Minnesota Session Laws - 1992, Regular Session

  

                         Laws of Minnesota 1992 

                        CHAPTER 517-H.F.No. 1910 
           An act relating to corporations; providing for the 
          formation, organization, operation, taxation, 
          management, and ownership of limited liability 
          companies; prescribing the procedures for filing 
          articles of organization; establishing the powers of a 
          limited liability company; providing for the naming of 
          a limited liability company; providing for the 
          appointment of a resident agent for a limited 
          liability company; establishing the relationship of 
          the members of a limited liability company to each 
          other and to third parties; permitting the merger of 
          one or more limited liability companies with other 
          domestic limited liability companies and domestic and 
          foreign corporations; providing for the dissolution, 
          winding up, and termination of a limited liability 
          company; providing for foreign limited liability 
          companies to do business in this state; defining 
          certain terms; amending Minnesota Statutes 1990, 
          sections 211B.15, subdivisions 1, 2, 3, 4, 6, 7, 9, 
          10, and 11; 290.01, by adding a subdivision; 302A.011, 
          subdivision 19; 302A.115, subdivision 1; 302A.121, 
          subdivision 2; 302A.601, by adding a subdivision; 
          308A.005, subdivision 6; 308A.121, subdivision 1; 
          317A.011, subdivision 16; 317A.115, subdivision 2; 
          319A.02, subdivision 5, and by adding a subdivision; 
          319A.03; 319A.05; 319A.06, subdivision 2; 319A.07; 
          319A.12, subdivisions 1a and 2; 319A.20; 322A.01; 
          322A.02; 333.001; 333.18, subdivision 2; 333.20, 
          subdivision 2; and 333.21, subdivision 1; Minnesota 
          Statutes 1991 Supplement, sections 290.06, subdivision 
          22; 302A.471, subdivision 1; and 500.24, subdivision 
          3; proposing coding for new law as Minnesota Statutes, 
          chapter 322B. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                               ARTICLE 1 
    Section 1.  Minnesota Statutes 1990, section 211B.15, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITION DEFINITIONS.] (a) For purposes 
of this section, the following terms have the meanings given 
them. 
    (b) "Corporation" for purposes of this section means a 
corporation organized for profit that does business in Minnesota.
    (c) "Limited liability company" means a limited liability 
company formed under chapter 322B, or under similar laws of 
another state, that does business in Minnesota. 
    Sec. 2.  Minnesota Statutes 1990, section 211B.15, 
subdivision 2, is amended to read: 
    Subd. 2.  [PROHIBITED CONTRIBUTIONS.] A corporation or 
limited liability company may not make a contribution or offer 
or agree to make a contribution, directly or indirectly, of any 
money, property, free service of its officers or employees, or 
thing of monetary value to a major political party, 
organization, committee, or individual to promote or defeat the 
candidacy of an individual for nomination, election, or 
appointment to a political office.  For the purpose of this 
subdivision, "contribution" includes an expenditure to promote 
or defeat the election or nomination of a candidate to a 
political office that is made with the authorization or 
expressed or implied consent of, or in cooperation or in concert 
with, or at the request or suggestion of, a candidate or 
committee established to support or oppose a candidate.  
    Sec. 3.  Minnesota Statutes 1990, section 211B.15, 
subdivision 3, is amended to read: 
    Subd. 3.  [INDEPENDENT EXPENDITURES.] A corporation or 
limited liability company may not make an independent 
expenditure or offer or agree to make an independent expenditure 
to promote or defeat the candidacy of an individual for 
nomination, election, or appointment to a political office.  For 
the purpose of this subdivision, "independent expenditure" means 
an expenditure that is not made with the authorization or 
expressed or implied consent of, or in cooperation or concert 
with, or at the request or suggestion of, a candidate or 
committee established to support or oppose a candidate. 
    Sec. 4.  Minnesota Statutes 1990, section 211B.15, 
subdivision 4, is amended to read: 
    Subd. 4.  [BALLOT QUESTION.] A corporation or limited 
liability company may make contributions or expenditures to 
promote or defeat a ballot question, to qualify a question for 
placement on the ballot unless otherwise prohibited by law, or 
to express its views on issues of public concern.  A corporation 
or limited liability company may not make a contribution to a 
candidate for nomination, election, or appointment to a 
political office or to a committee organized wholly or partly to 
promote or defeat a candidate. 
    Sec. 5.  Minnesota Statutes 1990, section 211B.15, 
subdivision 6, is amended to read: 
    Subd. 6.  [PENALTY FOR INDIVIDUALS.] An officer, manager, 
stockholder, member, agent, employee, attorney, or other 
representative of a corporation or limited liability company 
acting in behalf of the corporation or limited liability company 
who violates this section may be fined not more than $20,000 or 
be imprisoned for not more than five years, or both.  
    Sec. 6.  Minnesota Statutes 1990, section 211B.15, 
subdivision 7, is amended to read: 
    Subd. 7.  [PENALTY FOR CORPORATIONS OR LIMITED LIABILITY 
COMPANIES.] A corporation or limited liability company convicted 
of violating this section is subject to a fine not greater than 
$40,000.  A convicted domestic corporation or limited liability 
company may be dissolved as well as fined.  If a foreign or 
nonresident corporation or limited liability company is 
convicted, in addition to being fined, its right to do business 
in this state may be declared forfeited.  
    Sec. 7.  Minnesota Statutes 1990, section 211B.15, 
subdivision 9, is amended to read: 
    Subd. 9.  [MEDIA PROJECTS.] It is not a violation of this 
section for a corporation or limited liability company to 
contribute to or conduct public media projects to encourage 
individuals to attend precinct caucuses, register, or vote if 
the projects are not controlled by or operated for the advantage 
of a candidate, political party, or committee. 
    Sec. 8.  Minnesota Statutes 1990, section 211B.15, 
subdivision 10, is amended to read: 
    Subd. 10.  [MEETING FACILITIES.] It is not a violation of 
this section for a corporation or limited liability company to 
provide meeting facilities to a committee, political party, or 
candidate on a nondiscriminatory and nonpreferential basis. 
    Sec. 9.  Minnesota Statutes 1990, section 211B.15, 
subdivision 11, is amended to read: 
    Subd. 11.  [MESSAGES ON CORPORATE PREMISES.] It is not a 
violation of this section for a corporation or limited liability 
company selling products or services to the public to post on 
its public premises messages that promote participation in 
precinct caucuses, voter registration, or elections if the 
messages are not controlled by or operated for the advantage of 
a candidate, political party, or committee. 
    Sec. 10.  Minnesota Statutes 1990, section 290.01, is 
amended by adding a subdivision to read: 
    Subd. 3b.  [LIMITED LIABILITY COMPANY.] For purposes of 
this chapter and chapter 289A, a limited liability company that 
is formed under either the laws of this state or under similar 
laws of another state, and that is considered to be a 
partnership for federal income tax purposes, is considered to be 
a partnership and the members must be considered to be partners. 
    Sec. 11.  Minnesota Statutes 1991 Supplement, section 
290.06, subdivision 22, is amended to read: 
    Subd. 22.  [CREDIT FOR TAXES PAID TO ANOTHER STATE.] (a) A 
taxpayer who is liable for taxes on or measured by net income to 
another state or province or territory of Canada, as provided in 
paragraphs (b) through (f), upon income allocated or apportioned 
to Minnesota, is entitled to a credit for the tax paid to 
another state or province or territory of Canada if the tax is 
actually paid in the taxable year or a subsequent taxable year.  
A taxpayer who is a resident of this state pursuant to section 
290.01, subdivision 7, clause (2), and who is subject to income 
tax as a resident in the state of the individual's domicile is 
not allowed this credit unless the state of domicile does not 
allow a similar credit. 
      (b) For an individual, estate, or trust, the credit is 
determined by multiplying the tax payable under this chapter by 
the ratio derived by dividing the income subject to tax in the 
other state or province or territory of Canada that is also 
subject to tax in Minnesota while a resident of Minnesota by the 
taxpayer's federal adjusted gross income, as defined in section 
62 of the Internal Revenue Code of 1986, as amended through 
December 31, 1989, modified by the addition required by section 
290.01, subdivision 19a, clause (1), and the subtraction allowed 
by section 290.01, subdivision 19b, clause (1), to the extent 
the income is allocated or assigned to Minnesota under sections 
290.081 and 290.17.  
      (c) If the taxpayer is an athletic team that apportions all 
of its income under section 290.17, subdivision 5, paragraph 
(c), the credit is determined by multiplying the tax payable 
under this chapter by the ratio derived from dividing the total 
net income subject to tax in the other state or province or 
territory of Canada by the taxpayer's Minnesota taxable income. 
      (d) The credit determined under paragraph (b) or (c) shall 
not exceed the amount of tax so paid to the other state or 
province or territory of Canada on the gross income earned 
within the other state or province or territory of Canada 
subject to tax under this chapter, nor shall the allowance of 
the credit reduce the taxes paid under this chapter to an amount 
less than what would be assessed if such income amount was 
excluded from taxable net income. 
      (e) In the case of the tax assessed on a lump sum 
distribution under section 290.032, the credit allowed under 
paragraph (a) is the tax assessed by the other state or province 
or territory of Canada on the lump sum distribution that is also 
subject to tax under section 290.032, and shall not exceed the 
tax assessed under section 290.032.  To the extent the total 
lump sum distribution defined in section 290.032, subdivision 1, 
includes lump sum distributions received in prior years or is 
all or in part an annuity contract, the reduction to the tax on 
the lump sum distribution allowed under section 290.032, 
subdivision 2, includes tax paid to another state that is 
properly apportioned to that distribution. 
    (f) If a Minnesota resident reported an item of income to 
Minnesota and is assessed tax in such other state or province or 
territory of Canada on that same income after the Minnesota 
statute of limitations has expired, the taxpayer shall receive a 
credit for that year under paragraph (a), notwithstanding any 
statute of limitations to the contrary.  The claim for the 
credit must be submitted within one year from the date the taxes 
were paid to the other state or province or territory of 
Canada.  The taxpayer must submit sufficient proof to show 
entitlement to a credit. 
    (g) For the purposes of this subdivision, a resident 
shareholder of a corporation having a valid election in effect 
under section 1362 of the Internal Revenue Code of 1986, as 
amended through December 31, 1990, must be considered to have 
paid a tax imposed on the shareholder in an amount equal to the 
shareholder's pro rata share of any net income tax paid by the S 
corporation to a state that does not measure the income of the 
shareholder of the S corporation by reference to the income of 
the S corporation.  For the purposes of the preceding sentence, 
the term "net income tax" means any tax imposed on or measured 
by a corporation's net income. 
    (h) For the purposes of this subdivision, a resident member 
of a limited liability company taxed as a partnership under the 
Internal Revenue Code of 1986, as amended through December 31, 
1991, must be considered to have paid a tax imposed on the 
member in an amount equal to the member's pro rata share of any 
net income tax paid by the limited liability company to a state 
that does not measure the income of the member of the limited 
liability company by reference to the income of the limited 
liability company.  For purposes of the preceding sentence, the 
term "net income" tax means any tax imposed on or measured by a 
limited liability company's net income. 
    Sec. 12.  Minnesota Statutes 1990, section 302A.011, 
subdivision 19, is amended to read: 
    Subd. 19.  [ORGANIZATION.] "Organization" means a domestic 
or foreign corporation, limited liability company, whether 
domestic or foreign, partnership, limited partnership, joint 
venture, association, business trust, estate, trust, enterprise, 
and any other legal or commercial entity.  
    Sec. 13.  Minnesota Statutes 1990, section 302A.115, 
subdivision 1, is amended to read: 
    Subdivision 1.  [REQUIREMENTS; PROHIBITIONS.] The corporate 
name:  
    (a) Shall be in the English language or in any other 
language expressed in English letters or characters; 
    (b) Shall contain the word "corporation," "incorporated," 
or "limited," or shall contain an abbreviation of one or more of 
these words, or the word "company" or the abbreviation "Co." if 
that word or abbreviation is not immediately preceded by the 
word "and" or the character "&"; 
    (c) Shall not contain a word or phrase that indicates or 
implies that it is incorporated for a purpose other than a legal 
business purpose; 
    (d) Shall be distinguishable upon the records in the office 
of the secretary of state from the name of a domestic 
corporation or limited partnership, whether profit or nonprofit, 
or a limited liability company, whether domestic or foreign, or 
a foreign corporation or limited partnership authorized or 
registered to do business in this state, whether profit or 
nonprofit, or a name the right to which is, at the time of 
incorporation, reserved or provided for in sections 302A.117, 
322A.03, 322B.125, or 333.001 to 333.54, unless there is filed 
with the articles one of the following:  
    (1) The written consent of the domestic corporation or 
limited partnership or foreign corporation or limited 
partnership authorized or registered to do business in this 
state or the holder of a reserved name or a name filed by or 
registered with the secretary of state under sections 333.001 to 
333.54 having a name that is not distinguishable; 
     (2) A certified copy of a final decree of a court in this 
state establishing the prior right of the applicant to the use 
of the name in this state; or 
     (3) The applicant's affidavit that the corporation or 
limited partnership with the name that is not distinguishable 
has been incorporated or on file in this state for at least 
three years prior to the affidavit, if it is a domestic 
corporation or limited partnership, or has been authorized or 
registered to do business in this state for at least three years 
prior to the affidavit, if it is a foreign corporation or 
limited partnership, or that the holder of a name filed or 
registered with the secretary of state under sections 333.001 to 
333.54 filed or registered that name at least three years prior 
to the affidavit, and has not during the three-year period filed 
any document with the secretary of state; that the applicant has 
mailed written notice to the corporation or limited partnership 
or the holder of a name filed or registered with the secretary 
of state under sections 333.001 to 333.54 by certified mail, 
return receipt requested, properly addressed to the registered 
office of the corporation or in care of the agent of the limited 
partnership, or the address of the holder of a name filed or 
registered with the secretary of state under sections 333.001 to 
333.54, shown in the records of the secretary of state, that the 
applicant intends to use a name that is not distinguishable and 
the notice has been returned to the applicant as undeliverable 
to the addressee corporation or limited partnership or holder of 
a name filed or registered with the secretary of state under 
sections 333.001 to 333.54; that the applicant, after diligent 
inquiry, has been unable to find any telephone listing for the 
corporation or limited partnership with the name that is not 
distinguishable in the county in which is located the registered 
office of the corporation shown in the records of the secretary 
of state or has been unable to find any telephone listing for 
the holder of a name filed or registered with the secretary of 
state under sections 333.001 to 333.54 in the county in which is 
located the address of the holder shown in the records of the 
secretary of state; and that the applicant has no knowledge that 
the corporation or limited partnership or holder of a name filed 
or registered with the secretary of state under sections 333.001 
to 333.54 is currently engaged in business in this state.  
    Sec. 14.  Minnesota Statutes 1990, section 302A.121, 
subdivision 2, is amended to read: 
    Subd. 2.  [REGISTERED AGENT.] A corporation may designate 
in its articles a registered agent.  The registered agent may be 
a natural person residing in this state, a domestic corporation, 
or limited liability company, or a foreign corporation or 
foreign limited liability company authorized to transact 
business in this state.  The registered agent must maintain a 
business office that is identical with the registered office.  
    Sec. 15.  Minnesota Statutes 1991 Supplement, section 
302A.471, subdivision 1, is amended to read: 
    Subdivision 1.  [ACTIONS CREATING RIGHTS.] A shareholder of 
a corporation may dissent from, and obtain payment for the fair 
value of the shareholder's shares in the event of, any of the 
following corporate actions:  
    (a) An amendment of the articles that materially and 
adversely affects the rights or preferences of the shares of the 
dissenting shareholder in that it:  
     (1) alters or abolishes a preferential right of the shares; 
     (2) creates, alters, or abolishes a right in respect of the 
redemption of the shares, including a provision respecting a 
sinking fund for the redemption or repurchase of the shares; 
     (3) alters or abolishes a preemptive right of the holder of 
the shares to acquire shares, securities other than shares, or 
rights to purchase shares or securities other than shares; 
     (4) excludes or limits the right of a shareholder to vote 
on a matter, or to cumulate votes, except as the right may be 
excluded or limited through the authorization or issuance of 
securities of an existing or new class or series with similar or 
different voting rights; except that an amendment to the 
articles of an issuing public corporation that provides that 
section 302A.671 does not apply to a control share acquisition 
does not give rise to the right to obtain payment under this 
section; 
    (b) A sale, lease, transfer, or other disposition of all or 
substantially all of the property and assets of the corporation 
not made in the usual or regular course of its business, but not 
including a disposition in dissolution described in section 
302A.725, subdivision 2, or a disposition pursuant to an order 
of a court, or a disposition for cash on terms requiring that 
all or substantially all of the net proceeds of disposition be 
distributed to the shareholders in accordance with their 
respective interests within one year after the date of 
disposition; 
    (c) A plan of merger, whether under this chapter or under 
chapter 322B, to which the corporation is a party, except as 
provided in subdivision 3; 
    (d) A plan of exchange, whether under this chapter or under 
chapter 322B, to which the corporation is a party as the 
corporation whose shares will be acquired by the acquiring 
corporation, if the shares of the shareholder are entitled to 
vote on the plan; or 
    (e) Any other corporate action taken pursuant to a 
shareholder vote with respect to which the articles, the bylaws, 
or a resolution approved by the board directs that dissenting 
shareholders may obtain payment for their shares. 
    Sec. 16.  Minnesota Statutes 1990, section 302A.601, is 
amended by adding a subdivision to read: 
    Subd. 4.  [MERGER OR EXCHANGE WITH A LIMITED LIABILITY 
COMPANY.] A corporation may participate in a merger or exchange 
with a domestic limited liability company pursuant to chapter 
322B.  The dissenters' rights for shareholders of a corporation 
are governed by this chapter.  
    Sec. 17.  Minnesota Statutes 1990, section 308A.005, 
subdivision 6, is amended to read: 
    Subd. 6.  [CORPORATION.] "Corporation" means a company, 
limited liability company, whether domestic or foreign, 
association, or body vested with a corporate power or function. 
    Sec. 18.  Minnesota Statutes 1990, section 308A.121, 
subdivision 1, is amended to read: 
    Subdivision 1.  [NAME.] The name of a cooperative must 
distinguish the cooperative upon the records in the office of 
the secretary of state from the name of a domestic corporation, 
whether profit or nonprofit, or a limited partnership, or a 
foreign corporation or a limited partnership authorized or 
registered to do business in this state, whether profit or 
nonprofit, a limited liability company, whether domestic or 
foreign, or a name the right to which is, at the time of 
incorporation, reserved or provided for in sections 302A.117, 
317A.117, 322A.03, 322B.125, or 333.001 to 333.54. 
    Sec. 19.  Minnesota Statutes 1990, section 317A.011, 
subdivision 16, is amended to read: 
    Subd. 16.  [ORGANIZATION.] "Organization" means a domestic 
or foreign business or nonprofit corporation, limited liability 
company, whether domestic or foreign, partnership, limited 
partnership, joint venture, association, trust, estate, 
enterprise, or other legal or commercial entity.  
    Sec. 20.  Minnesota Statutes 1990, section 317A.115, 
subdivision 2, is amended to read: 
    Subd. 2.  [NAME MUST BE DISTINGUISHABLE.] (a) A corporate 
name must be distinguishable upon the records in the office of 
the secretary of state from the name of a domestic corporation 
or limited partnership, a foreign corporation or limited 
partnership authorized or registered to do business in this 
state, whether profit or nonprofit, a limited liability company, 
whether domestic or foreign, or a name the right to which is, at 
the time of incorporation, reserved, registered, or provided for 
in section 317A.117, 302A.117, 322A.03, 322B.125, or sections 
333.001 to 333.54, unless one of the following is filed with the 
articles:  
    (1) the written consent of the organization having the name 
that is not distinguishable; 
    (2) a certified copy of a final decree of a court in this 
state establishing the prior right of the applicant to use its 
corporate name in this state; or 
    (3) an affidavit of nonuse of the kind required by section 
302A.115, subdivision 1, paragraph (d), clause (3). 
    (b) The secretary of state shall determine whether a name 
is distinguishable from another name for purposes of this 
section and section 317A.117. 
    (c) This subdivision does not affect the right of a 
corporation existing on January 1, 1991, or a foreign 
corporation authorized to do business in this state on that 
date, to use its corporate name. 
    Sec. 21.  Minnesota Statutes 1990, section 319A.02, 
subdivision 5, is amended to read: 
    Subd. 5.  "Foreign professional corporation" means a 
corporation or limited liability company organized under laws 
other than the laws of this state for a purpose for which a 
professional corporation may be organized hereunder. 
    Sec. 22.  Minnesota Statutes 1990, section 319A.02, is 
amended by adding a subdivision to read: 
    Subd. 7.  "Corporation" as used in this chapter includes a 
limited liability company organized under chapter 322B and, with 
respect to a limited liability company, references in this 
chapter to articles of incorporation, bylaws, officers, 
directors, shareholders and shares of stock shall refer to 
articles of organization, operating agreement, governors, 
managers, members and membership interests, respectively. 
    Sec. 23.  Minnesota Statutes 1990, section 319A.03, is 
amended to read: 
    319A.03 [FORMATION OF CORPORATION.] 
    One or more natural professional persons may form a 
corporation pursuant to chapter 302A, or 317A and one or more 
natural professional persons may organize a limited liability 
company pursuant to chapter 322B for the purposes hereinafter 
set forth. 
    Sec. 24.  Minnesota Statutes 1990, section 319A.05, is 
amended to read: 
    319A.05 [APPLICABILITY OF CORPORATION ACTS.] 
    A corporation incorporating or a limited liability company 
organizing under sections 319A.01 to 319A.22 and chapter 302A, 
322B, or 317A shall proceed in the manner specified in chapter 
302A, 322B, or 317A.  After incorporation or organization a 
professional corporation or limited liability company shall 
enjoy the powers and privileges and shall be subject to the 
duties and liabilities of other corporations or limited 
liability companies, respectively organized under chapter 302A, 
322B, or 317A, except insofar as the same may be limited or 
enlarged by sections 319A.01 to 319A.22.  If any provision of 
sections 319A.01 to 319A.22 conflicts with the provisions of 
chapter 302A, 322B, or 317A, sections 319A.01 to 319A.22 take 
precedence. 
    Sec. 25.  Minnesota Statutes 1990, section 319A.06, 
subdivision 2, is amended to read: 
    Subd. 2.  A foreign professional corporation may provide 
professional service in this state only upon compliance with 
sections 303.01 to 303.24, or sections 322B.90 to 322B.955, 
regulating foreign corporations and foreign limited liability 
companies, respectively.  The secretary of state shall 
promulgate forms for such purpose.  The provisions of sections 
319A.01 to 319A.22 relating to the rendering of professional 
service by a professional corporation apply to a foreign 
professional corporation.  Sections 319A.01 to 319A.22 shall not 
be construed to prohibit the rendering of professional service 
in this state by a person who is a shareholder, director, 
officer, employee, or agent of a foreign professional 
corporation, if the person could lawfully render professional 
service in this state in the absence of any relationship to the 
foreign professional corporation, irrespective of whether the 
foreign professional corporation is authorized to provide 
professional service in this state.  
    Sec. 26.  Minnesota Statutes 1990, section 319A.07, is 
amended to read: 
    319A.07 [CORPORATE NAME.] 
    The corporate name of any corporation organized under 
sections 319A.01 to 319A.22 shall not be used to imply 
superiority and, in the case of a corporation, other than a 
limited liability company, shall end with the word "Chartered," 
or the word "Limited," or the abbreviation "Ltd.," or the words 
"Professional Association," or the abbreviation "P.A."  The name 
of any limited liability company organized under sections 
319A.01 to 319A.22 and chapter 322B shall end with the words 
"Professional Limited Liability Company," or the abbreviation 
"P.L.C."  
    Sec. 27.  Minnesota Statutes 1990, section 319A.12, 
subdivision 1a, is amended to read: 
    Subd. 1a.  A professional corporation may at any time by 
amendment to its articles of incorporation relinquish the powers 
and privileges conferred upon it by this chapter and elect to be 
governed thereafter solely by the provisions of chapter 302A, 
322B, or 317A, as the case may be.  Notwithstanding any 
provision of this chapter, the representative of a deceased or 
incompetent shareholder of a professional corporation shall have 
authority to vote the deceased or incompetent shareholder's 
shares on the question of adopting such an amendment. 
