New Rules for Certain Minnesota Limited Liability Companies
The Minnesota Secretary of State is sending out notice alerts to owners of limited liability companies formed in Minnesota prior to August 1, 2015. The purpose is to alert companies that they should review their organization to determine if any changes need to be made to their operational documents, or other personal aspects, to conform to the new limited liability company rules passed by the Minnesota legislature in 2015.
Any changes made by these companies will need to be in place by January 1, 2018. Otherwise, the company will become subject to the new 2015 rules without the benefit of deciding how conforming to the new rules would best serve it.
According to information developed by the Partnership and Limited Liabilities Companies Committee of the Minnesota Bar Association Business Law Section, at the request of the Minnesota Secretary of State, the following items should be reviewed by all affected limited liability companies:
- Governing agreement
- Management structure
- Default voting rights in member-managed LLC
- Default distribution and profit rights
- Dissenters’ rights
- Statutory apparent authority
- Fiduciary duties
- Indemnification obligations
Although the deadline to have these items reviewed and any changes made isn’t until January 1, 2018, the review process may necessitate more time to accomplish than anticipated. With that, it is strongly suggested that the transformational review process start sooner, rather than later. Please contact your attorney to see if you are impacted by these changes.