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1999 Minnesota Session Laws

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                             CHAPTER 85-H.F.No. 836 
                  An act relating to business organizations; regulating 
                  business corporations; defining terms; modifying the 
                  authority to grant restricted stock; regulating 
                  take-over offers; providing for name changes in 
                  certain circumstances; regulating mergers and 
                  exchanges; making clarifying and technical changes; 
                  removing ambiguities; regulating limited liability 
                  companies; eliminating unnecessary provisions; 
                  correcting terminology; regulating member control 
                  agreements and dissolutions; providing for the 
                  duration of certain companies; making conforming 
                  changes required by the enactment of the revised 
                  Uniform Partnership Act; amending Minnesota Statutes 
                  1998, sections 302A.011, subdivisions 7 and 56; 
                  302A.111, subdivision 5; 302A.181, subdivision 1; 
                  302A.223, subdivision 3; 302A.402, subdivision 3; 
                  302A.405, subdivision 1; 302A.417, subdivision 7; 
                  302A.457, subdivisions 1 and 2; 302A.471, subdivision 
                  1; 302A.613, subdivision 1; 302A.621, subdivisions 1 
                  and 6; 302A.671, subdivision 1; 302A.675, subdivision 
                  2; 319B.02, subdivisions 10, 12, 21, and 22; 319B.04, 
                  subdivisions 2 and 3; 319B.08, subdivision 1; 319B.10, 
                  subdivision 2; 319B.11, subdivisions 3, 4, and 8; 
                  322A.02; 322A.87; 322A.88; 322B.03, subdivisions 12, 
                  30, 44, and 45; 322B.115, subdivisions 1, 2, and 3; 
                  322B.155; 322B.20, subdivisions 1 and 2; 322B.30, 
                  subdivision 2; 322B.306; 322B.31, subdivision 3; 
                  322B.313, subdivisions 2, 3, and 7; 322B.323, 
                  subdivision 2; 322B.326; 322B.33, subdivisions 1 and 
                  4; 322B.333, subdivisions 1 and 3; 322B.336, 
                  subdivisions 1 and 3; 322B.34, subdivisions 2 and 3; 
                  322B.343, subdivisions 1 and 2; 322B.346; 322B.35, 
                  subdivision 1; 322B.353; 322B.356, subdivisions 1, 2, 
                  and 3; 322B.363, subdivisions 2 and 3; 322B.366, 
                  subdivision 1; 322B.37; 322B.383, subdivision 1; 
                  322B.386, subdivisions 1, 2, 4, and 5; 322B.40, 
                  subdivisions 1, 5, and 6; 322B.41, subdivisions 3 and 
                  4; 322B.42, subdivision 5; 322B.43, subdivisions 1 and 
                  3; 322B.50; 322B.51; 322B.52; 322B.54, subdivision 1; 
                  322B.56, subdivision 1; 322B.603; 322B.606, 
                  subdivision 1; 322B.61; 322B.613; 322B.616; 322B.623; 
                  322B.626; 322B.63, subdivision 1; 322B.636, 
                  subdivisions 1 and 3; 322B.64; 322B.643, subdivisions 
                  1, 3, and 4; 322B.646; 322B.65; 322B.653; 322B.656, 
                  subdivision 1; 322B.66, subdivision 2; 322B.663, 
                  subdivision 4; 322B.666, subdivision 1; 322B.673, 
                  subdivisions 1 and 2; 322B.676; 322B.686, subdivision 
                  3; 322B.689; 322B.699, subdivision 4; 322B.72, 
                  subdivisions 1 and 2; 322B.80, subdivision 1; 
                  322B.813, subdivision 3; 322B.816, subdivision 4; 
                  322B.833, subdivisions 2, 5, and 6; 322B.843, 
                  subdivision 2; 322B.873, subdivisions 1 and 4; 
                  323A.10-01; and 323A.11-02; repealing Minnesota 
                  Statutes 1998, sections 322B.03, subdivisions 4, 5, 9, 
                  and 16; 322B.363, subdivision 8; 322B.366, subdivision 
                  2; 322B.816, subdivision 3; and 322B.873, subdivisions 
                  2 and 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                             BUSINESS CORPORATIONS 
           Section 1.  Minnesota Statutes 1998, section 302A.011, 
        subdivision 7, is amended to read: 
           Subd. 7.  [CONSTITUENT CORPORATION.] "Constituent 
        corporation" means a domestic or corporation or a foreign 
        corporation that is a party to a merger or exchange: 
           (1) in a merger is either the surviving corporation or a 
        corporation that is merged into the surviving organization; or 
           (2) in an exchange is either the acquiring corporation or a 
        corporation whose shares are acquired by the acquiring 
        organization.  
           Sec. 2.  Minnesota Statutes 1998, section 302A.011, 
        subdivision 56, is amended to read: 
           Subd. 56.  [CONSTITUENT ORGANIZATION.] "Constituent 
        organization" means a corporation, foreign corporation, or a 
        domestic limited liability company or foreign limited liability 
        company that is a party to a merger or an exchange: 
           (1) in a merger is either the surviving organization or an 
        organization that is merged into the surviving organization; or 
           (2) in an exchange is either the acquiring organization or 
        an organization whose securities are acquired by the acquiring 
        organization. 
           Sec. 3.  Minnesota Statutes 1998, section 302A.111, 
        subdivision 5, is amended to read: 
           Subd. 5.  [OPTIONAL PROVISIONS:  GENERALLY.] The articles 
        may contain other provisions not inconsistent with section 
        302A.201 or any other provision of law relating to the 
        management of the business or the regulation of the affairs of 
        the corporation.  
           Sec. 4.  Minnesota Statutes 1998, section 302A.181, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERALLY.] A corporation may, but need 
        not, have bylaws.  Bylaws may contain any provision relating to 
        the management of the business or the regulation of the affairs 
        of the corporation not inconsistent with section 302A.201 or any 
        other provision of law or the articles.  
           Sec. 5.  Minnesota Statutes 1998, section 302A.223, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REMOVAL BY SHAREHOLDERS.] Except as provided in 
        subdivision 4, any one or all of the directors may be removed at 
        any time, with or without cause, by the affirmative vote of the 
        holders of the proportion or number a majority of the voting 
        power of the all shares of the classes or series the director 
        represents sufficient to elect them, except as provided in 
        subdivision 4 entitled to vote at an election of directors; 
        provided that, if a director has been elected solely by the 
        holders of a class or series of shares, as stated in the 
        articles or bylaws, then that director may be removed only by 
        the affirmative vote of the holders of a majority of the voting 
        power of all shares of that class or series entitled to vote at 
        an election of that director.  
           Sec. 6.  Minnesota Statutes 1998, section 302A.402, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BY ACTION OF BOARD ALONE; FILING OF ARTICLES OF 
        AMENDMENT.] (a) Subject to the restrictions provided in 
        subdivision 2 or any restrictions provision in the articles that 
        states that section 302A.402, subdivision 3, does not apply, a 
        share dividend, division, or combination may be effected by 
        action of the board alone, without the approval of shareholders 
        under sections 302A.135 and 302A.137.  In effecting a division 
        or combination under this subdivision, the board may amend the 
        articles to increase or decrease the par value of shares, 
        increase or decrease the number of authorized shares, and make 
        any other change necessary or appropriate to assure that the 
        rights or preferences of the holders of outstanding shares of 
        any class or series will not be adversely affected by the 
        division or combination. 
           (b) If a division or combination that includes an amendment 
        of the articles is effected under this subdivision, then 
        articles of amendment must be prepared that contain the 
        information required by section 302A.139 and a statement that 
        the amendment will not adversely affect the rights or 
        preferences of the holders of outstanding shares of any class or 
        series and will not result in the percentage of authorized 
        shares of any class or series that remains unissued after the 
        division or combination exceeding the percentage of authorized 
        shares of that class or series that were unissued before the 
        division or combination. 
           Sec. 7.  Minnesota Statutes 1998, section 302A.405, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CONSIDERATION; PROCEDURE.] Subject to any 
        restrictions in the articles: 
           (a) Shares may be issued for any consideration, including, 
        without limitation, money or other tangible or intangible 
        property received by the corporation or to be received by the 
        corporation under a written agreement, or services rendered to 
        the corporation or to be rendered to the corporation under a 
        written agreement, as authorized by resolution approved by the 
        affirmative vote of the directors required by section 302A.237, 
        or, if provided for in the articles, approved by the affirmative 
        vote of the shareholders required by section 302A.437, 
        establishing a price in money or other consideration, or a 
        minimum price, or a general formula or method by which the price 
        will be determined; and 
           (b) A corporation may, without any new or additional 
        consideration, issue its own shares in exchange for or in 
        conversion of its outstanding shares, or, subject to 
        authorization of share dividends, divisions, and combinations 
        according to section 302A.402, issue its own shares pro rata to 
        its shareholders or the shareholders of one or more classes or 
        series, to effectuate share dividends, divisions, or 
        combinations.  No shares of a class or series, shares of which 
        are then outstanding, shall be issued to the holders of shares 
        of another class or series (except in exchange for or in 
        conversion of outstanding shares of the other class or series), 
        unless the issuance either is expressly provided for in the 
        articles or is approved at a meeting by the affirmative vote of 
        the holders of a majority of the voting power of all shares of 
        the same class or series as the shares to be issued. 
           Sec. 8.  Minnesota Statutes 1998, section 302A.417, 
        subdivision 7, is amended to read: 
           Subd. 7.  [UNCERTIFICATED SHARES.] Unless uncertificated 
        shares are prohibited by the articles or bylaws, a resolution 
        approved by the affirmative vote of a majority of the directors 
        present may provide that some or all of any or all classes and 
        series of its shares will be uncertificated shares.  The 
        resolution does not apply to shares represented by a certificate 
        until the certificate is surrendered to the corporation.  Within 
        a reasonable time after the issuance or transfer of 
        uncertificated shares, the corporation shall send to the new 
        shareholder the information required by this section to be 
        stated on certificates.  This information is not required to be 
        sent to the new shareholder by a publicly held corporation that 
        has adopted a system of issuance, recordation, and transfer of 
        its shares by electronic or other means not involving an 
        issuance of certificates if the system complies with section 174 
        17A of the Securities Exchange Act of 1934.  Except as otherwise 
        expressly provided by statute, the rights and obligations of the 
        holders of certificated and uncertificated shares of the same 
        class and series are identical. 
           Sec. 9.  Minnesota Statutes 1998, section 302A.457, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORIZED.] A written agreement among the 
        shareholders of a corporation and the subscribers for shares to 
        be issued, relating to the control of any phase of the business 
        and affairs of the corporation, its liquidation and dissolution, 
        or the relations among shareholders of or subscribers to shares 
        of the corporation is valid and specifically enforceable as 
        provided in subdivision 2.  The agreement may also include as 
        parties persons who are neither shareholders nor subscribers. 
           Sec. 10.  Minnesota Statutes 1998, section 302A.457, 
        subdivision 2, is amended to read: 
           Subd. 2.  [METHOD OF APPROVAL; ENFORCEABILITY; COPIES.] (a) 
        A written agreement among persons as described in subdivision 1 
        that relates to the control of or the liquidation and 
        dissolution of the corporation, the relations among them the 
        shareholders and subscribers, or any phase of the business and 
        affairs of the corporation, including, without limitation, the 
        management of its business, the declaration and payment of 
        distributions, the election of directors or officers, the 
        employment of shareholders and others by the corporation, or the 
        arbitration of disputes, is valid and specifically enforceable, 
        if the agreement is signed by all persons who, on the date the 
        agreement first becomes effective, are then the shareholders of 
        the corporation, whether or not the shareholders all have voting 
        shares, and the subscribers for shares, whether or not voting 
        shares, to be issued.  A written agreement as described in 
        subdivision 1 may provide for its amendment through nonunanimous 
        means. 
           (b) The agreement is enforceable by the persons described 
        in subdivision 1 who are parties to it and is binding upon and 
        enforceable against only those persons and other persons having 
        knowledge of the existence of the agreement.  A copy of the 
        agreement shall be filed with the corporation.  The existence 
        and location of a copy of the agreement shall be noted 
        conspicuously on the face or back of each certificate for shares 
        issued by the corporation and included in information sent to 
        the holders of uncertificated shares according to section 
        302A.417, subdivision 7. 
           (c) A shareholder, a beneficial owner of shares, or another 
        person having a security interest in shares has the right upon 
        written demand to obtain a copy of the agreement from the 
        corporation at the expense of the corporation. 
           Sec. 11.  Minnesota Statutes 1998, 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) 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; 
           (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 section 302A.661, subdivision 1, or 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 party constituent 
        organization, except as provided in subdivision 3; 
           (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, if the shares of the shareholder are entitled to be 
        voted on the plan; or 
           (e) 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. 12.  Minnesota Statutes 1998, section 302A.613, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BOARD APPROVAL; NOTICE TO SHAREHOLDERS.] A 
        resolution containing the plan of merger or exchange shall be 
        approved by the affirmative vote of a majority of the directors 
        present at a meeting of the board of each constituent 
        corporation and shall then be submitted at a regular or a 
        special meeting to the shareholders of (i) each constituent 
        corporation, in the case of a plan of merger, and (ii) the 
        corporation whose shares will be acquired by the acquiring 
        organization in the exchange, in the case of a plan of 
        exchange.  The plan of merger or exchange may require that it be 
        submitted to the shareholders whether or not the board of 
        directors determines at any time after the board of directors' 
        initial approval of the plan that the plan is no longer 
        advisable and recommends that the shareholders reject it.  If 
        shareholders holding any class or series of stock of the 
        corporation are entitled to vote on the plan of merger or 
        exchange pursuant to this section, written notice shall be given 
        to every shareholder of a corporation, whether or not entitled 
        to vote at the meeting, not less than 14 days nor more than 60 
        days before the meeting, in the manner provided in section 
        302A.435 for notice of meetings of shareholders.  The written 
        notice shall state that a purpose of the meeting is to consider 
        the proposed plan of merger or exchange.  A copy or short 
        description of the plan of merger or exchange shall be included 
        in or enclosed with the notice.  If the merger or exchange is 
        with a domestic or foreign limited liability company, the plan 
        of merger or exchange must also be approved in the manner 
        required by the laws of the state under which the limited 
        liability company is organized. 
           Sec. 13.  Minnesota Statutes 1998, section 302A.621, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [WHEN AUTHORIZED; CONTENTS OF PLAN.] A 
        parent owning at least 90 percent of the outstanding shares of 
        each class and series of a subsidiary directly, or indirectly 
        through related corporations, may merge the subsidiary into 
        itself or into any other subsidiary at least 90 percent of the 
        outstanding shares of each class and series of which is owned by 
        the parent directly, or indirectly through related corporations, 
        without a vote of the shareholders of itself or any subsidiary 
        or may merge itself, or itself and one or more of the 
        subsidiaries, into one of the subsidiaries under this section.  
        A resolution approved by the affirmative vote of a majority of 
        the directors of the parent present shall set forth a plan of 
        merger that contains:  
           (a) The name of the subsidiary or subsidiaries, the name of 
        the parent and the name of the surviving corporation; 
           (b) The manner and basis of converting the shares of the 
        subsidiary or subsidiaries or parent into securities of the 
        parent, subsidiary, or of another corporation or, in whole or in 
        part, into money or other property; 
           (c) If the parent is a constituent corporation but is not 
        the surviving corporation in the merger, a provision for the pro 
        rata issuance of shares of the surviving corporation to the 
        holders of shares of the parent on surrender of any certificates 
        for shares of the parent; and 
           (d) If the surviving corporation is a subsidiary, a 
        statement of any amendments to the articles of the surviving 
        corporation that will be part of the merger.  
           If the parent is a constituent corporation and the 
        surviving corporation in the merger, it may change its corporate 
        name, without a vote of its shareholders, by the inclusion of a 
        provision to that effect in the resolution of merger setting 
        forth the plan of merger that is approved by the affirmative 
        vote of a majority of the directors of the parent present.  Upon 
        the effective date of the merger, the name of the parent shall 
        be changed. 
           If the parent is a constituent corporation but is not the 
        surviving corporation in the merger, the resolution is not 
        effective unless it is also approved by the affirmative vote of 
        the holders of a majority of the voting power of all shares of 
        the parent entitled to vote at a regular or special meeting held 
        in accordance with section 302A.613 if the parent is a domestic 
        corporation or in accordance with the laws under which it is 
        incorporated if the parent is a foreign corporation. 
           Sec. 14.  Minnesota Statutes 1998, section 302A.621, 
        subdivision 6, is amended to read: 
           Subd. 6.  [RIGHTS OF DISSENTING SHAREHOLDERS.] In the event 
        all of the stock of one or more domestic subsidiaries that is a 
        constituent party to a merger under this section is not owned by 
        the parent directly, or indirectly through related corporations, 
        immediately prior to the merger, the shareholders of each 
        domestic subsidiary have dissenters' rights under 
        section sections 302A.471, (without regard to section 302A.471, 
        subdivision 3) and 302A.473.  If the parent is a constituent 
        corporation but is not the surviving corporation in the merger, 
        and the articles of incorporation of the surviving corporation 
        immediately after the merger differ from the articles of 
        incorporation of the parent immediately prior to the merger in a 
        manner that would entitle a shareholder of the parent to 
        dissenters' rights under section 302A.471, subdivision 1, 
        paragraph (a), if the articles of incorporation of the surviving 
        corporation constituted an amendment to the articles of 
        incorporation of the parent, that shareholder of the parent has 
        dissenters' rights as provided under sections 302A.471 and 
        302A.473.  Except as provided in this subdivision, sections 
        302A.471 and 302A.473 do not apply to any merger effected under 
        this section. 
           Sec. 15.  Minnesota Statutes 1998, section 302A.671, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICATION.] (a) Unless otherwise 
        expressly provided in the articles or in bylaws approved by the 
        shareholders of an issuing public corporation, this section 
        applies to a control share acquisition.  A shareholder's 
        proposal to amend the corporation's articles or bylaws to cause 
        this section to be inapplicable to the corporation requires the 
        vote set forth in subdivision 4a, paragraph (b), in order for it 
        to be effective, unless it is approved by a committee of the 
        board comprised solely of directors who:  
           (1) are neither officers nor employees of, nor were during 
        the five years preceding the formation of the committee officers 
        or employees of, the corporation or a related organization; 
           (2) are neither acquiring persons nor affiliates or 
        associates of an acquiring person; 
           (3) were not nominated for election as directors by an 
        acquiring person or an affiliate or associate of an acquiring 
        person; and 
           (4) were directors at the time an acquiring person became 
        an acquiring person or were nominated, elected, or recommended 
        for election as directors by a majority of those directors. 
           (b) The shares of an issuing public corporation acquired by 
        an acquiring person in a control share acquisition that exceed 
        the threshold of voting power of any of the ranges specified in 
        subdivision 2, paragraph (d), shall have only the voting rights 
        as shall be accorded to them pursuant to subdivision 4a. 
           Sec. 16.  Minnesota Statutes 1998, section 302A.675, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXCEPTION.] Subdivision 1 does not apply if the 
        proposed acquisition of shares is approved, before the purchase 
        of any shares by the offeror pursuant to the earlier takeover 
        offer, by a committee of the board's disinterested directors 
        before the purchase of any shares by the offeror pursuant to the 
        earlier takeover offer.  The provisions of section 302A.673, 
        subdivision 1, paragraph (d), relating to a committee of 
        disinterested directors, apply to this section board, comprised 
        solely of directors who: 
           (1) neither are officers or employees of, nor were during 
        the five years preceding the formation of the committee officers 
        or employees of, the corporation or a related organization; 
           (2) are neither the offerors nor affiliates or associates 
        of the offeror; 
           (3) were not nominated for election as directors by the 
        offeror or an affiliate or associate of the offeror; and 
           (4) were directors at the time of the first public 
        announcement of the takeover offer or were nominated, elected, 
        or recommended for election as directors by a majority of the 
        directors. 
           Sec. 17.  [EFFECTIVE DATE.] 
           Sections 1 to 16 are effective the day following final 
        enactment. 
                                   ARTICLE 2
                          LIMITED LIABILITY COMPANIES
           Section 1.  Minnesota Statutes 1998, section 322B.03, 
        subdivision 12, is amended to read: 
           Subd. 12.  [CONSTITUENT ORGANIZATION.] "Constituent 
        organization" means a limited liability company or a domestic or 
        corporation or a foreign corporation that is a party to a merger 
        or an exchange.: 
           (1) in a merger is either the surviving organization or an 
        organization that is merged into the surviving organization; or 
           (2) in an exchange is either the acquiring organization or 
        an organization whose securities are acquired by the acquiring 
        organization. 
           Sec. 2.  Minnesota Statutes 1998, section 322B.03, 
        subdivision 30, is amended to read: 
           Subd. 30.  [MEMBER.] "Member" means a person reflected in 
        the required records of a limited liability company as the owner 
        of some governance rights of a membership interest of the 
        limited liability company.  A person may be a member without 
        having voting rights. 
           Sec. 3.  Minnesota Statutes 1998, section 322B.03, 
        subdivision 44, is amended to read: 
           Subd. 44.  [SERIES.] "Series" means a category of 
        membership interests, within a class of membership interests, 
        that have some of the same rights and preferences as other 
        membership interests within the same class, but that differ in 
        or one or more rights and preferences from another category of 
        membership interests within that class. 
           Sec. 4.  Minnesota Statutes 1998, section 322B.03, 
        subdivision 45, is amended to read: 
           Subd. 45.  [SIGNED.] (a) "Signed" means that the signature 
        of a person has been written on a document, as provided in 
        section 645.44, subdivision 14, and, with respect to a document 
        required by this chapter to be filed with the secretary of 
        state, means that the document has been signed by a person 
        authorized to do so by this chapter, the articles of 
        organization, a member control agreement, or operating agreement 
        or a resolution approved by the governors as required by section 
        322B.653 or the members as required by section 322B.346. 
           (b) A signature on a document may be a facsimile affixed, 
        engraved, printed, placed, stamped with indelible ink, 
        transmitted by facsimile or electronically, or in any other 
        manner reproduced on the document. 
           Sec. 5.  Minnesota Statutes 1998, section 322B.115, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REQUIRED PROVISIONS.] The articles of 
        organization must contain: 
           (1) the name of the limited liability company; 
           (2) the address of the registered office of the limited 
        liability company and the name of its registered agent, if any, 
        at that address; 
           (3) the name and address of each organizer; and 
           (4) a statement of the period of existence for the limited 
        liability company if different from the 30-year period set forth 
        in section 322B.20, subdivision 2. 
           Sec. 6.  Minnesota Statutes 1998, 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 operating 
        agreement is vested in the board of governors (section 
        322B.603); 
           (4) a limited liability company must allow cumulative 
        voting for governors (section 322B.63); 
           (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 restatement of value of previous contributions is 
        to be determined according to a specified process restated when 
        a new contribution is accepted (section 322B.41, subdivisions 3 
        and 4); 
           (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 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); and 
           (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)(B)(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. 7.  Minnesota Statutes 1998, section 322B.115, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STATUTORY PROVISIONS THAT MAY BE MODIFIED EITHER 
        IN ARTICLES OF ORGANIZATION, A MEMBER CONTROL AGREEMENT, OR IN 
        THE OPERATING AGREEMENT.] The following provisions govern a 
        limited liability company unless modified in the articles of 
        organization, a member control agreement under section 322B.37 
        or in the operating agreement: 
           (1) governors serve for an indefinite term that expires at 
        the next regular meeting of members (section 322B.616); 
           (2) the compensation of governors is fixed by the board of 
        governors (section 322B.623); 
           (3) a certain method must be used for removal of governors 
        (section 322B.636); 
           (4) a certain method must be used for filling board of 
        governor vacancies (section 322B.64); 
           (5) if the board of governors fails to select a place for a 
        board meeting, it must be held at the principal executive office 
        (section 322B.643, subdivision 1); 
           (6) the notice of a board of governors meeting need not 
        state the purpose of the meeting (section 322B.643, subdivision 
        3); 
           (7) a majority of the board of governors is a quorum for a 
        board meeting (section 322B.65); 
           (8) a committee consists of one or more persons, who need 
        not be governors, appointed by affirmative vote of a majority of 
        the governors present (section 322B.66, subdivision 2); 
           (9) the board may establish a special litigation committee 
        (section 322B.66); 
           (10) the chief manager and treasurer have specified duties, 
        until the board of governors determines otherwise (section 
        322B.673); 
           (11) managers may delegate some or all of their duties and 
        powers, if not prohibited by the board of governors from doing 
        so (section 322B.689); 
           (12) regular meetings of members need not be held, unless 
        demanded by a member under certain conditions (section 
        322B.333); 
           (13) in all instances where a specific minimum notice 
        period has not otherwise been fixed by law, not less than ten 
        days' notice is required for a meeting of members (section 
        322B.34, subdivision 2); 
           (14) for a quorum at a members' meeting there is required a 
        majority of the voting power of the membership interests 
        entitled to vote at the meeting (section 322B.353); 
           (15) the board of governors may fix a date up to 60 days 
        before the date of a members' meeting as the date for the 
        determination of the members entitled to notice of and entitled 
        to vote at the meeting (section 322B.356, subdivision 1); 
           (16) indemnification of certain persons is required 
        (section 322B.699); 
           (17) the board of governors may authorize, and the limited 
        liability company may make, distributions not prohibited, 
        limited, or restricted by an agreement (section 322B.54, 
        subdivision 1); and 
           (18) members have no right to interim distributions except 
        as provided through the operating agreement or an act of the 
        board of governors (section 322B.51).  
           Sec. 8.  Minnesota Statutes 1998, 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; 
           (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) 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) limit or deny any existing preemptive rights of the 
        membership interests of the class or series; or 
           (8) cancel or otherwise affect distributions on the 
        membership interests of the class or series. 
           Sec. 9.  Minnesota Statutes 1998, section 322B.20, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERALLY AND LIMITATIONS.] A limited 
        liability company has the powers set forth in this section, 
        subject to any limitations provided in any other statute of this 
        state or in its articles of organization.  The articles may not 
        limit the powers stated in subdivision 3.  A member control 
        agreement may limit the powers stated in subdivisions 4 to 24. 
           Sec. 10.  Minnesota Statutes 1998, section 322B.20, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DURATION.] (a) A limited liability company whose 
        existence begins before August 1, 1999, has a limited duration 
        of 30 years from the date the articles of organization are filed 
        with the secretary of state, unless the articles of organization 
        state a shorter or longer period of duration, which may be 
        perpetual. 
           (b) A limited liability company whose existence begins on 
        or after August 1, 1999, has perpetual duration. 
           Sec. 11.  Minnesota Statutes 1998, section 322B.30, 
        subdivision 2, is amended to read: 
           Subd. 2.  [STATEMENT OF MEMBERSHIP INTEREST.] At the 
        request of any member, the limited liability company shall state 
        in writing the particular membership interest owned by that 
        member as of the moment the limited liability company makes the 
        statement.  The statement must describe the member's rights to 
        vote, if any, to share in profits and losses, and to share in 
        distributions, restrictions on assignments of financial rights 
        under section 322B.31, subdivision 3, or governance rights under 
        section 322B.313, subdivision 6, then in effect, as well as any 
        assignment of the member's rights then in effect other than a 
        security interest.  The statement is not a certificated security 
        as defined in section 336.8-102(1)(a), is not a negotiable 
        instrument, and may not serve as a vehicle by which a transfer 
        of any membership interest may be effected. 
           Sec. 12.  Minnesota Statutes 1998, section 322B.306, is 
        amended to read: 
           322B.306 [TERMINATION OF A MEMBERSHIP INTEREST.] 
           Subdivision 1.  [TERMINATION DEFINED; MEMBER'S POWER TO 
        TERMINATE MEMBERSHIP.] The continued membership of a member in a 
        limited liability company is terminated by: 
           (i) the member's death; 
           (ii) the member's retirement; 
           (iii) the member's resignation; 
           (iv) redemption of the member's complete membership 
        interest; 
           (v) an assignment of the member's governance rights under 
        section 322B.313 which leaves the assignor with no governance 
        rights; 
           (vi) a buyout of a member's membership interest under 
        section 322B.833 that leaves that member with no governance 
        rights; 
           (vii) the member's expulsion; 
           (viii) the member's bankruptcy; 
           (ix) the dissolution of a member that is an organization; 
           (x) a merger in which the limited liability company is not 
        the surviving organization; or 
           (xi) the occurrence of any other event that terminates the 
        continued membership of a member in the limited liability 
        company. 
           A member always has the power, though not necessarily the 
        right, to terminate its membership by resigning or retiring at 
        any time.  A member's resignation or retirement, whether 
        rightful or wrongful, causes dissolution under section 322B.80, 
        subdivision 1, clause (5), unless dissolution is avoided under 
        that clause.  A member has no power to transfer all or part of 
        the member's membership interest, except as provided in sections 
        322B.31 and 322B.313. 
           Subd. 2.  [WHEN EXPULSION PERMITTED.] Unless otherwise 
        provided in the articles of organization or a member control 
        agreement, a member may not be expelled.  
           Subd. 3.  [EFFECT OF TERMINATION OF MEMBERSHIP ON THE 
        GOVERNANCE RIGHTS OF THE TERMINATED MEMBER.] If for any reason 
        the continued membership of a member is terminated, then subject 
        to the articles of organization and any member control agreement:
           (1) if dissolution under section 322B.80, subdivision 1, 
        clause (5), is avoided under that clause, then the termination 
        does not result in the dissolution of the limited liability 
        company, the member whose membership has terminated loses all 
        governance rights and will be considered merely an assignee of 
        the financial rights owned before the termination of membership; 
        and 
           (2) if dissolution under section 322B.80, subdivision 1, 
        clause (5), is not avoided under that clause the termination 
        results in the dissolution of the limited liability company, the 
        member whose continued membership has terminated retains all 
        governance rights and financial rights owned before the 
        termination of the membership and may exercise those rights 
        through the winding up and termination of the limited liability 
        company.  
           Subd. 4.  [ADDITIONAL EFFECTS IF TERMINATION OF MEMBERSHIP 
        IS WRONGFUL.] If a member resigns or retires in contravention of 
        the articles of organization or a member control agreement then: 
           (1) if dissolution avoidance consent is obtained, the 
        member who has wrongfully resigned or retired is liable to the 
        limited liability company to the extent damaged by the wrongful 
        resignation or retirement; and 
           (2) if dissolution avoidance consent is not obtained, 
        section 322B.873 applies. 
           Sec. 13.  Minnesota Statutes 1998, section 322B.31, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RESTRICTIONS OF ASSIGNMENT OF FINANCIAL RIGHTS.] 
        (a) A restriction on the assignment of financial rights may be 
        imposed in the articles, in a member control agreement, in the 
        operating agreement, by a resolution adopted by the members, or 
        by an agreement among or other written action by members or 
        among them and the limited liability company.  A restriction is 
        not binding with respect to financial rights reflected in the 
        required records before the adoption of the restriction, unless 
        the owners of those financial rights are parties to the 
        agreement or voted in favor of the restriction.  
           (b) Subject to paragraph (c), a written restriction on the 
        assignment of financial rights that is not manifestly 
        unreasonable under the circumstances and is noted conspicuously 
        in the required records may be enforced against the owner of the 
        restricted financial rights or a successor or transferee of the 
        owner, including a pledgee or a legal representative.  Unless 
        noted conspicuously in the required records, a restriction, even 
        though permitted by this section, is ineffective against a 
        person without knowledge of the restriction.  
           (c) With regard to restrictions on the assignment of 
        financial rights, a would-be assignee of financial rights is 
        entitled to rely on a statement of membership interest issued by 
        the limited liability company under section 322B.30.  A 
        restriction on the assignment of financial rights, which is 
        otherwise valid and in effect at the time of the issuance of a 
        statement of membership interest but which is not reflected in 
        that statement, is ineffective against an assignee who takes an 
        assignment in reliance on the statement. 
           (d) Notwithstanding any provision of law, articles of 
        organization, member control agreement, operating agreement, 
        other agreement, resolution, or action to the contrary, a 
        security interest in a member's financial rights may be 
        foreclosed and otherwise enforced, and a secured party may 
        assign a member's financial rights in accordance with chapter 
        336, without the consent or approval of the member whose 
        financial rights are subject to the security interest. 
           Sec. 14.  Minnesota Statutes 1998, section 322B.313, 
        subdivision 2, is amended to read: 
           Subd. 2.  [WHEN UNANIMOUS CONSENT REQUIRED.] Subject to 
        subdivision 6, a member may, without the consent of any other 
        member, assign governance rights, in whole or in part, to 
        another person already a member at the time of the assignment.  
        Except as otherwise set forth in the articles of organization or 
        a member control agreement, any other assignment of any 
        governance rights is effective only if all the members, other 
        than the member seeking to make the assignment, approve the 
        assignment by unanimous written consent.  Subject to subdivision 
        6, a member may grant a security interest in a complete 
        membership interest or governance rights without obtaining the 
        consent required by this subdivision.  However, a secured party 
        may not take or assign ownership of governance rights without 
        first obtaining the consent required by this subdivision.  If a 
        secured party has a security interest in both a member's 
        financial rights and governance rights, including a security 
        interest in a complete membership interest, this subdivision's 
        requirement that the secured party obtain consent applies only 
        to taking or assigning ownership of the governance rights and 
        does not apply to taking or assigning ownership of the financial 
        rights. 
           Sec. 15.  Minnesota Statutes 1998, section 322B.313, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EFFECT ON MEMBERSHIP.] When an assignment of 
        governance rights is effective under subdivision 2: 
           (1) if the assignment is not a security interest, the 
        assignee becomes a member, if not already a member; and 
           (2) if the assignor does not retain any governance rights, 
        the assignor ceases to be a member and the written consent 
        required under subdivision 2 also constitutes the dissolution 
        avoidance consent necessary to avoid dissolution that would 
        otherwise ensue under section 322B.80, subdivision 1, clause 
        (5), on account of the assignor ceasing to be a member if the 
        consent required to avoid dissolution is not greater than the 
        consent required under subdivision 2. 
           Sec. 16.  Minnesota Statutes 1998, section 322B.313, 
        subdivision 7, is amended to read: 
           Subd. 7.  [FORECLOSURE OF SECURITY INTEREST.] Subject to 
        subdivision 6, a member may grant a security interest in a 
        complete membership interest or governance rights without 
        obtaining the consent required by subdivision 2.  However, a 
        secured party may not take or assign ownership of governance 
        rights without first obtaining the consent required by 
        subdivision 2.  If a secured party has a security interest in 
        both member's financial rights and governance rights, including 
        a security interest in a complete membership interest, this 
        subdivision's requirement that the secured party obtain the 
        consents required by subdivision 2 applies only to taking or 
        assigning ownership of the governance rights and does not apply 
        to taking or assigning ownership of the financial rights.  
        Notwithstanding any provision of law, articles of organization, 
        member control agreement, operating agreement, other agreement, 
        resolution, or action to the contrary, a security interest in a 
        member's full membership interest or governance rights may be 
        foreclosed and otherwise enforced, and a secured party may 
        assign a member's complete membership interest or governance 
        rights in accordance with chapter 336, all without the consent 
        or approval of the member whose full membership interest or 
        governance rights are the subject of the security interest. 
           Sec. 17.  Minnesota Statutes 1998, section 322B.323, 
        subdivision 2, is amended to read: 
           Subd. 2.  [WHEN MEMBERSHIP IS TERMINATED.] If an event 
        referred to in subdivision 1 causes the termination of a 
        member's membership interest and the termination does not result 
        in dissolution is avoided under section 322B.80, subdivision 1, 
        clause (5), then subject to the articles of organization and any 
        member control agreement:  
           (1) as provided in section 322B.306, subdivision 3, the 
        terminated member's interest will be considered to be merely 
        that of an assignee of the financial rights owned before the 
        termination of membership; and 
           (2) the rights to be exercised by the legal representative 
        of the terminated member will be limited accordingly. 
           Sec. 18.  Minnesota Statutes 1998, section 322B.326, is 
        amended to read: 
           322B.326 [SHARING OF PROFITS AND LOSSES.] 
           Unless otherwise provided in the articles of organization, 
        a member control agreement, or by the board of governors under 
        section 322B.40, subdivisions 5 and 6, the profits and losses of 
        a limited liability company are to be allocated among the 
        members, and among classes and series of members, in proportion 
        to the value of the contributions of the members reflected in 
        the required records. 
           Sec. 19.  Minnesota Statutes 1998, section 322B.33, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PRESUMPTION AND MODIFICATION.] Unless 
        denied or limited in the articles of organization, a member 
        control agreement, or by the board of governors pursuant to 
        section 322B.40, subdivision 5, clause (2), a member of a 
        limited liability company has the preemptive rights provided in 
        this section.  
           Sec. 20.  Minnesota Statutes 1998, section 322B.33, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EXEMPTIONS.] Unless otherwise provided in the 
        articles of organization or a member control agreement, no 
        preemptive rights according to this section arise as to 
        contributions to be accepted from others or as to contribution 
        allowance agreements to be made with others when the 
        contribution is:  
           (1) to be made in a form other than money; 
           (2) to be made or reflected pursuant to a plan of merger or 
        exchange; 
           (3) to be made or reflected pursuant to an employee or 
        incentive benefit plan approved at a meeting by the affirmative 
        vote of the owners of a majority of the voting power of all 
        membership interests entitled to vote; 
           (4) to be made pursuant to a previously made contribution 
        allowance agreement; or 
           (5) to be made or reflected pursuant to a plan of 
        reorganization approved by a court of competent jurisdiction 
        pursuant to a statute of this state or of the United States.  
           Sec. 21.  Minnesota Statutes 1998, section 322B.333, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FREQUENCY.] Regular meetings of members 
        may be held on an annual or other less frequent periodic basis, 
        but need not be held unless required by the articles of 
        organization, a member control agreement, or operating agreement 
        or by subdivision 2.  
           Sec. 22.  Minnesota Statutes 1998, section 322B.333, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TIME AND PLACE.] A regular meeting, if any, must 
        be held on the day or date and at the time and place fixed by, 
        or in a manner authorized by, the articles, a member control 
        agreement, or operating agreement, except that a meeting called 
        by or at the demand of a member pursuant to subdivision 2 must 
        be held in the county where the principal executive office of 
        the limited liability company is located.  
           Sec. 23.  Minnesota Statutes 1998, section 322B.336, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [WHO MAY CALL.] Special meetings of the 
        members may be called for any purpose or purposes at any time, 
        by:  
           (1) the chief manager; 
           (2) the treasurer; 
           (3) two or more governors; 
           (4) a person authorized in the articles, a member control 
        agreement, or operating agreement to call special meetings; or 
           (5) a member or members owning ten percent or more of the 
        voting power of all membership interests entitled to vote.  
           Sec. 24.  Minnesota Statutes 1998, section 322B.336, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TIME AND PLACE.] Special meetings must be held 
        on the date and at the time and place fixed by the chief 
        manager, the treasurer, the board of governors, or a person 
        authorized by the articles, a member control agreement, or 
        operating agreement to call a meeting, except that a special 
        meeting called by or at the demand of a member or members 
        pursuant to subdivision 2 must be held in the county where the 
        principal executive office is located.  
           Sec. 25.  Minnesota Statutes 1998, section 322B.34, 
        subdivision 2, is amended to read: 
           Subd. 2.  [WHEN GIVEN.] In all instances where a specific 
        minimum notice period has not otherwise been fixed by law, the 
        notice must be given at least ten days before the date of the 
        meeting, or a shorter time provided in the articles of 
        organization, a member control agreement, or operating 
        agreement, and not more than 60 days before the date of the 
        meeting.  
           Sec. 26.  Minnesota Statutes 1998, section 322B.34, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CONTENTS.] The notice must contain the date, 
        time, and place of the meeting, the information with respect to 
        dissenters' rights required by section 322B.386, subdivision 2, 
        if applicable, and any other information required by this 
        chapter.  In the case of a special meeting, the notice must 
        contain a statement of the purposes of the meeting.  The notice 
        may also contain any other information required by the articles 
        of organization, a member control agreement, or operating 
        agreement or considered necessary or desirable by the board of 
        governors or by any other person or persons calling the meeting. 
           Sec. 27.  Minnesota Statutes 1998, section 322B.343, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELECTRONIC CONFERENCES.] If and to the 
        extent authorized in a member control agreement, the operating 
        agreement, or by the board of governors of a closely held 
        limited liability company, a conference among members by any 
        means of communication through which the members may 
        simultaneously hear each other during the conference constitutes 
        a regular or special meeting of members, if the same notice is 
        given of the conference to every owner of membership interests 
        entitled to vote as would be required by this chapter for a 
        meeting, and if the membership interests held by the members 
        participating in the conference would be sufficient to 
        constitute a quorum at a meeting.  Participation in a conference 
        by that means constitutes presence at the meeting in person or 
        by proxy if all the other requirements of section 322B.363 are 
        met. 
           Sec. 28.  Minnesota Statutes 1998, section 322B.343, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PARTICIPATION BY ELECTRONIC MEANS.] If and to 
        the extent authorized in a member control agreement, the 
        operating agreement, or by the board of governors of a closely 
        held limited liability company, a member may participate in a 
        regular or special meeting of members not described in 
        subdivision 1 by any means of communication through which the 
        member, other members so participating, and all members 
        physically present at the meeting may simultaneously hear each 
        other during the meeting.  Participation in a meeting by that 
        means constitutes presence at the meeting in person or by proxy 
        if all the other requirements of section 322B.363 are met.  
           Sec. 29.  Minnesota Statutes 1998, section 322B.346, is 
        amended to read: 
           322B.346 [ACT OF MEMBERS.] 
           Subdivision 1.  [MAJORITY REQUIRED.] 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 or, 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.  
           Subd. 2.  [VOTING BY CLASS OR SERIES.] In any case where a 
        class or series of membership interests is entitled by this 
        chapter, the articles of organization, a member control 
        agreement, or the terms of the membership interests to vote as a 
        class or series, the matter being voted upon must also receive 
        the affirmative vote of the owners of the same proportion of the 
        membership interests present of that class or series, or of the 
        total outstanding membership interests of that class or series, 
        as the proportion required pursuant to subdivision 1, unless the 
        articles or the member control agreement require a larger 
        proportion.  Unless otherwise stated in the articles, a member 
        control agreement, or operating agreement in the case of voting 
        as a class or series, the minimum percentage of the total voting 
        power of membership interests of the class or series that must 
        be present is equal to the minimum percentage of all membership 
        interests entitled to vote required to be present under section 
        322B.353.  
           Sec. 30.  Minnesota Statutes 1998, 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 by all of the members.  If the articles or a 
        member control agreement so provide, any action may be taken by 
        written action signed 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.  
           Sec. 31.  Minnesota Statutes 1998, section 322B.353, is 
        amended to read: 
           322B.353 [QUORUM.] 
           The owners of a majority of the voting power of the 
        membership interests entitled to vote at a meeting are a quorum 
        for the transaction of business, unless a larger or smaller 
        proportion is provided in the articles, a member control 
        agreement, or operating agreement.  If a quorum is present when 
        a duly called or held meeting is convened, the members present 
        may continue to transact business until adjournment, even though 
        the withdrawal of members originally present leaves less than 
        the proportion otherwise required for a quorum.  
           Sec. 32.  Minnesota Statutes 1998, section 322B.356, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DETERMINATION.] The board of governors may 
        fix, or authorize a manager to fix, a date not more than 60 
        days, or a shorter time period provided in the articles of 
        organization, a member control agreement, or operating 
        agreement, before the date of a meeting of members as the date 
        for the determination of the owners of membership interests 
        entitled to notice of and entitled to vote at the meeting.  When 
        a date is so fixed, only members on that date are entitled to 
        notice of and permitted to vote at that meeting of members. 
           Sec. 33.  Minnesota Statutes 1998, section 322B.356, 
        subdivision 2, is amended to read: 
           Subd. 2.  [VOTING POWER.] Unless otherwise provided in the 
        articles, a member control agreement, or by the board of 
        governors under section 322B.40, subdivisions 5 and 6, members 
        have voting power in proportion to the value of the 
        contributions of the members as reflected in the required 
        records.  
           Sec. 34.  Minnesota Statutes 1998, section 322B.356, 
        subdivision 3, is amended to read: 
           Subd. 3.  [NONMEMBERS.] The articles of organization or a 
        member control agreement may give or prescribe the manner of 
        giving a creditor, security holder, or other person a right to 
        vote under this section, but no prescription under this 
        subdivision may have the effect of transferring from an assignor 
        of financial rights to the assignee the assignor's voting rights.
           Sec. 35.  Minnesota Statutes 1998, section 322B.363, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DURATION.] The appointment of a proxy is valid 
        for 11 months, unless a longer period is expressly provided in 
        the appointment.  No appointment is irrevocable and any 
        agreement purporting to grant an irrevocable proxy is void.  A 
        member who revokes a proxy is not liable in any way for damages, 
        restitution, or other claim unless the appointment is coupled 
        with an interest in the membership interests or the limited 
        liability company.  
           Sec. 36.  Minnesota Statutes 1998, section 322B.363, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TERMINATION.] An appointment may be terminated 
        at will, unless the appointment is coupled with an interest, in 
        which case it shall not be terminated except in accordance with 
        the terms of an agreement, if any, between the parties to the 
        appointment.  Termination may be made by filing written notice 
        of the termination of the appointment with a manager of the 
        limited liability company, or by filing a new written 
        appointment of a proxy with a manager of the limited liability 
        company.  Termination in either manner revokes all prior proxy 
        appointments and is effective when filed with a manager of the 
        limited liability company.  
           Sec. 37.  Minnesota Statutes 1998, section 322B.366, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL RULE.] Except as provided in 
        subdivision 2, A written agreement among persons who are then 
        members or who have signed contribution agreements, relating to 
        the voting of their membership interests, is valid and 
        specifically enforceable by and against the parties to the 
        agreement.  The agreement may override the provisions of section 
        322B.363, subdivisions 1 to 7, regarding proxies.  
           Sec. 38.  Minnesota Statutes 1998, section 322B.37, is 
        amended to read: 
           322B.37 [MEMBER CONTROL AGREEMENTS.] 
           Subdivision 1.  [AUTHORIZATION AND SCOPE.] A written 
        agreement among persons who are then members, including a sole 
        member, or who have signed contribution agreements, relating to 
        the control of any phase of the business and affairs of the 
        limited liability company, its liquidation, dissolution and 
        termination, or the relations among members or persons who have 
        signed contribution agreements is valid as provided in 
        subdivision 2.  Wherever this chapter provides that a particular 
        result may or must be obtained through a provision in the 
        articles of organization (other than a provision required by 
        section 322B.115, subdivision 1, to be contained in the 
        articles) or in the operating agreement, the same result can be 
        accomplished through a member control agreement valid under this 
        section or through a procedure established by a member control 
        agreement valid under this section.  A member control agreement 
        may waive, in whole or in part, a member's dissenting rights 
        under sections 322B.383 and 322B.386, but may not waive 
        dissenters' rights under section 322B.873, subdivision 2, clause 
        (1).  A member control agreement relating to any phase or aspect 
        of the business and affairs of a limited liability company is 
        valid as provided in subdivision 2 and enforceable as provided 
        in subdivision 3.  A member control agreement valid under 
        subdivision 2 may relate to, without limitation, the management 
        of the limited liability company's business, the declaration and 
        payment of distributions, the sharing of profits and losses, the 
        election of governors or managers, the employment of members and 
        others by the limited liability company, the relations among 
        members and persons who have signed contribution agreements 
        (including the termination of continued membership), the 
        dissolution, termination, and liquidation of the limited 
        liability company (including the continuation of the limited 
        liability company's business through a successor organization or 
        individual), and the arbitration of disputes.  Wherever this 
        chapter provides that a particular result may or must be 
        obtained through a provision in the articles of organization 
        (other than a provision required by section 322B.115, 
        subdivision 1, to be contained in the articles), in the bylaws, 
        or by an act of the board, the same result can be accomplished 
        through a member control agreement valid under this section or 
        through a procedure established by a member control agreement 
        valid under this section.  A member control agreement may 
        allocate to the members authority ordinarily exercised by the 
        board of governors, allocate to the board of governors authority 
        ordinarily exercised by the members, or structure the governance 
        of the limited liability company in any agreed fashion and may 
        waive, in whole or in part, a member's dissenting rights under 
        sections 322B.383 and 322B.386. 
           Subd. 2.  [METHOD OF APPROVAL.] A written agreement among 
        persons described in subdivision 1 that relates to the control 
        of or the liquidation, dissolution and termination of the 
        limited liability company, the relations among them, or any 
        phase of the business and affairs of the limited liability 
        company, including, without limitation, the management of its 
        business, the declaration and payment of distributions, the 
        sharing of profits and losses, the election of governors or 
        managers, the employment of members by the limited liability 
        company, or the arbitration of disputes, is valid, if the 
        agreement is signed by all persons who are then the members of 
        the limited liability company, whether or not the members all 
        have voting power, and all those who have signed contribution 
        agreements, regardless of whether those signatories will, when 
        members, have voting power.  An agreement authorized under this 
        section may allocate to the members authority ordinarily 
        exercised by the board of governors, allocate to the board of 
        governors authority ordinarily exercised by the members, or 
        structure the governance of the limited liability company in any 
        agreed fashion.  A member control agreement as described in 
        subdivision 1 is valid if the agreement is in writing and is 
        signed by the persons who, on the date the agreement first 
        becomes effective, comprise all the members of the limited 
        liability company (regardless of voting power), and all persons 
        who are party to contribution agreements that on that date have 
        not yet been fully performed (regardless of whether those 
        parties will, when members, have voting power).  A member 
        control agreement may also include as parties persons who are 
        neither members nor parties to a contribution agreement.  A 
        member control agreement may provide for its amendment through 
        nonunanimous means. 
           Subd. 3.  [ENFORCEABILITY AND COPIES.] (a) An A member 
        control agreement valid under subdivisions 1 and 2 is 
        enforceable by persons who are parties to it and is binding upon 
        and enforceable against only those persons and other persons 
        having knowledge of the existence of the member control 
        agreement.  A copy of the member control agreement must be filed 
        with the limited liability company.  The limited liability 
        company shall note in its required records that the members' 
        interests are governed by a member control agreement entered 
        into under this section.  
           (b) A member control agreement valid under subdivisions 1 
        and 2 is specifically enforceable. 
           (c) A member control agreement may waive dissenters' 
        rights, subject to section 322B.873, subdivision 3.  
           (d) A member or any assignee of financial rights has the 
        right upon written demand to obtain a copy of any member control 
        agreement from the limited liability company at the company's 
        expense.  
           Subd. 4.  [LIABILITY.] If an a member control agreement 
        authorized under this section takes away from any person any of 
        the authority and responsibility which that person would 
        otherwise possess under this chapter, the effect of the member 
        control agreement is also to relieve that person of liability 
        imposed by law for acts and omissions in the possession or 
        exercise of that authority and responsibility and to impose that 
        liability on the person or persons possessing the authority and 
        responsibility under the agreement. 
           Subd. 5.  [OTHER AGREEMENTS.] This section does not apply 
        to, limit, or restrict agreements otherwise valid, nor is the 
        procedure set forth in this section the exclusive method of 
        agreement among members or between the members and the limited 
        liability company with respect to any of the matters described.  
           Sec. 39.  Minnesota Statutes 1998, section 322B.383, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ACTIONS CREATING DISSENTERS' RIGHTS.] 
        Subject to a member control agreement under section 322B.37, a 
        member of a limited liability company may dissent from, and 
        obtain payment for the fair value of the member's membership 
        interests in the event of, any of the following limited 
        liability company actions:  
           (1) an amendment of the articles of organization that, 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; 
           (vii) changes a statement that was required under section 
        322B.115, subdivision 1, regarding the power of remaining 
        members to avoid dissolution by giving dissolution avoidance 
        consent, if the statement was required under the law when the 
        articles of organization were executed; 
           (viii) changes a statement that was required under section 
        322B.115, subdivision 1, regarding the power of members to enter 
        into a business continuation agreement, if the statement was 
        required under the law when the articles of organization were 
        executed; or 
           (2) a sale, lease, transfer, or other disposition of all or 
        substantially all of the property and assets of the limited 
        liability company, but not including a transaction permitted 
        without member approval in section 322B.77, subdivision 1, or a 
        disposition in dissolution described in section 322B.813, 
        subdivision 4, or a disposition pursuant to an order of a court, 
        or a disposition for cash on terms requiring that all or 
        substantially all of the net proceeds of disposition be 
        distributed to the members in accordance with their respective 
        membership interests within one year after the date of 
        disposition; 
           (3) a plan of merger to which the limited liability company 
        is a party, except as provided in section 322B.873, subdivision 
        2, clause (1)(i) and subject to section 322B.873, subdivision 
        3 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) 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 operating 
        agreement, or a resolution approved by the board of governors 
        directs that dissenting members may obtain payment for their 
        membership interests; or 
           (6) a resolution of the board of governors under section 
        322B.873, subdivision 2, to implement a business continuation 
        agreement.  
           Sec. 40.  Minnesota Statutes 1998, section 322B.386, 
        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) "Limited liability company" means a limited liability 
        company whose members have obtained rights to dissent under 
        section 322B.383, subdivision 1, and includes any successor by 
        merger.  
           (c) "Fair value of the membership interests" means the 
        value of the membership interests of a limited liability company 
        immediately before the effective date of the limited liability 
        company action referred to in section 322B.383, subdivision 1. 
           (d) "Interest" means interest beginning five days after the 
        effective date of the limited liability company action referred 
        to in section 322B.383, subdivision 1, up to and including the 
        date of payment, calculated at the rate provided in section 
        549.09 for interest on verdicts and judgments.  
           (e) "Member" includes a former member when dissenters' 
        rights exist because:  
           (1) the membership of that former member has terminated 
        causing dissolution; and 
           (2) the dissolved limited liability company has then either 
        entered into a winding up merger under section 322B.81, 
        subdivision 3, or has disposed of its assets pursuant to a 
        business continuation agreement under section 322B.873, 
        subdivision 2.  
           Sec. 41.  Minnesota Statutes 1998, section 322B.386, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NOTICE OF ACTION.] If a limited liability 
        company calls a member meeting at which any action described in 
        section 322B.383, subdivision 1, is to be voted upon, the notice 
        of the meeting must inform each member of the right to dissent 
        and must include a copy of section 322B.383 and this section, 
        and if applicable, sections 322B.873, subdivisions 2 and 3, and 
        a brief description of the procedure to be followed under these 
        sections.  For members who have assigned some or all of their 
        financial rights, the description must also include the 
        procedures under subdivision 9.  
           Sec. 42.  Minnesota Statutes 1998, 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 all members who have complied with subdivision 3 and to 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, if 
        applicable, section 322B.873, subdivisions 2 and 3, 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. 43.  Minnesota Statutes 1998, section 322B.386, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PAYMENT.] (a) After the limited liability 
        company action takes effect, or after the limited liability 
        company receives a valid demand for payment, whichever is later, 
        the limited liability company shall remit to each dissenting 
        member who has complied with subdivisions 3 and 4 the amount the 
        limited liability company estimates to be the fair value of the 
        membership interests, plus interest, accompanied by:  
           (1) the limited liability company's closing balance sheet 
        and statement of income for a fiscal year ending not more than 
        16 months before the effective date of the limited liability 
        company action, together with the latest available interim 
        financial statements; 
           (2) an estimate by the limited liability company of the 
        fair value of the membership interests and a brief description 
        of the method used to reach the estimate; and 
           (3) a copy of section 322B.383, and this section, and, if 
        applicable, section 322B.873, subdivisions 2 and 3, and a brief 
        description of the procedure to be followed in demanding 
        supplemental payment.  
           (b) The limited liability company may withhold the 
        remittance described in paragraph (a) from a person who was not 
        a member on the date the action dissented from was first 
        announced to the public.  If the dissenter has complied with 
        subdivisions 3 and 4, the limited liability company shall 
        forward to the dissenter the materials described in paragraph 
        (a), a statement of the reason for withholding the remittance, 
        and an offer to pay to the dissenter the amount listed in the 
        materials if the dissenter agrees to accept that amount in full 
        satisfaction.  The dissenter may decline the offer and demand 
        payment under subdivision 6.  Failure to do so entitles the 
        dissenter only to the amount offered.  If the dissenter makes 
        demand, subdivisions 7 and 8 apply.  
           Sec. 44.  Minnesota Statutes 1998, section 322B.40, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BOARD OF GOVERNORS MAY AUTHORIZE.] Subject 
        to any restrictions in the articles of organization or a member 
        control agreement and only when authorized by the board of 
        governors or pursuant to a member control agreement, a limited 
        liability company may accept contributions under subdivisions 2 
        and 3, make contribution agreements under section 322B.42, and 
        make contribution allowance agreements under section 322B.43.  
           Sec. 45.  Minnesota Statutes 1998, section 322B.40, 
        subdivision 5, is amended to read: 
           Subd. 5.  [TERMS OF MEMBERSHIP INTERESTS.] All the 
        membership interests of a limited liability company must:  
           (1) be of one class, without series, unless the articles of 
        organization or a member control agreement establish, or 
        authorize the board of governors to establish, more than one 
        class or series within classes; 
           (2) be ordinary membership interests entitled to vote as 
        provided in section 322B.356, and have equal rights and 
        preferences in all matters not otherwise provided for by the 
        board of governors unless and to the extent that the articles of 
        organization or a member control agreement have fixed the 
        relative rights and preferences of different classes and series; 
        and 
           (3) share profits and losses as provided in section 
        322B.326, and be entitled to distributions as provided in 
        sections 322B.50, 322B.51, and 322B.873, subdivision 1, clause 
        (3). 
           Sec. 46.  Minnesota Statutes 1998, 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) 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.155 
        and 322B.383.  
           Sec. 47.  Minnesota Statutes 1998, section 322B.41, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RESTATEMENT AS TO THE PARTICULAR SERIES OR CLASS 
        TO WHICH THE NEW CONTRIBUTION PERTAINS.] Unless otherwise 
        provided in the articles of organization or a member control 
        agreement, this subdivision states the method of restating the 
        value of old contributions that pertain to the same series or 
        class to which the new contribution pertains:  
           (1) state the value the limited liability company has 
        accorded to the new contribution under section 322B.40, 
        subdivision 3, clause (1); 
           (2) determine what percentage the value stated under clause 
        (1) will constitute, after the restatement required by this 
        subdivision, of the total value of all contributions that 
        pertain to the particular series or class to which the new 
        contribution pertains; 
           (3) divide the value stated under clause (1) by the 
        percentage determined under clause (2), yielding the total 
        value, after the restatement required by this subdivision, of 
        all contributions pertaining to the particular series or class; 
           (4) subtract the value stated under clause (1) from the 
        value determined under clause (3), yielding the total value, 
        after the restatement required by this subdivision, of all the 
        old contributions pertaining to the particular series or class; 
           (5) subtract the value, as reflected in the required 
        records before the restatement required by this subdivision, of 
        the old contributions from the value determined under clause 
        (4), yielding the value to be allocated among and added to the 
        old contributions pertaining to the particular series or class; 
        and 
           (6) allocate the value determined under clause (5) 
        proportionally among the old contributions pertaining to the 
        particular series or class, add the allocated values to those 
        old contributions, and change the required records accordingly.  
           The values determined under clause (5) and allocated and 
        added under clause (6) may be positive, negative, or zero.  
           Sec. 48.  Minnesota Statutes 1998, section 322B.41, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RESTATEMENT METHOD FOR OTHER SERIES OR CLASSES.] 
        Unless otherwise provided in the articles of organization or a 
        member control agreement, this subdivision states the method of 
        restating the value of old contributions that do not pertain to 
        the same series or class to which the new contribution pertains; 
           (1) determine the percentage by which the restatement under 
        subdivision 3 has changed the total contribution value reflected 
        in the required records for the series or class to which the new 
        contribution pertains; and 
           (2) as to each old contribution that does not pertain to 
        the same series or class to which the new contribution pertains, 
        change the value reflected in the required records by the 
        percentage determined under clause (1).  The percentage 
        determined under clause (1) may be positive, negative, or zero.  
           Sec. 49.  Minnesota Statutes 1998, section 322B.42, 
        subdivision 5, is amended to read: 
           Subd. 5.  [RESTRICTIONS ON ASSIGNMENT.] Unless otherwise 
        provided in the articles of organization or a member control 
        agreement, a would-be contributor's rights under a contribution 
        agreement may not be assigned, in whole or in part, to a person 
        who was not a member at the time of the assignment, unless all 
        the members approve the assignment by unanimous written consent. 
           Sec. 50.  Minnesota Statutes 1998, section 322B.43, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AGREEMENTS PERMITTED.] Subject to any 
        restrictions in the articles of organization or a member control 
        agreement, a limited liability company may enter into 
        contribution allowance agreements under the terms, provisions, 
        and conditions fixed by the board of governors.  
           Sec. 51.  Minnesota Statutes 1998, section 322B.43, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RESTRICTIONS ON ASSIGNMENT.] Unless otherwise 
        provided in the articles of organization or a member control 
        agreement, a would-be contributor's rights under a contribution 
        allowance agreement may not be assigned in whole or in part to a 
        person who was not a member at the time of the assignment, 
        unless all the members approve the assignment by unanimous 
        written consent.  
           Sec. 52.  Minnesota Statutes 1998, section 322B.50, is 
        amended to read: 
           322B.50 [SHARING OF DISTRIBUTIONS.] 
           Unless otherwise provided in the articles of organization, 
        or a member control agreement, or by the board of governors 
        under section 322B.40, subdivisions 5 and 6, distributions of 
        cash or other assets of a limited liability company, including 
        distributions on termination of the limited liability company, 
        must be allocated in proportion to the value of the 
        contributions of the members reflected in the required records. 
           Sec. 53.  Minnesota Statutes 1998, section 322B.51, is 
        amended to read: 
           322B.51 [INTERIM DISTRIBUTIONS.] 
           Except as provided in the articles of organization or a 
        member control agreement, a member is entitled to receive 
        distributions before the limited liability company's termination 
        only as specified in the operating agreement or by the act of 
        the board of governors.  
           Sec. 54.  Minnesota Statutes 1998, section 322B.52, is 
        amended to read: 
           322B.52 [DISTRIBUTION IN KIND.] 
           Except as provided in the articles of organization or a 
        member control agreement, a member, regardless of the nature of 
        the member's contribution, has no right to demand and receive 
        any distribution from a limited liability company in any form 
        other than cash.  Except as provided in the articles of 
        organization or a member control agreement, a member may not be 
        compelled to accept a distribution of any asset in kind from a 
        limited liability company to the extent that the percentage of 
        the asset distributed to the member exceeds a percentage of that 
        asset that is equal to the percentage in which the member shares 
        in distributions from the limited liability company.  
           Sec. 55.  Minnesota Statutes 1998, section 322B.54, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [WHEN DISTRIBUTIONS ARE PERMITTED.] (a) The 
        board of governors may authorize and cause the limited liability 
        company to make a distribution only if the board of governors 
        determines, in accordance with subdivision 2, that the limited 
        liability company will be able to pay its debts in the ordinary 
        course of business after making the distribution and the board 
        of governors does not know before the distribution is made that 
        the determination was or has become erroneous. 
           (b) The limited liability company may make the distribution 
        if it is able to pay its debts in the ordinary course of 
        business after making the distribution.  
           (c) The effect of a distribution on the ability of the 
        limited liability company to pay its debts in the ordinary 
        course of business after making the distribution must be 
        measured in accordance with subdivision 3.  
           (d) The right of the board of governors to authorize, and 
        the limited liability company to make, distributions may be 
        prohibited, limited, or restricted by the articles of 
        organization, a member control agreement, or operating agreement 
        or an agreement. 
           Sec. 56.  Minnesota Statutes 1998, section 322B.56, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LIABILITY.] In addition to any other 
        liabilities, a governor who is present at a meeting and fails to 
        vote against, or who consents in writing to, a distribution made 
        in violation of section 322B.54, subdivision 1 or 4, or a 
        restriction contained in the articles of organization, a member 
        control agreement, or operating agreement or an agreement, and 
        who fails to comply with the standard of conduct provided in 
        section 322B.663, is liable to the limited liability company, 
        its receiver or any other person winding up its affairs jointly 
        and severally with all other governors so liable and to other 
        governors under subdivision 3, but only to the extent that the 
        distribution exceeded the amount that properly could have been 
        paid under section 322B.54.  
           Sec. 57.  Minnesota Statutes 1998, section 322B.603, is 
        amended to read: 
           322B.603 [OPERATING AGREEMENT BYLAWS.] 
           Subdivision 1.  [GENERALLY.] A limited liability company 
        may, but need not, have bylaws, which may, but need not, be 
        known as an operating agreement.  The operating agreement may 
        contain any provision relating to the management of the business 
        or the regulation of the affairs of the limited liability 
        company not inconsistent with law or the articles of 
        organization.  An act of the board under subdivision 2 and of 
        the members under subdivision 3 will be considered part of the 
        operating agreement only if the act expressly states that it is 
        intended to constitute or revise the operating agreement. 
           Subd. 2.  [POWER OF BOARD OF GOVERNORS.] An initial 
        operating agreement may be adopted pursuant to section 322B.60 
        by the organizers or by the first board of governors.  Unless 
        reserved by the articles of organization or a member control 
        agreement to the members, the power to adopt, amend, or repeal 
        the operating agreement is vested in the board of governors.  
        The power of the board of governors is subject to the power of 
        the members, exercisable in the manner provided in subdivision 
        3, to adopt, amend, or repeal the operating agreement adopted, 
        amended, or repealed by the board of governors.  After the 
        adoption of the initial operating agreement, the board of 
        governors shall not adopt, amend, or repeal an operating 
        agreement provision fixing a quorum for meetings of members, 
        prescribing procedures for removing governors or filling 
        vacancies in the board of governors, or fixing the number of 
        governors or their classifications, qualifications, or terms of 
        office, but may adopt or amend an operating agreement provision 
        to increase the number of governors. 
           Subd. 3.  [POWER OF MEMBERS AND PROCEDURE.] If a member or 
        members owning three percent or more of the voting power of the 
        members entitled to vote propose a resolution for action by the 
        members to adopt, amend, or repeal operating agreement 
        provisions adopted, amended, or repealed by the board of 
        governors and the resolution sets forth the provision or 
        provisions proposed for adoption, amendment, or repeal, the 
        limitations and procedures for submitting, considering, and 
        adopting the resolution are the same as provided in section 
        322B.15, subdivisions 2 to 4, for amendment of the articles of 
        organization.  
           Sec. 58.  Minnesota Statutes 1998, section 322B.606, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BOARD OF GOVERNORS TO MANAGE.] The 
        business and affairs of a limited liability company is to be 
        managed by or under the direction of a board of governors, 
        subject to the provisions of subdivision 2 and section 322B.37. 
        The first board of governors may be named in the articles of 
        organization or a member control agreement or elected by the 
        organizers pursuant to section 322B.60 or by the members. 
           Sec. 59.  Minnesota Statutes 1998, section 322B.61, is 
        amended to read: 
           322B.61 [NUMBER.] 
           The board of governors consists of one or more governors.  
        The number of governors must be fixed by or in the manner 
        provided in the articles of organization, a member control 
        agreement, or the operating agreement.  The number of governors 
        may be increased or, subject to section 322B.636, decreased at 
        any time by amendment to or in the manner provided in the 
        articles, a member control agreement, or operating agreement.  
           Sec. 60.  Minnesota Statutes 1998, section 322B.613, is 
        amended to read: 
           322B.613 [QUALIFICATIONS AND ELECTION.] 
           Governors must be natural persons.  The method of election 
        and any additional qualifications for governors may be imposed 
        by or in the manner provided in the articles, a member control 
        agreement, or operating agreement.  
           Sec. 61.  Minnesota Statutes 1998, section 322B.616, is 
        amended to read: 
           322B.616 [TERMS.] 
           Unless fixed terms are provided for in the articles, a 
        member control agreement, or operating agreement, a governor 
        serves for an indefinite term that expires at the next regular 
        meeting of the members.  A fixed term of a governor must not 
        exceed five years.  A governor holds office for the term for 
        which the governor was elected and until a successor is elected 
        and has qualified, or until the earlier death, resignation, 
        removal, or disqualification of the governor.  
           Sec. 62.  Minnesota Statutes 1998, section 322B.623, is 
        amended to read: 
           322B.623 [COMPENSATION.] 
           Subject to any limitations in the articles, a member 
        control agreement, or operating agreement, the board of 
        governors may fix the compensation of governors.  
           Sec. 63.  Minnesota Statutes 1998, section 322B.626, is 
        amended to read: 
           322B.626 [CLASSIFICATION OF GOVERNORS.] 
           Governors may be divided into classes as provided in the 
        articles, a member control agreement, or operating agreement. 
           Sec. 64.  Minnesota Statutes 1998, section 322B.63, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [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.  
           Sec. 65.  Minnesota Statutes 1998, section 322B.636, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MODIFICATION.] The provisions of this 
        section apply unless modified by the articles of organization, a 
        member control agreement, or the operating agreement.  
           Sec. 66.  Minnesota Statutes 1998, section 322B.636, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REMOVAL BY MEMBERS.] Except as provided in 
        subdivision 4, any one or all of the governors may be removed at 
        any time, with or without cause, by the affirmative vote of the 
        owners of the proportion a majority of the voting power of the 
        all membership interests of the classes or series the governor 
        represents sufficient to elect them, except as provided in 
        subdivision 4 entitled to vote at an election of governors; 
        provided that if a governor has been elected solely by the 
        holders of a class or series of membership interests, as stated 
        in the articles, any member control agreement, or bylaws, then 
        that governor may be removed only by the affirmative vote of the 
        holders of a majority of the voting power of all membership 
        interests of that class or series entitled to vote at an 
        election of that governor. 
           Sec. 67.  Minnesota Statutes 1998, section 322B.64, is 
        amended to read: 
           322B.64 [VACANCIES.] 
           Unless different rules for filling vacancies are provided 
        for in the articles, a member control agreement, or operating 
        agreement:  
           (1)(i) vacancies on the board of governors resulting from 
        the death, resignation, removal, or disqualification of a 
        governor may be filled by the affirmative vote of a majority of 
        the remaining governors, even though less than a quorum; and 
           (ii) vacancies on the board of governors resulting from 
        newly created governorships may be filled by the affirmative 
        vote of a majority of the governors serving at the time of the 
        increase; and 
           (2) each governor elected under this section to fill a 
        vacancy holds office until a qualified successor is elected by 
        the members at the next regular or special meeting of the 
        members.  
           Sec. 68.  Minnesota Statutes 1998, section 322B.643, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TIME AND PLACE.] Meetings of the board of 
        governors may be held from time to time as provided in the 
        articles of organization, a member control agreement, or 
        operating agreement at any place within or without the state 
        that the board of governors may select or by any means described 
        in subdivision 2.  If the board of governors fails to select a 
        place for a meeting, the meeting must be held at the principal 
        executive office, unless the articles, a member control 
        agreement, or operating agreement provide otherwise. 
           Sec. 69.  Minnesota Statutes 1998, section 322B.643, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CALLING MEETINGS AND NOTICE.] Unless the 
        articles of organization, a member control agreement, or 
        operating agreement 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 operating agreement 
        require it.  
           Sec. 70.  Minnesota Statutes 1998, section 322B.643, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PREVIOUSLY SCHEDULED MEETINGS.] If the day or 
        date, time, and place of a board of governors meeting have been 
        provided in the articles, a member control agreement, or 
        operating agreement, or announced at a previous meeting of the 
        board of governors, no notice is required.  Notice of an 
        adjourned meeting need not be given other than by announcement 
        at the meeting at which adjournment is taken.  
           Sec. 71.  Minnesota Statutes 1998, section 322B.646, is 
        amended to read: 
           322B.646 [ABSENT GOVERNORS.] 
           If the articles of organization, a member control 
        agreement, or operating agreement so provide, a governor may 
        give advance written consent or opposition to a proposal to be 
        acted on at a board of governors meeting.  If the governor is 
        not present at the meeting, consent or opposition to a proposal 
        does not constitute presence for purposes of determining the 
        existence of a quorum, but consent or opposition must be counted 
        as the vote of a governor present at the meeting in favor of or 
        against the proposal and must be entered in the minutes or other 
        record of action at the meeting, if the proposal acted on at the 
        meeting is substantially the same or has substantially the same 
        effect as the proposal to which the governor has consented or 
        objected.  
           Sec. 72.  Minnesota Statutes 1998, section 322B.65, is 
        amended to read: 
           322B.65 [QUORUM.] 
           A majority, or a larger or smaller proportion or number 
        provided in the articles of organization, a member control 
        agreement, or operating agreement, of the governors currently 
        holding office is a quorum for the transaction of business.  In 
        the absence of a quorum, a majority of the governors present may 
        adjourn a meeting from time to time until a quorum is present.  
        If a quorum is present when a duly called or held meeting is 
        convened, the governors present may continue to transact 
        business until adjournment, even though the withdrawal of a 
        number of governors originally present leaves less than the 
        proportion or number otherwise required for a quorum.  
           Sec. 73.  Minnesota Statutes 1998, section 322B.653, is 
        amended to read: 
           322B.653 [ACT OF THE BOARD OF GOVERNORS.] 
           The board of governors shall take action by the affirmative 
        vote of the greater of (1) a majority of governors present at a 
        duly held meeting at the time the action is taken, or (2) a 
        majority of the minimum proportion of or number of governors 
        that would constitute a quorum for the transaction of business 
        at the meeting, except where this chapter or, the articles, or a 
        member control agreement require the affirmative vote of a 
        larger proportion or number.  If the articles or a member 
        control agreement require a larger proportion or number than is 
        required by this chapter for a particular action, the 
        articles or member control agreement control.  
           Sec. 74.  Minnesota Statutes 1998, section 322B.656, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [METHOD.] An action required or permitted 
        to be taken at a board of governors meeting may be taken by 
        written action signed by all of the governors.  If the 
        articles or a member control agreement so provide, any action, 
        other than an action requiring member approval, may be taken by 
        written action signed by the number of governors that would be 
        required to take the same action at a meeting of the board of 
        governors at which all governors were present.  
           Sec. 75.  Minnesota Statutes 1998, section 322B.66, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MEMBERSHIP.] Committee members must be natural 
        persons.  Unless the articles, or a member control agreement, or 
        operating agreement provide for a different membership or manner 
        of appointment, a committee consists of one or more persons, who 
        need not be governors, appointed by affirmative vote of a 
        majority of the governors present. 
           Sec. 76.  Minnesota Statutes 1998, section 322B.663, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ELIMINATION OR LIMITATION OF LIABILITY.] A 
        governor's personal liability to the limited liability company 
        or its members for monetary damages for breach of fiduciary duty 
        as a governor may be eliminated or limited in the articles of 
        organization or a member control agreement.  Neither the 
        articles nor a member control agreement may not eliminate or 
        limit the liability of a governor:  
           (1) for any breach of the governor's duty of loyalty to the 
        limited liability company or its members; 
           (2) for acts or omissions not in good faith or that involve 
        intentional misconduct or a knowing violation of law; 
           (3) under section 80A.23 or 322B.56; 
           (4) for any transaction from which the governor derived an 
        improper personal benefit; or 
           (5) for any act or omission occurring before the date when 
        the provision in the articles of organization or a member 
        control agreement eliminating or limiting liability becomes 
        effective. 
           Sec. 77.  Minnesota Statutes 1998, section 322B.666, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CONFLICT AND PROCEDURE WHEN CONFLICT 
        ARISES.] A contract or other transaction between a limited 
        liability company and one or more of its governors, or between a 
        limited liability company and an organization in or of which one 
        or more of its governors are governors, directors, managers, 
        officers, or legal representatives or have a material financial 
        interest, is not void or voidable because the governor or 
        governors or the other organizations are parties or because the 
        governor or governors are present at the meeting of the members 
        or the board of governors or a committee at which the contract 
        or transaction is authorized, approved, or ratified, if:  
           (1) the contract or transaction was, and the person 
        asserting the validity of the contract or transaction sustains 
        the burden of establishing that the contract or transaction was, 
        fair and reasonable as to the limited liability company at the 
        time it was authorized, approved, or ratified; 
           (2) the material facts as to the contract or transaction 
        and as to the manager's governor's or managers' governors' 
        interest are fully disclosed or known to the members and the 
        contract or transaction is approved in good faith by (i) the 
        owners of two-thirds of the voting power of the membership 
        interests entitled to vote that are owned by persons other than 
        the interested governor or governors, or (ii) the unanimous 
        affirmative vote of all members, whether or not entitled to 
        vote; 
           (3) the material facts as to the contract or transaction 
        and as to the governor's or governors' interest are fully 
        disclosed or known to the board of governors or a committee, and 
        the board of governors or committee authorizes, approves, or 
        ratifies the contract or transaction in good faith by a majority 
        of the board of governors or committee, but the interested 
        governor or governors are not counted in determining the 
        presence of a quorum and must not vote; or 
           (4) the contract or transaction is a distribution described 
        in section 322B.54, subdivision 1, or a merger or exchange 
        described in section 322B.70, subdivision 1 or 2. 
           Sec. 78.  Minnesota Statutes 1998, section 322B.673, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PRESUMPTION AND MODIFICATION.] Unless the 
        articles of organization, a member control agreement, or the 
        operating agreement provide otherwise, the chief manager and 
        treasurer have the duties specified in this section.  
           Sec. 79.  Minnesota Statutes 1998, section 322B.673, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CHIEF MANAGER.] The chief manager shall:  
           (1) have general active management of the business of the 
        limited liability company; 
           (2) when present, preside at all meetings of the board of 
        governors and of the members; 
           (3) see that all orders and resolutions of the board of 
        governors are carried into effect; 
           (4) sign and deliver in the name of the limited liability 
        company any deeds, mortgages, bonds, contracts or other 
        instruments pertaining to the business of the limited liability 
        company, except in cases in which the authority to sign and 
        deliver is required by law to be exercised by another person or 
        is expressly delegated by the articles, a member control 
        agreement, or operating agreement or the board of governors to 
        some other manager or agent of the limited liability company; 
           (5) maintain records of and, whenever necessary, certify 
        all proceedings of the board of governors and the members; and 
           (6) perform other duties prescribed by the board of 
        governors.  
           Sec. 80.  Minnesota Statutes 1998, section 322B.676, is 
        amended to read: 
           322B.676 [OTHER MANAGERS.] 
           The board of governors may elect or appoint, in a manner 
        set forth in the articles of organization, a member control 
        agreement, or operating agreement or in a resolution approved by 
        the affirmative vote of a majority of the governors present, any 
        other managers or agents the board of governors considers 
        necessary for the operation and management of the limited 
        liability company.  Each of these managers and agents has the 
        powers, rights, duties, responsibilities, and terms in office 
        provided for in the articles, a member control agreement, or 
        operating agreement or determined by the board of governors.  
           Sec. 81.  Minnesota Statutes 1998, section 322B.686, 
        subdivision 3, is amended to read: 
           Subd. 3.  [VACANCY.] A vacancy in an office because of 
        death, resignation, removal, disqualification, or other cause 
        may, or in the case of a vacancy in the office of chief manager 
        or treasurer must, be filled for the unexpired portion of the 
        term in the manner provided in the articles, a member control 
        agreement, or operating agreement, or determined by the board of 
        governors, or pursuant to section 322B.68.  
           Sec. 82.  Minnesota Statutes 1998, section 322B.689, is 
        amended to read: 
           322B.689 [DELEGATION.] 
           Unless prohibited by the articles, a member control 
        agreement, or operating agreement or by a resolution approved by 
        the affirmative vote of a majority of the governors present, a 
        manager elected or appointed by the board of governors may, 
        without the approval of the board, delegate some or all of the 
        duties and powers of an office to other persons.  A manager who 
        delegates the duties or powers of an office remains subject to 
        the standard of conduct for a manager with respect to the 
        discharge of all duties and powers so delegated. 
           Sec. 83.  Minnesota Statutes 1998, section 322B.699, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PROHIBITION OR LIMIT ON INDEMNIFICATION OR 
        ADVANCES.] The articles of organization, a member control 
        agreement, or operating agreement either may prohibit 
        indemnification or advances of expenses otherwise required by 
        this section or may impose conditions on indemnification or 
        advances of expenses in addition to the conditions contained in 
        subdivisions 2 and 3 including, without limitation, monetary 
        limits on indemnification or advances of expenses, if the 
        conditions apply equally to all persons or to all persons within 
        a given class.  A prohibition or limit on indemnification or 
        advances may not apply to or affect the right of a person to 
        indemnification or advances of expenses with respect to any acts 
        or omissions of the person occurring before the effective date 
        of a provision in the articles of organization, a member control 
        agreement, or the date of adoption of a provision in the 
        operating agreement establishing the prohibition or limit on 
        indemnification or advances.  
           Sec. 84.  Minnesota Statutes 1998, section 322B.72, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GOVERNING BOARD APPROVAL AND NOTICE TO 
        OWNERS.] A resolution containing the plan of merger or exchange 
        must be approved by the affirmative vote of a majority of the 
        board members present at a meeting of the governing board of 
        each constituent organization and must then be submitted at a 
        regular or a special meeting to the owners of: 
           (1) each constituent organization, in the case of a plan of 
        merger; and 
           (2) the organization whose ownership interests will be 
        acquired by the acquiring organization in the exchange, in the 
        case of a plan of exchange. 
        The plan of merger or exchange may require that it be submitted 
        to the owners whether or not the governing board determines at 
        any time after the governing board's initial approval of the 
        plan that the plan is no longer advisable and recommends that 
        the owners reject it.  If owners owning any class or series 
        of stock ownership interest of an organization are entitled to 
        vote on the plan of merger or exchange pursuant to this section, 
        written notice must be given to every owner of that 
        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 
        meetings of shareholders in the case of a domestic corporation 
        and in the manner provided in section 322B.34 for notice of 
        meetings of members in the case of a limited liability company.  
        The written notice must state that a purpose of the meeting is 
        to consider the proposed plan of merger or exchange.  A copy or 
        short description of the plan of merger or exchange must be 
        included in or enclosed with the notice. 
           Sec. 85.  Minnesota Statutes 1998, section 322B.72, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPROVAL BY OWNERS.] (a) At the meeting a vote 
        of the owners must be taken on the proposed plan.  The plan of 
        merger or exchange is adopted when approved by the affirmative 
        vote of the owners of a majority of the voting power of all 
        ownership interests entitled to vote.  Except as provided in 
        paragraph (b) or a member control agreement, a class or series 
        of ownership interests of the organization is entitled to vote 
        as a class or series if any provision of the plan would, if 
        contained in a proposed amendment to the articles of 
        organization entitle the class or series of ownership interests 
        to vote as a class or series and, in the case of an exchange, if 
        the class or series is included in the exchange.  
           (b) A class or series of ownership interests of the 
        organization is not entitled to vote as a class or series solely 
        because the plan of merger effects a cancellation of the 
        ownership interests of the class or series if the plan of merger 
        effects a cancellation of all ownership interests of the 
        organization of all classes and series that are existing 
        immediately before the merger and owners of ownership interests 
        of that class or series are entitled to obtain payment for the 
        fair value of their shares under section 322B.383 in the event 
        of the merger. 
           Sec. 86.  Minnesota Statutes 1998, section 322B.80, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DISSOLUTION EVENTS.] A limited liability 
        company dissolves upon the occurrence of any of the following 
        events:  
           (1) when the period, if any, fixed in the articles of 
        organization for the duration of the limited liability company 
        expires, or if the limited liability company's term expires 
        pursuant to section 322B.20, subdivision 2, paragraph (a); 
           (2) by order of a court pursuant to sections 322B.833 and 
        322B.843; 
           (3) by action of the organizers pursuant to section 
        322B.803; 
           (4) by action of the members pursuant to section 322B.806; 
           (5)(i) for limited liability companies whose existence 
        begins before the effective date of this act, except as 
        otherwise provided in the articles of organization or a member 
        control agreement, upon the occurrence of an event that 
        terminates the continued membership of a member in the limited 
        liability company, including: 
           (i) death of any member; 
           (ii) retirement of any member; 
           (iii) resignation of any member; 
           (iv) redemption of a member's complete membership interest; 
           (v) assignment of a member's governance rights under 
        section 322B.313 which leaves the assignor with no governance 
        rights; 
           (vi) a buy-out of a member's membership interest under 
        section 322B.833 that leaves that member with no governance 
        rights; 
           (vii) expulsion of any member; 
           (viii) bankruptcy of any member; 
           (ix) dissolution of any member; 
           (x) a merger in which the limited liability company is not 
        the surviving organization; 
           (xi) an exchange in which the limited liability company is 
        not the acquiring organization; or 
           (xii) the occurrence of any other event that terminates the 
        continued membership of a member in the limited liability 
        company, 
        but the limited liability company is not dissolved and is not 
        required to be wound up by reason of any event that terminates 
        the continued membership of a member if (A) there is at least 
        one remaining member and the existence and business of the 
        limited liability company is continued by the consent of all the 
        remaining members obtained no later than 90 days after the 
        termination of the continued membership, or (B) if the 
        membership of the last or sole member terminates and the legal 
        representative of that last or sole member causes the limited 
        liability company to admit at least one member; or 
           (ii) for limited liability companies whose existence begins 
        on or after the effective date of this act, upon the occurrence 
        of an event that terminates the continued membership of a member 
        in the limited liability company, but only if:  (A) the articles 
        of organization or a member control agreement specifically 
        provide that the termination causes dissolution and in that 
        event only as provided in the articles or member control 
        agreement; or (B) if the membership of the last or sole member 
        terminates and the legal representative of that last or sole 
        member does not cause the limited liability company to admit at 
        least one member within 180 days after the termination; 
           (6) a merger in which the limited liability company is not 
        the surviving organization; or 
           (7) when terminated by the secretary of state according to 
        section 322B.960. 
           Sec. 87.  Minnesota Statutes 1998, section 322B.813, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COLLECTION AND PAYMENT.] When a notice of 
        dissolution has been filed with the secretary of state, the 
        board of governors, or the managers acting under the direction 
        of the board of governors, shall proceed as soon as possible: 
           (1) to give notice to creditors and claimants under section 
        322B.816 or to proceed under section 322B.82; 
           (2) subject to any business continuation agreement, to 
        collect or make provision for the collection of all known debts 
        due or owing to the limited liability company, including 
        unperformed contribution agreements; and 
           (3) except as provided in sections 322B.816, 322B.82, and 
        322B.863, to pay or make provision for the payment of all known 
        debts, obligations, and liabilities of the limited liability 
        company according to their priorities under section 322B.873. 
           Sec. 88.  Minnesota Statutes 1998, section 322B.816, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CLAIMS AGAINST LIMITED LIABILITY COMPANIES THAT 
        GIVE NOTICE.] (a) A limited liability company that gives notice 
        to creditors and claimants has 30 days from the receipt of each 
        claim filed according to the procedures set forth by the limited 
        liability company on or before the date set forth in the notice 
        to accept or reject the claim by giving written notice to the 
        person submitting it.  A claim not expressly rejected in this 
        manner is considered accepted.  
           (b) A creditor or claimant to whom notice is given and 
        whose claim is rejected by the limited liability company has 60 
        days from the date of rejection, 180 days from the date the 
        limited liability company filed with the secretary of state the 
        notice of dissolution, or 90 days after the date on which notice 
        was given to the creditor or claimant, whichever is longer, to 
        pursue any other remedies with respect to the claim.  
           (c) A creditor or claimant to whom notice is given who 
        fails to file a claim according to the procedures set forth by 
        the limited liability company on or before the date set forth in 
        the notice is barred from suing the dissolved limited liability 
        company on that claim or otherwise realizing upon or enforcing 
        it against the dissolved limited liability company, except as 
        provided in section 322B.863.  If the dissolved limited 
        liability company gave the additional information referred to in 
        subdivision 3, nothing in this section bars the creditor or 
        claimant from seeking to enforce its rights against the 
        successor organization.  
           (d) A creditor or claimant whose claim is rejected by the 
        limited liability company under paragraph (b) is barred from 
        suing on that claim or otherwise realizing upon or enforcing it 
        whether against the dissolved limited liability company or any 
        successor organization, if the creditor or claimant does not 
        initiate legal, administrative, or arbitration proceedings with 
        respect to the claim within the time provided in paragraph (b).  
           Sec. 89.  Minnesota Statutes 1998, section 322B.833, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BUY-OUT ON MOTION.] In an action under 
        subdivision 1, clause (2), in which one or more of the 
        circumstances described in that clause is established, the court 
        may, upon motion of a limited liability company or a member, 
        order the sale by a plaintiff or a defendant of all membership 
        interests of the limited liability company held by the plaintiff 
        or defendant to either the limited liability company or the 
        moving members, whichever is specified in the motion, if the 
        court determines in its discretion that an order would be fair 
        and equitable to all parties under all of the circumstances of 
        the case.  
           The purchase price of any membership interest so sold must 
        be the fair value of the membership interest as of the date of 
        the commencement of the action or as of another date found 
        equitable by the court.  If the articles of organization, or a 
        member control agreement or business continuation agreement 
        states a price for the redemption or buy-out of membership 
        interests, the court shall order the sale for the price and on 
        the terms set forth in them, unless the court determines that 
        the price or terms are unreasonable under all the circumstances 
        of the case.  
           Within five days after the entry of the order, the limited 
        liability company shall provide each selling member with the 
        information it is required to provide under section 322B.386, 
        subdivision 5, paragraph (a).  
           If the parties are unable to agree on fair value within 40 
        days of entry of the order, the court shall determine the fair 
        value of the membership interests under the provisions of 
        section 322B.386, subdivision 7, may allow interest or costs as 
        provided in section 322B.386, subdivisions 1 and 8, and may 
        allocate payment among the member whose membership interest is 
        being sold and any assignees of the financial rights of that 
        member.  
           The purchase price must be paid in one or more installments 
        as agreed on by the parties, or, if no agreement can be reached 
        within 40 days of entry of the order, as ordered by the court.  
        Upon entry of an order for the sale of a membership interest 
        under this subdivision and provided that the limited liability 
        company or the moving members post a bond in adequate amount 
        with sufficient sureties or otherwise satisfy the court that any 
        full purchase price of the membership interest, plus the 
        additional costs, expenses, and fees awarded by the court, will 
        be paid when due and payable, the selling member shall no longer 
        have any rights or status as a member, manager, or governor, 
        except the right to receive the fair value of the membership 
        interest plus other amounts as might be awarded. 
           Sec. 90.  Minnesota Statutes 1998, section 322B.833, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CONSIDERATIONS AS TO DISSOLUTION.] In 
        determining what relief to order, the court shall take into 
        account that any relief that results in the termination of a 
        member's membership interest will may cause dissolution of the 
        limited liability company.  If the court orders relief that 
        results in dissolution of the limited liability company, the 
        court shall make appropriate orders providing for the winding up 
        and termination of the dissolved limited liability company. 
           Sec. 91.  Minnesota Statutes 1998, section 322B.833, 
        subdivision 6, is amended to read: 
           Subd. 6.  [LIQUIDATION REMEDY.] In deciding whether to 
        order winding up through liquidation, the court shall consider 
        whether lesser relief suggested by one or more parties, or 
        provided in a business continuation member control agreement, 
        such as any form of equitable relief, or a buy-out or partial 
        liquidation coupled with the continuation of the business of the 
        dissolved limited liability company through a successor 
        organization, would be adequate to permanently relieve the 
        circumstances established under subdivision 1, clause (2) or 
        (3).  Lesser relief may be ordered in any case where it would be 
        appropriate under all the facts and circumstances of the case.  
           Sec. 92.  Minnesota Statutes 1998, section 322B.843, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NOTICE TO LIMITED LIABILITY COMPANY AND 
        CORRECTION.] An action must not be commenced under this section 
        until 30 days after notice to the limited liability company by 
        the attorney general of the reason for the filing of the 
        action.  If the reason for filing the action is an act that the 
        limited liability company has done, or omitted to do, and the 
        act or omission may be corrected by an amendment of the articles 
        of organization, a member control agreement, or the operating 
        agreement or by performance of or abstention from the act, the 
        attorney general shall give the limited liability company 30 
        additional days in which to effect the correction before filing 
        the action.  
           Sec. 93.  Minnesota Statutes 1998, section 322B.873, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DISPOSITION UPON LIQUIDATION.] Subject to 
        subdivision 4, except when the business of a dissolved limited 
        liability company is being continued under subdivision 2 or when 
        the dissolved limited liability company is being wound up and 
        terminated under section 322B.81, subdivision 3, the assets of 
        the dissolved limited liability company must be disposed of to 
        satisfying liabilities according to the following priorities:  
           (1) to creditors, including members who are creditors, to 
        the extent otherwise permitted by law, in satisfaction of 
        liabilities of the limited liability company other than 
        liabilities for interim distributions to members under section 
        322B.51 or termination distributions under section 322B.50; 
           (2) unless otherwise provided in the articles of 
        organization or a member control agreement, to members and 
        former members of the limited liability company in satisfaction 
        of liabilities for distributions under section 322B.50 or 
        322B.51; and 
           (3) unless otherwise provided in the articles of 
        organization or a member control agreement, to members first for 
        a return of their contributions, as restated from time to time 
        under section 322B.41, and secondly respecting their membership 
        interests in the proportions in which the members share in 
        distributions. 
           Sec. 94.  Minnesota Statutes 1998, section 322B.873, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DAMAGES AND OFFSETS FOR WRONGFUL DISSOCIATION 
        AND BREACH OF A MEMBER CONTROL AGREEMENT.] A member who 
        wrongfully resigns or retires is liable to the limited liability 
        company for any damages caused by the member's wrongful 
        resignation or retirement.  Any member who breaches a member 
        control agreement is liable to the limited liability company for 
        any damages caused by the breach.  Any payment due a member 
        under this section, including payments, if any, to dissenters 
        due to winding up merger under section 322B.81, subdivision 3, 
        is subject to offset these damages. 
           Sec. 95.  [REPEALER.] 
           Minnesota Statutes 1998, sections 322B.03, subdivisions 4, 
        5, 9, and 16; 322B.363, subdivision 8; 322B.366, subdivision 2; 
        322B.816, subdivision 3; and 322B.873, subdivisions 2 and 3, are 
        repealed. 
           Sec. 96.  [REVISOR INSTRUCTION.] 
           The revisor of statutes shall change the term "operating 
        agreement" or similar term to "bylaws" or similar term wherever 
        it appears in Minnesota Statutes, chapter 322B, except in the 
        first sentence of section 322B.603, subdivision 1. 
           Sec. 97.  [EFFECTIVE DATE; APPLICATION.] 
           Sections 1 to 96 are effective August 1, 1999, and unless 
        otherwise specified apply to all limited liability companies in 
        existence on or after that date. 
                                   ARTICLE 3
                            RUPA CONFORMING CHANGES
           Section 1.  Minnesota Statutes 1998, section 319B.02, 
        subdivision 10, is amended to read: 
           Subd. 10.  [MINNESOTA FIRM.] "Minnesota firm" includes a 
        corporation organized under chapter 302A or 317A, limited 
        liability company organized under chapter 322B, and limited 
        liability partnership registered under section 323.44, and 
        limited liability partnership that has an effective statement of 
        qualification under section 323A.10-01. 
           Sec. 2.  Minnesota Statutes 1998, section 319B.02, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ORGANIZATIONAL DOCUMENT.] "Organizational 
        document" means: 
           (1) with respect to a corporation organized under chapter 
        302A or 317A, that corporation's articles of incorporation; 
           (2) with respect to a limited liability company organized 
        under chapter 322B, that limited liability company's articles of 
        organization; and 
           (3) with respect to a limited liability partnership 
        registered under section 323.44, that limited liability 
        partnership's registration and any notice filed under section 
        323.44, subdivision 9, in connection with that registration; and 
           (4) with respect to a limited liability partnership that 
        has an effective statement of qualification under section 
        323A.10-01, that statement of qualification. 
           Sec. 3.  Minnesota Statutes 1998, section 319B.02, 
        subdivision 21, is amended to read: 
           Subd. 21.  [STATEMENT OF FOREIGN QUALIFICATION.] "Statement 
        of foreign qualification" means,: 
           (1) with respect to a foreign firm that is a limited 
        liability partnership, the and has filed a statement of 
        qualification required under section 323.49, that statement of 
        qualification and any notice filed under section 323.49, 
        subdivision 9, in connection with that registration.; and 
           (2) with respect to a limited liability partnership that 
        has an effective statement of foreign qualification under 
        section 323A.11-02, that statement of foreign qualification. 
           Sec. 4.  Minnesota Statutes 1998, section 319B.02, 
        subdivision 22, is amended to read: 
           Subd. 22.  [UPDATE.] "Update" means: 
           (1) with respect to a Minnesota professional firm that is 
        either a Minnesota corporation or a Minnesota limited liability 
        company, amend the organizational document; 
           (2) with respect to a Minnesota professional firm that is a 
        Minnesota limited liability partnership registered under section 
        323.44, file a notice under section 323.44, subdivision 9, in 
        connection with the Minnesota limited liability partnership's 
        registration; 
           (3) with respect to a foreign professional firm that is a 
        foreign corporation, file a notice under section 303.115 in 
        connection with the foreign corporation's certificate of 
        authority; 
           (4) with respect to a foreign firm that is a limited 
        liability company, file a notice under section 322B.92, clause 
        (3), in connection with the foreign limited liability company's 
        certificate of authority; and 
           (5) with respect to a foreign professional firm that is a 
        foreign limited liability partnership and has filed a statement 
        of qualification under section 323.49, file a notice under 
        section 323.49, subdivision 9, in connection with the foreign 
        limited liability partnership's that statement of qualification 
        .; 
           (6) with respect to a Minnesota professional firm that is a 
        limited liability partnership and has an effective statement of 
        qualification under section 323A.10-01, amend that statement of 
        qualification; and 
           (7) with respect to a foreign professional firm that is a 
        limited liability partnership and has an effective statement of 
        foreign qualification under section 323A.11-02, amend that 
        statement of foreign qualification. 
           Sec. 5.  Minnesota Statutes 1998, section 319B.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELECTION TO INVOKE AUTHORITY UNDER THIS ACT.] To 
        elect to become a foreign professional firm and be authorized to 
        furnish professional services according to sections 319B.01 to 
        319B.12, a foreign firm must in its certificate of authority or 
        statement of foreign qualification: 
           (1) state that the firm elects to operate under sections 
        319B.01 to 319B.12; 
           (2) acknowledge that the firm is subject to those sections; 
           (3) state that, to the extent its generally applicable 
        governing law conflicts or differs with those sections, the 
        foreign firm has made the necessary changes to the agreements 
        and other documents controlling its structure, governance, 
        operations, and internal affairs so as to comply with those 
        sections; and 
           (4) specify from the list stated in section 319B.02, 
        subdivision 19, the category or categories of professional 
        services the foreign firm is authorized to provide within 
        Minnesota. 
           The statements, acknowledgment, and specification may be 
        made when the foreign firm initially files for a certificate of 
        authority or statement of foreign qualification or may be added 
        at a later time by updating that document. 
           Sec. 6.  Minnesota Statutes 1998, section 319B.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RESCISSION AND AMENDMENT OF ELECTION.] (a) A 
        foreign firm may rescind its election by updating its 
        certificate of authority or statement of foreign qualification 
        to delete the statements, acknowledgment, and specification 
        required by subdivision 2. 
           (b) A foreign firm may update its certificate of authority 
        or statement of foreign qualification to change the 
        specification required by subdivision 2, clause (4). 
           Sec. 7.  Minnesota Statutes 1998, section 319B.08, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ACQUISITION OF INTERESTS OR AUTOMATIC LOSS 
        OF PROFESSIONAL FIRM STATUS.] (a) If an owner dies or becomes 
        disqualified to practice all the pertinent professional 
        services, then either: 
           (1) within 90 days after the death or the beginning of the 
        disqualification, all of that owner's ownership interest must be 
        acquired by the professional firm, by persons permitted by 
        section 319B.07 to own the ownership interest, or by some 
        combination; or 
           (2) at the end of the 90-day period, the firm's election 
        under section 319B.03, subdivision 2, or 319B.04, subdivision 2, 
        is automatically rescinded, the firm loses its status as a 
        professional firm, and the authority created by that election 
        and status terminates.  
           An acquisition satisfies clause (1) if all right and title 
        to the deceased or disqualified owner's interest are acquired 
        before the end of the 90-day period, even if some or all of the 
        consideration is paid after the end of the 90-day period.  
        However, payment cannot be secured in any way that violates 
        sections 319B.01 to 319B.12. 
           (b) If automatic rescission does occur under paragraph (a), 
        the firm must immediately and accordingly update its 
        organizational document, certificate of authority, or statement 
        of foreign qualification.  Even without that updating, however, 
        the rescission, loss of status, and termination of authority 
        provided by paragraph (a) occur automatically at the end of the 
        90-day period. 
           Sec. 8.  Minnesota Statutes 1998, section 319B.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EFFECT ON PARTICIPATING PROFESSIONAL FIRM.] (a) 
        If a professional firm participates in and survives a 
        reorganization but the reorganization causes the surviving firm 
        to be out of compliance with section 319B.07 or 319B.09, or both:
           (1) the surviving firm's election under section 319B.03, 
        subdivision 2, or 319B.04, subdivision 2, is automatically 
        rescinded; 
           (2) the surviving firm immediately loses its status as a 
        professional firm and the authority created by that election and 
        status terminates; and 
           (3) the surviving firm must immediately and accordingly 
        update its organizational document, certificate of authority, or 
        statement of foreign qualification.  Even without that 
        amendment, however, the rescission, loss of status, and 
        termination of authority occur automatically when the 
        reorganization takes effect. 
           (b) If, before a reorganization takes effect, the 90-day 
        deadline established in section 319B.07, subdivision 1, has been 
        triggered but has not yet elapsed with regard to an ownership 
        interest in a professional firm participating in the 
        reorganization, the surviving firm is not out of compliance with 
        sections 319B.07 and 319B.09 merely because the reorganization 
        accords a comparable ownership interest in the surviving firm to 
        the disqualified owner or the representative of the deceased 
        owner's estate.  The original 90-day deadline applies to the 
        comparable ownership interest and the surviving firm. 
           Sec. 9.  Minnesota Statutes 1998, section 319B.11, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FILING OF ORGANIZATIONAL DOCUMENT AND REPORT 
        INFORMATION.] (a) No professional firm may furnish professional 
        services within Minnesota until the firm files with each board 
        having jurisdiction over the pertinent professional services: 
           (1) a copy of the firm's organizational document, 
        certificate of authority, or statement of foreign qualification; 
           (2) a report containing the same information as required by 
        subdivision 4; and 
           (3) except as stated in paragraph (b), a fee of $100. 
           (b) If a firm has previously been organized under sections 
        319A.01 to 319A.22, that firm is not required to pay the filing 
        fee under paragraph (a).  
           Sec. 10.  Minnesota Statutes 1998, section 319B.11, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ANNUAL REPORT.] (a) Every professional firm must 
        file annually on or before January 1 with the board or boards 
        having jurisdiction over the pertinent professional services a 
        report containing the following: 
           (1) the name and address of the professional firm; 
           (2) the contents of any amendment made to the firm's 
        organizational document, certificate of authority, or statement 
        of foreign qualification since the filing of the most recent 
        report under subdivision 3 or this subdivision; 
           (3) a designation of the position or positions within the 
        firm that have governance authority; 
           (4) the name and address of each owner of an ownership 
        interest and each person occupying a position with governance 
        authority; 
           (5) a statement as to whether all employees, agents, and 
        independent contractors furnishing professional services within 
        Minnesota on behalf of the professional firm are professionals 
        authorized to furnish at least one category of the pertinent 
        professional services; 
           (6) except in the case of a professional firm that is 
        organized under chapter 317A or the nonprofit corporation 
        statute of another state, a statement as to whether all owners 
        and persons occupying a position with governance authority are 
        professionals authorized to furnish at least one category of the 
        pertinent professional services; 
           (7) in the case of a professional firm that is organized 
        under chapter 317A or the nonprofit corporation statute of 
        another state, a statement as to whether at least one person 
        occupying a position with governance authority is a professional 
        authorized to furnish at least one category of the pertinent 
        professional services; and 
           (8) any additional information as the board may by rule 
        prescribe as appropriate to assist in determining whether a 
        professional firm is complying with sections 319B.01 to 319B.12. 
           The statement required by clauses (5), (6), and (7) must be 
        made and signed under oath by a professional who is an owner or 
        employee of the professional firm, licensed in at least one 
        category of the pertinent professional services and duly 
        authorized to make the statement on behalf of the professional 
        firm. 
           (b) For filing each annual report under paragraph (a), each 
        firm must pay a fee of $25 to each board with which the report 
        is filed. 
           Sec. 11.  Minnesota Statutes 1998, section 319B.11, 
        subdivision 8, is amended to read: 
           Subd. 8.  [INVOLUNTARY DISSOLUTION AND RESCISSION OF 
        PROFESSIONAL FIRM STATUS.] A board, through the attorney 
        general, may institute proceedings in a district court of this 
        state or a contested case proceeding under chapter 14 to 
        involuntarily rescind a professional firm's election under 
        section 319B.03, subdivision 2, or 319B.04, subdivision 2, to 
        impose restrictions or conditions on that election or to 
        reprimand the professional firm due to a violation of sections 
        319B.01 to 319B.12, the relevant licensing statute as listed in 
        section 319B.02, subdivision 19, or the rules of the board.  A 
        board, through the attorney general, may institute proceedings 
        in a district court of this state to have a Minnesota 
        professional firm involuntarily dissolved, or a foreign 
        professional firm's certificate of authority or statement of 
        foreign qualification revoked on those grounds, as well as on 
        any other grounds provided by Minnesota law.  A board may seek 
        reprimands, restrictions, conditions, involuntary rescission, 
        and, as appropriate, dissolution or revocation within a single 
        proceeding in a district court of this state.  After a court 
        enters a decree imposing rescission, dissolution, or revocation 
        upon a professional firm, a board shall cause a certified copy 
        of the decree to be filed with the secretary of state.  The 
        secretary of state shall not charge a fee for filing the 
        decree.  A board's claim against a professional firm for 
        involuntary dissolution or revocation does not abate simply 
        because the professional firm has rescinded its election under 
        section 319B.03, subdivision 2, or 319B.04, subdivision 2.  A 
        voluntary rescission does abate a board's claim to obtain 
        reprimands, restrictions, conditions, or involuntary rescission. 
           Sec. 12.  Minnesota Statutes 1998, section 322A.02, is 
        amended to read: 
           322A.02 [NAME.] 
           (a) The name of each limited partnership as set forth in 
        its certificate of limited partnership: 
           (1) shall contain the words "limited partnership" or the 
        abbreviation "LP" or "L.P." or in the case of a limited 
        liability limited partnership shall contain: 
           (i) the words "limited liability limited partnership" or 
        the abbreviation "LLLP" or "L.L.L.P."; or 
           (ii) the words "limited partnership" or the abbreviation 
        "LP" or "L.P." plus the words "Registered Limited Liability 
        Partnership" or "Limited Liability Partnership" or the 
        abbreviation "R.L.L.P.," "L.L.P.," "RLLP," or "LLP"; 
           (2) may not contain the name of a limited partner unless 
        (i) it is also the name of a general partner or the corporate 
        name of a corporate general partner, or (ii) the business of the 
        limited partnership had been carried on under that name before 
        the admission of that limited partner; 
           (3) must be distinguishable from the name of a domestic 
        corporation or limited partnership, whether profit or nonprofit, 
        or 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 reserved or provided 
        for in the manner provided for in sections 302A.117, 322A.03, 
        322B.125, or 333.001 to 333.54, unless there is filed with the 
        certificate a written consent, court decree of prior right, or 
        affidavit of nonuse, of the kind required by section 302A.115, 
        subdivision 1, paragraph (d); and 
           (4) may not contain the following words:  corporation, 
        incorporated. 
           The secretary of state shall determine whether a name is 
        "distinguishable" from another name for purposes of this section 
        and section 322A.03.  This section does 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, 
        trademarks, service names, service marks, or any other rights to 
        the exclusive use of names or symbols, nor derogate the common 
        law or principles of equity.  
           (b) 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. 13.  Minnesota Statutes 1998, section 322A.87, is 
        amended to read: 
           322A.87 [RULES FOR CASES NOT PROVIDED FOR IN SECTIONS 
        322A.01 TO 322A.87.] 
           In any case not provided for in sections 322A.01 to 322A.87 
        the provisions of chapter 323, the Uniform Partnership Act 
        govern. (a) Before January 1, 2002, for any case not provided 
        for in sections 322A.01 to 322A.87 the governing law is as 
        follows: 
           (1) for limited partnerships formed after December 31, 
        1998, chapter 323A governs; 
           (2) for limited partnerships formed before January 1, 1999; 
           (i) if the limited partnership has filed a statement of 
        qualification under section 322A.88 or has amended its 
        certificate of limited partnership to state that the limited 
        partnership is subject to chapter 323A, chapter 323A governs; 
           (ii) if subparagraph (i) does not apply, chapter 323 
        governs. 
           (b) Beginning January 1, 2002, for any case not provided 
        for in sections 322A.01 to 322A.87, chapter 323A governs. 
           Sec. 14.  Minnesota Statutes 1998, section 322A.88, is 
        amended to read: 
           322A.88 [LIMITED LIABILITY LIMITED PARTNERSHIP.] 
           (a) A limited partnership may become a limited liability 
        limited partnership by: 
           (1) obtaining approval of the terms and conditions under 
        which the limited partnership elects limited liability limited 
        partnership status by the vote necessary to amend the limited 
        partnership agreement except, in the case of a limited 
        partnership agreement that expressly considers contribution 
        obligations, the vote necessary to amend those provisions; 
           (2) filing a statement of qualification under section 
        323A.10-01(c) of the Uniform Partnership Act (1994); and 
           (3) complying with the name requirements of section 
        323A.10-02 of the Uniform Partnership Act (1994) 322A.02, 
        paragraph (a), clause (1), as those requirements pertain to a 
        limited liability limited partnership.  
           (b) A limited liability limited partnership continues to be 
        the same entity that existed before the filing of a statement of 
        qualification under section 323A.10-01(c) of the Uniform 
        Partnership Act (1994). 
           (c) Sections 323A.3-06(c) and 323A.3-07(d) of the Uniform 
        Partnership Act (1994) apply to both general and limited 
        partners of a limited liability limited partnership. 
           Sec. 15.  Minnesota Statutes 1998, section 323A.10-01, is 
        amended to read: 
           323A.10-01 [STATEMENT OF QUALIFICATION.] 
           (a) A partnership may become a limited liability 
        partnership pursuant to this section. 
           (b) The terms and conditions on which a partnership becomes 
        a limited liability partnership must be approved by the vote 
        necessary to amend the partnership agreement except, in the case 
        of a partnership agreement that expressly considers obligations 
        to contribute to the partnership, the vote necessary to amend 
        those provisions. 
           (c) After the approval required by subsection (b), a 
        partnership may become a limited liability partnership by filing 
        a statement of qualification.  The statement must contain: 
           (1) the name of the partnership; 
           (2) the street address, including the zip code, of the 
        partnership's chief executive office and, if different, the 
        street address, including the zip code, of an office in this 
        state, if any; 
           (3) if the partnership does not have an office in this 
        state, the name and street address, including the zip code, of 
        the partnership's agent for service of process; 
           (4) a statement that the partnership elects to be a limited 
        liability partnership; and 
           (5) a deferred effective date, if any. 
           (d) The agent of a limited liability partnership for 
        service of process must be an individual who is a resident of 
        this state or other person authorized to do business in this 
        state. 
           (e) The status of a partnership as a limited liability 
        partnership is effective on the later of the filing of the 
        statement or a date specified in the statement.  The status 
        remains effective, regardless of changes in the partnership, 
        until it is canceled pursuant to section 323A.1-05(d) or revoked 
        pursuant to section 323A.10-03. 
           (f) The status of a partnership as a limited liability 
        partnership and the liability of its partners is not affected by 
        errors or later changes in the information required to be 
        contained in the statement of qualification under subsection (c).
           (g) The filing of a statement of qualification establishes 
        that a partnership has satisfied all conditions precedent to the 
        qualification of the partnership as a limited liability 
        partnership. 
           (h) An amendment or cancellation of a statement of 
        qualification is effective when it is filed or on a deferred 
        effective date specified in the amendment or cancellation.  
           (i) A statement of qualification may include the 
        information necessary to make an election under section 319B.03, 
        subdivision 2, and to update that information as provided in 
        section 319B.03, subdivision 3. 
           Sec. 16.  Minnesota Statutes 1998, section 323A.11-02, is 
        amended to read: 
           323A.11-02 [STATEMENT OF FOREIGN QUALIFICATION.] 
           (a) Before transacting business in this state, a foreign 
        limited liability partnership must file a statement of foreign 
        qualification.  The statement must contain: 
           (1) the name of the foreign limited liability partnership 
        which satisfies the requirements of the state or other 
        jurisdiction under whose law it is formed and ends with 
        "Registered Limited Liability Partnership," "Limited Liability 
        Partnership," "R.L.L.P.," "L.L.P.," "RLLP," or "LLP;" 
           (2) the street address, including the zip code, of the 
        partnership's chief executive office and, if different, the 
        street address, including the zip code, of an office of the 
        partnership in this state, if any; 
           (3) if there is no office of the partnership in this state, 
        the name and street address, including the zip code, of the 
        partnership's agent for service of process; and 
           (4) a deferred effective date, if any. 
           (b) The agent of a foreign limited liability company for 
        service of process must be an individual who is a resident of 
        this state or other person authorized to do business in this 
        state. 
           (c) The status of a partnership as a foreign limited 
        liability partnership is effective on the later of the filing of 
        the statement of foreign qualification or a date specified in 
        the statement.  The status remains effective, regardless of 
        changes in the partnership, until it is canceled pursuant to 
        section 323A.1-05(d) or revoked pursuant to section 323A.10-03. 
           (d) An amendment or cancellation of a statement of foreign 
        qualification is effective when it is filed or on a deferred 
        effective date specified in the amendment or cancellation. 
           (e) A statement of foreign qualification may include the 
        information necessary to make an election under section 319B.04, 
        subdivision 2, and to update that information as provided in 
        section 319B.04, subdivision 3. 
           Sec. 17.  [REVISOR INSTRUCTION.] 
           Effective January 1, 2002, the revisor of statutes shall 
        remove from Minnesota Statutes, chapter 319B, all references to 
        Minnesota Statutes, chapter 323. 
           Sec. 18.  [EFFECTIVE DATE.] 
           Sections 1 to 16 are effective retroactive to January 1, 
        1999. 
           Presented to the governor April 19, 1999 
           Signed by the governor April 22, 1999, 9:30 a.m.

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