Office of the Revisor of Statutes
Minnesota Session Laws - 2004, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 199-S.F.No. 1803
An act relating to business organizations; enacting
and modifying the Uniform Limited Partnership Act of
2001; providing transitional provisions; making
conforming changes; regulating the organization,
structure, and governance of business corporations,
nonprofit corporations, and limited liability
companies; appropriating money; amending Minnesota
Statutes 2002, sections 5.25, subdivision 1; 302A.011,
subdivisions 21, 31, 49, 51, by adding subdivisions;
302A.111, subdivision 2; 302A.115, subdivision 1;
302A.137; 302A.215; 302A.231, subdivisions 4, 6;
302A.401, subdivision 3; 302A.402, subdivision 2;
302A.437, subdivision 1; 302A.441; 302A.471,
subdivisions 1, 3; 302A.473, subdivisions 3, 4;
302A.521, subdivision 1; 302A.651, subdivision 1;
302A.661, subdivision 2; 302A.723, subdivision 1;
308A.121, subdivision 1; 317A.011, subdivision 14, by
adding a subdivision; 317A.115, subdivision 2;
317A.231, subdivisions 4, 5; 317A.447; 322B.03,
subdivisions 36a, 45a; 322B.115, subdivision 2;
322B.12, subdivision 1; 322B.155; 322B.346,
subdivision 1; 322B.35, subdivision 1; 322B.383,
subdivision 1; 322B.386, subdivisions 3, 4; 322B.40,
subdivision 6; 322B.63; 322B.643, subdivisions 4, 6;
322B.77, subdivision 2; 323A.1-01; Minnesota Statutes
2003 Supplement, section 317A.443, subdivision 2;
proposing coding for new law in Minnesota Statutes,
chapters 302A; 322B; proposing coding for new law as
Minnesota Statutes, chapter 321; repealing Minnesota
Statutes 2002, sections 322A.01; 322A.02; 322A.03;
322A.04; 322A.05; 322A.06; 322A.07; 322A.11; 322A.12;
322A.13; 322A.14; 322A.15; 322A.16; 322A.17; 322A.18;
322A.19; 322A.24; 322A.25; 322A.26; 322A.27; 322A.28;
322A.31; 322A.32; 322A.33; 322A.34; 322A.35; 322A.38;
322A.39; 322A.40; 322A.41; 322A.45; 322A.46; 322A.47;
322A.48; 322A.49; 322A.50; 322A.51; 322A.52; 322A.55;
322A.56; 322A.57; 322A.58; 322A.59; 322A.63; 322A.64;
322A.65; 322A.66; 322A.69; 322A.70; 322A.71; 322A.72;
322A.73; 322A.74; 322A.75; 322A.76; 322A.761; 322A.79;
322A.80; 322A.81; 322A.82; 322A.85; 322A.86; 322A.87;
322A.88.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
GENERAL PROVISIONS
Section 1. [321.101] [SHORT TITLE.]
This chapter may be cited as the Uniform Limited
Partnership Act 2001.
Sec. 2. [321.102] [DEFINITIONS.]
In this chapter:
(1) "Certificate of limited partnership" means the
certificate required by section 321.201. The term includes the
certificate as amended or restated.
(2) "Contribution," except in the phrase "right of
contribution," means any benefit provided by a person to a
limited partnership in order to become a partner or in the
person's capacity as a partner.
(3) "Debtor in bankruptcy" means a person that is the
subject of:
(A) an order for relief under Title 11 of the United States
Code or a comparable order under a successor statute of general
application; or
(B) a comparable order under federal, state, or foreign law
governing insolvency.
(4) "Designated office" means:
(A) with respect to a limited partnership, the office that
the limited partnership is required to designate and maintain
under section 321.114; and
(B) with respect to a foreign limited partnership, its
principal office.
(5) "Distribution" means a transfer of money or other
property from a limited partnership to a partner in the
partner's capacity as a partner or to a transferee on account of
a transferable interest owned by the transferee.
(6) "Foreign limited liability limited partnership" means a
foreign limited partnership whose general partners have limited
liability for the obligations of the foreign limited partnership
under a provision similar to section 321.404(c).
(7) "Foreign limited partnership" means a partnership
formed under the laws of a jurisdiction other than this state
and required by those laws to have one or more general partners
and one or more limited partners. The term includes a foreign
limited liability limited partnership.
(8) "General partner" means:
(A) with respect to a limited partnership, a person that:
(i) becomes a general partner under section 321.401 and has
not become dissociated as a general partner under section
321.603; or
(ii) was a general partner in a limited partnership when
the limited partnership became subject to this chapter under
section 321.1206(b), (c), or (f) and has not become dissociated
as a general partner under section 321.603; and
(B) with respect to a foreign limited partnership, a person
that has rights, powers, and obligations similar to those of a
general partner in a limited partnership.
(9) "Limited liability limited partnership," except in the
phrases "foreign limited liability limited partnership" and
"limited partnership that is a limited liability limited
partnership under section 322A.88," means:
(A) a limited partnership whose certificate of limited
partnership states that the limited partnership is a limited
liability limited partnership; or
(B) a limited partnership that:
(i) became subject to this chapter under section
321.1206(b), (c), or (f);
(ii) immediately before becoming subject to this chapter
was a limited liability limited partnership under section
322A.88; and
(iii) since becoming subject to this chapter has not
amended its certificate of limited partnership to state that it
is not a limited liability limited partnership.
(10) "Limited partner" means:
(A) with respect to a limited partnership, a person that:
(i) becomes a limited partner under section 321.301 and has
not become dissociated as a limited partner under section
321.601; or
(ii) was a limited partner in a limited partnership when
the limited partnership became subject to this chapter under
section 321.1206(b), (c), or (f) and has not become dissociated
as a limited partner under section 321.601; and
(B) with respect to a foreign limited partnership, a person
that has rights, powers, and obligations similar to those of a
limited partner in a limited partnership.
(11) "Limited partnership," except in the phrases "foreign
limited partnership," "foreign limited liability limited
partnership," "limited partnership formed under chapter 322,"
"limited partnership formed under chapter 322A," and "limited
partnership that is a limited liability limited partnership
under chapter 322A," means an entity, having one or more general
partners and one or more limited partners, which is formed under
this chapter by two or more persons or becomes subject to this
chapter under article 11 or section 321.1206(b), (c), or (f).
The term includes a limited liability limited partnership.
(12) "Partner" means a limited partner or general partner.
(13) "Partnership agreement" means the partners' agreement,
whether oral, implied, in a record, or in any combination,
concerning the limited partnership. The term includes the
agreement as amended.
(14) "Person" means an individual, corporation, business
trust, estate, trust, partnership, limited liability company,
association, joint venture, government; governmental
subdivision, agency, or instrumentality; public corporation, or
any other legal or commercial entity.
(15) "Person dissociated as a general partner" means a
person dissociated as a general partner of a limited partnership.
(16) "Principal office" means the office where the
principal executive office of a limited partnership or foreign
limited partnership is located, whether or not the office is
located in this state.
(17) "Record" means information that is inscribed on a
tangible medium or that is stored in an electronic or other
medium and is retrievable in perceivable form.
(18) "Required information" means the information that a
limited partnership is required to maintain under section
321.111.
(19) "Sign" means:
(A) to execute or adopt a tangible symbol with the present
intent to authenticate a record; or
(B) to attach or logically associate an electronic symbol,
sound, or process to or with a record with the present intent to
authenticate the record.
(20) "State" means a state of the United States, the
District of Columbia, Puerto Rico, the United States Virgin
Islands, or any territory or insular possession subject to the
jurisdiction of the United States.
(21) "Transfer" includes an assignment, conveyance, deed,
bill of sale, lease, mortgage, security interest, encumbrance,
gift, and transfer by operation of law.
(22) "Transferable interest" means a partner's right to
receive distributions.
(23) "Transferee" means, except in section 321.409, a
person to which all or part of a transferable interest has been
transferred, whether or not the transferor is a partner.
Sec. 3. [321.103] [KNOWLEDGE AND NOTICE.]
(a) A person knows a fact if the person has actual
knowledge of it.
(b) A person has notice of a fact if the person:
(1) knows of it;
(2) has received a notification of it;
(3) has reason to know it exists from all of the facts
known to the person at the time in question; or
(4) has notice of it under subsection (c) or (d).
(c) A certificate of limited partnership on file in the
office of the secretary of state is notice that the partnership
is a limited partnership and the persons designated in the
certificate as general partners are general partners. Except as
otherwise provided in subsections (d) and (i), the certificate
is not notice of any other fact.
(d) Subject to subsection (i), a person has notice of:
(1) another person's dissociation as a general partner, 90
days after the effective date of a filed amendment to the
certificate of limited partnership which states that the other
person has dissociated or 90 days after the effective date of a
filed statement of dissociation pertaining to the other person,
whichever occurs first;
(2) a limited partnership's dissolution, 90 days after the
effective date of a filed amendment to the certificate of
limited partnership stating that the limited partnership is
dissolved;
(3) a limited partnership's termination, 90 days after the
effective date of a filed statement of termination;
(4) a limited partnership's conversion under article 11, 90
days after the effective date of the filed articles of
conversion; or
(5) a merger under article 11, 90 days after the effective
date of the filed articles of merger.
(e) A person notifies or gives a notification to another
person by taking steps reasonably required to inform the other
person in ordinary course, whether or not the other person
learns of it.
(f) A person receives a notification when the notification:
(1) comes to the person's attention; or
(2) is delivered at the person's place of business or at
any other place held out by the person as a place for receiving
communications.
(g) Except as otherwise provided in subsection (h), a
person other than an individual knows, has notice, or receives a
notification of a fact for purposes of a particular transaction
when the individual conducting the transaction for the person
knows, has notice, or receives a notification of the fact, or in
any event when the fact would have been brought to the
individual's attention if the person had exercised reasonable
diligence. A person other than an individual exercises
reasonable diligence if it maintains reasonable routines for
communicating significant information to the individual
conducting the transaction for the person and there is
reasonable compliance with the routines. Reasonable diligence
does not require an individual acting for the person to
communicate information unless the communication is part of the
individual's regular duties or the individual has reason to know
of the transaction and that the transaction would be materially
affected by the information.
(h) A general partner's knowledge, notice, or receipt of a
notification of a fact relating to the limited partnership is
effective immediately as knowledge of, notice to, or receipt of
a notification by the limited partnership, except in the case of
a fraud on the limited partnership committed by or with the
consent of the general partner. A limited partner's knowledge,
notice, or receipt of a notification of a fact relating to the
limited partnership is not effective as knowledge of, notice to,
or receipt of a notification by the limited partnership.
(i) Notice otherwise effective under subsection (d) does
not affect the power of a person to transfer real property held
in the name of a limited partnership unless at the time of
transfer a certified copy of the relevant statement, amendment,
or articles, as filed with the secretary of state, has been
recorded in the Office of the County Recorder in the county in
which the real property affected by the statement, amendment, or
articles is located or, if the real property is registered under
chapter 508 or 508A, memorialized on the certificate of title
for that property.
Sec. 4. [321.104] [NATURE, PURPOSE, AND DURATION OF
ENTITY.]
(a) A limited partnership is an entity distinct from its
partners. A limited partnership is the same entity regardless
of whether its certificate states that the limited partnership
is a limited liability limited partnership.
(b) A limited partnership may be organized under this
chapter for any lawful purpose.
(c) A limited partnership has a perpetual duration.
Sec. 5. [321.105] [POWERS.]
A limited partnership has the powers to do all things
necessary or convenient to carry on its activities, including
the power to sue, be sued, and defend in its own name and to
maintain an action against a partner for harm caused to the
limited partnership by a breach of the partnership agreement or
violation of a duty to the partnership.
Sec. 6. [321.106] [GOVERNING LAW.]
The law of this state governs relations among the partners
of a limited partnership and between the partners and the
limited partnership and the liability of partners as partners
for an obligation of the limited partnership.
Sec. 7. [321.107] [SUPPLEMENTAL PRINCIPLES OF LAW; RATE OF
INTEREST.]
(a) Unless displaced by particular provisions of this
chapter, the principles of law and equity supplement this
chapter.
(b) If an obligation to pay interest arises under this
chapter and the rate is not specified, the rate is that
specified in section 334.01.
Sec. 8. [321.108] [NAME.]
(a) The name of a limited partnership may contain the name
of any partner.
(b) The name of a limited partnership that is not a limited
liability limited partnership must contain the phrase "limited
partnership" or the abbreviation "L.P." or "LP" and may not
contain the phrase "limited liability limited partnership" or
the abbreviation "LLLP" or "L.L.L.P."
(c) Except as provided in section 321.1206(d)(1), the name
of a limited liability limited partnership must contain the
phrase "limited liability limited partnership" or the
abbreviation "LLLP" or "L.L.L.P." and must not otherwise contain
the abbreviation "L.P." or "LP."
(d) The limited partnership name shall not contain a word
or phrase that indicates or implies that it is formed for a
purpose other than a legal purpose.
(e) The limited partnership name 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 formation, reserved as provided for
in sections 302A.117, 322A.03, 322B.125, or 333.001 to 333.54,
unless there is filed with the certificate of limited
partnership 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.
(f) The secretary of state shall determine whether a name
is distinguishable from another name for purposes of this
section and section 321.109.
(g) This section and section 321.109 do not abrogate or
limit the law of unfair competition or unfair practices; nor
sections 333.001 to 333.54; nor the laws of the United States
with respect to the right to acquire and protect copyrights,
trade names, trademarks, service names, service marks, or any
other rights to the exclusive use of names or symbols; nor
derogate the common law or the principles of equity.
(h) A limited partnership that is the surviving
organization in a merger with one or more other organizations,
or that is formed by the reorganization of one or more
organizations, or that acquires by sale, lease, or other
disposition to or exchange with an organization all or
substantially all of the assets of another organization,
including its name, may have the same name as that used in this
state by any of the other organizations, if the other
organization whose name is sought to be used was organized under
the laws of, or is authorized to transact business in, this
state.
(i) The use of a name by a limited partnership in violation
of this section does not affect or vitiate its existence, but a
court in this state may, upon application of the state or of a
person interested or affected, enjoin the limited partnership
from doing business under a name assumed in violation of this
section, although its certificate of limited partnership may
have been filed with the secretary of state and a certificate of
formation issued.
(j) A person doing business in this state may contest the
subsequent registration of a name with the Office of the
Secretary of State as provided in section 5.22.
Sec. 9. [321.109] [RESERVATION OF NAME.]
(a) The exclusive right to the use of a limited partnership
name otherwise permitted by section 321.108 may be reserved by:
(1) a person doing business in this state under that name;
(2) a person intending to form a limited partnership under
this chapter;
(3) a limited partnership intending to change its name;
(4) a foreign limited partnership intending to make
application for a certificate of authority to transact business
in this state;
(5) a foreign limited partnership authorized to transact
business in this state and intending to change its name;
(6) a person intending to form a limited partnership in
another state and intending to have the foreign limited
partnership make application for a certificate of authority to
transact business in this state;
(7) a foreign limited partnership formed under a name that
does not comply with section 321.108(b) or (c), but the name
reserved under this paragraph may differ from the foreign
limited partnership's name only to the extent necessary to
comply with section 321.108(b) and (c); or
(8) a foreign limited partnership doing business under that
name or a name not distinguishable from that name in one or more
states other than this state and not described in clause (4),
(5), (6), or (7).
(b) The reservation shall be made by delivering for filing
with the secretary of state a request that the name be
reserved. If the name is available for use by the applicant,
the secretary of state shall reserve the name for the exclusive
use of the applicant for a period of 12 months. The reservation
may be renewed for successive 12-month periods.
(c) The right to the exclusive use of a limited partnership
name reserved pursuant to this section may be transferred to
another person by or on behalf of the applicant for whom the
name was reserved by delivering for filing with the secretary of
state a notice of the transfer and specifying the name and
address of the transferee.
Sec. 10. [321.110] [EFFECT OF PARTNERSHIP AGREEMENT;
NONWAIVABLE PROVISIONS.]
(a) Except as otherwise provided in subsection (b), the
partnership agreement governs relations among the partners and
between the partners and the partnership. To the extent the
partnership agreement does not otherwise provide, this chapter
governs relations among the partners and between the partners
and the partnership.
(b) A partnership agreement may not:
(1) vary a limited partnership's power under section
321.105 to sue, be sued, and defend in its own name;
(2) vary the law applicable to a limited partnership under
section 321.106;
(3) vary the requirements of section 321.204;
(4) vary the information required under section 321.111 or
unreasonably restrict the right to information under section
321.304 or 321.407, but the partnership agreement may impose
reasonable restrictions on the availability and use of
information obtained under those sections and may define
appropriate remedies, including liquidated damages, for a breach
of any reasonable restriction on use;
(5) eliminate the duty of loyalty under section 321.408,
but the partnership agreement may:
(A) identify specific types or categories of activities
that do not violate the duty of loyalty, if not manifestly
unreasonable; and
(B) specify the number or percentage of partners which may
authorize or ratify, after full disclosure to all partners of
all material facts, a specific act or transaction that otherwise
would violate the duty of loyalty;
(6) unreasonably reduce the duty of care under section
321.408(c);
(7) eliminate the obligation of good faith and fair dealing
under sections 321.305(b) and 321.408(d), but the partnership
agreement may prescribe the standards by which the performance
of the obligation is to be measured, if the standards are not
manifestly unreasonable;
(8) vary the power of a person to dissociate as a general
partner under section 321.604(a) except to require that the
notice under section 321.603(1) be in a record;
(9) vary the power of a court to decree dissolution in the
circumstances specified in section 321.802;
(10) vary the requirement to wind up the partnership's
business as specified in section 321.803;
(11) unreasonably restrict the right to maintain an action
under article 10;
(12) restrict the right of a partner under section
321.1110(a) to approve a conversion or merger or the right of a
general partner under section 321.1110(b) to consent to an
amendment to the certificate of limited partnership which
deletes a statement that the limited partnership is a limited
liability limited partnership; or
(13) restrict rights under this chapter of a person other
than a partner or a transferee.
Sec. 11. [321.111] [REQUIRED INFORMATION.]
A limited partnership shall maintain at its designated
office the following information:
(1) a current list showing the full name and last known
street and mailing address of each partner, separately
identifying the general partners, in alphabetical order, and the
limited partners, in alphabetical order;
(2) a copy of the initial certificate of limited
partnership and all amendments to and restatements of the
certificate, together with signed copies of any powers of
attorney under which any certificate, amendment, or restatement
has been signed;
(3) a copy of any filed articles of conversion or merger;
(4) a copy of the limited partnership's federal, state, and
local income tax returns and reports, if any, for the three most
recent years;
(5) a copy of any partnership agreement made in a record
and any amendment made in a record to any partnership agreement;
(6) a copy of any financial statement of the limited
partnership for the three most recent years;
(7) a copy of the three most recent annual reports
delivered by the limited partnership to the secretary of state
pursuant to section 321.210;
(8) a copy of any record made by the limited partnership
during the past three years of any consent given by or vote
taken of any partner pursuant to this chapter or the partnership
agreement; and
(9) unless contained in a partnership agreement made in a
record, a record stating:
(A) the amount of cash, and a description and statement of
the agreed value of the other benefits, contributed and agreed
to be contributed by each partner;
(B) the times at which, or events on the happening of
which, any additional contributions agreed to be made by each
partner are to be made;
(C) for any person that is both a general partner and a
limited partner, a specification of what transferable interest
the person owns in each capacity; and
(D) any events upon the happening of which the limited
partnership is to be dissolved and its activities wound up.
Sec. 12. [321.112] [BUSINESS TRANSACTIONS OF PARTNER WITH
PARTNERSHIP.]
A partner may lend money to and transact other business
with the limited partnership and has the same rights and
obligations with respect to the loan or other transaction as a
person that is not a partner.
Sec. 13. [321.113] [DUAL CAPACITY.]
A person may be both a general partner and a limited
partner. A person that is both a general and limited partner
has the rights, powers, duties, and obligations provided by this
chapter and the partnership agreement in each of those
capacities. When the person acts as a general partner, the
person is subject to the obligations, duties and restrictions
under this chapter and the partnership agreement for general
partners. When the person acts as a limited partner, the person
is subject to the obligations, duties and restrictions under
this chapter and the partnership agreement for limited partners.
Sec. 14. [321.114] [OFFICE AND AGENT FOR SERVICE OF
PROCESS.]
(a) A limited partnership shall designate and continuously
maintain in this state:
(1) an office, which need not be a place of its activity in
this state; and
(2) an agent for service of process.
(b) A foreign limited partnership shall designate and
continuously maintain in this state an agent for service of
process.
(c) An agent for service of process of a limited
partnership or foreign limited partnership must be an individual
who is a resident of this state or other person authorized to do
business in this state.
Sec. 15. [321.115] [CHANGE OF DESIGNATED OFFICE OR AGENT
FOR SERVICE OF PROCESS.]
(a) In order to change its designated office, agent for
service of process, or the address of its agent for service of
process, a limited partnership or a foreign limited partnership
may deliver to the secretary of state for filing a statement of
change containing:
(1) the name of the limited partnership or foreign limited
partnership;
(2) if the current designated office is to be changed, the
street and mailing address of the new designated office; and
(3) if the current agent for service of process or an
address of the agent is to be changed, the new information.
(b) Subject to section 321.206(c), a statement of change is
effective when filed by the secretary of state.
Sec. 16. [321.116] [RESIGNATION OF AGENT FOR SERVICE OF
PROCESS.]
Subdivision 1. [RESIGNATION OF AGENT.] An agent of a
limited partnership or a foreign limited partnership may resign
by delivering for filing with the secretary of state a signed
written notice of resignation, including a statement that a
signed copy of the notice has been given to the limited
partnership at its principal office or to a legal representative
of the limited partnership. The appointment of the agent
terminates 30 days after the notice is filed by the secretary of
state.
Subd. 2. [CHANGE OF BUSINESS ADDRESS OR NAME OF AGENT.] If
the business address or name of an agent changes, the agent
shall change the address of the designated office or the name of
the agent, as the case may be, of each limited partnership or
foreign limited partnership represented by that agent by
delivering for filing with the secretary of state a change of
designated office statement signed by the agent, stating that a
copy of the statement has been mailed to each of those limited
partnerships or foreign limited partnerships or to the legal
representative of each of those limited partnerships or foreign
limited partnerships.
Sec. 17. [321.117] [SERVICE OF PROCESS.]
A process, notice, or demand required or permitted by law
to be served may be served as provided in section 5.25.
Sec. 18. [321.118] [CONSENT AND PROXIES OF PARTNERS.]
Action requiring the consent of partners under this chapter
may be taken without a meeting, and a partner may appoint a
proxy to consent or otherwise act for the partner by signing an
appointment record, either personally or by the partner's
attorney in fact.
ARTICLE 2
FORMATION; CERTIFICATE OF LIMITED PARTNERSHIP
AND OTHER FILINGS
Sec. 19. [321.201] [FORMATION OF LIMITED PARTNERSHIP;
CERTIFICATE OF LIMITED PARTNERSHIP.]
(a) In order for a limited partnership to be formed, a
certificate of limited partnership must be delivered to the
secretary of state for filing. The certificate must state:
(1) the name of the limited partnership, which must comply
with section 321.108;
(2) the street and mailing address of the initial
designated office and the name and street and mailing address of
the initial agent for service of process;
(3) the name and the street and mailing address of each
general partner;
(4) whether the limited partnership is a limited liability
limited partnership; and
(5) any additional information required by article 11.
(b) A certificate of limited partnership may also contain
any other matters but may not vary or otherwise affect the
provisions specified in section 321.110(b) in a manner
inconsistent with that section.
(c) If there has been substantial compliance with
subsection (a), subject to section 321.206(c) a limited
partnership is formed when the secretary of state files the
certificate of limited partnership.
(d) Subject to subsection (b), if any provision of a
partnership agreement is inconsistent with the filed certificate
of limited partnership or with a filed statement of
dissociation, termination, or change or filed articles of
conversion or merger:
(1) the partnership agreement prevails as to partners and
transferees; and
(2) the filed certificate of limited partnership, statement
of dissociation, termination, or change or articles of
conversion or merger prevail as to persons, other than partners
and transferees, that reasonably rely on the filed record to
their detriment.
Sec. 20. [321.202] [AMENDMENT OR RESTATEMENT OF
CERTIFICATE.]
(a) In order to amend its certificate of limited
partnership, a limited partnership must deliver to the secretary
of state for filing an amendment or, pursuant to article 11,
articles of merger stating:
(1) the name of the limited partnership;
(2) the date of filing of its initial certificate; and
(3) the changes the amendment makes to the certificate as
most recently amended or restated.
(b) A limited partnership shall promptly deliver to the
secretary of state for filing an amendment to a certificate of
limited partnership to reflect:
(1) the admission of a new general partner;
(2) the dissociation of a person as a general partner; or
(3) the appointment of a person to wind up the limited
partnership's activities under section 321.803(c) or (d).
(c) A general partner that knows that any information in a
filed certificate of limited partnership was false when the
certificate was filed or has become false due to changed
circumstances shall promptly:
(1) cause the certificate to be amended; or
(2) if appropriate, deliver to the secretary of state for
filing a statement of change pursuant to section 321.115 or a
statement of correction pursuant to section 321.207.
(d) A certificate of limited partnership may be amended at
any time for any other proper purpose as determined by the
limited partnership.
(e) A restated certificate of limited partnership may be
delivered to the secretary of state for filing in the same
manner as an amendment.
(f) Subject to section 321.206(c), an amendment or restated
certificate is effective when filed by the secretary of state.
Sec. 21. [321.203] [STATEMENT OF TERMINATION.]
A dissolved limited partnership that has completed winding
up may deliver to the secretary of state for filing a statement
of termination that states:
(1) the name of the limited partnership;
(2) the date of filing of its initial certificate of
limited partnership; and
(3) any other information as determined by the general
partners filing the statement or by a person appointed pursuant
to section 321.803(c) or (d).
Sec. 22. [321.204] [SIGNING OF RECORDS.]
(a) Each record delivered to the secretary of state for
filing pursuant to this chapter must be signed in the following
manner:
(1) An initial certificate of limited partnership must be
signed by all general partners listed in the certificate.
(2) An amendment adding or deleting a statement that the
limited partnership is a limited liability limited partnership
must be signed by all general partners listed in the certificate.
(3) An amendment designating as general partner a person
admitted under section 321.801(3)(B) following the dissociation
of a limited partnership's last general partner must be signed
by that person.
(4) An amendment required by section 321.803(c) following
the appointment of a person to wind up the dissolved limited
partnership's activities must be signed by that person.
(5) Any other amendment must be signed by:
(A) at least one general partner listed in the certificate;
(B) each other person designated in the amendment as a new
general partner; and
(C) each person that the amendment indicates has
dissociated as a general partner, unless:
(i) the person is deceased or a guardian or general
conservator has been appointed for the person and the amendment
so states; or
(ii) the person has previously delivered to the secretary
of state for filing a statement of dissociation.
(6) A restated certificate of limited partnership must be
signed by at least one general partner listed in the
certificate, and, to the extent the restated certificate effects
a change under any other paragraph of this subsection, the
certificate must be signed in a manner that satisfies that
paragraph.
(7) A statement of termination must be signed by all
general partners listed in the certificate or, if the
certificate of a dissolved limited partnership lists no general
partners, by the person appointed pursuant to section 321.803(c)
or (d) to wind up the dissolved limited partnership's activities.
(8) Articles of conversion must be signed by each general
partner listed in the certificate of limited partnership.
(9) Articles of merger must be signed as provided in
section 321.1108(a).
(10) Any other record delivered on behalf of a limited
partnership to the secretary of state for filing must be signed
by at last one general partner listed in the certificate.
(11) A statement by a person pursuant to section
321.605(a)(4) stating that the person has dissociated as a
general partner must be signed by that person.
(12) A statement of withdrawal by a person pursuant to
section 321.306 must be signed by that person.
(13) A record delivered on behalf of a foreign limited
partnership to the secretary of state for filing must be signed
by at least one general partner of the foreign limited
partnership.
(14) Any other record delivered on behalf of any person to
the secretary of state for filing must be signed by that person.
(b) Any person may sign by an attorney in fact any record
to be filed pursuant to this chapter.
Sec. 23. [321.205] [SIGNING AND FILING PURSUANT TO
JUDICIAL ORDER.]
(a) If a person required by this chapter to sign a record
or deliver a record to the secretary of state for filing does
not do so, any other person that is aggrieved may petition the
district court to order:
(1) the person to sign the record;
(2) deliver the record to the secretary of state for
filing; or
(3) the secretary of state to file the record unsigned.
(b) If the person aggrieved under subsection (a) is not the
limited partnership or foreign limited partnership to which the
record pertains, the aggrieved person shall make the limited
partnership or foreign limited partnership a party to the
action. A person aggrieved under subsection (a) may seek the
remedies provided in subsection (a) in the same action in
combination or in the alternative.
(c) A record filed unsigned pursuant to this section is
effective without being signed.
Sec. 24. [321.206] [DELIVERY TO AND FILING OF RECORDS BY
SECRETARY OF STATE; EFFECTIVE TIME AND DATE.]
(a) A record authorized or required to be delivered to the
secretary of state for filing under this chapter must be
captioned to describe the record's purpose, be in a medium
permitted by the secretary of state, and be delivered to the
secretary of state. Unless the secretary of state determines
that a record does not comply with the filing requirements of
this chapter, and if the appropriate filing fees have been paid,
the secretary of state shall file the record and:
(1) for a statement of dissociation, send:
(A) a copy of the filed statement to the person which the
statement indicates has dissociated as a general partner; and
(B) a copy of the filed statement to the limited
partnership;
(2) for a statement of withdrawal, send:
(A) a copy of the filed statement to the person on whose
behalf the record was filed; and
(B) if the statement refers to an existing limited
partnership, a copy of the filed statement to the limited
partnership; and
(3) for all other records, send a copy of the filed record
to the person on whose behalf the record was filed.
(b) Upon request and payment of a fee, the secretary of
state shall send to the requester a certified copy of the
requested record.
(c) Except as otherwise provided in sections 321.116 and
321.207, a record delivered to the secretary of state for filing
under this chapter may specify an effective time and a delayed
effective date. Except as otherwise provided in this chapter, a
record filed by the secretary of state is effective:
(1) if the record does not specify an effective time and
does not specify a delayed effective date, on the date and at
the time the record is filed as evidenced by the secretary of
state's endorsement of the date and time on the record;
(2) if the record specifies an effective time but not a
delayed effective date, on the date the record is filed at the
time specified in the record;
(3) if the record specifies a delayed effective date but
not an effective time, at 12:01 a.m. on the earlier of:
(A) the specified date; or
(B) the 30th day after the record is filed; or
(4) if the record specifies an effective time and a delayed
effective date, at the specified time on the earlier of:
(A) the specified date; or
(B) the 30th day after the record is filed.
(d) The appropriate fees for filings under this chapter are:
(1) for filing a certificate of limited partnership, $100;
(2) for filing an amended certificate of limited
partnership, $50;
(3) for filing any other record required or permitted to be
delivered for filing, $35;
(4) for filing a certificate requesting authority to
transact business in Minnesota as a foreign limited partnership,
$85;
(5) for filing an application of reinstatement, $25; and
(6) for filing any other record required or permitted to be
delivered for filing on a foreign limited partnership authorized
to transact business in Minnesota, $50.
Sec. 25. [321.207] [CORRECTING FILED RECORD.]
A limited partnership or foreign limited partnership may
deliver to the secretary of state for filing articles of
correction pursuant to section 5.16, except that for the
purposes of section 321.103(c) and (d) the articles are
effective only as of the date they are filed.
Sec. 26. [321.208] [LIABILITY FOR FALSE INFORMATION IN
FILED RECORD.]
(a) If a record delivered to the secretary of state for
filing under this chapter and filed by the secretary of state
contains false information, a person that suffers loss by
reliance on the information may recover damages for the loss
from:
(1) a person that signed the record, or caused another to
sign it on the person's behalf, and knew the information to be
false at the time the record was signed; and
(2) a general partner that has notice that the information
was false when the record was filed or has become false because
of changed circumstances, if the general partner has notice for
a reasonably sufficient time before the information is relied
upon to enable the general partner to effect an amendment under
section 321.202, file a petition pursuant to section 321.205, or
deliver to the secretary of state for filing a statement of
change pursuant to section 321.115 or a statement of correction
pursuant to section 321.207.
(b) A person signing a record pursuant to this chapter is
subject to section 5.15.
Sec. 27. [321.210] [ANNUAL REPORT FOR SECRETARY OF STATE.]
(a) Subject to subsection (b):
(1) in each calendar year following the calendar year in
which a limited partnership becomes subject to this chapter, the
limited partnership must deliver to the secretary of state for
filing an annual registration containing the information
required by subsection (d); and
(2) in each calendar year following the calendar year in
which there is first on file with the secretary of state a
certificate of authority under section 321.904 pertaining to a
foreign limited partnership, the foreign limited partnership
must deliver to the secretary of state for filing an annual
registration containing the information required by subsection
(d).
(b) A limited partnership's obligation under subsection (a)
ends if the limited partnership delivers to the secretary of
state for filing a statement of termination under section
321.203 and the statement becomes effective under section
321.206. A foreign limited partnership's obligation under
subsection (a) ends if the secretary of state issues and files a
certificate of revocation under section 321.906 or if the
foreign limited partnership delivers to the secretary of state
for filing a notice of cancellation under section 321.907(a) and
that notice takes effect under section 321.206. If a foreign
limited partnership's obligations under subsection (a) end and
later the secretary of state files, pursuant to section 321.904,
a new certificate of authority pertaining to that foreign
limited partnership, subsection (a)(2), again applies to the
foreign limited partnership and, for the purposes of subsection
(a)(2), the calendar year of the new filing is treated as the
calendar year in which a certificate of authority is first on
file with the secretary of state.
(c) The annual registration must contain:
(1) the name of the limited partnership or foreign limited
partnership;
(2) the address of its designated office and the name and
street and mailing address of its agent for service of process
in Minnesota;
(3) in the case of a limited partnership, the street and
mailing address of its principal office; and
(4) in the case of a foreign limited partnership, the name
of the state or other jurisdiction under whose law the foreign
limited partnership is formed and any alternate name adopted
under section 321.905(a).
(d) The secretary of state shall:
(1) administratively dissolve under section 321.809 a
limited partnership that has failed to file a registration
pursuant to subsection (a); and
(2) revoke under section 321.906 the certificate of
authority of a foreign limited partnership that has failed to
file a registration pursuant to subsection (a).
ARTICLE 3
LIMITED PARTNERS
Sec. 28. [321.301] [BECOMING LIMITED PARTNER.]
A person becomes a limited partner:
(1) as provided in the partnership agreement;
(2) as the result of a conversion or merger under article
11; or
(3) with the consent of all the partners.
Sec. 29. [321.302] [NO RIGHT OR POWER AS LIMITED PARTNER
TO BIND LIMITED PARTNERSHIP.]
A limited partner does not have the right or the power as a
limited partner to act for or bind the limited partnership.
Sec. 30. [321.303] [NO LIABILITY AS LIMITED PARTNER FOR
LIMITED PARTNERSHIP OBLIGATIONS.]
An obligation of a limited partnership, whether arising in
contract, tort, or otherwise, is not the obligation of a limited
partner. A limited partner is not personally liable, directly
or indirectly, by way of contribution or otherwise, for an
obligation of the limited partnership solely by reason of being
a limited partner, even if the limited partner participates in
the management and control of the limited partnership.
Sec. 31. [321.304] [RIGHT OF LIMITED PARTNER AND FORMER
LIMITED PARTNER TO INFORMATION.]
(a) On ten days' demand, made in a record received by the
limited partnership, a limited partner may inspect and copy
required information during regular business hours in the
limited partnership's designated office. The limited partner
need not have any particular purpose for seeking the information.
(b) During regular business hours and at a reasonable
location specified by the limited partnership, a limited partner
may obtain from the limited partnership and inspect and copy
true and full information regarding the state of the activities
and financial condition of the limited partnership and other
information regarding the activities of the limited partnership
as is just and reasonable if:
(1) the limited partner seeks the information for a purpose
reasonably related to the partner's interest as a limited
partner;
(2) the limited partner makes a demand in a record received
by the limited partnership, describing with reasonable
particularity the information sought and the purpose for seeking
the information; and
(3) the information sought is directly connected to the
limited partner's purpose.
(c) Within ten days after receiving a demand pursuant to
subsection (b), the limited partnership in a record shall inform
the limited partner that made the demand:
(1) what information the limited partnership will provide
in response to the demand;
(2) when and where the limited partnership will provide the
information; and
(3) if the limited partnership declines to provide any
demanded information, the limited partnership's reasons for
declining.
(d) Subject to subsection (f), a person dissociated as a
limited partner may inspect and copy required information during
regular business hours in the limited partnership's designated
office if:
(1) the information pertains to the period during which the
person was a limited partner;
(2) the person seeks the information in good faith; and
(3) the person meets the requirements of subsection (b).
(e) The limited partnership shall respond to a demand made
pursuant to subsection (d) in the same manner as provided in
subsection (c).
(f) If a limited partner dies, section 321.704 applies.
(g) The limited partnership may impose reasonable
restrictions on the use of information obtained under this
section. In a dispute concerning the reasonableness of a
restriction under this subsection, the limited partnership has
the burden of proving reasonableness.
(h) A limited partnership may charge a person that makes a
demand under this section reasonable costs of copying, limited
to the costs of labor and material.
(i) Whenever this chapter or a partnership agreement
provides for a limited partner to give or withhold consent to a
matter, before the consent is given or withheld, the limited
partnership shall, without demand, provide the limited partner
with all information material to the limited partner's decision
that the limited partnership knows.
(j) A limited partner or person dissociated as a limited
partner may exercise the rights under this section through an
attorney or other agent. Any restriction imposed under
subsection (g) or by the partnership agreement applies both to
the attorney or other agent and to the limited partner or person
dissociated as a limited partner.
(k) The rights stated in this section do not extend to a
person as transferee, but may be exercised by the legal
representative of an individual under legal disability who is a
limited partner or person dissociated as a limited partner.
Sec. 32. [321.305] [LIMITED DUTIES OF LIMITED PARTNERS.]
(a) A limited partner does not have any fiduciary duty to
the limited partnership or to any other partner solely by reason
of being a limited partner.
(b) A limited partner shall discharge the duties to the
partnership and the other partners under this chapter or under
the partnership agreement and exercise any rights consistently
with the obligation of good faith and fair dealing.
(c) A limited partner does not violate a duty or obligation
under this chapter or under the partnership agreement merely
because the limited partner's conduct furthers the limited
partner's own interest.
Sec. 33. [321.306] [PERSON ERRONEOUSLY BELIEVING SELF TO
BE LIMITED PARTNER.]
(a) Except as otherwise provided in subsection (b), a
person that makes an investment in a business enterprise and
erroneously but in good faith believes that the person has
become a limited partner in the enterprise is not liable for the
enterprise's obligations by reason of making the investment,
receiving distributions from the enterprise, or exercising any
rights of or appropriate to a limited partner, if, on
ascertaining the mistake, the person:
(1) causes an appropriate certificate of limited
partnership, amendment, or statement of correction to be signed
and delivered to the secretary of state for filing; or
(2) withdraws from future participation as an owner in the
enterprise by signing and delivering to the secretary of state
for filing a statement of withdrawal under this section.
(b) A person that makes an investment described in
subsection (a) is liable to the same extent as a general partner
to any third party that enters into a transaction with the
enterprise, believing in good faith that the person is a general
partner, before the secretary of state files a statement of
withdrawal, certificate of limited partnership, amendment, or
statement of correction to show that the person is not a general
partner.
(c) If a person makes a diligent effort in good faith to
comply with subsection (a)(1) and is unable to cause the
appropriate certificate of limited partnership, amendment, or
statement of correction to be signed and delivered to the
secretary of state for filing, the person has the right to
withdraw from the enterprise pursuant to subsection (a)(2) even
if the withdrawal would otherwise breach an agreement with
others that are or have agreed to become co-owners of the
enterprise.
ARTICLE 4
GENERAL PARTNERS
Sec. 34. [321.401] [BECOMING GENERAL PARTNER.]
A person becomes a general partner:
(1) as provided in the partnership agreement;
(2) under section 321.801(3)(B) following the dissociation
of a limited partnership's last general partner;
(3) as the result of a conversion or merger under article
11; or
(4) with the consent of all the partners.
Sec. 35. [321.402] [GENERAL PARTNER AGENT OF LIMITED
PARTNERSHIP.]
(a) Each general partner is an agent of the limited
partnership for the purposes of its activities. An act of a
general partner, including the signing of a record in the
partnership's name, for apparently carrying on in the ordinary
course the limited partnership's activities or activities of the
kind carried on by the limited partnership binds the limited
partnership, unless the general partner did not have authority
to act for the limited partnership in the particular matter and
the person with which the general partner was dealing knew, had
received a notification, or had notice under section 321.103(d)
that the general partner lacked authority.
(b) An act of a general partner which is not apparently for
carrying on in the ordinary course the limited partnership's
activities or activities of the kind carried on by the limited
partnership binds the limited partnership only if the act was
actually authorized by all the other partners.
Sec. 36. [321.403] [LIMITED PARTNERSHIP LIABLE FOR GENERAL
PARTNER'S ACTIONABLE CONDUCT.]
(a) A limited partnership is liable for loss or injury
caused to a person, or for a penalty incurred, as a result of a
wrongful act or omission, or other actionable conduct, of a
general partner acting in the ordinary course of activities of
the limited partnership or with authority of the limited
partnership.
(b) If, in the course of the limited partnership's
activities or while acting with authority of the limited
partnership, a general partner receives or causes the limited
partnership to receive money or property of a person not a
partner, and the money or property is misapplied by a general
partner, the limited partnership is liable for the loss.
Sec. 37. [321.404] [GENERAL PARTNER'S LIABILITY.]
(a) Except as otherwise provided in subsections (b) and
(c), all general partners are liable jointly and severally for
all obligations of the limited partnership unless otherwise
agreed by the claimant or provided by law.
(b) A person that becomes a general partner of an existing
limited partnership is not personally liable for an obligation
of a limited partnership incurred before the person became a
general partner.
(c) An obligation of a limited partnership incurred while
the limited partnership is a limited liability limited
partnership, whether arising in contract, tort, or otherwise, is
solely the obligation of the limited partnership. A general
partner is not personally liable, directly or indirectly, by way
of contribution or otherwise, for such an obligation solely by
reason of being or acting as a general partner. This subsection
applies despite anything inconsistent in the partnership
agreement that existed immediately before the consent required
to become a limited liability limited partnership under section
321.406(b)(2).
Sec. 38. [321.405] [ACTIONS BY AND AGAINST PARTNERSHIP AND
PARTNERS.]
(a) To the extent not inconsistent with section 321.404, a
general partner may be joined in an action against the limited
partnership or named in a separate action.
(b) A judgment against a limited partnership is not by
itself a judgment against a general partner. A judgment against
a limited partnership may not be satisfied from a general
partner's assets unless there is also a judgment against the
general partner.
(c) A judgment creditor of a general partner may not levy
execution against the assets of the general partner to satisfy a
judgment based on a claim against the limited partnership,
unless the partner is personally liable for the claim under
section 321.404 and:
(1) a judgment based on the same claim has been obtained
against the limited partnership and a writ of execution on the
judgment has been returned unsatisfied in whole or in part;
(2) the limited partnership is a debtor in bankruptcy;
(3) the general partner has agreed that the creditor need
not exhaust limited partnership assets;
(4) a court grants permission to the judgment creditor to
levy execution against the assets of a general partner based on
a finding that limited partnership assets subject to execution
are clearly insufficient to satisfy the judgment, that
exhaustion of limited partnership assets is excessively
burdensome, or that the grant of permission is an appropriate
exercise of the court's equitable powers; or
(5) liability is imposed on the general partner by law or
contract independent of the existence of the limited partnership.
Sec. 39. [321.406] [MANAGEMENT RIGHTS OF GENERAL PARTNER.]
(a) Each general partner has equal rights in the management
and conduct of the limited partnership's activities. Except as
expressly provided in this chapter, any matter relating to the
activities of the limited partnership may be exclusively decided
by the general partner or, if there is more than one general
partner, by a majority of the general partners.
(b) The consent of each partner is necessary to:
(1) amend the partnership agreement;
(2) amend the certificate of limited partnership to add or,
subject to section 321.1110, delete a statement that the limited
partnership is a limited liability limited partnership; and
(3) sell, lease, exchange, or otherwise dispose of all, or
substantially all, of the limited partnership's property, with
or without the good will, other than in the usual and regular
course of the limited partnership's activities.
(c) A limited partnership shall reimburse a general partner
for payments made and indemnify a general partner for
liabilities incurred by the general partner in the ordinary
course of the activities of the partnership or for the
preservation of its activities or property.
(d) A limited partnership shall reimburse a general partner
for an advance to the limited partnership beyond the amount of
capital the general partner agreed to contribute.
(e) A payment or advance made by a general partner which
gives rise to an obligation of the limited partnership under
subsection (c) or (d) constitutes a loan to the limited
partnership which accrues interest from the date of the payment
or advance.
(f) A general partner is not entitled to remuneration for
services performed for the partnership.
Sec. 40. [321.407] [RIGHT OF GENERAL PARTNER AND FORMER
GENERAL PARTNER TO INFORMATION.]
(a) A general partner, without having any particular
purpose for seeking the information, may inspect and copy during
regular business hours:
(1) in the limited partnership's designated office,
required information; and
(2) at a reasonable location specified by the limited
partnership, any other records maintained by the limited
partnership regarding the limited partnership's activities and
financial condition.
(b) Each general partner and the limited partnership shall
furnish to a general partner:
(1) without demand, any information concerning the limited
partnership's activities and financial condition reasonably
required for the proper exercise of the general partner's rights
and duties under the partnership agreement or this chapter; and
(2) on demand, any other information concerning the limited
partnership's activities, except to the extent the demand or the
information demanded is unreasonable or otherwise improper under
the circumstances.
(c) Subject to subsection (e), on ten days' demand made in
a record received by the limited partnership, a person
dissociated as a general partner may have access to the
information and records described in subsection (a) at the
location specified in subsection (a) if:
(1) the information or record pertains to the period during
which the person was a general partner;
(2) the person seeks the information or record in good
faith; and
(3) the person satisfies the requirements imposed on a
limited partner by section 321.304(b).
(d) The limited partnership shall respond to a demand made
pursuant to subsection (c) in the same manner as provided in
section 321.304(c).
(e) If a general partner dies, section 321.704 applies.
(f) The limited partnership may impose reasonable
restrictions on the use of information under this section. In
any dispute concerning the reasonableness of a restriction under
this subsection, the limited partnership has the burden of
proving reasonableness.
(g) A limited partnership may charge a person dissociated
as a general partner that makes a demand under this section
reasonable costs of copying, limited to the costs of labor and
material.
(h) A general partner or person dissociated as a general
partner may exercise the rights under this section through an
attorney or other agent. Any restriction imposed under
subsection (f) or by the partnership agreement applies both to
the attorney or other agent and to the general partner or person
dissociated as a general partner.
(i) The rights under this section do not extend to a person
as transferee, but the rights under subsection (c) of a person
dissociated as a general may be exercised by the legal
representative of an individual who dissociated as a general
partner under section 321.603(7)(B) or (C).
Sec. 41. [321.408] [GENERAL STANDARDS OF GENERAL PARTNER'S
CONDUCT.]
(a) The only fiduciary duties that a general partner has to
the limited partnership and the other partners are the duties of
loyalty and care under subsections (b) and (c).
(b) A general partner's duty of loyalty to the limited
partnership and the other partners is limited to the following:
(1) to account to the limited partnership and hold as
trustee for it any property, profit, or benefit derived by the
general partner in the conduct and winding up of the limited
partnership's activities or derived from a use by the general
partner of limited partnership property, including the
appropriation of a limited partnership opportunity;
(2) to refrain from dealing with the limited partnership in
the conduct or winding up of the limited partnership's
activities as or on behalf of a party having an interest adverse
to the limited partnership; and
(3) to refrain from competing with the limited partnership
in the conduct or winding up of the limited partnership's
activities.
(c) A general partner's duty of care to the limited
partnership and the other partners in the conduct and winding up
of the limited partnership's activities is limited to refraining
from engaging in grossly negligent or reckless conduct,
intentional misconduct, or a knowing violation of law.
(d) A general partner shall discharge the duties to the
partnership and the other partners under this chapter or under
the partnership agreement and exercise any rights consistently
with the obligation of good faith and fair dealing.
(e) A general partner does not violate a duty or obligation
under this chapter or under the partnership agreement merely
because the general partner's conduct furthers the general
partner's own interest.
Sec. 42. [321.409] [TRANSFER OF PARTNERSHIP PROPERTY.]
(a) Subject to the effect of a notification effective under
section 321.103(d) and (i), property held in the name of a
limited partnership may be transferred by an instrument of
transfer executed by a general partner in the limited
partnership name.
(b) Where a transfer has been made to an initial transferee
through an instrument of transfer effective under subsection
(a), a limited partnership may recover the transferred limited
partnership property from a transferee only if:
(1) the limited partnership proves that execution of the
instrument of initial transfer did not bind the partnership
under section 321.402; and
(2) as to a subsequent transferee who gave value for the
property, the limited partnership proves that the subsequent
transferee knew or had received a notification that the person
who executed the instrument of initial transfer lacked authority
to bind the partnership.
(c) A partnership may not recover partnership property from
a subsequent transferee if the partnership would not have been
entitled to recover the property, under subsection (b), from any
earlier transferee of the property.
(d) This section does not affect the power of a person
dissociated as a general partner to bind a limited partnership
under sections 321.606(a) and 321.804(b).
ARTICLE 5
CONTRIBUTIONS AND DISTRIBUTIONS
Sec. 43. [321.501] [FORM OF CONTRIBUTION.]
A contribution of a partner may consist of tangible or
intangible property or other benefit to the limited partnership,
including money, services performed, promissory notes, other
agreements to contribute cash or property, and contracts for
services to be performed.
Sec. 44. [321.502] [LIABILITY FOR CONTRIBUTION.]
(a) A partner's obligation to contribute money or other
property or other benefit to, or to perform services for, a
limited partnership is not excused by the partner's death,
disability, or other inability to perform personally.
(b) If a partner does not make a promised nonmonetary
contribution, the partner is obligated at the option of the
limited partnership to contribute money equal to that portion of
the value, as stated in the required information, of the stated
contribution which has not been made.
(c) The obligation of a partner to make a contribution or
return money or other property paid or distributed in violation
of this chapter may be compromised only by consent of all
partners. A creditor of a limited partnership which extends
credit or otherwise acts in reliance on an obligation described
in subsection (a), without notice of any compromise under this
subsection, may enforce the original obligation.
Sec. 45. [321.503] [SHARING OF DISTRIBUTIONS.]
A distribution by a limited partnership must be shared
among the partners on the basis of the value, as stated in the
required information when the limited partnership decides to
make the distribution, of the contributions the limited
partnership has received from each partner.
Sec. 46. [321.504] [INTERIM DISTRIBUTIONS.]
A partner does not have a right to any distribution before
the dissolution and winding up of the limited partnership unless
the limited partnership decides to make an interim distribution.
Sec. 47. [321.505] [NO DISTRIBUTION ON ACCOUNT OF
DISSOCIATION.]
A person does not have a right to receive a distribution on
account of dissociation.
Sec. 48. [321.506] [DISTRIBUTION IN KIND.]
A partner does not have a right to demand or receive any
distribution from a limited partnership in any form other than
cash. Subject to section 321.812(b), a limited partnership may
distribute an asset in kind to the extent each partner receives
a percentage of the asset equal to the partner's share of
distributions.
Sec. 49. [321.507] [RIGHT TO DISTRIBUTION.]
When a partner or transferee becomes entitled to receive a
distribution, the partner or transferee has the status of, and
is entitled to all remedies available to, a creditor of the
limited partnership with respect to the distribution. However,
the limited partnership's obligation to make a distribution is
subject to offset for any amount owed to the limited partnership
by the partner or dissociated partner on whose account the
distribution is made.
Sec. 50. [321.508] [LIMITATIONS ON DISTRIBUTION.]
(a) A limited partnership may not make a distribution in
violation of the partnership agreement.
(b) A limited partnership may not make a distribution if
after the distribution:
(1) the limited partnership would not be able to pay its
debts as they become due in the ordinary course of the limited
partnership's activities; or
(2) the limited partnership's total assets would be less
than the sum of its total liabilities plus the amount that would
be needed, if the limited partnership were to be dissolved,
wound up, and terminated at the time of the distribution, to
satisfy the preferential rights upon dissolution, winding up,
and termination of partners whose preferential rights are
superior to those of persons receiving the distribution.
(c) A limited partnership may base a determination that a
distribution is not prohibited under subsection (b) on financial
statements prepared on the basis of accounting practices and
principles that are reasonable in the circumstances or on a fair
valuation or other method that is reasonable in the
circumstances.
(d) Except as otherwise provided in subsection (g), the
effect of a distribution under subsection (b) is measured:
(1) in the case of distribution by purchase, redemption, or
other acquisition of a transferable interest in the limited
partnership, as of the date money or other property is
transferred or debt incurred by the limited partnership; and
(2) in all other cases, as of the date:
(A) the distribution is authorized, if the payment occurs
within 120 days after that date; or
(B) the payment is made, if payment occurs more than 120
days after the distribution is authorized.
(e) A limited partnership's indebtedness to a partner
incurred by reason of a distribution made in accordance with
this section is at parity with the limited partnership's
indebtedness to its general, unsecured creditors.
(f) A limited partnership's indebtedness, including
indebtedness issued in connection with or as part of a
distribution, is not considered a liability for purposes of
subsection (b) if the terms of the indebtedness provide that
payment of principal and interest are made only to the extent
that a distribution could then be made to partners under this
section.
(g) If indebtedness is issued as a distribution, each
payment of principal or interest on the indebtedness is treated
as a distribution, the effect of which is measured on the date
the payment is made.
Sec. 51. [321.509] [LIABILITY FOR IMPROPER DISTRIBUTIONS.]
(a) A general partner that consents to a distribution made
in violation of section 321.508 is personally liable to the
limited partnership for the amount of the distribution which
exceeds the amount that could have been distributed without the
violation if it is established that in consenting to the
distribution the general partner failed to comply with section
321.408.
(b) A partner or transferee that received a distribution
knowing that the distribution to that partner or transferee was
made in violation of section 321.508 is personally liable to the
limited partnership but only to the extent that the distribution
received by the partner or transferee exceeded the amount that
could have been properly paid under section 321.508.
(c) A general partner against which an action is commenced
under subsection (a) may:
(1) implead in the action any other person that is liable
under subsection (a) and compel contribution from the person;
and
(2) implead in the action any person that received a
distribution in violation of subsection (b) and compel
contribution from the person in the amount the person received
in violation of subsection (b).
(d) An action under this section is barred if it is not
commenced within two years after the distribution.
ARTICLE 6
DISSOCIATION
Sec. 52. [321.601] [DISSOCIATION AS LIMITED PARTNER.]
(a) A person does not have a right to dissociate as a
limited partner before the termination of the limited
partnership.
(b) A person is dissociated from a limited partnership as a
limited partner upon the occurrence of any of the following
events:
(1) the limited partnership's having notice of the person's
express will to withdraw as a limited partner or on a later date
specified by the person;
(2) an event agreed to in the partnership agreement as
causing the person's dissociation as a limited partner;
(3) the person's expulsion as a limited partner pursuant to
the partnership agreement;
(4) the person's expulsion as a limited partner by the
unanimous consent of the other partners if:
(A) it is unlawful to carry on the limited partnership's
activities with the person as a limited partner;
(B) there has been a transfer of all of the person's
transferable interest in the limited partnership, other than a
transfer for security purposes, or a court order charging the
person's interest, which has not been foreclosed;
(C) the person is a corporation and, within 90 days after
the limited partnership notifies the person that it will be
expelled as a limited partner because it has filed a certificate
of dissolution or the equivalent, its charter has been revoked,
or its right to conduct business has been suspended by the
jurisdiction of its incorporation, there is no revocation of the
certificate of dissolution or no reinstatement of its charter or
its right to conduct business; or
(D) the person is a limited liability company or
partnership that has been dissolved and whose business is being
wound up;
(5) on application by the limited partnership, the person's
expulsion as a limited partner by judicial order because:
(A) the person engaged in wrongful conduct that adversely
and materially affected the limited partnership's activities;
(B) the person willfully or persistently committed a
material breach of the partnership agreement or of the
obligation of good faith and fair dealing under section
321.305(b); or
(C) the person engaged in conduct relating to the limited
partnership's activities which makes it not reasonably
practicable to carry on the activities with the person as
limited partner;
(6) in the case of a person who is an individual, the
person's death;
(7) in the case of a person that is a trust or is acting as
a limited partner by virtue of being a trustee of a trust,
distribution of the trust's entire transferable interest in the
limited partnership, but not merely by reason of the
substitution of a successor trustee;
(8) in the case of a person that is an estate or is acting
as a limited partner by virtue of being a personal
representative of an estate, distribution of the estate's entire
transferable interest in the limited partnership, but not merely
by reason of the substitution of a successor personal
representative;
(9) termination of a limited partner that is not an
individual, partnership, limited liability company, corporation,
trust, or estate;
(10) the limited partnership's participation in a
conversion or merger under article 11, if the limited
partnership:
(A) is not the converted or surviving entity; or
(B) is the converted or surviving entity but, as a result
of the conversion or merger, the person ceases to be a limited
partner.
Sec. 53. [321.602] [EFFECT OF DISSOCIATION AS LIMITED
PARTNER.]
(a) Upon a person's dissociation as a limited partner:
(1) subject to section 321.704, the person does not have
further rights as a limited partner;
(2) the person's obligation of good faith and fair dealing
as a limited partner under section 321.305(b) continues only as
to matters arising and events occurring before the dissociation;
and
(3) subject to section 321.704 and article 11, any
transferable interest owned by the person in the person's
capacity as a limited partner immediately before dissociation is
owned by the person as a mere transferee.
(b) A person's dissociation as a limited partner does not
of itself discharge the person from any obligation to the
limited partnership or the other partners which the person
incurred while a limited partner.
Sec. 54. [321.603] [DISSOCIATION AS GENERAL PARTNER.]
A person is dissociated from a limited partnership as a
general partner upon the occurrence of any of the following
events:
(1) the limited partnership's having notice of the person's
express will to withdraw as a general partner or on a later date
specified by the person;
(2) an event agreed to in the partnership agreement as
causing the person's dissociation as a general partner;
(3) the person's expulsion as a general partner pursuant to
the partnership agreement;
(4) the person's expulsion as a general partner by the
unanimous consent of the other partners if:
(A) it is unlawful to carry on the limited partnership's
activities with the person as a general partner;
(B) there has been a transfer of all or substantially all
of the person's transferable interest in the limited
partnership, other than a transfer for security purposes, or a
court order charging the person's interest, which has not been
foreclosed;
(C) the person is a corporation and, within 90 days after
the limited partnership notifies the person that it will be
expelled as a general partner because it has filed a certificate
of dissolution or the equivalent, its charter has been revoked,
or its right to conduct business has been suspended by the
jurisdiction of its incorporation, there is no revocation of the
certificate of dissolution or no reinstatement of its charter or
its right to conduct business; or
(D) the person is a limited liability company or
partnership that has been dissolved and whose business is being
wound up;
(5) on application by the limited partnership, the person's
expulsion as a general partner by judicial determination because:
(A) the person engaged in wrongful conduct that adversely
and materially affected the limited partnership activities;
(B) the person willfully or persistently committed a
material breach of the partnership agreement or of a duty owed
to the partnership or the other partners under section 321.408;
or
(C) the person engaged in conduct relating to the limited
partnership's activities which makes it not reasonably
practicable to carry on the activities of the limited
partnership with the person as a general partner;
(6) the person's:
(A) becoming a debtor in bankruptcy;
(B) execution of an assignment for the benefit of
creditors;
(C) seeking, consenting to, or acquiescing in the
appointment of a trustee, receiver, or liquidator of the person
or of all or substantially all of the person's property; or
(D) failure, within 90 days after the appointment, to have
vacated or stayed the appointment of a trustee, receiver, or
liquidator of the general partner or of all or substantially all
of the person's property obtained without the person's consent
or acquiescence, or failing within 90 days after the expiration
of a stay to have the appointment vacated;
(7) in the case of a person who is an individual:
(A) the person's death;
(B) the appointment of a guardian or general conservator
for the person; or
(C) a judicial determination that the person has otherwise
become incapable of performing the person's duties as a general
partner under the partnership agreement;
(8) in the case of a person that is a trust or is acting as
a general partner by virtue of being a trustee of a trust,
distribution of the trust's entire transferable interest in the
limited partnership, but not merely by reason of the
substitution of a successor trustee;
(9) in the case of a person that is an estate or is acting
as a general partner by virtue of being a personal
representative of an estate, distribution of the estate's entire
transferable interest in the limited partnership, but not merely
by reason of the substitution of a successor personal
representative;
(10) termination of a general partner that is not an
individual, partnership, limited liability company, corporation,
trust, or estate; or
(11) the limited partnership's participation in a
conversion or merger under article 11, if the limited
partnership:
(A) is not the converted or surviving entity; or
(B) is the converted or surviving entity but, as a result
of the conversion or merger, the person ceases to be a general
partner.
Sec. 55. [321.604] [PERSON'S POWER TO DISSOCIATE AS
GENERAL PARTNER; WRONGFUL DISSOCIATION.]
(a) A person has the power to dissociate as a general
partner at any time, rightfully or wrongfully, by express will
pursuant to section 321.603(1).
(b) A person's dissociation as a general partner is
wrongful only if:
(1) it is in breach of an express provision of the
partnership agreement; or
(2) it occurs before the termination of the limited
partnership, and:
(A) the person withdraws as a general partner by express
will;
(B) the person is expelled as a general partner by judicial
determination under section 321.603(5);
(C) the person is dissociated as a general partner by
becoming a debtor in bankruptcy; or
(D) in the case of a person that is not an individual,
trust other than a business trust, or estate, the person is
expelled or otherwise dissociated as a general partner because
it willfully dissolved or terminated.
(c) A person that wrongfully dissociates as a general
partner is liable to the limited partnership and, subject to
section 321.1001, to the other partners for damages caused by
the dissociation. The liability is in addition to any other
obligation of the general partner to the limited partnership or
to the other partners.
Sec. 56. [321.605] [EFFECT OF DISSOCIATION AS GENERAL
PARTNER.]
(a) Upon a person's dissociation as a general partner:
(1) the person's right to participate as a general partner
in the management and conduct of the partnership's activities
terminates;
(2) the person's duty of loyalty as a general partner under
section 321.408(b)(3) terminates;
(3) the person's duty of loyalty as a general partner under
section 321.408(b)(1) and (2) and duty of care under section
321.408(c) continue only with regard to matters arising and
events occurring before the person's dissociation as a general
partner;
(4) the person may sign and deliver to the secretary of
state for filing a statement of dissociation pertaining to the
person and, at the request of the limited partnership, shall
sign an amendment to the certificate of limited partnership
which states that the person has dissociated; and
(5) subject to section 321.704 and article 11, any
transferable interest owned by the person immediately before
dissociation in the person's capacity as a general partner is
owned by the person as a mere transferee.
(b) A person's dissociation as a general partner does not
of itself discharge the person from any obligation to the
limited partnership or the other partners which the person
incurred while a general partner.
Sec. 57. [321.606] [POWER TO BIND AND LIABILITY TO LIMITED
PARTNERSHIP BEFORE DISSOLUTION OF PARTNERSHIP OF PERSON
DISSOCIATED AS GENERAL PARTNER.]
(a) After a person is dissociated as a general partner and
before the limited partnership is dissolved, converted under
article 11, or merged out of existence under article 11, the
limited partnership is bound by an act of the person if:
(1) the act would have bound the limited partnership under
section 321.402 before the dissociation; and
(2) at the time the other party enters into the transaction:
(A) less than two years has passed since the dissociation;
and
(B) the other party does not have notice of the
dissociation and reasonably believes that the person is a
general partner.
(b) If a limited partnership is bound under subsection (a),
the person dissociated as a general partner which caused the
limited partnership to be bound is liable:
(1) to the limited partnership for any damage caused to the
limited partnership arising from the obligation incurred under
subsection (a); and
(2) if a general partner or another person dissociated as a
general partner is liable for the obligation, to the general
partner or other person for any damage caused to the general
partner or other person arising from the liability.
Sec. 58. [321.607] [LIABILITY TO OTHER PERSONS OF PERSON
DISSOCIATED AS GENERAL PARTNER.]
(a) A person's dissociation as a general partner does not
of itself discharge the person's liability as a general partner
for an obligation of the limited partnership incurred before
dissociation. Except as otherwise provided in subsections (b)
and (c), the person is not liable for a limited partnership's
obligation incurred after dissociation.
(b) A person whose dissociation as a general partner
resulted in a dissolution and winding up of the limited
partnership's activities is liable to the same extent as a
general partner under section 321.404 on an obligation incurred
by the limited partnership under section 321.804.
(c) A person that has dissociated as a general partner but
whose dissociation did not result in a dissolution and winding
up of the limited partnership's activities is liable on a
transaction entered into by the limited partnership after the
dissociation only if:
(1) a general partner would be liable on the transaction;
and
(2) at the time the other party enters into the transaction:
(A) less than two years has passed since the dissociation;
and
(B) the other party does not have notice of the
dissociation and reasonably believes that the person is a
general partner.
(d) By agreement with a creditor of a limited partnership
and the limited partnership, a person dissociated as a general
partner may be released from liability for an obligation of the
limited partnership.
(e) A person dissociated as a general partner is released
from liability for an obligation of the limited partnership if
the limited partnership's creditor, with notice of the person's
dissociation as a general partner but without the person's
consent, agrees to a material alteration in the nature or time
of payment of the obligation.
ARTICLE 7
TRANSFERABLE INTERESTS AND RIGHTS
OF TRANSFEREES AND CREDITORS
Sec. 59. [321.701] [PARTNER'S TRANSFERABLE INTEREST.]
The only interest of a partner which is transferable is the
partner's transferable interest. A transferable interest is
personal property.
Sec. 60. [321.702] [TRANSFER OF PARTNER'S TRANSFERABLE
INTEREST.]
(a) A transfer, in whole or in part, of a partner's
transferable interest:
(1) is permissible;
(2) does not by itself cause the partner's dissociation or
a dissolution and winding up of the limited partnership's
activities; and
(3) does not, as against the other partners or the limited
partnership, entitle the transferee to participate in the
management or conduct of the limited partnership's activities,
to require access to information concerning the limited
partnership's transactions except as otherwise provided in
subsection (c), or to inspect or copy the required information
or the limited partnership's other records.
(b) A transferee has a right to receive, in accordance with
the transfer:
(1) distributions to which the transferor would otherwise
be entitled; and
(2) upon the dissolution and winding up of the limited
partnership's activities the net amount otherwise distributable
to the transferor.
(c) In a dissolution and winding up, a transferee is
entitled to an account of the limited partnership's transactions
only from the date of dissolution.
(d) Upon transfer, the transferor retains the rights of a
partner other than the interest in distributions transferred and
retains all duties and obligations of a partner.
(e) A limited partnership need not give effect to a
transferee's rights under this section until the limited
partnership has notice of the transfer.
(f) A transfer of a partner's transferable interest in the
limited partnership in violation of a restriction on transfer
contained in the partnership agreement is ineffective as to a
person having notice of the restriction at the time of transfer.
(g) A transferee that becomes a partner with respect to a
transferable interest is liable for the transferor's obligations
under sections 321.502 and 321.509. However, the transferee is
not obligated for liabilities unknown to the transferee at the
time the transferee became a partner.
Sec. 61. [321.703] [RIGHTS OF CREDITOR OF PARTNER OR
TRANSFEREE.]
(a) On application to a court of competent jurisdiction by
any judgment creditor of a partner or transferee, the court may
charge the transferable interest of the judgment debtor with
payment of the unsatisfied amount of the judgment with
interest. To the extent so charged, the judgment creditor has
only the rights of a transferee. The court may appoint a
receiver of the share of the distributions due or to become due
to the judgment debtor in respect of the partnership and make
all other orders, directions, accounts, and inquiries the
judgment debtor might have made or which the circumstances of
the case may require to give effect to the charging order.
(b) A charging order constitutes a lien on the judgment
debtor's transferable interest. The court may order a
foreclosure upon the interest subject to the charging order at
any time. The purchaser at the foreclosure sale has the rights
of a transferee.
(c) At any time before foreclosure, an interest charged may
be redeemed:
(1) by the judgment debtor;
(2) with property other than limited partnership property,
by one or more of the other partners; or
(3) with limited partnership property, by the limited
partnership with the consent of all partners whose interests are
not so charged.
(d) This chapter does not deprive any partner or transferee
of the benefit of any exemption laws applicable to the partner's
or transferee's transferable interest.
(e) This section provides the exclusive remedy by which a
judgment creditor of a partner or transferee may satisfy a
judgment out of the judgment debtor's transferable interest.
Sec. 62. [321.704] [POWER OF ESTATE OF DECEASED PARTNER.]
If a partner dies, the deceased partner's personal
representative or other legal representative may exercise the
rights of a transferee as provided in section 321.702 and, for
the purposes of settling the estate, may exercise the rights of
a current limited partner under section 321.304.
ARTICLE 8
DISSOLUTION
Sec. 63. [321.801] [NONJUDICIAL DISSOLUTION.]
Except as otherwise provided in section 321.802, a limited
partnership is dissolved, and its activities must be wound up,
only upon the occurrence of any of the following:
(1) the happening of an event specified in the partnership
agreement;
(2) the consent of all general partners and of limited
partners owning a majority of the rights to receive
distributions as limited partners at the time the consent is to
be effective;
(3) after the dissociation of a person as a general partner:
(A) if the limited partnership has at least one remaining
general partner, the consent to dissolve the limited partnership
given within 90 days after the dissociation by partners owning a
majority of the rights to receive distributions as partners at
the time the consent is to be effective; or
(B) if the limited partnership does not have a remaining
general partner, the passage of 90 days after the dissociation,
unless before the end of the period:
(i) consent to continue the activities of the limited
partnership and admit at least one general partner is given by
limited partners owning a majority of the rights to receive
distributions as limited partners at the time the consent is to
be effective; and
(ii) at least one person is admitted as a general partner
in accordance with the consent;
(4) the passage of 90 days after the dissociation of the
limited partnership's last limited partner, unless before the
end of the period the limited partnership admits at least one
limited partner; or
(5) the signing and filing of a declaration of dissolution
by the secretary of state under section 321.809(c).
Sec. 64. [321.802] [JUDICIAL DISSOLUTION.]
On application by a partner the district court may order
dissolution of a limited partnership if it is not reasonably
practicable to carry on the activities of the limited
partnership in conformity with the partnership agreement.
Sec. 65. [321.803] [WINDING UP.]
(a) A limited partnership continues after dissolution only
for the purpose of winding up its activities.
(b) In winding up its activities, the limited partnership:
(1) may amend its certificate of limited partnership to
state that the limited partnership is dissolved, preserve the
limited partnership business or property as a going concern for
a reasonable time, prosecute and defend actions and proceedings,
whether civil, criminal, or administrative, transfer the limited
partnership's property, settle disputes by mediation or
arbitration, file a statement of termination as provided in
section 321.203, and perform other necessary acts; and
(2) shall discharge the limited partnership's liabilities,
settle and close the limited partnership's activities, and
marshal and distribute the assets of the partnership.
(c) If a dissolved limited partnership does not have a
general partner, a person to wind up the dissolved limited
partnership's activities may be appointed by the consent of
limited partners owning a majority of the rights to receive
distributions as limited partners at the time the consent is to
be effective. A person appointed under this subsection:
(1) has the powers of a general partner under section
321.804; and
(2) shall promptly amend the certificate of limited
partnership to state:
(A) that the limited partnership does not have a general
partner;
(B) the name of the person that has been appointed to wind
up the limited partnership; and
(C) the street and mailing address of the person.
(d) On the application of any partner, the district court
may order judicial supervision of the winding up, including the
appointment of a person to wind up the dissolved limited
partnership's activities, if:
(1) a limited partnership does not have a general partner
and within a reasonable time following the dissolution no person
has been appointed pursuant to subsection (c); or
(2) the applicant establishes other good cause.
Sec. 66. [321.804] [POWER OF GENERAL PARTNER AND PERSON
DISSOCIATED AS GENERAL PARTNER TO BIND PARTNERSHIP AFTER
DISSOLUTION.]
(a) A limited partnership is bound by a general partner's
act after dissolution which:
(1) is appropriate for winding up the limited partnership's
activities; or
(2) would have bound the limited partnership under section
321.402 before dissolution, if, at the time the other party
enters into the transaction, the other party does not have
notice of the dissolution.
(b) A person dissociated as a general partner binds a
limited partnership through an act occurring after dissolution
if:
(1) at the time the other party enters into the transaction:
(A) less than two years has passed since the dissociation;
and
(B) the other party does not have notice of the
dissociation and reasonably believes that the person is a
general partner; and
(2) the act:
(A) is appropriate for winding up the limited partnership's
activities; or
(B) would have bound the limited partnership under section
321.402 before dissolution and at the time the other party
enters into the transaction the other party does not have notice
of the dissolution.
Sec. 67. [321.805] [LIABILITY AFTER DISSOLUTION OF GENERAL
PARTNER AND PERSON DISSOCIATED AS GENERAL PARTNER TO LIMITED
PARTNERSHIP, OTHER GENERAL PARTNERS, AND PERSONS DISSOCIATED AS
GENERAL PARTNER.]
(a) If a general partner having knowledge of the
dissolution causes a limited partnership to incur an obligation
under section 321.804(a) by an act that is not appropriate for
winding up the partnership's activities, the general partner is
liable:
(1) to the limited partnership for any damage caused to the
limited partnership arising from the obligation; and
(2) if another general partner or a person dissociated as a
general partner is liable for the obligation, to that other
general partner or person for any damage caused to that other
general partner or person arising from the liability.
(b) If a person dissociated as a general partner causes a
limited partnership to incur an obligation under section
321.804(b), the person is liable:
(1) to the limited partnership for any damage caused to the
limited partnership arising from the obligation; and
(2) if a general partner or another person dissociated as a
general partner is liable for the obligation, to the general
partner or other person for any damage caused to the general
partner or other person arising from the liability.
Sec. 68. [321.806] [KNOWN CLAIMS AGAINST DISSOLVED LIMITED
PARTNERSHIP.]
(a) A dissolved limited partnership may dispose of the
known claims against it by following the procedure described in
subsection (b).
(b) A dissolved limited partnership may notify its known
claimants of the dissolution in a record. The notice must:
(1) specify the information required to be included in a
claim;
(2) provide a mailing address to which the claim is to be
sent;
(3) state the deadline for receipt of the claim, which may
not be less than 120 days after the date the notice is received
by the claimant;
(4) state that the claim will be barred if not received by
the deadline; and
(5) unless the limited partnership has been at each moment
during its existence either a limited liability limited
partnership or a limited partnership that is a limited liability
limited partnership under chapter 322A, state that the barring
of a claim against the limited partnership will also bar any
corresponding claim against any general partner or person
dissociated as a general partner which is based on section
321.404.
(c) A claim against a dissolved limited partnership is
barred if the requirements of subsection (b) are met and:
(1) the claim is not received by the specified deadline; or
(2) in the case of a claim that is timely received but
rejected by the dissolved limited partnership, the claimant does
not commence an action to enforce the claim against the limited
partnership within 90 days after the receipt of the notice of
the rejection.
(d) This section does not apply to a claim based on an
event occurring after the effective date of dissolution or a
liability that is contingent on that date.
Sec. 69. [321.807] [OTHER CLAIMS AGAINST DISSOLVED LIMITED
PARTNERSHIPS.]
(a) A dissolved limited partnership may publish notice of
its dissolution and request persons having claims against the
limited partnership to present them in accordance with the
notice.
(b) The notice must:
(1) be published at least once in a newspaper of general
circulation in the county in which the dissolved limited
partnership's principal office is located or, if it has none in
this state, in the county in which the limited partnership's
designated office is or was last located;
(2) describe the information required to be contained in a
claim and provide a mailing address to which the claim is to be
sent;
(3) state that a claim against the limited partnership is
barred unless an action to enforce the claim is commenced within
five years after publication of the notice; and
(4) unless the limited partnership has been at each moment
during its existence either a limited liability limited
partnership or a limited liability limited partnership under
chapter 322A, state that the barring of a claim against the
limited partnership will also bar any corresponding claim
against any general partner or person dissociated as a general
partner which is based on section 321.404.
(c) If a dissolved limited partnership publishes a notice
in accordance with subsection (b), the claim of each of the
following claimants is barred unless the claimant commences an
action to enforce the claim against the dissolved limited
partnership within five years after the publication date of the
notice:
(1) a claimant that did not receive notice in a record
under section 321.806;
(2) a claimant whose claim was timely sent to the dissolved
limited partnership but not acted on; and
(3) a claimant whose claim is contingent or based on an
event occurring after the effective date of dissolution.
(d) A claim not barred under this section may be enforced:
(1) against the dissolved limited partnership, to the
extent of its undistributed assets;
(2) if the assets have been distributed in liquidation,
against a partner or transferee to the extent of that person's
proportionate share of the claim or the limited partnership's
assets distributed to the partner or transferee in liquidation,
whichever is less, but a person's total liability for all claims
under this paragraph does not exceed the total amount of assets
distributed to the person as part of the winding up of the
dissolved limited partnership; or
(3) against any person liable on the claim under section
321.404.
Sec. 70. [321.808] [LIABILITY OF GENERAL PARTNER AND
PERSON DISSOCIATED AS GENERAL PARTNER WHEN CLAIM AGAINST LIMITED
PARTNERSHIP BARRED.]
If a claim against a dissolved limited partnership is
barred under section 321.806 or 321.807, any corresponding claim
under section 321.404 is also barred.
Sec. 71. [321.809] [ADMINISTRATIVE DISSOLUTION.]
(a) A limited partnership that has failed to deliver for
filing a registration pursuant to the requirements of section
321.210 must be dissolved by the secretary of state as described
in this section.
(b) If the limited partnership has not filed the delinquent
registration, the secretary of state must issue a certificate of
administrative dissolution and the certificate must be filed in
the Office of the Secretary of State. The secretary of state
must annually inform the attorney general and the commissioner
of revenue of the methods by which the names of limited
partnerships administratively dissolved under this section
during the preceding year may be determined. The secretary of
state must also make available in an electronic format the names
of the administratively dissolved limited partnerships.
(c) A limited partnership administratively dissolved
continues its existence but may carry on only activities
necessary to wind up its activities and liquidate its assets
under sections 321.803 and 321.812 and to notify claimants under
sections 321.806 and 321.807.
(d) The administrative dissolution of a limited partnership
does not terminate the authority of its agent for service of
process.
Sec. 72. [321.810] [REINSTATEMENT FOLLOWING ADMINISTRATIVE
DISSOLUTION.]
(a) A limited partnership that has been administratively
dissolved may apply to the secretary of state for reinstatement
after the effective date of dissolution. The application must
be delivered to the secretary of state for filing and state:
(1) the name of the limited partnership and the effective
date of its administrative dissolution;
(2) that the grounds for dissolution either did not exist
or have been eliminated; and
(3) that the limited partnership's name satisfies the
requirements of section 321.108.
The application must also include any documents that were
required to be delivered for filing to the secretary of state
but which were not so delivered.
(b) If the secretary of state determines that an
application contains the information required by subsection (a)
and that the information is correct and the application includes
the appropriate fee, the secretary of state shall file the
reinstatement application and serve the limited partnership with
a copy.
(c) When reinstatement becomes effective, it relates back
to and takes effect as of the effective date of the
administrative dissolution and the limited partnership may
resume its activities as if the administrative dissolution had
never occurred, except that for the purposes of section
321.103(c) and (d) the reinstatement is effective only as of the
date the reinstatement is filed.
Sec. 73. [321.812] [DISPOSITION OF ASSETS; WHEN
CONTRIBUTIONS REQUIRED.]
(a) In winding up a limited partnership's activities, the
assets of the limited partnership, including the contributions
required by this section, must be applied to satisfy the limited
partnership's obligations to creditors, including, to the extent
permitted by law, partners that are creditors.
(b) Any surplus remaining after the limited partnership
complies with subsection (a) must be paid in cash as a
distribution.
(c) If a limited partnership's assets are insufficient to
satisfy all of its obligations under subsection (a), with
respect to each unsatisfied obligation incurred when the limited
partnership was neither a limited liability limited partnership
nor a limited partnership that is a limited liability limited
partnership under chapter 322A, the following rules apply:
(1) Each person that was a general partner when the
obligation was incurred and that has not been released from the
obligation under section 321.607 shall contribute to the limited
partnership for the purpose of enabling the limited partnership
to satisfy the obligation. The contribution due from each of
those persons is in proportion to the right to receive
distributions in the capacity of general partner in effect for
each of those persons when the obligation was incurred.
(2) If a person does not contribute the full amount
required under paragraph (1) with respect to an unsatisfied
obligation of the limited partnership, the other persons
required to contribute by paragraph (1) on account of the
obligation shall contribute the additional amount necessary to
discharge the obligation. The additional contribution due from
each of those other persons is in proportion to the right to
receive distributions in the capacity of general partner in
effect for each of those other persons when the obligation was
incurred.
(3) If a person does not make the additional contribution
required by paragraph (2), further additional contributions are
determined and due in the same manner as provided in that
paragraph.
(d) A person that makes an additional contribution under
subsection (c)(2) or (3) may recover from any person whose
failure to contribute under subsection (c)(1) or (2)
necessitated the additional contribution. A person may not
recover under this subsection more than the amount additionally
contributed. A person's liability under this subsection may not
exceed the amount the person failed to contribute.
(e) The estate of a deceased individual is liable for the
person's obligations under this section.
(f) An assignee for the benefit of creditors of a limited
partnership or a partner, or a person appointed by a court to
represent creditors of a limited partnership or a partner, may
enforce a person's obligation to contribute under subsection (c).
ARTICLE 9
FOREIGN LIMITED PARTNERSHIPS
Sec. 74. [321.901] [GOVERNING LAW.]
(a) The laws of the state or other jurisdiction under which
a foreign limited partnership is organized govern relations
among the partners of the foreign limited partnership and
between the partners and the foreign limited partnership and the
liability of partners as partners for an obligation of the
foreign limited partnership.
(b) A foreign limited partnership may not be denied a
certificate of authority by reason of any difference between the
laws of the jurisdiction under which the foreign limited
partnership is organized and the laws of this state.
(c) A certificate of authority does not authorize a foreign
limited partnership to engage in any business or exercise any
power that a limited partnership may not engage in or exercise
in this state.
Sec. 75. [321.902] [APPLICATION FOR CERTIFICATE OF
AUTHORITY.]
(a) A foreign limited partnership may apply for a
certificate of authority to transact business in this state by
delivering an application to the secretary of state for filing.
The application must state:
(1) the name of the foreign limited partnership and, if the
name does not comply with section 321.108, an alternate name
adopted pursuant to section 321.905(a);
(2) the name of the state or other jurisdiction under whose
law the foreign limited partnership is organized;
(3) the street and mailing address of the foreign limited
partnership's principal office and, if the laws of the
jurisdiction under which the foreign limited partnership is
organized require the foreign limited partnership to maintain an
office in that jurisdiction, the street and mailing address of
the required office;
(4) the name and street and mailing address of the foreign
limited partnership's initial agent for service of process in
this state;
(5) the name and street and mailing address of each of the
foreign limited partnership's general partners; and
(6) whether the foreign limited partnership is a foreign
limited liability limited partnership.
(b) A foreign limited partnership shall deliver with the
completed application a certificate of existence or a record of
similar import signed by the secretary of state or other
official having custody of the foreign limited partnership's
publicly filed records in the state or other jurisdiction under
whose law the foreign limited partnership is organized.
Sec. 76. [321.903] [ACTIVITIES NOT CONSTITUTING
TRANSACTING BUSINESS.]
(a) Activities of a foreign limited partnership which do
not constitute transacting business in this state within the
meaning of this article include:
(1) maintaining, defending, and settling an action or
proceeding;
(2) holding meetings of its partners or carrying on any
other activity concerning its internal affairs;
(3) maintaining accounts in financial institutions;
(4) maintaining offices or agencies for the transfer,
exchange, and registration of the foreign limited partnership's
own securities or maintaining trustees or depositories with
respect to those securities;
(5) selling through independent contractors;
(6) soliciting or obtaining orders, whether by mail or
electronic means or through employees or agents or otherwise, if
the orders require acceptance outside this state before they
become contracts;
(7) creating or acquiring indebtedness, mortgages, or
security interests in real or personal property;
(8) securing or collecting debts or enforcing mortgages or
other security interests in property securing the debts, and
holding, protecting, and maintaining property so acquired;
(9) conducting an isolated transaction that is completed
within 30 days and is not one in the course of similar
transactions of a like manner; and
(10) transacting business in interstate commerce.
(b) For purposes of this article, the ownership in this
state of income-producing real property or tangible personal
property, other than property excluded under subsection (a),
constitutes transacting business in this state.
(c) This section does not apply in determining the contacts
or activities that may subject a foreign limited partnership to
service of process, taxation, or regulation under any other law
of this state.
Sec. 77. [321.904] [FILING OF CERTIFICATE OF AUTHORITY.]
Unless the secretary of state determines that an
application for a certificate of authority does not comply with
the filing requirements of this chapter, the secretary of state,
upon payment of all filing fees, shall file the application,
prepare, sign and file a certificate of authority to transact
business in this state, and send a copy of the filed certificate
to the foreign limited partnership or its representative.
Sec. 78. [321.905] [NONCOMPLYING NAME OF FOREIGN LIMITED
PARTNERSHIP.]
(a) A foreign limited partnership whose name does not
comply with section 321.108 may not obtain a certificate of
authority until it adopts, for the purpose of transacting
business in this state, an alternate name that complies with
section 321.108. A foreign limited partnership that adopts an
alternate name under this subsection and then obtains a
certificate of authority with the name need not comply with
sections 333.01 to 333.06. After obtaining a certificate of
authority with an alternate name, a foreign limited partnership
shall transact business in this state under the name unless the
foreign limited partnership is authorized under sections 333.01
to 333.06 to transact business in this state under another name.
(b) If a foreign limited partnership authorized to transact
business in this state changes its name to one that does not
comply with section 321.108, it may not thereafter transact
business in this state until it complies with subsection (a) and
obtains an amended certificate of authority.
Sec. 79. [321.906] [REVOCATION OF CERTIFICATE OF
AUTHORITY.]
(a) A foreign limited partnership that has failed to
deliver for filing a registration pursuant to the requirements
of section 321.210 must have its certificate of authority to
transact business in Minnesota revoked as described in this
section.
(b) If the foreign limited partnership has not filed the
delinquent registration, the secretary of state must issue a
certificate of revocation and the certificate must be filed in
the Office of the Secretary of State. The secretary of state
must annually inform the attorney general and the commissioner
of revenue of the methods by which the names of limited
partnerships whose certificates of authority have been revoked
under this section during the preceding year may be determined.
The secretary of state must also make available in an electronic
format the names of the foreign limited partnerships whose
certificates have been revoked.
Sec. 80. [321.907] [CANCELLATION OF CERTIFICATE OF
AUTHORITY; EFFECT OF FAILURE TO HAVE CERTIFICATE.]
(a) In order to cancel its certificate of authority to
transact business in this state, a foreign limited partnership
must deliver to the secretary of state for filing a notice of
cancellation. The certificate is canceled when the notice
becomes effective under section 321.206.
(b) A foreign limited partnership transacting business in
this state may not maintain an action or proceeding in this
state unless it has a certificate of authority to transact
business in this state.
(c) The failure of a foreign limited partnership to have a
certificate of authority to transact business in this state does
not impair the validity of a contract or act of the foreign
limited partnership or prevent the foreign limited partnership
from defending an action or proceeding in this state.
(d) A partner of a foreign limited partnership is not
liable for the obligations of the foreign limited partnership
solely by reason of the foreign limited partnership's having
transacted business in this state without a certificate of
authority.
(e) If a foreign limited partnership transacts business in
this state without a certificate of authority or cancels its
certificate of authority, it appoints the secretary of state as
its agent for service of process for rights of action arising
out of the transaction of business in this state.
Sec. 81. [321.908] [ACTION BY ATTORNEY GENERAL.]
The attorney general may maintain an action to restrain a
foreign limited partnership from transacting business in this
state in violation of this article.
ARTICLE 10
ACTIONS BY PARTNERS
Sec. 82. [321.1001] [DIRECT ACTION BY PARTNER.]
(a) Subject to subsection (b), a partner may maintain a
direct action against the limited partnership or another partner
for legal or equitable relief, with or without an accounting as
to the partnership's activities, to enforce the rights and
otherwise protect the interests of the partner, including rights
and interests under the partnership agreement of this chapter or
arising independently of the partnership relationship.
(b) A partner commencing a direct action under this section
is required to plead and prove an actual or threatened injury
that is not solely the result of an injury suffered or
threatened to be suffered by the limited partnership.
(c) The accrual of, and any time limitation on, a right of
action for a remedy under this section is governed by other
law. A right to an accounting upon a dissolution and winding up
does not revive a claim barred by law.
Sec. 83. [321.1002] [DERIVATIVE ACTION.]
A partner may maintain a derivative action to enforce a
right of a limited partnership if:
(1) the partner first makes a demand on the general
partners, requesting that they cause the limited partnership to
bring an action to enforce the right, and the general partners
do not bring the action within a reasonable time; or
(2) a demand would be futile.
Sec. 84. [321.1003] [PROPER PLAINTIFF.]
A derivative action may be maintained only by a person that
is a partner at the time the action is commenced and:
(1) that was a partner when the conduct giving rise to the
action occurred; or
(2) whose status as a partner devolved upon the person by
operation of law or pursuant to the terms of the partnership
agreement from a person that was a partner at the time of the
conduct.
Sec. 85. [321.1004] [PLEADING.]
In a derivative action, the complaint must state with
particularity:
(1) the date and content of plaintiff's demand and the
general partners' response to the demand; or
(2) why demand should be excused as futile.
Sec. 86. [321.1005] [PROCEEDS AND EXPENSES.]
(a) Except as otherwise provided in subsection (b):
(1) any proceeds or other benefits of a derivative action,
whether by judgment, compromise, or settlement, belong to the
limited partnership and not to the derivative plaintiff;
(2) if the derivative plaintiff receives any proceeds, the
derivative plaintiff shall immediately remit them to the limited
partnership.
(b) If a derivative action is successful in whole or in
part, the court may award the plaintiff reasonable expenses,
including reasonable attorney's fees, from the recovery of the
limited partnership.
ARTICLE 11
CONVERSION AND MERGER
Sec. 87. [321.1101] [DEFINITIONS.]
In this article:
(1) "Constituent limited partnership" means a constituent
organization that is a limited partnership.
(2) "Constituent organization" means an organization that
is party to a merger.
(3) "Converted organization" means the organization into
which a converting organization converts pursuant to sections
321.1102 through 321.1105.
(4) "Converting limited partnership" means a converting
organization that is a limited partnership.
(5) "Converting organization" means an organization that
converts into another organization pursuant to section 321.1102.
(6) "General partner" means a general partner of a limited
partnership.
(7) "Governing statute" of an organization means the
statute that governs the organization's internal affairs.
(8) "Organization" means a general partnership, including a
limited liability partnership; limited partnership, including a
limited liability limited partnership; limited liability
company; business trust; corporation; or any other person having
a governing statute. The term includes domestic and foreign
organizations whether or not organized for profit.
(9) "Organizational documents" means:
(A) for a domestic or foreign general partnership, its
partnership agreement;
(B) for a limited partnership or foreign limited
partnership, its certificate of limited partnership and
partnership agreement;
(C) for a domestic or foreign limited liability company,
its articles of organization and operating agreement, or
comparable records as provided in its governing statute;
(D) for a business trust, its agreement of trust and
declaration of trust;
(E) for a domestic or foreign corporation for profit, its
articles of incorporation, bylaws, and other agreements among
its shareholders which are authorized by its governing statute,
or comparable records as provided in its governing statute; and
(F) for any other organization, the basic records that
create the organization and determine its internal governance
and the relations among the persons that own it, have an
interest in it, or are members of it.
(10) "Personal liability" means personal liability for a
debt, liability, or other obligation of an organization which is
imposed on a person that co-owns, has an interest in, or is a
member of the organization:
(A) by the organization's governing statute solely by
reason of the person co-owning, having an interest in, or being
a member of the organization; or
(B) by the organization's organizational documents under a
provision of the organization's governing statute authorizing
those documents to make one or more specified persons liable for
all or specified debts, liabilities, and other obligations of
the organization solely by reason of the person or persons
co-owning, having an interest in, or being a member of the
organization.
(11) "Surviving organization" means an organization into
which one or more other organizations are merged. A surviving
organization may preexist the merger or be created by the merger.
Sec. 88. [321.1102] [CONVERSION.]
(a) An organization other than a limited partnership may
convert to a limited partnership, and a limited partnership may
convert to another organization pursuant to this section and
sections 321.1103 through 321.1105 and a plan of conversion, if:
(1) the other organization's governing statute authorizes
the conversion;
(2) the conversion is not prohibited by the law of the
jurisdiction that enacted the governing statute; and
(3) the other organization complies with its governing
statute in effecting the conversion.
(b) A plan of conversion must be in a record and must
include:
(1) the name and form of the organization before
conversion;
(2) the name and form of the organization after conversion;
and
(3) the terms and conditions of the conversion, including
the manner and basis for converting interests in the converting
organization into any combination of money, interests in the
converted organization, and other consideration; and
(4) the organizational documents of the converted
organization.
Sec. 89. [321.1103] [ACTION ON PLAN OF CONVERSION BY
CONVERTING LIMITED PARTNERSHIP.]
(a) Subject to section 321.1110, a plan of conversion must
be consented to by all the partners of a converting limited
partnership.
(b) Subject to section 321.1110 and any contractual rights,
after a conversion is approved, and at any time before a filing
is made under section 321.1104, a converting limited partnership
may amend the plan or abandon the planned conversion:
(1) as provided in the plan; and
(2) except as prohibited by the plan, by the same consent
as was required to approve the plan.
Sec. 90. [321.1104] [FILINGS REQUIRED FOR CONVERSION;
EFFECTIVE DATE.]
(a) After a plan of conversion is approved:
(1) a converting limited partnership shall deliver to the
secretary of state for filing articles of conversion, which must
include:
(A) a statement that the limited partnership has been
converted into another organization;
(B) the name and form of the organization and the
jurisdiction of its governing statute;
(C) the date the conversion is effective under the
governing statute of the converted organization;
(D) a statement that the conversion was approved as
required by this chapter;
(E) a statement that the conversion was approved as
required by the governing statute of the converted organization;
and
(F) if the converted organization is a foreign organization
not authorized to transact business in this state, the street
and mailing address of an office which the secretary of state
may use for the purposes of section 321.1105(c); and
(2) if the converting organization is not a converting
limited partnership, the converting organization shall deliver
to the secretary of state for filing a certificate of limited
partnership, which must include, in addition to the information
required by section 321.201:
(A) a statement that the limited partnership was converted
from another organization;
(B) the name and form of the organization and the
jurisdiction of its governing statute; and
(C) a statement that the conversion was approved in a
manner that complied with the organization's governing statute.
(b) A conversion becomes effective:
(1) if the converted organization is a limited partnership,
when the certificate of limited partnership takes effect; and
(2) if the converted organization is not a limited
partnership, as provided by the governing statute of the
converted organization.
Sec. 91. [321.1105] [EFFECT OF CONVERSION.]
(a) An organization that has been converted pursuant to
this article is for all purposes the same entity that existed
before the conversion.
(b) When a conversion takes effect:
(1) all property owned by the converting organization
remains vested in the converted organization;
(2) all debts, liabilities, and other obligations of the
converting organization continue as obligations of the converted
organization;
(3) an action or proceeding pending by or against the
converting organization may be continued as if the conversion
had not occurred;
(4) except as prohibited by other law, all of the rights,
privileges, immunities, powers, and purposes of the converting
organization remain vested in the converted organization;
(5) except as otherwise provided in the plan of conversion,
the terms and conditions of the plan of conversion take effect;
and
(6) except as otherwise agreed, the conversion does not
dissolve a converting limited partnership for the purposes of
article 8.
(c) A converted organization that is a foreign organization
consents to the jurisdiction of the courts of this state to
enforce any obligation owed by the converting limited
partnership, if before the conversion the converting limited
partnership was subject to suit in this state on the
obligation. A converted organization that is a foreign
organization and not authorized to transact business in this
state appoints the secretary of state as its agent for service
of process for purposes of enforcing an obligation under this
subsection. Service on the secretary of state under this
subsection is made in the same manner and with the same
consequences as in section 321.117(c) and (d).
Sec. 92. [321.1106] [MERGER.]
(a) A limited partnership may merge with one or more other
constituent organizations pursuant to this section and sections
321.1107 through 321.1109 and a plan of merger, if:
(1) the governing statute of each of the other
organizations authorizes the merger;
(2) the merger is not prohibited by the law of a
jurisdiction that enacted any of those governing statutes; and
(3) each of the other organizations complies with its
governing statute in effecting the merger.
(b) A plan of merger must be in a record and must include:
(1) the name and form of each constituent organization;
(2) the name and form of the surviving organization and, if
the surviving organization is to be created by the merger, a
statement to that effect;
(3) the terms and conditions of the merger, including the
manner and basis for converting the interests in each
constituent organization into any combination of money,
interests in the surviving organization, and other
consideration;
(4) if the surviving organization is to be created by the
merger, the surviving organizations organizational documents;
and
(5) if the surviving organization is not to be created by
the merger, any amendments to be made by the merger to the
surviving organization's organizational documents.
Sec. 93. [321.1107] [ACTION ON PLAN OF MERGER BY
CONSTITUENT LIMITED PARTNERSHIP.]
(a) Subject to section 321.1110, a plan of merger must be
consented to by all the partners of a constituent limited
partnership.
(b) Subject to section 321.1110 and any contractual rights,
after a merger is approved, and at any time before a filing is
made under section 321.1108, a constituent limited partnership
may amend the plan or abandon the planned merger:
(1) as provided in the plan; and
(2) except as prohibited by the plan, with the same consent
as was required to approve the plan.
Sec. 94. [321.1108] [FILINGS REQUIRED FOR MERGER;
EFFECTIVE DATE.]
(a) After each constituent organization has approved a
merger, articles of merger must be signed on behalf of:
(1) each preexisting constituent limited partnership, by
each general partner listed in the certificate of limited
partnership; and
(2) each other preexisting constituent organization, by an
authorized representative.
(b) The articles of merger must include:
(1) the name and form of each constituent organization and
the jurisdiction of its governing statute;
(2) the name and form of the surviving organization, the
jurisdiction of its governing statute, and, if the surviving
organization is created by the merger, a statement to that
effect;
(3) the date the merger is effective under the governing
statute of the surviving organization;
(4) if the surviving organization is to be created by the
merger:
(A) if it will be a limited partnership, the limited
partnership's certificate of limited partnership; or
(B) if it will be an organization other than a limited
partnership, the organizational document that creates the
organization;
(5) if the surviving organization preexists the merger, any
amendments provided for in the plan of merger for the
organizational document that created the organization;
(6) a statement as to each constituent organization that
the merger was approved as required by the organization's
governing statute;
(7) if the surviving organization is a foreign organization
not authorized to transact business in this state, the street
and mailing address of an office which the secretary of state
may use for the purposes of section 321.1109(b); and
(8) any additional information required by the governing
statute of any constituent organization.
(c) Each constituent limited partnership shall deliver the
articles of merger for filing in the office of the secretary of
state.
(d) A merger becomes effective under this article:
(1) if the surviving organization is a limited partnership,
upon the later of:
(i) compliance with subsection (c); or
(ii) subject to section 321.206(c), as specified in the
articles of merger; or
(2) if the surviving organization is not a limited
partnership, as provided by the governing statute of the
surviving organization.
Sec. 95. [321.1109] [EFFECT OF MERGER.]
(a) When a merger becomes effective:
(1) the surviving organization continues or comes into
existence;
(2) each constituent organization that merges into the
surviving organization ceases to exist as a separate entity;
(3) all property owned by each constituent organization
that ceases to exist vest in the surviving organization;
(4) all debts, liabilities, and other obligations of each
constituent organization that ceases to exist continue as
obligations of the surviving organization;
(5) an action or proceeding pending by or against any
constituent organization that ceases to exist may be continued
as if the merger had not occurred;
(6) except as prohibited by other law, all of the rights,
privileges, immunities, powers, and purposes of each constituent
organization that ceases to exist vest in the surviving
organization;
(7) except as otherwise provided in the plan of merger, the
terms and conditions of the plan of merger take effect; and
(8) except as otherwise agreed, if a constituent limited
partnership ceases to exist, the merger does not dissolve the
limited partnership for the purposes of article 8;
(9) if the surviving organization is created by the merger:
(A) if it is a limited partnership, the certificate of
limited partnership becomes effective; or
(B) if it is an organization other than a limited
partnership, the organizational document that creates the
organization becomes effective; and
(10) if the surviving organization preexists the merger,
any amendments provided for in the articles of merger for the
organizational document that created the organization become
effective.
(b) A surviving organization that is a foreign organization
consents to the jurisdiction of the courts of this state to
enforce any obligation owed by a constituent organization, if
before the merger the constituent organization was subject to
suit in this state on the obligation. A surviving organization
that is a foreign organization and not authorized to transact
business in this state appoints the secretary of state as its
agent for service of process for the purposes of enforcing an
obligation under this subsection. Service on the secretary of
state under this subsection is made in the same manner and with
the same consequences as in section 321.117(c) and (d).
Sec. 96. [321.1110] [RESTRICTIONS ON APPROVAL OF
CONVERSIONS AND MERGERS AND ON RELINQUISHING LLLP STATUS.]
(a) If a partner of a converting or constituent limited
partnership will have personal liability with respect to a
converted or surviving organization, approval and amendment of a
plan of conversion or merger are ineffective without the consent
of the partner, unless:
(1) the limited partnership's partnership agreement
provides for the approval of the conversion or merger with the
consent of fewer than all the partners; and
(2) the partner has consented to the provision of the
partnership agreement.
(b) An amendment to a certificate of limited partnership
which deletes a statement that the limited partnership is a
limited liability limited partnership is ineffective without the
consent of each general partner unless:
(1) the limited partnership's partnership agreement
provides for the amendment with the consent of less than all the
general partners; and
(2) each general partner that does not consent to the
amendment has consented to the provision of the partnership
agreement.
(c) A partner does not give the consent required by
subsection (a) or (b) merely by consenting to a provision of the
partnership agreement which permits the partnership agreement to
be amended with the consent of fewer than all the partners.
Sec. 97. [321.1111] [LIABILITY OF GENERAL PARTNER AFTER
CONVERSION OR MERGER.]
(a) A conversion or merger under this article does not
discharge any liability under sections 321.404 and 321.607 of a
person that was a general partner in or dissociated as a general
partner from a converting or constituent limited partnership,
but:
(1) the provisions of this chapter pertaining to the
collection or discharge of the liability continue to apply to
the liability;
(2) for the purposes of applying those provisions, the
converted or surviving organization is deemed to be the
converting or constituent limited partnership; and
(3) if a person is required to pay any amount under this
subsection:
(A) the person has a right of contribution from each other
person that was liable as a general partner under section
321.404 when the obligation was incurred and has not been
released from the obligation under section 321.607; and
(B) the contribution due from each of those persons is in
proportion to the right to receive distributions in the capacity
of general partner in effect for each of those persons when the
obligation was incurred.
(b) In addition to any other liability provided by law:
(1) a person that immediately before a conversion or merger
became effective was a general partner in a converting or
constituent limited partnership that was not a limited liability
limited partnership is personally liable for each obligation of
the converted or surviving organization arising from a
transaction with a third party after the conversion or merger
becomes effective, if, at the time the third party enters into
the transaction, the third party:
(A) does not have notice of the conversion or merger; and
(B) reasonably believes that:
(i) the converted or surviving business is the converting
or constituent limited partnership;
(ii) the converting or constituent limited partnership is
not a limited liability limited partnership; and
(iii) the person is a general partner in the converting or
constituent limited partnership; and
(2) a person that was dissociated as a general partner from
a converting or constituent limited partnership before the
conversion or merger became effective is personally liable for
each obligation of the converted or surviving organization
arising from a transaction with a third party after the
conversion or merger becomes effective, if:
(A) immediately before the conversion or merger became
effective the converting or surviving limited partnership was
not a limited liability limited partnership; and
(B) at the time the third party enters into the transaction
less than two years have passed since the person dissociated as
a general partner and the third party:
(i) does not have notice of the dissociation;
(ii) does not have notice of the conversion or merger; and
(iii) reasonably believes that the converted or surviving
organization is the converting or constituent limited
partnership, the converting or constituent limited partnership
is not a limited liability limited partnership, and the person
is a general partner in the converting or constituent limited
partnership.
Sec. 98. [321.1112] [POWER OF GENERAL PARTNERS AND PERSONS
DISSOCIATED AS GENERAL PARTNERS TO BIND ORGANIZATION AFTER
CONVERSION OR MERGER.]
(a) An act of a person that immediately before a conversion
or merger became effective was a general partner in a converting
or constituent limited partnership binds the converted or
surviving organization after the conversion or merger becomes
effective, if:
(1) before the conversion or merger became effective, the
act would have bound the converting or constituent limited
partnership under section 321.402; and
(2) at the time the third party enters into the
transaction, the third party:
(A) does not have notice of the conversion or merger; and
(B) reasonably believes that the converted or surviving
business is the converting or constituent limited partnership
and that the person is a general partner in the converting or
constituent limited partnership.
(b) An act of a person that before a conversion or merger
became effective was dissociated as a general partner from a
converting or constituent limited partnership binds the
converted or surviving organization after the conversion or
merger becomes effective, if:
(1) before the conversion or merger became effective, the
act would have bound the converting or constituent limited
partnership under section 321.402 if the person had been a
general partner; and
(2) at the time the third party enters into the
transaction, less than two years have passed since the person
dissociated as a general partner and the third party:
(A) does not have notice of the dissociation;
(B) does not have notice of the conversion or merger; and
(C) reasonably believes that the converted or surviving
organization is the converting or constituent limited
partnership and that the person is a general partner in the
converting or constituent limited partnership.
(c) If a person having knowledge of the conversion or
merger causes a converted or surviving organization to incur an
obligation under subsection (a) or (b), the person is liable:
(1) to the converted or surviving organization for any
damage caused to the organization arising from the obligation;
and
(2) if another person is liable for the obligation, to that
other person for any damage caused to that other person arising
from the liability.
Sec. 99. [321.1113] [CHAPTER NOT EXCLUSIVE.]
This chapter does not preclude an entity from being
converted or merged under other law.
Sec. 100. [321.1114] [CONFLICT RELATING TO MERGER OR
CONVERSION.]
If a partnership governed by chapter 323A participates in a
merger or conversion under chapter 321, then in the event of any
conflict between the provisions of chapter 323A and chapter 321
relating to the merger or conversion, the provisions of chapter
321 control chapter 321.
ARTICLE 12
MISCELLANEOUS PROVISIONS
Sec. 101. [321.1201] [UNIFORMITY OF APPLICATION AND
CONSTRUCTION.]
In applying and construing this chapter, consideration must
be given to the need to promote uniformity of the law with
respect to its subject matter among states that enact it.
Sec. 102. [321.1202] [SEVERABILITY CLAUSE.]
If any provision of this chapter or its application to any
person or circumstance is held invalid, the invalidity does not
affect other provisions or applications of this chapter which
can be given effect without the invalid provision or
application, and to this end the provisions of this chapter are
severable.
Sec. 103. [321.1203] [RELATION TO ELECTRONIC SIGNATURES IN
GLOBAL AND NATIONAL COMMERCE ACT.]
This chapter modifies, limits, or supersedes the federal
Electronic Signatures in Global and National Commerce Act, 15
U.S.C. Section 7001 et seq., but this chapter does not modify,
limit, or supersede Section 101(c) of that Act or authorize
electronic delivery of any of the notices described in Section
103(b) of that Act.
Sec. 104. [321.1206] [APPLICATION TO EXISTING
RELATIONSHIPS.]
(a) Beginning January 1, 2005, no person may use chapter
322A to form an entity.
(b) Before January 1, 2007, this chapter governs only:
(1) a limited partnership formed on or after January 1,
2005; and
(2) except as otherwise provided in subsection (d):
(i) a limited partnership formed under chapter 322A which
elects, in the manner provided in its partnership agreement or
by law for amending the partnership agreement, to be subject to
this chapter; and
(ii) a limited partnership formed under chapter 322, if the
limited partnership elects pursuant to subsection (f) to be
subject to this chapter.
(c) Except as otherwise provided in subsection (d), on and
after January 1, 2007, this chapter governs:
(1) any limited partnership formed under chapter 322A which
has not previously elected to be governed by this chapter and is
still in existence on January 1, 2007; and
(2) all limited partnerships, including each limited
partnership formed under chapter 322A which has previously
elected to become governed by this chapter and each limited
partnership formed under chapter 322 which has elected,
previously or otherwise, to be governed by this chapter.
(d) With respect to a limited partnership formed before
January 1, 2005, the following rules apply except as the
partners otherwise elect in the manner provided in the
partnership agreement or by law for amending the partnership
agreement:
(1) section 321.104(c) does not apply and the limited
partnership has whatever duration it had under the law
applicable immediately before the limited partnership became
subject to this chapter;
(2) the limited partnership is not required to amend its
certificate of limited partnership to comply with section
321.201(a)(4);
(3) sections 321.601 and 321.602 do not apply and a limited
partner has the same right and power to dissociate from the
limited partnership, with the same consequences, as existed
immediately before the limited partnership became subject to
this chapter;
(4) section 321.603(4) does not apply;
(5) section 321.603(5) does not apply and a court has the
same power to expel a general partner as the court had
immediately before the limited partnership became subject to
this chapter; and
(6) section 321.801(3) does not apply and the connection
between a person's dissociation as a general partner and the
dissolution of the limited partnership is the same as existed
immediately before the limited partnership became subject to
this chapter;
(e) If subsection (c) causes a limited partnership that is
a limited liability limited partnership under section 322A.88 to
become subject to this chapter:
(1) if immediately before the limited partnership that is a
limited liability limited partnership under section 322A.88
became subject to this chapter its name complied with section
322A.02, the limited partnership may maintain its name even if
the name does not comply with section 321.108(c); and
(2) the statement of qualification of the limited
partnership that is a limited liability limited partnership
under section 322A.88, on file with the secretary of state
pursuant to section 322A.88(a)(2), is deemed to amend the
limited partnership's certificate of limited partnership to
state that the limited partnership is a limited liability
limited partnership.
(f) On or after January 1, 2005, a limited partnership
formed under chapter 322 may become subject to this chapter if:
(1) it elects, in the manner provided in its partnership
agreement or by law for amending the partnership agreement, to
be subject to this chapter;
(2) neither its certificate of limited partnership nor its
partnership agreement prohibit the election;
(3) its certificate of limited partnership, on file with
the county recorder, is amended to state the election and, as
may be necessary, to comply with this chapter; and
(4) a certified copy of the amended certificate of limited
partnership, and of all other limited partnership documents
previously filed with the county recorder, is filed with the
secretary of state.
Sec. 105. [321.1207] [SAVINGS CLAUSE.]
This chapter does not affect an action commenced,
proceeding brought, or right accrued before this chapter takes
effect.
Sec. 106. [321.1208] [EFFECT OF DESIGNATION.]
Except as otherwise provided in this chapter, a limited
partnership remains the same entity for purposes of holding
title to or conveying an interest in real or personal property
and for all other purposes:
(1) during the winding up of the limited partnership
following its dissolution;
(2) whether the certificate of limited partnership of a
limited partnership is amended to add or delete a statement that
the limited partnership is a limited liability limited
partnership pursuant to section 406(b)(2); and
(3) regardless of whether the words "limited partnership,"
"limited liability limited partnership," or the designation "LP,"
"L.P.," "LLLP," or "L.L.L.P." are used in an instrument
conveying an interest in real or personal property to or from
the limited partnership or in any other writing.
Sec. 107. [REPEALER.]
Minnesota Statutes 2002, sections 322A.01; 322A.02;
322A.03; 322A.04; 322A.05; 322A.06; 322A.07; 322A.11; 322A.12;
322A.13; 322A.14; 322A.15; 322A.16; 322A.17; 322A.18; 322A.19;
322A.24; 322A.25; 322A.26; 322A.27; 322A.28; 322A.31; 322A.32;
322A.33; 322A.34; 322A.35; 322A.38; 322A.39; 322A.40; 322A.41;
322A.45; 322A.46; 322A.47; 322A.48; 322A.49; 322A.50; 322A.51;
322A.52; 322A.55; 322A.56; 322A.57; 322A.58; 322A.59; 322A.63;
322A.64; 322A.65; 322A.66; 322A.69; 322A.70; 322A.71; 322A.72;
322A.73; 322A.74; 322A.75; 322A.76; 322A.761; 322A.79; 322A.80;
322A.81; 322A.82; 322A.85; 322A.86; 322A.87; and 322A.88, are
repealed effective January 1, 2007.
Sec. 108. [EFFECTIVE DATE.]
This act is effective January 1, 2005.
ARTICLE 13
CONFORMING CHANGES
Sec. 109. Minnesota Statutes 2002, section 5.25,
subdivision 1, is amended to read:
Subdivision 1. [WHO MAY BE SERVED.] A process, notice, or
demand required or permitted by law to be served upon an entity
governed by chapter 221, 302A, 303, 317A, 321, 322A, 322B, 323,
330, 540, or 543 may be served on: (1) the registered agent, if
any; (2) if no agent has been appointed then on an officer,
manager, or general partner of the entity; or (3) if no agent,
officer, manager, or general partner can be found at the address
on file with the secretary of state, the secretary of state as
provided in this section.
Sec. 110. Minnesota Statutes 2002, 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.03 321.109, 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. 111. Minnesota Statutes 2002, section 308A.121,
subdivision 1, is amended to read:
Subdivision 1. [NAME.] The name of a cooperative must
distinguish the cooperative upon the records in the Office of
the Secretary of State from the name of a domestic corporation,
whether profit or nonprofit, or a limited partnership, or a
foreign corporation or a limited partnership authorized or
registered to do business in this state, whether profit or
nonprofit, a limited liability company, whether domestic or
foreign, a limited liability partnership, whether domestic or
foreign, or a name the right to which is, at the time of
incorporation, reserved or provided for in sections 302A.117,
317A.117, 322A.03 321.109, 322B.125, or 333.001 to 333.54.
Sec. 112. Minnesota Statutes 2002, section 317A.115,
subdivision 2, is amended to read:
Subd. 2. [NAME MUST BE DISTINGUISHABLE.] (a) A corporate
name must be distinguishable upon the records in the Office of
the Secretary of State from the name of a domestic corporation
or limited partnership, a foreign corporation or limited
partnership authorized or registered to do business in this
state, whether profit or nonprofit, a limited liability company,
whether domestic or foreign, a limited liability partnership,
whether domestic or foreign, or a name the right to which is, at
the time of incorporation, reserved, registered, or provided for
in section 317A.117, 302A.117, 322A.03 321.109, 322B.125, or
sections 333.001 to 333.54, unless one of the following is filed
with the articles:
(1) the written consent of the organization having the 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 use its
corporate name in this state; or
(3) an affidavit of nonuse of the kind required by section
302A.115, subdivision 1, paragraph (d), clause (3).
(b) The secretary of state shall determine whether a name
is distinguishable from another name for purposes of this
section and section 317A.117.
(c) This subdivision does not affect the right of a
corporation existing on January 1, 1991, or a foreign
corporation authorized to do business in this state on that
date, to use its corporate name.
Sec. 113. Minnesota Statutes 2002, section 322B.12,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENTS AND PROHIBITIONS.] The
limited liability company name must:
(1) be in the English language or in any other language
expressed in English letters or characters;
(2) contain the words "limited liability company," or must
contain the abbreviation "LLC" or, in the case of an
organization formed pursuant to chapter 319B, must meet the
requirements of section 319B.05 applicable to a limited
liability company;
(3) not contain the word corporation or incorporated and
must not contain the abbreviation of either or both of these
words;
(4) not contain a word or phrase that indicates or implies
that it is organized for a purpose other than a legal business
purpose; and
(5) be distinguishable upon the records in the Office of
the Secretary of State from the name of each domestic limited
liability company, limited liability partnership, corporation,
and limited partnership, whether profit or nonprofit, and each
foreign limited liability company, limited liability
partnership, corporation, and limited partnership authorized or
registered to do business in this state, whether profit or
nonprofit, and each name the right to which is, at the time of
organization, reserved as provided for in sections 302A.117,
317A.117, 322A.03 321.109, 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. 114. Minnesota Statutes 2002, section 323A.1-01, is
amended to read:
323A.1-01 [DEFINITIONS.]
In this chapter:
(1) "Business" includes every trade, occupation, and
profession.
(2) "Debtor in bankruptcy" means a person who is the
subject of:
(i) an order for relief under Title 11 of the United States
Code or a comparable order under a successor statute of general
application; or
(ii) a comparable order under federal, state, or foreign
law governing insolvency.
(3) "Distribution" means a transfer of money or other
property from a partnership to a partner in the partner's
capacity as a partner or to the partner's transferee.
(4) "Executed" means signed.
(5) "Filed" or "filed with the secretary of state" means
that a document meeting the applicable requirements of this
chapter, signed, and accompanied by a filing fee of $135, has
been delivered to the secretary of 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.
(6) "Foreign limited liability partnership" means a
partnership that:
(i) is formed under laws other than the laws of this state;
and
(ii) has the status of a limited liability partnership
under those laws.
(7) "Limited liability partnership" means a partnership
that has filed a statement of qualification under section
323A.10-01 and does not have a similar statement in effect in
any other jurisdiction.
(8) "Partnership" means an association of two or more
persons to carry on as co-owners a business for profit,
including a limited liability partnership, formed under section
323A.2-02, predecessor law, or comparable law of another
jurisdiction.
(9) "Partnership agreement" means the agreement, whether
written, oral, or implied, among the partners concerning the
partnership, including amendments to the partnership agreement.
(10) "Partnership at will" means a partnership in which the
partners have not agreed to remain partners until the expiration
of a definite term or the completion of a particular undertaking.
(11) "Partnership interest" or "partner's interest in the
partnership" means all of a partner's interests in the
partnership, including the partner's transferable interest and
all management and other rights.
(12) "Person" means an individual, corporation, business
trust, estate, trust, partnership, association, joint venture,
government, governmental subdivision, agency, or
instrumentality, or any other legal or commercial entity.
(13) "Property" means all property, real, personal, or
mixed, tangible or intangible, or any interest in property.
(14) "Record," "recorded," and "recording" mean that a
certified copy of a statement meeting the applicable
requirements of this chapter as filed with the secretary of
state has been delivered to and filed in the office of the
county recorder or registrar of titles, whichever office
maintains the records for the real property affected by such
statement and, recorded in the Office of the County Recorder in
the county in which the real property affected by the statement
is located or, if the real property is registered land under
chapter 508 or 508A, that the statement is memorialized on the
certificate of title for the affected real that property.
(15) "Signed" means that:
(i) the signature of a person has been written on a
document, as provided in section 645.44, subdivision 14; and
(ii) with respect to a document that may be filed with the
secretary of state, the document has been signed by a person
authorized to do so by this chapter, by the partnership
agreement, or by a resolution approved as provided in the
partnership agreement.
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.
(16) "State" means a state of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, or any
territory or insular possession subject to the jurisdiction of
the United States.
(17) "Statement" means a statement of partnership authority
under section 323A.3-03, a statement of denial under section
323A.3-04, a statement of dissociation under section 323A.7-04,
a statement of dissolution under section 323A.8-05, a statement
of merger under section 323A.9-07, a statement of qualification
under section 323A.10-01, a statement of foreign qualification
under section 323A.11-02, or an amendment or cancellation of any
of the foregoing.
(18) "Transfer" includes an assignment, conveyance, lease,
mortgage, deed, and encumbrance.
ARTICLE 14
OTHER BUSINESS ORGANIZATIONS
Section 1. Minnesota Statutes 2002, section 302A.011,
subdivision 21, is amended to read:
Subd. 21. [PARENT.] "Parent" of a specified corporation
means a corporation or a foreign corporation that directly, or
indirectly through related organizations, owns more than 50
percent of the voting power of the shares entitled to vote for
directors of the specified corporation.
Sec. 2. Minnesota Statutes 2002, section 302A.011,
subdivision 31, is amended to read:
Subd. 31. [SUBSIDIARY.] "Subsidiary" of a specified
corporation means a corporation or a foreign corporation having
more than 50 percent of the voting power of its shares entitled
to vote for directors owned directly, or indirectly through
related organizations, by the specified corporation.
Sec. 3. Minnesota Statutes 2002, section 302A.011,
subdivision 49, is amended to read:
Subd. 49. [INTERESTED SHAREHOLDER.] (a) "Interested
shareholder," when used in reference to any issuing public
corporation, means any person that is (1) the beneficial owner,
directly or indirectly, of ten percent or more of the voting
power of the outstanding shares entitled to vote of the issuing
public corporation or (2) an affiliate or associate of the
issuing public corporation and that, at any time within the
four-year period immediately before the date in question, was
the beneficial owner, directly or indirectly, of ten percent or
more of the voting power of the then outstanding shares entitled
to vote of the issuing public corporation. Notwithstanding
anything stated in this subdivision,
(b) If a person who has not been a beneficial owner of ten
percent or more of the voting power of the outstanding shares
entitled to vote of the issuing public corporation immediately
prior to a repurchase of shares by, or recapitalization of, the
issuing public corporation or similar action shall become a
beneficial owner of ten percent or more of the voting power
solely as a result of the share repurchase, recapitalization, or
similar action, the person shall not be deemed to be the
beneficial owner of ten percent or more of the voting power for
purposes of paragraph (a), clause (1) or (2), unless:
(i) (1) the repurchase, recapitalization, conversion, or
similar action was proposed by or on behalf of, or pursuant to
any agreement, arrangement, relationship, understanding, or
otherwise (whether or not in writing) with, the person or any
affiliate or associate of the person; or
(ii) (2) the person thereafter acquires beneficial
ownership, directly or indirectly, of outstanding shares
entitled to vote of the issuing public corporation and,
immediately after the acquisition, is the beneficial owner,
directly or indirectly, of ten percent or more of the voting
power of the outstanding shares entitled to vote of the issuing
public corporation.
(b) (c) Interested shareholder does not include:
(1) the issuing public corporation or any of its
subsidiaries; or
(2) a savings, employee stock ownership, or other employee
benefit plan of the issuing public corporation or its
subsidiary, or a fiduciary of the plan when acting in a
fiduciary capacity pursuant to the plan.; or
(3) a licensed broker/dealer or licensed underwriter who:
(i) purchases shares of an issuing public corporation
solely for purposes of resale to the public; and
(ii) is not acting in concert with an interested
shareholder.
(d) For purposes of this subdivision, shares beneficially
owned by a plan described in paragraph (c), clause (2), or by a
fiduciary of a plan described in paragraph (c), clause (2),
pursuant to the plan, are not deemed to be beneficially owned by
a person who is a fiduciary of the plan.
Sec. 4. Minnesota Statutes 2002, section 302A.011,
subdivision 51, is amended to read:
Subd. 51. [SHARE ACQUISITION DATE.] "Share acquisition
date," with respect to any person and any issuing public
corporation, means the date that the person first becomes an
interested shareholder of the issuing public corporation;
provided, however, that in the event. Notwithstanding the
foregoing provisions of this subdivision:
(a) if a person becomes, on one or more dates, an
interested shareholder of the issuing public corporation, but
thereafter ceases to be an interested shareholder of the issuing
public corporation, and subsequently again becomes an interested
shareholder, "share acquisition date," with respect to that
person means the date on which the person most recently became
an interested shareholder of the issuing public corporation.;
and
(b) if, on or after August 1, 2004, a person is the
beneficial owner, directly or indirectly, of ten percent or more
of the voting power of the outstanding shares entitled to vote
of the issuing public corporation at the time the issuing public
corporation becomes a publicly held corporation, "share
acquisition date," with respect to that person means the date on
which the person first became the beneficial owner, directly or
indirectly, of ten percent or more of the voting power of the
outstanding shares entitled to vote of the corporation.
Sec. 5. Minnesota Statutes 2002, section 302A.011, is
amended by adding a subdivision to read:
Subd. 63. [CONVERTED ORGANIZATION.] "Converted
organization" means the corporation or domestic limited
liability company resulting from a conversion under sections
302A.681 to 302A.691.
Sec. 6. Minnesota Statutes 2002, section 302A.011, is
amended by adding a subdivision to read:
Subd. 64. [CONVERTING ORGANIZATION.] "Converting
organization" means the corporation or domestic limited
liability company that effects a conversion under sections
302A.681 to 302A.691.
Sec. 7. Minnesota Statutes 2002, section 302A.111,
subdivision 2, is amended to read:
Subd. 2. [STATUTORY PROVISIONS THAT MAY BE MODIFIED ONLY
IN ARTICLES.] The following provisions govern a corporation
unless modified in the articles:
(a) a corporation has general business purposes (section
302A.101);
(b) a corporation has perpetual existence and certain
powers (section 302A.161);
(c) the power to adopt, amend, or repeal the bylaws is
vested in the board (section 302A.181);
(d) a corporation must allow cumulative voting for
directors (section 302A.215, subdivision 2);
(e) the affirmative vote of a majority of directors present
is required for an action of the board (section 302A.237);
(f) a written action by the board taken without a meeting
must be signed by all directors (section 302A.239);
(g) the board may authorize the issuance of securities and
rights to purchase securities (section 302A.401, subdivision 1);
(h) all shares are common shares entitled to vote and are
of one class and one series (section 302A.401, subdivision 2,
clauses (a) and (b));
(i) all shares have equal rights and preferences in all
matters not otherwise provided for by the board (section
302A.401, subdivision 2, clause (b));
(j) the par value of shares is fixed at one cent per share
for certain purposes and may be fixed by the board for certain
other purposes (section 302A.401, subdivision 2, clause (c));
(k) the board or the shareholders may issue shares for any
consideration or for no consideration to effectuate share
dividends, divisions, or combinations, and determine the value
of nonmonetary consideration (section 302A.405, subdivision 1);
(l) shares of a class or series must not be issued to
holders of shares of another class or series to effectuate share
dividends, divisions, or combinations, unless authorized by a
majority of the voting power of the shares of the same class or
series as the shares to be issued (section 302A.405, subdivision
1);
(m) a corporation may issue rights to purchase securities
whose terms, provisions, and conditions are fixed by the board
(section 302A.409);
(n) a shareholder has certain preemptive rights, unless
otherwise provided by the board (section 302A.413);
(o) the affirmative vote of the holders of a majority of
the voting power of the shares present and entitled to vote at a
duly held meeting is required for an action of the shareholders,
except where this chapter requires the affirmative vote of a
plurality of the votes cast (section 302A.215, subdivision 1) or
a majority of the voting power of all shares entitled to vote
(section 302A.437, subdivision 1);
(p) shares of a corporation acquired by the corporation may
be reissued (section 302A.553, subdivision 1);
(q) each share has one vote unless otherwise provided in
the terms of the share (section 302A.445, subdivision 3);
(r) a corporation may issue shares for a consideration less
than the par value, if any, of the shares (section 302A.405,
subdivision 2); and
(s) the board may effect share dividends, divisions, and
combinations under certain circumstances without shareholder
approval (section 302A.402); and
(t) a written action of shareholders must be signed by all
shareholders (section 302A.441).
Sec. 8. Minnesota Statutes 2002, section 302A.137, is
amended to read:
302A.137 [CLASS OR SERIES VOTING ON AMENDMENTS.]
The holders of the outstanding shares of a class or series
are entitled to vote as a class or series upon a proposed
amendment, whether or not entitled to vote thereon by the
provisions of the articles, if the amendment would:
(a) Increase or decrease the aggregate number of authorized
shares of the class or series;
(b) effect an exchange, reclassification, or cancellation
of all or part of the shares of the class or series, or effect a
combination of outstanding shares of a class or series into a
lesser number of shares of the class or series where each other
class and series is not subject to a similar combination;
(c) (b) effect an exchange, or create a right of exchange,
of all or any part of the shares of another class or series for
the shares of the class or series;
(d) (c) change the rights or preferences of the shares of
the class or series;
(e) Change the shares of the class or series, whether with
or without par value, into the same or a different number of
shares, either with or without par value, of another class or
series;
(f) (d) create a new class or series of shares having
rights and preferences prior and superior to the shares of that
class or series, or increase the rights and preferences or the
number of authorized shares, of a class or series having rights
and preferences prior or superior to the shares of that class or
series;
(g) (e) divide the shares of the class into series and
determine the designation of each series and the variations in
the relative rights and preferences between the shares of each
series, or authorize the board to do so;
(h) (f) limit or deny any existing preemptive rights of the
shares of the class or series; or
(i) (g) cancel or otherwise affect distributions on the
shares of the class or series that have accrued but have not
been declared.
Sec. 9. Minnesota Statutes 2002, section 302A.215, is
amended to read:
302A.215 [CUMULATIVE VOTING FOR DIRECTORS; CUMULATIVE
VOTING.]
Subdivision 1. [REQUIRED VOTE.] Unless otherwise provided
in the articles, directors are elected by a plurality of the
voting power of the shares present and entitled to vote on the
election of directors at a meeting at which a quorum is present.
Subd. 2. [CUMULATIVE VOTING RIGHTS.] Unless the articles
provide that there shall be no cumulative voting, and except as
provided in section 302A.223, subdivision 5, each shareholder
entitled to vote for directors has the right to cumulate those
votes in the election of directors by giving written notice of
intent to cumulate those votes to any officer of the corporation
before the meeting, or to the presiding officer at the meeting
at which the election is to occur at any time before the
election of directors at the meeting, in which case:
(a) The presiding officer at the meeting shall announce,
before the election of directors, that shareholders shall
cumulate their votes; and
(b) Each shareholder shall cumulate those votes either by
casting for one candidate the number of votes equal to the
number of directors to be elected multiplied by the number of
votes represented by the shares, or by distributing all of those
votes on the same principle among any number of candidates.
Subd. 2. 3. [MODIFICATIONS OF CUMULATIVE VOTING.] No
amendment to the articles or bylaws which that has the effect of
denying, limiting, or modifying the right to cumulative voting
for directors provided in this section shall be adopted if the
votes of a proportion of the voting power sufficient to elect a
director at an election of the entire board under cumulative
voting are cast against the amendment.
Sec. 10. Minnesota Statutes 2002, section 302A.231,
subdivision 4, is amended to read:
Subd. 4. [CALLING MEETINGS; NOTICE.] (a) Unless the
articles or bylaws provide for a different time period, a
director may call a board meeting by giving at least ten days'
notice or, in the case of organizational meetings pursuant to
section 302A.171, subdivision 2, at least three days' notice, to
all directors of the date, time, and place of the meeting. The
notice need not state the purpose of the meeting unless the
articles or bylaws require it.
(b) Any notice to a director given under any provision of
this chapter, the articles, or the bylaws by a form of
electronic communication consented to by the director to whom
the notice is given is effective when given. The notice is
deemed given if by:
(1) facsimile communication, when directed to a telephone
number at which the director has consented to receive notice;
(2) electronic mail, when directed to an electronic mail
address at which the director has consented to receive notice;
and
(3) any other form of electronic communication by which the
director has consented to receive notice, when directed to the
director.
(c) Consent by a director to notice given by electronic
communication may be given in writing or by authenticated
electronic communication. Any consent so given may be relied
upon until revoked by the director, provided that no revocation
affects the validity of any notice given before receipt of
revocation of the consent.
Sec. 11. Minnesota Statutes 2002, section 302A.231,
subdivision 6, is amended to read:
Subd. 6. [WAIVER OF NOTICE.] A director may waive notice
of a meeting of the board. A waiver of notice by a director
entitled to notice is effective whether given before, at, or
after the meeting, and whether given in writing, orally, by
authenticated electronic communication, or by attendance.
Attendance by a director at a meeting is a waiver of notice of
that meeting, except where the director objects at the beginning
of the meeting to the transaction of business because the
meeting is not lawfully called or convened and does not
participate thereafter in the meeting.
Sec. 12. Minnesota Statutes 2002, section 302A.401,
subdivision 3, is amended to read:
Subd. 3. [PROCEDURE FOR FIXING TERMS.] (a) Subject to any
restrictions in the articles, the power granted in subdivision 2
may be exercised by a resolution or resolutions approved by the
affirmative vote of the directors required by section 302A.237
establishing a class or series, setting forth the designation of
the class or series, and fixing the relative rights and
preferences of the class or series. 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) Filing 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.135, 302A.137, and
302A.471. Filing an amendment of such a statement with the
secretary of state is considered an amendment of the articles
for purposes of sections 302A.135, 302A.137, and 302A.471.
Sec. 13. Minnesota Statutes 2002, section 302A.402,
subdivision 2, is amended to read:
Subd. 2. [WHEN SHAREHOLDER APPROVAL REQUIRED; FILING OF
ARTICLES OF AMENDMENT.] (a) Articles of amendment must be
adopted by the board and the shareholders under sections section
302A.135 and, if required, section 302A.137 to effect a division
or combination if, as a result of the proposed division or
combination:
(1) the rights or preferences of the holders of outstanding
shares of any class or series will be adversely affected; or
(2) the percentage of authorized shares of any class or
series remaining unissued after the division or combination will
exceed the percentage of authorized shares of that class or
series that were unissued before the division or combination.
(b) If a division or combination is effected under this
subdivision, articles of amendment must be prepared that contain
the information required by section 302A.139.
Sec. 14. Minnesota Statutes 2002, section 302A.437,
subdivision 1, is amended to read:
Subdivision 1. [MAJORITY REQUIRED.] Except for the
election of directors, which is governed by section 302A.215,
the shareholders shall take action by the affirmative vote of
the holders of the greater of (1) a majority of the voting power
of the shares present and entitled to vote on that item of
business, or (2) a majority of the voting power of the minimum
number of the shares entitled to vote that would constitute a
quorum for the transaction of business at the meeting, except
where this chapter or the articles require a larger proportion
or number. If the articles require a larger proportion or
number than is required by this chapter for a particular action,
the articles control.
Sec. 15. Minnesota Statutes 2002, section 302A.441, is
amended to read:
302A.441 [ACTION WITHOUT A MEETING.]
Subdivision 1. [METHOD.] An action required or permitted
to be taken at a meeting of the shareholders may be taken
without a meeting by written action signed, or consented to by
authenticated electronic communication, by all of the
shareholders entitled to vote on that action. The articles of a
corporation that is not a publicly held corporation may provide
that any action may be taken by written action signed, or
consented to by authenticated electronic communication, by
shareholders having voting power equal to the voting power that
would be required to take the same action at a meeting of the
shareholders at which all shareholders were present. After the
adoption of the initial articles, an amendment to the articles
to permit written action to be taken by less than all
shareholders requires the approval of all of the shareholders
entitled to vote on the amendment.
Subd. 2. [EFFECTIVE TIME.] The written action is effective
when it has been signed, or consented to by authenticated
electronic communication, by all of those the required
shareholders, unless a different effective time is provided in
the written action.
Subd. 3. [NOTICE AND LIABILITY.] When written action is
permitted to be taken by less than all shareholders, all
shareholders must be notified of its text and effective time no
later than five days after the effective time of the action.
Failure to provide the notice does not invalidate the written
action. A shareholder who does not sign or consent to the
written action has no liability for any action authorized by the
written action.
Sec. 16. Minnesota Statutes 2002, section 302A.471,
subdivision 1, is amended to read:
Subdivision 1. [ACTIONS CREATING RIGHTS.] A shareholder of
a corporation may dissent from, and obtain payment for the fair
value of the shareholder's shares in the event of, any of the
following corporate actions:
(a) unless otherwise provided in the articles, an amendment
of the articles that materially and adversely affects the rights
or preferences of the shares of the dissenting shareholder in
that it:
(1) alters or abolishes a preferential right of the shares;
(2) creates, alters, or abolishes a right in respect of the
redemption of the shares, including a provision respecting a
sinking fund for the redemption or repurchase of the shares;
(3) alters or abolishes a preemptive right of the holder of
the shares to acquire shares, securities other than shares, or
rights to purchase shares or securities other than shares;
(4) excludes or limits the right of a shareholder to vote
on a matter, or to cumulate votes, except as the right may be
excluded or limited through the authorization or issuance of
securities of an existing or new class or series with similar or
different voting rights; except that an amendment to the
articles of an issuing public corporation that provides that
section 302A.671 does not apply to a control share acquisition
does not give rise to the right to obtain payment under this
section; or
(5) eliminates the right to obtain payment under this
subdivision;
(b) a sale, lease, transfer, or other disposition of all or
substantially all of the property and assets of the corporation,
but not including a transaction permitted without shareholder
approval in that requires shareholder approval under section
302A.661, subdivision 1, or 2, but not including a disposition
in dissolution described in section 302A.725, subdivision 2, or
a disposition pursuant to an order of a court, or a disposition
for cash on terms requiring that all or substantially all of the
net proceeds of disposition be distributed to the shareholders
in accordance with their respective interests within one year
after the date of disposition;
(c) a plan of merger, whether under this chapter or under
chapter 322B, to which the corporation is a constituent
organization, except as provided in subdivision 3, and except
for a plan of merger adopted under section 302A.626;
(d) a plan of exchange, whether under this chapter or under
chapter 322B, to which the corporation is a party as the
corporation whose shares will be acquired by the acquiring
corporation, except as provided in subdivision 3; or
(e) a plan of conversion adopted by the corporation; or
(f) any other corporate action taken pursuant to a
shareholder vote with respect to which the articles, the bylaws,
or a resolution approved by the board directs that dissenting
shareholders may obtain payment for their shares.
Sec. 17. Minnesota Statutes 2002, section 302A.471,
subdivision 3, is amended to read:
Subd. 3. [RIGHTS NOT TO APPLY.] (a) Unless the articles,
the bylaws, or a resolution approved by the board otherwise
provide, the right to obtain payment under this section does not
apply to a shareholder of (1) the surviving corporation in a
merger with respect to shares of the shareholder that are not
entitled to be voted on the merger and are not canceled or
exchanged in the merger or (2) the corporation whose shares will
be acquired by the acquiring corporation in a plan of exchange
with respect to shares of the shareholder that are not entitled
to be voted on the plan of exchange and are not exchanged in the
plan of exchange.
(b) If a date is fixed according to section 302A.445,
subdivision 1, for the determination of shareholders entitled to
receive notice of and to vote on an action described in
subdivision 1, only shareholders as of the date fixed, and
beneficial owners as of the date fixed who hold through
shareholders, as provided in subdivision 2, may exercise
dissenters' rights.
(c) Notwithstanding subdivision 1, the right to obtain
payment under this section, other than in connection with a plan
of merger adopted under section 302A.621, is limited in
accordance with the following provisions:
(1) The right to obtain payment under this section is not
available for the holders of shares of any class or series of
shares that is listed on the New York Stock Exchange or the
American Stock Exchange or designated as a national market
system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc.
(2) The applicability of clause (1) is determined as of:
(i) the record date fixed to determine the shareholders
entitled to receive notice of, and to vote at, the meeting of
shareholders to act upon the corporate action described in
subdivision 1; or
(ii) the day before the effective date of corporate action
described in subdivision 1 if there is no meeting of
shareholders.
(3) Clause (1) is not applicable, and the right to obtain
payment under this section is available pursuant to subdivision
1, for the holders of any class or series of shares who are
required by the terms of the corporate action described in
subdivision 1 to accept for such shares anything other than
shares, or cash in lieu of fractional shares, of any class or
any series of shares of the corporation, or any other
proprietary interest of any other entity, that satisfies the
standards set forth in clause (1) at the time the corporate
action becomes effective.
Sec. 18. Minnesota Statutes 2002, section 302A.473,
subdivision 3, is amended to read:
Subd. 3. [NOTICE OF DISSENT.] If the proposed action must
be approved by the shareholders and the corporation holds a
shareholder meeting, 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. 19. Minnesota Statutes 2002, section 302A.473,
subdivision 4, is amended to read:
Subd. 4. [NOTICE OF PROCEDURE; DEPOSIT OF SHARES.] (a)
After the proposed action has been approved by the board and, if
necessary, the shareholders, the corporation shall send to (i)
all shareholders who have complied with subdivision 3, (ii) all
shareholders who did not sign or consent to a written action
that gave effect to the action creating the right to obtain
payment under section 302A.471, and to (iii) all shareholders
entitled to dissent if no shareholder vote was required, a
notice that contains:
(1) the address to which a demand for payment and
certificates of certificated shares must be sent in order to
obtain payment and the date by which they must be received;
(2) any restrictions on transfer of uncertificated shares
that will apply after the demand for payment is received;
(3) a form to be used to certify the date on which the
shareholder, or the beneficial owner on whose behalf the
shareholder dissents, acquired the shares or an interest in them
and to demand payment; and
(4) a copy of section 302A.471 and this section and a brief
description of the procedures to be followed under these
sections.
(b) In order to receive the fair value of the shares, a
dissenting shareholder must demand payment and deposit
certificated shares or comply with any restrictions on transfer
of uncertificated shares within 30 days after the notice
required by paragraph (a) was given, but the dissenter retains
all other rights of a shareholder until the proposed action
takes effect.
Sec. 20. Minnesota Statutes 2002, section 302A.521,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the terms defined in this subdivision have the meanings
given them.
(b) "Corporation" includes a domestic or foreign
corporation that was the predecessor of the corporation referred
to in this section in a merger or other transaction in which the
predecessor's existence ceased upon consummation of the
transaction.
(c) "Official capacity" means (1) with respect to a
director, the position of director in a corporation, (2) with
respect to a person other than a director, the elective or
appointive office or position held by an officer, member of a
committee of the board, or the employment relationship
undertaken by an employee of the corporation, and (3) with
respect to a director, officer, or employee of the corporation
who, while a director, officer, or employee of the corporation,
is or was serving at the request of the corporation or whose
duties in that position involve or involved service as a
director, officer, partner, trustee, governor, manager,
employee, or agent of another organization or employee benefit
plan, the position of that person as a director, officer,
partner, trustee, governor, manager, employee, or agent, as the
case may be, of the other organization or employee benefit plan.
(d) "Proceeding" means a threatened, pending, or completed
civil, criminal, administrative, arbitration, or investigative
proceeding, including a proceeding by or in the right of the
corporation.
(e) "Special legal counsel" means counsel who has not
represented the corporation or a related organization, or a
director, officer, member of a committee of the board, or
employee, whose indemnification is in issue.
Sec. 21. Minnesota Statutes 2002, section 302A.651,
subdivision 1, is amended to read:
Subdivision 1. [WHEN PERMITTED.] A domestic corporation
may merge with, including a merger pursuant to section 302A.621,
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 jurisdiction 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 jurisdiction
under which the foreign corporation or limited liability company
is incorporated or organized.
Sec. 22. Minnesota Statutes 2002, section 302A.661,
subdivision 2, is amended to read:
Subd. 2. [SHAREHOLDER APPROVAL; WHEN REQUIRED.] (a) A
corporation, by affirmative vote of a majority of the directors
present, may sell, lease, transfer, or otherwise dispose of all
or substantially all of its property and assets, including its
good will, not in the usual and regular course of its business,
upon those terms and conditions and for those considerations,
which may be money, securities, or other instruments for the
payment of money or other property, as the board deems
expedient, when approved at a regular or special meeting of the
shareholders by the affirmative vote of the holders of a
majority of the voting power of the shares entitled to vote.
Written notice of the meeting shall be given to all shareholders
whether or not they are entitled to vote at the meeting. The
written notice shall state that a purpose of the meeting is to
consider the sale, lease, transfer, or other disposition of all
or substantially all of the property and assets of the
corporation.
(b) Shareholder approval is not required under paragraph
(a) if, following the sale, lease, transfer, or other
disposition of its property and assets, the corporation retains
a significant continuing business activity. If a corporation
retains a business activity that represented at least (1) 25
percent of the corporation's total assets at the end of the most
recently completed fiscal year and (2) 25 percent of either
income from continuing operations before taxes or revenues from
continuing operations for that fiscal year, measured on a
consolidated basis with its subsidiaries for each of clauses (1)
and (2), then the corporation will conclusively be deemed to
have retained a significant continuing business activity.
Sec. 23. [302A.681] [CONVERSION OF CORPORATIONS AND
LIMITED LIABILITY COMPANIES.]
Subdivision 1. [CONVERSIONS AUTHORIZED.] A corporation may
become a domestic limited liability company, and a domestic
limited liability company may become a corporation, in each case
pursuant to a plan of conversion.
Subd. 2. [CERTAIN DEFINITIONS.] (a) For purposes of
sections 302A.681 to 302A.691, the words, terms, and phrases in
paragraphs (b) to (h) have the meanings given them.
(b) "Articles of organization" has the same meaning as it
does under section 322B.03, subdivision 6.
(c) "Board of governors" has the same meaning as it does
under section 322B.03, subdivision 7.
(d) "Class," when used with reference to membership
interests, has the same meaning as it does under section
322B.03, subdivision 10.
(e) "Governor" has the same meaning as it does under
section 322B.03, subdivision 24.
(f) "Member" has the same meaning as it does under section
322B.03, subdivision 30.
(g) "Membership interest" has the same meaning as it does
under section 322B.03, subdivision 31.
(h) "Series," when used with reference to membership
interests, has the same meaning as it does under section
322B.03, subdivision 44.
Sec. 24. [302A.683] [PLAN OF CONVERSION.]
A plan of conversion must contain:
(1) the name of the converting organization;
(2) the name of the converted organization;
(3) whether the converted organization is a corporation or
a limited liability company;
(4) the terms and conditions of the proposed conversion;
(5) the manner and basis of converting each ownership
interest in the converting organization into ownership interests
in the converted organization or, in whole or in part, into
money or other property;
(6) a copy of the proposed articles of incorporation or
articles of organization of the converted organization; and
(7) any other provisions with respect to the proposed
conversion that are deemed necessary or desirable.
Sec. 25. [302A.685] [PLAN APPROVAL.]
Subdivision 1. [BOARD APPROVAL; NOTICE TO OWNERS.] A
resolution containing the plan of conversion must be approved by
the affirmative vote of a majority of the directors or governors
present at a meeting of the board of directors or the board of
governors of the converting organization and must then be
submitted at a regular or a special meeting to the owners of the
converting organization. Written notice must be given to every
owner of the converting organization, 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 a meeting of shareholders or in the manner
provided in section 322B.34 for notice of a meeting of members.
The written notice must state that a purpose of the meeting is
to consider the proposed plan of conversion. A copy or short
description of the plan of conversion must be included in or
enclosed with the notice.
Subd. 2. [APPROVAL BY OWNERS.] At the meeting, a vote of
the owners must be taken on the proposed plan. The plan of
conversion is adopted when approved by the affirmative vote of
the holders of a majority of the voting power of all shares or
membership interests entitled to vote. A class or series of
shares or membership interests is entitled to vote as a class or
series on the approval of the plan.
Sec. 26. [302A.687] [ARTICLES OF CONVERSION.]
Subdivision 1. [CONTENTS OF ARTICLES.] Upon receiving the
approval required by section 302A.685, articles of conversion
must be prepared that contain:
(1) the plan of conversion;
(2) the name of the converting organization immediately
before the filing of the articles of conversion and the name to
which the name of the converting organization is to be changed,
which shall be a name that satisfies the laws applicable to the
converted organization;
(3) the type of organization that the converted
organization will be;
(4) a statement that the plan of conversion has been
approved by the converting organization under section 302A.685;
and
(5) a copy of the articles of incorporation or the articles
of organization of the converted organization.
Subd. 2. [ARTICLES SIGNED, FILED.] The articles of
conversion must be signed on behalf of the converting
organization and filed with the secretary of state. Filing of
the articles of conversion is also deemed to be a filing with
the secretary of state of the articles of incorporation or the
articles of organization of the converted organization.
Subd. 3. [CERTIFICATE.] The secretary of state shall issue
a certificate of conversion and a certificate of incorporation
or a certificate of organization to the converted organization
or its legal representative.
Sec. 27. [302A.689] [ABANDONMENT OF CONVERSION.]
Subdivision 1. [BY SHAREHOLDERS OR PLAN.] After a plan of
conversion has been approved by the owners entitled to vote on
the approval of the plan as provided in section 302A.685, and
before the effective date of the plan, it may be abandoned:
(1) if the owners of the converting organization entitled
to vote on the approval of the plan as provided in section
302A.685 have approved the abandonment at a meeting by the
affirmative vote of the holders of a majority of the voting
power of the shares or membership interests entitled to vote;
(2) if the plan itself provides for abandonment and all
conditions for abandonment set forth in the plan are met; or
(3) pursuant to subdivision 2.
Subd. 2. [BY BOARD.] A plan of conversion may be
abandoned, before the effective date of the plan, by a
resolution of the board of directors or the board of governors
of the converting organization abandoning the plan of conversion
approved by the affirmative vote of a majority of the directors
or governors present.
Subd. 3. [FILING OF ARTICLES.] If articles of conversion
have been filed with the secretary of state, but have not yet
become effective, the converting organization shall file with
the secretary of state articles of abandonment that contain:
(1) the name of the converting organization;
(2) the provision of this section under which the plan is
abandoned; and
(3) if the plan is abandoned under subdivision 2, the text
of the resolution abandoning the plan.
Sec. 28. [302A.691] [EFFECTIVE DATE OR TIME OF CONVERSION;
EFFECT.]
Subdivision 1. [EFFECTIVE DATE OR TIME.] A conversion is
effective when the articles of conversion are filed with the
secretary of state or on a later date or at a later time
specified in the articles of conversion.
Subd. 2. [EFFECT ON ORGANIZATION.] (a) A converted
organization is for all purposes the same organization as the
converting organization, having been incorporated or organized
on the date that the converting organization was originally
incorporated or organized.
(b) When a conversion becomes effective:
(1) if the converted organization is a corporation, the
converted organization has all the rights, privileges,
immunities, and powers, and is subject to all the duties and
liabilities, of a corporation incorporated under this chapter;
(2) if the converted organization is a limited liability
company, the converted organization has all the rights,
privileges, immunities, and powers, and is subject to all the
duties and liabilities, of a limited liability company organized
under chapter 322B;
(3) all property owned by the converting organization
remains vested in the converted organization;
(4) all debts, liabilities, and other obligations of the
converting organization continue as obligations of the converted
organization;
(5) an action or proceeding pending by or against the
converting organization may be continued as if the conversion
had not occurred; and
(6) all rights, privileges, immunities, and powers of the
converting organization remain vested in the converted
organization.
Subd. 3. [EFFECT ON SHAREHOLDERS OR MEMBERS.] When a
conversion becomes effective, each share or membership interest
in the converting organization is deemed to be converted into
shares or membership interests in the converted organization or,
in whole or in part, into money or other property to be received
under the plan by the shareholders or the members, subject to
any dissenters' rights under section 302A.471, in the case of
shareholders of the converting organization, or section
322B.383, in the case of members of the converting organization.
Sec. 29. Minnesota Statutes 2002, section 302A.723,
subdivision 1, is amended to read:
Subdivision 1. [CONTENTS.] If dissolution of the
corporation is approved pursuant to section 302A.721,
subdivision 2, the corporation shall file with the secretary of
state a notice of intent to dissolve. The notice shall contain:
(a) the name of the corporation;
(b) the date and place of the meeting at which the
resolution was approved pursuant to section 302A.721,
subdivision 2; and
(c) a statement that the requisite vote of the shareholders
was received, or that all the requisite shareholders entitled to
vote signed a written action.
Sec. 30. Minnesota Statutes 2002, section 317A.011, is
amended by adding a subdivision to read:
Subd. 3b. [BALLOT.] "Ballot" means a written ballot or a
ballot transmitted by electronic communication.
Sec. 31. Minnesota Statutes 2002, section 317A.011,
subdivision 14, is amended to read:
Subd. 14. [NOTICE.] (a) "Notice" is given by a member of a
corporation to the corporation or an officer of the corporation
when in writing and mailed or delivered to the corporation or
the officer at the registered office of the corporation.
(b) Notice is given by the corporation to a director,
officer, member, or other person:
(1) when mailed to the person at an address designated by
the person, at the last known address of the person or, in the
case of a director, officer, or member, at the address of the
person in the corporate records;
(2) when communicated to the person orally;
(3) when handed to the person;
(4) when left at the office of the person with a clerk or
other person in charge of the office, or if there is no one in
charge, when left in a conspicuous place in the office;
(5) if the person's office is closed or the person to be
notified has no office, when left at the dwelling or usual place
of abode of the person with a person of suitable age and
discretion residing in the house; or
(6) when provided to the person by means of electronic
communication as provided under section 317A.231 or 317A.450; or
(7) when the method is fair and reasonable when all the
circumstances are considered.
(c) Notice by mail is given when deposited in the United
States mail with sufficient postage. Notice is considered
received when it is given.
Sec. 32. Minnesota Statutes 2002, section 317A.231,
subdivision 4, is amended to read:
Subd. 4. [CALLING MEETINGS; NOTICE.] (a) Unless the
articles or bylaws provide otherwise, a director may call a
board meeting by giving five days' notice to all directors of
the date, time, and place of the meeting. The notice need not
state the purpose of the meeting unless the articles or bylaws
require it.
(b) If the day or date, time, and place of a board meeting
have been provided in the articles or bylaws, or announced at a
previous meeting of the board, notice is not required. Notice
of an adjourned meeting need not be given other than by
announcement at the meeting at which adjournment is taken.
(c) Any notice to a director given under any provision of
this chapter, the articles, or the bylaws by a form of
electronic communication consented to by the director to whom
the notice is given is effective when given. The notice is
deemed given if by:
(1) facsimile communication, when directed to a telephone
number at which the director has consented to receive notice;
(2) electronic mail, when directed to an electronic mail
address at which the director has consented to receive notice;
(3) a posting on an electronic network on which the
director has consented to receive notice, together with a
separate notice to the director of the specific posting, upon
the later of:
(i) the posting; or
(ii) the giving of the separate notice; and
(4) any other form of electronic communication by which the
director has consented to receive notice, when directed to the
director.
An affidavit of the secretary, other authorized officer, or
authorized agent of the corporation, that the notice has been
given by a form of electronic communication is, in the absence
of fraud, prima facie evidence of the facts stated in the
affidavit.
(d) Consent by a director to notice given by electronic
communication may be given in writing or by authenticated
electronic communication. Any consent so given may be relied
upon until revoked by the director, provided that no revocation
affects the validity of any notice given before receipt of
revocation of the consent.
Sec. 33. Minnesota Statutes 2002, section 317A.231,
subdivision 5, is amended to read:
Subd. 5. [WAIVER OF NOTICE.] A director may waive notice
of a meeting of the board. A waiver of notice by a director
entitled to notice is effective whether given before, at, or
after the meeting, and whether given in writing, orally, by
authenticated electronic communication, or by attendance.
Attendance by a director at a meeting is a waiver of notice of
that meeting, unless the director objects at the beginning of
the meeting to the transaction of business because the meeting
is not lawfully called or convened and does not participate in
the meeting.
Sec. 34. Minnesota Statutes 2003 Supplement, section
317A.443, subdivision 2, is amended to read:
Subd. 2. [METHODS.] Unless otherwise provided in the
articles or bylaws, members may take action at a meeting by
voice or ballot, by unanimous action without a meeting under
section 317A.445, by written ballot under section 317A.447, or
by electronic remote communication under section 317A.450.
Sec. 35. Minnesota Statutes 2002, section 317A.447, is
amended to read:
317A.447 [ACTION BY WRITTEN BALLOT.]
(a) Except as provided in paragraph (e) and unless
prohibited or limited by the articles or bylaws, an action that
may be taken at a regular or special meeting of members may be
taken without a meeting if the corporation mails or otherwise
delivers a written ballot to every member entitled to vote on
the matter. A corporation may deliver a ballot by electronic
communication only if the corporation complies with section
317A.450, subdivision 5, as if the ballot were a notice.
Consent by a member to receive notice by electronic
communication in a certain manner constitutes consent to receive
a ballot by electronic communication in the same manner.
(b) A written ballot must:
(1) set forth each proposed action; and
(2) provide an opportunity to vote for or against each
proposed action.
(c) Approval by written ballot under this section is valid
only if the number of votes cast by ballot equals or exceeds the
quorum required to be present at a meeting authorizing the
action, and the number of approvals equals or exceeds the number
of votes that would be required to approve the matter at a
meeting at which the total number of votes cast was the same as
the number of votes cast by ballot.
(d) Solicitations for votes by written ballot must:
(1) indicate the number of responses needed to meet the
quorum requirements;
(2) state the percentage of approvals necessary to approve
each matter other than election of directors; and
(3) specify the time by which a ballot must be received by
the corporation in order to be counted.
(e) Except as otherwise provided in the articles or bylaws,
a written ballot may not be revoked.
(f) A ballot delivered to the corporation by electronic
communication is valid only if authenticated as provided in
section 317A.011, subdivision 3a.
Sec. 36. Minnesota Statutes 2002, section 322B.03,
subdivision 36a, is amended to read:
Subd. 36a. [PARENT.] "Parent" of a specified limited
liability company means a limited liability company or a foreign
limited liability company that directly or indirectly through
related organizations owns more than 50 percent of the voting
power of the membership interests entitled to vote for governors
of the specified limited liability company.
Sec. 37. Minnesota Statutes 2002, section 322B.03,
subdivision 45a, is amended to read:
Subd. 45a. [SUBSIDIARY.] "Subsidiary" of a specified
limited liability company means a limited liability company or a
foreign limited liability company having more than 50 percent of
the voting power of its membership interests entitled to vote
for governors owned directly or indirectly through related
organizations by the specified limited liability company.
Sec. 38. Minnesota Statutes 2002, section 322B.115,
subdivision 2, is amended to read:
Subd. 2. [STATUTORY PROVISIONS THAT MAY BE MODIFIED ONLY
IN ARTICLES OF ORGANIZATION OR A MEMBER CONTROL AGREEMENT.] The
following provisions govern a limited liability company unless
modified in the articles of organization or a member control
agreement under section 322B.37:
(1) a limited liability company has general business
purposes (section 322B.10);
(2) a limited liability company has certain powers (section
322B.20);
(3) the power to adopt, amend, or repeal the bylaws is
vested in the board of governors (section 322B.603);
(4) a limited liability company must allow cumulative
voting for governors (section 322B.63, subdivision 2);
(5) the affirmative vote of a majority of governors present
is required for an action of the board of governors (section
322B.653);
(6) a written action by the board of governors taken
without a meeting must be signed by all governors (section
322B.656);
(7) the board may accept contributions, make contribution
agreements, and make contribution allowance agreements (sections
322B.40, subdivision 1; 322B.42; and 322B.43);
(8) all membership interests are ordinary membership
interests entitled to vote and are of one class with no series
(section 322B.40, subdivision 5, clauses (1) and (2));
(9) all membership interests have equal rights and
preferences in all matters not otherwise provided for by the
board of governors (section 322B.40, subdivision 5, clause (2));
(10) the value of previous contributions is to be restated
when a new contribution is accepted (section 322B.41);
(11) a member has certain preemptive rights, unless
otherwise provided by the board of governors (section 322B.33);
(12) the affirmative vote of the owners of a majority of
the voting power of the membership interests present and
entitled to vote at a duly held meeting is required for an
action of the members, except where this chapter requires the
affirmative vote of a plurality of the votes cast (section
322B.63, subdivision 1) or a majority of the voting power of all
membership interests entitled to vote (section 322B.35,
subdivision 1);
(13) the voting power of each membership interest is in
proportion to the value reflected in the required records of the
contributions of the members (section 322B.356);
(14) members share in distributions in proportion to the
value reflected in the required records of the contributions of
members (section 322B.50);
(15) members share profits and losses in proportion to the
value reflected in the required records of the contributions of
members (section 322B.326);
(16) a written action by the members taken without a
meeting must be signed by all members (section 322B.35);
(17) members have no right to receive distributions in kind
and the limited liability company has only limited rights to
make distributions in kind (section 322B.52);
(18) a member is not subject to expulsion (section
322B.306, subdivision 2);
(19) unanimous consent is required for the transfer of
governance rights to a person not already a member (section
322B.313, subdivision 2);
(20) for limited liability companies whose existence begins
before August 1, 1999, unanimous consent is required to avoid
dissolution (section 322B.80, subdivision 1, clause (5)(i));
(21) the termination of a person's membership interest has
specified consequences (section 322B.306); and
(22) restrictions apply to the assignment of governance
rights (section 322B.313).
Sec. 39. Minnesota Statutes 2002, section 322B.155, is
amended to read:
322B.155 [CLASS OR SERIES VOTING ON AMENDMENTS.]
The owners of the outstanding membership interests of a
class or series are entitled to vote as a class or series upon a
proposed amendment to the articles of organization, whether or
not entitled to vote on the amendment by the provisions of the
articles of organization, if the amendment would:
(1) effect an exchange, reclassification, or cancellation
of all or part of the membership interests of the class or
series, or effect a combination of outstanding membership
interests of a class or series into a lesser number of
membership interests of the class or series where each other
class or series is not subject to a similar combination;
(2) effect an exchange, or create a right of exchange, of
all or any part of the membership interests of another class or
series for the membership interests of the class or series;
(3) change the rights or preferences of the membership
interests of the class or series;
(4) change the membership interests of the class or series
into the same or a different number of membership interests of
another class or series;
(5) create a new class or series of membership interests
having rights and preferences prior and superior to the
membership interests of that class or series, or increase the
rights and preferences or the number of membership interests, of
a class or series having rights and preferences prior or
superior to the membership interests of that class or series;
(6) (5) divide the membership interests of the class into
series and determine the designation of each series and the
variations in the relative rights and preferences between the
membership interests of each series or authorize the board of
governors to do so;
(7) (6) limit or deny any existing preemptive rights of the
membership interests of the class or series; or
(8) (7) cancel or otherwise affect distributions on the
membership interests of the class or series.
Sec. 40. Minnesota Statutes 2002, section 322B.346,
subdivision 1, is amended to read:
Subdivision 1. [MAJORITY REQUIRED.] Except for the
election of governors, which is governed by section 322B.63, the
members shall take action by the affirmative vote of the owners
of the greater of: (1) a majority of the voting power of the
membership interests present and entitled to vote on that item
of business; or (2) a majority of the voting power that would
constitute a quorum for the transaction of business at the
meeting, except where this chapter, the articles of
organization, or a member control agreement, require a larger
proportion. If the articles or a member control agreement
require a larger proportion than is required by this chapter for
a particular action, the articles or the member control
agreement control.
Sec. 41. Minnesota Statutes 2002, section 322B.35,
subdivision 1, is amended to read:
Subdivision 1. [METHOD.] An action required or permitted
to be taken at a meeting of the members may be taken by written
action signed, or consented to by authenticated electronic
communication, by all of the members. If the articles or a
member control agreement so provide, any action may be taken by
written action signed, or consented to by authenticated
electronic communication, by the members who own voting power
equal to the voting power that would be required to take the
same action at a meeting of the members at which all members
were present. After the adoption of the initial articles or the
first making of a member control agreement, an amendment to the
articles or to a member control agreement to permit written
action to be taken by less than all members requires the
approval of all the members entitled to vote on the amendment.
Sec. 42. Minnesota Statutes 2002, 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) unless otherwise provided in the articles, an amendment
of the articles of organization, but not an amendment to a
member control agreement, which 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; or
(vii) eliminates the right to obtain payment under clause
(1);
(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 that requires member approval in under section 322B.77,
subdivision 1 2, or but not including 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 constituent organization;
(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; or
(5) a plan of conversion under section 302A.683; or
(6) any other limited liability company action taken
pursuant to a member vote with respect to which the articles of
organization, a member control agreement, the bylaws, or a
resolution approved by the board of governors directs that
dissenting members may obtain payment for their membership
interests.
Sec. 43. Minnesota Statutes 2002, section 322B.386,
subdivision 3, is amended to read:
Subd. 3. [NOTICE OF DISSENT.] If the proposed action must
be approved by the members and the limited liability company
holds a meeting of 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. 44. Minnesota Statutes 2002, section 322B.386,
subdivision 4, is amended to read:
Subd. 4. [NOTICE OF PROCEDURE.] (a) After the proposed
action has been approved by the board of governors and, if
necessary, the members, the limited liability company shall send
to (i) all members who have complied with subdivision 3, (ii)
all members who did not sign or consent to a written action that
gave effect to the action creating the right to obtain payment
under section 322B.383, and to (iii) all members entitled to
dissent if no member vote was required, a notice that contains:
(1) the address to which a demand for payment must be sent
in order to obtain payment and the date by which the demand must
be received;
(2) a form to be used to certify the date on which the
member acquired the membership interests and to demand payment;
and
(3) a copy of section 322B.383 and this section and a brief
description of the procedures to be followed under these
sections.
(b) In order to receive the fair value of the membership
interests, a dissenting member must demand payment within 30
days after the notice required by paragraph (a) was given, but
the dissenter retains all other rights of a member until the
proposed action takes effect.
Sec. 45. Minnesota Statutes 2002, section 322B.40,
subdivision 6, is amended to read:
Subd. 6. [PROCEDURE FOR FIXING TERMS.] (a) Subject to any
restrictions in the articles of organization or a member control
agreement, the power granted in subdivision 5 may be exercised
by a resolution or resolutions 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 of organization, in a member control agreement,
or by resolution of the board of governors:
(1) may be made dependent upon facts ascertainable outside
the articles of organization, or outside the resolution or
resolutions establishing the class or series, if 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 of organization 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 limited liability company in connection with the
establishment of the class or series if the limited liability
company 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 limited
liability company and the text of the resolution and certifying
the adoption of the resolution and the date of adoption must be
filed with the secretary of state before the acceptance of any
contributions for which the resolution creates rights or
preferences not set forth in the articles of organization or a
member control agreement. However, where the members have
received notice of the creation of membership interests with
rights or preferences not set forth in the articles of
organization or a member control agreement before the acceptance
of the contributions with respect to the membership interests,
the statement may be filed any time within one year after the
acceptance of contributions. 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 acceptance of contributions, on the date of its
adoption by the governors.
(c) Filing a statement filed with the secretary of state in
accordance with paragraph (b) is not considered an amendment of
the articles of organization for purposes of sections 322B.15,
322B.155, and 322B.383. Filing an amendment of such a statement
with the secretary of state is considered an amendment of the
articles for purposes of sections 322B.15, 322B.155, and
322B.383.
Sec. 46. Minnesota Statutes 2002, section 322B.63, is
amended to read:
322B.63 [CUMULATIVE VOTING FOR GOVERNORS; CUMULATIVE
VOTING.]
Subdivision 1. [REQUIRED VOTE.] Unless otherwise provided
in the articles, governors are elected by a plurality of the
voting power of the membership interests present and entitled to
vote on the election of governors at a meeting at which a quorum
is present.
Subd. 2. [CUMULATIVE VOTING RIGHTS.] Unless the articles
of organization or a member control agreement provide that there
is no cumulative voting, and except as provided in section
322B.636, subdivision 5, each member entitled to vote for
governors has the right to cumulate voting power in the election
of governors by giving written notice of intent to cumulate
voting power to any manager of the limited liability company
before the meeting, or to the presiding manager at the meeting
at which the election is to occur at any time before the
election of governors at the meeting, in which case:
(1) the presiding manager at the meeting shall announce,
before the election of governors, that members shall cumulate
their voting power; and
(2) each member shall cumulate that voting power either by
casting for one candidate the amount of voting power equal to
the number of governors to be elected multiplied by the voting
power represented by the membership interests owned by that
member, or by distributing all of that voting power on the same
principle among any number of candidates.
Subd. 2 3. [MODIFICATIONS OF CUMULATIVE VOTING.] No
amendment to the articles or bylaws that has the effect of
denying, limiting, or modifying the right to cumulative voting
for members provided in this section may be adopted if the votes
of a proportion of the voting power sufficient to elect a
governor at an election of the entire board of governors under
cumulative voting are cast against the amendment.
Sec. 47. Minnesota Statutes 2002, section 322B.643,
subdivision 4, is amended to read:
Subd. 4. [CALLING MEETINGS AND NOTICE.] (a) Unless the
articles of organization, a member control agreement, or bylaws
provide for a different time period, a governor may call a board
meeting by giving at least ten days' notice or, in the case of
organizational meetings under section 322B.60, subdivision 2, at
least three days' notice to all governors of the date, time, and
place of the meeting. The notice need not state the purpose of
the meeting unless the articles, a member control agreement, or
bylaws require it.
(b) Any notice to a governor given under any provision of
this chapter, the articles, a member control agreement, or the
bylaws by a form of electronic communication consented to by the
governor to whom the notice is given is effective when given.
The notice is deemed given if by:
(1) facsimile communication, when directed to a telephone
number at which the governor has consented to receive notice;
(2) electronic mail, when directed to an electronic mail
address at which the governor has consented to receive notice;
and
(3) any other form of electronic communication by which the
governor has consented to receive notice, when directed to the
governor.
(c) Consent by a governor to notice given by electronic
communication may be given in writing or by authenticated
electronic communication. Any consent so given may be relied
upon until revoked by the governor, provided that no revocation
affects the validity of any notice given before receipt of
revocation of the consent.
Sec. 48. Minnesota Statutes 2002, section 322B.643,
subdivision 6, is amended to read:
Subd. 6. [WAIVER OF NOTICE.] A governor may waive notice
of a meeting of the board of governors. A waiver of notice by a
governor entitled to notice is effective whether given before,
at, or after the meeting, and whether given in writing,
orally, by authenticated electronic communication, or by
attendance. Attendance by a governor at a meeting is a waiver
of notice of that meeting, except where the governor objects at
the beginning of the meeting to the transaction of business
because the meeting is not lawfully called or convened and does
not participate in the meeting after the objection.
Sec. 49. Minnesota Statutes 2002, section 322B.77,
subdivision 2, is amended to read:
Subd. 2. [MEMBER APPROVAL AND WHEN REQUIRED.] (a) A
limited liability company, by affirmative vote of a majority of
the governors present, may sell, lease, transfer, or otherwise
dispose of all or substantially all of its property and assets,
including its good will, not in the usual and regular course of
its business, upon those terms and conditions and for those
considerations, which may be money, securities, or other
instruments for the payment of money or other property, as the
board of governors considers expedient, when approved at a
regular or special meeting of the members by the affirmative
vote of the owners of a majority of the voting power of the
interests entitled to vote. Written notice of the meeting must
be given to all members whether or not they are entitled to vote
at the meeting. The written notice must state that a purpose of
the meeting is to consider the sale, lease, transfer, or other
disposition of all or substantially all of the property and
assets of the limited liability company.
(b) Member approval is not required under paragraph (a) if,
following the sale, lease, transfer, or other disposition of its
property and assets, the limited liability company retains a
significant continuing business activity. If a limited
liability company retains a business activity that represented
at least (i) 25 percent of the limited liability company's total
assets at the end of the most recently completed fiscal year and
(ii) 25 percent of either income from continuing operations
before taxes or revenues from continuing operations for that
fiscal year, measured on a consolidated basis with its
subsidiaries for each of clauses (i) and (ii), then the limited
liability company will conclusively be deemed to have retained a
significant continuing business activity.
Sec. 50. [322B.78] [CONVERSION.]
A domestic limited liability company may convert to a
domestic corporation pursuant to sections 302A.681 to 302A.691.
ARTICLE 15
FISCAL YEAR 2005 FUNDING
Section 1. [CHAPTERS 321 AND 322A FILING FEES.]
(a) Notwithstanding Minnesota Statutes, section 321.206 and
chapter 322A, and effective July 1, 2004, the fee for filing a
limited partnership is $200; the fee for filing an amended
certificate of limited partnership is $100; the fee for filing a
certificate requesting authority to transact business in
Minnesota as a foreign limited partnership is $200; and the fee
for filing any other record, other than an annual registration
prior to revocation of authority to transact business in
Minnesota, required or permitted to be delivered for filing on a
foreign limited partnership authorized to transact business in
Minnesota is $100.
(b) This section expires June 30, 2005.
Sec. 2. [APPROPRIATION.]
$75,000 is appropriated in fiscal year 2005 from the
general fund to the secretary of state for purposes of
implementing this act. This is a onetime appropriation.
Presented to the governor May 13, 2004
Signed by the governor May 15, 2004, 11:00 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes