Office of the Revisor of Statutes
Minnesota Session Laws - 1997, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 10-S.F.No. 315
An act relating to business organizations; making
technical changes applicable to business corporations
and limited liability companies; permitting mergers of
domestic corporations and limited liability companies;
regulating filings with the secretary of state;
amending Minnesota Statutes 1996, sections 302A.011,
subdivisions 11, 30, 38, 39, 50, 53, and by adding
subdivisions; 302A.111, subdivision 4; 302A.115,
subdivision 1; 302A.171, subdivision 2; 302A.223,
subdivision 5; 302A.401, subdivision 3; 302A.402,
subdivision 3; 302A.405, subdivision 1; 302A.409,
subdivision 4; 302A.413, by adding a subdivision;
302A.417, subdivision 7; 302A.423, subdivision 2;
302A.429, subdivision 2; 302A.437, subdivision 2;
302A.445, subdivision 1; 302A.449, subdivision 1;
302A.457, subdivision 2; 302A.461, subdivision 1;
302A.471, subdivision 3; 302A.473, subdivision 3;
302A.521, subdivisions 4 and 9; 302A.601, subdivision
4; 302A.611; 302A.613, subdivisions 1 and 2; 302A.615;
302A.621, subdivision 6; 302A.631; 302A.641,
subdivision 2; 302A.651; 302A.671, subdivision 3;
302A.673, subdivision 3; 302A.675; 308A.005, by adding
subdivisions; 317A.011, subdivisions 8 and 19;
322A.01; 322B.03, subdivisions 18 and 45; 322B.11;
322B.115, subdivisions 1 and 4; 322B.12, subdivision
1; 322B.20, subdivision 2; 322B.313, subdivision 2;
322B.33, by adding a subdivision; 322B.346,
subdivision 2; 322B.356, subdivision 1; 322B.363,
subdivision 1; 322B.37, subdivisions 1 and 3;
322B.383, subdivision 1, and by adding a subdivision;
322B.386, subdivision 3; 322B.699, subdivision 9;
322B.70, subdivisions 1 and 2; 322B.72, subdivisions 2
and 3; 322B.74, subdivisions 1 and 2; 322B.80,
subdivision 1; 323.02, by adding subdivisions; and
333.001, subdivision 5, and by adding subdivisions;
repealing Minnesota Statutes 1996, section 302A.011,
subdivision 33.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
TECHNICAL CHANGES; BUSINESS CORPORATIONS
Section 1. Minnesota Statutes 1996, section 302A.011,
subdivision 11, is amended to read:
Subd. 11. [FILED WITH THE SECRETARY OF STATE.] "Filed with
the secretary of state" means that an original of a document
meeting the applicable requirements of this chapter, signed and
accompanied by a filing fee of $35, has been delivered to the
secretary of state of this state. The secretary of state shall
endorse on the original document the word "Filed" and the month,
day, and year, and time of filing, record the document in the
office of the secretary of state, and return the a document to
the person who delivered it for filing.
Sec. 2. Minnesota Statutes 1996, section 302A.011,
subdivision 30, is amended to read:
Subd. 30. [SIGNED.] (a) "Signed" means that the signature
of a person has been written on a document, as provided in
section 645.44, subdivision 14, and, with respect to a document
required by this chapter to be filed with the secretary of
state, means that the document has been 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 as required by section
302A.237 or the holders of the required proportion or number of
the voting power of the shares present and entitled to
vote shareholders as required by section 302A.437.
(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,
transmitted by facsimile or electronically, or in any other
manner reproduced on the document.
Sec. 3. Minnesota Statutes 1996, section 302A.011,
subdivision 38, is amended to read:
Subd. 38. [CONTROL SHARE ACQUISITION.] "Control share
acquisition" means an acquisition, directly or indirectly, by an
acquiring person of beneficial ownership of shares of an issuing
public corporation that, except for section 302A.671, would,
when added to all other shares of the issuing public corporation
beneficially owned by the acquiring person, entitle the
acquiring person, immediately after the acquisition, to exercise
or direct the exercise of a new range of voting power within any
of the ranges specified in section 302A.671, subdivision 2,
paragraph (d), but does not include any of the following:
(a) an acquisition before, or pursuant to an agreement
entered into before, August 1, 1984;
(b) an acquisition by a donee pursuant to an inter vivos
gift not made to avoid section 302A.671 or by a distributee as
defined in section 524.1-201, clause (10);
(c) an acquisition pursuant to a security agreement not
created to avoid section 302A.671;
(d) an acquisition under sections 302A.601 to 302A.661, if
the issuing public corporation is a party to the transaction;
(e) an acquisition from the issuing public corporation;
(f) an acquisition for the benefit of others by a person
acting in good faith and not made to avoid section 302A.671, to
the extent that the person may not exercise or direct the
exercise of the voting power or disposition of the shares except
upon the instruction of others;
(g) an acquisition pursuant to a savings, employee stock
ownership, or other employee benefit plan of the issuing public
corporation or any of its subsidiaries, or by a fiduciary of the
plan acting in a fiduciary capacity pursuant to the plan; or
(h) an acquisition subsequent to January 1, 1991, pursuant
to an offer to purchase for cash pursuant to a tender offer all
shares of the voting stock of the issuing public corporation:
(i) which has been approved by a majority vote of the
members of a committee comprised of the disinterested members of
the board of the issuing public corporation formed pursuant to
section 302A.673, subdivision 1, paragraph (d), before the
commencement of, or the public announcement of the intent to
commence, the tender offer; and
(ii) pursuant to which the acquiring person will become the
owner of over 50 percent of the voting stock of the issuing
public corporation outstanding at the time of the transaction.
For purposes of this subdivision, shares beneficially owned
by a plan described in clause (g), or by a fiduciary of a plan
described in clause (g) pursuant to the plan, are not deemed to
be beneficially owned by a person who is a fiduciary of the
plan. All shares the beneficial ownership of which is acquired
within a 120-day period, and all shares the beneficial ownership
of which is acquired pursuant to a plan to make a control share
acquisition, shall be deemed to have been acquired in the same
acquisition.
Sec. 4. Minnesota Statutes 1996, section 302A.011,
subdivision 39, is amended to read:
Subd. 39. [ISSUING PUBLIC CORPORATION.] "Issuing public
corporation" means a corporation which has at least 50
shareholders. either: (1) a publicly held corporation that has
at least 50 shareholders; or (2) any other corporation that has
at least 100 shareholders, provided that if, before January 1,
1998, a corporation that has at least 50 shareholders elects to
be an issuing public corporation by express amendment contained
in the articles or bylaws, including bylaws approved by the
board, that corporation is an issuing public corporation if it
has at least 50 shareholders.
Sec. 5. Minnesota Statutes 1996, section 302A.011,
subdivision 50, is amended to read:
Subd. 50. [MARKET VALUE.] "Market value," when used in
reference to shares or other property of any corporation, means
the following:
(1) in the case of shares, the average closing sale price
of a share on the composite tape for New York Stock Exchange
listed shares during the 30 trading days immediately preceding
the date in question or, with respect to the references in
section 302A.553, subdivision 3, if a person or persons selling
the shares have commenced a tender offer or have announced an
intention to seek control of the corporation, during the 30
trading days preceding the earlier of the commencement of the
tender offer or the making of the announcement, or, if the
shares are not quoted on the composite tape or not listed on the
New York Stock Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act
of 1934 on which the shares are listed, or, if the shares are
not listed on any such exchange, on the National Association of
Securities Dealers, Inc. Automated Quotations NASDAQ National
Market System, or, if the shares are not quoted on the National
Association of Securities Dealers, Inc. Automated
Quotations NASDAQ National Market System, the average closing
bid quotation during the 30 trading days preceding the purchase
of the shares in question of a share on the National Association
of Securities Dealers, Inc. Automated Quotations System NASDAQ
Small Cap Market, or any system then in use, or, with respect to
the reference in section 302A.553, subdivision 3, if the person
or persons selling the shares shall have commenced a tender
offer or have announced an intention to seek control of the
corporation, during the 30 trading days preceding the earlier of
the commencement of the tender offer or the making of the
announcement, provided that if no quotation is available, the
market value is the fair market value on the date in question of
the shares as determined in good faith by the board of the
corporation;
(2) in the case of property other than cash or shares, the
fair market value of the property on the date in question as
determined in good faith by the board of the corporation.
Sec. 6. Minnesota Statutes 1996, section 302A.011,
subdivision 53, is amended to read:
Subd. 53. [TAKEOVER OFFER.] (a) "Takeover offer" means an
offer to acquire shares of an issuing public corporation from a
shareholder pursuant to a tender offer or request or invitation
for tenders, if, after the acquisition of all shares acquired
pursuant to the offer:
(1) the offeror would be directly or indirectly a
beneficial owner of more than ten percent of any class or series
of the outstanding shares of the issuing public corporation and
was directly or indirectly the beneficial owner of ten percent
or less of that class or series of the outstanding shares of the
issuing public corporation before commencement of the offer; or
(2) the beneficial ownership by the offeror of any class or
series of the outstanding shares of the issuing public
corporation would be increased by more than ten percent of that
class or series and the offeror was directly or indirectly the
beneficial owner of ten percent or more of any class or series
of the outstanding shares of the issuing public corporation
before commencement of the offer.
(b) Takeover offer does not include:
(1) an offer in connection with the acquisition of a share
which, together with all other acquisitions by the offeror of
shares of the same class or series of shares of the issuer,
would not result in the offeror having acquired more than two
percent of this that class or series during the preceding
12-month period;
(2) an offer by the issuer to acquire its own shares unless
the offer is made during the pendency of a takeover offer by a
person who is not an associate or affiliate of the issuer;
(3) an offer in which the issuing public corporation is an
insurance company subject to regulation by the commissioner of
commerce, a financial institution regulated by the commissioner,
or a public service utility subject to regulation by the public
utilities commission.
Sec. 7. Minnesota Statutes 1996, section 302A.111,
subdivision 4, is amended to read:
Subd. 4. [OPTIONAL PROVISIONS; SPECIFIC SUBJECTS.] The
provisions in paragraphs (a), (g), (q), (r), and (u) may be
included in the articles.
