Bill Text: MN SF1979 | 2013-2014 | 88th Legislature | Engrossed
Bill Title: Business organizations prefiling document review; limited liability companies and business corporations regulations modifications
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2014-04-02 - HF substituted on General Orders HF2190 [SF1979 Detail]
Download: Minnesota-2013-SF1979-Engrossed.html
1.2relating to business organizations; providing a prefiling document review;
1.3regulating limited liability companies and business corporations;amending
1.4Minnesota Statutes 2012, sections 80B.01, subdivision 6; 302A.011, subdivisions
1.518, 63, 64; 302A.111, subdivisions 2, 4; 302A.137; 302A.351; 302A.361;
1.6302A.423, subdivision 2; 302A.441, subdivision 3; 302A.471, subdivision 1;
1.7302A.473, subdivision 1; 302A.611, subdivision 1; 302A.621, subdivision 3;
1.8302A.641, subdivision 2; 302A.651, subdivision 4; 302A.681, subdivision 1, by
1.9adding a subdivision; 302A.683; 302A.685; 302A.687; 302A.689; 302A.691,
1.10subdivisions 2, 3; 302A.734, subdivision 2; 322B.115, subdivision 2; 322B.155;
1.11322B.35, subdivision 3; 322B.386, subdivision 1; 322B.689; 322B.69; 322B.71,
1.12subdivision 1; 322B.75, subdivision 2; 322B.76, subdivision 4; 322B.78;
1.13322B.826, subdivision 2; proposing coding for new law in Minnesota Statutes,
1.14chapter 5.
1.15BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.16 Section 1. [5.39] PREFILING DOCUMENT REVIEW.
1.17 Subdivision 1. Authorization and initiation. (a) The secretary of state shall
1.18conduct a prefiling review of a document proposed for filing on behalf of a business entity
1.19if the filing party submits to the secretary of state:
1.20(1) the document to be reviewed and a nonrefundable $250 fee; and
1.21(2) a name reservation form, if the document proposes a name change or requires
1.22the use of a name otherwise unregistered at the time the document is submitted under
1.23this subdivision.
1.24(b) If the secretary of state determines that the prefiled document meets all applicable
1.25statutory requirements, the document shall be returned to the filing party with an approval
1.26stamp affixed to the document that includes the approval date.
2.1(c) The fee submitted pursuant to paragraph (a) shall be deposited by the secretary of
2.2state in the state treasury and credited to the Uniform Commercial Code account for the
2.3purposes in section 336.1-110.
2.4 Subd. 2. Subsequent filing. A document approved pursuant to subdivision 1 may
2.5be filed with the secretary of state without further substantive review if:
2.6(1) the document submitted for filing is the document submitted for prefiling review
2.7and is submitted within six months of its approval date;
2.8(2) the appropriate filing fee is submitted by the filing party with the document
2.9being filed; and
2.10(3) neither the applicable statutory requirements nor the status of the business entity
2.11has changed since the approval date of the prefiling review.
2.12 Sec. 2. Minnesota Statutes 2012, section 80B.01, subdivision 6, is amended to read:
2.13 Subd. 6. Offeror. "Offeror" means a person who makes or in any way participates in
2.14making a takeover offer. Offeror does not include any bank or broker-dealer loaning funds
2.15to an offeror in the ordinary course of its business, or any bank, broker-dealer, attorney,
2.16accountant, consultant, employee, or other person furnishing information or advice to or
2.17performing ministerial duties for an offeror, and not otherwise participating in the takeover
2.18offer. When two or more persons act as a partnership, limited partnership, limited liability
2.19company, syndicate, or other group pursuant to any agreement, arrangement, relationship,
2.20understanding, or otherwise (whether or not in writing) for the purpose of acquiring,
2.21owning, or voting securities of a target company, all members of the partnership, limited
2.22liability company, syndicate, or other group constitute "a person."
2.23 Sec. 3. Minnesota Statutes 2012, section 302A.011, subdivision 18, is amended to read:
2.24 Subd. 18. Officer. "Officer" means the chief executive officer, the chief financial
2.25officer, a person elected, appointed, or otherwise designated as an officer pursuant to
2.26section302A.311 , and any other person deemed elected as an officer pursuant to section
2.27302A.321
. The term does not include a person elected, appointed, or otherwise designated
2.28chair of the board of the corporation, unless otherwise provided in the articles or bylaws.
2.29 Sec. 4. Minnesota Statutes 2012, section 302A.011, subdivision 63, is amended to read:
2.30 Subd. 63. Converted organization. "Converted organization" means the domestic
2.31or foreign corporation or domestic or foreign limited liability company resulting from a
2.32conversion under sections302A.681 to
302A.691 .
3.1 Sec. 5. Minnesota Statutes 2012, section 302A.011, subdivision 64, is amended to read:
3.2 Subd. 64. Converting organization. "Converting organization" means the domestic
3.3or foreign corporation or domestic or foreign limited liability company that effects a
3.4conversion under sections302A.681 to
302A.691 .
3.5 Sec. 6. Minnesota Statutes 2012, section 302A.111, subdivision 2, is amended to read:
3.6 Subd. 2. Statutory provisions that may be modified only in articles or in a
3.7shareholder control agreement. The following provisions govern a corporation unless
3.8modified in the articles or in a shareholder control agreement under section302A.457 :
3.9(a) a corporation has general business purposes (section302A.101 );
3.10(b) a corporation has perpetual existence and certain powers (section302A.161 );
3.11(c) the power to adopt, amend, or repeal the bylaws is vested in the board (section
3.12302A.181
);
3.13(d) a corporation must allow cumulative voting for directors (section302A.215,
3.14subdivision 2 );
3.15(e) the affirmative vote of a majority of directors present is required for an action
3.16of the board (section302A.237 );
3.17(f) a written action by the board taken without a meeting must be signed by all
3.18directors (section302A.239 );
3.19(g) the board may authorize the issuance of securities and rights to purchase
3.20securities (section302A.401, subdivision 1 );
3.21(h) all shares are common shares entitled to vote and are of one class and one series
3.22(section302A.401, subdivision 2 , clauses (a) and (b));
3.23(i) all shares have equal rights and preferences in all matters not otherwise provided
3.24for by the board (section302A.401, subdivision 2 , clause (b));
3.25(j) the par value of shares is fixed at one cent per share for certain purposes and may be
3.26fixed by the board for certain other purposes (section302A.401, subdivision 2 , clause (c));
3.27(k) the board or the shareholders may issue shares for any consideration or for no
3.28consideration to effectuate share dividends, divisions, or combinations, and determine the
3.29value of nonmonetary consideration (section302A.405, subdivision 1 );
3.30(l) shares of a class or series must not be issued to holders of shares of another class
3.31or series to effectuate share dividends, divisions, or combinations, unless authorized by a
3.32majority of the voting power of the shares of the same class or series as the shares to be
3.33issued (section302A.405, subdivision 1 );
3.34(m) a corporation may issue rights to purchase securities whose terms, provisions,
3.35and conditions are fixed by the board (section302A.409 );
4.1(n) a shareholder has certain preemptive rights, unless otherwise provided by the
4.2board (section302A.413 );
4.3(o) the affirmative vote of the holders of a majority of the voting power of the
4.4shares present and entitled to vote at a duly held meeting is required for an action of the
4.5shareholders, except where this chapter requires the affirmative vote of a plurality of the
4.6votes cast (section302A.215, subdivision 1 ) or a majority of the voting power of all
4.7shares entitled to vote (section302A.437, subdivision 1 );
4.8(p) shares of a corporation acquired by the corporation may be reissued (section
4.9302A.553, subdivision 1
);
4.10(q) each share has one vote unless otherwise provided in the terms of the share
4.11(section302A.445, subdivision 3 );
4.12(r) a corporation may issue shares for a consideration less than the par value, if any,
4.13of the shares (section302A.405, subdivision 2 );
4.14(s) the board may effect share dividends, divisions, and combinations under certain
4.15circumstances without shareholder approval (section302A.402 ); and
4.16(t) a written action of shareholders must be signed by all shareholders (section
4.17302A.441
).;
4.18(u) specified amendments of the articles create dissenters' rights (section 302A.471,
4.19subdivision 1, clause (a)); and
4.20(v) shareholders are entitled to vote as a class or series upon proposed amendments
4.21to the articles in specified circumstances (section 302A.137).
4.22 Sec. 7. Minnesota Statutes 2012, section 302A.111, subdivision 4, is amended to read:
4.23 Subd. 4. Optional provisions; specific subjects. The provisions in paragraphs (a),
4.24(g), (q), (r), and (u) may be included in the articles.
4.25The provisions in paragraphs (b) to (f), (h) to (p), (s), and (t) may be included either
4.26in the articles or the bylaws:
4.27(a) the members of the first board may be named in the articles (section302A.201,
4.28subdivision 1 );
4.29(b) a manner for increasing or decreasing the number of directors may be provided
4.30(section302A.203 );
4.31(c) additional qualifications for directors may be imposed (section302A.205 );
4.32(d) directors may be classified (section302A.213 );
4.33(e) the day or date, time, and place of board meetings may be fixed (section
4.34302A.231, subdivision 1
);
5.1(f) absent directors may be permitted to give written consent or opposition to
5.2a proposal (section302A.233 );
5.3(g) a larger than majority vote may be required for board action (section302A.237 );
5.4(h) authority to sign and deliver certain documents may be delegated to an officer
5.5or agent of the corporation other than the chief executive officer (section302A.305,
5.6subdivision 2 );
5.7(i) additional officers may be designated (section302A.311 );
5.8(j) additional powers, rights, duties, and responsibilities may be given to officers
5.9(section302A.311 );
5.10(k) a method for filling vacant offices may be specified (section302A.341,
5.11subdivision 3 );
5.12(l) a certain officer or agent may be authorized to sign share certificates (section
5.13302A.417, subdivision 2
);
5.14(m) the transfer or registration of transfer of securities may be restricted (section
5.15302A.429
);
5.16(n) the day or date, time, and place of regular shareholder meetings may be fixed
5.17(section302A.431, subdivision 3 );
5.18(o) certain persons may be authorized to call special meetings of shareholders
5.19(section302A.433, subdivision 1 );
5.20(p) notices of shareholder meetings may be required to contain certain information
5.21(section302A.435, subdivision 3 );
5.22(q) a larger than majority vote may be required for shareholder action (section
5.23302A.437
);
5.24(r) voting rights may be granted in or pursuant to the articles to persons who are not
5.25shareholders (section302A.445, subdivision 4 );
5.26(s) corporate actions giving rise to dissenter rights may be designated (section
5.27302A.471, subdivision 1
, clause (e) (g));
5.28(t) the rights and priorities of persons to receive distributions may be established
5.29(section302A.551 ); and
5.30(u) a director's personal liability to the corporation or its shareholders for monetary
5.31damages for breach of fiduciary duty as a director may be eliminated or limited in the
5.32articles (section302A.251, subdivision 4 ).
5.33Nothing in this subdivision limits the right of the board, by resolution, to take an
5.34action that may be included in the bylaws under this subdivision without including it in
5.35the bylaws, unless it is required to be included in the bylaws by another provision of this
6.1chapter. Nothing in this subdivision limits the permissible scope of a shareholder control
6.2agreement under section302A.457 .
6.3 Sec. 8. Minnesota Statutes 2012, section 302A.137, is amended to read:
6.4302A.137 CLASS OR SERIES VOTING ON AMENDMENTS.
6.5 Subdivision 1. Amendments creating rights. Except as provided in subdivision
6.62, the holders of the outstanding shares of a class or series are entitled to vote as a class
6.7or series upon a proposed amendment, whether or not entitled to vote thereon by the
6.8provisions of the articles, if the amendment would:
6.9(a) effect an exchange, reclassification, or cancellation of all or part of the shares of
6.10the class or series, or effect a combination of outstanding shares of a class or series into
6.11a lesser number of shares of the class or series where each other class and series is not
6.12subject to a similar combination;
6.13(b) effect an exchange, or create a right of exchange, of all or any part of the shares
6.14of another class or series for the shares of the class or series;
6.15(c) change the rights or preferences of the shares of the class or series;
6.16(d) create a new class or series of shares having rights and preferences prior and
6.17superior to the shares of that class or series, or increase the rights and preferences or the
6.18number of authorized shares, of a class or series having rights and preferences prior or
6.19superior to the shares of that class or series;
6.20(e) divide the shares of the class into series and determine the designation of each
6.21series and the variations in the relative rights and preferences between the shares of each
6.22series, or authorize the board to do so;
6.23(f) limit or deny any existing preemptive rights of the shares of the class or series; or
6.24(g) cancel or otherwise affect distributions on the shares of the class or series that
6.25have accrued but have not been declared.
6.26 Subd. 2. Combined voting groups. The articles may provide that, if a proposed
6.27amendment entitling the holders of the outstanding shares of two or more classes or series
6.28to vote as separate classes or series under subdivision 1 would affect those classes or
6.29series in the same or a substantially similar way, the holders of the outstanding shares
6.30of all the classes or series so affected must vote together as a single voting group on
6.31the proposed amendment.
6.32 Sec. 9. Minnesota Statutes 2012, section 302A.351, is amended to read:
6.33302A.351 DELEGATION.
7.1Unless prohibited by the articles or bylaws or by a resolution approved by the
7.2affirmative vote of a majority of the directors present, an officerelected or appointed by
7.3the board may, without the approval of the board, delegate some or all of the duties and
7.4powers of an office to other persons. An officer who delegates the duties or powers of
7.5an officeremains is subject to the standard of conduct for an officer stated in section
7.6302A.361 with respect tothe discharge of all: (1) the act of delegation; and (2) the
7.7supervision of persons to whom those duties and powers are so delegated.
7.8 Sec. 10. Minnesota Statutes 2012, section 302A.361, is amended to read:
7.9302A.361 STANDARD OF CONDUCT.
7.10An officer shall discharge the duties of an office in good faith, in a manner the
7.11officer reasonably believes to be in the best interests of the corporation, and with the care
7.12an ordinarily prudent person in a like position would exercise under similar circumstances.
7.13A person who so performs those duties is not liable by reason of being or having been
7.14an officer of the corporation. A person exercising the principal functions of an office
7.15or to whom some or all of the duties and powers of an office are delegated pursuant to
7.16section302A.351 is deemed an officer for purposes of this section and sections
302A.467
7.17and302A.521 .
7.18 Sec. 11. Minnesota Statutes 2012, section 302A.423, subdivision 2, is amended to read:
7.19 Subd. 2. Restrictions; rights. A corporation shall not pay money for fractional
7.20shares if that action would result in the cancellation of more than 20 percent of the
7.21outstanding shares of a class or series. Subject to the rights, if any, of dissenting
7.22shareholders under section 302A.471, a determination by the board of the fair value of
7.23fractions of a share is conclusive in the absence of fraud. A certificated or uncertificated
7.24fractional share does, but scrip or warrants do not unless they provide otherwise, entitle the
7.25shareholder to exercise voting rights or to receive distributions. The board may cause scrip
7.26or warrants to be issued subject to the condition that they become void if not exchanged
7.27for full shares before a specified date, or that the shares for which scrip or warrants are
7.28exchangeable may be sold by the corporation and the proceeds distributed to the holder of
7.29the scrip or warrants, or to any other condition or set of conditions the board may impose.
7.30 Sec. 12. Minnesota Statutes 2012, section 302A.441, subdivision 3, is amended to read:
7.31 Subd. 3. Notice and liability. When written action is permitted to be taken by less
7.32than all shareholders, all shareholders who did not sign or consent to the written action
7.33 must be notified of its text and effective time no later than five days after the effective
8.1time of the action. Failure to provide the notice does not invalidate the written action.
8.2A shareholder who does not sign or consent to the written action has no liability for any
8.3action authorized by the written action.
8.4 Sec. 13. Minnesota Statutes 2012, section 302A.471, subdivision 1, is amended to read:
8.5 Subdivision 1. Actions creating rights. A shareholder of a corporation may dissent
8.6from, and obtain payment for the fair value of the shareholder's shares in the event of, any
8.7of the following corporate actions:
8.8(a) unless otherwise provided in the articles, an amendment of the articles that
8.9materially and adversely affects the rights or preferences of the shares of the dissenting
8.10shareholder in that it:
8.11(1) alters or abolishes a preferential right of the shares;
8.12(2) creates, alters, or abolishes a right in respect of the redemption of the shares,
8.13including a provision respecting a sinking fund for the redemption or repurchase of the
8.14shares;
8.15(3) alters or abolishes a preemptive right of the holder of the shares to acquire shares,
8.16securities other than shares, or rights to purchase shares or securities other than shares;
8.17(4) excludes or limits the right of a shareholder to vote on a matter, or to cumulate
8.18votes, except as the right may be excluded or limited through the authorization or issuance
8.19of securities of an existing or new class or series with similar or different voting rights;
8.20except that an amendment to the articles of an issuing public corporation that provides that
8.21section302A.671 does not apply to a control share acquisition does not give rise to the
8.22right to obtain payment under this section; or
8.23(5) eliminates the right to obtain payment under this subdivision;
8.24(b) a sale, lease, transfer, or other disposition of property and assets of the
8.25corporation that requires shareholder approval under section302A.661, subdivision 2 , but
8.26not including a disposition in dissolution described in section302A.725, subdivision 2 , or a
8.27disposition pursuant to an order of a court, or a disposition for cash on terms requiring that
8.28all or substantially all of the net proceeds of disposition be distributed to the shareholders
8.29in accordance with their respective interests within one year after the date of disposition;
8.30(c) a plan of merger, whether under this chapter or under chapter 322B, to which the
8.31corporation is a constituent organization, except as provided in subdivision 3, and except
8.32for a plan of merger adopted under section302A.626 ;
8.33(d) a plan of exchange, whether under this chapter or under chapter 322B, to which
8.34the corporation is a party as the corporation whose shares will be acquired by the acquiring
8.35organization, except as provided in subdivision 3;
9.1(e) a plan of conversion adopted by the corporation;or
9.2(f) an amendment of the articles in connection with a combination of a class or series
9.3under section 302A.402 that reduces the number of shares of the class or series owned by
9.4the shareholder to a fraction of a share if the corporation exercises its right to repurchase
9.5the fractional share so created under section 302A.423; or
9.6(g) any other corporate action taken pursuant to a shareholder vote with respect to
9.7which the articles, the bylaws, or a resolution approved by the board directs that dissenting
9.8shareholders may obtain payment for their shares.
9.9 Sec. 14. Minnesota Statutes 2012, section 302A.473, subdivision 1, is amended to read:
9.10 Subdivision 1. Definitions. (a) For purposes of this section, the terms defined in this
9.11subdivision have the meanings given them.
9.12(b) "Corporation" means the issuer of the shares held by a dissenter before the
9.13corporate action referred to in section302A.471, subdivision 1 or the successor by merger
9.14of that issuer.
9.15(c) "Fair value of the shares" means the value of the shares of a corporation
9.16immediately before the effective date of the corporate action referred to in section
9.17302A.471, subdivision 1
.
9.18(d) "Interest" means interest commencing five days after the effective date of the
9.19corporate action referred to in section302A.471, subdivision 1 , up to and including the
9.20date of payment, calculated at the rate provided in section549.09 for interest on verdicts
9.21and judgments, subdivision 1, paragraph (c), clause (1).
9.22 Sec. 15. Minnesota Statutes 2012, section 302A.611, subdivision 1, is amended to read:
9.23 Subdivision 1. Contents of plan. A plan of merger or exchange shall contain:
9.24(a) The names of the constituent organizations proposing to merge or participate in
9.25an exchange, and:
9.26(1) in the case of a merger, the name of the surviving organization;
9.27(2) in the case of an exchange, the name of the acquiring organization;
9.28(b) The terms and conditions of the proposed merger or exchange;
9.29(c)(1) In the case of a merger, the manner and basis of converting the ownership
9.30interests of the constituent organizations into securities of, or other ownership interests in,
9.31the surviving organization or of any other organization, or, in whole or in part, into money
9.32or other property, or of canceling some or all of the ownership interests; or
9.33(2) In the case of an exchange, the manner and basis of exchanging the shares to be
9.34acquired for securities of, or other ownership interests in, the acquiring organization or
10.1any other organization or, in whole or part, into money or other property, or of canceling
10.2some of the shares;
10.3(d) In the case of a merger, a statement of any amendments to the articles of
10.4incorporation or organization of the surviving organization proposed as part of the merger;
10.5and
10.6(e) Any other provisions with respect to the proposed merger or exchange that are
10.7deemed necessary or desirable.
10.8 Sec. 16. Minnesota Statutes 2012, section 302A.621, subdivision 3, is amended to read:
10.9 Subd. 3. Articles of merger; contents of articles. Articles of merger shall be
10.10prepared that contain:
10.11(1) the plan of merger;
10.12(2) a statement that the parent owns directly, or indirectly through related
10.13organizations, at least 90 percent of thenumber of outstanding shares or other ownership
10.14interests of each class and series of each subsidiary that is a constituent organization in the
10.15merger, other than the classes or series that, absent this section, would otherwise not be
10.16entitled to vote on the merger, and the number of shares of each class and series or other
10.17ownership interests of the subsidiary or subsidiaries, other than classes or series that,
10.18absent this section, would otherwise not be entitled to vote on the merger, owned by the
10.19parent directly, or indirectly through related organizations; and
10.20(3) a statement that the plan of merger has been approved by the parent under this
10.21section.
10.22 Sec. 17. Minnesota Statutes 2012, section 302A.641, subdivision 2, is amended to read:
10.23 Subd. 2. Effect on organization. When a merger becomes effective:
10.24(a) the constituent organizations become a single entity, the surviving corporation or
10.25surviving limited liability company, as the case may be;
10.26(b) the separate existence of all constituent organizations except the surviving
10.27organization ceases;
10.28(c) if the surviving organization is a corporation, the surviving corporation has all the
10.29rights, privileges, immunities, and powers, and is subject to all the duties and liabilities, of
10.30a corporation incorporated under this chapter;
10.31(d) the surviving organization, whether a corporation, foreign corporation, or
10.32domestic or foreign limited liability company, possesses all the rights, privileges,
10.33immunities, and franchises, of a public as well as of a private nature, of each of the
10.34constituent organizations. All property, real, personal, and mixed, and all debts due on
11.1any account, including subscriptions to shares, and all other choses in action, and every
11.2other interest of or belonging to or due to each of the constituent organizations vests in the
11.3surviving organization without any further act or deed. Confirmatory deeds, assignments,
11.4or similar instruments to accomplish that vesting may be signed and delivered at any time
11.5in the name of a constituent organization by its current officers or managers, as the case
11.6may be, or, if the organization no longer exists, by its last officers or managers, as the case
11.7may be. The title to any realestate, personal, or mixed property or any interest therein in
11.8real, personal, or mixed property vested in any of the constituent organizations does not
11.9revert nor in any way become impaired by reason of the merger;
11.10(e) the surviving organization is responsible and liable for all the liabilities and
11.11obligations of each of the constituent organizations. A claim of or against or a pending
11.12proceeding by or against a constituent organization may be prosecuted as if the merger
11.13had not taken place, or the surviving organization may be substituted in the place of the
11.14constituent organization. Neither the rights of creditors nor any liens upon the property of
11.15a constituent organization are impaired by the merger; and
11.16(f) the articles of the surviving organization are deemed to be amended to the extent
11.17that changes in its articles, if any, are contained in the plan of merger.
11.18 Sec. 18. Minnesota Statutes 2012, section 302A.651, subdivision 4, is amended to read:
11.19 Subd. 4. Foreign surviving organization. If the surviving organization in a merger
11.20will be a foreign corporation or limited liability company and will transact business in
11.21this state, it shall comply with the provisions of chapter 303 with respect to foreign
11.22corporations or chapter 322B with respect to foreign limited liability companies. In every
11.23case the surviving organization shall file with the secretary of state:
11.24(a) an agreement that it may be served with process in this state in a proceeding for
11.25the enforcement of an obligation of a constituent organization and in a proceeding for the
11.26enforcement of the rights of a dissenting shareholder of a constituent corporation against
11.27the surviving organization;
11.28(b) an irrevocable appointment of the secretary of state as its agent to accept service
11.29of process in any proceeding as provided in section 5.25, and an address to which process
11.30may be forwarded; and
11.31(c) an agreement that it will promptly pay to the dissenting shareholders of each
11.32domestic constituent corporation the amount, if any, to which they are entitled under
11.33section302A.473 .
11.34 Sec. 19. Minnesota Statutes 2012, section 302A.681, subdivision 1, is amended to read:
12.1 Subdivision 1. Conversions authorized. In each case pursuant to a plan of
12.2conversion:
12.3(1) a domestic corporation may become a domestic or foreign limited liability
12.4company, and or a foreign corporation;
12.5(2) a domestic limited liability company may become a domestic or foreign
12.6corporation, in each case pursuant to a plan of conversion or a foreign limited liability
12.7company; and
12.8(3) a foreign corporation or foreign limited liability company may become a
12.9domestic corporation or a domestic limited liability company.
12.10 Sec. 20. Minnesota Statutes 2012, section 302A.681, is amended by adding a
12.11subdivision to read:
12.12 Subd. 3. Additional provisions applicable to conversions to or from foreign
12.13organizations. If either the converting organization or the converted organization is a
12.14foreign organization, then:
12.15(1) the conversion is authorized only if it is permitted by, and effected in compliance
12.16with, the applicable laws of the jurisdiction under which the foreign organization is or
12.17will be incorporated or organized;
12.18(2) if the converted organization will be a foreign organization and will transact
12.19business in this state, the converted organization shall comply with the provisions of
12.20chapter 303 with respect to foreign corporations or chapter 322B with respect to foreign
12.21limited liability companies, as applicable. In every such case, the converted organization
12.22shall file with the secretary of state:
12.23(i) an agreement that it may be served with process in this state in a proceeding for
12.24the enforcement of an obligation of the converting organization and in a proceeding for
12.25the enforcement of the rights of a dissenting shareholder of the converting organization
12.26against the converted organization if the converting organization is a domestic corporation;
12.27(ii) an irrevocable appointment of the secretary of state as its agent to accept service
12.28of process in any proceeding as provided in section 5.25, and an address to which process
12.29may be forwarded; and
12.30(iii) if the converting organization is a domestic organization, an agreement that it
12.31will promptly pay to the dissenting owners of the organization the amount, if any to which
12.32they are entitled under section 302A.473 or 322B.383, as applicable.
12.33 Sec. 21. Minnesota Statutes 2012, section 302A.683, is amended to read:
12.34302A.683 PLAN OF CONVERSION.
13.1A plan of conversion must contain:
13.2(1) the name of the converting organization;
13.3(2) the name of the converted organization;
13.4(3) whether the converted organization is a domestic or foreign corporation or a
13.5domestic or foreign limited liability company and the name of the jurisdiction under which
13.6the converted organization will be incorporated or organized;
13.7(4) the terms and conditions of the proposed conversion;
13.8(5) the manner and basis of converting each ownership interest in the converting
13.9organization into ownership interests in the converted organization or, in whole or in
13.10part, into money or other property;
13.11(6) if the converted organization is a domestic organization, a copy of the proposed
13.12articles of incorporation or articles of organization of the converted organization; and
13.13(7) any other provisions with respect to the proposed conversion that are deemed
13.14necessary or desirable.
13.15 Sec. 22. Minnesota Statutes 2012, section 302A.685, is amended to read:
13.16302A.685 PLAN APPROVAL.
13.17 Subdivision 1. Application to domestic and foreign organizations. If the
13.18converting organization is a domestic organization, the plan of conversion must be
13.19approved under subdivisions 2 and 3. If the converting organization is a foreign
13.20organization, the plan of conversion must be approved under subdivision 4.
13.21Subdivision 1. Subd. 2. Board approval; notice to owners. A resolution
13.22containing the plan of conversion must be approved by the affirmative vote of a majority
13.23of the directors or governors present at a meeting of the board of directors or the board
13.24of governors of the converting organization and must then be submitted at a regular or
13.25a special meeting to the owners of the converting organization. Written notice must be
13.26given to every owner of the converting organization, whether or not entitled to vote at the
13.27meeting, not less than 14 days nor more than 60 days before the meeting, in the manner
13.28provided in section302A.435 for notice of a meeting of shareholders or in the manner
13.29provided in section322B.34 for notice of a meeting of members. The written notice must
13.30state that a purpose of the meeting is to consider the proposed plan of conversion. A copy or
13.31short description of the plan of conversion must be included in or enclosed with the notice.
13.32 Subd.2 3. Approval by owners. At the meeting, a vote of the owners must be taken
13.33on the proposed plan. The plan of conversion is adopted when approved by the affirmative
13.34vote of the holders of a majority of the voting power of all shares or membership interests
14.1entitled to vote. A class or series of shares or membership interests is entitled to vote as a
14.2class or series on the approval of the plan.
14.3 Subd. 4. Foreign organizations. The conversion must be approved in accordance
14.4with the applicable laws of the jurisdiction under which the foreign organization is
14.5incorporated or organized.
14.6 Sec. 23. Minnesota Statutes 2012, section 302A.687, is amended to read:
14.7302A.687 ARTICLES OF CONVERSION.
14.8 Subdivision 1. Contents of articles. Upon receiving the approval required by
14.9section302A.685 , articles of conversion must be prepared that contain:
14.10(1) the plan of conversion;
14.11(2) the name of the converting organization immediately before the filing of the
14.12articles of conversion and the name to which the name of the converting organization is
14.13to be changed, which shall be a name that satisfies the laws applicable to the converted
14.14organization;
14.15(3) the type of organization that the converted organization will be and the name of
14.16the jurisdiction under which the converted organization will be incorporated or organized;
14.17(4) a statement that the plan of conversion has been approved by the converting
14.18organization under section302A.685 ; and
14.19(5) if the converted organization is a domestic organization, a copy of the articles of
14.20incorporation or the articles of organization of the converted organization.
14.21 Subd. 2. Articles signed, filed. The articles of conversion must be signed on behalf
14.22of the converting organization and filed with the secretary of state. If the converted
14.23organization is a domestic organization, filing of the articles of conversion is also deemed
14.24to be a filing with the secretary of state of the articles of incorporation or the articles of
14.25organization of the converted organization.
14.26 Subd. 3. Certificate. The secretary of state shall issue to the converted organization
14.27or its legal representative a certificate of conversion and, if the converted organization
14.28is a domestic organization, a certificate of incorporation or a certificate of organization
14.29to the converted organization or its legal representative.
14.30 Sec. 24. Minnesota Statutes 2012, section 302A.689, is amended to read:
14.31302A.689 ABANDONMENT OF CONVERSION.
14.32 Subdivision 1. By shareholders or plan. After a plan of conversion of a domestic
14.33converting organization has been approved by the owners entitled to vote on the approval
15.1of the plan as provided in section302A.685 , and before the effective date of the plan, it
15.2may be abandoned:
15.3(1) if the owners of the converting organization entitled to vote on the approval of
15.4the plan as provided in section302A.685 have approved the abandonment at a meeting
15.5by the affirmative vote of the holders of a majority of the voting power of the shares
15.6or membership interests entitled to vote;
15.7(2) if the plan itself provides for abandonment and all conditions for abandonment
15.8set forth in the plan are met; or
15.9(3) pursuant to subdivision 2.
15.10 Subd. 2. By board. A plan of conversion of a domestic converting organization may
15.11be abandoned, before the effective date of the plan, by a resolution of the board of directors
15.12or the board of governors of the converting organization abandoning the plan of conversion
15.13approved by the affirmative vote of a majority of the directors or governors present.
15.14 Subd. 3. Filing of articles. If articles of conversion of a domestic converting
15.15organization have been filed with the secretary of state, but have not yet become effective,
15.16the converting organization shall file with the secretary of state articles of abandonment
15.17that contain:
15.18(1) the name of the converting organization;
15.19(2) the provision of this section under which the plan is abandoned; and
15.20(3) if the plan is abandoned under subdivision 2, the text of the resolution
15.21abandoning the plan.
15.22 Subd. 4. Foreign organizations. A plan of conversion adopted by a foreign
15.23organization may be abandoned in accordance with the applicable laws of the jurisdiction
15.24under which the foreign organization is incorporated or organized.
15.25 Sec. 25. Minnesota Statutes 2012, section 302A.691, subdivision 2, is amended to read:
15.26 Subd. 2. Effect on organization. (a) A converted organization is for all purposes the
15.27same organization as the converting organization, having been incorporated or organized
15.28on the date that the converting organization was originally incorporated or organized.
15.29(b) When a conversion becomes effective:
15.30(1) if the converted organization is a domestic corporation, the converted
15.31organization has all the rights, privileges, immunities, and powers, and is subject to all the
15.32duties and liabilities, of a corporation incorporated under this chapter;
15.33(2) if the converted organization is a domestic limited liability company, the
15.34converted organization has all the rights, privileges, immunities, and powers, and is subject
15.35to all the duties and liabilities, of a limited liability company organized under chapter 322B;
16.1(3) all property owned by the converting organization remains vested in the
16.2converted organization;
16.3(4) all debts, liabilities, and other obligations of the converting organization continue
16.4as obligations of the converted organization;
16.5(5) an action or proceeding pending by or against the converting organization may
16.6be continued as if the conversion had not occurred; and
16.7(6) all rights, privileges, immunities, and powers of the converting organization
16.8remain vested in the converted organization.
16.9 Sec. 26. Minnesota Statutes 2012, section 302A.691, subdivision 3, is amended to read:
16.10 Subd. 3. Effect on shareholders or members. When a conversion becomes
16.11effective, each share or membership interest in the converting organization is deemed
16.12to be converted into shares or membership interests in the converted organization or,
16.13in whole or in part, into money or other property to be received under the plan by the
16.14shareholders or the members, subject to any dissenters' rights under section302A.471 , in
16.15the case of shareholders ofthe a converting organization that is a domestic corporation,
16.16or section322B.383 , in the case of members of the a converting organization that is a
16.17domestic limited liability company.
16.18 Sec. 27. Minnesota Statutes 2012, section 302A.734, subdivision 2, is amended to read:
16.19 Subd. 2. Certificate. The secretary of state shall issue to the corporation or its legal
16.20representative a certificate of dissolution that contains:
16.21(1) the name of the corporation;
16.22(2) the date the articles of dissolutionwas were filed with the secretary of state
16.23 or any later effective date or later effective time stated in the articles of dissolution in
16.24accordance with subdivision 1; and
16.25(3) a statement that the corporation is dissolved.
16.26 Sec. 28. Minnesota Statutes 2012, section 322B.115, subdivision 2, is amended to read:
16.27 Subd. 2. Statutory provisions that may be modified only in articles of
16.28organization or a member control agreement. The following provisions govern a
16.29limited liability company unless modified in the articles of organization or a member
16.30control agreement under section322B.37 :
16.31(1) a limited liability company has general business purposes (section322B.10 );
16.32(2) a limited liability company has certain powers (section322B.20 );
17.1(3) the power to adopt, amend, or repeal the bylaws is vested in the board of
17.2governors (section322B.603 );
17.3(4) a limited liability company must allow cumulative voting for governors (section
17.4322B.63, subdivision 2
);
17.5(5) the affirmative vote of a majority of governors present is required for an action of
17.6the board of governors (section322B.653 );
17.7(6) a written action by the board of governors taken without a meeting must be
17.8signed by all governors (section322B.656 );
17.9(7) the board may accept contributions, make contribution agreements, and make
17.10contribution allowance agreements (sections322B.40, subdivision 1 ;
322B.42 ; and
17.11322B.43
);
17.12(8) all membership interests are ordinary membership interests entitled to vote and
17.13are of one class with no series (section322B.40, subdivision 5 , clauses (1) and (2));
17.14(9) all membership interests have equal rights and preferences in all matters not
17.15otherwise provided for by the board of governors (section322B.40, subdivision 5 , clause
17.16(2));
17.17(10) the value of previous contributions is to be restated when a new contribution is
17.18accepted (section322B.41 );
17.19(11) a member has certain preemptive rights, unless otherwise provided by the board
17.20of governors (section322B.33 );
17.21(12) the affirmative vote of the owners of a majority of the voting power of the
17.22membership interests present and entitled to vote at a duly held meeting is required for
17.23an action of the members, except where this chapter requires the affirmative vote of a
17.24plurality of the votes cast (section322B.63, subdivision 1 ) or a majority of the voting
17.25power of all membership interests entitled to vote (section322B.35, subdivision 1 );
17.26(13) the voting power of each membership interest is in proportion to the value
17.27reflected in the required records of the contributions of the members (section322B.356 );
17.28(14) members share in distributions in proportion to the value reflected in the
17.29required records of the contributions of members (section322B.50 );
17.30(15) members share profits and losses in proportion to the value reflected in the
17.31required records of the contributions of members (section322B.326 );
17.32(16) a written action by the members taken without a meeting must be signed by
17.33all members (section322B.35 );
17.34(17) members have no right to receive distributions in kind and the limited liability
17.35company has only limited rights to make distributions in kind (section322B.52 );
17.36(18) a member is not subject to expulsion (section322B.306, subdivision 2 );
18.1(19) unanimous consent is required for the transfer of governance rights to a person
18.2not already a member (section322B.313, subdivision 2 );
18.3(20) for limited liability companies whose existence begins before August 1, 1999,
18.4unanimous consent is required to avoid dissolution (section322B.80, subdivision 1 ,
18.5clause (5)(i));
18.6(21) the termination of a person's membership interest has specified consequences
18.7(section322B.306 ); and
18.8(22) restrictions apply to the assignment of governance rights (section322B.313 ); and
18.9(23) members are entitled to vote as a class or series upon proposed amendments to
18.10the articles in specified circumstances (section322B.155 ).
18.11 Sec. 29. Minnesota Statutes 2012, section 322B.155, is amended to read:
18.12322B.155 CLASS OR SERIES VOTING ON AMENDMENTS.
18.13 Subdivision 1. Amendments creating rights. Except as provided in subdivision 2,
18.14the owners of the outstanding membership interests of a class or series are entitled to vote
18.15as a class or series upon a proposed amendment to the articles of organization, whether or
18.16not entitled to vote on the amendment by the provisions of the articles of organization,
18.17if the amendment would:
18.18(1) effect an exchange, reclassification, or cancellation of all or part of the
18.19membership interests of the class or series, or effect a combination of outstanding
18.20membership interests of a class or series into a lesser number of membership interests of
18.21the class or series where each other class or series is not subject to a similar combination;
18.22(2) effect an exchange, or create a right of exchange, of all or any part of the
18.23membership interests of another class or series for the membership interests of the class
18.24or series;
18.25(3) change the rights or preferences of the membership interests of the class or series;
18.26(4) create a new class or series of membership interests having rights and preferences
18.27prior and superior to the membership interests of that class or series, or increase the rights
18.28and preferences or the number of membership interests, of a class or series having rights
18.29and preferences prior or superior to the membership interests of that class or series;
18.30(5) divide the membership interests of the class into series and determine the
18.31designation of each series and the variations in the relative rights and preferences between
18.32the membership interests of each series or authorize the board of governors to do so;
18.33(6) limit or deny any existing preemptive rights of the membership interests of
18.34the class or series; or
19.1(7) cancel or otherwise affect distributions on the membership interests of the class
19.2or series.
19.3 Subd. 2. Combined voting groups. The articles of organization may provide that,
19.4if a proposed amendment entitling the holders of the outstanding membership interests
19.5of two or more classes or series to vote as separate classes or series under subdivision 1
19.6would affect those classes or series in the same or a substantially similar way, the holders
19.7of the outstanding membership interests of all the classes or series so affected must vote
19.8together as a single voting group on the proposed amendment.
19.9 Sec. 30. Minnesota Statutes 2012, section 322B.35, subdivision 3, is amended to read:
19.10 Subd. 3. Notice and liability. When written action is permitted to be taken by less
19.11than all members, all members who did not sign or consent to the written action must be
19.12notified of its text and effective date no later than five days after the effective time of the
19.13action. Failure to provide the notice does not invalidate the written action. A member
19.14who does not sign or consent to the written action has no liability for the action or actions
19.15taken by the written action.
19.16 Sec. 31. Minnesota Statutes 2012, section 322B.386, subdivision 1, is amended to read:
19.17 Subdivision 1. Definitions. (a) For purposes of this section, the terms defined in this
19.18subdivision have the meanings given them.
19.19(b) "Limited liability company" means a limited liability company whose members
19.20have obtained rights to dissent under section322B.383, subdivision 1 , and includes any
19.21successor by merger.
19.22(c) "Fair value of the membership interests" means the value of the membership
19.23interests of a limited liability company immediately before the effective date of the limited
19.24liability company action referred to in section322B.383, subdivision 1 .
19.25(d) "Interest" means interest beginning five days after the effective date of the
19.26limited liability company action referred to in section322B.383, subdivision 1 , up to and
19.27including the date of payment, calculated at the rate provided in section549.09 for interest
19.28on verdicts and judgments, subdivision 1, paragraph (c), clause (1).
19.29(e) "Member" includes a former member when dissenters' rights exist because:
19.30(1) the membership of that former member has terminated causing dissolution; and
19.31(2) the dissolved limited liability company has then entered into a winding up
19.32merger under section322B.81, subdivision 3 .
20.1 Sec. 32. Minnesota Statutes 2012, section 322B.689, is amended to read:
20.2322B.689 DELEGATION.
20.3Unless prohibited by the articles, a member control agreement, or bylaws or by a
20.4resolution approved by the affirmative vote of a majority of the governors present, a
20.5managerelected or appointed by the board of governors may, without the approval of the
20.6board, delegate some or all of the duties and powers of an office to other persons. A
20.7manager who delegates the duties or powers of an officeremains is subject to the standard
20.8of conduct for a manager in section 322B.69 with respect tothe discharge of all: (1) the
20.9act of delegation; and (2) the supervision of persons to whom those duties and powers are
20.10so delegated.
20.11 Sec. 33. Minnesota Statutes 2012, section 322B.69, is amended to read:
20.12322B.69 STANDARD OF CONDUCT.
20.13A manager shall discharge the duties of an office in good faith, in a manner the
20.14manager reasonably believes to be in the best interests of the limited liability company,
20.15and with the care an ordinarily prudent person in a like position would exercise under
20.16similar circumstances. A person who so performs those duties is not liable by reason of
20.17being or having been a manager of the limited liability company. A person exercising the
20.18principal functions of an office or to whom some or all of the duties and powers of an
20.19office are delegated pursuant to section322B.689 is considered a manager for purposes of
20.20this section and sections322B.38 and
322B.699 .
20.21 Sec. 34. Minnesota Statutes 2012, section 322B.71, subdivision 1, is amended to read:
20.22 Subdivision 1. Contents of plan. A plan of merger or exchange must contain:
20.23(1) the name of the limited liability company and each other constituent organization
20.24proposing to merge or participate in an exchange, and:
20.25(i) in the case of a merger, the name of the surviving organization, which may be the
20.26limited liability company or another constituent organization; or
20.27(ii) in the case of an exchange, the name of the acquiring organization;
20.28(2) the terms and conditions of the proposed merger or exchange;
20.29(3)(i) in the case of a merger, the manner and basis of converting the ownership
20.30interests of the constituent organizations into securities of, or other ownership interests in,
20.31the surviving organization or of any other organization, or, in whole or in part, into money
20.32or other property, or of canceling some or all of such ownership interests; or
20.33(ii) in the case of an exchange, the manner and basis of exchanging the ownership
20.34interests to be acquired for securities of, or other ownership interests in, the acquiring
21.1organization or any other organization or, in whole or part, for money or other property, or
21.2of canceling some or all of such ownership interests; or;
21.3(4) in the case of a merger, a statement of any amendments to the articles of
21.4organization or articles of incorporation, as the case may be, of the surviving organization
21.5proposed as part of the merger; and
21.6(5) any other provisions with respect to the proposed merger or exchange that are
21.7considered necessary or desirable.
21.8 Sec. 35. Minnesota Statutes 2012, section 322B.75, subdivision 2, is amended to read:
21.9 Subd. 2. Effect on constituent organizations. When a merger becomes effective:
21.10(1) the constituent organizations become a single entity, the surviving limited
21.11liability company or corporation, as the case may be;
21.12(2) the separate existence of all constituent organizations except the surviving
21.13organization ceases;
21.14(3) as to any limited liability company that was a constituent organization and is not
21.15the surviving organization, the articles of merger serve as the articles of termination, and,
21.16unless previously filed, the notice of dissolution;
21.17(4)(i) if the surviving organization is a limited liability company, the surviving
21.18limited liability company has all the rights, privileges, immunities, and powers, and is
21.19subject to all the duties and liabilities of a limited liability company under this chapter; and
21.20(ii) if the surviving organization is not a limited liability company, the surviving
21.21organization has all the rights, privileges, immunities, and powers, and is subject to all the
21.22duties and liabilities of the organization under its governing law;
21.23(5) the surviving organization, whether a limited liability company, a foreign
21.24limited liability company, a domestic corporation, a foreign corporation, or a cooperative
21.25organized under chapter 308A or 308B, possesses all the rights, privileges, immunities,
21.26and franchises, of a public as well as of a private nature, of each of the constituent
21.27organizations. All property, real, personal, and mixed, and all debts due on any account,
21.28including subscriptions to shares and contribution agreements, as the case may be, and all
21.29other choses in action, and every other interest of or belonging to or due to each of the
21.30constituent organizations vests in the surviving organization without any further act or
21.31deed. Confirmatory deeds, assignments, or similar instruments to accomplish that vesting
21.32may be signed and delivered at any time in the name of a constituent organization by its
21.33current officers or managers, as the case may be, or, if the organization no longer exists,
21.34by its last officers or managers, as the case may be. The title to any realestate, personal,
21.35or mixed property, or any interest in realestate, personal, or mixed property vested in
22.1any of the constituent organizations does not revert nor in any way become impaired
22.2by reason of the merger;
22.3(6) the surviving organization is responsible and liable for all the liabilities and
22.4obligations of each of the constituent organizations. A claim of or against or a pending
22.5proceeding by or against a constituent organization may be prosecuted as if the merger
22.6had not taken place, or the surviving organization may be substituted in the place of the
22.7constituent organization. Neither the rights of creditors nor any liens upon the property of
22.8a constituent organization are impaired by the merger; and
22.9(7) the articles of organization or articles of incorporation, as the case may be, of
22.10the surviving organization are considered to be amended to the extent that changes in its
22.11articles, if any, are contained in the plan of merger.
22.12 Sec. 36. Minnesota Statutes 2012, section 322B.76, subdivision 4, is amended to read:
22.13 Subd. 4.Surviving foreign corporation or foreign limited liability company
22.14 Foreign surviving organization. If the surviving organization in a merger will be a
22.15foreign corporation or foreign limited liability company and will transact business in this
22.16state, it shall comply, as the case may be, with the provisions of chapter 303 with respect
22.17to foreign corporations or with the provisions of this chapter with respect to foreign
22.18limited liability companies. In every case the surviving foreign corporation or foreign
22.19limited liability company shall file with the secretary of state:
22.20(1) an agreement that it may be served with process in this state in a proceeding for
22.21the enforcement of an obligation of a constituent organization and in a proceeding for the
22.22enforcement of the rights of a dissenting owner of an ownership interest of a constituent
22.23organization against the surviving foreign corporation or foreign limited liability company;
22.24(2) an irrevocable appointment of the secretary of state as its agent to accept service
22.25of process in any proceeding, as provided in section 5.25, and an address to which process
22.26may be forwarded; and
22.27(3) an agreement that it will promptly pay to any dissenting members of each
22.28constituent domestic limited liability company the amount, if any, to which they are
22.29entitled under section322B.386 .
22.30 Sec. 37. Minnesota Statutes 2012, section 322B.78, is amended to read:
22.31322B.78 CONVERSION.
22.32A domestic limited liability company that is not a nonprofit limited liability company
22.33may convert to a domestic or foreign corporation or a foreign limited liability company
22.34pursuant to sections302A.681 to
302A.691 .
23.1 Sec. 38. Minnesota Statutes 2012, section 322B.826, subdivision 2, is amended to read:
23.2 Subd. 2. Certificate. The secretary of state shall issue to the limited liability
23.3company or its legal representative a certificate of termination that contains:
23.4(1) the name of the limited liability company;
23.5(2) the date the articles of terminationwas were filed with the secretary of state
23.6 or any later effective date or later effective time stated in the articles of termination in
23.7accordance with subdivision 1; and
23.8(3) a statement that the limited liability company is terminated at the effective date
23.9of the termination.
1.3regulating limited liability companies and business corporations;amending
1.4Minnesota Statutes 2012, sections 80B.01, subdivision 6; 302A.011, subdivisions
1.518, 63, 64; 302A.111, subdivisions 2, 4; 302A.137; 302A.351; 302A.361;
1.6302A.423, subdivision 2; 302A.441, subdivision 3; 302A.471, subdivision 1;
1.7302A.473, subdivision 1; 302A.611, subdivision 1; 302A.621, subdivision 3;
1.8302A.641, subdivision 2; 302A.651, subdivision 4; 302A.681, subdivision 1, by
1.9adding a subdivision; 302A.683; 302A.685; 302A.687; 302A.689; 302A.691,
1.10subdivisions 2, 3; 302A.734, subdivision 2; 322B.115, subdivision 2; 322B.155;
1.11322B.35, subdivision 3; 322B.386, subdivision 1; 322B.689; 322B.69; 322B.71,
1.12subdivision 1; 322B.75, subdivision 2; 322B.76, subdivision 4; 322B.78;
1.13322B.826, subdivision 2; proposing coding for new law in Minnesota Statutes,
1.14chapter 5.
1.15BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.16 Section 1. [5.39] PREFILING DOCUMENT REVIEW.
1.17 Subdivision 1. Authorization and initiation. (a) The secretary of state shall
1.18conduct a prefiling review of a document proposed for filing on behalf of a business entity
1.19if the filing party submits to the secretary of state:
1.20(1) the document to be reviewed and a nonrefundable $250 fee; and
1.21(2) a name reservation form, if the document proposes a name change or requires
1.22the use of a name otherwise unregistered at the time the document is submitted under
1.23this subdivision.
1.24(b) If the secretary of state determines that the prefiled document meets all applicable
1.25statutory requirements, the document shall be returned to the filing party with an approval
1.26stamp affixed to the document that includes the approval date.
2.1(c) The fee submitted pursuant to paragraph (a) shall be deposited by the secretary of
2.2state in the state treasury and credited to the Uniform Commercial Code account for the
2.3purposes in section 336.1-110.
2.4 Subd. 2. Subsequent filing. A document approved pursuant to subdivision 1 may
2.5be filed with the secretary of state without further substantive review if:
2.6(1) the document submitted for filing is the document submitted for prefiling review
2.7and is submitted within six months of its approval date;
2.8(2) the appropriate filing fee is submitted by the filing party with the document
2.9being filed; and
2.10(3) neither the applicable statutory requirements nor the status of the business entity
2.11has changed since the approval date of the prefiling review.
2.12 Sec. 2. Minnesota Statutes 2012, section 80B.01, subdivision 6, is amended to read:
2.13 Subd. 6. Offeror. "Offeror" means a person who makes or in any way participates in
2.14making a takeover offer. Offeror does not include any bank or broker-dealer loaning funds
2.15to an offeror in the ordinary course of its business, or any bank, broker-dealer, attorney,
2.16accountant, consultant, employee, or other person furnishing information or advice to or
2.17performing ministerial duties for an offeror, and not otherwise participating in the takeover
2.18offer. When two or more persons act as a partnership, limited partnership, limited liability
2.19company, syndicate, or other group pursuant to any agreement, arrangement, relationship,
2.20understanding, or otherwise (whether or not in writing) for the purpose of acquiring,
2.21owning, or voting securities of a target company, all members of the partnership, limited
2.22liability company, syndicate, or other group constitute "a person."
2.23 Sec. 3. Minnesota Statutes 2012, section 302A.011, subdivision 18, is amended to read:
2.24 Subd. 18. Officer. "Officer" means the chief executive officer, the chief financial
2.25officer, a person elected, appointed, or otherwise designated as an officer pursuant to
2.26section
2.28chair of the board of the corporation, unless otherwise provided in the articles or bylaws.
2.29 Sec. 4. Minnesota Statutes 2012, section 302A.011, subdivision 63, is amended to read:
2.30 Subd. 63. Converted organization. "Converted organization" means the domestic
2.31or foreign corporation or domestic or foreign limited liability company resulting from a
2.32conversion under sections
3.1 Sec. 5. Minnesota Statutes 2012, section 302A.011, subdivision 64, is amended to read:
3.2 Subd. 64. Converting organization. "Converting organization" means the domestic
3.3or foreign corporation or domestic or foreign limited liability company that effects a
3.4conversion under sections
3.5 Sec. 6. Minnesota Statutes 2012, section 302A.111, subdivision 2, is amended to read:
3.6 Subd. 2. Statutory provisions that may be modified only in articles or in a
3.7shareholder control agreement. The following provisions govern a corporation unless
3.8modified in the articles or in a shareholder control agreement under section
3.9(a) a corporation has general business purposes (section
3.10(b) a corporation has perpetual existence and certain powers (section
3.11(c) the power to adopt, amend, or repeal the bylaws is vested in the board (section
3.13(d) a corporation must allow cumulative voting for directors (section
3.14subdivision 2
3.15(e) the affirmative vote of a majority of directors present is required for an action
3.16of the board (section
3.17(f) a written action by the board taken without a meeting must be signed by all
3.18directors (section
3.19(g) the board may authorize the issuance of securities and rights to purchase
3.20securities (section
3.21(h) all shares are common shares entitled to vote and are of one class and one series
3.22(section
3.23(i) all shares have equal rights and preferences in all matters not otherwise provided
3.24for by the board (section
3.25(j) the par value of shares is fixed at one cent per share for certain purposes and may be
3.26fixed by the board for certain other purposes (section
3.27(k) the board or the shareholders may issue shares for any consideration or for no
3.28consideration to effectuate share dividends, divisions, or combinations, and determine the
3.29value of nonmonetary consideration (section
3.30(l) shares of a class or series must not be issued to holders of shares of another class
3.31or series to effectuate share dividends, divisions, or combinations, unless authorized by a
3.32majority of the voting power of the shares of the same class or series as the shares to be
3.33issued (section
3.34(m) a corporation may issue rights to purchase securities whose terms, provisions,
3.35and conditions are fixed by the board (section
4.1(n) a shareholder has certain preemptive rights, unless otherwise provided by the
4.2board (section
4.3(o) the affirmative vote of the holders of a majority of the voting power of the
4.4shares present and entitled to vote at a duly held meeting is required for an action of the
4.5shareholders, except where this chapter requires the affirmative vote of a plurality of the
4.6votes cast (section
4.7shares entitled to vote (section
4.8(p) shares of a corporation acquired by the corporation may be reissued (section
4.10(q) each share has one vote unless otherwise provided in the terms of the share
4.11(section
4.12(r) a corporation may issue shares for a consideration less than the par value, if any,
4.13of the shares (section
4.14(s) the board may effect share dividends, divisions, and combinations under certain
4.15circumstances without shareholder approval (section
4.16(t) a written action of shareholders must be signed by all shareholders (section
4.18(u) specified amendments of the articles create dissenters' rights (section 302A.471,
4.19subdivision 1, clause (a)); and
4.20(v) shareholders are entitled to vote as a class or series upon proposed amendments
4.21to the articles in specified circumstances (section 302A.137).
4.22 Sec. 7. Minnesota Statutes 2012, section 302A.111, subdivision 4, is amended to read:
4.23 Subd. 4. Optional provisions; specific subjects. The provisions in paragraphs (a),
4.24(g), (q), (r), and (u) may be included in the articles.
4.25The provisions in paragraphs (b) to (f), (h) to (p), (s), and (t) may be included either
4.26in the articles or the bylaws:
4.27(a) the members of the first board may be named in the articles (section
4.28subdivision 1
4.29(b) a manner for increasing or decreasing the number of directors may be provided
4.30(section
4.31(c) additional qualifications for directors may be imposed (section
4.32(d) directors may be classified (section
4.33(e) the day or date, time, and place of board meetings may be fixed (section
5.1(f) absent directors may be permitted to give written consent or opposition to
5.2a proposal (section
5.3(g) a larger than majority vote may be required for board action (section
5.4(h) authority to sign and deliver certain documents may be delegated to an officer
5.5or agent of the corporation other than the chief executive officer (section
5.6subdivision 2
5.7(i) additional officers may be designated (section
5.8(j) additional powers, rights, duties, and responsibilities may be given to officers
5.9(section
5.10(k) a method for filling vacant offices may be specified (section
5.11subdivision 3
5.12(l) a certain officer or agent may be authorized to sign share certificates (section
5.14(m) the transfer or registration of transfer of securities may be restricted (section
5.16(n) the day or date, time, and place of regular shareholder meetings may be fixed
5.17(section
5.18(o) certain persons may be authorized to call special meetings of shareholders
5.19(section
5.20(p) notices of shareholder meetings may be required to contain certain information
5.21(section
5.22(q) a larger than majority vote may be required for shareholder action (section
5.24(r) voting rights may be granted in or pursuant to the articles to persons who are not
5.25shareholders (section
5.26(s) corporate actions giving rise to dissenter rights may be designated (section
5.28(t) the rights and priorities of persons to receive distributions may be established
5.29(section
5.30(u) a director's personal liability to the corporation or its shareholders for monetary
5.31damages for breach of fiduciary duty as a director may be eliminated or limited in the
5.32articles (section
5.33Nothing in this subdivision limits the right of the board, by resolution, to take an
5.34action that may be included in the bylaws under this subdivision without including it in
5.35the bylaws, unless it is required to be included in the bylaws by another provision of this
6.1chapter. Nothing in this subdivision limits the permissible scope of a shareholder control
6.2agreement under section
6.3 Sec. 8. Minnesota Statutes 2012, section 302A.137, is amended to read:
6.4302A.137 CLASS OR SERIES VOTING ON AMENDMENTS.
6.5 Subdivision 1. Amendments creating rights. Except as provided in subdivision
6.62, the holders of the outstanding shares of a class or series are entitled to vote as a class
6.7or series upon a proposed amendment, whether or not entitled to vote thereon by the
6.8provisions of the articles, if the amendment would:
6.9(a) effect an exchange, reclassification, or cancellation of all or part of the shares of
6.10the class or series, or effect a combination of outstanding shares of a class or series into
6.11a lesser number of shares of the class or series where each other class and series is not
6.12subject to a similar combination;
6.13(b) effect an exchange, or create a right of exchange, of all or any part of the shares
6.14of another class or series for the shares of the class or series;
6.15(c) change the rights or preferences of the shares of the class or series;
6.16(d) create a new class or series of shares having rights and preferences prior and
6.17superior to the shares of that class or series, or increase the rights and preferences or the
6.18number of authorized shares, of a class or series having rights and preferences prior or
6.19superior to the shares of that class or series;
6.20(e) divide the shares of the class into series and determine the designation of each
6.21series and the variations in the relative rights and preferences between the shares of each
6.22series, or authorize the board to do so;
6.23(f) limit or deny any existing preemptive rights of the shares of the class or series; or
6.24(g) cancel or otherwise affect distributions on the shares of the class or series that
6.25have accrued but have not been declared.
6.26 Subd. 2. Combined voting groups. The articles may provide that, if a proposed
6.27amendment entitling the holders of the outstanding shares of two or more classes or series
6.28to vote as separate classes or series under subdivision 1 would affect those classes or
6.29series in the same or a substantially similar way, the holders of the outstanding shares
6.30of all the classes or series so affected must vote together as a single voting group on
6.31the proposed amendment.
6.32 Sec. 9. Minnesota Statutes 2012, section 302A.351, is amended to read:
6.33302A.351 DELEGATION.
7.1Unless prohibited by the articles or bylaws or by a resolution approved by the
7.2affirmative vote of a majority of the directors present, an officer
7.3
7.4powers of an office to other persons. An officer who delegates the duties or powers of
7.5an office
7.6302A.361 with respect to
7.7supervision of persons to whom those duties and powers are so delegated.
7.8 Sec. 10. Minnesota Statutes 2012, section 302A.361, is amended to read:
7.9302A.361 STANDARD OF CONDUCT.
7.10An officer shall discharge the duties of an office in good faith, in a manner the
7.11officer reasonably believes to be in the best interests of the corporation, and with the care
7.12an ordinarily prudent person in a like position would exercise under similar circumstances.
7.13A person who so performs those duties is not liable by reason of being or having been
7.14an officer of the corporation. A person exercising the principal functions of an office
7.15or to whom some or all of the duties and powers of an office are delegated pursuant to
7.16section
7.17and
7.18 Sec. 11. Minnesota Statutes 2012, section 302A.423, subdivision 2, is amended to read:
7.19 Subd. 2. Restrictions; rights. A corporation shall not pay money for fractional
7.20shares if that action would result in the cancellation of more than 20 percent of the
7.21outstanding shares of a class or series. Subject to the rights, if any, of dissenting
7.22shareholders under section 302A.471, a determination by the board of the fair value of
7.23fractions of a share is conclusive in the absence of fraud. A certificated or uncertificated
7.24fractional share does, but scrip or warrants do not unless they provide otherwise, entitle the
7.25shareholder to exercise voting rights or to receive distributions. The board may cause scrip
7.26or warrants to be issued subject to the condition that they become void if not exchanged
7.27for full shares before a specified date, or that the shares for which scrip or warrants are
7.28exchangeable may be sold by the corporation and the proceeds distributed to the holder of
7.29the scrip or warrants, or to any other condition or set of conditions the board may impose.
7.30 Sec. 12. Minnesota Statutes 2012, section 302A.441, subdivision 3, is amended to read:
7.31 Subd. 3. Notice and liability. When written action is permitted to be taken by less
7.32than all shareholders, all shareholders who did not sign or consent to the written action
7.33 must be notified of its text and effective time no later than five days after the effective
8.1time of the action. Failure to provide the notice does not invalidate the written action.
8.2A shareholder who does not sign or consent to the written action has no liability for any
8.3action authorized by the written action.
8.4 Sec. 13. Minnesota Statutes 2012, section 302A.471, subdivision 1, is amended to read:
8.5 Subdivision 1. Actions creating rights. A shareholder of a corporation may dissent
8.6from, and obtain payment for the fair value of the shareholder's shares in the event of, any
8.7of the following corporate actions:
8.8(a) unless otherwise provided in the articles, an amendment of the articles that
8.9materially and adversely affects the rights or preferences of the shares of the dissenting
8.10shareholder in that it:
8.11(1) alters or abolishes a preferential right of the shares;
8.12(2) creates, alters, or abolishes a right in respect of the redemption of the shares,
8.13including a provision respecting a sinking fund for the redemption or repurchase of the
8.14shares;
8.15(3) alters or abolishes a preemptive right of the holder of the shares to acquire shares,
8.16securities other than shares, or rights to purchase shares or securities other than shares;
8.17(4) excludes or limits the right of a shareholder to vote on a matter, or to cumulate
8.18votes, except as the right may be excluded or limited through the authorization or issuance
8.19of securities of an existing or new class or series with similar or different voting rights;
8.20except that an amendment to the articles of an issuing public corporation that provides that
8.21section
8.22right to obtain payment under this section; or
8.23(5) eliminates the right to obtain payment under this subdivision;
8.24(b) a sale, lease, transfer, or other disposition of property and assets of the
8.25corporation that requires shareholder approval under section
8.26not including a disposition in dissolution described in section
8.27disposition pursuant to an order of a court, or a disposition for cash on terms requiring that
8.28all or substantially all of the net proceeds of disposition be distributed to the shareholders
8.29in accordance with their respective interests within one year after the date of disposition;
8.30(c) a plan of merger, whether under this chapter or under chapter 322B, to which the
8.31corporation is a constituent organization, except as provided in subdivision 3, and except
8.32for a plan of merger adopted under section
8.33(d) a plan of exchange, whether under this chapter or under chapter 322B, to which
8.34the corporation is a party as the corporation whose shares will be acquired by the acquiring
8.35organization, except as provided in subdivision 3;
9.1(e) a plan of conversion adopted by the corporation;
9.2(f) an amendment of the articles in connection with a combination of a class or series
9.3under section 302A.402 that reduces the number of shares of the class or series owned by
9.4the shareholder to a fraction of a share if the corporation exercises its right to repurchase
9.5the fractional share so created under section 302A.423; or
9.6(g) any other corporate action taken pursuant to a shareholder vote with respect to
9.7which the articles, the bylaws, or a resolution approved by the board directs that dissenting
9.8shareholders may obtain payment for their shares.
9.9 Sec. 14. Minnesota Statutes 2012, section 302A.473, subdivision 1, is amended to read:
9.10 Subdivision 1. Definitions. (a) For purposes of this section, the terms defined in this
9.11subdivision have the meanings given them.
9.12(b) "Corporation" means the issuer of the shares held by a dissenter before the
9.13corporate action referred to in section
9.14of that issuer.
9.15(c) "Fair value of the shares" means the value of the shares of a corporation
9.16immediately before the effective date of the corporate action referred to in section
9.18(d) "Interest" means interest commencing five days after the effective date of the
9.19corporate action referred to in section
9.20date of payment, calculated at the rate provided in section
9.21
9.22 Sec. 15. Minnesota Statutes 2012, section 302A.611, subdivision 1, is amended to read:
9.23 Subdivision 1. Contents of plan. A plan of merger or exchange shall contain:
9.24(a) The names of the constituent organizations proposing to merge or participate in
9.25an exchange, and:
9.26(1) in the case of a merger, the name of the surviving organization;
9.27(2) in the case of an exchange, the name of the acquiring organization;
9.28(b) The terms and conditions of the proposed merger or exchange;
9.29(c)(1) In the case of a merger, the manner and basis of converting the ownership
9.30interests of the constituent organizations into securities of, or other ownership interests in,
9.31the surviving organization or of any other organization, or, in whole or in part, into money
9.32or other property, or of canceling some or all of the ownership interests; or
9.33(2) In the case of an exchange, the manner and basis of exchanging the shares to be
9.34acquired for securities of, or other ownership interests in, the acquiring organization or
10.1any other organization or, in whole or part, into money or other property, or of canceling
10.2some of the shares;
10.3(d) In the case of a merger, a statement of any amendments to the articles of
10.4incorporation or organization of the surviving organization proposed as part of the merger;
10.5and
10.6(e) Any other provisions with respect to the proposed merger or exchange that are
10.7deemed necessary or desirable.
10.8 Sec. 16. Minnesota Statutes 2012, section 302A.621, subdivision 3, is amended to read:
10.9 Subd. 3. Articles of merger; contents of articles. Articles of merger shall be
10.10prepared that contain:
10.11(1) the plan of merger;
10.12(2) a statement that the parent owns directly, or indirectly through related
10.13organizations, at least 90 percent of the
10.14interests of each class and series of each subsidiary that is a constituent organization in the
10.15merger, other than the classes or series that, absent this section, would otherwise not be
10.16entitled to vote on the merger
10.17
10.18
10.19
10.20(3) a statement that the plan of merger has been approved by the parent under this
10.21section.
10.22 Sec. 17. Minnesota Statutes 2012, section 302A.641, subdivision 2, is amended to read:
10.23 Subd. 2. Effect on organization. When a merger becomes effective:
10.24(a) the constituent organizations become a single entity, the surviving corporation or
10.25surviving limited liability company, as the case may be;
10.26(b) the separate existence of all constituent organizations except the surviving
10.27organization ceases;
10.28(c) if the surviving organization is a corporation, the surviving corporation has all the
10.29rights, privileges, immunities, and powers, and is subject to all the duties and liabilities, of
10.30a corporation incorporated under this chapter;
10.31(d) the surviving organization, whether a corporation, foreign corporation, or
10.32domestic or foreign limited liability company, possesses all the rights, privileges,
10.33immunities, and franchises, of a public as well as of a private nature, of each of the
10.34constituent organizations. All property, real, personal, and mixed, and all debts due on
11.1any account, including subscriptions to shares, and all other choses in action, and every
11.2other interest of or belonging to or due to each of the constituent organizations vests in the
11.3surviving organization without any further act or deed. Confirmatory deeds, assignments,
11.4or similar instruments to accomplish that vesting may be signed and delivered at any time
11.5in the name of a constituent organization by its current officers or managers, as the case
11.6may be, or, if the organization no longer exists, by its last officers or managers, as the case
11.7may be. The title to any real
11.8real, personal, or mixed property vested in any of the constituent organizations does not
11.9revert nor in any way become impaired by reason of the merger;
11.10(e) the surviving organization is responsible and liable for all the liabilities and
11.11obligations of each of the constituent organizations. A claim of or against or a pending
11.12proceeding by or against a constituent organization may be prosecuted as if the merger
11.13had not taken place, or the surviving organization may be substituted in the place of the
11.14constituent organization. Neither the rights of creditors nor any liens upon the property of
11.15a constituent organization are impaired by the merger; and
11.16(f) the articles of the surviving organization are deemed to be amended to the extent
11.17that changes in its articles, if any, are contained in the plan of merger.
11.18 Sec. 18. Minnesota Statutes 2012, section 302A.651, subdivision 4, is amended to read:
11.19 Subd. 4. Foreign surviving organization. If the surviving organization in a merger
11.20will be a foreign corporation or limited liability company and will transact business in
11.21this state, it shall comply with the provisions of chapter 303 with respect to foreign
11.22corporations or chapter 322B with respect to foreign limited liability companies. In every
11.23case the surviving organization shall file with the secretary of state:
11.24(a) an agreement that it may be served with process in this state in a proceeding for
11.25the enforcement of an obligation of a constituent organization and in a proceeding for the
11.26enforcement of the rights of a dissenting shareholder of a constituent corporation against
11.27the surviving organization;
11.28(b) an irrevocable appointment of the secretary of state as its agent to accept service
11.29of process in any proceeding as provided in section 5.25, and an address to which process
11.30may be forwarded; and
11.31(c) an agreement that it will promptly pay to the dissenting shareholders of each
11.32domestic constituent corporation the amount, if any, to which they are entitled under
11.33section
11.34 Sec. 19. Minnesota Statutes 2012, section 302A.681, subdivision 1, is amended to read:
12.1 Subdivision 1. Conversions authorized. In each case pursuant to a plan of
12.2conversion:
12.3(1) a domestic corporation may become a domestic or foreign limited liability
12.4company
12.5(2) a domestic limited liability company may become a domestic or foreign
12.6corporation
12.7company; and
12.8(3) a foreign corporation or foreign limited liability company may become a
12.9domestic corporation or a domestic limited liability company.
12.10 Sec. 20. Minnesota Statutes 2012, section 302A.681, is amended by adding a
12.11subdivision to read:
12.12 Subd. 3. Additional provisions applicable to conversions to or from foreign
12.13organizations. If either the converting organization or the converted organization is a
12.14foreign organization, then:
12.15(1) the conversion is authorized only if it is permitted by, and effected in compliance
12.16with, the applicable laws of the jurisdiction under which the foreign organization is or
12.17will be incorporated or organized;
12.18(2) if the converted organization will be a foreign organization and will transact
12.19business in this state, the converted organization shall comply with the provisions of
12.20chapter 303 with respect to foreign corporations or chapter 322B with respect to foreign
12.21limited liability companies, as applicable. In every such case, the converted organization
12.22shall file with the secretary of state:
12.23(i) an agreement that it may be served with process in this state in a proceeding for
12.24the enforcement of an obligation of the converting organization and in a proceeding for
12.25the enforcement of the rights of a dissenting shareholder of the converting organization
12.26against the converted organization if the converting organization is a domestic corporation;
12.27(ii) an irrevocable appointment of the secretary of state as its agent to accept service
12.28of process in any proceeding as provided in section 5.25, and an address to which process
12.29may be forwarded; and
12.30(iii) if the converting organization is a domestic organization, an agreement that it
12.31will promptly pay to the dissenting owners of the organization the amount, if any to which
12.32they are entitled under section 302A.473 or 322B.383, as applicable.
12.33 Sec. 21. Minnesota Statutes 2012, section 302A.683, is amended to read:
12.34302A.683 PLAN OF CONVERSION.
13.1A plan of conversion must contain:
13.2(1) the name of the converting organization;
13.3(2) the name of the converted organization;
13.4(3) whether the converted organization is a domestic or foreign corporation or a
13.5domestic or foreign limited liability company and the name of the jurisdiction under which
13.6the converted organization will be incorporated or organized;
13.7(4) the terms and conditions of the proposed conversion;
13.8(5) the manner and basis of converting each ownership interest in the converting
13.9organization into ownership interests in the converted organization or, in whole or in
13.10part, into money or other property;
13.11(6) if the converted organization is a domestic organization, a copy of the proposed
13.12articles of incorporation or articles of organization of the converted organization; and
13.13(7) any other provisions with respect to the proposed conversion that are deemed
13.14necessary or desirable.
13.15 Sec. 22. Minnesota Statutes 2012, section 302A.685, is amended to read:
13.16302A.685 PLAN APPROVAL.
13.17 Subdivision 1. Application to domestic and foreign organizations. If the
13.18converting organization is a domestic organization, the plan of conversion must be
13.19approved under subdivisions 2 and 3. If the converting organization is a foreign
13.20organization, the plan of conversion must be approved under subdivision 4.
13.21
13.22containing the plan of conversion must be approved by the affirmative vote of a majority
13.23of the directors or governors present at a meeting of the board of directors or the board
13.24of governors of the converting organization and must then be submitted at a regular or
13.25a special meeting to the owners of the converting organization. Written notice must be
13.26given to every owner of the converting organization, whether or not entitled to vote at the
13.27meeting, not less than 14 days nor more than 60 days before the meeting, in the manner
13.28provided in section
13.29provided in section
13.30state that a purpose of the meeting is to consider the proposed plan of conversion. A copy or
13.31short description of the plan of conversion must be included in or enclosed with the notice.
13.32 Subd.
13.33on the proposed plan. The plan of conversion is adopted when approved by the affirmative
13.34vote of the holders of a majority of the voting power of all shares or membership interests
14.1entitled to vote. A class or series of shares or membership interests is entitled to vote as a
14.2class or series on the approval of the plan.
14.3 Subd. 4. Foreign organizations. The conversion must be approved in accordance
14.4with the applicable laws of the jurisdiction under which the foreign organization is
14.5incorporated or organized.
14.6 Sec. 23. Minnesota Statutes 2012, section 302A.687, is amended to read:
14.7302A.687 ARTICLES OF CONVERSION.
14.8 Subdivision 1. Contents of articles. Upon receiving the approval required by
14.9section
14.10(1) the plan of conversion;
14.11(2) the name of the converting organization immediately before the filing of the
14.12articles of conversion and the name to which the name of the converting organization is
14.13to be changed, which shall be a name that satisfies the laws applicable to the converted
14.14organization;
14.15(3) the type of organization that the converted organization will be and the name of
14.16the jurisdiction under which the converted organization will be incorporated or organized;
14.17(4) a statement that the plan of conversion has been approved by the converting
14.18organization under section
14.19(5) if the converted organization is a domestic organization, a copy of the articles of
14.20incorporation or the articles of organization of the converted organization.
14.21 Subd. 2. Articles signed, filed. The articles of conversion must be signed on behalf
14.22of the converting organization and filed with the secretary of state. If the converted
14.23organization is a domestic organization, filing of the articles of conversion is also deemed
14.24to be a filing with the secretary of state of the articles of incorporation or the articles of
14.25organization of the converted organization.
14.26 Subd. 3. Certificate. The secretary of state shall issue to the converted organization
14.27or its legal representative a certificate of conversion and, if the converted organization
14.28is a domestic organization, a certificate of incorporation or a certificate of organization
14.29
14.30 Sec. 24. Minnesota Statutes 2012, section 302A.689, is amended to read:
14.31302A.689 ABANDONMENT OF CONVERSION.
14.32 Subdivision 1. By shareholders or plan. After a plan of conversion of a domestic
14.33converting organization has been approved by the owners entitled to vote on the approval
15.1of the plan as provided in section
15.2may be abandoned:
15.3(1) if the owners of the converting organization entitled to vote on the approval of
15.4the plan as provided in section
15.5by the affirmative vote of the holders of a majority of the voting power of the shares
15.6or membership interests entitled to vote;
15.7(2) if the plan itself provides for abandonment and all conditions for abandonment
15.8set forth in the plan are met; or
15.9(3) pursuant to subdivision 2.
15.10 Subd. 2. By board. A plan of conversion of a domestic converting organization may
15.11be abandoned, before the effective date of the plan, by a resolution of the board of directors
15.12or the board of governors of the converting organization abandoning the plan of conversion
15.13approved by the affirmative vote of a majority of the directors or governors present.
15.14 Subd. 3. Filing of articles. If articles of conversion of a domestic converting
15.15organization have been filed with the secretary of state, but have not yet become effective,
15.16the converting organization shall file with the secretary of state articles of abandonment
15.17that contain:
15.18(1) the name of the converting organization;
15.19(2) the provision of this section under which the plan is abandoned; and
15.20(3) if the plan is abandoned under subdivision 2, the text of the resolution
15.21abandoning the plan.
15.22 Subd. 4. Foreign organizations. A plan of conversion adopted by a foreign
15.23organization may be abandoned in accordance with the applicable laws of the jurisdiction
15.24under which the foreign organization is incorporated or organized.
15.25 Sec. 25. Minnesota Statutes 2012, section 302A.691, subdivision 2, is amended to read:
15.26 Subd. 2. Effect on organization. (a) A converted organization is for all purposes the
15.27same organization as the converting organization, having been incorporated or organized
15.28on the date that the converting organization was originally incorporated or organized.
15.29(b) When a conversion becomes effective:
15.30(1) if the converted organization is a domestic corporation, the converted
15.31organization has all the rights, privileges, immunities, and powers, and is subject to all the
15.32duties and liabilities, of a corporation incorporated under this chapter;
15.33(2) if the converted organization is a domestic limited liability company, the
15.34converted organization has all the rights, privileges, immunities, and powers, and is subject
15.35to all the duties and liabilities, of a limited liability company organized under chapter 322B;
16.1(3) all property owned by the converting organization remains vested in the
16.2converted organization;
16.3(4) all debts, liabilities, and other obligations of the converting organization continue
16.4as obligations of the converted organization;
16.5(5) an action or proceeding pending by or against the converting organization may
16.6be continued as if the conversion had not occurred; and
16.7(6) all rights, privileges, immunities, and powers of the converting organization
16.8remain vested in the converted organization.
16.9 Sec. 26. Minnesota Statutes 2012, section 302A.691, subdivision 3, is amended to read:
16.10 Subd. 3. Effect on shareholders or members. When a conversion becomes
16.11effective, each share or membership interest in the converting organization is deemed
16.12to be converted into shares or membership interests in the converted organization or,
16.13in whole or in part, into money or other property to be received under the plan by the
16.14shareholders or the members, subject to any dissenters' rights under section
16.15the case of shareholders of
16.16or section
16.17domestic limited liability company.
16.18 Sec. 27. Minnesota Statutes 2012, section 302A.734, subdivision 2, is amended to read:
16.19 Subd. 2. Certificate. The secretary of state shall issue to the corporation or its legal
16.20representative a certificate of dissolution that contains:
16.21(1) the name of the corporation;
16.22(2) the date the articles of dissolution
16.23 or any later effective date or later effective time stated in the articles of dissolution in
16.24accordance with subdivision 1; and
16.25(3) a statement that the corporation is dissolved.
16.26 Sec. 28. Minnesota Statutes 2012, section 322B.115, subdivision 2, is amended to read:
16.27 Subd. 2. Statutory provisions that may be modified only in articles of
16.28organization or a member control agreement. The following provisions govern a
16.29limited liability company unless modified in the articles of organization or a member
16.30control agreement under section
16.31(1) a limited liability company has general business purposes (section
16.32(2) a limited liability company has certain powers (section
17.1(3) the power to adopt, amend, or repeal the bylaws is vested in the board of
17.2governors (section
17.3(4) a limited liability company must allow cumulative voting for governors (section
17.5(5) the affirmative vote of a majority of governors present is required for an action of
17.6the board of governors (section
17.7(6) a written action by the board of governors taken without a meeting must be
17.8signed by all governors (section
17.9(7) the board may accept contributions, make contribution agreements, and make
17.10contribution allowance agreements (sections
17.12(8) all membership interests are ordinary membership interests entitled to vote and
17.13are of one class with no series (section
17.14(9) all membership interests have equal rights and preferences in all matters not
17.15otherwise provided for by the board of governors (section
17.16(2));
17.17(10) the value of previous contributions is to be restated when a new contribution is
17.18accepted (section
17.19(11) a member has certain preemptive rights, unless otherwise provided by the board
17.20of governors (section
17.21(12) the affirmative vote of the owners of a majority of the voting power of the
17.22membership interests present and entitled to vote at a duly held meeting is required for
17.23an action of the members, except where this chapter requires the affirmative vote of a
17.24plurality of the votes cast (section
17.25power of all membership interests entitled to vote (section
17.26(13) the voting power of each membership interest is in proportion to the value
17.27reflected in the required records of the contributions of the members (section
17.28(14) members share in distributions in proportion to the value reflected in the
17.29required records of the contributions of members (section
17.30(15) members share profits and losses in proportion to the value reflected in the
17.31required records of the contributions of members (section
17.32(16) a written action by the members taken without a meeting must be signed by
17.33all members (section
17.34(17) members have no right to receive distributions in kind and the limited liability
17.35company has only limited rights to make distributions in kind (section
17.36(18) a member is not subject to expulsion (section
18.1(19) unanimous consent is required for the transfer of governance rights to a person
18.2not already a member (section
18.3(20) for limited liability companies whose existence begins before August 1, 1999,
18.4unanimous consent is required to avoid dissolution (section
18.5clause (5)(i));
18.6(21) the termination of a person's membership interest has specified consequences
18.7(section
18.8(22) restrictions apply to the assignment of governance rights (section
18.9(23) members are entitled to vote as a class or series upon proposed amendments to
18.10the articles in specified circumstances (section
18.11 Sec. 29. Minnesota Statutes 2012, section 322B.155, is amended to read:
18.12322B.155 CLASS OR SERIES VOTING ON AMENDMENTS.
18.13 Subdivision 1. Amendments creating rights. Except as provided in subdivision 2,
18.14the owners of the outstanding membership interests of a class or series are entitled to vote
18.15as a class or series upon a proposed amendment to the articles of organization, whether or
18.16not entitled to vote on the amendment by the provisions of the articles of organization,
18.17if the amendment would:
18.18(1) effect an exchange, reclassification, or cancellation of all or part of the
18.19membership interests of the class or series, or effect a combination of outstanding
18.20membership interests of a class or series into a lesser number of membership interests of
18.21the class or series where each other class or series is not subject to a similar combination;
18.22(2) effect an exchange, or create a right of exchange, of all or any part of the
18.23membership interests of another class or series for the membership interests of the class
18.24or series;
18.25(3) change the rights or preferences of the membership interests of the class or series;
18.26(4) create a new class or series of membership interests having rights and preferences
18.27prior and superior to the membership interests of that class or series, or increase the rights
18.28and preferences or the number of membership interests, of a class or series having rights
18.29and preferences prior or superior to the membership interests of that class or series;
18.30(5) divide the membership interests of the class into series and determine the
18.31designation of each series and the variations in the relative rights and preferences between
18.32the membership interests of each series or authorize the board of governors to do so;
18.33(6) limit or deny any existing preemptive rights of the membership interests of
18.34the class or series; or
19.1(7) cancel or otherwise affect distributions on the membership interests of the class
19.2or series.
19.3 Subd. 2. Combined voting groups. The articles of organization may provide that,
19.4if a proposed amendment entitling the holders of the outstanding membership interests
19.5of two or more classes or series to vote as separate classes or series under subdivision 1
19.6would affect those classes or series in the same or a substantially similar way, the holders
19.7of the outstanding membership interests of all the classes or series so affected must vote
19.8together as a single voting group on the proposed amendment.
19.9 Sec. 30. Minnesota Statutes 2012, section 322B.35, subdivision 3, is amended to read:
19.10 Subd. 3. Notice and liability. When written action is permitted to be taken by less
19.11than all members, all members who did not sign or consent to the written action must be
19.12notified of its text and effective date no later than five days after the effective time of the
19.13action. Failure to provide the notice does not invalidate the written action. A member
19.14who does not sign or consent to the written action has no liability for the action or actions
19.15taken by the written action.
19.16 Sec. 31. Minnesota Statutes 2012, section 322B.386, subdivision 1, is amended to read:
19.17 Subdivision 1. Definitions. (a) For purposes of this section, the terms defined in this
19.18subdivision have the meanings given them.
19.19(b) "Limited liability company" means a limited liability company whose members
19.20have obtained rights to dissent under section
19.21successor by merger.
19.22(c) "Fair value of the membership interests" means the value of the membership
19.23interests of a limited liability company immediately before the effective date of the limited
19.24liability company action referred to in section
19.25(d) "Interest" means interest beginning five days after the effective date of the
19.26limited liability company action referred to in section
19.27including the date of payment, calculated at the rate provided in section
19.28
19.29(e) "Member" includes a former member when dissenters' rights exist because:
19.30(1) the membership of that former member has terminated causing dissolution; and
19.31(2) the dissolved limited liability company has then entered into a winding up
19.32merger under section
20.1 Sec. 32. Minnesota Statutes 2012, section 322B.689, is amended to read:
20.2322B.689 DELEGATION.
20.3Unless prohibited by the articles, a member control agreement, or bylaws or by a
20.4resolution approved by the affirmative vote of a majority of the governors present, a
20.5manager
20.6board, delegate some or all of the duties and powers of an office to other persons. A
20.7manager who delegates the duties or powers of an office
20.8of conduct for a manager in section 322B.69 with respect to
20.9act of delegation; and (2) the supervision of persons to whom those duties and powers are
20.10so delegated.
20.11 Sec. 33. Minnesota Statutes 2012, section 322B.69, is amended to read:
20.12322B.69 STANDARD OF CONDUCT.
20.13A manager shall discharge the duties of an office in good faith, in a manner the
20.14manager reasonably believes to be in the best interests of the limited liability company,
20.15and with the care an ordinarily prudent person in a like position would exercise under
20.16similar circumstances. A person who so performs those duties is not liable by reason of
20.17being or having been a manager of the limited liability company. A person exercising the
20.18principal functions of an office or to whom some or all of the duties and powers of an
20.19office are delegated pursuant to section
20.20this section and sections
20.21 Sec. 34. Minnesota Statutes 2012, section 322B.71, subdivision 1, is amended to read:
20.22 Subdivision 1. Contents of plan. A plan of merger or exchange must contain:
20.23(1) the name of the limited liability company and each other constituent organization
20.24proposing to merge or participate in an exchange, and:
20.25(i) in the case of a merger, the name of the surviving organization, which may be the
20.26limited liability company or another constituent organization; or
20.27(ii) in the case of an exchange, the name of the acquiring organization;
20.28(2) the terms and conditions of the proposed merger or exchange;
20.29(3)(i) in the case of a merger, the manner and basis of converting the ownership
20.30interests of the constituent organizations into securities of, or other ownership interests in,
20.31the surviving organization or of any other organization, or, in whole or in part, into money
20.32or other property, or of canceling some or all of such ownership interests; or
20.33(ii) in the case of an exchange, the manner and basis of exchanging the ownership
20.34interests to be acquired for securities of, or other ownership interests in, the acquiring
21.1organization or any other organization or, in whole or part, for money or other property, or
21.2of canceling some or all of such ownership interests; or;
21.3(4) in the case of a merger, a statement of any amendments to the articles of
21.4organization or articles of incorporation, as the case may be, of the surviving organization
21.5proposed as part of the merger; and
21.6(5) any other provisions with respect to the proposed merger or exchange that are
21.7considered necessary or desirable.
21.8 Sec. 35. Minnesota Statutes 2012, section 322B.75, subdivision 2, is amended to read:
21.9 Subd. 2. Effect on constituent organizations. When a merger becomes effective:
21.10(1) the constituent organizations become a single entity, the surviving limited
21.11liability company or corporation, as the case may be;
21.12(2) the separate existence of all constituent organizations except the surviving
21.13organization ceases;
21.14(3) as to any limited liability company that was a constituent organization and is not
21.15the surviving organization, the articles of merger serve as the articles of termination, and,
21.16unless previously filed, the notice of dissolution;
21.17(4)(i) if the surviving organization is a limited liability company, the surviving
21.18limited liability company has all the rights, privileges, immunities, and powers, and is
21.19subject to all the duties and liabilities of a limited liability company under this chapter; and
21.20(ii) if the surviving organization is not a limited liability company, the surviving
21.21organization has all the rights, privileges, immunities, and powers, and is subject to all the
21.22duties and liabilities of the organization under its governing law;
21.23(5) the surviving organization, whether a limited liability company, a foreign
21.24limited liability company, a domestic corporation, a foreign corporation, or a cooperative
21.25organized under chapter 308A or 308B, possesses all the rights, privileges, immunities,
21.26and franchises, of a public as well as of a private nature, of each of the constituent
21.27organizations. All property, real, personal, and mixed, and all debts due on any account,
21.28including subscriptions to shares and contribution agreements, as the case may be, and all
21.29other choses in action, and every other interest of or belonging to or due to each of the
21.30constituent organizations vests in the surviving organization without any further act or
21.31deed. Confirmatory deeds, assignments, or similar instruments to accomplish that vesting
21.32may be signed and delivered at any time in the name of a constituent organization by its
21.33current officers or managers, as the case may be, or, if the organization no longer exists,
21.34by its last officers or managers, as the case may be. The title to any real
21.35or mixed property, or any interest in real
22.1any of the constituent organizations does not revert nor in any way become impaired
22.2by reason of the merger;
22.3(6) the surviving organization is responsible and liable for all the liabilities and
22.4obligations of each of the constituent organizations. A claim of or against or a pending
22.5proceeding by or against a constituent organization may be prosecuted as if the merger
22.6had not taken place, or the surviving organization may be substituted in the place of the
22.7constituent organization. Neither the rights of creditors nor any liens upon the property of
22.8a constituent organization are impaired by the merger; and
22.9(7) the articles of organization or articles of incorporation, as the case may be, of
22.10the surviving organization are considered to be amended to the extent that changes in its
22.11articles, if any, are contained in the plan of merger.
22.12 Sec. 36. Minnesota Statutes 2012, section 322B.76, subdivision 4, is amended to read:
22.13 Subd. 4.
22.14 Foreign surviving organization. If the surviving organization in a merger will be a
22.15foreign corporation or foreign limited liability company and will transact business in this
22.16state, it shall comply, as the case may be, with the provisions of chapter 303 with respect
22.17to foreign corporations or with the provisions of this chapter with respect to foreign
22.18limited liability companies. In every case the surviving foreign corporation or foreign
22.19limited liability company shall file with the secretary of state:
22.20(1) an agreement that it may be served with process in this state in a proceeding for
22.21the enforcement of an obligation of a constituent organization and in a proceeding for the
22.22enforcement of the rights of a dissenting owner of an ownership interest of a constituent
22.23organization against the surviving foreign corporation or foreign limited liability company;
22.24(2) an irrevocable appointment of the secretary of state as its agent to accept service
22.25of process in any proceeding
22.26may be forwarded; and
22.27(3) an agreement that it will promptly pay to any dissenting members of each
22.28constituent domestic limited liability company the amount, if any, to which they are
22.29entitled under section
22.30 Sec. 37. Minnesota Statutes 2012, section 322B.78, is amended to read:
22.31322B.78 CONVERSION.
22.32A domestic limited liability company that is not a nonprofit limited liability company
22.33may convert to a domestic or foreign corporation or a foreign limited liability company
22.34pursuant to sections
23.1 Sec. 38. Minnesota Statutes 2012, section 322B.826, subdivision 2, is amended to read:
23.2 Subd. 2. Certificate. The secretary of state shall issue to the limited liability
23.3company or its legal representative a certificate of termination that contains:
23.4(1) the name of the limited liability company;
23.5(2) the date the articles of termination
23.6 or any later effective date or later effective time stated in the articles of termination in
23.7accordance with subdivision 1; and
23.8(3) a statement that the limited liability company is terminated at the effective date
23.9of the termination.
