2007 Minnesota Statutes

322B.37 MEMBER CONTROL AGREEMENTS.
    Subdivision 1. Authorization and scope. 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 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) 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 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 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.
History: 1992 c 517 art 2 s 46; 1997 c 10 art 2 s 5,6; 1999 c 85 art 2 s 38