The following provisions relating to the management of the
business or the regulation of the affairs of a corporation in
paragraphs (b) to (f), (h) to (p), (s), and (t) may be included
either in the articles or, except for naming members of the
first board, fixing a greater than majority director or
shareholder vote, or giving or prescribing the manner of giving
voting rights to persons other than shareholders otherwise than
pursuant to the articles, or eliminating or limiting a
director's personal liability, in the bylaws:
(a) The members of the first board may be named in the
articles (section 302A.201, subdivision 1);
(b) A manner for increasing or decreasing the number of
directors may be provided (section 302A.203);
(c) Additional qualifications for directors may be imposed
(section 302A.205);
(d) Directors may be classified (section 302A.213);
(e) The day or date, time, and place of board meetings may
be fixed (section 302A.231, subdivision 1);
(f) Absent directors may be permitted to give written
consent or opposition to a proposal (section 302A.233);
(g) A larger than majority vote may be required for board
action (section 302A.237);
(h) Authority to sign and deliver certain documents may be
delegated to an officer or agent of the corporation other than
the chief executive officer (section 302A.305, subdivision 2);
(i) Additional officers may be designated (section
302A.311);
(j) Additional powers, rights, duties, and responsibilities
may be given to officers (section 302A.311);
(k) A method for filling vacant offices may be specified
(section 302A.341, subdivision 3);
(l) A certain officer or agent may be authorized to sign
share certificates (section 302A.417, subdivision 2);
(m) The transfer or registration of transfer of securities
may be restricted (section 302A.429);
(n) The day or date, time, and place of regular shareholder
meetings may be fixed (section 302A.431, subdivision 3);
(o) Certain persons may be authorized to call special
meetings of shareholders (section 302A.433, subdivision 1);
(p) Notices of shareholder meetings may be required to
contain certain information (section 302A.435, subdivision 3);
(q) A larger than majority vote may be required for
shareholder action (section 302A.437);
(r) Voting rights may be granted in or pursuant to the
articles to persons who are not shareholders (section 302A.445,
subdivision 4);
(s) Corporate actions giving rise to dissenter rights may
be designated (section 302A.471, subdivision 1, clause (e));
(t) The rights and priorities of persons to receive
distributions may be established (section 302A.551); and
(u) A director's personal liability to the corporation or
its shareholders for monetary damages for breach of fiduciary
duty as a director may be eliminated or limited in the articles
(section 302A.251, subdivision 4).
Nothing in this subdivision limits the right of the board,
by resolution, to take an action that may be included in the
bylaws under this subdivision without including it in the
bylaws, unless it is required to be included in the bylaws by
another provision of this chapter.
Sec. 8. Minnesota Statutes 1996, section 302A.115,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENTS; PROHIBITIONS.] The corporate
name:
(a) Shall be in the English language or in any other
language expressed in English letters or characters;
(b) Shall contain the word "corporation," "incorporated,"
or "limited," or shall contain an abbreviation of one or more of
these words, or the word "company" or the abbreviation "Co." if
that word or abbreviation is not immediately preceded by the
word "and" or the character "&";
(c) Shall not contain a word or phrase that indicates or
implies that it is incorporated for a purpose other than a legal
business purpose;
(d) Shall be distinguishable upon the records in the office
of the secretary of state from the name of each domestic
corporation, limited partnership, limited liability partnership,
and limited liability company, whether profit or nonprofit, and
each foreign corporation, limited partnership, limited liability
partnership, and limited liability company authorized or
registered to do business in this state, whether profit or
nonprofit, and each name the right to which is, at the time of
incorporation, reserved as provided for in sections 302A.117,
322A.03, 322B.125, or 333.001 to 333.54, unless there is filed
with the articles one of the following:
(1) The written consent of the domestic corporation,
limited partnership, limited liability partnership, or limited
liability company, or the foreign corporation, limited
partnership, limited liability partnership, or limited liability
company authorized or registered to do business in this state or
the holder of a reserved name or a name filed by or registered
with the secretary of state under sections 333.001 to 333.54
having a name that is not distinguishable;
(2) A certified copy of a final decree of a court in this
state establishing the prior right of the applicant to the use
of the name in this state; or
(3) The applicant's affidavit that the corporation, limited
partnership, or limited liability company with the name that is
not distinguishable has been incorporated or on file in this
state for at least three years prior to the affidavit, if it is
a domestic corporation, limited partnership, or limited
liability company, or has been authorized or registered to do
business in this state for at least three years prior to the
affidavit, if it is a foreign corporation, limited partnership,
or limited liability company, or that the holder of a name filed
or registered with the secretary of state under sections 333.001
to 333.54 filed or registered that name at least three years
prior to the affidavit; that the corporation, limited
partnership, or limited liability company or holder has not
during the three-year period before the affidavit filed any
document with the secretary of state; that the applicant has
mailed written notice to the corporation, limited partnership,
or limited liability company or the holder of a name filed or
registered with the secretary of state under sections 333.001 to
333.54 by certified mail, return receipt requested, properly
addressed to the registered office of the corporation or limited
liability company or in care of the agent of the limited
partnership, or the address of the holder of a name filed or
registered with the secretary of state under sections 333.001 to
333.54, shown in the records of the secretary of state, stating
that the applicant intends to use a name that is not
distinguishable and the notice has been returned to the
applicant as undeliverable to the addressee corporation, limited
partnership, limited liability company, or holder of a name
filed or registered with the secretary of state under sections
333.001 to 333.54; that the applicant, after diligent inquiry,
has been unable to find any telephone listing for the
corporation, limited partnership, or limited liability company
with the name that is not distinguishable in the county in which
is located the registered office of the corporation, limited
partnership, or limited liability company shown in the records
of the secretary of state or has been unable to find any
telephone listing for the holder of a name filed or registered
with the secretary of state under sections 333.001 to 333.54 in
the county in which is located the address of the holder shown
in the records of the secretary of state; and that the applicant
has no knowledge that the corporation, limited partnership,
limited liability company, or holder of a name filed or
registered with the secretary of state under sections 333.001 to
333.54 is currently engaged in business in this state.
Sec. 9. Minnesota Statutes 1996, section 302A.171,
subdivision 2, is amended to read:
Subd. 2. [MEETING.] After the filing of articles of
incorporation, the incorporators or the directors named in the
articles shall either 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, including,
without limitation, amending the articles, electing directors,
adopting bylaws, electing officers, adopting banking
resolutions, authorizing or ratifying the purchase, lease, or
other acquisition of suitable space, furniture, furnishings,
supplies, and materials, approving a corporate seal, approving
forms of certificates or transaction statements for shares of
the corporation, adopting a fiscal year for the corporation,
accepting subscriptions for and issuing shares of the
corporation, and making any appropriate tax elections. If a
meeting is held, the person or 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. Incorporators and directors may waive
notice of an organizational meeting in the same manner that a
director may waive notice of meetings of the board pursuant to
section 302A.231, subdivision 5.
Sec. 10. Minnesota Statutes 1996, section 302A.223,
subdivision 5, is amended to read:
Subd. 5. [ELECTION OF REPLACEMENTS.] New directors may be
elected at a meeting at which directors are removed. If the
corporation allows cumulative voting and a shareholder notifies
the presiding officer at any time prior to the election of new
directors of intent to cumulate the votes of the shareholder,
the presiding officer shall announce before the election that
cumulative voting is in effect, and shareholders shall cumulate
their votes as provided in section 302A.215, subdivision 1,
clause (b).
Sec. 11. Minnesota Statutes 1996, section 302A.401,
subdivision 3, is amended to read:
Subd. 3. [PROCEDURE FOR FIXING TERMS.] (a) Subject to any
restrictions in the articles, the power granted in subdivision 2
may be exercised by a resolution or resolutions approved by the
affirmative vote of a majority of the directors present required
by section 302A.237 establishing a class or series, setting
forth the designation of the class or series, and fixing the
relative rights and preferences of the class or series. Any of
the rights and preferences of a class or series established in
the articles or by resolution of the directors:
(1) may be made dependent upon facts ascertainable outside
the articles, or outside the resolution or resolutions
establishing the class or series, provided that the manner in
which the facts operate upon the rights and preferences of the
class or series is clearly and expressly set forth in the
articles or in the resolution or resolutions establishing the
class or series; and
(2) may incorporate by reference some or all of the terms
of any agreements, contracts, or other arrangements entered into
by the issuing corporation in connection with the establishment
of the class or series if the corporation retains at its
principal executive office a copy of the agreements, contracts,
or other arrangements or the portions incorporated by reference.
(b) A statement setting forth the name of the corporation
and the text of the resolution and certifying the adoption of
the resolution and the date of adoption shall be filed with the
secretary of state before the issuance of any shares for which
the resolution creates rights or preferences not set forth in
the articles; provided, however, where the shareholders have
received notice of the creation of shares with rights or
preferences not set forth in the articles before the issuance of
the shares, the statement may be filed any time within one year
after the issuance of the shares. The resolution is effective
when the statement has been filed with the secretary of state;
or, if it is not required to be filed with the secretary of
state before the issuance of shares, on the date of its adoption
by the directors.
(c) A statement filed with the secretary of state in
accordance with paragraph (b) is not considered an amendment of
the articles for purposes of sections 302A.137 and 302A.471.
Sec. 12. Minnesota Statutes 1996, section 302A.402,
subdivision 3, is amended to read:
Subd. 3. [BY ACTION OF BOARD ALONE; FILING OF ARTICLES OF
AMENDMENT.] (a) Subject to the restrictions provided in
subdivision 2 or any restrictions in the articles, a share
dividend, division, or combination may be effected by action of
the board alone, without the approval of shareholders under
sections 302A.135 and 302A.137. In effecting a division or
combination under this subdivision, the board may amend the
articles to increase or decrease the par value of shares,
increase or decrease the number of authorized shares, and make
any other change necessary or appropriate to assure that the
rights or preferences of the holders of outstanding shares of
any class or series will not be adversely affected by the
division or combination.
(b) If a division or combination that includes an amendment
of the articles is effected under this subdivision, then
articles of amendment must be prepared that contain the
information required by section 302A.139 and a statement that
the amendment will not adversely affect the rights or
preferences of the holders of outstanding shares of any class or
series and will not result in the percentage of authorized
shares of any class or series that remains unissued after the
division or combination exceeding the percentage of authorized
shares of that class or series that were unissued before the
division or combination.
Sec. 13. Minnesota Statutes 1996, section 302A.405,
subdivision 1, is amended to read:
Subdivision 1. [CONSIDERATION; PROCEDURE.] Subject to any
restrictions in the articles:
(a) Shares may be issued for any consideration, including,
without limitation, money or other tangible or intangible
property received by the corporation or to be received by the
corporation under a written agreement, or services rendered to
the corporation or to be rendered to the corporation under a
written agreement, as authorized by resolution approved by the
affirmative vote of a majority of the directors present required
by section 302A.237, or, if provided for in the articles,
approved by the affirmative vote of the holders of a majority of
the voting power of the shares present shareholders required by
section 302A.437, establishing a price in money or other
consideration, or a minimum price, or a general formula or
method by which the price will be determined; and
(b) Upon authorization in accordance with section 302A.402,
the A corporation may, without any new or additional
consideration, issue its own shares in exchange for or in
conversion of its outstanding shares, or, subject to
authorization of share dividends, divisions, and combinations
according to section 302A.402, issue its own shares pro rata to
its shareholders or the shareholders of one or more classes or
series, to effectuate share dividends, divisions, or
combinations. No shares of a class or series, shares of which
are then outstanding, shall be issued to the holders of shares
of another class or series (except in exchange for or in
conversion of outstanding shares of the other class or series),
unless the issuance either is expressly provided for in the
articles or is approved at a meeting by the affirmative vote of
the holders of a majority of the voting power of all shares of
the same class or series as the shares to be issued.
Sec. 14. Minnesota Statutes 1996, section 302A.409,
subdivision 4, is amended to read:
Subd. 4. [TERMS SET FORTH.] The instrument evidencing the
right to purchase or, if no instrument exists, a transaction
statement written agreement, shall set forth in full, summarize,
or incorporate by reference all the terms, provisions, and
conditions applicable to the right to purchase.
Sec. 15. Minnesota Statutes 1996, section 302A.413, is
amended by adding a subdivision to read:
Subd. 10. [CONTRACTUAL RIGHTS.] A denial or limitation of
preemptive rights otherwise provided in this section does not
limit the power of a corporation to grant first refusal rights
or other rights to purchase from the corporation shares or other
securities of the corporation to shareholders, subscribers, or
other persons before they are offered to, or acquired by, any
other person.
Sec. 16. Minnesota Statutes 1996, section 302A.417,
subdivision 7, is amended to read:
Subd. 7. [UNCERTIFICATED SHARES.] Unless uncertificated
shares are prohibited by the articles or bylaws, a resolution
approved by the affirmative vote of a majority of the directors
present may provide that some or all of any or all classes and
series of its shares will be uncertificated shares. The
resolution does not apply to shares represented by a certificate
until the certificate is surrendered to the corporation. Within
a reasonable time after the issuance or transfer of
uncertificated shares, the corporation shall send to the new
shareholder the information required by this section to be
stated on certificates. This information is not required to be
sent to the new shareholder by a publicly held corporation that
has adopted a system of issuance, recordation, and transfer of
its shares by electronic or other means not involving an
issuance of certificates if the system complies with section 174
of the Securities Exchange Act of 1934. Except as otherwise
expressly provided by statute, the rights and obligations of the
holders of certificated and uncertificated shares of the same
class and series are identical.
Sec. 17. Minnesota Statutes 1996, section 302A.423,
subdivision 2, is amended to read:
Subd. 2. [RESTRICTIONS; RIGHTS.] A corporation shall not
pay money for fractional shares if that action would result in
the cancellation of more than 20 percent of the outstanding
shares of a class or series. A determination by the board of
the fair value of fractions of a share is conclusive in the
absence of fraud. A certificate certificated or a transaction
statement for a uncertificated fractional share does, but scrip
or warrants do not unless they provide otherwise, entitle the
shareholder to exercise voting rights or to receive
distributions. The board may cause scrip or warrants to be
issued subject to the condition that they become void if not
exchanged for full shares before a specified date, or that the
shares for which scrip or warrants are exchangeable may be sold
by the corporation and the proceeds distributed to the holder of
the scrip or warrants, or to any other condition or set of
conditions the board may impose.
Sec. 18. Minnesota Statutes 1996, section 302A.429,
subdivision 2, is amended to read:
Subd. 2. [RESTRICTIONS PERMITTED.] A written restriction
on the transfer or registration of transfer of securities of a
corporation that is not manifestly unreasonable under the
circumstances and is either: (1) noted conspicuously on the
face or back of the certificate; or transaction statement (2)
included in information sent to the holders of uncertificated
shares in accordance with section 302A.417, subdivision 7, may
be enforced against the holder of the restricted securities or a
successor or transferee of the holder, including a pledgee or a
legal representative. Unless noted conspicuously on the face or
back of the certificate or transaction statement included in
information sent to the holders of uncertificated shares in
accordance with section 302A.417, subdivision 7, a restriction,
even though permitted by this section, is ineffective against a
person without knowledge of the restriction. A restriction
under this section is deemed to be noted conspicuously and is
effective if the existence of the restriction is stated on the
certificate and reference is made to a separate document
creating or describing the restriction.
Sec. 19. Minnesota Statutes 1996, section 302A.437,
subdivision 2, is amended to read:
Subd. 2. [VOTING BY CLASS OR SERIES.] In any case where a
class or series of shares is entitled by this chapter, the
articles, the bylaws, or the terms of the shares to vote as a
class or series, the matter being voted upon must also receive
the affirmative vote of the holders of the same proportion of
the shares present of that class or series, or of the total
outstanding shares of that class or series, as the proportion
required pursuant to subdivision 1, unless the articles require
a larger proportion. Unless otherwise stated in the articles or
bylaws in the case of voting as a class or series, the minimum
percentage of the total number of shares of the class or series
which must be present shall be equal to the minimum percentage
of all outstanding shares entitled to vote required to be
present under section 302A.443.
Sec. 20. Minnesota Statutes 1996, section 302A.445,
subdivision 1, is amended to read:
Subdivision 1. [DETERMINATION.] The board may fix, or
authorize an officer to 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 shareholders as the date for the
determination of the holders of shares entitled to notice of and
entitled to vote at the meeting. When a date is so fixed, only
shareholders on that date are entitled to notice of and
permitted to vote at that meeting of shareholders.
Sec. 21. Minnesota Statutes 1996, section 302A.449,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORIZATION.] (a) A shareholder may cast
or authorize the casting of a vote by filing a written
appointment of a proxy, signed by the shareholder, with an
officer of the corporation at or before the meeting at which the
appointment is to be effective. A written In addition, a
shareholder of a publicly held corporation may cast or authorize
the casting of a vote by a proxy by transmitting to the
corporation or the corporation's duly authorized agent before
the meeting, an appointment of a proxy may be signed by the
shareholder or authorized by the shareholder by transmission of
a telegram, cablegram, or other means of electronic
transmission, provided that the corporation has no reason to
believe that the telegram, cablegram, or other electronic
transmission was not authorized by the shareholder. Any by
means of a telegram, cablegram, or any other form of electronic
transmission, including telephonic transmission, whether or not
accompanied by written instructions of the shareholder. The
electronic transmission must set forth or be submitted with
information from which it can be determined that the appointment
was authorized by the shareholder. If it is determined that a
telegram, cablegram, or other electronic transmission is valid,
the inspectors of election or, if there are no inspectors, the
other persons making that determination shall specify the
information upon which they relied to make that determination.
(b) A copy, facsimile telecommunication, or other
reproduction of the original writing or transmission may be
substituted or used in lieu of the original writing or
transmission for any purpose for which the original writing or
transmission could be used, provided that the copy, facsimile
telecommunication, or other reproduction is a complete and
legible reproduction of the entire original writing or
transmission.
(c) An appointment of a proxy for shares held jointly by
two or more shareholders is valid if signed or otherwise
authorized by any one of them, unless the corporation receives
from any one of those shareholders written notice either denying
the authority of that person to appoint a proxy or appointing a
different proxy.
Sec. 22. Minnesota Statutes 1996, section 302A.457,
subdivision 2, is amended to read:
Subd. 2. [METHOD OF APPROVAL; ENFORCEABILITY; COPIES.] (a)
A written agreement among persons described in subdivision 1
that relates to the control of or the liquidation and
dissolution of the corporation, the relations among them, or any
phase of the business and affairs of the corporation, including,
without limitation, the management of its business, the
declaration and payment of distributions, the election of
directors or officers, the employment of shareholders by the
corporation, or the arbitration of disputes, is valid and
specifically enforceable, if the agreement is signed by all
persons who are then the shareholders of the corporation,
whether or not the shareholders all have voting shares, and the
subscribers for shares, whether or not voting shares, to be
issued.
(b) The agreement is enforceable by the persons described
in subdivision 1 who are parties to it and is binding upon and
enforceable against only those persons and other persons having
knowledge of the existence of the agreement. A copy of the
agreement shall be filed with the corporation. The existence
and location of a copy of the agreement shall be noted
conspicuously on the face or back of each certificate for shares
issued by the corporation and on each transaction statement
included in information sent to the holders of uncertificated
shares according to section 302A.417, subdivision 7.
(c) A shareholder, a beneficial owner of shares, or another
person having a security interest in shares has the right upon
written demand to obtain a copy of the agreement from the
corporation at the expense of the corporation.
Sec. 23. Minnesota Statutes 1996, section 302A.461,
subdivision 1, is amended to read:
Subdivision 1. [SHARE REGISTER; DATES OF ISSUANCE.] (a) A
corporation shall keep at its principal executive office, or at
another place or places within the United States determined by
the board, a share register not more than one year old,
containing the names and addresses of the shareholders and the
number and classes of shares held by each shareholder.
(b) A corporation shall also keep, at its principal
executive office, or at another place or places within the
United States determined by the board, a record of the dates on
which certificates or transaction statements representing
certificated or uncertificated shares were issued.
Sec. 24. Minnesota Statutes 1996, section 302A.471,
subdivision 3, is amended to read:
Subd. 3. [RIGHTS NOT TO APPLY.] (a) Unless the articles,
the bylaws, or a resolution approved by the board otherwise
provide, the right to obtain payment under this section does not
apply to a shareholder of the surviving corporation in a merger,
if the shares of the shareholder are not entitled to be voted on
the merger.
(b) If a date is fixed according to section 302A.445,
subdivision 1, for the determination of shareholders entitled to
receive notice of and to vote on an action described in
subdivision 1, only shareholders as of the date fixed, and
beneficial owners as of the date fixed who hold through
shareholders, as provided in subdivision 2, may exercise
dissenters' rights.
Sec. 25. Minnesota Statutes 1996, section 302A.473,
subdivision 3, is amended to read:
Subd. 3. [NOTICE OF DISSENT.] If the proposed action must
be approved by the shareholders, a shareholder who is entitled
to dissent under section 302A.471 and who wishes to exercise
dissenters' rights must file with the corporation before the
vote on the proposed action a written notice of intent to demand
the fair value of the shares owned by the shareholder and must
not vote the shares in favor of the proposed action.
Sec. 26. Minnesota Statutes 1996, section 302A.521,
subdivision 4, is amended to read:
Subd. 4. [PROHIBITION OR LIMIT ON INDEMNIFICATION OR
ADVANCES.] The articles or bylaws either may prohibit
indemnification or advances of expenses otherwise required by
this section or may impose conditions on indemnification or
advances of expenses in addition to the conditions contained in
subdivisions 2 and 3 including, without limitation, monetary
limits on indemnification or advances of expenses, if
the prohibition or conditions apply equally to all persons or to
all persons within a given class. A prohibition or limit on
indemnification or advances may not apply to or affect the right
of a person to indemnification or advances of expenses with
respect to any acts or omissions of the person occurring prior
to 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.
Sec. 27. Minnesota Statutes 1996, section 302A.521,
subdivision 9, is amended to read:
Subd. 9. [INDEMNIFICATION OF OTHER PERSONS.] Nothing in
this section shall be construed to limit the power of the
corporation to indemnify other persons other than a director,
officer, employee, or member of a committee of the board of the
corporation by contract or otherwise.
Sec. 28. Minnesota Statutes 1996, section 302A.621,
subdivision 6, is amended to read:
Subd. 6. [RIGHTS OF DISSENTING SHAREHOLDERS.] In the event
all of the stock of one or more domestic subsidiaries that is a
constituent party to a merger under this section is not owned by
the parent directly, or indirectly through related corporations,
immediately prior to the merger, the shareholders of each
domestic subsidiary have dissenters' rights under section
302A.471, without regard to sections section 302A.471,
subdivision 3, and 302A.473. If the parent is a constituent
corporation but is not the surviving corporation in the merger,
and the articles of incorporation of the surviving corporation
immediately after the merger differ from the articles of
incorporation of the parent immediately prior to the merger in a
manner that would entitle a shareholder of the parent to
dissenters' rights under section 302A.471, subdivision 1,
paragraph (a), if the articles of incorporation of the surviving
corporation constituted an amendment to the articles of
incorporation of the parent, that shareholder of the parent has
dissenters' rights as provided under sections 302A.471 and
302A.473. Except as provided in this subdivision, sections
302A.471 and 302A.473 do not apply to any merger effected under
this section.
Sec. 29. Minnesota Statutes 1996, section 302A.651,
subdivision 1, is amended to read:
Subdivision 1. [WHEN PERMITTED.] A domestic corporation
may merge with or participate in an exchange with a foreign
corporation by following the procedures set forth in this
section, if:
(1) with respect to a merger, the merger is permitted by
the laws of the state jurisdiction under which the foreign
corporation is incorporated; and
(2) with respect to an exchange, the corporation whose
shares will be acquired is a domestic corporation, whether or
not the exchange is permitted by the laws of the state
jurisdiction under which the foreign corporation is incorporated.
Sec. 30. Minnesota Statutes 1996, section 302A.671,
subdivision 3, is amended to read:
Subd. 3. [MEETING OF SHAREHOLDERS.] If the acquiring
person so requests in writing at the time of delivery of an
information statement pursuant to subdivision 2, and has made,
or has made a bona fide written offer to make, a control share
acquisition and gives a written undertaking to pay or reimburse
the issuing public corporation's expenses of a special meeting,
except the expenses of the issuing public corporation in
opposing according voting rights with respect to shares acquired
or to be acquired in the control share acquisition, within ten
days after receipt by the issuing public corporation of the
information statement, a special meeting of the shareholders of
the issuing public corporation shall be called pursuant to
section 302A.433, subdivision 1, for the sole purpose of
considering the voting rights to be accorded to shares referred
to in subdivision 1, paragraph (b), acquired or to be acquired
pursuant to the control share acquisition. The special meeting
shall be held no later than 55 days after receipt of the
information statement and written undertaking to pay or
reimburse the issuing public corporation's expenses of the
special meeting, unless the acquiring person agrees to a later
date. If the acquiring person so requests in writing at the
time of delivery of the information statement, (1) the special
meeting shall not be held sooner than 30 days after receipt by
the issuing public corporation of the information statement and
(2) the record date for the meeting must be at least 30 days
prior to the date of the meeting. If no request for a special
meeting is made, consideration of the voting rights to be
accorded to shares referred to in subdivision 1, paragraph (b),
acquired or to be acquired pursuant to the control share
acquisition shall be presented at the next special or annual
meeting of the shareholders of which notice has not been given,
unless prior thereto the matter of the voting rights becomes
moot. The issuing public corporation is not required to have
the voting rights to be accorded to shares acquired or to be
acquired according to a control share acquisition considered at
the next special or annual meeting of the shareholders unless it
has received the information statement and documents required by
subdivision 4 at least 55 days before the meeting. The notice
of the meeting shall at a minimum be accompanied by a copy of
the information statement (and a copy of any amendment to the
information statement previously delivered to the issuing public
corporation) and a statement disclosing that the board of the
issuing public corporation recommends approval of, expresses no
opinion and is remaining neutral toward, recommends rejection
of, or is unable to take a position with respect to according
voting rights to shares referred to in subdivision 1, paragraph
(b), acquired or to be acquired in the control share
acquisition. The notice of meeting shall be given at least ten
days prior to the meeting. Any amendments to the information
statement received after mailing of the notice of the meeting
must be mailed promptly to the shareholders by the issuing
public corporation.
Sec. 31. Minnesota Statutes 1996, section 302A.673,
subdivision 3, is amended to read:
Subd. 3. [APPLICATION.] (a) Unless by express provision
electing to be subject to this section contained in the articles
or in bylaws approved by the shareholders of an issuing public
corporation, this section does not apply to any business
combination of an issuing public corporation, that is not, at
any time during the period from June 1, 1987, until adoption of
the article or bylaw provision, a publicly held corporation.
(b) Except as provided in paragraph (c), this section does
not apply to any business combination of an issuing public
corporation:
(1) if, prior to the time the issuing public corporation
becomes a publicly held corporation or becomes subject to this
section by virtue of an election under paragraph (a), including
any time prior to the time that the corporation becomes an
issuing public corporation, articles or bylaws of the
corporation contain a provision expressly electing not to be
subject to this section;
(2) if the board of the issuing public corporation adopts,
prior to September 1, 1987, an amendment to the issuing public
corporation's bylaws expressly electing not to be subject to
this section;
(3) if an amendment to the articles or bylaws of the
issuing public corporation is approved by the shareholders,
other than interested shareholders and their affiliates and
associates, holding a majority of the outstanding voting power
of all shares entitled to vote, excluding the shares of
interested shareholders and their affiliates and associates,
expressly electing not to be subject to this section and the
amendment provides that it is not to be effective until 18
months after the vote of shareholders and provides that, except
as provided in paragraph (c), it does not apply to any business
combination of the issuing public corporation with an interested
shareholder whose share acquisition date is on or before the
effective date of the amendment; or
(4) if the business combination was consummated before, or
if a binding agreement for the business combination was entered
into before, the day following June 1, 1987.
(c) This section does not apply to any business combination
of an issuing public corporation with, with respect to, proposed
by or on behalf of, or pursuant to any written or oral
agreement, arrangement, relationship, understanding, or
otherwise with:
(1) any person that would have been an interested
shareholder on June 1, 1987, had this section been in effect on
this date and had the issuing public corporation been an issuing
public corporation on this date;
(2) any interested shareholder whose share acquisition date
is either before the effective date of the article or bylaw
provision by which an issuing public corporation that was not
subject to this section immediately prior to the election
elected to be subject to this section, or on the effective date,
but prior to the effective time of the article or bylaw
provision; or
(3) in the case of a corporation that was not subject to
this section immediately prior to becoming a publicly held
corporation, any interested shareholder whose share acquisition
date is either before the date on which the corporation becomes
a publicly held corporation or on that date, but prior to the
time the corporation becomes a publicly held corporation, and to
whom the application of this section is expressly excluded by an
amendment to the articles or bylaws of the corporation approved
by the shareholders before the corporation becomes a publicly
held corporation and, if expressly provided by the amendment to
the articles or bylaws, any affiliate or associate of an
interested shareholder described in this clause.
This section applies to any business combination of an
issuing public corporation to which it previously did not apply
because of provisions in articles or bylaws adopted or approved
under paragraph (b), clause (1), (2), or (3), upon an amendment
to the articles or bylaws approved by shareholders holding a
majority of the outstanding voting power of all shares entitled
to vote expressly electing to be subject to this section
becoming effective. Also, this section does not apply to any
business combination of the corporation with, with respect to,
proposed by or on behalf of, or pursuant to any written or oral
agreement, arrangement, relationship, understanding, or
otherwise with any person that would have been an interested
shareholder at the effective time of the amendment if this
section had been applicable.
Sec. 32. Minnesota Statutes 1996, section 302A.675, is
amended to read:
302A.675 [TAKEOVER OFFER; FAIR PRICE.]
Subdivision 1. [FAIR PRICE REQUIREMENT.] An offeror may
not acquire shares of a publicly held corporation within two
years following the last purchase of shares pursuant to a
takeover offer with respect to that class, including, but not
limited to, acquisitions made by purchase, exchange, merger,
consolidation, partial or complete liquidation, redemption,
reverse stock split, recapitalization, reorganization, or any
other similar transaction, unless the shareholder is afforded,
at the time of the proposed acquisition, a reasonable
opportunity to dispose of the shares to the offeror upon
substantially equivalent terms as those provided in the earlier
takeover offer.
Subd. 2. [EXCEPTION.] Subdivision 1 does not apply if
the proposed acquisition of shares is approved by a committee of
the board's disinterested directors before the purchase of any
shares by the offeror pursuant to a the earlier takeover offer.
The provisions of section 302A.673, subdivision 1, paragraph
(d), relating to a committee of disinterested directors, apply
to this section.
Sec. 33. [REPEALER.]
Minnesota Statutes 1996, section 302A.011, subdivision 33,
is repealed.
ARTICLE 2
TECHNICAL CHANGES; LIMITED LIABILITY COMPANIES
Section 1. Minnesota Statutes 1996, section 322B.11, is
amended to read:
322B.11 [TWO MEMBER REQUIREMENT.]
A limited liability company shall have two one or more
members at the time of its formation. A limited liability
company shall be dissolved under section 322B.80, subdivision 1,
clause (5), whenever the limited liability company ceases to
have at least two members unless the remaining member admits a
new member within 90 days of the termination of the continued
membership of the former member.
Sec. 2. Minnesota Statutes 1996, section 322B.115,
subdivision 1, is amended to read:
Subdivision 1. [REQUIRED PROVISIONS.] The articles of
organization must contain:
(1) the name of the limited liability company;
(2) the address of the registered office of the limited
liability company and the name of its registered agent, if any,
at that address;
(3) the name and address of each organizer; and
(4) a statement of the limited period of existence for the
limited liability company, which must be a period of 30 years or
less from the date the articles of organization are filed with
the secretary of state, unless the articles of organization
expressly authorize a longer period of duration; if different
from the 30-year period set forth in section 322B.20,
subdivision 2.
(5) a statement as to whether upon the occurrence of any
event under section 322B.80, subdivision 1, clause (5), that
terminates the continued membership of a member in the limited
liability company, the remaining members will have the power to
avoid dissolution by giving dissolution avoidance consent; and
(6) a statement as to whether the members have the power to
enter into a business continuation agreement.
Sec. 3. Minnesota Statutes 1996, section 322B.20,
subdivision 2, is amended to read:
Subd. 2. [DURATION.] A limited liability company has a
limited duration of 30 years from the date the articles of
organization are filed with the secretary of state, unless the
articles of organization state a shorter or longer period of
duration, which may be perpetual.
Sec. 4. Minnesota Statutes 1996, section 322B.313,
subdivision 2, is amended to read:
Subd. 2. [WHEN UNANIMOUS CONSENT REQUIRED.] Subject to
subdivision 6, a member may, without the consent of any other
member, assign governance rights, in whole or in part, to
another person already a member at the time of the assignment.
Except as otherwise set forth in the articles of organization or
a member control agreement, any other assignment of any
governance rights is effective only if all the members, other
than the member seeking to make the assignment, approve the
assignment by unanimous written consent. Subject to subdivision
6, a member may grant a security interest in a complete
membership interest or governance rights without obtaining the
consent required by this subdivision. However, a secured party
may not take or assign ownership of governance rights without
first obtaining the consent required by this subdivision. If a
secured party has a security interest in both a member's
financial rights and governance rights, including a security
interest in a complete membership interest, this subdivision's
requirement that the secured party obtain consent applies only
to taking or assigning ownership of the governance rights and
does not apply to taking or assigning ownership of the financial
rights.
Sec. 5. Minnesota Statutes 1996, section 322B.37,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORIZATION AND SCOPE.] A written
agreement among persons who are then members, including a sole
member, or who have signed contribution agreements, relating to
the control of any phase of the business and affairs of the
limited liability company, its liquidation, dissolution and
termination, or the relations among members or persons who have
signed contribution agreements is valid as provided in
subdivision 2. Wherever this chapter provides that a particular
result may or must be obtained through a provision in the
articles of organization (other than a provision required by
section 322B.115, subdivision 1, to be contained in the
articles) or in the operating agreement, the same result can be
accomplished through a member control agreement valid under this
section or through a procedure established by a member control
agreement valid under this section. A member control agreement
may waive, in whole or in part, a member's dissenting rights
under sections 322B.383 and 322B.386, but may not waive
dissenters' rights under section 322B.873, subdivision 2, clause
(1). A member control agreement may not include an agreement to
give transfer consent. A member control agreement may include a
business continuation agreement only if the articles of
organization grant the members the power to enter into business
continuation agreements.
Sec. 6. Minnesota Statutes 1996, section 322B.37,
subdivision 3, is amended to read:
Subd. 3. [ENFORCEABILITY AND COPIES.] (a) An agreement
valid under subdivisions 1 and 2 is enforceable by persons who
are parties to it and is binding upon and enforceable against
only those persons and other persons having knowledge of the
existence of the agreement. A copy of the agreement must be
filed with the limited liability company. The limited liability
company shall note in its required records that the members'
interests are governed by a member control agreement entered
into under this section.
(b) A member control agreement valid under subdivisions 1
and 2 is specifically enforceable, except that an agreement to
give dissolution avoidance consent is not specifically
enforceable.
(c) A member control agreement may waive dissenters'
rights, subject to section 322B.873, subdivision 3.
(d) A member or any assignee of financial rights has the
right upon written demand to obtain a copy of any member control
agreement from the limited liability company at the company's
expense.
Sec. 7. Minnesota Statutes 1996, section 322B.383,
subdivision 1, is amended to read:
Subdivision 1. [ACTIONS CREATING DISSENTERS' RIGHTS.]
Subject to a member control agreement under section 322B.37, a
member of a limited liability company may dissent from, and
obtain payment for the fair value of the member's membership
interests in the event of, any of the following limited
liability company actions:
(1) an amendment of the articles of organization that
materially and adversely affects the rights or preferences of
the membership interests of the dissenting member in that it:
(i) alters or abolishes a preferential right of the
membership interests;
(ii) creates, alters, or abolishes a right in respect of
the redemption of the membership interests, including a
provision respecting a sinking fund for the redemption or
repurchase of the membership interests;
(iii) alters or abolishes a preemptive right of the owner
of the membership interests to make a contribution;
(iv) excludes or limits the right of a member to vote on a
matter, or to cumulate votes, except as the right may be
excluded or limited through the acceptance of contributions or
the making of contribution agreements pertaining to membership
interests with similar or different voting rights;
(v) changes a member's right to resign or retire;
(vi) establishes or changes the conditions for or
consequences of expulsion;
(vii) changes the a statement that was required under
section 322B.115, subdivision 1, clause (5) regarding the power
of remaining members to avoid dissolution by giving dissolution
avoidance consent, if the statement was required under the law
when the articles of organization were executed;
(viii) changes the a statement that was required under
section 322B.115, subdivision 1, clause (6) regarding the power
of members to enter into a business continuation agreement, if
the statement was required under the law when the articles of
organization were executed; or
(2) a sale, lease, transfer, or other disposition of all or
substantially all of the property and assets of the limited
liability company, but not including a transaction permitted
without member approval in section 322B.77, subdivision 1, or a
disposition in dissolution described in section 322B.813,
subdivision 4, or a disposition pursuant to an order of a court,
or a disposition for cash on terms requiring that all or
substantially all of the net proceeds of disposition be
distributed to the members in accordance with their respective
membership interests within one year after the date of
disposition;
(3) a plan of merger to which the limited liability company
is a party, except as provided in section 322B.873, subdivision
2, clause (1)(i) and subject to section 322B.873, subdivision 3;
(4) a plan of exchange to which the limited liability
company is a party as the organization whose ownership interests
will be acquired by the acquiring organization, if the
membership interests being acquired are entitled to be voted on
the plan;
(5) any other limited liability company action taken
pursuant to a member vote with respect to which the articles of
organization, the operating agreement, or a resolution approved
by the board of governors directs that dissenting members may
obtain payment for their membership interests; or
(6) a resolution of the board of governors under section
322B.873, subdivision 2, to implement a business continuation
agreement.
Sec. 8. Minnesota Statutes 1996, section 322B.80,
subdivision 1, is amended to read:
Subdivision 1. [DISSOLUTION EVENTS.] A limited liability
company dissolves upon the occurrence of any of the following
events:
(1) when the period fixed in the articles of organization
for the duration of the limited liability company expires;
(2) by order of a court pursuant to sections 322B.833 and
322B.843;
(3) by action of the organizers pursuant to section
322B.803;
(4) by action of the members pursuant to section 322B.806;
(5) except as otherwise provided in the articles of
organization or a member control agreement, upon the occurrence
of an event that terminates the continued membership of a member
in the limited liability company, including:
(i) death of any member;
(ii) retirement of any member;
(iii) resignation of any member;
(iv) redemption of a member's complete membership interest;
(v) assignment of a member's governance rights under
section 322B.313 which leaves the assignor with no governance
rights;
(vi) a buy-out of a member's membership interest under
section 322B.833 that leaves that member with no governance
rights;
(vii) expulsion of any member;
(viii) bankruptcy of any member;
(ix) dissolution of any member;
(x) a merger in which the limited liability company is not
the surviving organization;
(xi) an exchange in which the limited liability company is
not the acquiring organization; or
(xii) the occurrence of any other event that terminates the
continued membership of a member in the limited liability
company,
but the limited liability company is not dissolved and is not
required to be wound up by reason of any event that terminates
the continued membership of a member if (A) either there are is
at least two one remaining members or a new member is admitted
as provided in section 322B.11, member and (B) the existence and
business of the limited liability company is continued either by
the consent of all the remaining members under a right to
consent stated in the articles of organization and the consent
is obtained no later than 90 days after the termination of the
continued membership or under a separate right to continue
stated in the articles of organization;, or (B) if the
membership of the last or sole member terminates and the legal
representative of that last or sole member causes the limited
liability company to admit at least one member; or
(6) when terminated by the secretary of state according to
section 322B.960.
ARTICLE 3
AMENDMENTS TO PERMIT MERGER OF DOMESTIC
CORPORATION AND FOREIGN LIMITED LIABILITY COMPANY
Section 1. Minnesota Statutes 1996, section 302A.011, is
amended by adding a subdivision to read:
Subd. 55. [ACQUIRING ORGANIZATION.] "Acquiring
organization" means a corporation, foreign corporation, or
domestic or foreign limited liability company that acquires in
an exchange the shares of a corporation or foreign corporation
or the membership interests of a domestic or foreign limited
liability company.
Sec. 2. Minnesota Statutes 1996, section 302A.011, is
amended by adding a subdivision to read:
Subd. 56. [CONSTITUENT ORGANIZATION.] "Constituent
organization" means a corporation, foreign corporation, or a
domestic or foreign limited liability company that is a party to
a merger or an exchange.
Sec. 3. Minnesota Statutes 1996, section 302A.011, is
amended by adding a subdivision to read:
Subd. 57. [OWNERS.] "Owners" means shareholders in the
case of a corporation or foreign corporation and members in the
case of a limited liability company.
Sec. 4. Minnesota Statutes 1996, section 302A.011, is
amended by adding a subdivision to read:
Subd. 58. [OWNERSHIP INTERESTS.] "Ownership interests"
means shares in the case of a corporation or foreign corporation
and membership interests in the case of a domestic or foreign
limited liability company.
Sec. 5. Minnesota Statutes 1996, section 302A.011, is
amended by adding a subdivision to read:
Subd. 59. [SURVIVING ORGANIZATION.] "Surviving
organization" means the corporation or foreign corporation or
domestic or foreign limited liability company resulting from a
merger.
Sec. 6. Minnesota Statutes 1996, section 302A.601,
subdivision 4, is amended to read:
Subd. 4. [MERGER OR EXCHANGE WITH A LIMITED LIABILITY
COMPANY.] A corporation may participate in a merger or exchange
with a domestic limited liability company pursuant to chapter
322B. The dissenters' rights for shareholders of a corporation
are governed by this chapter.
Sec. 7. Minnesota Statutes 1996, section 302A.611, is
amended to read:
302A.611 [PLAN OF MERGER OR EXCHANGE.]
Subdivision 1. [CONTENTS OF PLAN.] A plan of merger or
exchange shall contain:
(a) The names of the corporations constituent organizations
proposing to merge or participate in an exchange, and:
(1) in the case of a merger, the name of the surviving
corporation organization;
(2) in the case of an exchange, the name of the acquiring
corporation organization;
(b) The terms and conditions of the proposed merger or
exchange;
(c)(1) In the case of a merger, the manner and basis of
converting the shares ownership interests of the constituent
corporations organizations into securities of the
surviving corporation organization or of any other
corporation organization, or, in whole or in part, into money or
other property; or
(2) In the case of an exchange, the manner and basis of
exchanging the shares to be acquired for securities of the
acquiring corporation organization or any other corporation
organization or, in whole or part, into money or other property;
(d) In the case of a merger, a statement of any amendments
to the articles of incorporation or organization of the
surviving corporation organization proposed as part of the
merger; and
(e) Any other provisions with respect to the proposed
merger or exchange that are deemed necessary or desirable.
Subd. 2. [OTHER AGREEMENTS.] The procedure authorized by
this section does not limit the power of a corporation to
acquire all or part of the shares ownership interests of one or
more classes or series of another corporation organization
through a negotiated agreement with the shareholders owners or
otherwise.
Sec. 8. Minnesota Statutes 1996, section 302A.613,
subdivision 1, is amended to read:
Subdivision 1. [BOARD APPROVAL; NOTICE TO SHAREHOLDERS.] A
resolution containing the plan of merger or exchange shall be
approved by the affirmative vote of a majority of the directors
present at a meeting of the board of each constituent
corporation and shall then be submitted at a regular or a
special meeting to the shareholders of (i) each constituent
corporation, in the case of a plan of merger, and (ii) the
corporation whose shares will be acquired by the acquiring
corporation organization in the exchange, in the case of a plan
of exchange. If shareholders holding any class or series of
stock of the corporation are entitled to vote on the plan of
merger or exchange pursuant to this section, written notice
shall be given to every shareholder of a corporation, whether or
not entitled to vote at the meeting, not less than 14 days nor
more than 60 days before the meeting, in the manner provided in
section 302A.435 for notice of meetings of shareholders. The
written notice shall state that a purpose of the meeting is to
consider the proposed plan of merger or exchange. A copy or
short description of the plan of merger or exchange shall be
included in or enclosed with the notice. If the merger or
exchange is with a domestic or foreign limited liability
company, the plan of merger or exchange must also be approved in
the manner required by the laws of the state under which the
limited liability company is organized.
Sec. 9. Minnesota Statutes 1996, section 302A.613,
subdivision 2, is amended to read:
Subd. 2. [APPROVAL BY SHAREHOLDERS OWNERS.] (a) At the
meeting a vote of the shareholders owners shall be taken on the
proposed plan. The plan of merger or exchange is adopted when
approved by the affirmative vote of the holders of a majority of
the voting power of all shares entitled to vote and, if the
merger or exchange is with a domestic or foreign limited
liability company, when approved in the manner required by the
laws of the state under which the limited liability company is
organized. Except as provided in paragraph (b), a class or
series of shares of the corporation is entitled to vote as a
class or series if any provision of the plan would, if contained
in a proposed amendment to the articles, entitle the class or
series of shares to vote as a class or series and, in the case
of an exchange, if the class or series is included in the
exchange.
(b) A class or series of shares of the corporation is not
entitled to vote as a class or series solely because the plan of
merger effects a cancellation of the shares of the class or
series if the plan of merger effects a cancellation of all
shares of the corporation of all classes and series that are
outstanding immediately prior to the merger and shareholders of
shares of that class or series are entitled to obtain payment
for the fair value of their shares under section 302A.471 in the
event of the merger.
Sec. 10. Minnesota Statutes 1996, section 302A.615, is
amended to read:
302A.615 [ARTICLES OF MERGER OR EXCHANGE; CERTIFICATE.]
Subdivision 1. [CONTENTS OF ARTICLES.] Upon receiving the
approval required by section 302A.613, articles of merger or
exchange shall be prepared that contain:
(a) the plan of merger or exchange; and
(b) a statement that the plan has been approved by each
corporation constituent organization pursuant to this chapter.
Subd. 2. [ARTICLES SIGNED, FILED.] The articles of merger
or exchange shall be signed on behalf of each constituent
corporation organization and filed with the secretary of state.
Subd. 3. [CERTIFICATE.] The secretary of state shall issue
a certificate of merger to the surviving corporation
organization or its legal representative and a certificate of
exchange to the acquiring corporation organization or its legal
representative.
Sec. 11. Minnesota Statutes 1996, section 302A.631, is
amended to read:
302A.631 [ABANDONMENT.]
Subdivision 1. [BY SHAREHOLDERS OR PLAN.] After a plan of
merger or exchange has been approved by the shareholders
entitled to vote on the approval of the plan as provided in
section 302A.613, and before the effective date of the plan, it
may be abandoned:
(a) if (i) the shareholders of each of the constituent
corporations entitled to vote on the approval of the plan as
provided in section 302A.613 have approved the abandonment at a
meeting by the affirmative vote of the holders of a majority of
the voting power of the shares entitled to vote and, if; (ii)
the merger or exchange is with a domestic or foreign limited
liability company, if abandonment is approved in such manner as
may be required by the laws of the state under which the limited
liability company is organized; and (iii) the shareholders of a
constituent corporation are not entitled to vote on the approval
of the plan under section 302A.613, the board of directors of
the constituent corporation has approved the abandonment by the
affirmative vote of a majority of the directors present;
(b) if the plan itself provides for abandonment and all
conditions for abandonment set forth in the plan are met; or
(c) pursuant to subdivision 2.
Subd. 2. [BY BOARD.] A plan of merger or exchange may be
abandoned, before the effective date of the plan, by a
resolution of the board of directors of any constituent
corporation abandoning the plan of merger or exchange approved
by the affirmative vote of a majority of the directors present,
subject to the contract rights of any other person under the
plan. If a plan of merger or exchange is with a domestic or
foreign limited liability company, the plan of merger or
exchange may be abandoned before the effective date of the plan
by a resolution of the limited liability company adopted
according to the laws of the state under which the limited
liability company is organized, subject to the contract rights
of any other person under the plan.
Subd. 3. [FILING OF ARTICLES.] If articles of merger or
exchange have been filed with the secretary of state, but have
not yet become effective, the constituent corporations
organizations, in the case of abandonment under subdivision 1,
clause (a), the constituent corporations organizations or any
one of them, in the case of abandonment under subdivision 1,
clause (b), or the abandoning corporation organization in the
case of abandonment under subdivision 2, shall file with the
secretary of state articles of abandonment that contain:
(a) The names of the constituent corporations
organizations;
(b) The provision of this section under which the plan is
abandoned; and
(c) If the plan is abandoned under subdivision 2, the text
of the resolution approved by the affirmative vote of a majority
of the directors present abandoning the plan.
Sec. 12. Minnesota Statutes 1996, section 302A.641,
subdivision 2, is amended to read:
Subd. 2. [EFFECT ON CORPORATION ORGANIZATION.] When a
merger becomes effective:
(a) The constituent corporations organizations become a
single corporation entity, the surviving corporation or
surviving limited liability company, as the case may be;
(b) The separate existence of all constituent corporations
organizations except the surviving corporation organization
ceases;
(c) If the surviving organization is a corporation, the
surviving corporation has all the rights, privileges,
immunities, and powers, and is subject to all the duties and
liabilities, of a corporation incorporated under this chapter;
(d) The surviving corporation organization, whether a
corporation, foreign corporation, or domestic or foreign limited
liability company, possesses all the rights, privileges,
immunities, and franchises, of a public as well as of a private
nature, of each of the constituent corporations organizations.
All property, real, personal, and mixed, and all debts due on
any account, including subscriptions to shares, and all other
choses in action, and every other interest of or belonging to or
due to each of the constituent corporations organizations vests
in the surviving corporation organization without any further
act or deed. Confirmatory deeds, assignments, or similar
instruments to accomplish that vesting may be signed and
delivered at any time in the name of a constituent corporation
organization by its current officers or managers, as the case
may be, or, if the corporation organization no longer exists, by
its last officers or managers, as the case may be. The title to
any real estate or any interest therein vested in any of the
constituent corporations organizations does not revert nor in
any way become impaired by reason of the merger;
(e) The surviving corporation organization is responsible
and liable for all the liabilities and obligations of each of
the constituent corporations organizations. A claim of or
against or a pending proceeding by or against a
constituent corporation organization may be prosecuted as if the
merger had not taken place, or the surviving corporation
organization may be substituted in the place of the
constituent corporation organization. Neither the rights of
creditors nor any liens upon the property of a
constituent corporation organization are impaired by the merger;
and
(f) The articles of the surviving corporation organization
are deemed to be amended to the extent that changes in its
articles, if any, are contained in the plan of merger.
Sec. 13. Minnesota Statutes 1996, section 302A.651, is
amended to read:
302A.651 [MERGER OR EXCHANGE WITH FOREIGN CORPORATION OR
LIMITED LIABILITY COMPANY.]
Subdivision 1. [WHEN PERMITTED.] A domestic corporation
may merge with or participate in an exchange with a foreign
corporation or limited liability company by following the
procedures set forth in this section, if:
(1) with respect to a merger, the merger is permitted by
the laws of the state under which the foreign corporation or
limited liability company is incorporated or organized; and
(2) with respect to an exchange, the corporation whose
shares will be acquired is a domestic corporation, whether or
not the exchange is permitted by the laws of the state under
which the foreign corporation or limited liability company is
incorporated or organized.
Subd. 2. [LAWS APPLICABLE BEFORE TRANSACTION.] Each
domestic corporation shall comply with the provisions of
sections 302A.601 to 302A.651 with respect to the merger or
exchange of shares of corporations and each foreign
corporation or limited liability company shall comply with the
applicable provisions of the laws under which it was
incorporated or organized or by which it is governed.
Subd. 3. [DOMESTIC SURVIVING CORPORATION.] If the
surviving corporation organization in a merger will be a
domestic corporation, it shall comply with all the provisions of
this chapter.
Subd. 4. [FOREIGN SURVIVING CORPORATION ORGANIZATION.] If
the surviving corporation organization in a merger will be a
foreign corporation or limited liability company and will
transact business in this state, it shall comply with the
provisions of chapter 303 with respect to foreign
corporations or chapter 322B with respect to foreign limited
liability companies. In every case the surviving corporation
organization shall file with the secretary of state:
(a) 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 organization and in a proceeding for the
enforcement of the rights of a dissenting shareholder of a
constituent corporation against the surviving corporation
organization;
(b) An irrevocable appointment of the secretary of state as
its agent to accept service of process in any proceeding, and an
address to which process may be forwarded; and
(c) An agreement that it will promptly pay to the
dissenting shareholders of each domestic constituent corporation
the amount, if any, to which they are entitled under section
302A.473.
Sec. 14. Minnesota Statutes 1996, section 322B.70,
subdivision 1, is amended to read:
Subdivision 1. [MERGER.] With or without a business
purpose, a limited liability company may merge:
(1) with another limited liability company or a domestic
corporation pursuant to a plan of merger approved in the manner
provided in sections 322B.71 to 322B.75; and
(2) with a domestic corporation under a plan of merger
approved in the manner provided in sections 322B.71 to 322B.75,
and in chapter 302A; and
(3) with any foreign corporation or foreign limited
liability company pursuant to a plan of merger approved in the
manner provided in section 322B.76.
Sec. 15. Minnesota Statutes 1996, section 322B.70,
subdivision 2, is amended to read:
Subd. 2. [EXCHANGE.] (a) A limited liability company may
acquire all of the ownership interests of one or more classes or
series of another limited liability company or domestic
corporation pursuant to a plan of exchange approved in the
manner provided in sections 322B.71 to 322B.75.
(b) A limited liability company may acquire all of the
ownership interests of one or more classes or series of a
domestic corporation pursuant to a plan of exchange approved in
the manner provided in sections 322B.71 to 322B.75, and in
chapter 302A.
(c) A domestic corporation may acquire all of the ownership
interests of one or more classes or series of a limited
liability company pursuant to a plan of exchange approved in the
manner provided in sections 322B.71 to 322B.75, and in chapter
302A.
(c) (d) A foreign corporation or foreign limited liability
company may acquire all of the ownership interests of one or
more classes or series of a limited liability company pursuant
to a plan of exchange approved in the manner provided in section
322B.76.
Sec. 16. Minnesota Statutes 1996, section 322B.72,
subdivision 2, is amended to read:
Subd. 2. [APPROVAL BY OWNERS.] (a) At the meeting a vote
of the owners must be taken on the proposed plan. The plan of
merger or exchange is adopted when approved by the affirmative
vote of the owners of a majority of the voting power of all
ownership interests entitled to vote. Except as provided in
paragraph (b), a class or series of ownership interests of the
organization is entitled to vote as a class or series if any
provision of the plan would, if contained in a proposed
amendment to the articles of organization or articles of
incorporation, as the case may be, entitle the class or series
of ownership interests to vote as a class or series and, in the
case of an exchange, if the class or series is included in the
exchange.
(b) A class or series of ownership interests of the
organization is not entitled to vote as a class or series solely
because the plan of merger effects a cancellation of the
ownership interests of the class or series if the plan of merger
effects a cancellation of all ownership interests of the
organization of all classes and series that are existing
immediately before the merger and owners of ownership interests
of that class or series are entitled to obtain payment for the
fair value of their shares under section 322B.383 or 302A.471,
as the case may be, in the event of the merger.
Sec. 17. Minnesota Statutes 1996, section 322B.72,
subdivision 3, is amended to read:
Subd. 3. [WHEN APPROVAL BY SHAREHOLDERS OF A SURVIVING
CORPORATION IS NOT REQUIRED.] Notwithstanding subdivisions 1 and
2, submission of a plan of merger to a vote at a meeting of
shareholders of a surviving corporation is not required if:
(1) the articles of the corporation will not be amended in
the transaction;
(2) each holder of shares of the corporation that were
outstanding immediately before the effective time of the
transaction will hold the same number of shares with identical
rights immediately after that date;
(3) the voting power of the outstanding shares of the
corporation entitled to vote immediately after the merger, plus
the voting power of the shares of the corporation entitled to
vote issuable on conversion of or on the exercise of rights to
purchase, securities issued in the transaction, will not exceed
by more than 20 percent, the voting power of the outstanding
shares of the corporation entitled to vote immediately before
the transaction; and
(4) the number of participating shares of the corporation
immediately after the merger, plus the number of participating
shares of the corporation issuable on conversion, or on the
exercise of rights to purchase, securities issued in the
transaction, will not exceed by more than 20 percent, the number
of participating shares of the corporation immediately before
the transaction. "Participating shares" are outstanding shares
of the corporation that entitle their holders to participate
without limitation in distributions by the corporation.
[APPROVAL BY CONSTITUENT DOMESTIC CORPORATION.] If the merger or
exchange is with a domestic corporation, the plan of merger or
exchange must also be approved in the manner provided in chapter
302A.
Sec. 18. Minnesota Statutes 1996, section 322B.74,
subdivision 1, is amended to read:
Subdivision 1. [BY OWNERS OR PLAN.] After a plan of merger
or exchange has been approved by the owners entitled to vote on
the approval of the plan as provided in section 322B.72, and
before the effective date of the plan, it may be abandoned:
(1) if the owners of ownership interests of each of the
constituent organizations entitled to vote on the approval of
the plan as provided in section 322B.72 have approved the
abandonment at a meeting by the affirmative vote of the owners
of a majority of the voting power of the ownership interests
entitled to vote and, if the owners of a constituent
organization are not entitled to vote on the approval of the
plan under section 322B.72, the governing board of that
constituent organization limited liability company has approved
the abandonment by the affirmative vote of a majority of the
board members present, and the abandonment has been approved in
the manner provided in chapter 302A by any constituent
organization that is a domestic corporation;
(2) if the plan itself provides for abandonment and all
conditions for abandonment set forth in the plan are met; or
(3) pursuant to subdivision 2.
Sec. 19. Minnesota Statutes 1996, section 322B.74,
subdivision 2, is amended to read:
Subd. 2. [BY THE GOVERNING BOARD.] A plan of merger or
exchange may be abandoned, before the effective date of the
plan, by a resolution of the governing board of any constituent
organization that is a limited liability company abandoning the
plan of merger or exchange approved by the affirmative vote of a
majority of the board members present, subject to the contract
rights of any other person under the plan. Abandonment by the
board of a constituent organization that is a domestic
corporation may be accomplished as provided in chapter 302A.
ARTICLE 4
CONFORMING AMENDMENTS
Section 1. Minnesota Statutes 1996, section 308A.005, is
amended by adding a subdivision to read:
Subd. 7a. [FILED WITH THE SECRETARY OF STATE.] "Filed with
the secretary of state" means that a document meeting the
applicable requirements of this chapter, signed and accompanied
by the required filing fee, has been delivered to the secretary
of state of this state. The secretary of state shall endorse on
the document the word "Filed" and the month, day, and year of
filing, record the document in the office of the secretary of
state, and return a document to the person who delivered it for
filing.
Sec. 2. Minnesota Statutes 1996, section 308A.005, is
amended by adding a subdivision to read:
Subd. 10a. [SIGNED.] (a) "Signed" means that the signature
of a person has been written on a document, as provided in
section 645.44, subdivision 14, and, with respect to a document
required by this chapter to be filed with the secretary of
state, means that the document has been signed by a person
authorized to do so by this chapter, the articles or bylaws, or
by a resolution approved by the directors or the members.
(b) A signature on a document may be a facsimile affixed,
engraved, printed, placed, stamped with indelible ink,
transmitted by facsimile or electronically, or in any other
manner reproduced on the document.
Sec. 3. Minnesota Statutes 1996, section 317A.011,
subdivision 8, is amended to read:
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 $35, 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, and
year, and time of filing, record the document in the office of
the secretary of state, and return the a document to the person
who delivered it for filing.
Sec. 4. Minnesota Statutes 1996, section 317A.011,
subdivision 19, is amended to read:
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, as required by section
317A.237, or the required proportion or number of members with
voting rights, if any, if required by section 317A.443.
(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,
transmitted by facsimile or electronically, or in any other
manner reproduced on the document.
Sec. 5. Minnesota Statutes 1996, section 322A.01, is
amended to read:
322A.01 [DEFINITIONS.]
As used in sections 322A.01 to 322A.87, unless the context
otherwise requires:
(1) "Certificate of limited partnership" means the
certificate referred to in section 322A.11, and the certificate
as amended or restated.
(2) "Contribution" means any cash, property, services
rendered, or a promissory note or other binding obligation to
contribute cash or property or to perform services, which a
partner contributes to a limited partnership as a partner.
(3) "Event of withdrawal of a general partner" means an
event that causes a person to cease to be a general partner as
provided in section 322A.32.
(4) "Executed" means signed.
(5) "Filed with the secretary of state" means that a
document meeting the applicable requirements of this chapter,
signed and accompanied by the required filing fee, has been
delivered to the secretary of state of this state.
(6) "Foreign limited partnership" means a partnership
formed under the laws of any state other than this state and
having as partners one or more general partners and one or more
limited partners.
(5) (7) "General partner" means a person who has been
admitted to a limited partnership as a general partner in
accordance with the partnership agreement and named in the
certificate of limited partnership as a general partner.
(6) (8) "Limited partner" means a person who has been
admitted to a limited partnership as a limited partner in
accordance with the partnership agreement.
(7) (9) "Limited partnership" and "domestic limited
partnership" mean a partnership formed by two or more persons
under the laws of this state and having one or more general
partners and one or more limited partners.
(8) (10) "Partner" means a limited or general partner.
(9) (11) "Partnership agreement" means any valid agreement,
written or oral, of the partners as to the affairs of a limited
partnership and the conduct of its business.
(10) (12) "Partnership interest" means a partner's share of
the profits and losses of a limited partnership and the right to
receive distributions of partnership assets.
(11) (13) "Person" means a natural person, partnership,
limited partnership (domestic or foreign), trust, estate,
association, limited liability company (whether domestic or
foreign), or corporation.
(14)(a) "Signed" means that the signature of a person has
been written on a document, as provided in section 645.44,
subdivision 14, and, with respect to a document required by this
chapter to be filed with the secretary of state, means that the
document has been signed by a person authorized to do so by this
chapter, the articles or bylaws, or by a resolution approved by
the partners.
(b) A signature on a document may be a facsimile affixed,
engraved, printed, placed, stamped with indelible ink,
transmitted by facsimile or electronically, or in any other
manner reproduced on the document.
(12) (15) "State" means a state, territory, or possession
of the United States, the District of Columbia, or the
Commonwealth of Puerto Rico.
Sec. 6. Minnesota Statutes 1996, section 322B.03,
subdivision 18, is amended to read:
Subd. 18. [FILED WITH THE SECRETARY OF STATE.] "Filed with
the secretary of state" means that an original of a document
meeting the applicable requirements of this chapter, signed and
accompanied by a filing fee of $35, 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, and
year of filing, record the document in the office of the
secretary of state, and return the a document to the person who
delivered it for filing.
Sec. 7. Minnesota Statutes 1996, section 322B.03,
subdivision 45, is amended to read:
Subd. 45. [SIGNED.] (a) "Signed" means that the signature
of a person has been written on a document, as provided in
section 645.44, subdivision 14, and, with respect to a document
required by this chapter to be filed with the secretary of
state, means that the document has been signed by a person
authorized to do so by this chapter, the articles of
organization or operating agreement or a resolution approved by
the affirmative vote of the required proportion or number of
governors as required by section 322B.653 or the required
proportion of the voting power of membership interests present
and entitled to vote members as required by section 322B.346.
(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,
transmitted by facsimile or electronically, or in any other
manner reproduced on the document.
Sec. 8. Minnesota Statutes 1996, section 322B.115,
subdivision 4, is amended to read:
Subd. 4. [OPTIONAL PROVISIONS AND SPECIFIC SUBJECTS.] The
provisions in clauses (1), (7), (15), (16), and (18) may be
included in the articles of organization or a member control
agreement under section 322B.37.
The following provisions relating to the management of the
business or the regulation of the affairs of a limited liability
company in clauses (2) to (6), (8) to (14), and (17) may be
included in the articles of organization, a member control
agreement under section 322B.37 or, except for naming persons to
serve as the first board of governors, fixing a greater than
majority governor or member vote, establishing the rights and
priorities for distributions and the rights to share in profits
and losses, or giving or prescribing the manner of giving voting
rights to persons other than members otherwise than pursuant to
the articles of organization, or eliminating or limiting a
governor's personal liability, in the operating agreement:
(1) the persons to serve as the first board of governors
may be named in the articles of organization (section 322B.606,
subdivision 1);
(2) a manner for increasing or decreasing the number of
governors may be provided (section 322B.61);
(3) additional qualifications for governors may be imposed
(section 322B.613);
(4) governors may be classified (section 322B.626);
(5) the day or date, time, and place of board of governors
meetings may be fixed (section 322B.643, subdivision 1);
(6) absent governors may be permitted to give written
consent or opposition to a proposal (section 322B.646);
(7) a larger than majority vote may be required for board
of governor action (section 322B.653);
(8) authority to sign and deliver certain documents may be
delegated to a manager or agent of the limited liability company
other than the chief manager (section 322B.673, subdivision 2);
(9) additional managers may be designated (section
322B.676);
(10) additional powers, rights, duties, and
responsibilities may be given to managers (section 322B.676);
(11) a method for filling vacant offices may be specified
(section 322B.686, subdivision 3);
(12) the day or date, time, and place of regular member
meetings may be fixed (section 322B.333, subdivision 3);
(13) certain persons may be authorized to call special
meetings of members (section 322B.336, subdivision 1);
(14) notices of member meetings may be required to contain
certain information (section 322B.34, subdivision 3);
(15) a larger than majority vote may be required for member
action (section 322B.346);
(16) voting rights may be granted in or pursuant to the
articles of organization to persons who are not members (section
322B.356, subdivision 3);
(17) limited liability company actions giving rise to
dissenter rights may be designated (section 322B.386,
subdivision 1, paragraph (e)); and
(18) a governor's personal liability to the limited
liability company or its members for monetary damages for breach
of fiduciary duty as a governor may be eliminated or limited in
the articles (section 322B.663, subdivision 4).
Nothing in this subdivision limits the right of the board,
by resolution, to take an action that may be included in the
operating agreement under this subdivision without including it
in the operating agreement, unless it is required to be included
in the operating agreement by another provision of this chapter.
Sec. 9. Minnesota Statutes 1996, section 322B.12,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENTS AND PROHIBITIONS.] The
limited liability company name must:
(1) be in the English language or in any other language
expressed in English letters or characters;
(2) contain the words "limited liability company," or must
contain the abbreviation "LLC" or, in the case of an
organization formed pursuant to section 319A.03, must meet the
requirements of section 319A.07 applicable to a limited
liability company;
(3) not contain the word corporation or incorporated and
must not contain the abbreviation of either or both of these
words;
(4) not contain a word or phrase that indicates or implies
that it is organized for a purpose other than a legal business
purpose; and
(5) be distinguishable upon the records in the office of
the secretary of state from the name of each domestic limited
liability company, limited liability partnership, corporation,
and limited partnership, whether profit or nonprofit, and each
foreign limited liability company, limited liability
partnership, corporation, and limited partnership authorized or
registered to do business in this state, whether profit or
nonprofit, and each name the right to which is, at the time of
organization, reserved as provided for in sections 302A.117,
317A.117, 322A.03, 322B.125, or 333.001 to 333.54, unless there
is filed with the articles of organization one of the following:
(i) the written consent of the domestic limited liability
company, limited liability partnership, corporation, or limited
partnership or the foreign limited liability company, limited
liability partnership, corporation, or limited partnership
authorized or registered to do business in this state or the
holder of a reserved name or a name filed by or registered with
the secretary of state under sections 333.001 to 333.54 having a
name that is not distinguishable;
(ii) a certified copy of a final decree of a court in this
state establishing the prior right of the applicant to the use
of the name in this state; or
(iii) the applicant's affidavit that the limited liability
company, corporation, or limited partnership with the name that
is not distinguishable has been organized, incorporated, or on
file in this state for at least three years prior to the
affidavit, if it is a domestic limited liability company,
corporation, or limited partnership, or has been authorized or
registered to do business in this state for at least three years
prior to the affidavit, if it is a foreign limited liability
company, corporation, or limited partnership, or that the holder
of a name filed or registered with the secretary of state under
sections 333.001 to 333.54 filed or registered that name at
least three years prior to the affidavit, that the limited
liability company, corporation, or limited partnership or holder
has not during the three-year period before the affidavit filed
any document with the secretary of state; that the applicant has
mailed written notice to the limited liability company,
corporation, or limited partnership or the holder of a name
filed or registered with the secretary of state under sections
333.001 to 333.54 by certified mail, return receipt requested,
properly addressed to the registered office of the limited
liability company or corporation or in care of the agent of the
limited partnership, or the address of the holder of a name
filed or registered with the secretary of state under sections
333.001 to 333.54, shown in the records of the secretary of
state, stating that the applicant intends to use a name that is
not distinguishable and the notice has been returned to the
applicant as undeliverable to the addressee limited liability
company, corporation, or limited partnership or holder of a name
filed or registered with the secretary of state under sections
333.001 to 333.54; that the applicant, after diligent inquiry,
has been unable to find any telephone listing for the limited
liability company, corporation, or limited partnership with the
name that is not distinguishable in the county in which is
located the registered office of the limited liability company,
corporation, or limited partnership shown in the records of the
secretary of state or has been unable to find any telephone
listing for the holder of a name filed or registered with the
secretary of state under sections 333.001 to 333.54 in the
county in which is located the address of the holder shown in
the records of the secretary of state; and that the applicant
has no knowledge that the limited liability company,
corporation, or limited partnership or holder of a name filed or
registered with the secretary of state under sections 333.001 to
333.54 is currently engaged in business in this state.
Sec. 10. Minnesota Statutes 1996, section 322B.33, is
amended by adding a subdivision to read:
Subd. 10. [CONTRACTUAL RIGHTS.] A denial or limitation of
preemptive rights otherwise provided in this section does not
limit the power of a limited liability company to grant first
refusal rights, contribution allowance rights, or other rights
to make contributions to the limited liability company to
members, persons who have entered into contribution agreements,
or other persons before accepting contributions or making
contribution allowance agreements with any other person.
Sec. 11. Minnesota Statutes 1996, section 322B.346,
subdivision 2, is amended to read:
Subd. 2. [VOTING BY CLASS OR SERIES.] In any case where a
class or series of membership interests is entitled by this
chapter, the articles of organization, the operating agreement,
or the terms of the membership interests to vote as a class or
series, the matter being voted upon must also receive the
affirmative vote of the owners of the same proportion of the
membership interests present of that class or series, or of the
total outstanding membership interests of that class or series,
as the proportion required pursuant to subdivision 1, unless the
articles require a larger proportion. Unless otherwise stated
in the articles or operating agreement in the case of voting as
a class or series, the minimum percentage of the total voting
power of membership interests of the class or series that must
be present is equal to the minimum percentage of all membership
interests entitled to vote required to be present under section
322B.353.
Sec. 12. Minnesota Statutes 1996, section 322B.356,
subdivision 1, is amended to read:
Subdivision 1. [DETERMINATION.] The board of governors may
fix, or authorize a manager to fix, a date not more than 60
days, or a shorter time period provided in the articles of
organization or operating agreement, before the date of a
meeting of members as the date for the determination of the
owners of membership interests entitled to notice of and
entitled to vote at the meeting. When a date is so fixed, only
members on that date are entitled to notice of and permitted to
vote at that meeting of members.
Sec. 13. Minnesota Statutes 1996, section 322B.363,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORIZATION.] A member may cast or
authorize the casting of a vote by filing a written appointment
of a proxy with a manager of the limited liability company at or
before the meeting at which the appointment is to be effective.
A written appointment of a proxy may be signed by the member or
authorized by the member by transmission of a telegram,
cablegram, or other means of electronic transmission, provided
that the limited liability company has no reason to believe that
the telegram, cablegram, or other electronic transmission was
not authorized by the member. Any copy, facsimile,
telecommunication, or other reproduction of the original writing
or transmission may be substituted or used in lieu of the
original writing or transmission for any purpose for which the
original transmission could be used, if the copy, facsimile
telecommunication, or other reproduction is a complete and
legible reproduction of the entire original writing or
transmission. An appointment of a proxy for membership
interests owned jointly by two or more members is valid if
signed or otherwise authorized by any one of them, unless the
limited liability company receives from any one of those members
written notice either denying the authority of that person to
appoint a proxy or appointing a different proxy.
Sec. 14. Minnesota Statutes 1996, section 322B.383, is
amended by adding a subdivision to read:
Subd. 3. [RIGHTS NOT TO APPLY.] If a date is fixed
according to section 322B.356, subdivision 1, for the
determination of members entitled to receive notice of and to
vote on an action described in subdivision 1, only members as of
the date fixed may exercise dissenters' rights.
Sec. 15. Minnesota Statutes 1996, section 322B.386,
subdivision 3, is amended to read:
Subd. 3. [NOTICE OF DISSENT.] If the proposed action must
be approved by the members, a member who is entitled to dissent
under section 322B.383 and who wishes to exercise dissenters'
rights must file with the limited liability company before the
vote on the proposed action a written notice of intent to demand
the fair value of the membership interests owned by the member
and must not vote the membership interests in favor of the
proposed action.
Sec. 16. Minnesota Statutes 1996, section 322B.699,
subdivision 9, is amended to read:
Subd. 9. [INDEMNIFICATION OF OTHER PERSONS.] Nothing in
this section must be construed to limit the power of the limited
liability company to indemnify other persons other than a
governor, manager, member, employee, or member of a committee of
the board of the limited liability company, by contract or
otherwise.
Sec. 17. Minnesota Statutes 1996, section 323.02, is
amended by adding a subdivision to read:
Subd. 10. [FILED WITH THE SECRETARY OF STATE.] "Filed with
the secretary of state" means that a document meeting the
applicable requirements of this chapter, signed and accompanied
by the required filing fee, has been delivered to the secretary
of state of this state. The secretary of state shall endorse on
the document the word "Filed" and the month, day, and year of
filing, record the document in the office of the secretary of
state, and return a document to the person who delivered it for
filing.
Sec. 18. Minnesota Statutes 1996, section 323.02, is
amended by adding a subdivision to read:
Subd. 11. [SIGNED.] (a) "Signed" means that the signature
of a person has been written on a document, as provided in
section 645.44, subdivision 14, and, with respect to a document
required by this chapter to be filed with the secretary of
state, means that the document has been signed by a person
authorized to do so by this chapter, the articles or bylaws, or
by a resolution approved by the partners.
(b) A signature on a document may be a facsimile affixed,
engraved, printed, placed, stamped with indelible ink,
transmitted by facsimile or electronically, or in any other
manner reproduced on the document.
Sec. 19. Minnesota Statutes 1996, section 333.001,
subdivision 5, is amended to read:
Subd. 5. [EXECUTED.] "Executed" means executed by one
natural person, if a proprietorship; by a general partner if a
general or limited partnership or limited liability partnership;
by a manager, if a limited liability company; by an officer, if
a corporation; by a trustee, if a trust; or by a beneficial
owner or managing agent, if some other form of business
organization signed.
Sec. 20. Minnesota Statutes 1996, section 333.001, is
amended by adding a subdivision to read:
Subd. 6. [SIGNED.] (a) "Signed" means that the signature
of a person has been written on a document, as provided in
section 645.44, subdivision 14, and, with respect to a document
required by this chapter to be filed with the secretary of
state, means that the document has been signed by a person
authorized to do so by the organizational documents, bylaws,
agreements, or by a resolution approved by the ultimately
responsible managing entity for the business organization.
(b) A signature on a document may be a facsimile affixed,
engraved, printed, placed, stamped with indelible ink,
transmitted by facsimile or electronically, or in any other
manner reproduced on the document.
Sec. 21. Minnesota Statutes 1996, section 333.001, is
amended by adding a subdivision to read:
Subd. 7. [FILED WITH THE SECRETARY OF STATE.] "Filed with
the secretary of state" means that a document meeting the
applicable requirements of this chapter, signed and accompanied
by the required filing fee, has been delivered to the secretary
of state of this state. The secretary of state shall endorse on
the document the word "Filed" and the month, day, and year of
filing, record the document in the office of the secretary of
state, and return a document to the person who delivered it for
filing.
Presented to the governor March 17, 1997
Signed by the governor March 18, 1997, 9:20 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes