The changes shared in part one and two of our three part series are certainly
significant, but there are other changes coming with the New Act. In our
third and final blog post to wrap up this series, we address six other
points of interest that will impact LLCs throughout Minnesota.
What else does the New Act change about LLCs?
Some other provisions of interest under the New Act include: 1) The ability
of limited liability companies to have non -human owners, including business
trusts, estates, trusts, partnerships, limited liability companies, associations,
joint ventures, public corporations, governments or governmental subdivisions,
agencies, or instrumentalities, or any other legal or commercial entities;
2) The ability to file a Statement of Authority with the Secretary of
State listing who may bind the LLC in agreements or may buy real estate
on its behalf (required for foreign LLCs and deniable by filing a like-kind
statement); 3) The ability to create pre-formation agreements that become
controlling upon organization subjecting all subsequent members to the
terms and conditions previously determined; 4) The ability to specifically
authorize a deceased member’s Personal Representative to act on
the decedent’s behalf; 5) A definition of oppression as it relates
to a member’s rights as an employee in a closely-held LLC; and 6)
Like a partnership, the New Act allows dissociation without a forced buyout
for members who want to leave the company, “rightfully or wrongly”
but subject to liability (the New Act is more like a partnership whereas
322B reflected a corporation).
Because the New Act will automatically subject all existing LLCs to its
definitions and its specific and non-conforming terms, most multi-member
LLCs will want to adopt an Operating Agreement by August 1, 2018. The
New Act combines the Bylaws and Member Control Agreements (no longer authorized)
into an Operating Agreement. You should adopt (or amend) an Operating
Agreement for your LLC as soon after August 1, 2015 as possible so you
may avoid any possibility of being governed by two statutes with starkly
conflicting definitions and provisions. An Operating Agreement adopted
under the New Act will allow the members more options, greater control
and enhanced predictability; all things most business owners want when
running their business.
At MKT Law, we can help. Call our business law attorney in St. Paul today
or send in an e-mail and we can start the process and you will have a
compliant Operating Agreement that takes full advantage of all that will
be available to you under the New Act and supersede your outdated Member
Control Agreement.