and allow to the corporation or
to the other parties to the contract compensation for the loss
or damage sustained as a result of the action of the court in
setting aside and enjoining the performance of the contract.
Subd. 3. [ACTION BY CORPORATION.] The corporation may
bring an action, directly or through a director or member with
voting rights in a representative or derivative suit, against
the incumbent or former officers or directors of the corporation
for exceeding or violating their authority.
ORGANIZATION; BYLAWS
Sec. 25. [317A.171] [ORGANIZATION.]
Subdivision 1. [ROLE OF INCORPORATORS.] If the first board
is not named in the articles, the incorporators may elect the
first board or may act as directors with the powers, rights,
duties, and liabilities of directors, until directors are
elected.
Subd. 2. [MEETING.] After the issuance of the certificate
of incorporation, the incorporators or the directors named in
the articles shall, within a reasonable time, hold an
organizational meeting at the call of a majority of the
incorporators or of the directors named in the articles, or take
written action, for the purposes of transacting business and
taking actions necessary or appropriate to complete the
organization of the corporation. If a meeting is held, the
persons calling the meeting shall give at least three days'
notice of the meeting to each incorporator or director named,
stating the date, time, and place of the meeting.
Sec. 26. [317A.181] [BYLAWS.]
Subdivision 1. [GENERALLY.] A corporation may, but need
not, have bylaws. Bylaws may contain any provision relating to
the management or regulation of the affairs of the corporation
consistent with law or the articles, including but not limited
to:
(1) the number of directors, and the qualifications, manner
of election, powers, duties, and compensation, if any, of
directors;
(2) the qualifications of members;
(3) different classes of membership;
(4) the manner of admission, withdrawal, suspension, and
expulsion of members;
(5) property, voting, and other rights and privileges of
members;
(6) the appointment and authority of committees;
(7) the appointment or election, duties, compensation, and
tenure of officers;
(8) the time, place, and manner of calling, conducting, and
giving notice of member, board, and committee meetings, or of
conducting mail ballots;
(9) the making of reports and financial statements to
members; or
(10) the number establishing a quorum for meetings of
members and the board.
Subd. 2. [ADOPTION; AMENDMENTS.] (a) Initial bylaws may be
adopted under section 25 by the incorporators or by the first
board. Unless reserved by the articles to the members, the
power to adopt, amend, or repeal the bylaws is vested in the
board. The power of the board is subject to the power of the
members with voting rights under paragraph (b) to adopt, amend,
or repeal bylaws adopted, amended, or repealed by the board.
After the adoption of the initial bylaws, the board may not
adopt, amend, or repeal a bylaw fixing a quorum for meetings of
members, prescribing procedures for removing directors or
filling vacancies in the board, or fixing the number of
directors or their classifications, qualifications, or terms of
office, but may adopt or amend a bylaw to increase the number of
directors.
(b) If at least 50 members with voting rights or ten
percent of the members with voting rights, whichever is less,
propose a resolution for action by the members to adopt, amend,
or repeal bylaws adopted, amended, or repealed by the board and
the resolution sets forth the provisions proposed for adoption,
amendment, or repeal, the limitations and procedures for
submitting, considering, and adopting the resolution are the
same as provided in section 17, for amendment of the articles,
except that board approval is not required. The articles or
bylaws may impose additional requirements for the members to
adopt, amend, or repeal the bylaws.
BOARD
Sec. 27. [317A.201] [BOARD.]
The business and affairs of a corporation must be managed
by or under the direction of a board of directors. The members
of the first board may be named in the articles, designated or
appointed pursuant to the articles, or elected by the
incorporators under section 25.
Sec. 28. [317A.203] [NUMBER.]
A board of directors must consist of three or more
individuals, with the number specified in or fixed in accordance
with the articles or bylaws, except that if the corporation has
either one or two members with voting rights, the number of
directors may be less than three but not less than the number of
members with voting rights.
Sec. 29. [317A.205] [QUALIFICATIONS; ELECTION.]
The qualifications and method of election, designation, or
appointment of directors may be imposed by or in the manner
provided in the articles or bylaws, provided that directors must
be natural persons and a majority of the directors must be
adults.
Sec. 30. [317A.207] [TERMS.]
Subdivision 1. [LENGTH.] (a) Directors are elected,
designated, or appointed and hold office for fixed terms
provided for in the articles or bylaws. A term of a director,
other than an ex officio director, may not exceed ten years. If
the articles or bylaws do not provide for a fixed term, the term
is one year.
(b) Unless the articles or bylaws provide otherwise, a
director holds office until expiration of the term for which the
director was elected and until a successor is elected and
qualified, or until the earlier death, resignation, removal, or
disqualification of the director.
(c) A decrease in the number of directors or term of office
does not shorten an incumbent director's term.
(d) Except as provided in the articles or bylaws, the term
of a director filling a vacancy expires at the end of the
unexpired term that the director is filling.
Subd. 2. [STAGGERED TERMS.] The articles or bylaws may
provide for staggering the terms of directors by dividing the
total number of directors into groups. The terms of office of
the groups need not be uniform.
Sec. 31. [317A.209] [ACTS NOT VOID OR VOIDABLE.]
The expiration of a director's term with or without the
election of a qualified successor does not make prior or later
acts of the officers or the board void or voidable.
Sec. 32. [317A.211] [COMPENSATION.]
Subject to a limitation in the articles or bylaws, the
board may fix the compensation of directors.
Sec. 33. [317A.213] [CLASSIFICATION OF DIRECTORS.]
(a) Except as provided in paragraph (b), directors may be
divided into classes.
(b) Directors of a corporation described in section 117,
subdivision 1, may not vote by class except to the extent that
the articles or bylaws provide that a class of directors may not
vote or that not all classes of directors may vote on a
particular matter.
Sec. 34. [317A.215] [CUMULATIVE VOTING FOR DIRECTORS.]
Unless the articles provide otherwise, there is no
cumulative voting.
Sec. 35. [317A.221] [RESIGNATION.]
(a) A director may resign at any time by giving written
notice to the corporation. The resignation is effective without
acceptance when the notice is given to the corporation, unless a
later effective time is specified in the notice.
(b) If a resignation is made effective at a later date, the
board may fill the pending vacancy before the effective date if
the board provides that the successor does not take office until
the effective date.
Sec. 36. [317A.223] [REMOVAL OF DIRECTORS.]
Subdivision 1. [MODIFICATION.] The provisions of this
section apply unless a different method of removal is provided
for in the articles or bylaws.
Subd. 2. [REMOVAL BY DIRECTORS WHEN THERE ARE MEMBERS WITH
VOTING RIGHTS.] If there are members with voting rights, a
director may be removed at any time, with or without cause, if:
(1) the director was named by the board to fill a vacancy;
(2) the members with voting rights have not elected
directors in the interval between the time of the appointment to
fill the vacancy and the time of the removal; and
(3) a majority of the remaining directors present
affirmatively vote to remove the director.
Subd. 3. [REMOVAL BY DIRECTORS WHEN THERE ARE NO MEMBERS
WITH VOTING RIGHTS.] If there are no members with voting rights,
a director may be removed at any time, with or without cause, by
those directors eligible to elect the director.
Subd. 4. [REMOVAL BY MEMBERS WITH VOTING RIGHTS.] A
director may be removed at any time, with or without cause, by
those members eligible to elect the director.
Sec. 37. [317A.225] [REMOVAL OF DESIGNATED OR APPOINTED
DIRECTORS.]
Except as otherwise provided in the articles or bylaws, a
designated or appointed director may be removed without cause by
the person designating or appointing the director. The person
removing the director shall do so by giving written notice of
the removal to the director and either the presiding officer of
the board or the corporation's president or secretary. A
removal is effective when the notice is effective unless the
notice states a future effective date.
Sec. 38. [317A.227] [VACANCIES.]
(a) Unless the articles or bylaws provide otherwise, and
except as provided in paragraphs (b), (c), and (d), if a vacancy
occurs on the board of directors, including a vacancy resulting
from an increase in the number of directors:
(1) the members with voting rights, if any, may fill the
vacancy; or
(2) the remaining members of the board, though less than a
quorum, may fill the vacancy.
(b) If a vacant office was held by a director elected by a
class, chapter, or other organizational unit or by region or
other geographic grouping, only members of the class, chapter,
unit, or grouping are entitled to vote to fill the vacancy.
(c) If a vacant office was held by an appointed director,
only the person who appointed the director may fill the vacancy.
(d) If a vacant office was held by a designated director,
the vacancy must be filled as provided in the articles or
bylaws. The vacancy may not be filled by the board unless
authorized by the articles or bylaws.
(e) A vacancy that will occur at a specific later date may
be filled before the vacancy occurs but the new director may not
take office until the vacancy occurs.
Sec. 39. [317A.231] [BOARD MEETINGS.]
Subdivision 1. [TIME; PLACE.] Meetings of the board may be
held as provided in the articles or bylaws in or out of this
state. Unless the articles or bylaws provide otherwise, a
meeting of the board must be held at least once per year. If
the articles or bylaws or the board fail to select a place for a
meeting, the meeting must be held at the registered office.
Subd. 2. [ELECTRONIC COMMUNICATIONS.] (a) A conference
among directors by a means of communication through which the
directors may simultaneously hear each other during the
conference is a board meeting, if the same notice is given of
the conference as would be required for a meeting, and if the
number of directors participating in the conference is a
quorum. Participation in a meeting by this means is personal
presence at the meeting.
(b) A director may participate in a board meeting by any
means of communication through which the director, other
directors participating, and all directors physically present at
the meeting may simultaneously hear each other during the
meeting. Participation in a meeting by this means is personal
presence at the meeting.
Subd. 3. [CALLING MEETINGS; NOTICE.] (a) Unless the
articles or bylaws provide otherwise, a director may call a
board meeting by giving five days' notice to all directors of
the date, time, and place of the meeting. The notice need not
state the purpose of the meeting unless the articles or bylaws
require it.
(b) If the day or date, time, and place of a board meeting
have been provided in the articles or bylaws, or announced at a
previous meeting of the board, notice is not required. Notice
of an adjourned meeting need not be given other than by
announcement at the meeting at which adjournment is taken.
Subd. 4. [WAIVER OF NOTICE.] A director may waive notice
of a meeting of the board. A waiver of notice by a director
entitled to notice is effective whether given before, at, or
after the meeting, and whether given in writing, orally, or by
attendance. Attendance by a director at a meeting is a waiver
of notice of that meeting, unless the director objects at the
beginning of the meeting to the transaction of business because
the meeting is not lawfully called or convened and does not
participate in the meeting.
Sec. 40. [317A.235] [QUORUM.]
A majority, or a larger or smaller proportion or number
provided in the articles or bylaws but not less than one-third,
of the directors currently holding office is a quorum for the
transaction of business. In the absence of a quorum, a majority
of the directors present may adjourn a meeting from time to time
until a quorum is present. If a quorum is present when a duly
called or held meeting is convened, the directors present may
continue to transact business until adjournment, even though the
withdrawal of directors originally present leaves less than the
proportion or number otherwise required for a quorum.
Sec. 41. [317A.237] [ACT OF THE BOARD.]
The board shall take action by the affirmative vote of a
majority of directors present at a duly held meeting, unless
this chapter or the articles or bylaws require the affirmative
vote of a larger proportion or number.
Sec. 42. [317A.239] [ACTION WITHOUT MEETING.]
Subdivision 1. [METHOD.] An action required or permitted
to be taken at a board meeting may be taken by written action
signed by all of the directors. If the articles so provide, an
action, other than an action requiring member approval, may be
taken by written action signed by the number of directors that
would be required to take the same action at a meeting of the
board at which all directors were present.
Subd. 2. [EFFECTIVE TIME.] The written action is effective
when signed by the required number of directors, unless a
different effective time is provided in the written action.
Subd. 3. [NOTICE; LIABILITY.] When written action is
permitted to be taken by less than all directors, all directors
must be notified immediately of its text and effective date.
Failure to provide the notice does not invalidate the written
action. A director who does not sign or consent to the written
action is not liable for the action.
Sec. 43. [317A.241] [COMMITTEES.]
Subdivision 1. [GENERALLY.] A resolution approved by the
affirmative vote of a majority of the board may establish
committees having the authority of the board in the management
of the business of the corporation to the extent provided in the
resolution. Committees are subject at all times to the
direction and control of the board.
Subd. 2. [MEMBERSHIP.] Committee members must be natural
persons. Unless the articles or bylaws provide otherwise, a
committee must consist of one or more persons, who need not be
directors, appointed by the board.
Subd. 3. [PROCEDURE.] Sections 39 to 42 apply to
committees and members of committees to the same extent as those
sections apply to the board.
Subd. 4. [MINUTES.] Minutes, if any, of committee meetings
must be made available upon request to members of the committee
and to a director.
Subd. 5. [STANDARD OF CONDUCT.] The establishment of,
delegation of authority to, and action by a committee does not
alone constitute compliance by a director with the standard of
conduct set forth in section 44.
Subd. 6. [COMMITTEE MEMBERS CONSIDERED DIRECTORS.]
Committee members are considered to be directors for purposes of
sections 44, 45, and 83.
Sec. 44. [317A.251] [STANDARD OF CONDUCT.]
Subdivision 1. [STANDARD; LIABILITY.] A director shall
discharge the duties of the position of director in good faith,
in a manner the director reasonably believes to be in the best
interests of the corporation, and with the care an ordinarily
prudent person in a like position would exercise under similar
circumstances. A person who so performs those duties is not
liable by reason of being or having been a director of the
corporation.
Subd. 2. [RELIANCE.] (a) A director is entitled to rely on
information, opinions, reports, or statements, including
financial statements and other financial data, in each case
prepared or presented by:
(1) one or more officers or employees of the corporation
whom the director reasonably believes to be reliable and
competent in the matters presented;
(2) counsel, public accountants, or other persons as to
matters that the director reasonably believes are within the
person's professional or expert competence; or
(3) a committee of the board upon which the director does
not serve, duly established under section 43, as to matters
within its designated authority, if the director reasonably
believes the committee to merit confidence.
(b) Paragraph (a) does not apply to a director who has
actual knowledge concerning the matter in question that makes
the reliance otherwise permitted by paragraph (a) unwarranted.
Subd. 3. [PRESUMPTION OF ASSENT; DISSENT.] A director who
is present at a meeting of the board when an action is approved
by the board is presumed to have assented to the action
approved, unless the director:
(1) objects at the beginning of the meeting to the
transaction of business because the meeting is not lawfully
called or convened and does not participate in the meeting, in
which case the director is not considered to be present at the
meeting for purposes of this chapter;
(2) votes against the action at the meeting; or
(3) is prohibited by section 45 from voting on the action.
Subd. 4. [NOT CONSIDERED TRUSTEE.] A director, regardless
of how identified, is not considered to be a trustee with
respect to the corporation or with respect to property held or
administered by the corporation, including without limit,
property that may be subject to restrictions imposed by the
donor or transferor of the property.
Sec. 45. [317A.255] [DIRECTOR CONFLICTS OF INTEREST.]
Subdivision 1. [CONFLICT; PROCEDURE WHEN CONFLICT ARISES.]
A contract or other transaction between a corporation and its
director, or between its director and a related organization, or
between a corporation and an organization in or of which its
director is a director, officer, or legal representative or has
a material financial interest, is not void or voidable because
the director or the other organization are parties or because
the director is present at the meeting of the members or the
board or a committee at which the contract or transaction is
authorized, approved, or ratified if:
(1) the contract or transaction was, and the person
asserting the validity of the contract or transaction has the
burden of establishing that the contract or transaction was,
fair and reasonable as to the corporation when it was
authorized, approved, or ratified;
(2) the material facts as to the contract or transaction
and as to the director's interest are fully disclosed or known
to the members and the contract or transaction is approved in
good faith by two-thirds of the members entitled to vote, other
than the interested director or directors, or the unanimous
affirmative vote of all members, whether or not entitled to
vote;
(3) the material facts as to the contract or transaction
and as to the director's interest are fully disclosed or known
to the board or a committee, and the board or committee
authorizes, approves, or ratifies the contract or transaction in
good faith by a majority of the board or committee, but the
interested director may not be counted in determining the
presence of a quorum and may not vote; or
(4) the contract or transaction is a merger or
consolidation described in section 84.
Subd. 2. [MATERIAL FINANCIAL INTEREST.] For purposes of
this section:
(1) a director does not have a material financial interest
in a resolution fixing the compensation of the director or
fixing the compensation of another director as a director,
officer, employee, or agent of the corporation, even though the
first director is also receiving compensation from the
corporation; and
(2) a director has a material financial interest in an
organization in which the director, or the spouse, parents,
children and spouses of children, brothers and sisters or
spouses of brothers and sisters of the director, have a material
financial interest.
Subd. 3. [EXCEPTION.] The procedures described under
subdivision 1, clauses (1) to (3), are not required if the
contract or other transaction is between related organizations.
Sec. 46. [317A.257] [UNPAID DIRECTORS; LIABILITY FOR
DAMAGES.]
Subdivision 1. [GENERALLY.] Except as provided in
subdivision 2, a person who serves without compensation as a
director, officer, trustee, member, or agent of an organization
exempt from state income taxation under section 290.05,
subdivision 2, or who serves without compensation as a fire
chief of a nonprofit firefighting corporation or municipal
volunteer fire department, or of a public corporation
established by law but not considered a municipality, is not
civilly liable for an act or omission by that person if the act
or omission was in good faith, was within the scope of the
person's responsibilities as a director, officer, trustee,
member, agent, or fire chief of the organization, and did not
constitute willful or reckless misconduct.
Subd. 2. [EXCEPTIONS.] (a) Subdivision 1 does not apply to:
(1) an action or proceeding brought by the attorney general
for a breach of a fiduciary duty as a director;
(2) a cause of action to the extent it is based on federal
law;
(3) a cause of action based on the person's express
contractual obligation; or
(4) an action or proceeding based on a breach of public
pension plan fiduciary responsibility.
(b) Subdivision 1 does not limit an individual's liability
for physical injury to the person of another or for wrongful
death that is personally and directly caused by the individual,
nor the liability of a municipality arising out of the
performance of firefighting or related activities.
Subd. 3. [DEFINITION.] For purposes of this section, the
term "compensation" means any thing of value received for
services rendered, except:
(1) reimbursement for expenses actually incurred;
(2) a per diem in an amount not more than the per diem
authorized for state advisory councils and committees under
section 15.059, subdivision 3; or
(3) payment by an organization of insurance premiums on
behalf of a person who is or was a director, officer, trustee,
member, or agent of an organization, or who, while a director,
officer, trustee, member, or agent of the organization, is or
was serving at the request of the organization as a director,
officer, partner, trustee, employee, or agent of another
organization or employee benefit plan against liability asserted
against and incurred by the person in or arising from that
capacity.
OFFICERS
Sec. 47. [317A.301] [OFFICERS REQUIRED.]
A corporation must have one or more natural persons
exercising the functions of the offices of president and
treasurer, however designated.
Sec. 48. [317A.305] [DUTIES OF REQUIRED OFFICERS.]
Subdivision 1. [PRESUMPTION; MODIFICATION.] Unless the
articles, the bylaws, or a resolution adopted by the board and
consistent with the articles or bylaws, provide otherwise, the
president and treasurer have the duties in this section.
Subd. 2. [PRESIDENT.] The president shall:
(1) have general active management of the business of the
corporation;
(2) when present, preside at meetings of the board and of
the members;
(3) see that orders and resolutions of the board are
carried into effect;
(4) sign and deliver in the name of the corporation deeds,
mortgages, bonds, contracts or other instruments pertaining to
the business of the corporation, except in cases in which the
authority to sign and deliver is required by law to be exercised
by another person or is expressly delegated by the articles or
bylaws or by the board to another officer or agent of the
corporation;
(5) maintain records of and, when necessary, certify
proceedings of the board and the members; and
(6) perform other duties prescribed by the board.
Subd. 3. [TREASURER.] The treasurer shall:
(1) keep accurate financial records for the corporation;
(2) deposit money, drafts, and checks in the name of and to
the credit of the corporation in the banks and depositories
designated by the board;
(3) endorse for deposit notes, checks, and drafts received
by the corporation as ordered by the board, making proper
vouchers for the deposit;
(4) disburse corporate funds and issue checks and drafts in
the name of the corporation, as ordered by the board;
(5) upon request, provide the president and the board an
account of transactions by the treasurer and of the financial
condition of the corporation; and
(6) perform other duties prescribed by the board or by the
president.
Sec. 49. [317A.311] [OTHER OFFICERS.]
The board may elect or appoint, in a manner set forth in
the articles or bylaws or in a resolution adopted by the board,
other officers or agents the board considers necessary for the
operation and management of the corporation, each of whom has
the powers, rights, duties, responsibilities, and terms in
office provided for in the articles or bylaws or determined by
the board.
Sec. 50. [317A.315] [MULTIPLE OFFICES.]
Any number of offices or functions of those offices may be
held or exercised by the same person. If a document must be
signed by persons holding different offices or functions and a
person holds or exercises more than one of those offices or
functions, that person may sign the document in more than one
capacity, but only if the document indicates each capacity in
which the person signs.
Sec. 51. [317A.321] [OFFICERS CONSIDERED ELECTED.]
In the absence of an election or appointment of officers by
the board, the person exercising the principal functions of the
president or the treasurer is considered to have been elected to
the office.
Sec. 52. [317A.331] [CONTRACT RIGHTS.]
The election or appointment of a person as an officer or
agent does not, of itself, create contract rights. A
corporation may enter into a contract with an officer or agent
for a period if, in the board's judgment, the contract would be
in the best interests of the corporation. The fact that the
contract may be for a term longer than the terms of the
directors who authorized or approved the contract does not make
the contract void or voidable.
Sec. 53. [317A.341] [RESIGNATION; REMOVAL; VACANCIES.]
Subdivision 1. [RESIGNATION.] An officer may resign by
giving written notice to the corporation. The resignation is
effective without acceptance when the notice is given to the
corporation, unless a later effective date is named in the
notice.
Subd. 2. [REMOVAL.] An officer may be removed, with or
without cause, by a resolution adopted by the board. The
removal is without prejudice to contractual rights of the
officer.
Subd. 3. [VACANCY.] A vacancy in an office because of
death, resignation, removal, disqualification, or other cause
may, or in the case of a vacancy in the office of president or
treasurer must, be filled for the unexpired part of the term in
the manner provided in the articles or bylaws, or as determined
by the board or under section 51.
Sec. 54. [317A.351] [DELEGATION.]
Unless prohibited by the articles or bylaws or by a
resolution adopted by the board, an officer may, without the
approval of the board, delegate some or all the duties and
powers of an office to other persons. An officer who delegates
the duties or powers of an office remains subject to the
standard of conduct for an officer with respect to the discharge
of the delegated duties and powers.
Sec. 55. [317A.361] [STANDARD OF CONDUCT.]
Subdivision 1. [STANDARD; LIABILITY.] An officer shall
discharge the duties of an office in good faith, in a manner the
officer reasonably believes to be in the best interests of the
corporation, and with the care an ordinarily prudent person in a
like position would exercise under similar circumstances. A
person exercising the principal functions of an office or to
whom some or all of the duties and powers of an office are
delegated under section 54 is considered an officer for purposes
of this section and sections 80 and 83.
Subd. 2. [NOT CONSIDERED TRUSTEE.] An officer is not
considered to be a trustee with respect to the corporation or
with respect to property held or administered by the
corporation, including without limit, property that may be
subject to restrictions imposed by the donor or transferor of
the property.
MEMBERS
Sec. 56. [317A.401] [MEMBERS.]
Subdivision 1. [EXISTENCE.] (a) A corporation may have one
or more classes of members or may have no members. In the
absence of a provision in its articles or bylaws providing for
members, a corporation has no members.
(b) If a corporation has no members, an action for which
there is no specific provision of this chapter applicable to a
corporation without members and that would otherwise require
approval of the members requires only the approval of the board.
(c) A reference in this chapter to a corporation that has
no members includes a corporation in which the directors are the
only members.
Subd. 2. [ADMISSION.] A corporation may admit any person
as a member. The articles or bylaws may establish criteria or
procedures for admission. A person may not be admitted as a
member without the person's express or implied consent. For
purposes of this subdivision, consent includes, but is not
limited to, acceptance of membership benefits knowing that the
benefits are available only to members, or taking some other
affirmative action that confers membership benefits. If the
articles or bylaws provide that a person who contributes to the
corporation is a member, a contribution is consent.
Subd. 3. [CONSIDERATION.] Except as provided in its
articles or bylaws, a corporation may admit members for no
consideration or for consideration as is determined by the board.
Subd. 4. [RIGHTS.] Members are of one class unless the
articles establish, or authorize the board or members to
establish, more than one class. Members are entitled to vote
and have equal rights and preferences in matters not otherwise
provided for by the board or members, unless and to the extent
that the articles or bylaws have fixed or limited the rights and
preferences of members or different classes of members or
provide for nonvoting members. The articles or bylaws may fix
the term of membership.
Sec. 57. [317A.403] [MEMBERSHIP CERTIFICATES.]
A corporation may issue certificates showing membership in
the corporation. In lieu of a membership certificate, a
corporation may issue preferred or common stock to a
subdivision, unit, or agency of the United States or a state or
local government that is a member of the corporation. The stock
may be issued upon the terms and conditions that the board
considers appropriate, except that it may be transferable only
to another government subdivision, unit, or agency.
Sec. 58. [317A.405] [TRANSFER OF MEMBERSHIP.]
(a) Except as provided in the articles or bylaws, a member
of a corporation may not transfer a membership or a right
arising from it.
(b) Where transfer rights have been provided, a restriction
on them is not binding with respect to a member holding a
membership issued before the adoption of the restriction unless
the restriction is approved by the members and the affected
member.
Sec. 59. [317A.407] [LIABILITY OF MEMBERS.]
Subdivision 1. [THIRD PARTIES.] A member of a corporation
is not, as such, personally liable for the acts, debts,
liabilities, or obligations of the corporation.
Subd. 2. [DUES, ASSESSMENTS, OR FEES.] (a) When authority
to do so is conferred by the articles or bylaws and subject to
any limitations, a corporation may levy dues, assessments, or
fees upon its members. The dues, assessments, or fees may be
imposed upon all classes of members alike or differently upon
different classes of members. Members of one or more classes
may be exempted.
(b) Articles or bylaws may:
(1) fix the amount of the levy and the method of collection
of dues, assessments, or fees; or
(2) authorize the directors to fix the amount from time to
time and determine the methods of collection.
(c) Articles or bylaws may provide for:
(1) enforcement or collection of dues, assessments, or
fees;
(2) cancellation of membership, on reasonable notice, for
nonpayment of dues, assessments, or fees; or
(3) reinstatement of membership.
Sec. 60. [317A.409] [RESIGNATION.]
A member may resign at any time. The resignation of a
member does not relieve the member from any obligations the
member may have to the corporation for dues, assessments, or
fees or charges for goods or services.
Sec. 61. [317A.411] [TERMINATION.]
Subdivision 1. [FAIR AND REASONABLE PROCEDURE REQUIRED.] A
member may not be expelled or suspended, and a membership may
not be terminated or suspended except pursuant to a procedure
that is fair and reasonable and is carried out in good faith.
This section does not apply to the termination of a membership
at the end of a fixed term.
Subd. 2. [STANDARDS.] A procedure is fair and reasonable
when it is fair and reasonable taking into consideration all of
the relevant facts and circumstances. In addition, a procedure
is fair and reasonable if it provides:
(1) not less than 15 days' prior written notice of the
expulsion, suspension, or termination, and the reasons for it;
and
(2) an opportunity for the member to be heard, orally or in
writing, not less than five days before the effective date of
the expulsion, suspension, or termination by a person authorized
to decide that the proposed expulsion, termination, or
suspension not take place.
Subd. 3. [TIME LIMIT TO CHALLENGE.] A proceeding
challenging an expulsion, suspension, or termination, including
a proceeding in which defective notice is alleged, must be begun
within one year after the effective date of the expulsion,
suspension, or termination.
Subd. 4. [MEMBER LIABILITY.] The expulsion, suspension, or
termination of a member does not relieve the member from
obligations the member may have to the corporation for dues,
assessments, or fees or charges for goods or services.
Sec. 62. [317A.413] [PURCHASE OF MEMBERSHIPS.]
If authorized in its articles or bylaws, a corporation may
buy the membership of a member who resigns or whose membership
is terminated for the amount and pursuant to the conditions in
the articles or bylaws.
Sec. 63. [317A.415] [DELEGATES.]
A corporation may provide in its articles or bylaws for
delegates having some or all the authority of members. The
articles or bylaws may set forth provisions relating to:
(1) the characteristics, qualifications, rights,
limitations, and obligations of the delegates, including their
selection and removal;
(2) calling, noticing, holding, and conducting meetings of
delegates; and
(3) carrying on corporate activities during and between
meetings of delegates.
Sec. 64. [317A.431] [REGULAR MEETINGS OF VOTING MEMBERS.]
Subdivision 1. [FREQUENCY.] Unless the articles or bylaws
provide otherwise, a corporation with voting members shall hold
a regular meeting of voting members annually.
Subd. 2. [DEMAND BY MEMBERS.] If a regular meeting of
voting members has not been held during the preceding 15 months,
at least 50 members with voting rights or ten percent of the
members with voting rights, whichever is less, may demand a
regular meeting of members by written notice of demand given to
the president or the treasurer of the corporation. Within 30
days after receipt of the demand, the board shall cause a
regular meeting of members to be called and held on notice no
later than 90 days after receipt of the demand at the expense of
the corporation. If the board fails to cause a regular meeting
to be called and held as required by this subdivision, the
members making the demand may call the regular meeting by giving
notice as required by section 67 at the expense of the
corporation.
Subd. 3. [TIME; PLACE.] A regular meeting of members must
be held at the time and place stated in or fixed in accordance
with the articles or bylaws. If a place is not stated or if a
demand for a meeting is made under subdivision 2, the meeting
must be held in the county where the corporation's registered
office is located.
Subd. 4. [ELECTIONS; BUSINESS.] At a regular meeting of
members:
(1) there must be an election of successors for directors
elected by members who serve for an indefinite term or whose
terms have expired or will expire before the next regular
meeting of the members;
(2) the president and treasurer shall report on the
activities and financial condition of the corporation; and
(3) the members shall consider and act upon other matters
as may be raised consistent with the notice of meeting
requirements.
Subd. 5. [EFFECT OF FAILURE TO HOLD MEETING.] The failure
to hold a meeting in accordance with a corporation's articles or
bylaws does not affect the validity of a corporate action.
Sec. 65. [317A.433] [SPECIAL MEETINGS OF VOTING MEMBERS.]
Subdivision 1. [WHO MAY CALL.] A corporation with voting
members shall hold a special meeting of members:
(1) on call of its board or persons authorized to do so by
the articles or bylaws; or
(2) if at least 50 members with voting rights or ten
percent of the members with voting rights, whichever is less,
sign, date, and deliver to the president or the treasurer one or
more written demands for the meeting describing the purpose for
which it is to be held.
Subd. 2. [NOTICE.] Within 30 days after receipt of a
demand for a special meeting from voting members, the board
shall cause a special meeting to be called and held on notice no
later than 90 days after receipt of the demand at the expense of
the corporation. If the board fails to cause a special meeting
to be called and held as required by this subdivision, a voting
member making the demand may call the meeting by giving notice
under section 67 at the expense of the corporation.
Subd. 3. [TIME; PLACE.] Special meetings of members may be
held in or out of this state at the place stated in or fixed in
accordance with the articles, bylaws, or by the president or the
board. If a special meeting is demanded by the members, the
meeting must be held in the county where the corporation's
registered office is located.
Subd. 4. [NOTICE REQUIREMENTS; BUSINESS LIMITED.] The
notice of a special meeting must contain a statement of the
purposes of the meeting. The notice may also contain other
information required by the articles or bylaws or considered
necessary or desirable by the board or by another person calling
the meeting. The business transacted at a special meeting is
limited to the purposes stated within the notice of the
meeting. Business transacted at a special meeting that is not
included in those stated purposes is voidable by or on behalf of
the corporation, unless all of the members with voting rights
have waived notice of the meeting under section 67.
Sec. 66. [317A.434] [COURT-ORDERED MEETING OF VOTING
MEMBERS.]
Subdivision 1. [WHEN AUTHORIZED.] The district court of
the county where a corporation's registered office is located
may order a meeting to be held:
(1) on application of at least 50 members with voting
rights or ten percent of the members with voting rights,
whichever is less, or of another person entitled to participate
in the annual meeting, if a meeting was not held within the
earlier of six months after the end of the corporation's fiscal
year or 15 months after its last meeting; or
(2) on application of a voting member who signed a demand
for a special meeting valid under section 65 or a person
entitled to call a special meeting if:
(i) notice of the special meeting was not given within 30
days after the date the demand was delivered to a corporate
officer; or
(ii) the special meeting was not held in accordance with
the notice.
Subd. 2. [SCOPE OF ORDER.] The court may fix the time and
place of the meeting, specify a record date for determining
members entitled to notice of and to vote at the meeting,
prescribe the form and content of the meeting notice, fix the
quorum required for specific matters to be considered at the
meeting, or direct that the votes represented at the meeting
constitute a quorum for action on those matters, and enter other
orders necessary to accomplish the purposes of the meeting.
Subd. 3. [COSTS AND ATTORNEYS FEES.] If the court orders a
meeting, it may also order the corporation to pay the member's
costs, including reasonable attorneys fees, incurred to obtain
the order.
Sec. 67. [317A.435] [NOTICE REQUIREMENTS.]
Subdivision 1. [TO WHOM GIVEN.] Notice of meetings of
members must be given to every voting member as of the record
date determined under section 68. If the meeting is an
adjourned meeting and the date, time, and place of the meeting
were announced at the time of adjournment, notice is not
required unless a new record date for the adjourned meeting is
or must be fixed under section 68.
Subd. 2. [WHEN GIVEN; CONTENTS.] In all cases where a
specific minimum notice period has not been fixed by law, the
notice must be given at least five days before the date of the
meeting, or a shorter time provided in the articles or bylaws,
and not more than 30 days before the date of the meeting. The
notice must contain the date, time, and place of the meeting,
and other information required by this chapter. If proxies are
permitted at the meeting, the notice must so inform members and
state the procedure for appointing proxies.
Subd. 3. [WAIVER OF NOTICE; OBJECTIONS.] A member may
waive notice of a meeting of members. A waiver of notice by a
member entitled to notice is effective whether given before, at,
or after the meeting, and whether given in writing, orally, or
by attendance. Attendance by a member at a meeting is a waiver
of notice of that meeting, unless the member objects at the
beginning of the meeting to the transaction of business because
the meeting is not lawfully called or convened, or objects
before a vote on an item of business because the item may not
lawfully be considered at that meeting and does not participate
in the consideration of the item at that meeting.
Sec. 68. [317A.437] [RECORD DATE; DETERMINING MEMBERS
ENTITLED TO NOTICE AND VOTE.]
Subdivision 1. [DETERMINATION.] The board may fix a date
not more than 60 days, or a shorter time period provided in the
articles or bylaws, before the date of a meeting of members as
the date for the determination of the members entitled to notice
of and entitled to vote at the meeting. When a date is so
fixed, only voting members on that date are entitled to notice
of and permitted to vote at that meeting of members.
Subd. 2. [ADJOURNED MEETING.] (a) A determination of
members entitled to notice and to vote at a membership meeting
is effective for an adjournment of the meeting unless the board
fixes a new date for determining the right to notice and to
vote, which it must do if the meeting is adjourned to a date
more than 60 days after the record date for determining members
entitled to notice of the original meeting.
(b) If a court orders a meeting adjourned to a date more
than 120 days after the date fixed for the original meeting, it
may provide that the original record date for notice and voting
continues in effect or it may fix a new record date for notice
and voting.
Sec. 69. [317A.439] [MEMBERS' LIST FOR MEETING.]
Subdivision 1. [PREPARATION.] After fixing a record date
for notice of and voting at a meeting, a corporation shall
prepare an alphabetical list of the names of its members who are
entitled to notice and to vote. The list must show the address
and number of votes each member is entitled to vote at the
meeting.
Subd. 2. [INSPECTION.] The list of members must be
available for inspection by a member with voting rights for the
purpose of communication with other members concerning the
meeting, beginning two business days after the meeting notice is
given and continuing through the meeting, at the corporation's
registered office or at a reasonable place identified in the
meeting notice in the city where the meeting will be held. The
list also must be available at the meeting. A member, a
member's agent, or attorney is entitled on written demand to
inspect and to copy the list, at a reasonable time and at the
member's expense, during the period it is available for
inspection and at any time during the meeting or an adjournment.
Subd. 3. [ENFORCEMENT.] If the corporation refuses to
allow a member with voting rights, the member's agent, or
attorney to inspect the list of members before or at the
meeting, the district court of the county where a corporation's
registered office is located, on application of the member, may:
(1) order the inspection or copying at the corporation's
expense;
(2) postpone the meeting until the inspection or copying is
complete; or
(3) order the corporation to pay the member's costs,
including reasonable attorneys fees, incurred to obtain the
order.
Subd. 4. [EFFECT OF FAILURE TO COMPLY.] Unless a written
demand to inspect and copy a membership list has been made under
subdivision 2 before the membership meeting and a corporation
improperly refuses to comply with the demand, refusal, or
failure to comply with this section does not affect the validity
of action taken at the meeting.
Subd. 5. [IMPROPER USE PROHIBITED.] A member, agent, or
attorney who gains access to a membership list under this
section may not use or give to another for use the membership
list for any purpose other than a proper purpose. Upon
application of the corporation, the district court may issue a
protective order or order other relief necessary to enforce this
subdivision.
Sec. 70. [317A.441] [RIGHT TO VOTE.]
Unless the articles or bylaws provide otherwise, each
member with voting rights is entitled to one vote on each matter
voted on by the members. If a membership stands of record in
the names of two or more persons, their acts with respect to
voting have the following effect:
(1) if only one votes, the act binds all; and
(2) if more than one votes, the vote must be divided on a
pro rata basis.
Sec. 71. [317A.443] [ACT OF THE MEMBERS.]
Subdivision 1. [GENERAL.] Unless this chapter or the
articles or bylaws require a greater vote or voting by class, if
a quorum is present, or if a quorum has been present at a
meeting, the affirmative vote of the majority of the members
with voting rights present and entitled to vote, which must also
be a majority of the required quorum, is the act of the
members. A bylaw amendment to increase or decrease the vote
required for a member action must be approved by the members.
Subd. 2. [METHODS.] Unless otherwise provided in the
articles or bylaws, members may take action at a meeting by
voice or ballot, by unanimous action without a meeting under
section 72, by written ballot under section 73, or by electronic
communication under section 74.
Sec. 72. [317A.445] [UNANIMOUS ACTION WITHOUT A MEETING.]
An action required or permitted to be taken at a meeting of
the members may be taken without a meeting by written action
signed by all of the members entitled to vote on that action.
The written action is effective when it has been signed by all
of those members, unless a different effective time is provided
in the written action. When this chapter requires a certificate
concerning an action to be filed with the secretary of state,
the officers signing the certificate must indicate that the
action was taken under this section.
Sec. 73. [317A.447] [ACTION BY WRITTEN BALLOT.]
(a) Except as provided in paragraph (e) and unless
prohibited or limited by the articles or bylaws, an action that
may be taken at a regular or special meeting of members may be
taken without a meeting if the corporation mails or delivers a
written ballot to every member entitled to vote on the matter.
(b) A written ballot must:
(1) set forth each proposed action; and
(2) provide an opportunity to vote for or against each
proposed action.
(c) Approval by written ballot under this section is valid
only when the number of votes cast by ballot equals or exceeds
the quorum required to be present at a meeting authorizing the
action, and the number of approvals equals or exceeds the number
of votes that would be required to approve the matter at a
meeting at which the total number of votes cast was the same as
the number of votes cast by ballot.
(d) Solicitations for votes by written ballot must:
(1) indicate the number of responses needed to meet the
quorum requirements;
(2) state the percentage of approvals necessary to approve
each matter other than election of directors; and
(3) specify the time by which a ballot must be received by
the corporation in order to be counted.
(e) Except as otherwise provided in the articles or bylaws,
a written ballot may not be revoked.
Sec. 74. [317A.449] [ACTION BY ELECTRONIC COMMUNICATION.]
(a) A conference among members by a means of communication
through which the participants may simultaneously hear each
other during the conference is a meeting of the members, if the
same notice is given of the conference as would be required for
a meeting and if the number of persons participating in the
conference is a quorum. Participation in a meeting by this
means is personal presence at the meeting.
(b) A member may participate in a meeting of the membership
by a means of communication through which the member, other
persons participating, and all persons physically present at the
meeting may simultaneously hear each other during the meeting.
Participation in a meeting by this means is personal presence at
the meeting.
Sec. 75. [317A.451] [QUORUM.]
Subdivision 1. [NUMBER REQUIRED.] Unless otherwise
provided by the articles or bylaws, a quorum for a meeting of
members is ten percent of the members entitled to vote at the
meeting.
Subd. 2. [ACTION.] (a) Except as provided in paragraph
(b), a quorum is necessary for the transaction of business at a
meeting of members. If a quorum is not present, a meeting may
be adjourned from time to time for that reason.
(b) If a quorum has been present at a meeting and members
have withdrawn from the meeting so that less than a quorum
remains, the members still present may continue to transact
business until adjournment.
Sec. 76. [317A.453] [PROXIES.]
Subdivision 1. [AUTHORIZATION.] If the articles or bylaws
permit proxy voting, a member may appoint a proxy to vote or
otherwise act for the member by signing an appointment form
either personally or by an attorney-in-fact.
Subd. 2. [EFFECTIVE PERIOD.] An appointment of a proxy is
effective when received by the secretary or other officer or
agent authorized to tabulate votes. An appointment is valid for
11 months unless a different period is expressly provided in the
appointment form provided, however, that a proxy is not valid
for more than three years from its date of execution.
Subd. 3. [REVOCATION.] An appointment of a proxy is
revocable by the member. Appointment of a proxy is revoked by
the person appointing the proxy by:
(1) attending a meeting and voting in person; or
(2) signing and delivering to the secretary or other
officer or agent authorized to tabulate proxy votes either a
writing stating that the appointment of the proxy is revoked or
a later appointment form.
Subd. 4. [DEATH.] The death or incapacity of the member
appointing a proxy does not affect the right of the corporation
to accept the proxy's authority unless notice of the death or
incapacity is received by the secretary or other officer or
agent authorized to tabulate votes before the proxy exercises
authority under the appointment.
Subd. 5. [ACCEPTANCE OF VOTE; LIABILITY.] (a) Subject to
section 77 and an express limitation on the proxy's authority
appearing on the face of the appointment form, a corporation is
entitled to accept the proxy's vote or other action as that of
the member making the appointment.
(b) The vote of a proxy is final, binding, and not subject
to challenge, but the proxy is liable to the member for damages
resulting from a failure to exercise the proxy or from an
exercise of the proxy in violation of the authority granted in
the appointment.
Subd. 6. [MULTIPLE PROXIES.] Unless the appointment
specifically provides otherwise, if two or more persons are
appointed as proxies for a member:
(1) any one of them may vote on each item of business in
accordance with specific instructions contained in the
appointment; or
(2) if no specific instructions are contained in the
appointment with respect to voting on a particular item of
business, a majority of the proxies have the authority conferred
by the instrument. If the proxies are equally divided, they
share the vote equally.
Sec. 77. [317A.455] [CORPORATION'S ACCEPTANCE OF MEMBER
ACT.]
Subdivision 1. [NAME OF MEMBER.] If the name signed on a
vote, consent, waiver, or proxy appointment corresponds to the
record name of a member, the corporation if acting in good faith
may accept the vote, consent, waiver, or proxy appointment and
give it effect as the act of the member.
Subd. 2. [NAME OTHER THAN MEMBER.] Unless the articles or
bylaws provide otherwise, if the name signed on a vote, consent,
waiver, or proxy appointment does not correspond to the record
name of a member, the corporation if acting in good faith may
accept the vote, consent, waiver, or proxy appointment and give
it effect as the act of the member if:
(1) the member is an entity and the name signed purports to
be that of an officer or agent of the entity;
(2) the name signed purports to be that of an
administrator, guardian, or conservator representing the member
and, if the corporation requests, evidence of fiduciary status
acceptable to the corporation has been presented with respect to
the vote, consent, waiver, or proxy appointment;
(3) the name signed purports to be that of a receiver or
trustee in bankruptcy of the member, and, if the corporation
requests, evidence of this status acceptable to the corporation
has been presented with respect to the vote, consent, waiver, or
proxy appointment;
(4) the name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the member and if the
corporation requests, evidence acceptable to the corporation of
the signatory's authority to sign for the member has been
presented with respect to the vote, consent, waiver, or proxy
appointment; or
(5) two or more persons hold the membership as cotenants or
fiduciaries and the name signed purports to be the name of at
least one of the coholders and the person signing appears to be
acting on behalf of all the coholders.
Subd. 3. [REJECTION OF VOTE.] The corporation may reject a
vote, consent, waiver, or proxy appointment if the secretary or
other officer or agent authorized to tabulate votes, acting in
good faith, has reasonable basis for doubt about the validity of
the signature on it or about the signatory's authority to sign
for the member.
Subd. 4. [LIABILITY.] The corporation or its officer or
agent who accepts or rejects a vote, consent, waiver, or proxy
appointment in good faith and in accordance with the standards
of this section is not liable in damages to the member for the
consequences of the acceptance or rejection.
Subd. 5. [VALIDITY OF CORPORATE ACTION.] Corporate action
based on the acceptance or rejection of a vote, consent, waiver,
or proxy appointment under this section is valid unless a court
of competent jurisdiction determines otherwise.
Sec. 78. [317A.457] [VOTING AGREEMENTS.]
(a) To the extent permitted in the articles or bylaws, two
or more members may provide for how they will vote by signing an
agreement for that purpose. An agreement may be valid for a
period of up to ten years. The agreement must have a reasonable
purpose consistent with the corporation's purposes.
(b) A voting agreement created under this section is
specifically enforceable.
(c) A voting agreement is not effective until it is filed
with the corporation.
Sec. 79. [317A.461] [BOOKS AND RECORDS; FINANCIAL
STATEMENT.]
Subdivision 1. [ARTICLES AND BYLAWS; MINUTES.] A
corporation shall keep at its registered office correct and
complete copies of its articles and bylaws, accounting records,
and minutes of meetings of members, board of directors, and
committees having any of the authority of the board of directors.
Subd. 2. [INSPECTION.] A member, or the agent or attorney
of a member, may inspect all books and records and voting
agreements for any proper purpose at any reasonable time.
Subd. 3. [FINANCIAL STATEMENT.] Upon request, a
corporation shall give the member a statement showing the
financial result of all operations and transactions affecting
income and surplus during its last annual accounting period and
a balance sheet containing a summary of its assets and
liabilities as of the closing date of the accounting period.
Sec. 80. [317A.467] [EQUITABLE REMEDIES.]
If a corporation or an officer or director of the
corporation violates this chapter, a court in this state, in an
action brought by at least 50 members with voting rights or ten
percent of the members with voting rights, whichever is less, or
by the attorney general, may grant equitable relief it considers
just and reasonable in the circumstances and award expenses,
including attorney fees and disbursements, to the members.
LOANS; OBLIGATIONS
Sec. 81. [317A.501] [LOANS; GUARANTEES; SURETYSHIP.]
Subdivision 1. [PREREQUISITES.] A corporation may lend
money to, guarantee or pledge its assets as security for an
obligation of, become a surety for, or otherwise financially
assist a person, if the transaction, or a class of transactions
to which the transaction belongs, is approved by the board and:
(1) is in the usual and regular course of activities of the
corporation;
(2) is with, or for the benefit of, a related organization,
an organization in which the corporation has a financial
interest, a person with whom the corporation has a relationship
in the course of its activities, or an organization to which the
corporation has the power to make donations;
(3) is with, or for the benefit of, an officer, director,
or employee of the corporation or a related organization, and is
authorized under subdivision 2; or
(4) subject to subdivision 2, has been approved by
two-thirds of the members with voting rights or, if there are no
members with voting rights, by two-thirds of the board.
Subd. 2. [LIMITATION ON LOANS AND GUARANTEES FOR OFFICERS,
DIRECTORS, AND EMPLOYEES.] A corporation may not lend money to
or guarantee the obligation of a director, officer, or employee
of the corporation or a related organization, or of the spouse,
parents, children and spouses of children, brothers and sisters
or spouses of brothers and sisters of the director, officer, or
employee, unless the loan or guarantee may reasonably be
expected, in the judgment of the board, to benefit the
corporation. If a loan or guarantee is made in violation of
this subdivision, the borrower's liability on the loan is not
affected. The officers and directors who make a loan in
violation of this subdivision or assent to it are jointly and
severally liable for its repayment. This subdivision does not
prohibit an advance of money for expenses authorized by section
82.
Subd. 3. [INTEREST; SECURITY.] A loan, guaranty, surety
contract, or other financial assistance under subdivision 1 or 2
may be with or without interest and may be unsecured or secured.
Subd. 4. [BANKING AUTHORITY NOT GRANTED.] This section
does not grant authority to act as a bank or to carry on the
business of banking.
Sec. 82. [317A.505] [ADVANCES.]
A corporation may, without a vote of the directors, advance
money to its directors, officers, employees, or agents to cover
expenses that can reasonably be anticipated to be incurred by
them in the performance of their duties and for which they would
be entitled to reimbursement in the absence of an advance.
Sec. 83. [317A.521] [INDEMNIFICATION.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the terms defined in this subdivision have the meanings
given them.
(b) "Corporation" includes a domestic or foreign
corporation that was the predecessor of the corporation referred
to in this section in a merger, consolidation, or other
transaction in which the predecessor's existence ended upon
completion of the transaction.
(c) "Official capacity" means:
(1) with respect to a director, the position of director in
a corporation;
(2) with respect to a person other than a director, the
elective or appointive office or position held by an officer,
member of a committee of the board, or the employment
relationship undertaken by an employee of the corporation; and
(3) with respect to a director, officer, or employee of the
corporation who, while a director, officer, or employee of the
corporation, is or was serving at the request of the corporation
or whose duties in that position involve or involved service as
a director, officer, partner, trustee, employee, or agent of
another organization or employee benefit plan, the position of
that person as a director, officer, partner, trustee, employee,
or agent, as the case may be, of the other organization or
employee benefit plan.
(d) "Proceeding" means a threatened, pending, or completed
civil, criminal, administrative, arbitration, or investigative
proceeding, including a proceeding by or in the right of the
corporation.
(e) "Special legal counsel" means counsel who has not
represented the corporation or a related organization, or a
director, officer, member of a committee of the board, or
employee whose indemnification is in issue.
Subd. 2. [INDEMNIFICATION MANDATORY; STANDARD.] (a)
Subject to subdivision 4, a corporation shall indemnify a person
made or threatened to be made a party to a proceeding by reason
of the former or present official capacity of the person against
judgments, penalties, fines, including, without limitation,
excise taxes assessed against the person with respect to an
employee benefit plan, settlements, and reasonable expenses,
including attorneys fees and disbursements, incurred by the
person in connection with the proceeding, if, with respect to
the acts or omissions of the person complained of in the
proceeding, the person:
(1) has not been indemnified by another organization or
employee benefit plan for the same liability described in the
preceding paragraph with respect to the same acts or omissions;
(2) acted in good faith;
(3) received no improper personal benefit and section 45,
if applicable, has been satisfied;
(4) in the case of a criminal proceeding, did not have
reasonable cause to believe the conduct was unlawful; and
(5) in the case of acts or omissions occurring in the
official capacity described in subdivision 1, paragraph (c),
clause (1) or (2), reasonably believed that the conduct was in
the best interests of the corporation, or in the case of acts or
omissions occurring in the official capacity described in
subdivision 1, paragraph (c), clause (3), reasonably believed
that the conduct was not opposed to the best interests of the
corporation. If the person's acts or omissions complained of in
the proceeding relate to conduct as a director, officer,
trustee, employee, or agent of an employee benefit plan, the
conduct is not considered to be opposed to the best interests of
the corporation if the person reasonably believed that the
conduct was in the best interests of the participants or
beneficiaries of the employee benefit plan.
(b) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent does not, of itself, establish that the person did
not meet the criteria in this subdivision.
Subd. 3. [ADVANCES.] Subject to subdivision 4, if a person
is made or threatened to be made a party to a proceeding, the
person is entitled, upon written request to the corporation, to
payment or reimbursement by the corporation of reasonable
expenses, including attorneys fees and disbursements, incurred
by the person in advance of the final disposition of the
proceeding:
(1) upon receipt by the corporation of a written
affirmation by the person of a good faith belief that the
criteria for indemnification in subdivision 2 have been
satisfied and a written undertaking by the person to repay the
amounts paid or reimbursed by the corporation, if it is
determined that the criteria for indemnification have not been
satisfied; and
(2) after a determination that the facts then known to
those making the determination would not preclude
indemnification under this section.
The written undertaking required by clause (1) is an
unlimited general obligation of the person making it, but need
not be secured and must be accepted without reference to
financial ability to make the repayment.
Subd. 4. [PROHIBITION OR LIMIT ON INDEMNIFICATION OR
ADVANCES.] The articles or bylaws may prohibit indemnification
or advances of expenses required by this section or may impose
conditions on indemnification or advances of expenses in
addition to the conditions contained in subdivisions 2 and 3
including, without limitation, monetary limits on
indemnification or advances of expenses, if the conditions apply
equally to all persons or to all persons within a given class.
A prohibition or limit on indemnification or advances may not
apply to or affect the right of a person to indemnification or
advances of expenses with respect to acts or omissions of the
person occurring before the effective date of a provision in the
articles or the date of adoption of a provision in the bylaws
establishing the prohibition or limit on indemnification or
advances.
Subd. 5. [REIMBURSEMENT TO WITNESSES.] This section does
not require, or limit the ability of, a corporation to reimburse
expenses, including attorneys fees and disbursements, incurred
by a person in connection with an appearance as a witness in a
proceeding at a time when the person has not been made or
threatened to be made a party to a proceeding.
Subd. 6. [DETERMINATION OF ELIGIBILITY.] (a)
Determinations as to whether indemnification of a person is
required because the criteria set forth in subdivision 2 have
been satisfied and whether a person is entitled to payment or
reimbursement of expenses in advance of the final disposition of
a proceeding under subdivision 3 must be made:
(1) by the board by a majority of a quorum; directors who
are at the time parties to the proceeding are not counted for
determining a majority or the presence of a quorum;
(2) if a quorum under clause (1) cannot be obtained, by a
majority of a committee of the board, consisting solely of two
or more directors not at the time parties to the proceeding,
duly designated to act in the matter by a majority of the full
board including directors who are parties;
(3) if a determination is not made under clause (1) or (2),
by special legal counsel, selected either by a majority of the
board or a committee by vote under clause (1) or (2) or, if the
requisite quorum of the full board cannot be obtained and the
committee cannot be established, by a majority of the full board
including directors who are parties;
(4) if a determination is not made under clauses (1) to
(3), by the members with voting rights, other than members who
are parties to the proceeding; or
(5) if an adverse determination is made under clauses (1)
to (4) or under paragraph (b), or if no determination is made
under clauses (1) to (4) or under paragraph (b) within 60 days
after the termination of a proceeding or after a request for an
advance of expenses, by a court in this state, which may be the
court in which the proceeding involving the person's liability
took place, upon application of the person and notice the court
requires.
(b) With respect to a person who is not, and was not at the
time of the acts or omissions complained of in the proceedings,
a director, officer, or person having, directly or indirectly,
the power to direct or cause the direction of the management or
policies of the corporation, the determination whether
indemnification of this person is required because the criteria
in subdivision 2 have been satisfied and whether this person is
entitled to payment or reimbursement of expenses in advance of
the final disposition of a proceeding under subdivision 3 may be
made by an annually appointed committee of the board, having at
least one member who is a director. The committee shall report
at least annually to the board concerning its actions.
Subd. 7. [INSURANCE.] A corporation may buy and maintain
insurance on behalf of a person in that person's official
capacity against liability asserted against and incurred by the
person in or arising from that capacity, whether or not the
corporation would have been required to indemnify the person
against the liability under this section.
Subd. 8. [DISCLOSURE.] A corporation with members with
voting rights that indemnifies or advances expenses to a person
under this section in connection with a proceeding by or on
behalf of the corporation shall report to the members in writing
the amount of the indemnification or advance and to whom and on
whose behalf it was paid not later than the next meeting of
members.
Subd. 9. [INDEMNIFICATION OF OTHER PERSONS.] This section
does not limit the power of a corporation to indemnify other
persons.
MERGER; CONSOLIDATION; TRANSFER
Sec. 84. [317A.601] [MERGER, CONSOLIDATION, OR TRANSFER.]
Subdivision 1. [MERGER OR CONSOLIDATION.] Two or more
corporations may merge or consolidate, resulting in a single
corporation subject to this chapter. A merger or consolidation
must be made as provided in sections 85 to 91.
Subd. 2. [TRANSFER.] A corporation may sell, lease,
transfer, or dispose of all or substantially all of its property
and assets under section 92.
Subd. 3. [NOTICE TO ATTORNEY GENERAL.] If applicable, a
corporation shall comply with section 118 before it may merge or
consolidate or transfer all or substantially all of its assets.
Sec. 85. [317A.611] [PLAN OF MERGER OR CONSOLIDATION.]
A plan of merger or consolidation must contain:
(1) the names of the corporations proposing to merge or
consolidate;
(2) the name of the surviving or new corporation;
(3) the terms and conditions of the proposed merger or
consolidation;
(4) in the case of a merger, the manner and basis of
converting the memberships of the constituent corporations into
memberships of the surviving corporation or of any other
corporation;
(5) in the case of a merger, a statement of amendments to
the articles of the surviving corporation proposed as part of
the merger;
(6) in the case of a consolidation, the provisions required
by section 10 to be set out in the articles of the new
corporation; and
(7) other provisions with respect to the proposed merger or
consolidation that are considered necessary or desirable.
Sec. 86. [317A.613] [PLAN APPROVAL.]
Subdivision 1. [APPROVAL REQUIRED.] A plan of merger or
consolidation must be approved and adopted by each constituent
corporation as provided in this section.
Subd. 2. [APPROVAL BY BOARD AND MEMBERS WITH VOTING
RIGHTS.] When a constituent corporation has members with voting
rights, the board of directors of the corporation shall adopt a
resolution by a majority vote of all directors approving a
proposed plan of merger or consolidation and directing that the
plan be submitted to a vote at a meeting of the members with
voting rights. Notice of the meeting must be given, accompanied
by a copy or summary of the proposed plan. Unless the articles
or bylaws require a greater vote, the plan of merger or
consolidation is adopted upon receiving the affirmative vote of
a majority of the members who vote upon the proposed plan.
Subd. 3. [APPROVAL BY BOARD.] When a constituent
corporation does not have members with voting rights, and unless
the articles or bylaws require a greater vote, a plan of merger
or consolidation is adopted at a meeting of the board of
directors of the corporation upon receiving the affirmative
votes of a majority of all directors. Notice of the meeting
must be given accompanied by a copy of the proposed plan of
merger or consolidation.
Sec. 87. [317A.615] [ARTICLES OF MERGER OR CONSOLIDATION;
CERTIFICATE.]
Subdivision 1. [CONTENTS OF ARTICLES.] Upon receiving the
approval required by section 86 and after compliance with
section 118, if applicable, articles of merger or consolidation
must be prepared that contain:
(1) the plan of merger or consolidation;
(2) a statement that the plan has been approved by each
corporation under this chapter; and
(3) if applicable, a statement that the notice to the
attorney general required by section 118 has been given and the
waiting period has expired or has been waived by the attorney
general.
Subd. 2. [ARTICLES SIGNED, FILED.] The articles of merger
or consolidation must be signed on behalf of each constituent
corporation and filed with the secretary of state.
Subd. 3. [CERTIFICATE.] The secretary of state shall issue
a certificate of merger to the surviving corporation or a
certificate of consolidation and incorporation to the new
corporation.
Sec. 88. [317A.631] [ABANDONMENT.]
Subdivision 1. [BY MEMBERS OR BOARD OF EACH CORPORATION;
UNDER TERMS OF PLAN.] After a plan of merger or consolidation
has been approved by each constituent corporation under section
86 and before the effective date of the plan, it may be
abandoned:
(1) if each constituent corporation has approved the
abandonment at a meeting by a majority of the members with
voting rights voting on the issue, or if the corporation does
not have voting members, by a majority of all directors; or
(2) if the plan itself provides for abandonment and the
conditions for abandonment in the plan are met.
Subd. 2. [BY BOARD OF ONE CORPORATION.] A plan of merger
or consolidation may be abandoned after it has been approved by
each constituent corporation and before the effective date of
the plan, by a resolution approved by a majority of all
directors of the constituent corporation abandoning the plan of
merger or consolidation, subject to the contract rights of any
other person under the plan.
Subd. 3. [FILING OF ARTICLES.] If articles of merger or
consolidation have been filed with the secretary of state, but
have not yet become effective, the constituent corporations, in
the case of abandonment under subdivision 1, clause (1), the
constituent corporations or any one of them, in the case of
abandonment under subdivision 1, clause (2), or the abandoning
corporation 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 corporations;
(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 approved by the directors abandoning the plan.
Sec. 89. [317A.641] [EFFECTIVE DATE OF MERGER OR
CONSOLIDATION; EFFECT.]
Subdivision 1. [EFFECTIVE DATE.] A merger or consolidation
is effective when the articles of merger or consolidation are
filed with the secretary of state or on a later date named in
the articles.
Subd. 2. [EFFECT ON CORPORATION; GENERAL.] When a merger
or consolidation becomes effective:
(1) the constituent corporations become a single
corporation, which in case of merger is a surviving corporation,
or in case of consolidation is a new corporation;
(2) subject to clause (3) and section 90, the separate
existence of the constituent corporations except the surviving
corporation ends;
(3) when the agreement of merger or consolidation expressly
provides for the continuance of the corporate existence of a
constituent corporation and expressly declares the purpose for
the continuance, the corporate existence of the constituent
corporation continues in the single corporation for the purpose
declared in the agreement;
(4) the single corporation has the rights, privileges,
immunities, and powers, and is subject to the duties and
liabilities, of a corporation formed under this chapter;
(5) the single corporation has the rights, privileges,
immunities, powers, and franchises, public and private, of each
constituent corporation;
(6) all real or personal property, debts, including debts
arising from a subscription for membership, and interests
belonging to each constituent corporation are transferred to the
single corporation without further act or deed;
(7) interest in real estate possessed by a constituent
corporation does not revert to the grantor, or otherwise, nor is
it in any way impaired by reason of the merger or consolidation;
and the personal property of a constituent corporation does not
revert by reason of the merger or consolidation;
(8) except where the will or other instrument provides
otherwise, and subject to section 93, a devise, bequest, gift,
or grant contained in a will or other instrument, in trust or
otherwise, made before or after the merger or consolidation has
become effective, to or for any of the constituent corporations,
inures to the single corporation;
(9) debts, liabilities, and obligations of each constituent
corporation become the debts, liabilities, and obligations of
the single corporation, just as if the debts, liabilities, and
obligations had been incurred or contracted by the single
corporation;
(10) existing claims or a pending action or proceeding by
or against a constituent corporation may be prosecuted to
judgment as though the merger or consolidation had not been
effected, or the single corporation may be substituted for the
constituent corporation;
(11) the liabilities of the members, officers, directors,
or similar groups or persons, however denominated, of a
constituent corporation are not affected by the merger or
consolidation of a constituent corporation;
(12) the rights of creditors or liens upon the property of
a constituent corporation are not impaired by the merger or
consolidation, but the liens are limited to the property upon
which they were liens immediately before the merger or
consolidation;
(13) the articles of the surviving corporation are
considered to be amended to the extent that changes in its
articles are contained in a plan of merger; and
(14) in the case of a consolidation, the plan of
consolidation constitutes the articles of incorporation of the
new corporation.
Subd. 3. [EFFECT ON FIDUCIARY CAPACITY.] (a) For purposes
of this subdivision, "fiduciary capacity" means the capacities
of trustee, executor, administrator, personal representative,
guardian, conservator, receiver, escrow agent, agent for the
investment of money, attorney-in-fact, or a similar capacity.
(b) Except where the will, declaration of trust, or other
instrument provides otherwise, the single corporation is,
without further act or deed, the successor of the constituent
corporations in fiduciary capacities in which a constituent
corporation was acting at the time of the merger or
consolidation and is liable to the beneficiaries as fully as if
the constituent corporation had continued its separate corporate
existence.
(c) If a constituent corporation is nominated and
appointed, or has been nominated and appointed, in a fiduciary
capacity in a will, declaration of trust, or other instrument,
order, or judgment before or after the merger or consolidation,
then even if the will or other instrument, order, or judgment
does not become operative or effective until after the merger or
consolidation becomes effective, every fiduciary capacity and
the rights, powers, privileges, duties, discretions, and
responsibilities provided for in the nomination or appointment
fully vest in and are to be exercised by the single corporation,
whether there are one or more successive mergers or
consolidations.
Sec. 90. [317A.643] [CONTINUANCE OF CORPORATE AUTHORITY.]
When an act or instrument is considered necessary or
appropriate to evidence the vesting of property or other rights
in the single corporation, the persons with authority to do so
under the articles or bylaws of each constituent corporation
shall do the act or execute and deliver the instrument and for
this purpose, the existence of the constituent corporations and
the authority of those persons is continued.
Sec. 91. [317A.651] [MERGER OR CONSOLIDATION WITH FOREIGN
CORPORATION.]
Subdivision 1. [WHEN PERMITTED.] A corporation may merge
or consolidate with a foreign corporation by following the
procedures set forth in this section, if the merger or
consolidation is permitted by the laws of the state under which
the foreign corporation is incorporated.
Subd. 2. [LAWS APPLICABLE BEFORE TRANSACTION.] Each
corporation shall comply with sections 84 to 90 with respect to
the merger or consolidation of corporations and each foreign
corporation shall comply with the laws under which it was
incorporated or by which it is governed.
Subd. 3. [SURVIVING CORPORATION.] If the single
corporation will be incorporated under this chapter, it shall
comply with this chapter.
Subd. 4. [FOREIGN SURVIVING CORPORATION.] If the single
corporation will be a foreign corporation and will transact
business in this state, it shall comply with the provisions of
chapter 303 with respect to foreign corporations. In every case
the single corporation 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 corporation; and
(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.
Sec. 92. [317A.661] [TRANSFER OF ASSETS; WHEN PERMITTED.]
Subdivision 1. [MEMBER APPROVAL; WHEN NOT
REQUIRED.] Unless otherwise provided in its articles or bylaws,
a corporation, by affirmative vote of the board of directors,
may sell, lease, transfer, or dispose of all or substantially
all of its property and assets in the usual and regular course
of its activities and, subject to section 81, subdivision 1,
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 activities, 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 considers expedient, in which case no member approval
is required.
Subd. 2. [VOTING MEMBER APPROVAL; WHEN REQUIRED.] A
corporation, by affirmative vote of the board of directors, may
sell, lease, transfer, or dispose of all or substantially all of
its property and assets, including its good will, not in the
usual and regular course of its activities, 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 considers expedient, when approved
at a regular or special meeting of the members by the
affirmative vote of the majority of the members with voting
rights. If there are no members with voting rights, member
approval is not required. Notice of the meeting must be given
to the members with voting rights. The notice must state that a
purpose of the meeting is to consider the sale, lease, transfer,
or other disposition of all or substantially all of the property
and assets of the corporation.
Subd. 3. [NOTICE TO ATTORNEY GENERAL.] If applicable, a
corporation shall comply with section 118 before transferring
all or substantially all of its assets under this section.
Subd. 4. [SIGNING OF DOCUMENTS.] Confirmatory deeds,
assignments, or similar instruments to evidence a sale, lease,
transfer, or other disposition may be signed and delivered at
any time in the name of the transferor by its current officers
or, if the corporation no longer exists, by its last officers.
Subd. 5. [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.
Sec. 93. [317A.671] [CERTAIN ASSETS NOT TO BE DIVERTED.]
Except as provided in section 501.12, when a corporation
dissolves, merges or consolidates, transfers its assets, or
grants a mortgage or other security interest in its assets,
assets of the corporation or a constituent corporation, and
assets subsequently received by a single corporation after a
merger or consolidation, may not be diverted from the uses and
purposes for which the assets have been received and held, or
from the uses and purposes expressed or intended by the original
donor.
DISSOLUTION
Sec. 94. [317A.701] [METHODS OF DISSOLUTION.]
(a) Subject to section 118, a corporation may be dissolved:
(1) by the incorporators under section 95;
(2) by the board and members with voting rights under
sections 96 to 103; or
(3) by order of a court under sections 105 to 111.
(b) A corporation also may be dissolved by the secretary of
state under section 123.
Sec. 95. [317A.711] [VOLUNTARY DISSOLUTION BY
INCORPORATORS.]
Subdivision 1. [MANNER.] If the first board of directors
has not been named in the articles, designated or appointed
pursuant to the articles, or elected under section 25, a
corporation may be dissolved by the incorporators as provided in
this section.
Subd. 2. [ARTICLES OF DISSOLUTION.] (a) A majority of the
incorporators shall sign articles of dissolution containing:
(1) the name of the corporation;
(2) the date of incorporation;
(3) a statement that the first board of directors has not
been named in the articles, designated or appointed pursuant to
the articles, or elected at an organizational meeting;
(4) a statement that no debts remain unpaid; and
(5) if applicable, a statement that notice to the attorney
general required by section 118 has been given and the waiting
period has expired or has been waived by the attorney general.
(b) The articles of dissolution must be filed with the
secretary of state.
Subd. 3. [EFFECTIVE DATE.] When the articles of
dissolution have been filed with the secretary of state, the
corporation is dissolved.
Subd. 4. [CERTIFICATE.] The secretary of state shall issue
to the dissolved corporation a certificate of dissolution that
contains:
(1) the name of the corporation;
(2) the date and time the articles of dissolution were
filed with the secretary of state; and
(3) a statement that the corporation is dissolved.
Sec. 96. [317A.721] [VOLUNTARY DISSOLUTION BY BOARD AND
MEMBERS WITH VOTING RIGHTS.]
Subdivision 1. [MANNER.] A corporation may be dissolved by
the board and members with voting rights as provided in this
section.
Subd. 2. [APPROVAL BY BOARD; PLAN OF DISSOLUTION.] The
board shall adopt a resolution proposing dissolution of the
corporation by the affirmative vote of a majority of all
directors. The resolution must include a plan of dissolution
that states to whom the assets owned or held by the corporation
will be distributed after creditors are paid. The plan must
comply with the requirements of section 104. If the board will
have discretion in distributing assets, the plan must state that
the assets will be distributed to persons the board subsequently
identifies. If there are members with voting rights, the
resolution and plan of dissolution must be submitted to the
members under subdivision 3.
Subd. 3. [APPROVAL BY MEMBERS WITH VOTING RIGHTS.] (a)
Written notice must be given to each member with voting rights,
within the time and in the manner provided in section 67 for
notice of meetings of members and, whether the meeting is a
regular or a special meeting, must state that a purpose of the
meeting is to consider dissolving the corporation.
(b) The proposed dissolution must be submitted for approval
at a meeting of members. If the proposed dissolution is
approved by the members, the dissolution must be started.
Sec. 97. [317A.723] [FILING NOTICE OF INTENT TO DISSOLVE;
EFFECT.]
Subdivision 1. [CONTENTS.] If dissolution of the
corporation is approved under section 96, the corporation shall
file with the secretary of state a notice of intent to
dissolve. The notice must contain:
(1) the name of the corporation;
(2) the date and place of the meeting at which the
resolution was approved by the board under section 96,
subdivision 2, and by the members under section 96, subdivision
3, if applicable; and
(3) a statement that the requisite approval of the
directors and members was received.
If applicable, the corporation also shall notify the
attorney general under section 118.
Subd. 2. [WINDING UP.] When the notice of intent to
dissolve has been filed with the secretary of state and subject
to section 102, the corporation may not carry on its activities,
except to the extent necessary for the winding up of the
corporation. The board and members with voting rights have the
right to revoke the dissolution proceedings under section 102
and the members with voting rights have the right to remove
directors or fill vacancies on the board. The corporate
existence continues to the extent necessary to wind up the
affairs of the corporation until the dissolution proceedings are
revoked or articles of dissolution are filed with the secretary
of state.
Subd. 3. [REMEDIES CONTINUED.] The filing with the
secretary of state of a notice of intent to dissolve does not
affect a remedy in favor of the corporation or a remedy against
it or its directors, officers, or members in those capacities,
except as provided in section 113.
Sec. 98. [317A.725] [PROCEDURE IN DISSOLUTION.]
Subdivision 1. [COLLECTION; PAYMENT.] When a notice of
intent to dissolve has been filed with the secretary of state,
the board, or the officers acting under the direction of the
board, shall proceed as soon as possible:
(1) to collect or make provision for the collection of
debts due or owing to the corporation; and
(2) to pay or make provision for the payment of debts,
obligations, and liabilities of the corporation according to
their priorities.
Subd. 2. [TRANSFER OF ASSETS.] Notwithstanding section 92,
when a notice of intent to dissolve has been filed with the
secretary of state, the directors may sell, lease, transfer, or
otherwise dispose of all or substantially all of the property
and assets of a dissolving corporation without a vote of the
members, subject to sections 93 and 118.
Subd. 3. [DISTRIBUTION OF ASSETS.] Tangible or intangible
property, including money, remaining after the discharge of the
debts, obligations, and liabilities of the corporation must be
distributed under section 104.
Sec. 99. [317A.727] [NOTICE TO CREDITORS AND CLAIMANTS.]
Subdivision 1. [WHEN PERMITTED; HOW GIVEN.] When a notice
of intent to dissolve has been filed with the secretary of state
and the attorney general, if applicable, the corporation may
give notice of the filing to each creditor of and claimant
against the corporation known or unknown, present or future, and
contingent or noncontingent. If notice to creditors and
claimants is given, it must be given by publishing the notice
once each week for four successive weeks in a legal newspaper in
the county where the registered office of the corporation is
located and by giving written notice to known creditors and
claimants under section 2, subdivision 14.
Subd. 2. [CONTENTS.] The notice to creditors and claimants
must contain:
(1) a statement that the corporation is in the process of
dissolving;
(2) a statement that the corporation has filed a notice of
intent to dissolve with the secretary of state;
(3) the date of filing the notice of intent to dissolve;
(4) the address of the office to which written claims
against the corporation must be presented; and
(5) the date by which the claims must be received, which is
the later of 90 days after published notice or, with respect to
a particular known creditor or claimant, 90 days after the date
on which written notice is given to that creditor or claimant.
Published notice is considered given on the date of first
publication for determining this date.
Sec. 100. [317A.729] [CLAIMS IN DISSOLUTION.]
If the corporation gives notice to creditors and claimants
under section 99:
(1) the corporation has 30 days from the receipt of each
claim filed according to the procedures set forth by the
corporation on or before the date set forth in the notice to
accept or reject the claim by giving written notice to the
person submitting it, a claim not expressly rejected in this
manner is considered accepted; and
(2) a creditor or claimant to whom notice is given and
whose claim is rejected by the corporation has 60 days from the
date of rejection, or 180 days from the date the corporation
filed the notice of intent to dissolve with the secretary of
state, or 90 days after the date on which notice was given to
the creditor or claimant, whichever is longer, to pursue other
remedies with respect to the claim.
Sec. 101. [317A.730] [STATUTE OF LIMITATIONS.]
Subdivision 1. [CORPORATIONS THAT GIVE NOTICE.] If the
corporation gives notice to creditors and claimants under
section 99:
(1) the claim of a creditor or claimant to whom notice is
given who fails to file a claim according to the procedures set
forth by the corporation on or before the date set forth in the
notice is subject to section 113; and
(2) the claim of a creditor or claimant that is rejected by
the corporation under section 100 is subject to section 113 if
the creditor or claimant does not begin legal, administrative,
or arbitration proceedings with respect to the claim during the
period set forth in section 100, clause 2.
Subd. 2. [OTHER CORPORATIONS.] If the corporation does not
give notice to creditors and claimants under section 99, the
claim of a creditor or claimant who does not begin legal,
administrative, or arbitration proceedings concerning the claim
within two years after the date of filing the notice of intent
to dissolve is subject to section 113.
Sec. 102. [317A.731] [REVOCATION OF DISSOLUTION
PROCEEDINGS.]
Subdivision 1. [GENERALLY.] Dissolution proceedings begun
under section 96 may be revoked before the articles of
dissolution are filed as provided in this section.
Subd. 2. [REVOCATION BY BOARD.] The board may adopt a
resolution revoking the proposed dissolution by the affirmative
vote of a majority of all directors. If there are members with
voting rights, the resolution must be submitted to the members
under subdivision 3.
Subd. 3. [APPROVAL BY MEMBERS WITH VOTING RIGHTS.] Written
notice must be given to the members with voting rights within
the time and in the manner provided in section 67 for notice of
meetings of members and must state that a purpose of the meeting
is to consider the advisability of revoking the dissolution
proceedings. The proposed revocation must be submitted to the
members at the meeting. If the proposed revocation is approved
by the members with voting rights, the dissolution proceedings
are revoked.
Subd. 4. [EFFECTIVE DATE; EFFECT.] Revocation of
dissolution proceedings is effective when a notice of revocation
is filed with the secretary of state. After the notice is
filed, the corporation may resume business. If notice to the
attorney general has been given under section 118, the notice of
revocation also must be given to the attorney general on or
before the time that it is filed with the secretary of state.
Sec. 103. [317A.733] [ARTICLES OF DISSOLUTION; CERTIFICATE
OF DISSOLUTION; EFFECT.]
Subdivision 1. [ARTICLES; WHEN FILED.] Articles of
dissolution for a corporation dissolving under section 96 must
be filed with the secretary of state after compliance with
section 118, if applicable, and:
(1) the payment of claims of known creditors and claimants
has been made or provided for;
(2) if the corporation has given notice to creditors and
claimants in the manner provided in section 99: (i) the 90-day
period in section 99, subdivision 2, clause (4), has expired and
the payment of claims of the creditors and claimants filing a
claim within that period has been made or provided for; or (ii)
the longer of the periods described in section 100, clause (2),
has expired; or, in all other cases;
(3) the two-year period described in section 101 has
expired.
Subd. 2. [CONTENTS OF ARTICLES.] The articles of
dissolution must state:
(a)(1) whether notice has been given to the creditors and
claimants of the corporation in the manner provided in section
99 and, if notice has been given, the last date on which the
notice was given and: (i) that the payment of the creditors and
claimants filing a claim within the 90-day period set forth in
section 99, subdivision 2, clause (4), has been made or provided
for; or (ii) the date on which the longer of the periods
described in section 100, clause (2), expired; or
(2) if notice was not given and articles of dissolution are
being filed under subdivision 1, clause (1), that the debts,
obligations, and liabilities of the corporation have been paid
and discharged or that adequate provisions have been made for
them;
(b) that the remaining assets of the corporation have been
distributed under section 104 or that adequate provision has
been made for the distribution;
(c) that there are no pending legal, administrative, or
arbitration proceedings by or against the corporation, or that
adequate provision has been made for the satisfaction of a
judgment, order, or decree that may be entered against it in a
pending proceeding; and
(d) if applicable, that notice to the attorney general
required by section 118 has been given and the waiting period
has expired or has been waived by the attorney general.
Subd. 3. [EFFECTIVE DATE.] When the articles of
dissolution have been filed with the secretary of state, the
corporation is dissolved.
Subd. 4. [CERTIFICATE.] The secretary of state shall issue
to the dissolved corporation a certificate of dissolution that
contains:
(1) the name of the corporation;
(2) the date and time the articles of dissolution were
filed with the secretary of state; and
(3) a statement that the corporation is dissolved.
Sec. 104. [317A.735] [DISTRIBUTION OF ASSETS.]
Subdivision 1. [GENERAL.] In performing their duties under
section 98, the board, or the officers acting under the
direction of the board, shall distribute the assets of the
corporation in the following order of priority:
(1) distribution of assets held under a special condition
or limit under subdivision 2;
(2) payment of costs and expenses of the dissolution
proceedings, including attorney fees and disbursements;
(3) payment of debts, obligations, and liabilities of the
corporation;
(4) distribution of assets pursuant to articles or bylaws
of the dissolving corporation or the rules or canons of another
organization under subdivision 3; and
(5) distribution of remaining assets under subdivision 4.
Subd. 2. [SPECIAL CONDITIONS.] Assets held by the
corporation upon condition or subject to an executory or special
limitation, if the condition or limitation occurs by reason of
the dissolution of the corporation, must revert, be returned,
transferred, or conveyed in accordance with the condition or
limitation.
Subd. 3. [ARTICLES, BYLAWS, OR ANOTHER
ORGANIZATION.] Where the articles or bylaws of the dissolving
corporation, or the rules or canons of another organization by
which the dissolving corporation is bound, provide for a
particular distribution of the assets of the dissolving
corporation, the assets must be distributed accordingly.
Subd. 4. [REMAINDER.] The distribution of assets held for
or devoted to a charitable or public use or purpose is subject
to section 501.12.
Sec. 105. [317A.741] [SUPERVISED VOLUNTARY DISSOLUTION.]
After the notice of intent to dissolve has been filed with
the secretary of state and before a certificate of dissolution
has been issued, the corporation, the attorney general, or, for
good cause, a creditor or at least 50 members with voting rights
or ten percent of the members with voting rights, whichever is
less, may apply to a court within the county in which the
registered office of the corporation is located to have the
dissolution conducted or continued under the supervision of the
court under sections 106 to 111.
Sec. 106. [317A.751] [JUDICIAL INTERVENTION; EQUITABLE
REMEDIES OR DISSOLUTION.]
Subdivision 1. [GENERAL; WHEN PERMITTED.] A court may
grant equitable relief it considers just and reasonable in the
circumstances or may dissolve a corporation and liquidate its
assets and business as provided in this section.
Subd. 2. [SUPERVISED VOLUNTARY DISSOLUTION.] A court may
grant equitable relief in a supervised voluntary dissolution
under section 105.
Subd. 3. [ACTION BY MEMBERS WITH VOTING RIGHTS.] A court
may grant equitable relief in an action by at least 50 members
with voting rights or ten percent of the members with voting
rights, whichever is less, when it is established that:
(1) the directors or the persons having the authority
otherwise vested in the board are deadlocked in the management
of the corporate affairs, the members cannot break the deadlock,
and the corporation or the parties have not provided for a
procedure to resolve the dispute;
(2) the directors or those in control of the corporation
have acted fraudulently, illegally, or in a manner unfairly
prejudicial toward one or more members in their capacities as
members, directors, or officers;
(3) the members of the corporation are so divided in voting
power that, for a period that includes the time when two
consecutive regular meetings were held, they have failed to
elect successors to directors whose terms have expired or would
have expired upon the election and qualification of their
successors;
(4) the corporate assets are being misapplied or wasted; or
(5) the period of duration as provided in the articles has
expired and has not been extended as provided in section 116.
Subd. 4. [ACTION BY CREDITOR.] A court may grant equitable
relief in an action by a creditor when:
(1) the claim of the creditor has been reduced to judgment
and an execution on it has been returned unsatisfied; or
(2) the corporation has admitted in writing that the claim
of the creditor is due and owing and it is established that the
corporation cannot pay its debts in the ordinary course of its
activities.
Subd. 5. [ACTION BY ATTORNEY GENERAL.] A court may grant
equitable relief in an action by the attorney general when it is
established that:
(1) the articles and certificate of incorporation were
obtained through fraud;
(2) the corporation should not have been formed under this
chapter;
(3) the corporation failed to comply with the requirements
of sections 3 to 21 essential to incorporation under or election
to become governed by this chapter;
(4) the corporation has flagrantly violated a provision of
this chapter, has violated a provision of this chapter more than
once, or has violated more than one provision of this chapter;
(5) the corporation has engaged in an unauthorized act,
contract, conveyance, or transfer or has exceeded its powers;
(6) the corporation has acted, or failed to act, in a
manner that constitutes surrender or abandonment of the
corporate purpose, franchise, privileges, or enterprise;
(7) the corporation has liabilities and obligations
exceeding the corporate assets;
(8) the period of corporate existence has ended without
extension;
(9) the corporation has failed for a period of 90 days to
pay fees, charges, or penalties required by this chapter;
(10) the corporation has failed for a period of 30 days
after changing its registered office to file with the secretary
of state a statement of the change;
(11) the corporation has answered falsely or failed to
answer a reasonable written interrogatory from the secretary of
state, the attorney general, the commissioner of human services,
commissioner of commerce, or commissioner of revenue, to the
corporation, its officers, or directors;
(12) the corporation has solicited property and has failed
to use it for the purpose solicited; or
(13) the corporation has fraudulently used or solicited
property.
Subd. 6. [CONDITION OF CORPORATION.] In determining
whether to order equitable relief or dissolution under this
section, the court shall consider the financial condition of the
corporation but may not refuse to order equitable relief or
dissolution solely on the ground that the corporation is solvent.
Subd. 7. [DISSOLUTION AS REMEDY.] In deciding whether to
order dissolution, the court shall consider whether lesser
relief suggested by one or more parties, such as any form of
equitable relief or a partial liquidation, would be adequate to
permanently relieve the circumstances established under
subdivision 3, 4, or 5. Lesser relief may be ordered if it
would be appropriate under the facts and circumstances of the
case.
Subd. 8. [EXPENSES.] If the court finds that a party to a
proceeding brought under this section has acted arbitrarily,
vexatiously, or otherwise not in good faith, it may award
reasonable expenses, including attorneys fees and disbursements,
to any of the other parties.
Subd. 9. [VENUE; PARTIES.] Proceedings under this section
must be brought in a court within the county in which the
registered office of the corporation is located. It is not
necessary to make members parties to the action or proceeding
unless relief is sought against them personally.
Sec. 107. [317A.753] [PROCEDURE IN INVOLUNTARY OR
SUPERVISED VOLUNTARY DISSOLUTION.]
Subdivision 1. [ACTION BEFORE HEARING.] In dissolution
proceedings the court may issue injunctions, appoint receivers
with powers and duties the court directs, take other actions
required to preserve the corporate assets wherever located, and
carry on the business of the corporation until a full hearing
can be held.
Subd. 2. [NOTICE TO ATTORNEY GENERAL; INTERVENTION.] When
a proceeding involving a corporation described in section 118,
subdivision 1, is begun, the court shall order that a copy of
the petition be served on the attorney general. In all
proceedings under this section, the attorney general has a right
to participate as a party.
Subd. 3. [ACTION AFTER HEARING.] After a full hearing has
been held, upon whatever notice the court directs to be given to
the parties to the proceedings and to other parties in interest
designated by the court, the court may appoint a receiver to
collect the corporate assets. A receiver has authority, subject
to the order of the court, to continue the business of the
corporation and to sell, lease, transfer, or otherwise dispose
of all or any of the assets of the corporation at a public or
private sale.
Subd. 4. [DISCHARGE OF OBLIGATIONS.] The assets of the
corporation or the proceeds resulting from a sale, lease,
transfer, or other disposition must be applied in the following
order of priority to the payment and discharge of:
(1) the costs and expenses of the dissolution proceedings,
including attorneys fees and disbursements;
(2) debts, taxes, and assessments due the United States,
the state of Minnesota and their subdivisions, and other states
and their subdivisions, in that order;
(3) claims duly proved and allowed to employees under the
workers' compensation act, provided that claims under this
clause are not allowed if the corporation carried workers'
compensation insurance, as provided by law, at the time the
injury was sustained;
(4) claims, including the value of compensation paid in a
medium other than money, duly proved and allowed to employees
for services performed within three months preceding the
appointment of the receiver, if any; and
(5) other claims duly proved and allowed.
Subd. 5. [REMAINDER.] After payment of the expenses of
receivership and claims of creditors duly proved, the remaining
assets, if any, must be distributed as provided in section 104.
Sec. 108. [317A.755] [QUALIFICATIONS OF RECEIVERS;
POWERS.]
Subdivision 1. [QUALIFICATIONS.] A receiver must be a
natural person or a domestic corporation or a foreign
corporation authorized to transact business in this state. A
receiver shall give bond as directed by the court with the
sureties required by the court.
Subd. 2. [POWERS.] A receiver may sue and defend in courts
as receiver of the corporation. The court appointing the
receiver has exclusive jurisdiction of the corporation and its
property.
Sec. 109. [317A.759] [FILING CLAIMS IN PROCEEDINGS TO
DISSOLVE.]
Subdivision 1. [FILING MAY BE REQUIRED.] In a proceeding
under section 106 to dissolve a corporation, the court may
require creditors and claimants of the corporation to file their
claims under oath with the court administrator or with the
receiver in a form prescribed by the court.
Subd. 2. [DATE; CLAIMS BARRED.] If the court requires the
filing of claims, it shall fix a date, which may not be less
than 120 days from the date of the order, as the last day for
the filing of claims, and shall prescribe the notice of the
fixed date that must be given to creditors and claimants.
Before the fixed date, the court may extend the time for filing
claims. Creditors and claimants failing to file claims on or
before the fixed date may be barred, by order of court, from
claiming an interest in or receiving payment out of the assets
of the corporation.
Sec. 110. [317A.763] [DECREE OF DISSOLUTION.]
Subdivision 1. [PROCEDURE; WHEN ENTERED.] In an
involuntary or supervised voluntary dissolution, the court shall
provide for the discharge of obligations and the distribution of
the assets as set forth in section 107, subdivision 4, and shall
enter a decree dissolving the corporation.
Subd. 2. [EFFECTIVE DATE.] When the decree dissolving the
corporation has been entered, the corporation is dissolved.
Sec. 111. [317A.765] [FILING DECREE.]
After the court enters a decree dissolving a corporation,
the court administrator shall cause a certified copy of the
decree to be filed with the secretary of state. The secretary
of state may not charge a fee for filing the decree.
Sec. 112. [317A.771] [DEPOSIT WITH STATE TREASURER OF
AMOUNT DUE CERTAIN PERSONS.]
Upon dissolution of a corporation, the part of the assets
distributable to a person who is unknown or cannot be found, or
who is under disability, if there is no person legally competent
to receive it, must be reduced to money and deposited with the
state treasurer. The amount deposited is appropriated to the
state treasurer and must be paid over to the person, upon proof
satisfactory to the state treasurer of a right to payment.
Sec. 113. [317A.781] [CLAIMS BARRED; EXCEPTIONS.]
Subdivision 1. [CLAIMS BARRED.] A person who is or becomes
a creditor or claimant at any time before, during, or following
the conclusion of dissolution proceedings, who does not file a
claim or pursue a remedy in a legal, administrative, or
arbitration proceeding within the time provided in section 101,
105, 106, or 109, or has not begun a legal, administrative, or
arbitration proceeding before the beginning of the dissolution
proceedings, and a person claiming through or under the creditor
or claimant, is barred from suing on that claim or otherwise
realizing upon or enforcing it, except as provided in this
section.
Subd. 2. [CLAIMS REOPENED.] Within one year after articles
of dissolution have been filed with the secretary of state under
section 103, subdivision 1, clause (1) or (2), or a decree of
dissolution has been entered, a creditor or claimant who shows
good cause for not having previously filed the claim may apply
to a court in this state to allow a claim against the
corporation to the extent of undistributed assets.
Subd. 3. [CLAIMS PERMITTED.] Debts, obligations, and
liabilities incurred during dissolution proceedings must be paid
or provided for by the corporation before the distribution of
assets under section 104. A person to whom this kind of debt,
obligation, or liability is owed but not paid may pursue any
remedy against the officers or directors of the corporation
before the expiration of the applicable statute of limitations.
This subdivision does not apply to dissolution under the
supervision or order of a court.
Sec. 114. [317A.783] [RIGHT TO SUE OR DEFEND AFTER
DISSOLUTION.]
After a corporation has been dissolved, its former
officers, directors, or members with voting rights may assert or
defend, in the name of the corporation, a claim by or against
the corporation.
Sec. 115. [317A.791] [OMITTED ASSETS.]
Title to assets remaining after payment of the debts,
obligations, or liabilities and after distributions may be
transferred by a court in this state.
EXTENSION
Sec. 116. [317A.801] [EXTENSION AFTER DURATION EXPIRED.]
Subdivision 1. [EXTENSION BY AMENDMENT.] A corporation
whose period of duration provided in the articles has expired
and that has continued to operate despite that expiration may
reinstate its articles and extend the period of corporate
duration, including making the duration perpetual, after the
date of expiration by filing an amendment to the articles as set
forth in this section.
Subd. 2. [CONTENTS OF AMENDMENT.] An amendment to the
articles must be approved by the board of directors and must
include:
(1) the date the period of duration expired under the
articles;
(2) a statement that the period of duration will be
perpetual or, if a shorter period is to be provided, the date to
which the period of duration is extended; and
(3) a statement that the corporation has been in continuous
operation since before the date of expiration of its original
period of duration.
Subd. 3. [APPROVAL BY MEMBERS WITH VOTING RIGHTS.] If the
corporation has members with voting rights, the amendment to the
articles must be presented, after notice, to a meeting of those
members. The amendment is adopted when approved by the members
with voting rights under section 17.
Subd. 4. [FILING.] Articles of amendment conforming to
section 10 must be filed with the secretary of state.
Sec. 117. [317A.805] [EFFECT OF EXTENSION.]
Filing with the secretary of state of articles of amendment
extending the period of duration of a corporation:
(1) relates back to the date of expiration of the original
period of duration of the corporation as provided in the
articles;
(2) validates contracts or other acts within the authority
of the articles, and the corporation is liable for those
contracts or acts; and
(3) restores to the corporation the assets and rights of
the corporation to the extent they were held by the corporation
before expiration of its original period of duration, except
those sold or otherwise distributed after that time.
ATTORNEY GENERAL
Sec. 118. [317A.811] [NOTICE TO ATTORNEY GENERAL; WAITING
PERIOD.]
Subdivision 1. [WHEN REQUIRED.] Except as provided in
subdivision 6, the following corporations shall notify the
attorney general of their intent to dissolve, merge, or
consolidate, or to transfer all or substantially all of their
assets:
(1) a corporation that holds assets for a public or
charitable purpose; or
(2) a corporation that is recognized as exempt under
section 501(c)(3) of the Internal Revenue Code of 1986, or any
successor section.
The notice must include the plan of dissolution, merger or
consolidation, or, in the case of a transfer of assets under
section 92, a list of the persons to whom the assets will be
transferred and the terms and conditions of the transfer.
Subd. 2. [RESTRICTION ON TRANSFERS.] Subject to
subdivision 3, a corporation described in subdivision 1 may not
transfer or convey assets as part of a dissolution, merger or
consolidation, or transfer of assets under section 92 until 45
days after it has given written notice to the attorney general,
unless the attorney general waives all or part of the waiting
period.
Subd. 3. [EXTENSION OF WAITING PERIOD.] The attorney
general may extend the waiting period under subdivision 2 for
one additional 30-day period by notifying the corporation in
writing of the extension. The attorney general shall notify the
secretary of state if the waiting period is extended.
Subd. 4. [NOTICE AFTER TRANSFER.] When all or
substantially all of the assets of a corporation described in
subdivision 1 have been transferred or conveyed following
approval by the attorney general, the board shall deliver to the
attorney general a list of persons to whom the assets were
transferred or conveyed. The list must include the addresses of
each person who received assets and show what assets the person
received.
Subd. 5. [EFFECT.] Failure of the attorney general to take
an action with respect to a transaction under this section does
not constitute approval of the transaction and does not prevent
the attorney general from taking other action.
Subd. 6. [EXCEPTION.] Subdivisions 1 to 4 do not apply to
a merger with, consolidation into, or transfer of assets to a
corporation described in subdivision 1, clause (2), or to a
transfer of assets to an organization recognized as exempt under
section 501(c)(3) of the Internal Revenue Code of 1986, or any
successor section. A corporation that is exempt under this
subdivision shall send a copy of the certificate of merger or
certificate of consolidation and incorporation to the attorney
general.
Sec. 119. [317A.813] [REMEDIAL POWERS OF ATTORNEY
GENERAL.]
The attorney general has the powers in sections 8.31,
501.78, and 501.79 to supervise and investigate corporations
under this chapter and to bring proceedings to secure compliance.
CORPORATE REGISTRATION
Sec. 120. [317A.821] [INITIAL CORPORATE REGISTRATION WITH
SECRETARY OF STATE.]
Subdivision 1. [NOTICE FROM SECRETARY OF STATE;
REGISTRATION REQUIRED.] (a) Before February 1, 1990, the
secretary of state shall mail a corporate registration form by
first-class mail to each corporation at its last registered
office address listed in the records of the secretary of state.
The form must include the exact legal corporate name and
registered office address currently on file with the secretary
of state.
(b) A corporation that is subject to chapter 317 shall file
an initial corporate registration with the secretary of state
between January 1, 1990, and December 31, 1990. The
registration must include the exact legal corporate name and
registered office address of the corporation and must be signed
by an authorized person. If the current registered office
address listed in the records of the secretary of state is not
in compliance with section 2, subdivision 2, or if the
corporation has changed its registered office address to an
address other than that listed with the secretary of state, the
corporation shall list a new registered office address that
complies with section 2, subdivision 2, on the registration
form. A fee of $25 must be paid for filing the registered
office address change. The new registered office address must
have been approved by the board.
Subd. 2. [LOSS OF GOOD STANDING; CORPORATE NAME.] A
corporation that does not file the initial corporate
registration required under subdivision 1 with the secretary of
state on or before December 31, 1990, loses its good standing.
To regain its good standing, the corporation must file the
initial corporate registration. If a corporation loses its good
standing under this subdivision, its corporate name or a
deceptively similar name may be registered after January 1,
1992, by another person before the corporation regains its good
standing. If the name or a deceptively similar name has been
registered by another person, the corporation may not file its
initial corporate registration and regain its good standing
unless it obtains the consent of the other person as provided in
section 12, subdivision 2, or adopts a new corporate name that
complies with section 12.
Subd. 3. [DISSOLUTION; EXTENSION.] If a corporation fails
to regain its good standing under subdivision 2 on or before
December 31, 2000, the corporation is dissolved under section
123. After December 31, 2000, the corporate existence of a
corporation dissolved under this subdivision may be extended by
filing the initial corporate registration with the secretary of
state and payment of a $1,000 fee. The extension relates back
to December 31, 2000.
Subd. 4. [IMMEDIATE DISSOLUTION.] As part of the initial
registration process under this section, a corporation may elect
to dissolve immediately if the corporation has assets valued at
$1,000 or less. The corporation must state that it wishes to be
dissolved on the initial registration form and must state that
it has assets valued at $1,000 or less and that any assets will
be disposed of in accordance with section 104. Section 118 does
not apply to dissolutions under this subdivision.
Sec. 121. [317A.823] [ANNUAL CORPORATE REGISTRATION.]
Subdivision 1. [NOTICE FROM SECRETARY OF STATE;
REGISTRATION REQUIRED.] (a) Before February 1 of each year, the
secretary of state shall mail a corporate registration form by
first-class mail to each corporation that incorporated or filed
a corporate registration during either of the previous two
calendar years at its last registered office address listed on
the records of the secretary of state. The form must include
the exact legal corporate name and registered office address
currently on file with the secretary of state.
(b) A corporation shall file a corporate registration with
the secretary of state once each calendar year. The
registration must include the exact legal corporate name and
registered office address of the corporation and must be signed
by an authorized person. If the corporation has changed its
registered office address to an address other than that listed
on the records of the secretary of state, the corporation shall
list the new registered office address on the registration
form. A fee of $25 must be paid for filing the registered
office address change. The new address must comply with section
2, subdivision 2, and must have been approved by the board.
Subd. 2. [LOSS OF GOOD STANDING; CORPORATE NAME.] A
corporation that files an initial corporate registration under
section 120 or that is incorporated on or after January 1, 1990,
and that does not file a corporate registration during a
calendar year loses its good standing after December 31 of that
year. To regain its good standing, the corporation must file
the annual corporate registration and pay a $25 fee. If a
corporation loses its good standing under this subdivision, its
corporate name or a deceptively similar name may be registered
by another person before the corporation regains its good
standing. If the name or a deceptively similar name has been
registered by another person, the corporation may not file its
corporate registration and regain its good standing unless it
obtains the consent of the other person as provided in section
12, subdivision 2, or adopts a new corporate name that complies
with section 12.
Subd. 3. [NOTICE; DISSOLUTION.] If a corporation fails to
file a report required under this section for two consecutive
calendar years, the secretary of state shall give notice to the
corporation by first-class mail at its registered office that it
has violated this section and is subject to dissolution under
section 123 if the delinquent registrations are not filed with a
$25 fee within 60 days after the mailing of the notice. A
corporation that fails to file the delinquent annual
registrations within the 60 days is dissolved under section 123.
Sec. 122. [317A.825] [ACCEPTANCE OF REGISTRATION BY
SECRETARY OF STATE.]
The secretary of state may accept a registration under
section 120 or 121 if the information on the registration is in
substantial compliance with these sections, even if the
information on the registration is not identical to equivalent
information in the records of the secretary of state.
Sec. 123. [317A.827] [ADMINISTRATIVE DISSOLUTION.]
Subdivision 1. [PROCEDURE.] If a corporation requests
dissolution as part of the initial registration under section
120, if it fails to file the initial registration by December
31, 2000, or if it fails to file the delinquent registrations
before expiration of the 60-day period in section 121,
subdivision 3, the secretary of state shall immediately issue a
certificate of dissolution and file a copy in the office of the
secretary of state. If the corporation is dissolved for failure
to file a registration, the secretary of state shall issue a
certificate of involuntary dissolution. The secretary of state
shall send the original certificate and a notice that the
corporation has been dissolved to the registered office of the
corporation. The secretary of state shall annually inform the
attorney general of the names of corporations dissolved under
this section during the previous year and indicate whether the
dissolution was voluntary or involuntary. A corporation
dissolved under this section is not entitled to the benefits of
section 113, subdivision 1.
Subd. 2. [ATTORNEY GENERAL POWERS CONTINUED.] A
corporation dissolved under this section continues for three
years after the dissolution date for the sole purpose of
supervision, investigation, and other actions by the attorney
general under sections 8.31, 501.78, and 501.79.
ACTIONS AGAINST CORPORATIONS
Sec. 124. [317A.901] [SERVICE OF PROCESS ON CORPORATION.]
Subdivision 1. [WHO MAY BE SERVED.] A process, notice, or
demand required or permitted by law to be served upon a
corporation may be served upon the registered agent, if any, of
the corporation named in the articles, upon an officer of the
corporation, or upon the secretary of state as provided in this
section.
Subd. 2. [SERVICE ON SECRETARY OF STATE; WHEN PERMITTED.]
If a corporation has appointed and maintained a registered agent
in this state but its registered agent or an officer of the
corporation cannot be found at the registered office, or if a
corporation fails to appoint or maintain a registered agent in
this state and an officer of the corporation cannot be found at
the registered office, then the secretary of state is the agent
of the corporation upon whom the process, notice, or demand may
be served. The return of the sheriff, or the affidavit of a
person not a party, that no registered agent or officer can be
found at the registered office in a county is conclusive
evidence that the corporation has no registered agent or officer
at its registered office. Service on the secretary of state of
a process, notice, or demand is personal service upon the
corporation and must be made by filing with the secretary of
state duplicate copies of the process, notice, or demand. The
secretary of state shall immediately forward, by certified mail,
addressed to the corporation at its registered office, a copy of
the process, notice, or demand. Service on the secretary of
state is returnable in not less than 30 days notwithstanding a
shorter period named in the process, notice, or demand.
Subd. 3. [RECORD OF SERVICE.] The secretary of state shall
maintain at its office a record of processes, notices, and
demands served upon the secretary of state under this section,
including the date and time of service and the action taken with
reference to it.
Subd. 4. [OTHER METHODS OF SERVICE.] This section does not
limit the right of a person to serve a process, notice, or
demand required or permitted by law to be served upon a
corporation in another manner permitted by law.
Sec. 125. [317A.903] [STATE INTERESTED; PROCEEDINGS.]
If it appears at any stage of a proceeding in a court in
this state that the state is, or is likely to be, interested in
the proceeding, or that it is a matter of general public
interest, the court shall order that a copy of the complaint or
petition be served upon the attorney general in the manner
prescribed for serving a summons in a civil action. The
attorney general shall intervene in a proceeding when the
attorney general determines that the public interest requires
it, whether or not the attorney general has been served.
SPECIAL PROVISIONS
Sec. 126. [317A.905] [CHAMBERS OF COMMERCE, BOARDS OF
TRADE, EXCHANGES.]
Subdivision 1. [SPECIAL PURPOSES.] A corporation may be
formed under this chapter to:
(1) acquire and disseminate useful business information;
(2) promote equitable principles of trade; or
(3) establish, maintain, and enforce uniformity in the
commercial usages, business transactions, and trade relations in
the municipality in which it is located.
Subd. 2. [ARBITRATION OF DIFFERENCES.] A corporation,
formed for a purpose in subdivision 1, may, through its articles
or bylaws, arbitrate and adjust differences between:
(1) the corporation and its members;
(2) the members; or
(3) a member and a third person who has given written
consent.
The corporation may take testimony, make awards, and
enforce an award by a fine or by a forfeiture of the membership
of a person or of the person's other rights or privileges.
Subd. 3. [PUBLIC MARKETS.] A corporation that is a chamber
of commerce, board of trade, or exchange, and that maintains or
operates a regular place of business or trading room for members
only, in which the members buy, sell, or exchange grain,
livestock, or other farm products for themselves or for others,
is a public market.
Subd. 4. [ASSOCIATION OR CORPORATION DEFINED.] As used in
subdivisions 5 and 6, the words "association or corporation"
include a cooperative corporation or association authorized to
do business in this state.
Subd. 5. [MEMBERSHIP IN PUBLIC MARKET.] Membership in a
public market is open to a person, association, or corporation:
(1) having a method of business operation or plan of
organization that does not conflict with a reasonable rule of
the public market; and
(2) desiring to deal or trade in the commodities usually
dealt in on the public market.
Application for membership must be made in the manner
provided in the articles or bylaws of the public market.
Subd. 6. [RULES AND BYLAWS OF PUBLIC MARKETS.] A public
market may make reasonable rules, regulations, and bylaws,
including provisions for membership fees and uniform reasonable
assessments. A rule, regulation, or bylaw of a public market is
unreasonable when it modifies a provision in the articles,
constitution, or bylaws of an association or corporation,
governing the distribution of profits to the shareholders or
members of the association or corporation. Members of a public
market shall comply with reasonable rules, regulations, and
bylaws established by the market.
Subd. 7. [MONOPOLY IN RESTRAINT OF TRADE.] A public market
is a monopoly in restraint of trade when it:
(1) wrongfully or unreasonably refuses to admit or delays
the admission of an applicant for membership;
(2) discriminates, or causes another to discriminate, among
members; or
(3) violates this section.
Subd. 8. [PROSECUTION BY ATTORNEY GENERAL.] When a public
market is a monopoly in restraint of trade under subdivision 7,
trading or dealing in it is prohibited, and the attorney general
shall bring an action to terminate the existence of the
corporation under section 106, or sue to enjoin further
operation of the market or further violations of this chapter.
Sec. 127. [317A.907] [CORPORATIONS TO SECURE OR MAINTAIN
HOMES FOR DEPENDENT CHILDREN.]
Subdivision 1. [PURPOSES.] A corporation may be formed for
the following purposes:
(1) securing homes for orphaned, homeless, abandoned,
neglected, or mistreated children; or
(2) establishing and maintaining homes for those children.
Subd. 2. [CERTIFICATE OF TRUSTWORTHINESS.] When it files
its articles with the secretary of state, the corporation shall
file an accompanying certificate of the commissioner of human
services declaring that the corporation has complied with
applicable rules of the commissioner of human services governing
the operation of child caring agencies or child caring
institutions and is reputable and trustworthy.
Subd. 3. [COMPLY WITH RULES; OPEN BOOKS TO PUBLIC
INSPECTION.] A corporation formed under subdivision 1 shall:
(1) comply with rules established by the commissioner of
human services to govern its operation; and
(2) maintain the financial records of the corporation open
to public inspection.
Subd. 4. [VISITORIAL POWERS OF COURT.] Upon its own
motion, or upon application, a court of equity has visitorial
powers over the corporation, its affairs and officers.
Subd. 5. [LEGAL GUARDIAN.] If the commissioner of human
services currently certifies that a corporation formed for the
purpose set out in subdivision 1, clause (1), is a licensed
child caring agency complying with the rules established by the
commissioner of human services to govern its operation, the
corporation has the power to become the guardian of a child in
the manner prescribed for securing the guardianship of children
in need of protection or services under chapter 260.
Subd. 6. [EXPENSE REIMBURSEMENT.] (a) An organization,
association, or society licensed by the commissioner of human
services may receive payment for expenses related to adoption
services in an amount that fairly reflects the agency's
reasonable and necessary expenses of:
(1) adoptive counseling, whether or not legal adoption is
completed;
(2) provision of services to children before adoptive
placement; or
(3) the supervision of children in the home until legal
adoption is completed.
Only that part of the expenses may be requested that the
person seeking to adopt is financially able to meet. No person
may be barred from receiving a child for adoption because of
inability to pay part of the expenses referred to in this
subdivision. In addition to other reports as may be required, a
licensed agency shall file annually with the commissioner of
human services a full accounting of expense reimbursement
received under this subdivision, together with the record of the
services given for which the reimbursement was made. If the
person returns the child to the corporation, the person may not
receive compensation for the care, clothing, or medical expenses
of the child. This paragraph does not preclude voluntary
contributions by an individual or organization. A pledge by an
adoption applicant to make a voluntary contribution is voidable
at the option of the person pledging.
(b) No organization, association, or society is eligible to
receive an expense reimbursement from a person who takes a child
into the person's home or who adopts a child during the first 12
months that the organization, association, or society is
licensed by the commissioner of human services.
Subd. 7. [EXEMPTION OF PROPERTY FROM TAXATION.] A
corporation formed for one or both of the purposes set out in
subdivision 1 and personal and real property owned by it are
exempt from taxation.
Sec. 128. [317A.909] [CORPORATIONS FOR RELIGIOUS
PURPOSES.]
Subdivision 1. [BENEFITS FOR MEMBERS.] When authorized by
its members or otherwise, a corporation formed for a religious
purpose may provide directly or through a church benefits board
for:
(1) support and payment of benefits to its ministers,
teachers, employees, or functionaries and to the ministers,
teachers, employees, or functionaries of a nonprofit
organization affiliated with it or under its jurisdiction;
(2) payment of benefits to the surviving spouses, children,
dependents, or other beneficiaries of the persons named in
clause (1);
(3) collection of contributions and other payments; or
(4) creation, maintenance, investment, management, and
disbursement of necessary endowment, reserve, and other funds
for these purposes, including a trust fund or corporation that
funds a "church plan" as defined in section 414(e) of the
Internal Revenue Code of 1986, as amended through December 31,
1988.
Subd. 2. [INSURANCE LAWS NOT APPLICABLE.] The insurance
laws of this state do not apply to the operations of a
corporation under subdivision 1.
Subd. 3. [PROPERTY EXEMPT FROM TAXATION.] Except for
property leased or used for profit, personal and real property
that a religious corporation necessarily uses for a religious
purpose is exempt from taxation.
Subd. 4. [PEACE OFFICER POWERS.] The governing board of a
religious corporation may appoint peace officers to keep order
on its grounds. The peace officers shall be paid by the
corporation. When on duty, these officers have the authority of
constables.
Subd. 5. [CHURCH BENEFITS BOARD.] A "church benefits
board" is an organization described in section 414(e)(3)(A) of
the Internal Revenue Code of 1986, as amended through December
31, 1988, whether a civil law corporation or otherwise, the
principal purpose or function of which is the administration or
funding of a plan or program for the provision of retirement
benefits or welfare benefits for the employees of a church or a
convention or association of churches, if the organization is
controlled by or associated with a church or a convention or
association of churches.
MISCELLANEOUS SECTIONS
Sec. 129. Minnesota Statutes 1988, section 8.31,
subdivision 1, is amended to read:
Subdivision 1. [INVESTIGATE OFFENSES AGAINST THE
PROVISIONS OF CERTAIN DESIGNATED SECTIONS; ASSIST IN
ENFORCEMENT.] The attorney general shall investigate violations
of the law of this state respecting unfair, discriminatory, and
other unlawful practices in business, commerce, or trade, and
specifically, but not exclusively, the nonprofit corporation act
(sections 1 to 128), the act against unfair discrimination and
competition (sections 325D.01 to 325D.08), the unlawful trade
practices act (sections 325D.09 to 325D.16), the antitrust act
(sections 325D.49 to 325D.66), section 325F.67 and other laws
against false or fraudulent advertising, the antidiscrimination
acts contained in section 325D.67, the act against
monopolization of food products (section 325D.68), and the
prevention of consumer fraud act (sections 325F.68 to 325F.70)
and assist in the enforcement of those laws as in this section
provided.
Sec. 130. Minnesota Statutes 1988, section 52.09, is
amended by adding a subdivision to read:
Subd. 5. [ELIMINATION OR LIMITATION OF LIABILITY.] A
director's personal liability to the credit union or its members
for monetary damages for breach of fiduciary duty as a director
may be eliminated or limited in the bylaws. The bylaws shall
not eliminate or limit liability of a director:
(1) for breach of the director's duty of loyalty to the
credit union or its members;
(2) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law;
(3) for a transaction from which the director derived an
improper personal benefit; or
(4) for an act or omission occurring prior to the date when
the provision in the bylaws eliminating or limiting liability
becomes effective.
Sec. 131. Minnesota Statutes 1988, section 79A.09,
subdivision 1, is amended to read:
Subdivision 1. [CREATION.] The self-insurers' security
fund is established as a nonprofit corporation pursuant to the
Minnesota nonprofit corporation act, sections 317.01 to 317.69 1
to 128. If any provision of the Minnesota nonprofit corporation
act conflicts with any provision of this chapter, the provisions
of this chapter apply. Each private self-insurer who is
self-insured on July 1, 1988, or who becomes self-insured
thereafter, shall participate as a member in the security fund.
This participation shall be a condition of maintaining its
certificate to self-insure.
Sec. 132. Minnesota Statutes 1988, section 257.03, is
amended to read:
257.03 [NOTICE TO COMMISSIONER OF HUMAN SERVICES.]
Any person receiving a child in the person's home with
intent to adopt the child or keep the child permanently, except
a person receiving a child from an authorized agency, must
notify the commissioner of human services in writing within 30
days after the child is received. Notice shall state the true
name of the child; the child's last previous address; the name
and address of the child's parents or legal guardian and of
persons with whom the child last resided; and the names and
addresses of persons who placed the child in the home, arranged
for, or assisted with arrangements for the child's placement
there; and such other facts about the child or the home as the
commissioner may require. It is the duty of the commissioner or
a designated agent to investigate the circumstances surrounding
the child's entry into the home and to take appropriate action
to assure for the child, the biological parents, and the foster
parents the full protection of all laws of Minnesota relating to
custody and foster care of children. Except as provided by
section 317.65 127, no person shall solicit, receive, or accept
any payment, promise of payment, or compensation, for placing a
child in foster care or for assisting to place a child in foster
care. Nor shall any person pay or promise to pay or in any way
compensate any person, for placing or for assisting to place a
child in foster care.
Sec. 133. Minnesota Statutes 1988, section 309.67, is
amended to read:
309.67 [STANDARD OF CONDUCT.]
In the administration of the powers to appropriate
appreciation, to make and retain investments, and to delegate
investment management of institutional funds, members of a
governing board shall exercise ordinary business care and
prudence under the facts and circumstances prevailing at the
time of the action or decision discharge their duties in the
manner provided in section 44. In so doing they shall consider
long and short term needs of the institution in carrying out its
educational, religious, charitable, or other eleemosynary
purposes, its present and anticipated financial requirements,
expected total return on its investments, price level trends,
and general economic conditions.
Sec. 134. Minnesota Statutes 1988, section 319A.20, is
amended to read:
319A.20 [SUSPENSION OR REVOCATION.]
The corporate charter of a professional corporation or the
certificate of authority of a foreign professional corporation
may be suspended or revoked pursuant to section 301.57,
302A.757, or 317.62 106 for the reasons enumerated therein or
for failure to comply with the provisions of sections 319A.01 to
319A.22 or the rules of any board. A board through the attorney
general may institute such suspension or revocation proceedings.
Sec. 135. Minnesota Statutes 1988, section 354A.021,
subdivision 2, is amended to read:
Subd. 2. [ORGANIZATION.] Each teachers retirement fund
association shall be organized and governed pursuant to this
chapter and chapter 317 317A, except that no association shall
be required to amend its articles of incorporation or bylaws to
conform with section 317.08, subdivision 2, clause (3), and that
each association shall be deemed to be a nonprofit corporation
without coming within the application of definition in section
317.02, subdivision 5 2, subdivision 7. Any corporate action of
any teachers retirement fund association taken prior to April 9,
1976 shall be deemed to be valid if it conformed with Minnesota
Statutes 1976, chapter 317 or 354A, or Revised Laws 1905,
chapter 58, as amended through April 9, 1976.
Sec. 136. Minnesota Statutes 1988, section 469.144,
subdivision 1, is amended to read:
Subdivision 1. [ESTABLISHMENT.] Any county or combination
of counties by resolution of the county board or boards may
establish a rural development financing authority as a public
nonprofit corporation. An authority has the powers and duties
conferred and imposed on a private nonprofit corporation by
chapter 317 317A, except as otherwise or additionally provided
herein. No such authority shall transact any business or
exercise any powers until a certified copy of the resolutions of
each participating county board has been submitted to the
secretary of state and a certificate of incorporation issued
pursuant to section 317.10 21. Each resolution shall include
all of the provisions required by section 317.08, subdivision 2
10, subdivision 1. Alternatively, a county may determine by
resolution of the county board to exercise the powers granted in
this chapter to a rural development finance authority; no filing
is required.
Sec. 137. [INSTRUCTION TO REVISOR.]
The revisor of statutes shall change the phrase "chapter
317" to "chapter 317A" wherever it appears in Minnesota Statutes.
Sec. 138. [APPROPRIATION.]
(a) $185,000 is appropriated from the general fund to the
secretary of state to carry out the additional duties imposed by
this act. $93,000 is for fiscal year 1990 and $92,000 is for
fiscal year 1991. The approved complement for the office of the
secretary of state is increased by two positions.
(b) $160,000 is appropriated from the general fund to the
attorney general to carry out the additional duties imposed by
this act. $83,000 is for fiscal year 1990 and $77,000 is for
fiscal year 1991. The approved complement of the office of the
attorney general is increased by two positions.
Sec. 139. [REPEALER.]
Minnesota Statutes 1988, sections 317.01; 317.02; 317.03;
317.04; 317.05; 317.06; 317.07; 317.08; 317.09; 317.10; 317.12;
317.13; 317.14; 317.15; 317.16; 317.165; 317.17; 317.175;
317.18; 317.19; 317.20; 317.201; 317.21; 317.22; 317.23; 317.24;
317.25; 317.26; 317.27; 317.271; 317.28; 317.285; 317.29;
317.30; 317.31; 317.32; 317.33; 317.34; 317.35; 317.36; 317.37;
317.38; 317.39; 317.40; 317.41; 317.42; 317.44; 317.45; 317.46;
317.47; 317.48; 317.49; 317.50; 317.51; 317.52; 317.53; 317.54;
317.55; 317.56; 317.57; 317.58; 317.59; 317.60; 317.61; 317.62;
317.63; 317.64; 317.65; 317.66; 317.67; 317.68, and 317.69, are
repealed.
Section 120, subdivision 4, is repealed.
Sec. 140. [EFFECTIVE DATES.]
Sections 1 to 120 and 122 to 128 are effective August 1,
1989. Sections 121, 129 to 136, and 138 are effective January
1, 1991.
Presented to the governor May 30, 1989
Signed by the governor June 1, 1989, 11:30 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes