Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

Office of the Revisor of Statutes

CHAPTER 319B. PROFESSIONAL FIRMS

Table of Sections
SectionHeadnote
319B.01PROFESSIONAL FIRMS ACT; CITATION.
319B.02DEFINITIONS.
319B.03AUTHORITY OF MINNESOTA FIRMS TO FURNISH PROFESSIONAL SERVICES; ELECTION BY MINNESOTA FIRMS TO INVOKE THE ACT.
319B.04AUTHORITY OF FOREIGN FIRMS TO FURNISH PROFESSIONAL SERVICES; ELECTION BY FOREIGN FIRMS TO INVOKE THE ACT.
319B.05FIRM NAME.
319B.06FURNISHING SERVICES.
319B.07OWNERSHIP INTERESTS.
319B.08EFFECT OF DEATH OR DISQUALIFICATION OF OWNER.
319B.09GOVERNANCE.
319B.10MERGERS AND OTHER REORGANIZATIONS.
319B.11PROFESSIONAL REGULATION.
319B.12TRANSITION PROVISIONS.
319B.40PROFESSIONAL HEALTH SERVICES.
319B.01 PROFESSIONAL FIRMS ACT; CITATION.
Sections 319B.01 to 319B.12 may be cited as the "Minnesota Professional Firms Act."
History: 1997 c 22 art 1 s 1
319B.02 DEFINITIONS.
    Subdivision 1. Scope. For the purposes of sections 319B.01 to 319B.12, the terms defined in
this section have the meanings given them.
    Subd. 2. Board. "Board" means an agency of the state of Minnesota which has jurisdiction
to grant a license to furnish professional services of a category within subdivision 19, except
that in the case of a professional firm that provides legal services, "board" means the Board of
Professional Responsibility.
    Subd. 3. Certificate of authority. "Certificate of authority" means:
(1) with respect to a foreign firm that is a corporation, the certificate of authority required
under sections 303.01 to 303.24 and any notice filed under section 303.115 in connection with
that certificate; and
(2) with respect to a foreign firm that is a limited liability company, the certificate of authority
required under sections 322B.905 to 322B.955 and any notice filed under section 322B.92, clause
(3), in connection with that certificate.
    Subd. 4. Disqualified. "Disqualified" means to have a license to provide pertinent
professional services:
(1) suspended, unless by its terms the suspension will automatically end less than 90 days
after it takes effect; or
(2) revoked.
The disqualification occurs when the suspension or revocation first takes effect.
    Subd. 5. Firm. "Firm" includes a corporation, limited liability company, and limited liability
partnership, wherever incorporated, organized, or registered.
    Subd. 6. Foreign firm. "Foreign firm" means a corporation incorporated, limited liability
company organized, or limited liability partnership registered under the laws of a state other
than Minnesota.
    Subd. 7. Foreign professional firm. "Foreign professional firm" means a foreign firm that
has in effect an election under section 319B.04, subdivision 2.
    Subd. 8. Generally applicable governing law. "Generally applicable governing law" of a
firm means:
(1) with respect to a firm that is a corporation, the state statute under which the corporation
is incorporated;
(2) with respect to a firm that is a limited liability company, the state statute under which the
limited liability company is organized; and
(3) with respect to a firm that is a limited liability partnership, the state statute under which
the limited liability partnership obtains its status as a limited liability partnership;
plus any other law that is generally relevant to the structure, governance, operations, or other
internal affairs of the firm.
    Subd. 9. Governance authority. "Governance authority" means the authority and
responsibility to:
(1) determine important policies for a professional firm;
(2) superintend the professional firm's overall operations; and
(3) maintain general, active management of and ultimate control over all matters involving
professional judgment.
    Subd. 9a. License. "License" includes any license, certificate, registration, or other authority
referred to in subdivision 17 or 19.
    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 that has an effective statement of qualification under section 323A.1001.
    Subd. 11. Minnesota professional firm. "Minnesota professional firm" means a Minnesota
firm that has in effect an election under section 319B.03, subdivision 2.
    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 that has an effective statement of
qualification under section 323A.1001, that statement of qualification.
    Subd. 13. Owner. "Owner" means:
(1) with respect to a professional firm that is a corporation, except a nonprofit corporation, an
owner of shares in the corporation;
(2) with respect to a professional firm that is a limited liability company, a member in the
limited liability company; and
(3) with respect to a professional firm that is a limited liability partnership, a partner in the
limited liability partnership.
    Subd. 14. Ownership interest. "Ownership interest" means:
(1) with respect to a professional firm that is a corporation, except a nonprofit corporation,
shares in the corporation;
(2) with respect to a professional firm that is a limited liability company, a membership
interest in the limited liability company; and
(3) with respect to a professional firm that is a limited liability partnership, a partnership
interest.
    Subd. 15. Partial right. "Partial right" means a right in or with respect to an ownership
interest where the right is by itself insufficient to make the right's holder an owner.
    Subd. 16. Pertinent professional services. "Pertinent professional services" means, with
respect to a professional firm, the category or categories of professional services specified by the
firm in its election under section 319B.03, subdivision 2, or 319B.04, subdivision 2.
    Subd. 17. Professional. "Professional" means a natural person who is licensed by the laws of
the state of Minnesota or similar laws of another state to furnish one or more of the categories
of professional services listed in subdivision 19. Professional includes a natural person who is
licensed or otherwise authorized to practice law under the laws of a foreign nation.
    Subd. 18. Professional firm. "Professional firm" means both Minnesota professional firms
and foreign professional firms.
    Subd. 19. Professional services. "Professional services" means services of the type required
or permitted to be furnished by a professional under a license, registration, or certificate issued
by the state of Minnesota to practice medicine and surgery under sections 147.01 to 147.22,
as a physician assistant pursuant to sections 147A.01 to 147A.27, chiropractic under sections
148.01 to 148.105, registered nursing under sections 148.171 to 148.285, optometry under
sections 148.52 to 148.62, psychology under sections 148.88 to 148.98, social work under
chapter 148D, marriage and family therapy under sections 148B.29 to 148B.39, dentistry and
dental hygiene under sections 150A.01 to 150A.12, pharmacy under sections 151.01 to 151.40,
podiatric medicine under sections 153.01 to 153.25, veterinary medicine under sections 156.001
to 156.14, architecture, engineering, surveying, landscape architecture, geoscience, and certified
interior design under sections 326.02 to 326.15, accountancy under chapter 326A, or law under
sections 481.01 to 481.17, or under a license or certificate issued by another state under similar
laws. Professional services includes services of the type required to be furnished by a professional
pursuant to a license or other authority to practice law under the laws of a foreign nation.
    Subd. 20. State. "State" means a state of the United States and the District of Columbia.
    Subd. 21. Statement of foreign qualification. "Statement of foreign qualification" means
with respect to a limited liability partnership that has an effective statement of foreign qualification
under section 323A.1102, that statement of foreign qualification.
    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 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;
(3) 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;
(4) with respect to a Minnesota professional firm that is a limited liability partnership and
has an effective statement of qualification under section 323A.1001, amend that statement
of qualification; and
(5) with respect to a foreign professional firm that is a limited liability partnership and has an
effective statement of foreign qualification under section 323A.1102, amend that statement of
foreign qualification.
History: 1997 c 22 art 1 s 2; 1998 c 309 s 5-7; 1999 c 85 art 3 s 1-4,17; 2000 c 260 s 53;
2001 c 42 s 2; 2001 c 109 art 2 s 4; 2005 c 147 art 1 s 69; 2005 c 153 s 1
319B.03 AUTHORITY OF MINNESOTA FIRMS TO FURNISH PROFESSIONAL
SERVICES; ELECTION BY MINNESOTA FIRMS TO INVOKE THE ACT.
    Subdivision 1. Authority under this act and under other law. (a) A Minnesota firm that
has in effect an election under subdivision 2 may furnish professional services within Minnesota
as provided in sections 319B.01 to 319B.12. A Minnesota firm may furnish professional services
within Minnesota without making an election under subdivision 2 only if:
(1) no Minnesota statute, Minnesota rule, or tenet of Minnesota common law requires the
Minnesota firm to make that election in order to furnish professional services within Minnesota;
and
(2) no Minnesota statute, Minnesota rule, or tenet of Minnesota common law precludes the
Minnesota firm from furnishing professional services within Minnesota in the absence of that
election.
(b) A Minnesota professional firm may provide professional services and exercise the
ancillary powers permitted under section 319B.06, subdivision 1, paragraph (c), in another state if:
(1) the Minnesota professional firm is authorized to provide the services and exercise the
powers within Minnesota;
(2) the Minnesota firm's organizational document does not prohibit the Minnesota
professional firm from providing the services or exercising the powers in the other state;
(3) in the case of a Minnesota professional firm that is a limited liability partnership, the
partnership agreement does not prohibit the Minnesota professional firm from providing the
services or exercising the powers in the other state; and
(4) the Minnesota professional firm complies with all applicable laws of that other state
regulating the furnishing of professional services and exercising of ancillary powers in that state.
    Subd. 2. Election to invoke this act. To elect to become a Minnesota professional firm
and be authorized to furnish professional services according to sections 319B.01 to 319B.12, a
Minnesota firm must in its organizational document:
(1) state that the Minnesota firm elects to operate under those sections;
(2) acknowledge that the Minnesota firm is subject to those sections; and
(3) specify from the list stated in section 319B.02, subdivision 19, the category or categories
of professional services the Minnesota firm is authorized to provide.
The statement, acknowledgment, and specification may be made when a Minnesota firm
initially files the organizational document or may be added at a later time by updating that
document.
    Subd. 3. Rescission and amendment of election. (a) A Minnesota professional firm
may rescind its election by updating its organizational document to delete the statement,
acknowledgment, and specification required by subdivision 2.
(b) A Minnesota professional firm may update its organizational document to change the
specification required by subdivision 2, clause (3).
    Subd. 4. Relationship of this act and generally applicable governing law. If a Minnesota
firm has an election under subdivision 2 in effect and the Minnesota firm's generally applicable
governing law conflicts with sections 319B.01 to 319B.12, sections 319B.01 to 319B.12 govern.
History: 1997 c 22 art 1 s 3
319B.04 AUTHORITY OF FOREIGN FIRMS TO FURNISH PROFESSIONAL
SERVICES; ELECTION BY FOREIGN FIRMS TO INVOKE THE ACT.
    Subdivision 1. Authority under this act and under other law. A foreign firm that has in
effect an election under subdivision 2 may furnish professional services within Minnesota as
provided in sections 319B.01 to 319B.12. A foreign firm may furnish professional services within
Minnesota without making an election under subdivision 2 only if:
(1) no Minnesota statute, Minnesota rule, or tenet of Minnesota common law requires the
foreign firm to make that election in order to furnish professional services within Minnesota; and
(2) no Minnesota statute, Minnesota rule, or tenet of Minnesota common law precludes the
foreign firm from furnishing professional services within Minnesota in the absence of that election.
    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.
    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).
History: 1997 c 22 art 1 s 4; 1999 c 85 art 3 s 5,6
319B.05 FIRM NAME.
    Subdivision 1. No implication of superiority. The name of a professional firm must not
imply or be used to imply superiority.
    Subd. 2. Required name endings. The name of a professional firm must end:
(1) in the case of a corporation, with any one of the following phrases, words, or
abbreviations: "Professional Corporation"; "Professional Service Corporation"; "Service
Corporation"; "Professional Association"; "Chartered"; "Limited"; "P.C."; "P.S.C."; "S.C.";
"P.A."; or "Ltd.";
(2) in the case of a limited liability company, with any one of the following phrases
or abbreviations: "Professional Limited Liability Company"; "Limited Liability Company";
"P.L.L.C."; "P.L.C."; or "L.L.C."; or
(3) in the case of a limited liability partnership, with any one of the following phrases or
abbreviations: "Professional Limited Liability Partnership"; "Limited Liability Partnership";
"P.L.L.P."; or "L.L.P."
A permitted abbreviation may include or omit periods.
History: 1997 c 22 art 1 s 5
319B.06 FURNISHING SERVICES.
    Subdivision 1. Categories of service. (a) A professional firm may provide professional
services within Minnesota in one of the categories listed in section 319B.02, subdivision 19, if:
(1) the professional firm's election under section 319B.03, subdivision 2, or 319B.04,
subdivision 2
, specifies that category; and
(2) each of the professional firm's owners meet the requirements of section 319B.07 with
regard to that category.
(b) A professional firm may provide professional services within Minnesota in more than
one of the categories listed in section 319B.02, subdivision 19, if:
(1) the professional firm's election under section 319B.03, subdivision 2, or 319B.04,
subdivision 2
, specifies those categories;
(2) each of the professional firm's owners meet the requirements of section 319B.07 with
regard to at least one of those categories; and
(3) the relevant licensing statutes, as listed in section 319B.02, subdivision 19, or rules in
effect under those statutes, specifically authorize those categories of services to be practiced
in combination.
(c) A professional firm may exercise any powers accorded it by its generally applicable
governing law, so long as the professional firm exercises those powers solely to provide the
pertinent professional services or to accomplish tasks ancillary to providing those services.
(d) A professional firm may not conduct any other business or provide any other services
beyond those authorized in this subdivision, either within or outside of Minnesota.
(e) A professional firm may not adopt, implement, or follow a policy, procedure, or practice
that would give a board grounds for disciplinary action against a professional who follows, agrees
to, or acquiesces in the policy, procedure, or practice.
    Subd. 2. Manner of furnishing services. (a) A professional firm may furnish professional
services within Minnesota only through professionals licensed or otherwise authorized by the state
of Minnesota to furnish the pertinent professional services. Firm owners who are properly licensed
professionals may provide professional services on a professional firm's behalf, and a professional
firm may also hire or retain properly licensed professionals as employees, nonemployee agents, or
independent contractors to furnish professional services on the professional firm's behalf.
(b) If a professional firm is authorized under subdivision 1, paragraph (b), to furnish more
than one category of professional services, a professional furnishing professional services on
behalf of the professional firm is required to be licensed or authorized only with respect to the
category or categories of services which the professional actually furnishes.
    Subd. 3. Relationship to person served. (a) Sections 319B.01 to 319B.12 do not alter any
law applicable to the relationship between a person furnishing professional services and a person
receiving the professional services, including liability arising out of the professional services and
the confidential relationship and privilege of communications between the person furnishing
professional services and the person receiving the professional services.
(b) Sections 319B.01 to 319B.12 do not alter any law applicable to the relationship between a
professional firm furnishing professional services and a person receiving the professional services,
including liability arising out of the professional services and the confidential relationship and
privilege of communications between the professional firm furnishing professional services and
the person receiving the professional services.
(c) Whether a professional firm's owners and persons who control, manage, or act for the
firm are personally liable for the firm's debts and obligations is determined according to the firm's
generally applicable governing law.
History: 1997 c 22 art 1 s 6; 1997 c 174 art 12 s 65
319B.07 OWNERSHIP INTERESTS.
    Subdivision 1. Ownership of interests restricted. Ownership interests in a professional firm
may not be owned or held, either directly or indirectly, except by any of the following:
(1) professionals who, with respect to at least one category of the pertinent professional
services, are licensed and not disqualified;
(2) general partnerships, other than limited liability partnerships, authorized to furnish at
least one category of the professional firm's pertinent professional services;
(3) other professional firms authorized to furnish at least one category of the professional
firm's pertinent professional services;
(4) a voting trust established with respect to some or all of the ownership interests in the
professional firm, if (i) the professional firm's generally applicable governing law permits the
establishment of voting trusts, and (ii) all the voting trustees and all the holders of beneficial
interests in the trust are professionals licensed to furnish at least one category of the pertinent
professional services; and
(5) an employee stock ownership plan as defined in section 4975(e)(7) of the Internal
Revenue Code of 1986, as amended, if (i) all the voting trustees of the plan are professionals
licensed to furnish at least one category of the pertinent professional services, and (ii) the
ownership interests are not directly issued to anyone other than professionals licensed to furnish
at least one category of the pertinent professional services.
    Subd. 2. Issuance and transfer of ownership interests restricted. A professional firm may
not sell, grant, give, allocate, issue, or otherwise transfer an ownership interest except to persons
who meet the requirements of subdivision 1. No owner may transfer an ownership interest except
to persons who meet the requirements of subdivision 1. These restrictions apply regardless of
whether a purported sale, grant, gift, allocation, issuance, or other transfer:
(1) is voluntary or involuntary;
(2) constitutes a present transfer or an undertaking to make future transfer or to allow the
transferee to cause a future transfer to occur; or
(3) is permanent or subject to defeasement.
    Subd. 3. Issuance and transfer of partial rights restricted. (a) Except as permitted by this
paragraph, no professional firm may sell, grant, give, allocate, issue, or otherwise transfer a partial
right. Unless prohibited by its generally applicable governing law or some provision of a document
or agreement permitted by its generally applicable governing law, a professional firm may:
(1) subject to section 319B.08, subdivision 3, sell, grant, give, allocate, issue, or otherwise
transfer an option to acquire an entire ownership interest to a person who meets the requirements
of subdivision 1; and
(2) subject to its licensing law, undertake to make payments, in the nature of separation,
retirement, or death benefits, on account of a former owner who has died, become disqualified, or
for any other reason has ceased to be an owner.
(b) Except as permitted by this paragraph, no owner may transfer any partial right. Unless
prohibited by the professional firm's generally applicable governing law or some provision of
a document or agreement authorized by the professional firm's generally applicable governing
law, an owner may, subject to section 319B.09:
(1) enter into an agreement with other owners of the professional firm regarding voting
rights and other aspects of management; and
(2) grant a proxy to a person who meets the requirements of subdivision 1.
(c) Except as permitted by paragraphs (a) and (b), no person may hold or transfer a partial
right. These restrictions apply regardless of whether a purported transfer:
(1) is voluntary or involuntary;
(2) constitutes a present transfer or an undertaking to make a future transfer or to allow the
transferee to cause a future transfer to occur; or
(3) is permanent or subject to defeasement.
    Subd. 4. Improper issuance and transfers void. A sale, grant, gift, allocation, issuance,
undertaking, creation, pledge, or other transfer in violation of this section is void.
    Subd. 5. Further transfer restrictions permitted. If permitted by its generally applicable
governing law, a professional firm may further restrict the transfer of ownership interests and
partial rights.
    Subd. 6. Nonapplication of securities regulation provisions. Chapter 80A does not apply
to or govern a transaction relating to an ownership interest of a professional firm.
History: 1997 c 22 art 1 s 7
319B.08 EFFECT OF DEATH OR DISQUALIFICATION OF OWNER.
    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.
    Subd. 2. Terms of acquisition. (a) If:
(1) an owner dies or becomes disqualified to practice all the pertinent professional services;
(2) the professional firm has in effect a mechanism, valid according to the professional firm's
generally applicable governing law, to effect a purchase of the deceased or disqualified owner's
ownership interest so as to satisfy subdivision 1, paragraph (a), clause (1); and
(3) the professional firm does not agree with the disqualified owner or the representative of
the deceased owner to set aside the mechanism,
then that mechanism applies.
(b) If:
(1) an owner dies or becomes disqualified to practice all the pertinent professional services;
(2) the professional firm has in effect no mechanism as described in paragraph (a), or has
agreed as mentioned in paragraph (a), clause (3), to set aside that mechanism; and
(3) consistent with its generally applicable governing law, the professional firm agrees with
the disqualified owner or the representative of the deceased owner, before the end of the 90-day
period, to an arrangement to effect a purchase of the deceased or disqualified owner's ownership
interest so as to satisfy subdivision 1, paragraph (a), clause (1),
then that arrangement applies.
(c) If:
(1) an owner of a Minnesota professional firm dies or becomes disqualified to practice all
the pertinent professional services;
(2) the Minnesota professional firm does not have in effect a mechanism as described in
paragraph (a);
(3) the Minnesota professional firm does not make an arrangement as described in paragraph
(b); and
(4) no provision or tenet of the Minnesota professional firm's generally applicable governing
law and no provision of any document or agreement authorized by the Minnesota professional
firm's generally applicable governing law expressly precludes an acquisition under this paragraph,
then the firm may acquire the deceased or disqualified owner's ownership interest as stated in this
paragraph. To act under this paragraph, the Minnesota professional firm must within 90 days after
the death or beginning of the disqualification tender to the representative of the deceased owner's
estate or to the disqualified owner the fair value of the owner's ownership interest, as determined
by the Minnesota professional firm's governance authority. That price must be at least the book
value, as determined in accordance with the Minnesota professional firm's regular method of
accounting, as of the end of the month immediately preceding the death or loss of license.
The tender must be unconditional and may not attempt to have the recipient waive any rights
provided in this section. If the Minnesota professional firm tenders a price under this paragraph
within the 90-day period, the deceased or disqualified owner's ownership interest immediately
transfers to the Minnesota professional firm regardless of any dispute as to the fairness of the
price. A disqualified owner or representative of the deceased owner's estate who disputes the
fairness of the tendered price may take the tendered price and bring suit in district court seeking
additional payment. The suit must be commenced within one year after the payment is tendered.
A Minnesota professional firm may agree with a disqualified owner or the representative of a
deceased owner's estate to delay all or part of the payment due under this paragraph, but all right
and title to the owner's ownership interests must be acquired before the end of the 90-day period
and payment may not be secured in any way that violates sections 319B.01 to 319B.12.
    Subd. 3. Expiration of firm-issued option on death or disqualification of holder. If the
holder of an option issued under section 319B.07, subdivision 3, paragraph (a), clause (1), dies or
becomes disqualified, the option automatically expires.
    Subd. 4.[Obsolete, 1999 c 85 art 3 s 17]
History: 1997 c 22 art 1 s 8; 1999 c 85 art 3 s 7
319B.09 GOVERNANCE.
    Subdivision 1. Governance authority. (a) Except as stated in paragraph (b), a professional
firm's governance authority must rest with one or more professionals, each of whom is licensed to
furnish at least one category of the pertinent professional services.
(b) In a Minnesota professional firm organized under chapter 317A and in a foreign
professional firm organized under the nonprofit corporation statute of another state, at least one
individual possessing governance authority must be a professional licensed to furnish at least one
category of the pertinent professional services.
(c) Individuals who possess governance authority within a professional firm may delegate
administrative and operational matters to others. No decision entailing the exercise of professional
judgment may be delegated or assigned to anyone who is not a professional licensed to practice
the professional services involved in the decision.
(d) An individual whose license to practice any pertinent professional services is revoked or
suspended may not, during the time the revocation or suspension is in effect, possess or exercise
governance authority, hold a position with governance authority, or take part in any decision or
other action constituting an exercise of governance authority. Nothing in this chapter prevents a
board from further terminating, restricting, limiting, qualifying, or imposing conditions on an
individual's governance role as board disciplinary action.
    Subd. 2. Voting and management rights restricted. (a) The restrictions stated in section
319B.07 apply to the holding and exercise of:
(1) any proxy relating to the voting right of any ownership interest in a professional firm; and
(2) any other right to vote or participate in the management of a professional firm where the
right derives from or is on account of an ownership interest in the professional firm.
Except as stated in paragraphs (b) and (c), this paragraph applies to rights a representative of
a deceased or incompetent owner might otherwise have.
(b) If a Minnesota professional firm is deciding whether to rescind its election under section
319B.03, subdivision 3, the representative of a deceased or incompetent owner has authority to
vote the deceased or incompetent owner's ownership interest on that issue to the same extent the
owner would have had the right to vote but for the death or incompetency.
(c) If a foreign professional firm is deciding whether to rescind its election under section
319B.04, subdivision 3, and the foreign professional firm's generally applicable governing law
provides the representative of a deceased or incompetent owner authority to vote the deceased or
incompetent owner's ownership interest on that issue, nothing in sections 319B.01 to 319B.12
limits the representative's authority.
History: 1997 c 22 art 1 s 9
319B.10 MERGERS AND OTHER REORGANIZATIONS.
    Subdivision 1. Reorganization permitted. A professional firm may enter into a merger,
consolidation, exchange of ownership interests, conversion, or any other reorganization permitted
by its generally applicable governing law.
    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.
    Subd. 3. Filings with secretary of state. (a) For a Minnesota professional firm involved in a
merger, the document filed with the secretary of state to effectuate the merger must state whether
that Minnesota professional firm will survive the merger, and if so, whether that Minnesota
professional firm will remain a Minnesota professional firm once the merger takes effect.
(b) For a foreign professional firm involved in a merger, the certificate filed with the secretary
of state under section 303.11 or 322B.92 must be accompanied by a statement as to whether that
foreign firm will survive the merger, and if so, whether that foreign professional firm will remain
a foreign professional firm once the merger takes effect.
    Subd. 4. Status of newly created firm. If a reorganization involves the creation of a
new firm, that firm may make an election under section 319B.03, subdivision 2, or 319B.04,
subdivision 2
, and become a professional firm if the firm meets the requirements of sections
319B.01 to 319B.12.
History: 1997 c 22 art 1 s 10; 1999 c 85 art 3 s 8
319B.11 PROFESSIONAL REGULATION.
    Subdivision 1. Boards' powers. Each board may make whatever rules are necessary to carry
out sections 319B.01 to 319B.12. Except as stated in this section, nothing in sections 319B.01
to 319B.12 restricts or limits in any manner the authority or duty of a board with respect to
persons furnishing professional services within the jurisdiction of the board, even if the person is
an owner, director, governor, officer, manager, employee, agent, or independent contractor of a
professional firm and furnishes professional services through that firm.
    Subd. 2. Liability shield. (a) Except as stated in paragraph (b), no board may directly or
indirectly require a person providing professional services through a professional firm to assume
greater liability for the firm's debts and obligations than is contemplated by section 319B.06,
subdivision 3
.
(b) Paragraph (a) does not prevent the board from requiring a professional to assume
personal liability for specified obligations or categories of obligations as a term or requirement of
board disciplinary or corrective action concerning the professional.
    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).
    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.
    Subd. 5. Report of owner's death or disqualification. (a) Except as stated in paragraph
(b), within 30 days after the death or disqualification of an owner, the professional firm must
report the death or disqualification to each board having jurisdiction over any of the pertinent
professional services.
(b) A professional firm need not report a disqualification to a board which took the action
that caused the disqualification.
    Subd. 6. Examination by board. (a) A board, or an employee or agent designated by a
board, may inspect at all reasonable times all books and records of a professional firm and
may summon and examine under oath the owners, directors, governors, officers, managers,
persons occupying a position with governance authority, and employees of the firm in all matters
concerning the operations of the professional firm that are governed by sections 319B.01 to
319B.12, the rules of the board, or the professional firm's generally applicable governing law.
This subdivision does not authorize anyone to have access to or to compel anyone to testify with
respect to books, records, or information of any type subject to a privilege recognized by law.
(b) Any information obtained by a board as a result of an examination authorized by
paragraph (a) is confidential, immune from subpoena, and inadmissible as evidence at a trial,
hearing, or proceeding before a court, board, or commissioner except a proceeding under
subdivision 8.
(c) A professional firm subject to an examination under paragraph (a) may request in writing
that the board under whose authority the examination is being or has been conducted provide
the professional firm with a copy of all or any specified parts of the sworn testimony taken or
received during the examination as well as all or any specified exhibits provided as part of that
testimony. The board must comply promptly with the request and may charge the requesting firm
the reasonable cost of making and providing the copies.
    Subd. 7. Status of information. Except as stated in subdivision 6, information filed by a
professional firm under this section is public data under chapter 13.
    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.
    Subd. 9. Fees. All fees paid under this section are for the board to which they are due.
History: 1997 c 22 art 1 s 11; 1999 c 85 art 3 s 9-11
319B.12 TRANSITION PROVISIONS.
    Subdivision 1. Special definitions. As used in this section:
(1) "professional corporation" has the meaning given in section 319A.02, subdivision 4;
(2) "foreign professional corporation" has the meaning given in 319A.02, subdivision 5; and
(3) "corporation" has the meaning given in section 319A.02, subdivision 7.
    Subd. 2. New use of chapter 319A precluded. Beginning July 1, 1997, no Minnesota firm
may organize under chapter 319A and no foreign firm may begin to operate under chapter 319A.
    Subd. 3. Early election into this chapter by chapter 319A organizations. (a) At any
time before January 1, 1999, a professional corporation organized under chapter 319A and a
foreign professional corporation governed by chapter 319A may elect to be governed by sections
319B.01 to 319B.12. To make that election, the professional corporation or foreign professional
corporation must:
(1) comply with section 319B.03, subdivision 2, or 319B.04, subdivision 2, whichever is
applicable; and
(2) amend, to the extent necessary to comply with sections 319B.01 to 319B.12, its
organizational document, certificate of authority, or statement of qualification, as well as any
agreements and other documents controlling the corporation's structure, governance, operations,
and internal affairs.
(b) Regardless of the date an electing professional corporation or foreign professional
corporation actually makes its election under this subdivision, the electing professional
corporation or foreign professional corporation may make the election effective as of January
1, 1997. Except as allowed by this paragraph, an election under this subdivision is effective
on the date the electing professional corporation or foreign professional corporation complies
with paragraph (a).
(c) The law and documents that govern the structure, governance, operations, and other
internal affairs of a professional corporation or foreign professional corporation when the
corporation is deciding whether, when, and as of when to make an election under this subdivision
control the manner of making those decisions.
    Subd. 4. All use of chapter 319A ended; deemed election for Minnesota professional
firms. (a) Beginning January 1, 1999:
(1) no professional corporation may operate under chapter 319A and no foreign professional
corporation may operate under chapter 319A; and
(2) chapter 319A ceases to apply to professional corporations and foreign professional
corporations.
(b) On January 1, 1999, a Minnesota professional corporation that has not elected to be
governed by sections 319B.01 to 319B.12 will be considered to have made that election, and
the professional corporation's purposes, as stated under section 319A.03, clause (2), will be
considered to be the specification required by section 319B.03, subdivision 2, clause (3).
    Subd. 5. Acts during transition. The continuation or completion of an act by a professional
firm that had been a professional corporation or foreign professional corporation but elected to
become a professional firm governed by this chapter and the continuation or performance of
any executed or wholly or partially executory contract, conveyance, or transfer to or by the
professional firm shall, if otherwise lawful before the professional firm became governed by this
chapter, remain valid, and may be continued, completed, consummated, enforced, or terminated
as required or as permitted by a statute applicable to the contract, conveyance, or transfer before
January 1, 1997.
History: 1997 c 22 art 1 s 12
319B.40 PROFESSIONAL HEALTH SERVICES.
(a) Individuals who furnish professional services pursuant to a license, registration, or
certificate issued by the state of Minnesota to practice medicine pursuant to sections 147.01 to
147.22, as a physician assistant pursuant to sections 147A.01 to 147A.27, chiropractic pursuant to
sections 148.01 to 148.106, registered nursing pursuant to sections 148.171 to 148.285, optometry
pursuant to sections 148.52 to 148.62, psychology pursuant to sections 148.88 to 148.98, social
work pursuant to chapter 148D, marriage and family therapy pursuant to sections 148B.29 to
148B.39, dentistry pursuant to sections 150A.01 to 150A.12, pharmacy pursuant to sections
151.01 to 151.40, or podiatric medicine pursuant to sections 153.01 to 153.26 are specifically
authorized to practice any of these categories of services in combination if the individuals are
organized under this chapter.
(b) This authorization does not authorize an individual to practice any profession, or furnish
a professional service, for which the individual is not licensed, registered, or certified, but
otherwise applies regardless of any contrary provision of a licensing statute or rules adopted
pursuant to that statute, related to practicing and organizing in combination with other health
services professionals.
History: 1997 c 76 s 2; 1998 c 309 s 8; 2001 c 42 s 3; 2005 c 147 art 1 s 70; 2005 c 153 s 2

Official Publication of the State of Minnesota
Revisor of Statutes