First a brief overview.
Governor Mark Dayton signed into law the Minnesota Revised Uniform Limited Liability Company Act (the “Act”) on April 8, 2014. The Act became effective on August 1, 2015, for all LLCs formed on or after that date. Minnesota LLCs in existence on July 31, 2015, remain governed by the present Minnesota LLC Act, Chapter 322B, but may elect to be governed by the new Act. Any Chapter 322B LLCs that have not elected to be governed by the new Act will automatically become subject to the new Act on January 1, 2018.
How does the new act affect my LLC?
For many businesses set up in Rochester and throughout Southeastern Minnesota, governing documentation will require little or no modification. Others, however, should consider the following:
- The new Act has an expanded definition of an operating agreement. Thus, some LLC’s may need to consider creating an operating agreement for purposes of the Revised Act by consolidating substantive provisions in the articles of organization, member control agreement, and by-laws.
- The new Act moves from Chapter 322B, which was largely cloned from the Minnesota Business Corporation Act, toward a partnership model. Thus, the new act defaults to member management, but permits manager management and board management. This change may warrant revision of default language in existing governing documentation
Business owners should consider their unique LLC and decide whether revisions to governing documentation are prudent. Additionally, with the transition to the new Act, those considering investing or acquiring a Minnesota LLC, should consult an attorney to discuss the implications of the new Act. Contact Rochford & Langins, LLC attorneys Peter Langins or Robert Rochford at 507-534-3119 to discuss the implications of the new Act on your Minnesota LLC.