If you’re one of the nearly quarter-million Minnesotans who created a Limited Liability Company since the entity selection first came to be in 1993, you’ll want to take notice of a new law signed into law by Governor Dayton. While the law does not provide for sweeping changes, there are certainly some differences between the new law and Minnesota’s Uniform Limited Liability Company Act; the effects of which are yet to be seen.
Enactment of the Minnesota Revised Uniform Limited Liability Company Act (or Re-ULLCA) this summer will bring Minnesota into line with nine other states that have passed the Act in one form or another, including neighbor state Iowa. The law will further align Minnesota law with those states that have existing LLC Acts designed based on a partnership model as opposed to Minnesota’s current corporation-based model.
Some changes, like the allowance for a “shelf LLC” which contains no members and awaits activation until a member is identified, will not likely be groundbreaking. Others, however, such as changes to sections regarding operating agreements, fiduciary duties, apparent authority, management structure, among others, have the potential to change the way Minnesota lawyers advise business clients who own or deal with LLCs.
Does your LLC comply with the new law? In most cases, the statutory changes are not significant enough to draw an existing LLC out of compliance. Further, the new law has a section that will serve to grandfather older LLCs in under the law that existed when they were formed. If you feel as though your business may be at risk of non-compliance or have questions regarding the new law, contact a WFJ business attorney to review your organizational documents today.
Attorney Nicholas N. Sperling