    Sec. 28.  Minnesota Statutes 1990, section 319A.12, 
subdivision 2, is amended to read: 
    Subd. 2.  If within 90 days following the date of death of 
a shareholder or member of a professional corporation or the 
loss of a license to render professional service all of the 
shares or membership owned by the deceased or disqualified 
shareholder or member have not been transferred to and acquired 
by the corporation or persons qualified to own the shares or 
membership, the corporation shall thereafter be governed solely 
by the provisions of chapter 302A, 322B, or 317A, as the case 
may be and shall not enjoy any of the powers and privileges 
conferred by sections 319A.01 to 319A.22.  When the corporation 
ceases to be authorized to render professional service, its 
corporate name must be changed to comply with the corporate name 
provision of chapter 302A, 322B, or 317A, as the case may be, 
and any words, phrases or abbreviations contained therein to 
comply with the provisions of sections 319A.01 to 319A.22 shall 
be eliminated. 
    Sec. 29.  Minnesota Statutes 1990, section 319A.20, is 
amended to read: 
    319A.20 [SUSPENSION OR REVOCATION.] 
    The corporate charter of a professional corporation or the 
certificate of authority of a foreign professional corporation 
may be suspended or revoked pursuant to section 302A.757, 
322B.843, or 317A.751 for the reasons enumerated therein or for 
failure to comply with the provisions of sections 319A.01 to 
319A.22 or the rules of any board.  A board through the attorney 
general may institute such suspension or revocation proceedings. 
    Sec. 30.  Minnesota Statutes 1990, section 322A.01, is 
amended to read: 
    322A.01 [DEFINITIONS.] 
    As used in sections 322A.01 to 322A.87, unless the context 
otherwise requires: 
    (1) "Certificate of limited partnership" means the 
certificate referred to in section 322A.11, and the certificate 
as amended or restated. 
     (2) "Contribution" means any cash, property, services 
rendered, or a promissory note or other binding obligation to 
contribute cash or property or to perform services, which a 
partner contributes to a limited partnership as a partner. 
     (3) "Event of withdrawal of a general partner" means an 
event that causes a person to cease to be a general partner as 
provided in section 322A.32. 
     (4) "Foreign limited partnership" means a partnership 
formed under the laws of any state other than this state and 
having as partners one or more general partners and one or more 
limited partners. 
     (5) "General partner" means a person who has been admitted 
to a limited partnership as a general partner in accordance with 
the partnership agreement and named in the certificate of 
limited partnership as a general partner. 
     (6) "Limited partner" means a person who has been admitted 
to a limited partnership as a limited partner in accordance with 
the partnership agreement. 
     (7) "Limited partnership" and "domestic limited 
partnership" mean a partnership formed by two or more persons 
under the laws of this state and having one or more general 
partners and one or more limited partners. 
    (8) "Partner" means a limited or general partner. 
    (9) "Partnership agreement" means any valid agreement, 
written or oral, of the partners as to the affairs of a limited 
partnership and the conduct of its business. 
    (10) "Partnership interest" means a partner's share of the 
profits and losses of a limited partnership and the right to 
receive distributions of partnership assets. 
    (11) "Person" means a natural person, partnership, limited 
partnership (domestic or foreign), trust, estate, 
association, limited liability company (whether domestic or 
foreign), or corporation. 
    (12) "State" means a state, territory, or possession of the 
United States, the District of Columbia, or the Commonwealth of 
Puerto Rico. 
    Sec. 31.  Minnesota Statutes 1990, section 322A.02, is 
amended to read: 
    322A.02 [NAME.] 
    (a) The name of each limited partnership as set forth in 
its certificate of limited partnership: 
    (1) shall contain without abbreviation the words "limited 
partnership"; 
    (2) may not contain the name of a limited partner unless 
(i) it is also the name of a general partner or the corporate 
name of a corporate general partner, or (ii) the business of the 
limited partnership had been carried on under that name before 
the admission of that limited partner; 
    (3) must be distinguishable from the name of a domestic 
corporation or limited partnership, whether profit or nonprofit, 
or a foreign corporation or limited partnership authorized or 
registered to do business in this state, whether profit or 
nonprofit, a limited liability company, whether domestic or 
foreign, or a name the right to which is reserved or provided 
for in the manner provided for in sections 302A.117, 322A.03, 
322B.125, or 333.001 to 333.54, unless there is filed with the 
certificate a written consent, court decree of prior right, or 
affidavit of nonuse, of the kind required by section 302A.115, 
subdivision 1, paragraph (d); and 
    (4) may not contain the following words:  corporation, 
incorporated. 
    The secretary of state shall determine whether a name is 
"distinguishable" from another name for purposes of this section 
and section 322A.03.  This section does not abrogate or limit 
the law of unfair competition or unfair practices, nor sections 
333.001 to 333.54, nor the laws of the United States with 
respect to the right to acquire and protect copyrights, 
trademarks, service names, service marks, or any other rights to 
the exclusive use of names or symbols, nor derogate the common 
law or principles of equity.  
     (b) A person doing business in this state may contest the 
subsequent registration of a name with the office of the 
secretary of state as provided in section 5.22. 
    Sec. 32.  Minnesota Statutes 1990, section 333.001, is 
amended to read: 
    333.001 [DEFINITIONS.] 
    Subdivision 1.  As used in sections 333.001 to 333.06, the 
following terms shall have the meanings given, unless the 
context clearly indicates that a different meaning is intended. 
    Subd. 2.  [PERSON.] "Person" means one or more natural 
persons; a limited liability company, whether domestic or 
foreign; a partnership; a limited partnership; a corporation, 
including a foreign, domestic, or nonprofit corporation; a 
trust; or any other business organization. 
    Subd. 3.  [TRUE NAME.] "True name" means the true full name 
of the natural person, if a proprietorship; the true full name 
of each partner, if a partnership; the full corporate name as 
stated in its articles, if a corporation; the full name of the 
limited liability company as stated in its articles of 
organization or certificate of authority; the full name of the 
limited partnership, if a limited partnership; the true full 
name of at least one trustee, if a trust; or the true full name 
of at least one beneficial owner, if any other form of business 
organization. 
    Subd. 4.  "Address" means the full residential address of 
each natural person, trustee or beneficial owner, limited 
liability company, whether domestic or foreign, or corporation, 
included in subdivision 3, and the address of the principal 
place in Minnesota where the business is conducted or transacted.
    Subd. 5.  "Executed" means executed by one natural person, 
if a proprietorship; by a general partner if a general or 
limited partnership; by a manager, if a limited liability 
company; by an officer, if a corporation; by a trustee, if a 
trust; or by a beneficial owner or managing agent, if some other 
form of business organization. 
    Sec. 33.  Minnesota Statutes 1990, section 333.18, 
subdivision 2, is amended to read: 
    Subd. 2.  The term "person" as used herein means any 
individual, firm, partnership, corporation, limited liability 
company, whether domestic or foreign, association, union or 
other organization.  
    Sec. 34.  Minnesota Statutes 1990, section 333.20, 
subdivision 2, is amended to read: 
    Subd. 2.  The application shall be signed by the applicant 
or by a member of the firm or an officer of the corporation, or 
association or by a manager of a domestic or foreign limited 
liability company, or association applying.  
    Sec. 35.  Minnesota Statutes 1990, section 333.21, 
subdivision 1, is amended to read: 
    Subdivision 1.  Upon a finding by the secretary of state 
that the mark and application for registration comply with the 
requirements of sections 333.18 to 333.31, and that the class 
indicated, if any, in which the mark is to be registered is not 
clearly incorrect, the secretary of state shall cause a 
certificate of registration to be issued and delivered to the 
applicant.  The certificate of registration shall be issued 
under the signature of the secretary of state and the seal of 
the state, and shall show the registrant's name and business 
address and, if a corporation or a limited liability company, 
the state of incorporation or organization, the date claimed for 
the first use of the mark in this state, the class of goods or 
services and a description of the goods or services in 
connection with which the mark is used, a reproduction of the 
mark, the registration date and the term of the registration. 
    Sec. 36.  Minnesota Statutes 1991 Supplement, section 
500.24, subdivision 3, is amended to read: 
    Subd. 3.  [FARMING AND OWNERSHIP OF AGRICULTURAL LAND BY 
CORPORATIONS RESTRICTED.] No corporation, limited liability 
company, pension or investment fund, or limited partnership 
shall engage in farming; nor shall any corporation, limited 
liability company, pension or investment fund, or limited 
partnership, directly or indirectly, own, acquire, or otherwise 
obtain an interest, whether legal, beneficial or otherwise, in 
any title to real estate used for farming or capable of being 
used for farming in this state.  Provided, however, that the 
restrictions in this subdivision do not apply to corporations or 
partnerships in clause (b) and do not apply to corporations, 
limited partnerships, and pension or investment funds that 
record its name and the particular exception under clauses (a) 
to (s) under which the agricultural land is owned or farmed, 
have a conservation plan prepared for the agricultural land, 
report as required under subdivision 4, and satisfy one of the 
following conditions under clauses (a) to (s): 
    (a) A bona fide encumbrance taken for purposes of security; 
    (b) A family farm corporation, an authorized farm 
corporation, a family farm partnership, or an authorized farm 
partnership as defined in subdivision 2 or a general 
partnership; 
    (c) Agricultural land and land capable of being used for 
farming owned by a corporation as of May 20, 1973, or a pension 
or investment fund as of May 12, 1981, including the normal 
expansion of such ownership at a rate not to exceed 20 percent 
of the amount of land owned as of May 20, 1973, or, in the case 
of a pension or investment fund, as of May 12, 1981, measured in 
acres, in any five-year period, and including additional 
ownership reasonably necessary to meet the requirements of 
pollution control rules; 
    (d) Agricultural land operated for research or experimental 
purposes with the approval of the commissioner of agriculture, 
provided that any commercial sales from the operation must be 
incidental to the research or experimental objectives of the 
corporation.  A corporation, limited partnership, or pension or 
investment fund seeking to operate agricultural land for 
research or experimental purposes must submit to the 
commissioner a prospectus or proposal of the intended method of 
operation, containing information required by the commissioner 
including a copy of any operational contract with individual 
participants, prior to initial approval of an operation.  A 
corporation, limited partnership, or pension or investment fund 
operating agricultural land for research or experimental 
purposes prior to May 1, 1988, must comply with all requirements 
of this clause except the requirement for initial approval of 
the project; 
    (e) Agricultural land operated by a corporation or limited 
partnership for the purpose of raising breeding stock, including 
embryos, for resale to farmers or operated for the purpose of 
growing seed, wild rice, nursery plants or sod; 
    (f) Agricultural land and land capable of being used for 
farming leased by a corporation or limited partnership in an 
amount, measured in acres, not to exceed the acreage under lease 
to such corporation as of May 20, 1973, or to the limited 
partnership as of May 1, 1988, and the additional acreage 
required for normal expansion at a rate not to exceed 20 percent 
of the amount of land leased as of May 20, 1973, for a 
corporation or May 1, 1988, for a limited partnership in any 
five-year period, and the additional acreage reasonably 
necessary to meet the requirements of pollution control rules; 
    (g) Agricultural land when acquired as a gift (either by 
grant or a devise) by an educational, religious, or charitable 
nonprofit corporation or by a pension or investment fund or 
limited partnership; provided that all lands so acquired by a 
pension or investment fund, and all lands so acquired by a 
corporation or limited partnership which are not operated for 
research or experimental purposes, or are not operated for the 
purpose of raising breeding stock for resale to farmers or 
operated for the purpose of growing seed, wild rice, nursery 
plants or sod must be disposed of within ten years after 
acquiring title thereto; 
    (h) Agricultural land acquired by a pension or investment 
fund or a corporation other than a family farm corporation or 
authorized farm corporation, as defined in subdivision 2, or a 
limited partnership other than a family farm partnership or 
authorized farm partnership as defined in subdivision 2, for 
which the corporation or limited partnership has documented 
plans to use and subsequently uses the land within six years 
from the date of purchase for a specific nonfarming purpose, or 
if the land is zoned nonagricultural, or if the land is located 
within an incorporated area.  A pension or investment fund or a 
corporation or limited partnership may hold such agricultural 
land in such acreage as may be necessary to its nonfarm business 
operation; provided, however, that pending the development of 
agricultural land for nonfarm purposes, such land may not be 
used for farming except under lease to a family farm unit, a 
family farm corporation, an authorized farm corporation, a 
family farm partnership, or an authorized farm partnership, or 
except when controlled through ownership, options, leaseholds, 
or other agreements by a corporation which has entered into an 
agreement with the United States of America pursuant to the New 
Community Act of 1968 (Title IV of the Housing and Urban 
Development Act of 1968, United States Code, title 42, sections 
3901 to 3914) as amended, or a subsidiary or assign of such a 
corporation; 
    (i) Agricultural lands acquired by a pension or investment 
fund or a corporation or limited partnership by process of law 
in the collection of debts, or by any procedure for the 
enforcement of a lien or claim thereon, whether created by 
mortgage or otherwise; provided, however, that all lands so 
acquired be disposed of within ten years after acquiring the 
title if acquired before May 1, 1988, and five years after 
acquiring the title if acquired on or after May 1, 1988, 
acquiring the title thereto, and further provided that the land 
so acquired shall not be used for farming during the ten-year or 
five-year period except under a lease to a family farm unit, a 
family farm corporation, an authorized farm corporation, a 
family farm partnership, or an authorized farm partnership.  The 
aforementioned ten-year or five-year limitation period shall be 
deemed a covenant running with the title to the land against any 
grantee, assignee, or successor of the pension or investment 
fund or corporate or limited partnership grantee or assignee or 
the successor of such pension or investment fund or corporation 
or limited partnership, corporation, or limited partnership.  
Notwithstanding the five-year divestiture requirement under this 
clause, a financial institution may continue to own the 
agricultural land if the agricultural land is leased to the 
immediately preceding former owner, but must divest of the 
agricultural land within the ten-year period; 
    (j) Agricultural land acquired by a corporation regulated 
under the provisions of Minnesota Statutes 1974, chapter 216B, 
for purposes described in that chapter or by an electric 
generation or transmission cooperative for use in its business, 
provided, however, that such land may not be used for farming 
except under lease to a family farm unit, a family farm 
corporation, or a family farm partnership; 
    (k) Agricultural land, either leased or owned, totaling no 
more than 2,700 acres, acquired after May 20, 1973, for the 
purpose of replacing or expanding asparagus growing operations, 
provided that such corporation had established 2,000 acres of 
asparagus production; 
    (l) All agricultural land or land capable of being used for 
farming which was owned or leased by an authorized farm 
corporation as defined in Minnesota Statutes 1974, section 
500.24, subdivision 1, clause (d), but which does not qualify as 
an authorized farm corporation as defined in subdivision 2, 
clause (d); 
      (m) A corporation formed primarily for religious purposes 
whose sole income is derived from agriculture; 
      (n) Agricultural land owned or leased by a corporation 
prior to August 1, 1975, which was exempted from the restriction 
of this subdivision under the provisions of Laws 1973, chapter 
427, including normal expansion of such ownership or leasehold 
interest to be exercised at a rate not to exceed 20 percent of 
the amount of land owned or leased on August 1, 1975, in any 
five-year period and the additional ownership reasonably 
necessary to meet requirements of pollution control rules; 
      (o) Agricultural land owned or leased by a corporation 
prior to August 1, 1978, including normal expansion of such 
ownership or leasehold interest, to be exercised at a rate not 
to exceed 20 percent of the amount of land owned or leased on 
August 1, 1978, and the additional ownership reasonably 
necessary to meet requirements of pollution control rules, 
provided that nothing herein shall reduce any exemption 
contained under the provisions of Laws 1975, chapter 324, 
section 1, subdivision 2; 
    (p) An interest in the title to agricultural land acquired 
by a pension fund or family trust established by the owners of a 
family farm, authorized farm corporation or family farm 
corporation, but limited to the farm on which one or more of 
those owners or shareholders have resided or have been actively 
engaged in farming as required by subdivision 2, clause (b), 
(c), or (d); 
    (q) Agricultural land owned by a nursing home located in a 
city with a population, according to the state demographer's 
1985 estimate, between 900 and 1,000, in a county with a 
population, according to the state demographer's 1985 estimate, 
between 18,000 and 19,000, if the land was given to the nursing 
home as a gift with the expectation that it would not be sold 
during the donor's lifetime.  This exemption is available until 
July 1, 1995; 
    (r) The acreage of agricultural land and land capable of 
being used for farming owned and recorded by an authorized farm 
corporation as defined in Minnesota Statutes 1986, section 
500.24, subdivision 2, paragraph (d), or a limited partnership 
as of May 1, 1988, including the normal expansion of the 
ownership at a rate not to exceed 20 percent of the land owned 
and recorded as of May 1, 1988, measured in acres, in any 
five-year period, and including additional ownership reasonably 
necessary to meet the requirements of pollution control rules; 
     (s) Agricultural land owned or leased as a necessary part 
of an aquatic farm as defined in section 17.47, subdivision 3.  
     Sec. 37.  [EFFECTIVE DATE.] 
    Sections 10 and 11 are effective for taxable years 
beginning after December 31, 1992.  The rest of the article is 
effective January 1, 1993. 

                               ARTICLE 2 

                 MINNESOTA LIMITED LIABILITY COMPANY ACT
    Section 1.  [322B.01] [CITATION.] 
    This chapter may be cited as the "Minnesota limited 
liability company act." 
    Sec. 2.  [322B.02] [LAWS NOT TO APPLY.] 
    Sections 222.19, 222.23, 300.01, 300.02, 300.06 to 300.09, 
300.12 to 300.68, and chapters 301, 316, and 556 do not apply to 
a limited liability company organized under this chapter.  
    Sec. 3.  [322B.03] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] For the purposes of this chapter, 
unless the language or context clearly indicates that a 
different meaning is intended, the words, terms, and phrases 
defined in this section have the meanings given them. 
    Subd. 2.  [ACQUIRING ORGANIZATION.] "Acquiring organization"
means the limited liability company or foreign or domestic 
corporation that acquires in an exchange the shares of a 
domestic or foreign corporation or the membership interests of a 
limited liability company. 
    Subd. 3.  [ADDRESS.] "Address" means mailing address, 
including a zip code.  In the case of a registered office or 
principal executive office, the term means the mailing address 
and the actual office location which must not be a post office 
box. 
    Subd. 4.  [AGREEMENT TO GIVE DISSOLUTION AVOIDANCE 
CONSENT.] "Agreement to give dissolution avoidance consent" 
means a member control agreement under section 322B.37, or a 
part of a member control agreement, under which the members 
agree in advance that if in the future the continued membership 
of any member is terminated through an event covered in the 
agreement, then each remaining member shall give dissolution 
avoidance consent. 
    Subd. 5.  [AGREEMENT TO GIVE TRANSFER CONSENT.] "Agreement 
to give transfer consent" means a member control agreement under 
section 322B.37, or a part of a member control agreement, under 
which the members agree in advance to give any consent referred 
to in section 322B.313, subdivision 2.  
    Subd. 6.  [ARTICLES OR ARTICLES OF ORGANIZATION.] 
"Articles" or "Articles of organization" means, in the case of a 
limited liability company organized under this chapter, articles 
of organization, articles of amendment, a statement of change of 
registered office, registered agent, or name of registered 
agent, a statement establishing or fixing the rights and 
preferences of a class or series of membership interests, 
articles of merger, articles of abandonment, and articles of 
termination.  In the case of a foreign limited liability 
company, the term includes all documents serving a similar 
function required to be filed with the secretary of state or 
other state office of the limited liability company's state of 
organization. 
    Subd. 7.  [BOARD OR BOARD OF GOVERNORS.] "Board" or "board 
of governors" means the board of governors of a limited 
liability company. 
    Subd. 8.  [BOARD MEMBER.] "Board member" means a natural 
person serving on the board of governors in the case of a 
limited liability company and a natural person serving on the 
board of directors in the case of a corporation. 
    Subd. 9.  [BUSINESS CONTINUATION AGREEMENT.] "Business 
continuation agreement" means a member control agreement under 
section 322B.37, or a part of a member control agreement, made 
before or after the limited liability company has incurred an 
event of dissolution, under which the members: 
    (1) agree that, despite any dissolution, winding up and 
termination of the limited liability company as a legal entity, 
its business will be continued in a successor organization 
through a merger, transfer of assets, transfer of membership 
interests, or otherwise; and 
    (2) specify the terms and conditions under which the 
business continuation will occur.  
    Subd. 10.  [CLASS.] "Class," when used with reference to 
membership interests, means a category of membership interests 
that differs in one or more rights or preferences from another 
category of membership interests of the limited liability 
company. 
    Subd. 11.  [CLOSELY HELD LIMITED LIABILITY 
COMPANY.] "Closely held limited liability company" means a 
limited liability company that does not have more than 35 
members. 
    Subd. 12.  [CONSTITUENT ORGANIZATION.] "Constituent 
organization" means a limited liability company or a domestic or 
foreign corporation that is a party to a merger or an exchange. 
    Subd. 13.  [CONTRIBUTION AGREEMENT.] "Contribution 
agreement" means an agreement between a person and a limited 
liability company, under which: 
    (1) the person agrees to make a contribution in the future; 
and 
    (2) the limited liability company agrees that, at the time 
specified for the contribution in the future, the limited 
liability company will accept the contribution, and reflect the 
contribution in the required records. 
    Subd. 14.  [CONTRIBUTION ALLOWANCE AGREEMENT.] 
"Contribution allowance agreement" means an agreement between a 
person and a limited liability company, under which: 
    (1) the person has the right, but not the obligation, to 
make a contribution in the future; and 
    (2) the limited liability company agrees that, if the 
person makes the specified contribution at the time specified in 
the future, the limited liability company will accept the 
contribution, and reflect the contribution in the required 
records. 
    Subd. 15.  [DISSOLUTION.] "Dissolution" means that the 
limited liability company has incurred an event under section 
322B.80, subdivision 1, subject only to sections 322B.823 and 
322B.85, that obligates the limited liability company to wind up 
its affairs and to terminate its existence as a legal entity. 
    Subd. 16.  [DISSOLUTION AVOIDANCE CONSENT.] "Dissolution 
avoidance consent" means the consent of all remaining members: 
    (1) given, as provided in section 322B.80, subdivision 1, 
clause (5), after the occurrence of any event that terminates 
the continued membership of a member in the limited liability 
company; and 
    (2) that the limited liability company must be continued as 
a legal entity without dissolution. 
    Subd. 17.  [DISTRIBUTION.] "Distribution" means a direct or 
indirect transfer of money or other property, other than its own 
membership interests, with or without consideration, or an 
incurrence or issuance of indebtedness, by a limited liability 
company to any of its members in respect of membership 
interests.  A distribution may be in the form of an interim 
distribution or a termination distribution, or as consideration 
for the purchase, redemption, or other acquisition of its 
membership interests, or otherwise. 
    Subd. 18.  [FILED WITH THE SECRETARY OF STATE.] "Filed with 
the secretary of state" means that an original of a document 
meeting the applicable requirements of this chapter, signed and 
accompanied by a filing fee of $35, has been delivered to the 
secretary of state of this state.  The secretary of state shall 
endorse on the original the word "Filed" and the month, day, and 
year of filing, record the document in the office of the 
secretary of state, and return the document to the person who 
delivered it for filing. 
    Subd. 19.  [FINANCIAL RIGHTS.] "Financial rights" means a 
member's rights:  
    (1) to share in profits and losses as provided in section 
322B.326; 
    (2) to share in distributions as provided in section 
322B.50; 
    (3) to receive interim distributions as provided in section 
322B.51; and 
    (4) to receive termination distributions as provided in 
section 322B.873, subdivision 1, clause (3).  
    Subd. 20.  [FOREIGN LIMITED LIABILITY COMPANY.] "Foreign 
limited liability company" means a limited liability company 
organized for profit that is organized under laws other than the 
laws of this state for a purpose or purposes for which a limited 
liability company may be organized under this chapter. 
    Subd. 21.  [GOOD FAITH.] "Good faith" means honesty in fact 
in the conduct of the act or transaction concerned. 
    Subd. 22.  [GOVERNANCE RIGHTS.] "Governance rights" means 
all a member's rights as a member in the limited liability 
company other than financial rights and the right to assign 
financial rights. 
    Subd. 23.  [GOVERNING BOARD.] "Governing board" means the 
board of governors in the case of a limited liability company 
and the board of directors in the case of a corporation.  
    Subd. 24.  [GOVERNOR.] "Governor" means a natural person 
serving on the board of governors. 
    Subd. 25.  [INTENTIONALLY.] "Intentionally" means that the 
person referred to either has a purpose to do or fail to do the 
act or cause the result specified or believes that the act or 
failure to act, if successful, will cause that result.  A person 
intentionally violates a statute if the person intentionally 
does the act or causes the result prohibited by the statute, or 
if the person intentionally fails to do the act or cause the 
result required by the statute, even though the person may not 
know of the existence or constitutionality of the statute or the 
scope or meaning of the terms used in the statute. 
    Subd. 26.  [KNOW AND KNOWLEDGE.] A person "knows" or has 
"knowledge" of a fact when the person has actual knowledge of 
it.  A person does not know or have knowledge of a fact merely 
because the person has reason to know of the fact. 
    Subd. 27.  [LEGAL REPRESENTATIVE.] "Legal representative" 
means a person empowered to act for another person, including, 
but not limited to, an agent, manager, partner, or associate, of 
an organization; a trustee of a trust; a personal 
representative; an executor of a will; an administrator of an 
estate; a trustee in bankruptcy; and a receiver, guardian, 
custodian, or conservator of the person or estate of a person. 
    Subd. 28.  [LIMITED LIABILITY COMPANY.] "Limited liability 
company" means a limited liability company, other than a foreign 
limited liability company, organized under this chapter. 
    Subd. 29.  [MANAGER.] "Manager" means a person elected, 
appointed, or otherwise designated as a manager by the board of 
governors, and any other person considered elected as a manager 
pursuant to section 322B.68.  
    Subd. 30.  [MEMBER.] "Member" means a person reflected in 
the required records of a limited liability company as the owner 
of some governance rights of a membership interest of the 
limited liability company. 
    Subd. 31.  [MEMBERSHIP INTEREST.] "Membership interest" 
means a member's interest in a limited liability company 
consisting of a member's financial rights, a member's right to 
assign financial rights as provided in section 322B.31, a 
member's governance rights, and a member's right to assign 
governance rights as provided in section 322B.313. 
    Subd. 32.  [NOTICE.] "Notice" is given by a member of a 
limited liability company to the limited liability company or a 
manager of a limited liability company when in writing and 
mailed or delivered to the limited liability company or the 
manager at the registered office or principal executive office 
of the limited liability company.  In all other cases, notice is 
given to a person when mailed to the person at an address 
designated by the person or at the last known address of the 
person, or when communicated to the person orally, or when 
handed to the person, or when left at the office of the person 
with a clerk or other person in charge of the office, or if 
there is no one in charge, when left in a conspicuous place in 
the office, or if the office is closed or the person to be 
notified has no office, when left at the dwelling house or usual 
place of abode of the person with some person of suitable age 
and discretion who is residing there.  Notice by mail is given 
when deposited in the United States mail with sufficient postage 
affixed.  Notice is considered received when it is given. 
    Subd. 33.  [OPERATING AGREEMENT.] "Operating agreement" 
means rules, resolutions, or other provisions that:  
    (1) relate to the management of the business or the 
regulation of the affairs of the limited liability company; and 
    (2) have been made expressly part of the operating 
agreement by the action, taken from time to time under section 
322B.603, by the board of governors or the members. 
    Subd. 34.  [ORGANIZATION.] "Organization" means a domestic 
or foreign limited liability company, corporation, partnership, 
limited partnership, joint venture, association, business trust, 
estate, trust, enterprise, and any other legal or commercial 
entity. 
    Subd. 35.  [OWNERS.] "Owners" means members in the case of 
a limited liability company and shareholders in the case of a 
corporation.  
    Subd. 36.  [OWNERSHIP INTERESTS.] "Ownership interests" 
means membership interests in the case of a limited liability 
company and shares in the case of a corporation.  
    Subd. 37.  [PERSON.] "Person" includes a natural person and 
an organization. 
    Subd. 38.  [PERTAINS.] A contribution pertains to a 
particular series when the contribution is made in return for a 
membership interest in that particular series.  A contribution 
pertains to a particular class when the class has no series and 
the contribution is made in return for a membership interest in 
the class.  A contribution that pertains to a series does not 
pertain to the class of which the series is a part. 
    Subd. 39.  [PRINCIPAL EXECUTIVE OFFICE.] "Principal 
executive office" means an office where the elected or appointed 
chief manager of the limited liability company has an office.  
If the limited liability company has no elected or appointed 
chief manager, principal executive office means the registered 
office of the limited liability company. 
    Subd. 40.  [REGISTERED OFFICE.] "Registered office" means 
the place in this state designated in the articles of 
organization as the registered office of the limited liability 
company. 
    Subd. 41.  [RELATED LIMITED LIABILITY COMPANY.] "Related 
limited liability company" of a specified limited liability 
company means a parent or subsidiary of the specified limited 
liability company or another subsidiary of a parent of the 
specified limited liability company. 
    Subd. 42.  [REQUIRED RECORDS.] "Required records" are those 
records required to be maintained under section 322B.373. 
    Subd. 43.  [SECURITY.] "Security" has the meaning given it 
in section 80A.14, subdivision 18. 
    Subd. 44.  [SERIES.] "Series" means a category of 
membership interests, within a class of membership interests, 
that have some of the same rights and preferences as other 
membership interests within the same class, but that differ in 
or one or more rights and preferences from another category of 
membership interests within that class. 
    Subd. 45.  [SIGNED.] (a) "Signed" means that the signature 
of a person has been written on a document, as provided in 
section 645.44, subdivision 14, and, with respect to a document 
required by this chapter to be filed with the secretary of 
state, means that the document has been signed by a person 
authorized to do so by this chapter, the articles of 
organization or operating agreement or a resolution approved by 
the affirmative vote of the required proportion or number of 
governors or the required proportion of the voting power of 
membership interests present and entitled to vote. 
    (b) A signature on a document not required by this chapter 
to be filed with the secretary of state may be a facsimile 
affixed, engraved, printed, placed, stamped with indelible ink, 
or in any other manner reproduced on the document. 
    Subd. 46.  [SUCCESSOR ORGANIZATION.] "Successor 
organization" means an organization that, pursuant to a business 
continuation agreement or an order of the court under section 
322B.833, subdivision 6, continues the business of the dissolved 
and terminated limited liability company. 
    Subd. 47.  [SURVIVING ORGANIZATION.] "Surviving 
organization" means the limited liability company or domestic or 
foreign corporation resulting from a merger. 
    Subd. 48.  [TERMINATION.] "Termination" means the end of a 
limited liability company's existence as a legal entity and 
occurs when a notice of termination is filed with the secretary 
of state under section 322B.826 or is considered filed with the 
secretary of state under section 322B.75, subdivision 2, clause 
(3). 
    Subd. 49.  [VOTE.] "Vote" includes authorization by written 
action. 
    Subd. 50.  [WINDING UP.] "Winding up" means the period 
triggered by dissolution during which the limited liability 
company ceases to carry on its business, except to the extent 
necessary for concluding its affairs, and disposes of its assets 
under section 322B.873. 
    Subd. 51.  [WRITTEN ACTION.] "Written action" means a 
written document signed by all of the persons required to take 
the action described.  The term also means the counterparts of a 
written document signed by any of the persons taking the action 
described.  Each counterpart constitutes the action of the 
persons signing it, and all the counterparts, taken together, 
constitute one written action by all of the persons signing them.

                 FORMATION AND ARTICLES OF ORGANIZATION
    Sec. 4.  [322B.10] [PURPOSES.] 
    A limited liability company may be organized under this 
chapter for any business purpose or purposes, unless some other 
statute of this state requires organization for any of those 
purposes under a different law.  Unless otherwise provided in 
its articles of organization, a limited liability company has 
general business purposes. 
    Sec. 5.  [322B.105] [ORGANIZERS.] 
    One or more natural persons of full age may act as 
organizers of a limited liability company by filing with the 
secretary of state articles of organization for the limited 
liability company. 
    Sec. 6.  [322B.11] [TWO MEMBER REQUIREMENT.] 
    A limited liability company shall have two or more members 
at the time of its formation.  A limited liability company shall 
be dissolved under section 322B.80, subdivision 1, clause (5), 
whenever the limited liability company ceases to have at least 
two members unless the remaining member admits a new member 
within 90 days of the termination of the continued membership of 
the former member.  
    Sec. 7.  [322B.115] [ARTICLES OF ORGANIZATION.] 
    Subdivision 1.  [REQUIRED PROVISIONS.] The articles of 
organization must contain: 
    (1) the name of the limited liability company; 
    (2) the address of the registered office of the limited 
liability company and the name of its registered agent, if any, 
at that address; 
    (3) the name and address of each organizer; 
    (4) the limited period of existence for the limited 
liability company, which must be a period of 30 years or less 
from the date the articles of organization are filed with the 
secretary of state; 
    (5) a statement as to whether upon the occurrence of any 
event under section 322B.80, subdivision 1, clause (5), that 
terminates the continued membership of a member in the limited 
liability company, the remaining members will have the power to 
avoid dissolution by giving dissolution avoidance consent; and 
    (6) a statement as to whether the members have the power to 
enter into a business continuation agreement.  
    Subd. 2.  [STATUTORY PROVISIONS THAT MAY BE MODIFIED ONLY 
IN ARTICLES OF ORGANIZATION.] The following provisions govern a 
limited liability company unless modified in the articles of 
organization: 
    (1) a limited liability company has general business 
purposes (section 322B.10); 
    (2) a limited liability company has certain powers (section 
322B.20); 
    (3) the power to adopt, amend, or repeal the operating 
agreement is vested in the board of governors (section 
322B.603); 
    (4) a limited liability company must allow cumulative 
voting for governors (section 322B.63); 
    (5) the affirmative vote of a majority of governors present 
is required for an action of the board of governors (section 
322B.653); 
    (6) a written action by the board of governors taken 
without a meeting must be signed by all governors (section 
322B.656); 
    (7) the board may accept contributions, make contribution 
agreements, and make contribution allowance agreements (sections 
322B.40, subdivision 1; 322B.42; and 322B.43); 
    (8) all membership interests are ordinary membership 
interests entitled to vote and are of one class with no series 
(section 322B.40, subdivision 5, clauses (1) and (2)); 
    (9) all membership interests have equal rights and 
preferences in all matters not otherwise provided for by the 
board of governors (section 322B.40, subdivision 5, clause (2)); 
    (10) the restatement of value of previous contributions is 
to be determined according to a specified process (section 
322B.41, subdivisions 3 and 4); 
    (11) a member has certain preemptive rights, unless 
otherwise provided by the board of governors (section 322B.33); 
    (12) the affirmative vote of the owners of a majority of 
the voting power of the membership interests present and 
entitled to vote at a duly held meeting is required for an 
action of the members, except where this chapter requires the 
affirmative vote of a majority of the voting power of all 
membership interests entitled to vote (section 322B.35, 
subdivision 1); 
    (13) the voting power of each membership interest is in 
proportion to the value reflected in the required records of the 
contributions of the members (section 322B.356); 
    (14) members share in distributions in proportion to the 
value reflected in the required records of the contributions of 
members (section 322B.50); 
    (15) members share profits and losses in proportion to the 
value reflected in the required records of the contributions of 
members (section 322B.326); 
    (16) a written action by the members taken without a 
meeting must be signed by all members (section 322B.35); 
    (17) members have no right to receive distributions in kind 
and the limited liability company has only limited rights to 
make distributions in kind (section 322B.52); and 
    (18) a member is not subject to expulsion (section 
322B.306, subdivision 2). 
    Subd. 3.  [STATUTORY PROVISIONS THAT MAY BE MODIFIED EITHER 
IN ARTICLES OF ORGANIZATION OR IN THE OPERATING AGREEMENT.] The 
following provisions govern a limited liability company unless 
modified either in the articles of organization or in the 
operating agreement: 
    (1) governors serve for an indefinite term that expires at 
the next regular meeting of members (section 322B.616); 
    (2) the compensation of governors is fixed by the board of 
governors (section 322B.623); 
    (3) a certain method must be used for removal of governors 
(section 322B.636); 
    (4) a certain method must be used for filling board of 
governor vacancies (section 322B.64); 
    (5) if the board of governors fails to select a place for a 
board meeting, it must be held at the principal executive office 
(section 322B.643, subdivision 1); 
    (6) a governor may call a board of governors meeting, and 
the notice of the meeting need not state the purpose of the 
meeting (section 322B.643, subdivision 3); 
    (7) a majority of the board of governors is a quorum for a 
board meeting (section 322B.65); 
    (8) a committee consists of one or more persons, who need 
not be governors, appointed by affirmative vote of a majority of 
the governors present (section 322B.66, subdivision 2); 
    (9) the board may establish a special litigation committee 
(section 322B.66); 
    (10) the chief manager and treasurer have specified duties, 
until the board of governors determines otherwise (section 
322B.673); 
    (11) managers may delegate some or all of their duties and 
powers, if not prohibited by the board of governors from doing 
so (section 322B.689); 
    (12) regular meetings of members need not be held, unless 
demanded by a member under certain conditions (section 
322B.333); 
    (13) in all instances where a specific minimum notice 
period has not otherwise been fixed by law, not less than ten 
days' notice is required for a meeting of members (section 
322B.34, subdivision 2); 
    (14) for a quorum at a members' meeting there is required a 
majority of the voting power of the membership interests 
entitled to vote at the meeting (section 322B.353); 
    (15) the board of governors may fix a date up to 60 days 
before the date of a members' meeting as the date for the 
determination of the members entitled to notice of and entitled 
to vote at the meeting (section 322B.356, subdivision 1); 
    (16) indemnification of certain persons is required 
(section 322B.699); 
    (17) the board of governors may authorize, and the limited 
liability company may make, distributions not prohibited, 
limited, or restricted by an agreement (section 322B.54, 
subdivision 1); and 
    (18) members have no right to interim distributions except 
as provided through the operating agreement or an act of the 
board of governors (section 322B.51).  
    Subd. 4.  [OPTIONAL PROVISIONS AND SPECIFIC SUBJECTS.] The 
following provisions relating to the management of the business 
or the regulation of the affairs of a limited liability company 
may be included either in the articles of organization or, 
except for naming persons to serve as the first board of 
governors, fixing a greater than majority governor or member 
vote, establishing the rights and priorities for distributions 
and the rights to share in profits and losses, or giving or 
prescribing the manner of giving voting rights to persons other 
than members otherwise than pursuant to the articles of 
organization, or eliminating or limiting a governor's personal 
liability, in the operating agreement: 
    (1) the persons to serve as the first board of governors 
may be named in the articles of organization (section 322B.606, 
subdivision 1); 
    (2) a manner for increasing or decreasing the number of 
governors may be provided (section 322B.61); 
    (3) additional qualifications for governors may be imposed 
(section 322B.613); 
    (4) governors may be classified (section 322B.626); 
    (5) the day or date, time, and place of board of governors 
meetings may be fixed (section 322B.643, subdivision 1); 
    (6) absent governors may be permitted to give written 
consent or opposition to a proposal (section 322B.646); 
    (7) a larger than majority vote may be required for board 
of governor action (section 322B.653); 
    (8) authority to sign and deliver certain documents may be 
delegated to a manager or agent of the limited liability company 
other than the chief manager (section 322B.673, subdivision 2); 
    (9) additional managers may be designated (section 
322B.676); 
    (10) additional powers, rights, duties, and 
responsibilities may be given to managers (section 322B.679); 
    (11) a method for filling vacant offices may be specified 
(section 322B.686, subdivision 3); 
    (12) the day or date, time, and place of regular member 
meetings may be fixed (section 322B.333, subdivision 3); 
    (13) certain persons may be authorized to call special 
meetings of members (section 322B.336, subdivision 1); 
    (14) notices of member meetings may be required to contain 
certain information (section 322B.34, subdivision 3); 
    (15) a larger than majority vote may be required for member 
action (section 322B.346); 
    (16) voting rights may be granted in or pursuant to the 
articles of organization to persons who are not members (section 
322B.356, subdivision 3); 
    (17) limited liability company actions giving rise to 
dissenter rights may be designated (section 322B.386, 
subdivision 1, paragraph (e)); and 
    (18) a governor's personal liability to the limited 
liability company or its members for monetary damages for breach 
of fiduciary duty as a governor may be eliminated or limited in 
the articles (section 322B.663, subdivision 4). 
    Subd. 5.  [OPTIONAL PROVISIONS GENERALLY.] The articles of 
organization may contain other provisions not inconsistent with 
law relating to the management of the business or the regulation 
of the affairs of the limited liability company. 
    Subd. 6.  [POWERS NEED NOT BE STATED.] It is not necessary 
to set forth in the articles of organization any of the limited 
liability company powers granted by this chapter. 
    Sec. 8.  [322B.12] [LIMITED LIABILITY COMPANY NAME.] 
    Subdivision 1.  [REQUIREMENTS AND PROHIBITIONS.] The 
limited liability company name must: 
    (1) be in the English language or in any other language 
expressed in English letters or characters; 
    (2) contain the words "limited liability company," or must 
contain the abbreviation "LLC" or, in the case of an 
organization formed pursuant to section 319A.03, must contain 
the words "professional limited liability company," or the 
abbreviation "PLC"; 
    (3) not contain the word corporation or incorporated and 
must not contain the abbreviation of either or both of these 
words; 
    (4) not contain a word or phrase that indicates or implies 
that it is organized for a purpose other than a legal business 
purpose; and 
    (5) be distinguishable upon the records in the office of 
the secretary of state from the name of a domestic limited 
liability company, corporation, or limited partnership, whether 
profit or nonprofit, or a foreign limited liability company, 
corporation, or limited partnership authorized or registered to 
do business in this state, whether profit or nonprofit, or a 
name the right to which is, at the time of organization, 
reserved or provided for in sections 302A.117, 317A.117, 
322B.125, 322A.03, or 333.001 to 333.54, unless there is filed 
with the articles of organization one of the following: 
    (i) the written consent of the domestic limited liability 
company, corporation, or limited partnership or foreign limited 
liability company, corporation, or limited partnership 
authorized or registered to do business in this state or the 
holder of a reserved name or a name filed by or registered with 
the secretary of state under sections 333.001 to 333.54 having a 
name that is not distinguishable; 
    (ii) a certified copy of a final decree of a court in this 
state establishing the prior right of the applicant to the use 
of the name in this state; or 
    (iii) the applicant's affidavit that the limited liability 
company, corporation, or limited partnership with the name that 
is not distinguishable has been organized, incorporated, or on 
file in this state for at least three years prior to the 
affidavit, if it is a domestic limited liability company, 
corporation, or limited partnership, or has been authorized or 
registered to do business in this state for at least three years 
prior to the affidavit, if it is a foreign limited liability 
company, corporation, or limited partnership, or that the holder 
of a name filed or registered with the secretary of state under 
sections 333.001 to 333.54 filed or registered that name at 
least three years prior to the affidavit, and has not during the 
three-year period filed any document with the secretary of 
state; that the applicant has mailed written notice to the 
limited liability company, corporation, or limited partnership 
or the holder of a name filed or registered with the secretary 
of state under sections 333.001 to 333.54 by certified mail, 
return receipt requested, properly addressed to the registered 
office of the limited liability company or corporation or in 
care of the agent of the limited partnership, or the address of 
the holder of a name filed or registered with the secretary of 
state under sections 333.001 to 333.54, shown in the records of 
the secretary of state, that the applicant intends to use a name 
that is not distinguishable and the notice has been returned to 
the applicant as undeliverable to the addressee limited 
liability company, corporation, or limited partnership or holder 
of a name filed or registered with the secretary of state under 
sections 333.001 to 333.54; that the applicant, after diligent 
inquiry, has been unable to find any telephone listing for the 
limited liability company, corporation, or limited partnership 
with the name that is not distinguishable in the county in which 
is located the registered office of the limited liability 
company or corporation shown in the records of the secretary of 
state or has been unable to find any telephone listing for the 
holder of a name filed or registered with the secretary of state 
under sections 333.001 to 333.54 in the county in which is 
located the address of the holder shown in the records of the 
secretary of state; and that the applicant has no knowledge that 
the limited liability company, corporation, or limited 
partnership or holder of a name filed or registered with the 
secretary of state under sections 333.001 to 333.54 is currently 
engaged in business in this state. 
    Subd. 2.  [DETERMINATION.] The secretary of state shall 
determine whether a name is "distinguishable" from another name 
for purposes of this section and section 322B.125. 
    Subd. 3.  [OTHER LAWS AFFECTING USE OF NAMES.] This section 
and section 322B.125 do not abrogate or limit the law of unfair 
competition or unfair practices, or sections 333.001 to 333.54, 
or the laws of the United States with respect to the right to 
acquire and protect copyrights, trade names, trademarks, service 
names, service marks, or any other rights to the exclusive use 
of names or symbols, or derogate the common law or the 
principles of equity. 
    Subd. 4.  [USE OF A NAME BY A SURVIVING ORGANIZATION.] A 
limited liability company that is merged with another limited 
liability company or domestic or foreign corporation, or that is 
organized by the reorganization of one or more limited liability 
companies or domestic or foreign corporations, or that acquires 
by sale, lease, or other disposition to or exchange with a 
limited liability company all or substantially all of the assets 
of another limited liability company or domestic or foreign 
corporation including its name, may have the same name as that 
used in this state by any of the other limited liability 
companies or domestic or foreign corporations, if the other 
limited liability company or domestic or foreign corporation was 
organized under the laws of, or is authorized to transact 
business in, this state. 
    Subd. 5.  [INJUNCTION.] The use of a name by a limited 
liability company in violation of this section does not affect 
or vitiate its limited liability company existence, but a court 
in this state may, upon application of the state or of a person 
interested or affected, enjoin the limited liability company 
from doing business under a name assumed in violation of this 
section, although its articles of organization may have been 
filed with the secretary of state and a certificate of 
organization issued. 
    Subd. 6.  [CONTEST OF REGISTRATION OF NAME.] A person doing 
business in this state may contest the subsequent registration 
of a name with the office of the secretary of state as provided 
in section 5.22. 
    Sec. 9.  [322B.125] [RESERVED NAME.] 
    Subdivision 1.  [WHO MAY RESERVE.] The exclusive right to 
the use of a limited liability company name otherwise permitted 
by section 322B.12 may be reserved by: 
    (1) a person doing business in this state under that name; 
    (2) a person intending to organize under this chapter; 
    (3) a domestic limited liability company intending to 
change its name; 
    (4) a foreign limited liability company intending to make 
application for a certificate of authority to transact business 
in this state; 
    (5) a foreign limited liability company authorized to 
transact business in this state and intending to change its 
name; 
    (6) a person intending to organize a foreign limited 
liability company and intending to have the foreign limited 
liability company make application for a certificate of 
authority to transact business in this state; or 
    (7) a foreign limited liability company doing business 
under that name or a name deceptively similar to that name in 
one or more states other than this state and not described in 
clause (4), (5), or (6). 
    Subd. 2.  [METHOD OF RESERVATION.] The reservation is made 
by filing with the secretary of state a request that the name be 
reserved.  If the name is available for use by the applicant, 
the secretary of state shall reserve the name for the exclusive 
use of the applicant for a period of 12 months.  The reservation 
may be renewed for successive 12-month periods. 
    Subd. 3.  [TRANSFER OF RESERVATION.] The right to the 
exclusive use of a limited liability company name reserved 
pursuant to this section may be transferred to another person by 
or on behalf of the applicant for whom the name was reserved by 
filing with the secretary of state a notice of the transfer and 
specifying the name and address of the transferee. 
    Sec. 10.  [322B.13] [REGISTERED OFFICE AND AGENT.] 
    Subdivision 1.  [REGISTERED OFFICE.] A limited liability 
company shall continuously maintain a registered office in this 
state.  A registered office need not be the same as the 
principal place of business of the limited liability company and 
need not be the same as the principal executive office of a 
limited liability company. 
    Subd. 2.  [REGISTERED AGENT.] A limited liability company 
may designate in its articles of organization a registered 
agent.  The registered agent may be a natural person residing in 
this state, a domestic corporation or a domestic limited 
liability company, or a foreign corporation or foreign limited 
liability company authorized to transact business in this 
state.  The registered agent must maintain a business office 
that is identical with the registered office. 
    Sec. 11.  [322B.135] [CHANGE OF REGISTERED OFFICE OR 
AGENT.] 
    Subdivision 1.  [STATEMENT.] A limited liability company 
may change its registered office, designate or change its 
registered agent, or state a change in the name of its 
registered agent, by filing with the secretary of state a 
statement containing: 
    (1) the name of the limited liability company; 
    (2) if the address of its registered office is to be 
changed, the new address of its registered office; 
    (3) if its registered agent is to be designated or changed, 
the name of its new registered agent; 
    (4) if the name of its registered agent is to be changed, 
the name of its registered agent as changed; 
    (5) a statement that the address of its registered office 
and the address of the business office of its registered agent, 
as changed, will be identical; and 
    (6) a statement that the change of registered office or 
registered agent was authorized by resolution approved by the 
affirmative vote of a majority of the governors present. 
    Subd. 2.  [RESIGNATION OF AGENT.] A registered agent of a 
limited liability company may resign by filing with the 
secretary of state a signed written notice of resignation, 
including a statement that a signed copy of the notice has been 
given to the limited liability company at its principal 
executive office, or to a legal representative of the limited 
liability company.  The appointment of the agent terminates 30 
days after the notice is filed with the secretary of state. 
    Subd. 3.  [CHANGE OF BUSINESS ADDRESS OR NAME OF AGENT.] If 
the business address or name of a registered agent changes, the 
agent shall change the address of the registered office or the 
name of the registered agent, as the case may be, of each 
limited liability company represented by that agent by filing 
with the secretary of state a statement as required in 
subdivision 1, except that it need be signed only by the 
registered agent, need not be responsive to clause (3) or (6), 
and must state that a copy of the statement has been mailed to 
each of those limited liability companies or to the legal 
representative of each of those limited liability companies. 
    Sec. 12.  [322B.14] [AMENDMENT OF ARTICLES OF 
ORGANIZATION.] 
    The articles of organization of a limited liability company 
may be amended at any time to include or modify any provision 
that is required or permitted to appear in the articles or to 
omit any provision not required to be included in the articles, 
except that when articles are amended to restate them, the name 
and address of each organizer may be omitted.  Unless otherwise 
provided in this chapter, the articles may be amended or 
modified only in accordance with sections 322B.14 to 322B.16.  
An amendment that merely restates the then existing articles of 
organization, as amended, is not an amendment for the purposes 
of section 322B.63, subdivision 2, or 322B.33, subdivision 9. 
    Sec. 13.  [322B.145] [PROCEDURE FOR AMENDMENT BEFORE 
CONTRIBUTION.] 
    Before any contribution is reflected in the required 
records of a limited liability company, the articles of 
organization may be amended pursuant to section 322B.60 by the 
organizers or by the board of governors.  The articles of 
organization may be amended by the board of governors to change 
a statement pursuant to section 322B.40, subdivision 6, 
establishing or fixing the rights and preferences of a class or 
series of membership interests before any contribution 
pertaining to that class or series is reflected in the required 
records of the limited liability company. 
    Sec. 14.  [322B.15] [PROCEDURE FOR AMENDMENT AFTER 
CONTRIBUTION.] 
    Subdivision 1.  [MANNER OF AMENDMENT.] After any 
contribution has been reflected in the required records of a 
limited liability company, the articles of organization may be 
amended in the manner set forth in this section. 
    Subd. 2.  [SUBMISSION TO MEMBERS.] A resolution approved by 
the affirmative vote of a majority of the governors present, or 
proposed by a member or members owning three percent or more of 
the voting power of the members entitled to vote, that sets 
forth the proposed amendment must be submitted to a vote at the 
next regular or special meeting of the members of which notice 
has not yet been given but still can be timely given.  Any 
number of amendments may be submitted to the members and voted 
upon at one meeting, but the same or substantially the same 
amendment proposed by a member or members need not be submitted 
to the members or be voted upon at more than one meeting during 
a 15-month period.  The resolution may amend the articles of 
organization in their entirety to restate and supersede the 
original articles of organization and all amendments to them.  
    Subd. 3.  [NOTICE.] Written notice of the members' meeting 
setting forth the substance of the proposed amendment must be 
given to each member in the manner provided in section 322B.34 
for the giving of notice of meetings of members. 
    Subd. 4.  [APPROVAL BY MEMBERS.] (a) The proposed amendment 
is adopted when approved by the affirmative vote of the owners 
of a majority of the voting power of the members present and 
entitled to vote, except as provided in paragraphs (b) and (c), 
and subdivision 5. 
    (b) For a closely held limited liability company, if the 
articles of organization provide for a specified proportion 
equal to or larger than the majority necessary to transact a 
specified type of business at a meeting, or if it is proposed to 
amend the articles to provide for a specified proportion equal 
to or larger than the majority necessary to transact a specified 
type of business at a meeting, the affirmative vote necessary to 
add the provision to, or to amend an existing provision in, the 
articles of organization is the larger of: 
    (1) the specified proportion or, in the absence of a 
specific provision, the affirmative vote necessary to transact 
the type of business described in the proposed amendment at a 
meeting immediately before the effectiveness of the proposed 
amendment; or 
    (2) the specified proportion that would, upon effectiveness 
of the proposed amendment, be necessary to transact the 
specified type of business at a meeting. 
    (c) For limited liability companies other than closely held 
limited liability companies, if the articles provide for a 
larger proportion to transact a specified type of business at a 
meeting, the affirmative vote of that larger proportion is 
necessary to amend the articles to decrease the proportion 
necessary to transact the business. 
    Subd. 5.  [CERTAIN RESTATEMENTS.] An amendment that merely 
restates the existing articles, as amended, may be authorized by 
a resolution approved by the board of governors and may, but 
need not, be submitted to and approved by the members as 
provided in subdivisions 2, 3, and 4. 
    Sec. 15.  [322B.155] [CLASS OR SERIES VOTING ON 
AMENDMENTS.] 
    The owners of the outstanding membership interests of a 
class or series are entitled to vote as a class or series upon a 
proposed amendment, whether or not entitled to vote on the 
amendment by the provisions of the articles of organization, if 
the amendment would: 
    (1) effect an exchange, reclassification, or cancellation 
of all or part of the membership interests of the class or 
series; 
    (2) effect an exchange, or create a right of exchange, of 
all or any part of the membership interests of another class or 
series for the membership interests of the class or series; 
    (3) change the rights or preferences of the membership 
interests of the class or series; 
    (4) change the membership interests of the class or series 
into the same or a different number of membership interests of 
the same or another class or series; 
    (5) create a new class or series of membership interests 
having rights and preferences prior and superior to the 
membership interests of that class or series, or increase the 
rights and preferences or the number of membership interests, of 
a class or series having rights and preferences prior or 
superior to the membership interests of that class or series; 
    (6) divide the membership interests of the class into 
series and determine the designation of each series and the 
variations in the relative rights and preferences between the 
membership interests of each series or authorize the board of 
governors to do so; 
    (7) limit or deny any existing preemptive rights of the 
membership interests of the class or series; or 
    (8) cancel or otherwise affect distributions on the 
membership interests of the class or series. 
    Sec. 16.  [322B.16] [ARTICLES OF AMENDMENT.] 
    When an amendment has been adopted, articles of amendment 
must be prepared that contain: 
    (1) the name of the limited liability company; 
    (2) the amendment adopted; 
    (3) with respect to an amendment restating the articles, a 
statement that the amendment restating the articles of 
organization correctly sets forth without change the 
corresponding provisions of the articles as previously amended 
if the amendment was approved only by the board; 
    (4) if the amendment provides for but does not establish 
the manner for effecting an exchange, reclassification, 
division, combination, or cancellation of membership interests, 
a statement of the manner in which it will be effected; and 
    (5) a statement that the amendment has been adopted 
pursuant to this chapter.  
    Sec. 17.  [322B.165] [EFFECT OF AMENDMENT.] 
    Subdivision 1.  [EFFECT ON CAUSE OF ACTION.] An amendment 
does not affect an existing cause of action in favor of or 
against the limited liability company, nor a pending suit to 
which the limited liability company is a party, nor the existing 
rights of persons other than members.  
    Subd. 2.  [EFFECT OF CHANGE OF NAME.] If the limited 
liability company name is changed by the amendment, a suit 
brought by or against the limited liability company under its 
former name does not abate for that reason.  
    Subd. 3.  [EFFECT OF AMENDMENTS RESTATING ARTICLES.] When 
effective under section 322B.175, an amendment restating the 
articles of organization in their entirety supersedes the 
original articles of organization and all amendments to the 
original articles of organization.  
    Sec. 18.  [322B.17] [FILING OF ARTICLES OF ORGANIZATION.] 
    Articles of organization and articles of amendment must be 
filed with the secretary of state.  
    Sec. 19.  [322B.175] [EFFECTIVE DATE OF ARTICLES OF 
ORGANIZATION.] 
    Articles of organization are effective and limited 
liability company existence begins when the articles of 
organization are filed with the secretary of state accompanied 
by a payment of $135, which includes a $100 organization fee in 
addition to the $35 filing fee required by section 322B.03, 
subdivision 18.  Articles of amendment and articles of merger 
are effective when filed with the secretary of state or at 
another time within 30 days after filing if the articles of 
amendment so provide.  Articles of merger must be accompanied by 
a fee of $60, which includes a $25 merger fee in addition to the 
$35 filing fee required by section 322B.03, subdivision 18.  
    Sec. 20.  [322B.18] [PRESUMPTION AND CERTIFICATE OF 
ORGANIZATION.] 
    When the articles of organization have been filed with the 
secretary of state and the required fee has been paid to the 
secretary of state, it is presumed that all conditions precedent 
required to be performed by the organizers have been complied 
with and that the limited liability company has been organized, 
and the secretary of state shall issue a certificate of 
organization to the limited liability company.  This presumption 
does not apply against this state in a proceeding to cancel or 
revoke the certificate of organization or to compel the 
involuntary dissolution of the limited liability company.  

                                 POWERS 
    Sec. 21.  [322B.20] [POWERS.] 
    Subdivision 1.  [GENERALLY AND LIMITATIONS.] A limited 
liability company has the powers set forth in this section, 
subject to any limitations provided in any other statute of this 
state or in its articles of organization.  
    Subd. 2.  [DURATION.] A limited liability company has a 
limited duration of 30 years from the date the articles of 
organization are filed with the secretary of state, unless the 
articles of organization state a shorter duration.  
    Subd. 3.  [LEGAL CAPACITY.] A limited liability company may 
sue and be sued, and complain, defend, and participate as a 
party or otherwise in any legal, administrative, or arbitration 
proceeding, in its limited liability company name.  
    Subd. 4.  [PROPERTY OWNERSHIP.] A limited liability company 
may purchase, lease, or otherwise acquire, own, hold, improve, 
use, and otherwise deal in and with, real or personal property, 
or any interest in property, wherever situated.  
    Subd. 5.  [PROPERTY DISPOSITION.] A limited liability 
company may sell, convey, mortgage, create a security interest 
in, lease, exchange, transfer, or otherwise dispose of all or 
any part of its real or personal property, or any interest in 
this property, wherever situated.  
    Subd. 6.  [TRADING IN SECURITIES AND OBLIGATIONS.] A 
limited liability company may purchase, subscribe for, or 
otherwise acquire, own, hold, vote, use, employ, sell, exchange, 
mortgage, lend, create a security interest in, or otherwise 
dispose of and otherwise use and deal in and with, securities or 
other interests in, or obligations of, a person or direct or 
indirect obligations of any domestic or foreign government or 
instrumentality of a government.  
    Subd. 7.  [CONTRACTS AND MORTGAGES.] A limited liability 
company may make contracts and incur liabilities, borrow money, 
and secure any of its obligations by mortgage of or creation of 
a security interest in all or any of its property, franchises, 
and income.  
    Subd. 8.  [INVESTMENT.] A limited liability company may 
invest and reinvest its funds. 
    Subd. 9.  [HOLDING PROPERTY AS SECURITY.] A limited 
liability company may take and hold real and personal property, 
whether or not of a kind sold or otherwise dealt in by the 
limited liability company, as security for the payment of money 
loaned, advanced, or invested.  
    Subd. 10.  [LOCATION.] A limited liability company may 
conduct its business, carry on its operations, have offices, and 
exercise the powers granted by this chapter anywhere in the 
universe.  
    Subd. 11.  [DONATIONS.] A limited liability company may 
make donations, irrespective of limited liability company 
benefit, for:  (1) the public welfare; (2) social, community, 
charitable, religious, educational, scientific, civic, literary, 
and testing for public safety purposes; and for similar or 
related purposes; (3) for the purpose of fostering national or 
international amateur sports competition; and (4) the prevention 
of cruelty to children and animals.  
    Subd. 12.  [PENSIONS AND BENEFITS.] A limited liability 
company may pay pensions, retirement allowances, and 
compensation for past services to and for the benefit of, and 
establish, maintain, continue, and carry out, wholly or 
partially at the expense of the limited liability company, 
employee or incentive benefit plans, trusts, and provisions to 
or for the benefit of, any or all of its and its related limited 
liability companies' managers, governors, employees, and agents 
and the families, dependents, and beneficiaries of any of them.  
It may indemnify and purchase and maintain insurance for and on 
behalf of a fiduciary of any of these employee benefit and 
incentive plans, trusts, and provisions.  
    Subd. 13.  [PARTICIPATING IN MANAGEMENT.] A limited 
liability company may participate in any capacity in the 
promotion, organization, ownership, management, and operation of 
any organization or in any transaction, undertaking, or 
arrangement that the participating limited liability company 
would have power to conduct by itself, whether or not the 
participation involves sharing or delegation of control with or 
to others.  
    Subd. 14.  [INSURANCE.] A limited liability company may 
provide for its benefit life insurance and other insurance with 
respect to the services of any or all of its managers, 
governors, employees, and agents, or on the life of a member for 
the purpose of acquiring at the death of the member any or all 
membership interests in the limited liability company owned by 
the member.  
    Subd. 15.  [LIMITED LIABILITY COMPANY SEAL.] A limited 
liability company may have, alter at its pleasure, and use a 
limited liability company seal as provided in section 322B.21.  
    Subd. 16.  [OPERATING AGREEMENT.] A limited liability 
company may adopt, amend, and repeal an operating agreement 
relating to the management of the business or the regulation of 
the affairs of the limited liability company as provided in 
section 322B.603.  
    Subd. 17.  [COMMITTEES.] A limited liability company may 
establish committees of the board of governors, elect or appoint 
persons to the committees, and define their duties as provided 
in section 322B.66 and fix their compensation.  
    Subd. 18.  [MANAGERS, EMPLOYEES, AND AGENTS.] A limited 
liability company may elect or appoint managers, employees and 
agents of the limited liability company, and define their duties 
as provided in sections 322B.67 to 322B.69, and fix their 
compensation.  
    Subd. 19.  [CONTRIBUTIONS.] A limited liability company may 
accept contributions under section 322B.40 and may enter into 
contribution agreements under section 322B.42 and contribution 
allowance agreements under section 322B.43.  
    Subd. 20.  [LOANS, GUARANTIES, AND SURETIES.] A limited 
liability company may lend money to, guarantee an obligation of, 
become a surety for, or otherwise financially assist persons as 
provided in section 322B.693.  
    Subd. 21.  [ADVANCES.] A limited liability company may make 
advances to its governors, managers, and employees and those of 
its subsidiaries as provided in section 322B.696.  
    Subd. 22.  [INDEMNIFICATION.] A limited liability company 
shall indemnify those persons identified in section 322B.699 
against certain expenses and liabilities only as provided in 
section 322B.699 and may indemnify other persons.  
    Subd. 23.  [ASSUMED NAMES.] A limited liability company may 
conduct all or part of its business under one or more assumed 
names as provided in sections 333.001 to 333.06.  
    Subd. 24.  [OTHER POWERS.] A limited liability company may 
have and exercise all other powers necessary or convenient to 
effect any or all of the business purposes for which the limited 
liability company is organized. 
    Sec. 22.  [322B.21] [LIMITED LIABILITY COMPANY SEAL.] 
    Subdivision 1.  [SEAL NOT REQUIRED.] A limited liability 
company may, but need not, have a limited liability company 
seal, and the use or nonuse of a limited liability company seal 
does not affect the validity, recordability, or enforceability 
of a document or act.  If a limited liability company has a 
limited liability company seal, the use of the seal by the 
limited liability company on a document is not necessary.  
    Subd. 2.  [REQUIRED WORDS AND USE.] If a limited liability 
company has a limited liability company seal, the seal may 
consist of a mechanical imprinting device, or a rubber stamp 
with a facsimile of the seal affixed on it, or a facsimile or 
reproduction of either.  The seal need include only the word 
"Seal," but it may also include a part or all of the name of the 
limited liability company and a combination, derivation, or 
abbreviation of either or both of the phrases "a Minnesota 
Limited Liability Company" and "Limited Liability Company Seal." 
If a limited liability company seal is used, it or a facsimile 
of it may be affixed, engraved, printed, placed, stamped with 
indelible ink, or in any other manner reproduced on any document.
    Sec. 23.  [322B.22] [EFFECT OF LACK OF POWER AND ULTRA 
VIRES.] 
    The doing, continuing, or performing by a limited liability 
company of an act, or an executed or wholly or partially 
executory contract, conveyance or transfer to or by the limited 
liability company, if otherwise lawful, is not invalid because 
the limited liability company was without the power to do, 
continue, or perform the act, contract, conveyance, or transfer, 
unless the lack of power is established in a court in this state:
    (1) in a proceeding by a member against the limited 
liability company to enjoin the doing, continuing, or performing 
of the act, contract, conveyance, or transfer.  If the 
unauthorized act, continuation, or performance sought to be 
enjoined is being, or to be, performed or made pursuant to a 
contract to which the limited liability company is a party, the 
court may, if just and reasonable in the circumstances, set 
aside and enjoin the performance of the contract and in so doing 
may allow to the limited liability company or to the other 
parties to the contract compensation for the loss or damage 
sustained as a result of the action of the court in setting 
aside and enjoining the performance of the contract; 
    (2) in a proceeding by or in the name of the limited 
liability company, whether acting directly or through a legal 
representative, or through members in a representative or 
derivative suit, against the incumbent or former managers or 
governors of the limited liability company for exceeding or 
otherwise violating their authority, or against a person having 
actual knowledge of the lack of power; or 
    (3) in a proceeding by the attorney general, as provided in 
section 322B.843, to dissolve the limited liability company, or 
in a proceeding by the attorney general to enjoin the limited 
liability company from the transaction of unauthorized business. 
    Sec. 24.  [322B.23] [TRANSACTION OF BUSINESS OUTSIDE 
MINNESOTA.] 
    By enacting this chapter the Minnesota legislature 
recognizes the limited liability company as an important and 
constructive form of business organization.  The legislature 
understands that:  
    (1) businesses organized under this chapter will often 
transact business in other states; 
    (2) for businesses organized under this chapter to function 
effectively and for this chapter to be a useful enactment, this 
chapter must be accorded the same comity and full faith and 
credit that states typically accord to each other's corporate 
laws; and 
    (3) specifically, it is essential that other states 
recognize both the legal existence of limited liability 
companies formed under this chapter and the legal status of all 
members of these limited liability companies.  
    The legislature therefore specifically seeks that, subject 
to any reasonable registration requirements, other states extend 
to this chapter the same full faith and credit under section 1 
of Article IV of the Constitution of the United States, and the 
same comity, that Minnesota extends to statutes that other 
states enact to provide for the establishment and operation of 
business organizations.  

                    MEMBERS AND MEMBERSHIP INTERESTS 
    Sec. 25.  [322B.30] [NATURE OF A MEMBERSHIP INTEREST AND 
STATEMENT OF INTEREST OWNED.] 
    Subdivision 1.  [GENERALLY.] A membership interest is 
personal property.  A member has no interest in specific limited 
liability company property.  All property of the limited 
liability company is property of the limited liability company 
itself. 
    Subd. 2.  [STATEMENT OF MEMBERSHIP INTEREST.] At the 
request of any member, the limited liability company shall state 
in writing the particular membership interest owned by that 
member as of the moment the limited liability company makes the 
statement.  The statement must describe the member's rights to 
vote, to share in profits and losses, and to share in 
distributions, as well as any assignment of the member's rights 
then in effect.  The statement is not a certificated security as 
defined in section 336.8-102(1)(a), is not a negotiable 
instrument, and may not serve as a vehicle by which a transfer 
of any membership interest may be effected. 
    Subd. 3.  [GRANT OF A SECURITY INTEREST.] For the purpose 
of any law relating to security interests, a membership interest 
and financial rights are each a general intangible, as defined 
in section 336.9-106, and not a certificated security as defined 
in section 336.8-102(1)(a) and not an uncertificated security as 
defined in section 336.8-102(1)(b).  
    Sec. 26.  [322B.303] [PERSONAL LIABILITY OF MEMBERS AS 
MEMBERS.] 
    Subdivision 1.  [LIMITED LIABILITY RULE.] Subject to 
subdivision 2, a member, governor, manager, or other agent of a 
limited liability company is not, merely on account of this 
status, personally liable for the acts, debts, liabilities, or 
obligations of the limited liability company.  
    Subd. 2.  [PIERCING THE VEIL.] The case law that states the 
conditions and circumstances under which the corporate veil of a 
corporation may be pierced under Minnesota law also applies to 
limited liability companies. 
    Subd. 3.  [LIMITED LIABILITY AFTER DISSOLUTION.] The 
limited liability described in subdivisions 1 and 2 continues in 
full force regardless of any dissolution, winding up, and 
termination of a limited liability company.  
    Sec. 27.  [322B.306] [TERMINATION OF A MEMBERSHIP 
INTEREST.] 
    Subdivision 1.  [MEMBER'S POWER TO TERMINATE MEMBERSHIP.] A 
member always has the power, though not necessarily the right, 
to terminate its membership by resigning or retiring at any 
time.  A member's resignation or retirement, whether rightful or 
wrongful, causes dissolution under section 322B.80, subdivision 
1, clause (5), unless dissolution avoidance consent is obtained 
from the remaining members.  A member has no power to transfer 
all or part of the member's membership interest, except as 
provided in sections 322B.31 and 322B.313. 
    Subd. 2.  [WHEN EXPULSION PERMITTED.] Unless otherwise 
provided in the articles of organization, a member may not be 
expelled.  
    Subd. 3.  [EFFECT OF TERMINATION OF MEMBERSHIP ON THE 
GOVERNANCE RIGHTS OF THE TERMINATED MEMBER.] If for any reason 
the continued membership of a member is terminated:  
    (1) if dissolution under section 322B.80, subdivision 1, 
clause (5), is avoided through dissolution avoidance consent, 
then the member whose membership has terminated loses all 
governance rights and will be considered merely an assignee of 
the financial rights owned before the termination of membership; 
and 
    (2) if dissolution under section 322B.80, subdivision 1, 
clause (5), is not avoided through dissolution avoidance 
consent, the member whose continued membership has terminated 
retains all governance rights owned before the termination of 
the membership and may exercise those rights through the winding 
up and termination of the limited liability company.  
    Subd. 4.  [ADDITIONAL EFFECTS IF TERMINATION OF MEMBERSHIP 
IS WRONGFUL.] If a member resigns or retires in contravention of 
the articles of organization or a member control agreement then: 
    (1) the member who has wrongfully resigned or retired is 
liable to all the other members and to the limited liability 
company to the extent damaged by the wrongful resignation or 
retirement; and 
    (2) if dissolution avoidance consent is not obtained but 
the business of the limited liability company is continued under 
a business continuation agreement, then unless otherwise 
provided in the business continuation agreement:  
    (i) the member who has wrongfully resigned or retired has 
the right as against the successor organization to have the 
value of the resigned or retired membership interest determined 
and paid in cash; but 
    (ii) in ascertaining the value of the resigned or retired 
membership interest, the value of the goodwill of the business 
must not be considered.  
    Sec. 28.  [322B.31] [ASSIGNMENT OF FINANCIAL RIGHTS.] 
    Subdivision 1.  [ASSIGNMENT OF FINANCIAL RIGHTS PERMITTED.] 
Except as provided in subdivision 3, a member's financial rights 
are transferable in whole or in part. 
    Subd. 2.  [EFFECT OF ASSIGNMENT OF FINANCIAL RIGHTS.] An 
assignment of a member's financial rights entitles the assignee 
to receive, to the extent assigned, only the share of profits 
and losses and the distributions to which the assignor would 
otherwise be entitled.  An assignment of a member's financial 
rights does not dissolve the limited liability company and does 
not entitle or empower the assignee to become a member, to 
exercise any governance rights, to receive any notices from the 
limited liability company, or to cause dissolution.  The 
assignment may not allow the assignee to control the member's 
exercise of governance rights. 
    Subd. 3.  [RESTRICTIONS OF ASSIGNMENT OF FINANCIAL 
RIGHTS.] (a) A restriction on the assignment of financial rights 
may be imposed in the articles, in the operating agreement, by a 
resolution adopted by the members, or by an agreement among or 
other written action by members or among them and the limited 
liability company.  A restriction is not binding with respect to 
financial rights reflected in the required records before the 
adoption of the restriction, unless the owners of those 
financial rights are parties to the agreement or voted in favor 
of the restriction.  
    (b) A written restriction on the assignment of financial 
rights that is not manifestly unreasonable under the 
circumstances and is noted conspicuously in the required records 
may be enforced against the owner of the restricted financial 
rights or a successor or transferee of the owner, including a 
pledgee or a legal representative.  Unless noted conspicuously 
in the required records, a restriction, even though permitted by 
this section, is ineffective against a person without knowledge 
of the restriction.  
    Sec. 29.  [322B.313] [ASSIGNMENT OF A COMPLETE MEMBERSHIP 
INTEREST AND OF GOVERNANCE RIGHTS COUPLED WITH AN ASSIGNMENT OF 
FINANCIAL RIGHTS.] 
    Subdivision 1.  [TRANSFER OF MEMBERSHIP INTERESTS 
RESTRICTED.] A member may assign the member's full membership 
interest only by assigning all of the member's governance rights 
coupled with a simultaneous assignment to the same assignee of 
all the member's financial rights.  A member's governance rights 
are assignable, in whole or in part, only as provided in this 
section.  
    Subd. 2.  [WHEN UNANIMOUS CONSENT REQUIRED.] Subject to 
subdivision 6, a member may, without the consent of any other 
member, assign governance rights, in whole or in part, to 
another person already a member at the time of the assignment.  
Any other assignment of any governance rights is effective only 
if all the members, other than the member seeking to make the 
assignment, approve the assignment by unanimous written consent. 
    Subd. 3.  [EFFECT ON MEMBERSHIP.] When an assignment of 
governance rights coupled with financial rights is effective 
under subdivision 2: 
    (1) the assignee becomes a member, if not already a member; 
and 
    (2) if the assignor does not retain any governance rights, 
the assignor ceases to be a member, and the unanimous written 
consent required under subdivision 2, clause (2), also 
constitutes the dissolution avoidance consent necessary to avoid 
dissolution that would otherwise ensue under section 322B.80, 
subdivision 1, clause (5), on account of the assignor ceasing to 
be a member. 
    Subd. 4.  [EFFECT ON LIABILITY FOR CONTRIBUTIONS AND 
ILLEGAL DISTRIBUTIONS.] When an assignment is effective under 
subdivision 2:  
    (1) the assignee is liable for any obligations of the 
assignor under sections 322B.40 (including liability for 
unperformed promises that have been reflected as contributions 
in the required records) and 322B.55 existing at the time of 
transfer, except to the extent that, at the time the assignee 
became a member, the liability was unknown to the assignee, and 
could not be ascertained from the required records; and 
    (2) the assignor is not released from liability to the 
limited liability company for obligations of the assignor 
existing at the time of transfer under sections 322B.40 and 
322B.55. 
    Subd. 5.  [CONSEQUENCES OF INEFFECTIVE ASSIGNMENT.] If any 
purported or attempted assignment of governance rights is 
ineffective for failure to obtain the consent required in 
subdivision 2:  
    (1) the purported or attempted assignment is ineffective in 
its entirety; and 
    (2) any assignment of financial rights that accompanied the 
purported or attempted assignment of governance rights is void.  
    Subd. 6.  [RESTRICTIONS ON ASSIGNMENT OF GOVERNANCE 
RIGHTS.] Restrictions on the transfer of governance rights may 
be imposed following the same procedures and under the same 
conditions as stated in section 322B.31, subdivision 3, for 
restricting the transfer of financial rights. 
    Sec. 30.  [322B.316] [EFFECTIVE DATE OF ASSIGNMENTS.] 
    Any permissible assignment of financial rights under 
section 322B.31 and of governance rights coupled with financial 
rights under section 322B.313 will be effective as to and 
binding on the limited liability company only when the 
assignee's name, address, and the nature and extent of the 
assignment are reflected in the required records of the limited 
liability company.  
    Sec. 31.  [322B.32] [RIGHTS OF JUDGMENT CREDITOR.] 
    On application to a court of competent jurisdiction by any 
judgment creditor of a member, the court may charge a member's 
or an assignee's financial rights with payment of the 
unsatisfied amount of the judgment with interest.  To the extent 
so charged, the judgment creditor has only the rights of an 
assignee of a member's financial rights under section 322B.31.  
This chapter does not deprive any member or assignee of 
financial rights of the benefit of any exemption laws applicable 
to the membership interest.  This section is the sole and 
exclusive remedy of a judgment creditor with respect to the 
judgment debtor's membership interest. 
    Sec. 32.  [322B.323] [POWERS OF ESTATE OF A DECEASED OR 
INCOMPETENT MEMBER.] 
    Subdivision 1.  [GENERAL RULE.] If a member who is an 
individual dies or a court of competent jurisdiction adjudges 
the member to be incompetent to manage the member's person or 
property, or an order for relief under the bankruptcy code is 
entered with respect to the member, the member's executor, 
administrator, guardian, conservator, trustee, or other legal 
representative may exercise all of the member's rights for the 
purpose of settling the estate or administering the member's 
property.  If a member is a corporation, trust, or other entity 
and is dissolved, terminated, or placed by a court in 
receivership or bankruptcy, the powers of that member may be 
exercised by its legal representative or successor. 
    Subd. 2.  [WHEN MEMBERSHIP IS TERMINATED.] If an event 
referred to in subdivision 1 causes the termination of a 
member's membership interest and the remaining members give 
dissolution avoidance consent, then:  
    (1) as provided in section 322B.306, subdivision 3, the 
terminated member's interest will be considered to be merely 
that of an assignee of the financial rights owned before the 
termination of membership; and 
    (2) the rights to be exercised by the legal representative 
of the terminated member will be limited accordingly. 
    Sec. 33.  [322B.326] [SHARING OF PROFITS AND LOSSES.] 
    Unless otherwise provided in the articles of organization 
or by the board of governors under section 322B.40, subdivisions 
5 and 6, the profits and losses of a limited liability company 
are to be allocated among the members, and among classes and 
series of members, in proportion to the value of the 
contributions of the members reflected in the required records. 
    Sec. 34.  [322B.33] [PREEMPTIVE RIGHTS.] 
    Subdivision 1.  [PRESUMPTION AND MODIFICATION.] Unless 
denied or limited in the articles of organization or by the 
board of governors pursuant to section 322B.40, subdivision 5, 
clause (2), a member of a limited liability company has the 
preemptive rights provided in this section.  
    Subd. 2.  [DEFINITION.] A preemptive right is the right of 
a member to make contributions of a certain amount or to make a 
contribution allowance agreement specifying future contributions 
of a certain amount before the limited liability company may 
accept new contributions from other persons or to make 
contribution allowance agreements with other persons.  
    Subd. 3.  [WHEN RIGHT ACCRUES.] A member has a preemptive 
right whenever the limited liability company proposes to accept 
contributions from other persons, or to make contribution 
allowance agreements with other persons, pertaining to 
membership interests of the same series or class as the series 
or class owned by the member.  
    Subd. 4.  [EXEMPTIONS.] No preemptive rights arise as to 
contributions to be accepted from others or as to contribution 
allowance agreements to be made with others when the 
contribution is:  
    (1) to be made in a form other than money; 
    (2) to be made or reflected pursuant to a plan of merger or 
exchange; 
    (3) to be made or reflected pursuant to an employee or 
incentive benefit plan approved at a meeting by the affirmative 
vote of the owners of a majority of the voting power of all 
membership interests entitled to vote; 
    (4) to be made pursuant to a previously made contribution 
allowance agreement; or 
    (5) to be made or reflected pursuant to a plan of 
reorganization approved by a court of competent jurisdiction 
pursuant to a statute of this state or of the United States.  
    Subd. 5.  [EXTENT OF PREEMPTIVE RIGHT.] The extent to which 
each member may make a new contribution, or obtain the right to 
make a new contribution under a contribution allowance 
agreement, by exercise of a preemptive right as to any class or 
series is the ratio that the value of that member's 
contributions, as reflected in the required records as 
pertaining to that class or series before the contribution, 
bears to the total value of all members' contributions reflected 
in the required records as pertaining to that class or series 
before the new contribution. 
    Subd. 6.  [WAIVER.] A member may waive a preemptive right 
in writing.  The waiver is binding upon the member whether or 
not consideration has been given for the waiver.  Unless 
otherwise provided in the waiver, a waiver of preemptive rights 
is effective only for the proposed contribution or contribution 
allowance agreement described in the waiver.  
    Subd. 7.  [NOTICE.] When proposing to accept new 
contributions, or to make contribution allowance agreements, 
with respect to which members have preemptive rights under this 
section, the board of governors shall cause notice to be given 
to each member entitled to preemptive rights.  The notice must 
be given at least ten days before the date by which the member 
must exercise a preemptive right and must contain:  
    (1) the extent of the member's preemptive right, being:  
    (i) in the case of a preemptive right to make a 
contribution, the amount of the contribution to be made, and 
    (ii) in the case of a preemptive right to make a 
contribution allowance agreement, the amount of the contribution 
to be allowed under that contribution allowance agreement; 
    (2) the method used to determine the extent of the member's 
preemptive right; 
    (3) the terms and conditions upon which the member may make 
a contribution or make a contribution allowance agreement; and 
    (4) the time within which and the method by which the 
member must exercise the right. 
    Subd. 8.  [CONTRIBUTION AND PARTICIPATION BY OTHERS.] If a 
member does not exercise preemptive rights to make a 
contribution or to make a contribution allowance agreement, then 
for a period not exceeding one year after the date fixed by the 
board of governors for the exercise of those preemptive rights 
and to the extent of the preemptive rights not exercised, the 
board of governors may accept contributions or make contribution 
allowance agreements on terms no less favorable to the limited 
liability company than those offered to the member.  
    Subd. 9.  [MODIFICATION.] No amendment to the articles of 
organization that has the effect of denying, limiting, or 
modifying the preemptive rights provided in this section shall 
be adopted if the votes of a proportion of the voting power 
sufficient to elect a governor at an election of the entire 
board of governors under cumulative voting are cast against the 
amendment.  
    Sec. 35.  [322B.333] [REGULAR MEETINGS OF MEMBERS.] 
    Subdivision 1.  [FREQUENCY.] Regular meetings of members 
may be held on an annual or other less frequent periodic basis, 
but need not be held unless required by the articles of 
organization or operating agreement or by subdivision 2.  
    Subd. 2.  [DEMAND BY MEMBER.] If a regular meeting of 
members has not been held during the immediately preceding 15 
months, a member or members owning three percent or more of the 
voting power of all members entitled to vote may demand a 
regular meeting of members by written notice of demand given to 
the chief manager or the treasurer of the limited liability 
company.  Within 30 days after receipt of the demand by one of 
those managers, the board of governors shall cause a regular 
meeting of members to be called and held on notice no later than 
90 days after receipt of the demand, all at the expense of the 
limited liability company.  If the board of governors fails to 
cause a regular meeting to be called and held as required by 
this subdivision, the member or members making the demand may 
call the regular meeting by giving notice as required by section 
322B.34, all at the expense of the limited liability company.  
    Subd. 3.  [TIME AND PLACE.] A regular meeting, if any, must 
be held on the day or date and at the time and place fixed by, 
or in a manner authorized by, the articles or operating 
agreement, except that a meeting called by or at the demand of a 
member pursuant to subdivision 2 must be held in the county 
where the principal executive office of the limited liability 
company is located.  
    Subd. 4.  [ELECTIONS REQUIRED AND OTHER BUSINESS.] At each 
regular meeting of members there must be an election of 
qualified successors for governors who serve for an indefinite 
term or whose terms have expired or are due to expire within six 
months after the date of the meeting.  No other particular 
business is required to be transacted at a regular meeting.  Any 
business appropriate for action by the members may be transacted 
at a regular meeting.  
    Sec. 36.  [322B.336] [SPECIAL MEETINGS OF MEMBERS.] 
    Subdivision 1.  [WHO MAY CALL.] Special meetings of the 
members may be called for any purpose or purposes at any time, 
by:  
    (1) the chief manager; 
    (2) the treasurer; 
    (3) two or more governors; 
    (4) a person authorized in the articles or operating 
agreement to call special meetings; or 
    (5) a member or members owning ten percent or more of the 
voting power of all membership interests entitled to vote.  
    Subd. 2.  [DEMAND BY MEMBERS.] A member or members owning 
the voting power specified in subdivision 1, clause (5), may 
demand a special meeting of members by written notice of demand 
given to the chief manager or treasurer of the limited liability 
company and containing the purposes of the meeting.  Within 30 
days after receipt of the demand by one of those managers, the 
board of governors shall cause a special meeting of members to 
be called and held on notice no later than 90 days after receipt 
of the demand, all at the expense of the limited liability 
company.  If the board of governors fails to cause a special 
meeting to be called and held as required by this subdivision, 
the member or members making the demand may call the meeting by 
giving notice as required by section 322B.34, all at the expense 
of the limited liability company.  
    Subd. 3.  [TIME AND PLACE.] Special meetings must be held 
on the date and at the time and place fixed by the chief 
manager, the treasurer, the board of governors, or a person 
authorized by the articles or operating agreement to call a 
meeting, except that a special meeting called by or at the 
demand of a member or members pursuant to subdivision 2 must be 
held in the county where the principal executive office is 
located.  
    Subd. 4.  [BUSINESS LIMITED.] The business transacted at a 
special meeting is limited to the purposes stated in the notice 
of the meeting.  Any business transacted at a special meeting 
that is not included in those stated purposes is voidable by or 
on behalf of the limited liability company, unless all of the 
members have waived notice of the meeting in accordance with 
section 322B.34, subdivision 4. 
    Sec. 37.  [322B.34] [NOTICE.] 
    Subdivision 1.  [TO WHOM GIVEN.] Except as otherwise 
provided in this chapter, notice of all meetings of members must 
be given to every owner of membership interests entitled to 
vote, unless:  
    (1) the meeting is an adjourned meeting and the date, time, 
and place of the meeting were announced at the time of 
adjournment; or 
    (2) the following have been mailed by first class mail to a 
member at the address in the limited liability company records 
and returned undeliverable:  
    (i) two consecutive annual meeting notices and notice of 
any special meetings held during the period between the two 
annual meetings; and 
    (ii) all payment of distributions, provided there are at 
least two sent during a 12-month period.  
    An action or meeting that is taken or held without notice 
under clause (2) has the same force and effect as if notice was 
given.  If the member delivers a written notice of the member's 
current address to the limited liability company, the notice 
requirement is reinstated.  
    Subd. 2.  [WHEN GIVEN.] In all instances where a specific 
minimum notice period has not otherwise been fixed by law, the 
notice must be given at least ten days before the date of the 
meeting, or a shorter time provided in the articles of 
organization or operating agreement, and not more than 60 days 
before the date of the meeting.  
    Subd. 3.  [CONTENTS.] The notice must contain the date, 
time, and place of the meeting, and any other information 
required by this chapter.  In the case of a special meeting, the 
notice must contain a statement of the purposes of the meeting.  
The notice may also contain any other information required by 
the articles of organization or operating agreement or 
considered necessary or desirable by the board of governors or 
by any other person or persons calling the meeting.  
    Subd. 4.  [WAIVER AND OBJECTIONS.] A member may waive 
notice of a meeting of members.  A waiver of notice by a member 
entitled to notice is effective whether given before, at, or 
after the meeting, and whether given in writing, orally, or by 
attendance.  Attendance by a member at a meeting is a waiver of 
notice of that meeting, except where the member objects at the 
beginning of the meeting to the transaction of business because 
the meeting is not lawfully called or convened, or objects 
before a vote on an item of business because the item may not 
lawfully be considered at that meeting and does not participate 
in the consideration of the item at that meeting.  
    Sec. 38.  [322B.343] [ELECTRONIC COMMUNICATIONS.] 
    Subdivision 1.  [ELECTRONIC CONFERENCES.] If and to the 
extent authorized in the operating agreement or by the board of 
governors of a closely held limited liability company, a 
conference among members by any means of communication through 
which the members may simultaneously hear each other during the 
conference constitutes a regular or special meeting of members, 
if the same notice is given of the conference to every owner of 
membership interests entitled to vote as would be required by 
this chapter for a meeting, and if the membership interests held 
by the members participating in the conference would be 
sufficient to constitute a quorum at a meeting.  Participation 
in a conference by that means constitutes presence at the 
meeting in person or by proxy if all the other requirements of 
section 322B.363 are met. 
    Subd. 2.  [PARTICIPATION BY ELECTRONIC MEANS.] If and to 
the extent authorized in the operating agreement or by the board 
of governors of a closely held limited liability company, a 
member may participate in a regular or special meeting of 
members not described in subdivision 1 by any means of 
communication through which the member, other members so 
participating, and all members physically present at the meeting 
may simultaneously hear each other during the meeting.  
Participation in a meeting by that means constitutes presence at 
the meeting in person or by proxy if all the other requirements 
of section 322B.363 are met.  
    Subd. 3.  [WAIVER.] Waiver of notice of a meeting by means 
of communication described in subdivisions 1 and 2 may be given 
in the manner provided in section 322B.34, subdivision 4.  
Participation in a meeting by means of communication described 
in subdivisions 1 and 2 is a waiver of notice of that meeting, 
except where the member objects at the beginning of the meeting 
to the transaction of business because the meeting is not 
lawfully called or convened, or objects before a vote on an item 
of business because the item may not lawfully be considered at 
the meeting and does not participate in the consideration of the 
item at that meeting. 
    Sec. 39.  [322B.346] [ACT OF MEMBERS.] 
    Subdivision 1.  [MAJORITY REQUIRED.] The members shall take 
action by the affirmative vote of the owners of the greater of: 
(1) a majority of the voting power of the membership interests 
present and entitled to vote on that item of business; or (2) a 
majority of the voting power that would constitute a quorum for 
the transaction of business at the meeting, except where this 
chapter or the articles of organization require a larger 
proportion.  If the articles require a larger proportion than is 
required by this chapter for a particular action, the articles 
control.  
    Subd. 2.  [VOTING BY CLASS.] In any case where a class or 
series of membership interests is entitled by this chapter, the 
articles of organization, the operating agreement, or the terms 
of the membership interests to vote as a class or series, the 
matter being voted upon must also receive the affirmative vote 
of the owners of the same proportion of the membership interests 
present of that class or series, or of the total outstanding 
membership interests of that class or series, as the proportion 
required pursuant to subdivision 1, unless the articles require 
a larger proportion.  Unless otherwise stated in the articles or 
operating agreement in the case of voting as a class, the 
minimum percentage of the total voting power of membership 
interests of the class or series that must be present is equal 
to the minimum percentage of all membership interests entitled 
to vote required to be present under section 322B.353.  
    Sec. 40.  [322B.35] [ACTION WITHOUT A MEETING.] 
    Subdivision 1.  [METHOD.] An action required or permitted 
to be taken at a meeting of the members may be taken by written 
action signed by all of the members.  If the articles so 
provide, any action may be taken by written action signed by the 
members who own voting power equal to the voting power that 
would be required to take the same action at a meeting of the 
members at which all members were present.  
    Subd. 2.  [EFFECTIVE TIME.] The written action is effective 
when signed by the required members, unless a different 
effective time is provided in the written action.  
    Subd. 3.  [NOTICE AND LIABILITY.] When written action is 
permitted to be taken by less than all members, all members must 
be notified immediately of its text and effective date.  Failure 
to provide the notice does not invalidate the written action.  A 
member who does not sign or consent to the written action has no 
liability for the action or actions taken by the written action. 
    Sec. 41.  [322B.353] [QUORUM.] 
    The owners of a majority of the voting power of the 
membership interests entitled to vote at a meeting are a quorum 
for the transaction of business, unless a larger or smaller 
proportion is provided in the articles or operating agreement.  
If a quorum is present when a duly called or held meeting is 
convened, the members present may continue to transact business 
until adjournment, even though the withdrawal of members 
originally present leaves less than the proportion otherwise 
required for a quorum.  
    Sec. 42.  [322B.356] [VOTING RIGHTS.] 
    Subdivision 1.  [DETERMINATION.] The board of governors may 
fix a date not more than 60 days, or a shorter time period 
provided in the articles of organization or operating agreement, 
before the date of a meeting of members as the date for the 
determination of the owners of membership interests entitled to 
notice of and entitled to vote at the meeting.  When a date is 
so fixed, only members on that date are entitled to notice of 
and permitted to vote at that meeting of members. 
    Subd. 2.  [VOTING POWER.] Unless otherwise provided in the 
articles or by the board of governors under section 322B.40, 
subdivisions 5 and 6, members have voting power in proportion to 
the value of the contributions of the members as reflected in 
the required records.  
    Subd. 3.  [NONMEMBERS.] The articles of organization may 
give or prescribe the manner of giving a creditor, security 
holder, or other person a right to vote under this section, but 
no prescription under this subdivision may have the effect of 
transferring from an assignor of financial rights to the 
assignee the assignor's voting rights. 
    Subd. 4.  [JOINTLY OWNED MEMBERSHIP INTERESTS.] Membership 
interests owned by two or more members may be voted by any one 
of them unless the limited liability company receives written 
notice from any one of them denying the authority of that person 
to vote those membership interests.  
    Subd. 5.  [MANNER OF VOTING AND PRESUMPTION.] Except as 
provided in subdivision 4, an owner of a membership interest 
entitled to vote may vote any portion of the membership interest 
in any way the member chooses.  If a member votes without 
designating the proportion voted in a particular way, the member 
is considered to have voted all of the membership interest in 
that way.  
    Sec. 43.  [322B.36] [VOTING BY ORGANIZATIONS AND LEGAL 
REPRESENTATIVES.] 
    Subdivision 1.  [MEMBERSHIP INTERESTS HELD BY ANOTHER 
ORGANIZATION.] Membership interests of a limited liability 
company reflected in the required records as being owned by 
another domestic or foreign organization may be voted by the 
chief manager, chief executive officer, or another legal 
representative of that organization.  
    Subd. 2.  [MEMBERSHIP INTERESTS HELD BY SUBSIDIARY.] Except 
as provided in subdivision 3, membership interests of a limited 
liability company reflected in the required records as being 
owned by a subsidiary are not entitled to vote on any matter. 
    Subd. 3.  [MEMBERSHIP INTERESTS CONTROLLED IN A FIDUCIARY 
CAPACITY.] Membership interests of a limited liability company 
in the name of, or under the control of, the limited liability 
company or a subsidiary in a fiduciary capacity are not entitled 
to vote on any matter, except to the extent that the settlor or 
beneficiary possesses and exercises a right to vote or gives the 
limited liability company binding instructions on how to vote 
the membership interests.  
    Subd. 4.  [VOTING BY CERTAIN REPRESENTATIVES.] Subject to 
section 322B.323, membership interests under the control of a 
person in a capacity as a personal representative, an 
administrator, executor, guardian, conservator, or the like may 
be voted by the person, either in person or by proxy, without 
reflecting in the required records those membership interests in 
the name of the person.  
    Subd. 5.  [VOTING BY TRUSTEE IN BANKRUPTCY OR RECEIVER.] 
Membership interests reflected in the required records in the 
name of a trustee in bankruptcy or a receiver may be voted by 
the trustee or receiver either in person or by proxy.  
Membership interests under the control of a trustee in 
bankruptcy or a receiver may be voted by the trustee or receiver 
without reflecting in the required records the name of the 
trustee or receiver, if authority to do so is contained in an 
appropriate order of the court by which the trustee or receiver 
was appointed.  The right to vote of trustees in bankruptcy and 
receivers is subject to section 322B.323.  
    Subd. 6.  [MEMBERSHIP INTERESTS HELD BY OTHER 
ORGANIZATIONS.] Membership interests reflected in the required 
records in the name of an organization not described in 
subdivisions 1 to 5 may be voted either in person or by proxy by 
the legal representative of that organization.  
    Subd. 7.  [GRANT OF SECURITY INTEREST.] The grant of a 
security interest in a membership interest does not entitle the 
holders of the security interest to vote except as provided in 
section 322B.313.  
    Sec. 44.  [322B.363] [PROXIES.] 
    Subdivision 1.  [AUTHORIZATION.] A member may cast or 
authorize the casting of a vote by filing a written appointment 
of a proxy with a manager of the limited liability company at or 
before the meeting at which the appointment is to be effective.  
A written appointment of a proxy may be signed by the member or 
authorized by the member by transmission of a telegram, 
cablegram, or other means of electronic transmission.  The 
telegram, cablegram, or other means of electronic transmission 
must set forth or be submitted with information from which it 
can be determined that the telegram, cablegram, or other 
electronic transmission was authorized by the member.  Any 
reproduction of the writing or transmission may be substituted 
or used in lieu of the original writing or transmission for any 
purpose for which the original transmission could be used, if 
the copy, facsimile telecommunication, or other reproduction is 
a complete and legible reproduction of the entire original 
writing or transmission.  An appointment of a proxy for 
membership interests owned jointly by two or more members is 
valid if signed or otherwise authorized by any one of them, 
unless the limited liability company receives from any one of 
those members written notice either denying the authority of 
that person to appoint a proxy or appointing a different proxy. 
    Subd. 2.  [DURATION.] The appointment of a proxy is valid 
for 11 months, unless a longer period is expressly provided in 
the appointment.  No appointment is irrevocable and any 
agreement purporting to grant an irrevocable proxy is void.  A 
member who revokes a proxy is not liable in any way for damages, 
restitution, or other claim.  
    Subd. 3.  [TERMINATION.] An appointment may be terminated 
at will.  Termination may be made by filing written notice of 
the termination of the appointment with a manager of the limited 
liability company, or by filing a new written appointment of a 
proxy with a manager of the limited liability company.  
Termination in either manner revokes all prior proxy 
appointments and is effective when filed with a manager of the 
limited liability company.  
    Subd. 4.  [REVOCATION BY DEATH OR INCAPACITY.] The death or 
incapacity of a person appointing a proxy does not revoke the 
authority of the proxy, unless written notice of the death or 
incapacity is received by a manager of the limited liability 
company before the proxy exercises the authority under that 
appointment. 
    Subd. 5.  [MULTIPLE PROXIES.] Unless the appointment 
specifically provides otherwise, if two or more persons are 
appointed as proxies for a member:  
    (1) any one of them may vote the membership interests on 
each item of business in accordance with specific instructions 
contained in the appointment; and 
    (2) if no specific instructions are contained in the 
appointment with respect to voting the membership interests on a 
particular item of business, the membership interests must be 
voted as a majority of the proxies determine.  If the proxies 
are equally divided, the membership interests must not be voted. 
    Subd. 6.  [VOTE OF PROXY ACCEPTED AND LIABILITY.] Unless 
the appointment of a proxy contains a restriction, limitation, 
or specific reservation of authority, the limited liability 
company may accept a vote or action taken by a person named in 
the appointment.  The vote of a proxy is final, binding, and not 
subject to challenge, but the proxy is liable to the member for 
damages resulting from a failure to exercise the proxy or from 
an exercise of the proxy in violation of the authority granted 
in the appointment.  
    Subd. 7.  [LIMITED AUTHORITY.] If a proxy is given 
authority by a member to vote on less than all items of business 
considered at a meeting of members, the member is considered to 
be present and entitled to vote by the proxy for purposes of 
section 322B.346, subdivision 1, only with respect to those 
items of business for which the proxy has authority to vote.  A 
proxy who is given authority by a member who abstains with 
respect to an item of business is considered to have authority 
to vote on the item of business for purposes of this subdivision.
    Subd. 8.  [LIMITATIONS ON PROXIES.] A member may not grant 
any proxy to any person who is an assignee of any member's 
financial rights and who is not also a member.  
    Sec. 45.  [322B.366] [MEMBER VOTING AGREEMENTS.] 
    Subdivision 1.  [GENERAL RULE.] Except as provided in 
subdivision 2, a written agreement among persons who are then 
members or who have signed contribution agreements, relating to 
the voting of their membership interests, is valid and 
specifically enforceable by and against the parties to the 
agreement.  The agreement may override the provisions of section 
322B.363, subdivisions 1 to 7, regarding proxies.  
    Subd. 2.  [LIMITATION ON VOTING AGREEMENTS.] Any assignee 
of any member's financial rights may not be a party to an 
agreement under subdivision 1, unless that assignee is also a 
member.  A voting agreement may not relate to the consents 
referred to in sections 322B.80, subdivision 1, clause (5); 
322B.313, subdivision 2; 322B.42, subdivision 5; or 322B.43, 
subdivision 3. 
    Sec. 46.  [322B.37] [MEMBER CONTROL AGREEMENTS.] 
    Subdivision 1.  [AUTHORIZATION AND SCOPE.] A written 
agreement among persons who are then members or who have signed 
contribution agreements, relating to the control of any phase of 
the business and affairs of the limited liability company, its 
liquidation, dissolution and termination, or the relations among 
members or persons who have signed contribution agreements is 
valid as provided in subdivision 2.  Wherever this chapter 
provides that a particular result may or must be obtained 
through a provision in the articles of organization (other than 
a provision required by section 322B.115, subdivision 1, to be 
contained in the articles) or in the operating agreement, the 
same result can be accomplished through a member control 
agreement valid under this section or through a procedure 
established by a member control agreement valid under this 
section.  A member control agreement may waive, in whole or in 
part, a member's dissenting rights under sections 322B.383 and 
322B.386, but may not waive dissenters' rights under section 
322B.873, subdivision 2, clause (1).  A member control agreement 
may not include an agreement to give transfer consent.  A member 
control agreement may include a business continuation agreement 
only if the articles of organization grant the members the power 
to enter into business continuation agreements.  
    Subd. 2.  [METHOD OF APPROVAL.] A written agreement among 
persons described in subdivision 1 that relates to the control 
of or the liquidation, dissolution and termination of the 
limited liability company, the relations among them, or any 
phase of the business and affairs of the limited liability 
company, including, without limitation, the management of its 
business, the declaration and payment of distributions, the 
sharing of profits and losses, the election of governors or 
managers, the employment of members by the limited liability 
company, or the arbitration of disputes, is valid, if the 
agreement is signed by all persons who are then the members of 
the limited liability company, whether or not the members all 
have voting power, and all those who have signed contribution 
agreements, regardless of whether those signatories will, when 
members, have voting power.  An agreement authorized under this 
section may allocate to the members authority ordinarily 
exercised by the board of governors, allocate to the board of 
governors authority ordinarily exercised by the members, or 
structure the governance of the limited liability company in any 
agreed fashion.  
    Subd. 3.  [ENFORCEABILITY AND COPIES.] (a) An agreement 
valid under subdivisions 1 and 2 is enforceable by persons who 
are parties to it and is binding upon and enforceable against 
only those persons and other persons having knowledge of the 
existence of the agreement.  A copy of the agreement must be 
filed with the limited liability company.  The limited liability 
company shall note in its required records that the members' 
interests are governed by a member control agreement entered 
into under this section.  
    (b) A member control agreement valid under subdivisions 1 
and 2 is specifically enforceable, except that an agreement to 
give dissolution avoidance consent is not specifically 
enforceable. 
    (c) A member control agreement may waive dissenters' 
rights, subject to section 322B.873, subdivision 3.  
    (d) A member or any assignee of financial rights has the 
right upon written demand to obtain a copy of any member control 
agreement from the limited liability company at the company's 
expense.  
    Subd. 4.  [LIABILITY.] If an agreement authorized under 
this section takes away from any person any of the authority and 
responsibility which that person would otherwise possess under 
this chapter, the effect of the agreement is also to relieve 
that person of liability imposed by law for acts and omissions 
in the possession or exercise of that authority and 
responsibility and to impose that liability on the person or 
persons possessing the authority and responsibility under the 
agreement. 
    Subd. 5.  [OTHER AGREEMENTS.] This section does not apply 
to, limit, or restrict agreements otherwise valid, nor is the 
procedure set forth in this section the exclusive method of 
agreement among members or between the members and the limited 
liability company with respect to any of the matters described.  
    Sec. 47.  [322B.373] [REQUIRED RECORDS AND INFORMATION.] 
    Subdivision 1.  [REQUIRED RECORDS.] A limited liability 
company shall keep at its principal executive office, or at 
another place or places within the United States determined by 
the board of governors:  
    (1) a current list of the full name and last-known 
business, residence, or mailing address of each member, 
governor, and chief manager; 
    (2) a current list of the full name and last-known 
business, residence, or mailing address of each assignee of 
financial rights and a description of the rights assigned; 
    (3) a copy of the articles of organization and all 
amendments to the articles; 
    (4) copies of any currently effective written operating 
agreement; 
    (5) copies of the limited liability company's federal, 
state, and local income tax returns and reports, if any, for the 
three most recent years; 
    (6) financial statements required by section 322B.376; 
    (7) records of all proceedings of members for the last 
three years; 
    (8) records of all proceedings of the board of governors 
for the last three years; 
    (9) reports made to members generally within the last three 
years; 
    (10) member control agreements described in section 
322B.37; 
    (11) a statement of all contributions accepted under 
section 322B.40, subdivision 3, including for each contribution: 
    (i) the identity of the member to whom the contribution 
relates; 
    (ii) the class or series to which the contribution 
pertains; 
    (iii) the amount of cash accepted by the limited liability 
company or promised to be paid to the limited liability company; 
    (iv) a description of any services rendered to or for the 
benefit of the limited liability company or promised to be 
rendered to or for the benefit of the limited liability company; 
and 
    (v) the value accorded under section 322B.40, subdivision 4 
to:  
    (A) any other property transferred or promised to be 
transferred to the limited liability company; and 
    (B) any services rendered to or for the benefit of the 
limited liability company or promised to be rendered to or for 
the benefit of the limited liability company; 
    (12) a statement of all contribution agreements made under 
section 322B.42, including for each contribution agreement:  
    (i) the identity of the would-be contributor; 
    (ii) the class or series to which the future contribution 
pertains; and 
    (iii) as to each future contribution to be made, the same 
information as subdivision 1, clause (11) requires for 
contributions already accepted; 
    (13) a statement of all contribution allowance agreements 
made under section 322B.43, including for each contribution 
allowance agreement:  
    (i) the identity of the would-be contributor; 
    (ii) the class or series to which the future contribution 
would pertain; and 
    (iii) as to each future contribution allowed to be made, 
the same information as subdivision 1, clause (11) requires for 
contributions already accepted; 
    (14) an explanation of any restatement of value made under 
section 322B.41; 
    (15) any written consents obtained from members under this 
chapter; 
    (16) a copy of agreements, contracts, or other arrangements 
or portions of them incorporated by reference under section 
322B.40, subdivision 6.  
    Subd. 2.  [RIGHT TO INSPECT.] (a) A member of a limited 
liability company has an absolute right, upon written demand, to 
examine and copy, in person or by a legal representative, at any 
reasonable time all documents referred to in subdivision 1. 
    (b) A member of a limited liability company has a right, 
upon written demand, to examine and copy, in person or by a 
legal representative, other limited liability company records at 
any reasonable time only if the member demonstrates a proper 
purpose for the examination.  
    (c) For purposes of this section, a "proper purpose" is one 
reasonably related to the person's interest as a member of the 
limited liability company.  
    Subd. 3.  [PROTECTIVE ORDERS.] On application of the 
limited liability company, a court in this state may issue a 
protective order permitting the limited liability company to 
withhold portions of the records of proceedings of the board of 
governors for a reasonable period of time, not to exceed 12 
months, in order to prevent premature disclosure of confidential 
information that would be likely to cause competitive injury to 
the limited liability company.  A protective order may be 
renewed for successive reasonable periods of time, each not to 
exceed 12 months and in total not to exceed 36 months, for good 
cause shown.  In the event a protective order is issued, the 
statute of limitations for any action that the member might 
bring as a result of information withheld automatically extends 
for the period of delay.  If the court does not issue a 
protective order with respect to any portion of the records of 
proceedings as requested by the limited liability company, it 
shall award reasonable expenses, including attorney's fees and 
disbursements, to the member.  This subdivision does not limit 
the right of a court to grant other protective orders or impose 
other reasonable restrictions on the nature of the limited 
liability company records that may be copied or examined under 
subdivision 2 or the use or distribution of the records by the 
demanding member.  
    Subd. 4.  [OTHER USE PROHIBITED.] A member who has gained 
access under this section to any limited liability company 
record may not use or furnish to another for use the limited 
liability company record or a portion of the contents for any 
purpose other than a proper purpose.  Upon application of the 
limited liability company, a court may issue a protective order 
or order other relief as may be necessary to enforce the 
provisions of this subdivision.  
    Subd. 5.  [COST OF COPIES.] Copies of the information 
referred to in subdivision 1 must be furnished at the expense of 
the limited liability company.  In all other cases, the limited 
liability company may charge the requesting party a reasonable 
fee to cover the expenses of providing the copy.  
    Subd. 6.  [COMPUTERIZED RECORDS.] The records maintained by 
a limited liability company may utilize any information storage 
technique, including, for example, punched holes, printed or 
magnetized spots, or micro-images, even though that makes them 
illegible visually, if the records can be converted accurately 
and within a reasonable time, into a form that is legible 
visually and whose contents are assembled by related subject 
matter to permit convenient use by people in the normal course 
of business.  A limited liability company shall convert any of 
the records referred to in subdivision 2 upon the request of a 
person entitled to inspect them, and the expense of the 
conversion shall be borne by the person who bears the expense of 
copying pursuant to subdivision 5.  A copy of the conversion is 
admissible in evidence, and is acceptable for all other 
purposes, to the same extent as the existing or original records 
would be if they were legible visually. 
    Sec. 48.  [322B.376] [FINANCIAL STATEMENTS.] 
    A limited liability company shall, upon written request by 
a member, furnish annual financial statements, including at 
least a balance sheet as of the end of each fiscal year and a 
statement of income for the fiscal year, prepared on the basis 
of accounting methods reasonable in the circumstances.  The 
financial statements may be consolidated statements of the 
limited liability company and one or more of its subsidiaries.  
In the case of statements audited by a public accountant, each 
copy must be accompanied by a report setting forth the opinion 
of the accountant on the statements; in other cases, each copy 
must be accompanied by a statement of the treasurer or other 
person in charge of the limited liability company's financial 
records stating the reasonable belief of the person that the 
financial statements were prepared in accordance with accounting 
methods reasonable in the circumstances, describing the basis of 
presentation, and describing any respects in which the financial 
statements were not prepared on a basis consistent with those 
prepared for the previous year.  
    Sec. 49.  [322B.38] [EQUITABLE REMEDIES.] 
    If a limited liability company or a manager or governor of 
the limited liability company violates a provision of this 
chapter, a court in this state may, in an action brought by a 
member of the limited liability company, grant any equitable 
relief it considers just and reasonable in the circumstances and 
award expenses, including attorneys' fees and disbursements, to 
the member.  
    Sec. 50.  [322B.383] [RIGHTS OF DISSENTING MEMBERS.] 
    Subdivision 1.  [ACTIONS CREATING DISSENTERS' RIGHTS.] 
Subject to a member control agreement under section 322B.37, a 
member of a limited liability company may dissent from, and 
obtain payment for the fair value of the member's membership 
interests in the event of, any of the following limited 
liability company actions:  
    (1) an amendment of the articles of organization that 
materially and adversely affects the rights or preferences of 
the membership interests of the dissenting member in that it:  
    (i) alters or abolishes a preferential right of the 
membership interests; 
    (ii) creates, alters, or abolishes a right in respect of 
the redemption of the membership interests, including a 
provision respecting a sinking fund for the redemption or 
repurchase of the membership interests; 
    (iii) alters or abolishes a preemptive right of the owner 
of the membership interests to make a contribution; 
    (iv) excludes or limits the right of a member to vote on a 
matter, or to cumulate votes, except as the right may be 
excluded or limited through the acceptance of contributions or 
the making of contribution agreements pertaining to membership 
interests with similar or different voting rights; 
    (v) changes a member's right to resign or retire; 
    (vi) establishes or changes the conditions for or 
consequences of expulsion; 
    (vii) changes the statement required under section 
322B.115, subdivision 1, clause (5); 
    (viii) changes the statement required under section 
322B.115, subdivision 1, clause (6); or 
    (2) a sale, lease, transfer, or other disposition of all or 
substantially all of the property and assets of the limited 
liability company not made in the usual or regular course of its 
business, but not including a disposition in dissolution 
described in section 322B.813, subdivision 4, or a disposition 
pursuant to an order of a court, or a disposition for cash on 
terms requiring that all or substantially all of the net 
proceeds of disposition be distributed to the members in 
accordance with their respective membership interests within one 
year after the date of disposition; 
    (3) a plan of merger to which the limited liability company 
is a party, except as provided in section 322B.873, subdivision 
2, clause (1)(i) and subject to section 322B.873, subdivision 3; 
    (4) a plan of exchange to which the limited liability 
company is a party as the organization whose ownership interests 
will be acquired by the acquiring organization, if the 
membership interests being acquired are entitled to be voted on 
the plan; 
    (5) any other limited liability company action taken 
pursuant to a member vote with respect to which the articles of 
organization, the operating agreement, or a resolution approved 
by the board of governors directs that dissenting members may 
obtain payment for their membership interests; or 
    (6) a resolution of the board of governors under section 
322B.873, subdivision 2, to implement a business continuation 
agreement.  
    Subd. 2.  [OTHER RIGHTS.] The members of a limited 
liability company who have a right under this section to obtain 
payment for their membership interests do not have a right at 
law or in equity to have a limited liability company action 
described in subdivision 1 set aside or rescinded, except when 
the limited liability company action is fraudulent with regard 
to the complaining member or the limited liability company. 
    Sec. 51.  [322B.386] [PROCEDURES FOR ASSERTING DISSENTERS' 
RIGHTS.] 
    Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
section, the terms defined in this subdivision have the meanings 
given them.  
    (b) "Limited liability company" means a limited liability 
company whose members have obtained rights to dissent under 
section 322B.383, subdivision 1, and includes any successor by 
merger.  
    (c) "Fair value of the membership interests" means the 
value of the membership interests of a limited liability company 
immediately before the effective date of the limited liability 
company action referred to in section 322B.383, subdivision 1. 
    (d) "Interest" means interest beginning five days after the 
effective date of the limited liability company action referred 
to in section 322B.383, subdivision 1, up to and including the 
date of payment, calculated at the rate provided in section 
549.09 for interest on verdicts and judgments.  
    (e) "Member" includes a former member when dissenters' 
rights exist because:  
    (1) the membership of that former member has terminated 
causing dissolution; and 
    (2) the dissolved limited liability company has then either 
entered into a winding up merger under section 322B.81, 
subdivision 3, or has disposed of its assets pursuant to a 
business continuation agreement under section 322B.873, 
subdivision 2.  
    Subd. 2.  [NOTICE OF ACTION.] If a limited liability 
company calls a member meeting at which any action described in 
section 322B.383, subdivision 1, is to be voted upon, the notice 
of the meeting must inform each member of the right to dissent 
and must include a copy of section 322B.383 and this section, 
and if applicable, sections 322B.873, subdivisions 2 and 3, and 
a brief description of the procedure to be followed under these 
sections.  For members who have assigned some or all of their 
financial rights, the description must also include the 
procedures under subdivision 9.  
    Subd. 3.  [NOTICE OF DISSENT.] If the proposed action must 
be approved by the members, a member who wishes to exercise 
dissenters' rights must file with the limited liability company 
before the vote on the proposed action a written notice of 
intent to demand the fair value of the membership interests 
owned by the member and must not vote the membership interests 
in favor of the proposed action. 
    Subd. 4.  [NOTICE OF PROCEDURE.] (a) After the proposed 
action has been approved by the board of governors and, if 
necessary, the members, the limited liability company shall send 
to all members who have complied with subdivision 3 and to all 
members entitled to dissent if no member vote was required, a 
notice that contains: 
    (1) the address to which a demand for payment must be sent 
in order to obtain payment and the date by which the demand must 
be received; 
    (2) a form to be used to certify the date on which the 
member acquired the membership interests and to demand payment; 
and 
    (3) a copy of section 322B.383, this section and, if 
applicable, section 322B.873, subdivisions 2 and 3, and a brief 
description of the procedures to be followed under these 
sections.  
    (b) In order to receive the fair value of the membership 
interests, a dissenting member must demand payment within 30 
days after the notice was given, but the dissenter retains all 
other rights of a member until the proposed action takes effect. 
    Subd. 5.  [PAYMENT.] (a) After the limited liability 
company action takes effect, or after the limited liability 
company receives a valid demand for payment, whichever is later, 
the limited liability company shall remit to each dissenting 
member who has complied with subdivisions 3 and 4 the amount the 
limited liability company estimates to be the fair value of the 
membership interests, plus interest, accompanied by:  
    (1) the limited liability company's closing balance sheet 
and statement of income for a fiscal year ending not more than 
16 months before the effective date of the limited liability 
company action, together with the latest available interim 
financial statements; 
    (2) an estimate by the limited liability company of the 
fair value of the membership interests and a brief description 
of the method used to reach the estimate; and 
    (3) a copy of section 322B.383, this section, and, if 
applicable, section 322B.873, subdivisions 2 and 3, and a brief 
description of the procedure to be followed in demanding 
supplemental payment.  
    (b) The limited liability company may withhold the 
remittance described in paragraph (a) from a person who was not 
a member on the date the action dissented from was first 
announced to the public.  If the dissenter has complied with 
subdivisions 3 and 4, the limited liability company shall 
forward to the dissenter the materials described in paragraph 
(a), a statement of the reason for withholding the remittance, 
and an offer to pay to the dissenter the amount listed in the 
materials if the dissenter agrees to accept that amount in full 
satisfaction.  The dissenter may decline the offer and demand 
payment under subdivision 6.  Failure to do so entitles the 
dissenter only to the amount offered.  If the dissenter makes 
demand, subdivisions 7 and 8 apply.  
    Subd. 6.  [SUPPLEMENTAL PAYMENT.] If a dissenter believes 
that the amount remitted under subdivision 5 is less than the 
fair value of the membership interests plus interest, the 
dissenter may give written notice to the limited liability 
company of the dissenter's own estimate of the fair value of the 
membership interests, plus interest, within 30 days after the 
limited liability company mails the remittance under subdivision 
5, and demand payment of the difference.  Otherwise, a dissenter 
is entitled only to the amount remitted by the limited liability 
company. 
    Subd. 7.  [PETITION AND DETERMINATION.] If the limited 
liability company receives a demand under subdivision 6, it 
shall, within 60 days after receiving the demand, either pay to 
the dissenter the amount demanded or agreed to by the dissenter 
after discussion with the limited liability company or file in 
court a petition requesting that the court determine the fair 
value of the membership interests, plus interest.  The petition 
must be filed in the county in which the registered office of 
the limited liability company is located, except that a 
surviving foreign corporation that receives a demand relating to 
the membership interests of a constituent limited liability 
company shall file the petition in the county in this state in 
which the last registered office of the constituent limited 
liability company was located.  The petition must name as 
parties all dissenters who have demanded payment under 
subdivision 6 and who have not reached agreement with the 
limited liability company.  The jurisdiction of the court is 
plenary and exclusive.  The court may appoint appraisers, with 
powers and authorities the court considers proper, to receive 
evidence on and recommend the amount of the fair value of the 
membership interests.  The court shall determine whether the 
member or members in question have fully complied with the 
requirements of this section, and shall determine the fair value 
of the membership interests, taking into account any and all 
factors the court finds relevant, computed by any method or 
combination of methods that the court, in its discretion, sees 
fit to use, whether or not used by the limited liability company 
or by a dissenter.  The fair value of the membership interests 
as determined by the court is binding on all members, wherever 
located.  A dissenter is entitled to judgment for the amount by 
which the fair value of the membership interests as determined 
by the court, plus interest, exceeds the amount, if any, 
remitted under subdivision 5, but is not liable to the limited 
liability company for the amount, if any, by which the amount, 
if any, remitted to the dissenter under subdivision 5 exceeds 
the fair value of the membership interests as determined by the 
court, plus interest.  
    Subd. 8.  [COSTS, FEES AND EXPENSES.] (a) The court shall 
determine the costs and expenses of a proceeding under 
subdivision 7, including the reasonable expenses and 
compensation of any appraisers appointed by the court, and shall 
assess those costs and expenses against the limited liability 
company, except that the court may assess part or all of those 
costs and expenses against a dissenter whose action in demanding 
payment under subdivision 6 is found to be arbitrary, vexatious, 
or not in good faith.  
    (b) If the court finds that the limited liability company 
has failed to comply substantially with this section, the court 
may assess all fees and expenses of any experts or attorneys as 
the court considers equitable.  These fees and expenses may also 
be assessed against a person who has acted arbitrarily, 
vexatiously, or not in good faith in bringing the proceeding, 
and may be awarded to a party injured by those actions.  
    (c) The court may award, in its discretion, fees and 
expenses to an attorney for the dissenters out of the amount 
awarded to the dissenters, if any.  
    Subd. 9.  [PROCEDURES AS TO ASSIGNEES OF FINANCIAL RIGHTS.] 
When an assignment of some or all of the financial rights of a 
membership interest is in effect, then as to that membership 
interest the provisions of subdivisions 1 to 8 must be followed 
subject to the following revisions.  
    (a) All rights to be exercised and actions to be taken by a 
member under subdivision 2 to 8 shall be taken by the member and 
not by any assignee of the member's financial rights.  As 
between the limited liability company and the assignees, the 
actions taken or omitted by the member bind the assignees. 
    (b) Instead of remitting a payment under subdivision 5, 
paragraph (a), the limited liability company shall forward to 
the dissenter member:  
    (i) the materials described in subdivision 5, paragraph 
(a); 
    (ii) an offer to pay the amount listed in the materials, 
with that amount to be allocated among and paid to the member 
and the assignees of financial rights according to the terms of 
the assignments reflected in the required records; and 
    (iii) a statement of that allocation.  
    (c) If the dissenter member accepts the amount of the offer 
made under paragraph (b) but disputes the allocation, the 
dissenter shall promptly so notify the limited liability company 
and promptly after the notification bring an action to determine 
the proper allocation.  The suit must be filed in the county in 
which the registered office of the limited liability company is 
located, or in the case of a surviving foreign corporation that 
is complying with this section following a merger or an exchange 
with a constituent limited liability company the suit must be 
filed in the county in this state in which the last registered 
office of the constituent limited liability company was 
located.  The suit must name as parties the member, the limited 
liability company and all assignees of the member's financial 
rights.  Upon being served with the action, the limited 
liability company shall promptly pay into the court the amount 
offered under paragraph (b) and shall then be dismissed from the 
action.  
    (d) If the dissenter considers the amount offered under 
paragraph (b) inadequate, the dissenter may decline the offer 
and demand payment under subdivision 6.  If the dissenter makes 
demand, subdivisions 7 and 8 apply, with the court having 
jurisdiction also to determine the correctness of the allocation.
    (e) If the member fails to take action under either 
paragraph (c) or (d), then:  
    (i) as to the limited liability company, both the member 
and the assignees of the member's financial rights are limited 
to the amount and allocation offered under paragraph (b); and 
    (ii) the limited liability company discharges its 
obligation of payment by making payment according to the amount 
and allocation offered under paragraph (b). 

                             CONTRIBUTIONS 
    Sec. 52.  [322B.40] [AUTHORIZATION, FORM AND ACCEPTANCE OF 
CONTRIBUTIONS.] 
    Subdivision 1.  [BOARD OF GOVERNORS MAY AUTHORIZE.] Subject 
to any restrictions in the articles of organization and only 
when authorized by the board of governors, a limited liability 
company may accept contributions under subdivisions 2 and 3, 
make contribution agreements under section 322B.42, and make 
contribution allowance agreements under section 322B.43.  
    Subd. 2.  [PERMISSIBLE FORMS.] A person may make a 
contribution to a limited liability company:  
    (1) by paying money or transferring the ownership of an 
interest in property to the limited liability company, or 
rendering services to or for the benefit of the limited 
liability company; or 
    (2) through a written obligation signed by the person to 
pay money or transfer ownership of an interest in property to 
the limited liability company or to perform services to or for 
the benefit of the limited liability company.  
    Subd. 3.  [ACCEPTANCE OF CONTRIBUTIONS.] No purported 
contribution is to be treated or considered as a contribution, 
unless:  
    (1) the board of governors accepts the contribution on 
behalf of the limited liability company and in that acceptance 
describes the contribution, including terms of future 
performance, if any, and states the value being accorded to the 
contribution; and 
    (2) the fact of contribution and the contribution's 
accorded value are both reflected in the required records of the 
limited liability company.  
    Subd. 4.  [VALUATION.] The determinations of the board of 
governors as to the amount or fair value or the fairness to the 
limited liability company of the contribution accepted or to be 
accepted by the limited liability company or the terms of 
payment or performance, including under a contribution agreement 
in section 322B.42, and a contribution allowance agreement in 
section 322B.43, are presumed to be proper if they are made in 
good faith and on the basis of accounting methods, or a fair 
valuation or other method, reasonable in the circumstances. 
Governors who are present and entitled to vote, and who, 
intentionally or without reasonable investigation, fail to vote 
against approving a consideration that is unfair to the limited 
liability company, or overvalue property or services received or 
to be received by the limited liability company as a 
contribution, are jointly and severally liable to the limited 
liability company for the benefit of the then members who did 
not consent to and are damaged by the action, to the extent of 
the damages of those members.  A governor against whom a claim 
is asserted pursuant to this subdivision, except in case of 
knowing participation in a deliberate fraud, is entitled to 
contribution on an equitable basis from other governors who are 
liable under this subdivision.  
    Subd. 5.  [TERMS OF MEMBERSHIP INTERESTS.] All the 
membership interests of a limited liability company must:  
    (1) be of one class, without series, unless the articles of 
organization establish, or authorize the board of governors to 
establish, more than one class or series within classes; 
    (2) be ordinary membership interests entitled to vote as 
provided in section 322B.356, and have equal rights and 
preferences in all matters not otherwise provided for by the 
board of governors unless and to the extent that the articles of 
organization have fixed the relative rights and preferences of 
different classes and series; and 
    (3) share profits and losses as provided in section 
322B.323, and be entitled to distributions as provided in 
sections 322B.50, 322B.51, and 322B.873, subdivision 1, clause 
(3). 
    Subd. 6.  [PROCEDURE FOR FIXING TERMS.] (a) Subject to any 
restrictions in the articles of organization, the power granted 
in subdivision 5 may be exercised by a resolution or resolutions 
establishing a class or series, setting forth the designation of 
the class or series, and fixing the relative rights and 
preferences of the class or series.  Any of the rights and 
preferences of a class or series:  
    (1) may be made dependent upon facts ascertainable outside 
the articles of organization, or outside the resolution or 
resolutions establishing the class or series, if the manner in 
which the facts operate upon the rights and preferences of the 
class or series is clearly and expressly set forth in the 
articles of organization or in the resolution or resolutions 
establishing the class or series; and 
    (2) may incorporate by reference some or all of the terms 
of any agreements, contracts, or other arrangements entered into 
by the limited liability company in connection with the 
establishment of the class or series if the limited liability 
company retains at its principal executive office a copy of the 
agreements, contracts, or other arrangements or the portions 
incorporated by reference.  
    (b) A statement setting forth the name of the limited 
liability company and the text of the resolution and certifying 
the adoption of the resolution and the date of adoption must be 
filed with the secretary of state before the acceptance of any 
contributions for which the resolution creates rights or 
preferences not set forth in the articles of organization.  
However, where the members have received notice of the creation 
of membership interests with rights or preferences not set forth 
in the articles of organization before the acceptance of the 
contributions with respect to the membership interests, the 
statement may be filed any time within one year after the 
acceptance of contributions.  The resolution is effective when 
the statement has been filed with the secretary of state; or, if 
it is not required to be filed with the secretary of state 
before the acceptance of contributions, on the date of its 
adoption by the governors.  
    (c) A statement filed with the secretary of state in 
accordance with paragraph (b) is not considered an amendment of 
the articles of organization for purposes of sections 322B.155 
and 322B.383.  
    Subd. 7.  [SPECIFIC TERMS.] Without limiting the authority 
granted in this section, a limited liability company may have 
membership interests of a class or series: 
    (1) subject to the right of the limited liability company 
to redeem any of those membership interests at the price fixed 
for their redemption by the articles of organization or by the 
board of governors; 
    (2) entitling the members to cumulative, partially 
cumulative, or noncumulative distributions; 
    (3) having preference over any class or series of 
membership interests for the payment of distributions of any or 
all kinds; 
    (4) convertible into membership interests of any other 
class or any series of the same or another class; or 
    (5) having full, partial, or no voting rights, except as 
provided in section 322B.155. 
    Sec. 53.  [322B.41] [RESTATEMENT OF VALUE OF PREVIOUS 
CONTRIBUTIONS.] 
    Subdivision 1.  [DEFINITION.] As used in this section, an 
"old" contribution is a contribution reflected in the required 
records of a limited liability company before the time the 
limited liability company accepts a new contribution. 
    Subd. 2.  [RESTATEMENT REQUIRED.] Whenever a limited 
liability company accepts a new contribution, the board shall 
restate, as required by this section, the value of all old 
contributions.  
    Subd. 3.  [RESTATEMENT AS TO THE PARTICULAR SERIES OR CLASS 
TO WHICH THE NEW CONTRIBUTION PERTAINS.] Unless otherwise 
provided in the articles of organization, this subdivision 
states the method of restating the value of old contributions 
that pertain to the same series or class to which the new 
contribution pertains:  
    (1) state the value the limited liability company has 
accorded to the new contribution under section 322B.40, 
subdivision 3, clause (1); 
    (2) determine what percentage the value stated under clause 
(1) will constitute, after the restatement required by this 
subdivision, of the total value of all contributions that 
pertain to the particular series or class to which the new 
contribution pertains; 
    (3) divide the value stated under clause (1) by the 
percentage determined under clause (2), yielding the total 
value, after the restatement required by this subdivision, of 
all contributions pertaining to the particular series or class; 
    (4) subtract the value stated under clause (1) from the 
value determined under clause (3), yielding the total value, 
after the restatement required by this subdivision, of all the 
old contributions pertaining to the particular series or class; 
    (5) subtract the value, as reflected in the required 
records before the restatement required by this subdivision, of 
the old contributions from the value determined under clause 
(4), yielding the value to be allocated among and added to the 
old contributions pertaining to the particular series or class; 
and 
    (6) allocate the value determined under clause (5) 
proportionally among the old contributions pertaining to the 
particular series or class, add the allocated values to those 
old contributions, and change the required records accordingly.  
    The values determined under clause (5) and allocated and 
added under clause (6) may be positive, negative, or zero.  
    Subd. 4.  [RESTATEMENT METHOD FOR OTHER SERIES OR CLASSES.] 
Unless otherwise provided in the articles of organization, this 
subdivision states the method of restating the value of old 
contributions that do not pertain to the same series or class to 
which the new contribution pertains; 
    (1) determine the percentage by which the restatement under 
subdivision 3 has changed the total contribution value reflected 
in the required records for the series or class to which the new 
contribution pertains; and 
    (2) as to each old contribution that does not pertain to 
the same series or class to which the new contribution pertains, 
change the value reflected in the required records by the 
percentage determined under clause (1).  The percentage 
determined under clause (1) may be positive, negative, or zero.  
    Subd. 5.  [NEW CONTRIBUTIONS MAY BE AGGREGATED.] If a 
limited liability company accepts more than one contribution 
pertaining to the same series or class at the same time, then 
for the purpose of the restatement required by this section the 
limited liability company may consider all those new 
contributions as if they were a single contribution.  
    Sec. 54.  [322B.42] [CONTRIBUTION AGREEMENTS.] 
    Subdivision 1.  [SIGNED WRITING.] A contribution agreement, 
whether made before or after the formation of the limited 
liability company, is not enforceable against the would-be 
contributor unless it is in writing and signed by the would-be 
contributor.  
    Subd. 2.  [IRREVOCABLE PERIOD.] A contribution agreement is 
irrevocable for a period of six months, unless the contribution 
agreement provides for, or unless all other would-be 
contributors who are a party to a contribution consent to, an 
earlier revocation.  
    Subd. 3.  [CURRENT AND DEFERRED PAYMENT.] A contribution 
agreement, whether made before or after the formation of a 
limited liability company, must be paid or performed in full at 
the time or times, or in the installments, if any, specified in 
the contribution agreement.  In the absence of a provision in 
the contribution agreement specifying the time at which the 
contribution is to be paid or performed, the contribution must 
be paid or performed at the time or times determined by the 
board of governors, but a call made by the board of governors 
for payment or performance on contributions must be uniform for 
all membership interests of the same class or for all membership 
interests of the same series.  
    Subd. 4.  [FAILURE TO PAY REMEDIES.] (a) Unless otherwise 
provided in the contribution agreement, in the event of default 
in the payment or performance of an installment or call when 
due, the limited liability company may proceed to collect the 
amount due in the same manner as a debt due the limited 
liability company, or, if the amount due remains unpaid for a 
period of 20 days after written notice of demand for payment has 
been given to the delinquent would-be contributor, the board of 
governors may declare a forfeiture of the contribution agreement 
or cancel it in accordance with this subdivision.  If a would-be 
contributor does not make a required contribution of property or 
services, the limited liability company shall require the 
would-be contributor to contribute cash equal to that portion of 
the value, as stated in the limited liability company required 
records, of the contribution that has not been made.  
    (b) Upon forfeiture of a contribution agreement, the 
membership interests that were subject to the contribution 
agreement may be offered for sale by the limited liability 
company for a price in money equaling or exceeding the sum of 
the full balance owed by the delinquent would-be contributor 
plus the expenses incidental to the sale.  Any excess of net 
proceeds realized by the limited liability company over the sum 
of the amount owed by the delinquent would-be contributor plus 
the expenses incidental to the sale must be paid to the 
delinquent would-be contributor or to a legal representative.  
The payment must not exceed the amount of contribution actually 
made by the delinquent would-be contributor.  
    (c) If, within 20 days after the limited liability company 
offers to sell the membership interests that were subject to the 
defaulted contribution agreement, no prospective purchaser 
offers to purchase the membership interests for a money price 
sufficient to pay the sum of the full balance owed by the 
delinquent would-be contributor plus the expenses incidental to 
the sale, or if the limited liability company has refunded to 
the would-be contributor or a legal representative a portion of 
the contribution agreement price actually paid, the contribution 
agreement may be canceled and the limited liability company may 
retain the portion of the contribution agreement price actually 
paid that does not exceed ten percent of the contribution 
agreement price.  
    Subd. 5.  [RESTRICTIONS ON ASSIGNMENT.] A would-be 
contributor's rights under a contribution agreement may not be 
assigned, in whole or in part, to a person who was not a member 
at the time of the assignment, unless all the members approve 
the assignment by unanimous written consent.  
    Sec. 55.  [322B.43] [CONTRIBUTION ALLOWANCE AGREEMENTS.] 
    Subdivision 1.  [AGREEMENTS PERMITTED.] Subject to any 
restrictions in the articles of organization, a limited 
liability company may enter into contribution allowance 
agreements under the terms, provisions, and conditions fixed by 
the board of governors.  
    Subd. 2.  [WRITING REQUIRED AND TERMS TO BE STATED.] Any 
contribution allowance agreement must be in writing, and the 
writing must state in full, summarize, or incorporate by 
reference all the agreement's terms, provisions, and conditions. 
    Subd. 3.  [RESTRICTIONS ON ASSIGNMENT.] A would-be 
contributor's rights under a contribution allowance agreement 
may not be assigned in whole or in part to a person who was not 
a member at the time of the assignment, unless all the members 
approve the assignment by unanimous written consent.  

                             DISTRIBUTIONS  
    Sec. 56.  [322B.50] [SHARING OF DISTRIBUTIONS.] 
    Unless otherwise provided in the articles of organization 
or by the board of governors under section 322B.40, subdivisions 
5 and 6, distributions of cash or other assets of a limited 
liability company, including distributions on termination of the 
limited liability company, must be allocated in proportion to 
the value of the contributions of the members reflected in the 
required records. 
    Sec. 57.  [322B.51] [INTERIM DISTRIBUTIONS.] 
    Except as provided in the articles of organization, a 
member is entitled to receive distributions before the limited 
liability company's termination only as specified in the 
operating agreement or by the act of the board of governors.  
    Sec. 58.  [322B.52] [DISTRIBUTION IN KIND.] 
    Except as provided in the articles of organization, a 
member, regardless of the nature of the member's contribution, 
has no right to demand and receive any distribution from a 
limited liability company in any form other than cash.  Except 
as provided in the articles of organization, a member may not be 
compelled to accept a distribution of any asset in kind from a 
limited liability company to the extent that the percentage of 
the asset distributed to the member exceeds a percentage of that 
asset that is equal to the percentage in which the member shares 
in distributions from the limited liability company.  
    Sec. 59.  [322B.53] [STATUS AS A CREDITOR.] 
    At the time a member becomes entitled to receive a 
distribution, the member has the status of, and is entitled to 
all remedies available to, a creditor of the limited liability 
company with respect to the distribution.  
    Sec. 60.  [322B.54] [LIMITATIONS ON DISTRIBUTION.] 
    Subdivision 1.  [WHEN DISTRIBUTIONS ARE PERMITTED.] The 
board of governors may authorize and cause the limited liability 
company to make a distribution only if the board of governors 
determines, in accordance with subdivision 2, that the limited 
liability company will be able to pay its debts in the ordinary 
course of business after making the distribution and the board 
of governors does not know before the distribution is made that 
the determination was or has become erroneous, and the limited 
liability company may make the distribution if it is able to pay 
its debts in the ordinary course of business after making the 
distribution.  The effect of a distribution on the ability of 
the limited liability company to pay its debts in the ordinary 
course of business after making the distribution must be 
measured in accordance with subdivision 3.  The right of the 
board of governors to authorize, and the limited liability 
company to make, distributions may be prohibited, limited, or 
restricted by the articles of organization or operating 
agreement or an agreement. 
    Subd. 2.  [DETERMINATION PRESUMED PROPER.] A determination 
that the limited liability company will be able to pay its debts 
in the ordinary course of business after the distribution is 
presumed to be proper if the determination is made in compliance 
with the standard of conduct provided in section 322B.663 on the 
basis of financial information prepared in accordance with 
accounting methods, or a fair valuation or other method, 
reasonable in the circumstances.  No liability under section 
322B.663 or 322B.56 will accrue if the requirements of this 
subdivision have been met.  
    Subd. 3.  [EFFECT MEASURED.] (a) In the case of a 
distribution made by a limited liability company in connection 
with a redemption of its membership interests, the effect of the 
distribution must be measured as of the date on which money or 
other property is transferred, or indebtedness payable in 
installments or otherwise is incurred, by the limited liability 
company, or as of the date on which the member ceases to be a 
member of the limited liability company, whichever is the 
earliest.  
    (b) The effect of any other distribution must be measured 
as of the date of its authorization if payment occurs 120 days 
or less following the date of authorization, or as of the date 
of payment if payment occurs more than 120 days following the 
date of authorization.  
    (c) Indebtedness of a limited liability company incurred or 
issued in a distribution in accordance with this section to a 
member who as a result of the transaction is no longer a member 
is on a parity with the indebtedness of the limited liability 
company to its general unsecured creditors, except to the extent 
subordinated, agreed to, or secured by a pledge of any assets of 
the limited liability company or a related limited liability 
company, or subject to any other agreement between the limited 
liability company and the member.  
    (d) Sections 322B.54 to 322B.56 supersede all other 
statutes of this state with respect to distributions, and the 
provisions of sections 513.41 to 513.51 do not apply to 
distributions made by a limited liability company governed by 
this chapter. 
    Subd. 4.  [RESTRICTIONS.] (a) A distribution may be made to 
the owners of a class or series of membership interests only if: 
    (1) all amounts payable to the owners of membership 
interests having a preference for the payment of that kind of 
distribution, other than those owners who give notice to the 
limited liability company of their agreement to waive their 
rights to that payment, are paid; and 
    (2) the payment of the distribution does not reduce the 
remaining net assets of the limited liability company below the 
aggregate preferential amount payable in the event of 
liquidation to the owners of membership interests having 
preferential rights, unless the distribution is made to those 
members in the order and to the extent of their respective 
priorities or the owners of membership interests who do not 
receive distributions in that order give notice to the limited 
liability company of their agreement to waive their rights to 
that distribution.  
    A determination that the payment of the distribution does 
not reduce the remaining net assets of the limited liability 
company below the aggregate preferential amount payable in the 
event of termination to the owners of membership interests 
having preferential rights is presumed to be proper if the 
determination is made in compliance with the standard of conduct 
provided in section 322B.663 on the basis of financial 
information prepared in accordance with accounting methods, or a 
fair valuation or other method, reasonable in the 
circumstances.  Liability under section 322B.663 or 322B.56 will 
not arise if the requirements of this paragraph are met.  
    (b) If the money or property available for distribution is 
insufficient to satisfy all preferences, the distributions shall 
be made pro rata according to the order of priority of 
preferences by classes and by series within those classes unless 
those owners who do not receive distributions in that order give 
notice to the limited liability company of their agreement to 
waive their rights to that distribution. 
    Sec. 61.  [322B.55] [LIABILITY OF MEMBERS FOR ILLEGAL 
DISTRIBUTIONS.] 
    Subdivision 1. [LIABILITY.] A member who receives a 
distribution made in violation of section 322B.54 is liable to 
the limited liability company, its receiver or other person 
winding up its affairs, or a governor under section 322B.56, 
subdivision 2, but only to the extent that the distribution 
received by the member exceeded the amount that properly could 
have been paid under section 322B.54. 
    Subd. 2.  [STATUTE OF LIMITATIONS.] An action must not be 
commenced under this section more than two years from the date 
of the distribution.  
    Sec. 62.  [322B.56] [LIABILITY OF GOVERNORS FOR ILLEGAL 
DISTRIBUTIONS.] 
    Subdivision 1.  [LIABILITY.] In addition to any other 
liabilities, a governor who is present at a meeting and fails to 
vote against, or who consents in writing to, a distribution made 
in violation of section 322B.54 or a restriction contained in 
the articles of organization or operating agreement or an 
agreement, and who fails to comply with the standard of conduct 
provided in section 322B.663, is liable to the limited liability 
company jointly and severally with all other governors so liable 
and to other governors under subdivision 3, but only to the 
extent that the distribution exceeded the amount that properly 
could have been paid under section 322B.54.  
    Subd. 2.  [CONTRIBUTION FROM MEMBERS.] A governor against 
whom an action is brought under this section with respect to a 
distribution may implead in that action all members who received 
the distribution and may compel pro rata contribution from them 
in that action to the extent provided in section 322B.55, 
subdivision 1. 
    Subd. 3.  [IMPLEADER AND CONTRIBUTION FROM GOVERNORS.] A 
governor against whom an action is brought under this section 
with respect to a distribution may implead in that action all 
other governors who voted for or consented in writing to the 
distribution and may compel pro rata contribution from them in 
that action. 
    Subd. 4.  [STATUTE OF LIMITATIONS.] An action must not be 
commenced under this section more than two years from the date 
of the distribution.  

                       ORGANIZATION AND GOVERNANCE
    Sec. 63.  [322B.60] [ORGANIZATION.] 
    Subdivision 1.  [ROLE OF ORGANIZERS.] If the first board of 
governors is not named in the articles of organization, the 
organizers may elect the first board of governors or may act as 
governors with all of the powers, rights, duties, and 
liabilities of governors, until governors are elected or until a 
contribution is accepted, whichever occurs first.  
    Subd. 2.  [MEETING.] After the issuance of the certificate 
of organization, the organizers or the governors named in the 
articles of organization shall either hold an organizational 
meeting at the call of a majority of the organizers or of the 
governors named in the articles, or take written action, for the 
purposes of transacting business and taking actions necessary or 
appropriate to complete the organization of the limited 
liability company, including, without limitation, amending the 
articles, electing governors, adopting an operating agreement, 
electing managers, adopting banking resolutions, authorizing or 
ratifying the purchase, lease, or other acquisition of suitable 
space, furniture, furnishings, supplies, and materials, 
approving a limited liability company seal, adopting a fiscal 
year for the limited liability company, contracting to receive 
and accept contributions, and making any appropriate tax 
elections.  If a meeting is held, the person or persons calling 
the meeting shall give at least three days notice of the meeting 
to each organizer or governor named, stating the date, time, and 
place of the meeting.  
    Sec. 64.  [322B.603] [OPERATING AGREEMENT.] 
    Subdivision 1.  [GENERALLY.] A limited liability company 
may, but need not, have an operating agreement.  The operating 
agreement may contain any provision relating to the management 
of the business or the regulation of the affairs of the limited 
liability company not inconsistent with law or the articles of 
organization.  An act of the board under subdivision 2 and of 
the members under subdivision 3 will be considered part of the 
operating agreement only if the act expressly states that it is 
intended to constitute or revise the operating agreement. 
    Subd. 2.  [POWER OF BOARD OF GOVERNORS.] An initial 
operating agreement may be adopted pursuant to section 322B.60 
by the organizers or by the first board of governors.  Unless 
reserved by the articles of organization to the members, the 
power to adopt, amend, or repeal the operating agreement is 
vested in the board of governors.  The power of the board of 
governors is subject to the power of the members, exercisable in 
the manner provided in subdivision 3, to adopt, amend, or repeal 
the operating agreement adopted, amended, or repealed by the 
board of governors.  After the adoption of the initial operating 
agreement, the board of governors shall not adopt, amend, or 
repeal an operating agreement provision fixing a quorum for 
meetings of members, prescribing procedures for removing 
governors or filling vacancies in the board of governors, or 
fixing the number of governors or their classifications, 
qualifications, or terms of office, but may adopt or amend an 
operating agreement provision to increase the number of 
governors. 
    Subd. 3.  [POWER OF MEMBERS AND PROCEDURE.] If a member or 
members owning three percent or more of the voting power of the 
members entitled to vote propose a resolution for action by the 
members to adopt, amend, or repeal operating agreement 
provisions adopted, amended, or repealed by the board of 
governors and the resolution sets forth the provision or 
provisions proposed for adoption, amendment, or repeal, the 
limitations and procedures for submitting, considering, and 
adopting the resolution are the same as provided in section 
322B.15, subdivisions 2 to 4, for amendment of the articles of 
organization.  

                           BOARD OF GOVERNORS
    Sec. 65.  [322B.606] [BOARD OF GOVERNORS.] 
    Subdivision 1.  [BOARD OF GOVERNORS TO MANAGE.] The 
business and affairs of a limited liability company is to be 
managed by or under the direction of a board of governors, 
subject to the provisions of subdivision 2 and section 322B.37. 
The first board of governors may be named in the articles of 
organization or elected by the organizers pursuant to section 
322B.60 or by the members. 
    Subd. 2.  [MEMBER MANAGEMENT.] The owners of the membership 
interests entitled to vote for governors of the limited 
liability company may, by unanimous affirmative vote, take any 
action that this chapter requires or permits the board of 
governors to take.  As to an action taken by the members in that 
manner:  
    (1) the governors have no duties, liabilities, or 
responsibilities as governors under this chapter with respect to 
or arising from the action; 
    (2) the members collectively and individually have all of 
the duties, liabilities, and responsibilities of governors under 
this chapter with respect to and arising from the action; 
    (3) if the action relates to a matter required or permitted 
by this chapter or by any other law to be approved or adopted by 
the board of governors, either with or without approval or 
adoption by the members, the action is considered to have been 
approved or adopted by the board of governors; and 
    (4) a requirement that an instrument filed with a 
governmental agency contain a statement that the action has been 
approved and adopted by the board of governors is satisfied by a 
statement that the members have taken the action under this 
subdivision.  
    Sec. 66.  [322B.61] [NUMBER.] 
    The board of governors consists of one or more governors.  
The number of governors must be fixed by or in the manner 
provided in the articles of organization or the operating 
agreement.  The number of governors may be increased or, subject 
to section 322B.636, decreased at any time by amendment to or in 
the manner provided in the articles or operating agreement.  
    Sec. 67.  [322B.613] [QUALIFICATIONS AND ELECTION.] 
    Governors must be natural persons.  The method of election 
and any additional qualifications for governors may be imposed 
by or in the manner provided in the articles or operating 
agreement.  
    Sec. 68.  [322B.616] [TERMS.] 
    Unless fixed terms are provided for in the articles or 
operating agreement, a governor serves for an indefinite term 
that expires at the next regular meeting of the members.  A 
fixed term of a governor must not exceed five years.  A governor 
holds office for the term for which the governor was elected and 
until a successor is elected and has qualified, or until the 
earlier death, resignation, removal, or disqualification of the 
governor.  
    Sec. 69.  [322B.62] [ACTS NOT VOID OR VOIDABLE.] 
    The expiration of a governor's term with or without the 
election of a qualified successor does not make prior or 
subsequent acts of the governors or the board of governors void 
or voidable.  
    Sec. 70.  [322B.623] [COMPENSATION.] 
    Subject to any limitations in the articles or operating 
agreement, the board of governors may fix the compensation of 
governors.  
    Sec. 71.  [322B.626] [CLASSIFICATION OF GOVERNORS.] 
    Governors may be divided into classes as provided in the 
articles or operating agreement. 
    Sec. 72.  [322B.63] [CUMULATIVE VOTING FOR GOVERNORS.] 
    Subdivision 1.  [VOTING RIGHTS.] Unless the articles of 
organization provide that there is no cumulative voting, and 
except as provided in section 322B.636, subdivision 5, each 
member entitled to vote for governors has the right to cumulate 
voting power in the election of governors by giving written 
notice of intent to cumulate voting power to any manager of the 
limited liability company before the meeting, or to the 
presiding manager at the meeting at which the election is to 
occur at anytime before the election of governors at the 
meeting, in which case: 
    (1) the presiding manager at the meeting shall announce, 
before the election of governors, that members shall cumulate 
their voting power; and 
    (2) each member shall cumulate that voting power either by 
casting for one candidate the amount of voting power equal to 
the number of governors to be elected multiplied by the voting 
power represented by the membership interests owned by that 
member, or by distributing all of that voting power on the same 
principle among any number of candidates.  
    Subd. 2.  [MODIFICATIONS.] No amendment to the articles or 
operating agreement that has the effect of denying, limiting, or 
modifying the right to cumulative voting for members provided in 
this section may be adopted if the votes of a proportion of the 
voting power sufficient to elect a governor at an election of 
the entire board of governors under cumulative voting are cast 
against the amendment. 
    Sec. 73.  [322B.633] [RESIGNATION.] 
    A governor may resign at any time by giving written notice 
to the limited liability company.  The resignation is effective 
without acceptance when the notice is given to the limited 
liability company, unless a later effective time is specified in 
the notice.  
    Sec. 74.  [322B.636] [REMOVAL OF GOVERNORS.] 
    Subdivision 1.  [MODIFICATION.] The provisions of this 
section apply unless modified by the articles of organization or 
the operating agreement.  
    Subd. 2.  [REMOVAL OF GOVERNORS.] A governor may be removed 
at any time, with or without cause, if:  
    (1) the governor was named by the board of governors to 
fill a vacancy; 
    (2) the members have not elected governors in the interval 
between the time of the appointment to fill a vacancy and the 
time of the removal; and 
    (3) a majority of the remaining governors present 
affirmatively vote to remove the governor. 
    Subd. 3.  [REMOVAL BY MEMBERS.] Any one or all of the 
governors may be removed at any time, with or without cause, by 
the affirmative vote of the owners of the proportion of the 
voting power of the membership interests of the classes or 
series the governor represents sufficient to elect them, except 
as provided in subdivision 4.  
    Subd. 4.  [EXCEPTION FOR LIMITED LIABILITY COMPANIES WITH 
CUMULATIVE VOTING.] In a limited liability company having 
cumulative voting, unless the entire board of governors is 
removed simultaneously, a governor is not removed from the board 
of governors if there are cast against removal of the governor 
the votes of a proportion of the voting power sufficient to 
elect the governor at an election of the entire board of 
governors under cumulative voting.  
    Subd. 5.  [ELECTION OF REPLACEMENTS.] New governors may be 
elected at a meeting at which governors are removed.  If the 
limited liability company allows cumulative voting and a member 
notifies the presiding manager at any time before the election 
of new governors of intent to cumulate the votes of the member, 
the presiding manager shall announce before the election that 
cumulative voting is in effect, and members shall cumulate their 
votes as provided in section 322B.63, subdivision 1, clause (2). 
    Sec. 75.  [322B.64] [VACANCIES.] 
    Unless different rules for filling vacancies are provided 
for in the articles or operating agreement:  
    (1)(i) vacancies on the board of governors resulting from 
the death, resignation, removal, or disqualification of a 
governor may be filled by the affirmative vote of a majority of 
the remaining governors, even though less than a quorum; and 
    (ii) vacancies on the board of governors resulting from 
newly created governorships may be filled by the affirmative 
vote of a majority of the governors serving at the time of the 
increase; and 
    (2) each governor elected under this section to fill a 
vacancy holds office until a qualified successor is elected by 
the members at the next regular or special meeting of the 
members.  
    Sec. 76.  [322B.643] [BOARD OF GOVERNORS MEETINGS.] 
    Subdivision 1.  [TIME AND PLACE.] Meetings of the board of 
governors may be held from time to time as provided in the 
articles of organization or operating agreement at any place 
within or without the state that the board of governors may 
select or by any means described in subdivision 2.  If the board 
of governors fails to select a place for a meeting, the meeting 
must be held at the principal executive office, unless the 
articles or operating agreement provide otherwise. 
    Subd. 2.  [ELECTRONIC COMMUNICATIONS.] (a) A conference 
among governors by any means of communication through which the 
governors may simultaneously hear each other during the 
conference constitutes a board of governors meeting, if the same 
notice is given of the conference as would be required by 
subdivision 3 for a meeting, and if the number of governors 
participating in the conference would be sufficient to 
constitute a quorum at a meeting.  Participation in a meeting by 
that means constitutes presence in person at the meeting.  
    (b) A governor may participate in a board of governors 
meeting not described in paragraph (a) by any means of 
communication through which the governor, other governors so 
participating, and all governors physically present at the 
meeting may simultaneously hear each other during the meeting.  
Participation in a meeting by that means constitutes presence in 
person at the meeting.  
    Subd. 3.  [CALLING MEETINGS AND NOTICE.] Unless the 
articles of organization or operating agreement provide for a 
different time period, a governor may call a board meeting by 
giving ten days notice to all governors of the date, time, and 
place of the meeting.  The notice need not state the purpose of 
the meeting unless the articles or operating agreement require 
it.  
    Subd. 4.  [PREVIOUSLY SCHEDULED MEETINGS.] If the day or 
date, time, and place of a board of governors meeting have been 
provided in the articles or operating agreement, or announced at 
a previous meeting of the board of governors, no notice is 
required.  Notice of an adjourned meeting need not be given 
other than by announcement at the meeting at which adjournment 
is taken.  
    Subd. 5.  [WAIVER OF NOTICE.] A governor may waive notice 
of a meeting of the board of governors.  A waiver of notice by a 
governor entitled to notice is effective whether given before, 
at, or after the meeting, and whether given in writing, orally, 
or by attendance.  Attendance by a governor at a meeting is a 
waiver of notice of that meeting, except where the governor 
objects at the beginning of the meeting to the transaction of 
business because the meeting is not lawfully called or convened 
and does not participate in the meeting after the objection.  
    Sec. 77.  [322B.646] [ABSENT GOVERNORS.] 
    If the articles of organization or operating agreement so 
provide, a governor may give advance written consent or 
opposition to a proposal to be acted on at a board of governors 
meeting.  If the governor is not present at the meeting, consent 
or opposition to a proposal does not constitute presence for 
purposes of determining the existence of a quorum, but consent 
or opposition must be counted as a vote in favor of or against 
the proposal and must be entered in the minutes or other record 
of action at the meeting, if the proposal acted on at the 
meeting is substantially the same or has substantially the same 
effect as the proposal to which the governor has consented or 
objected.  
    Sec. 78.  [322B.65] [QUORUM.] 
    A majority, or a larger or smaller proportion or number 
provided in the articles of organization or operating agreement, 
of the governors currently holding office is a quorum for the 
transaction of business.  In the absence of a quorum, a majority 
of the governors present may adjourn a meeting from time to time 
until a quorum is present.  If a quorum is present when a duly 
called or held meeting is convened, the governors present may 
continue to transact business until adjournment, even though the 
withdrawal of a number of governors originally present leaves 
less than the proportion or number otherwise required for a 
quorum.  
    Sec. 79.  [322B.653] [ACT OF THE BOARD OF GOVERNORS.] 
    The board of governors shall take action by the affirmative 
vote of a majority of governors present at a duly held meeting, 
except where this chapter or the articles require the 
affirmative vote of a larger proportion or number.  If the 
articles require a larger proportion or number than is required 
by this chapter for a particular action, the articles control.  
    Sec. 80.  [322B.656] [ACTION WITHOUT A MEETING.] 
    Subdivision 1.  [METHOD.] An action required or permitted 
to be taken at a board of governors meeting may be taken by 
written action signed by all of the governors.  If the articles 
so provide, any action, other than an action requiring member 
approval, may be taken by written action signed by the number of 
governors that would be required to take the same action at a 
meeting of the board of governors at which all governors were 
present.  
    Subd. 2.  [EFFECTIVE TIME.] The written action is effective 
when signed by the required number of governors, unless a 
different effective time is provided in the written action.  
    Subd. 3.  [NOTICE AND LIABILITY.] When written action is 
permitted to be taken by less than all governors, all governors 
must be notified immediately of its text and effective date.  
Failure to provide the notice does not invalidate the written 
action.  A governor who does not sign or consent to the written 
action has no liability for the action or actions taken by the 
written action. 
    Sec. 81.  [322B.66] [COMMITTEES.] 
    Subdivision 1.  [GENERALLY.] A resolution approved by the 
affirmative vote of a majority of the board of governors may 
establish committees having the authority of the board in the 
management of the business of the limited liability company only 
to the extent provided in the resolution.  Committees may 
include a special litigation committee consisting of one or more 
independent governors or other independent persons to consider 
legal rights or remedies of the limited liability company and 
whether those rights and remedies should be pursued.  Committees 
other than special litigation committees are subject at all 
times to the direction and control of the board of governors.  
    Subd. 2.  [MEMBERSHIP.] Committee members must be natural 
persons.  Unless the articles or operating agreement provide for 
a different membership or manner of appointment, a committee 
consists of one or more persons, who need not be governors, 
appointed by affirmative vote of a majority of the governors 
present. 
    Subd. 3.  [PROCEDURE.] Sections 322B.643 to 322B.656 apply 
to committees and members of committees to the same extent as 
those sections apply to the board of governors and governors.  
    Subd. 4.  [MINUTES.] Minutes, if any, of committee meetings 
must be made available upon request to members of the committee 
and to any governor.  
    Subd. 5.  [STANDARD OF CONDUCT.] The establishment of, 
delegation of authority to, and action by a committee does not 
alone constitute compliance by a governor with the standard of 
conduct set forth in section 322B.663.  
    Subd. 6.  [COMMITTEE MEMBERS CONSIDERED GOVERNORS.] 
Committee members are considered to be governors for purposes of 
sections 322B.663, 322B.666, and 322B.699.  
    Sec. 82.  [322B.663] [STANDARD OF CONDUCT.] 
    Subdivision 1.  [STANDARD AND LIABILITY.] A governor shall 
discharge the duties of the position of governor in good faith, 
in a manner the governor reasonably believes to be in the best 
interests of the limited liability company, and with the care an 
ordinarily prudent person in a like position would exercise 
under similar circumstances.  A person who so performs those 
duties is not liable by reason of being or having been a 
governor of the limited liability company.  
    Subd. 2.  [RELIANCE.] (a) A governor is entitled to rely on 
information, opinions, reports, or statements, including 
financial statements and other financial data, in each case 
prepared or presented by:  
    (1) one or more managers or employees of the limited 
liability company whom the governor reasonably believes to be 
reliable and competent in the matters presented; 
    (2) counsel, public accountants, or other persons as to 
matters that the governor reasonably believes are within the 
person's professional or expert competence; or 
    (3) a committee of the board of governors upon which the 
governor does not serve, duly established in accordance with 
section 322B.66, as to matters within its designated authority, 
if the governor reasonably believes the committee to merit 
confidence.  
    (b) Paragraph (a) does not apply to a governor who has 
knowledge concerning the matter in question that makes the 
reliance otherwise permitted by paragraph (a) unwarranted. 
    Subd. 3.  [PRESUMPTION OF ASSENT AND DISSENT.] A governor 
who is present at a meeting of the board of governors when an 
action is approved by the affirmative vote of a majority of the 
governors present is presumed to have assented to the action 
approved, unless the governor:  
    (1) objects at the beginning of the meeting to the 
transaction of business because the meeting is not lawfully 
called or convened and does not participate in the meeting after 
the objection, in which case the governor is not considered to 
be present at the meeting for any purpose of this chapter; 
    (2) votes against the action at the meeting; or 
    (3) is prohibited by section 322B.666 from voting on the 
action.  
    Subd. 4.  [ELIMINATION OR LIMITATION OF LIABILITY.] A 
governor's personal liability to the limited liability company 
or its members for monetary damages for breach of fiduciary duty 
as a governor may be eliminated or limited in the articles of 
organization.  The articles may not eliminate or limit the 
liability of a governor:  
    (1) for any breach of the governor's duty of loyalty to the 
limited liability company or its members; 
    (2) for acts or omissions not in good faith or that involve 
intentional misconduct or a knowing violation of law; 
    (3) under section 322B.56 or 80A.23; 
    (4) for any transaction from which the governor derived an 
improper personal benefit; or 
    (5) for any act or omission occurring before the date when 
the provision in the articles of organization eliminating or 
limiting liability becomes effective. 
    Subd. 5.  [CONSIDERATIONS.] In discharging the duties of 
the position of governor, a governor may, in considering the 
best interests of the limited liability company, consider the 
interests of the limited liability company's employees, 
customers, suppliers, and creditors, the economy of the state 
and nation, community and societal considerations, and the 
long-term as well as short-term interests of the limited 
liability company and its members including the possibility that 
these interests may be best served by the continued independence 
of the limited liability company. 
    Sec. 83.  [322B.666] [GOVERNOR CONFLICTS OF INTEREST.] 
    Subdivision 1.  [CONFLICT AND PROCEDURE WHEN CONFLICT 
ARISES.] A contract or other transaction between a limited 
liability company and one or more of its governors, or between a 
limited liability company and an organization in or of which one 
or more of its governors are governors, directors, managers, 
officers, or legal representatives or have a material financial 
interest, is not void or voidable because the governor or 
governors or the other organizations are parties or because the 
governor or governors are present at the meeting of the members 
or the board of governors or a committee at which the contract 
or transaction is authorized, approved, or ratified, if:  
    (1) the contract or transaction was, and the person 
asserting the validity of the contract or transaction sustains 
the burden of establishing that the contract or transaction was, 
fair and reasonable as to the limited liability company at the 
time it was authorized, approved, or ratified; 
    (2) the material facts as to the contract or transaction 
and as to the manager's or managers' interest are fully 
disclosed or known to the members and the contract or 
transaction is approved in good faith by (i) the owners of 
two-thirds of the voting power of the membership interests 
entitled to vote that are owned by persons other than the 
interested governor or governors, or (ii) the unanimous 
affirmative vote of all members, whether or not entitled to 
vote; 
    (3) the material facts as to the contract or transaction 
and as to the governor's or governors' interest are fully 
disclosed or known to the board of governors or a committee, and 
the board of governors or committee authorizes, approves, or 
ratifies the contract or transaction in good faith by a majority 
of the board of governors or committee, but the interested 
governor or governors are not counted in determining the 
presence of a quorum and must not vote; or 
    (4) the contract or transaction is a distribution described 
in section 322B.54, subdivision 1, or a merger or exchange 
described in section 322B.70, subdivision 1 or 2. 
    Subd. 2.  [MATERIAL FINANCIAL INTEREST.] For purposes of 
this section:  
    (1) a governor does not have a material financial interest 
in a resolution fixing the compensation of the governor or 
fixing the compensation of another governor as a governor, 
manager, employee, or agent of the limited liability company, 
even though the first governor is also receiving compensation 
from the limited liability company; and 
    (2) a governor has a material financial interest in each 
organization in which the governor, or the spouse, parents, 
children and spouses of children, brothers and sisters and 
spouses of brothers and sisters of the governor, or any 
combination of them have a material financial interest.  

                                MANAGERS 
    Sec. 84.  [322B.67] [MANAGERS REQUIRED.] 
    A limited liability company must have one or more natural 
persons exercising the functions of the offices, however 
designated, of chief manager and treasurer. 
    Sec. 85.  [322B.673] [DUTIES OF REQUIRED MANAGERS.] 
    Subdivision 1.  [PRESUMPTION AND MODIFICATION.] Unless the 
articles of organization or the operating agreement provide 
otherwise, the chief manager and treasurer have the duties 
specified in this section.  
    Subd. 2.  [CHIEF MANAGER.] The chief manager shall:  
    (1) have general active management of the business of the 
limited liability company; 
    (2) when present, preside at all meetings of the board of 
governors and of the members; 
    (3) see that all orders and resolutions of the board of 
governors are carried into effect; 
    (4) sign and deliver in the name of the limited liability 
company any deeds, mortgages, bonds, contracts or other 
instruments pertaining to the business of the limited liability 
company, except in cases in which the authority to sign and 
deliver is required by law to be exercised by another person or 
is expressly delegated by the articles or operating agreement or 
the board of governors to some other manager or agent of the 
limited liability company; 
    (5) maintain records of and, whenever necessary, certify 
all proceedings of the board of governors and the members; and 
    (6) perform other duties prescribed by the board of 
governors.  
    Subd. 3.  [TREASURER.] The treasurer shall:  
    (1) keep accurate financial records for the limited 
liability company; 
    (2) deposit all money, drafts, and checks in the name of 
and to the credit of the limited liability company in the banks 
and depositories designated by the board of governors; 
    (3) endorse for deposit all notes, checks, and drafts 
received by the limited liability company as ordered by the 
board of governors, making proper vouchers for them; 
    (4) disburse limited liability company funds and issue 
checks and drafts in the name of the limited liability company, 
as ordered by the board of governors; 
    (5) give to the chief manager and the board of governors, 
whenever requested, an account of all transactions by the 
treasurer and of the financial condition of the limited 
liability company; and 
    (6) perform other duties prescribed by the board of 
governors or by the chief manager. 
    Sec. 86.  [322B.676] [OTHER MANAGERS.] 
    The board of governors may elect or appoint, in a manner 
set forth in the articles of organization or operating agreement 
or in a resolution approved by the affirmative vote of a 
majority of the governors present, any other managers or agents 
the board of governors considers necessary for the operation and 
management of the limited liability company.  Each of these 
managers and agents has the powers, rights, duties, 
responsibilities, and terms in office provided for in the 
articles or operating agreement or determined by the board of 
governors.  
    Sec. 87.  [322B.679] [MULTIPLE MANAGERIAL POSITIONS.] 
    Any number of managerial positions or functions of those 
positions may be held or exercised by the same person.  If a 
document must be signed by persons holding different positions 
or functions and a person holds or exercises more than one of 
those positions or functions, that person may sign the document 
in more than one capacity, but only if the document indicates 
each capacity in which the person signs. 
    Sec. 88.  [322B.68] [MANAGERS CONSIDERED ELECTED.] 
    In the absence of an election or appointment of managers by 
the board of governors, the person or persons exercising the 
principal functions of the chief manager or the treasurer are 
considered to have been elected to those offices, except for the 
purpose of determining the location of the principal executive 
office, which in that case is the registered office of the 
limited liability company.  
    Sec. 89.  [322B.683] [CONTRACT RIGHTS.] 
    The election or appointment of a person as a manager or 
agent does not, of itself, create contract rights.  A limited 
liability company may enter into a contract with a manager or 
agent for a period of time if, in the board of governors' 
judgment, the contract would be in the best interests of the 
limited liability company.  The fact that the contract may be 
for a term longer than the terms of the governors who authorized 
or approved the contract does not make the contract void or 
voidable.  
    Sec. 90.  [322B.686] [RESIGNATION, REMOVAL AND VACANCY.] 
    Subdivision 1.  [RESIGNATION.] A manager may resign at any 
time by giving written notice to the limited liability company.  
The resignation is effective without acceptance when the notice 
is given to the limited liability company, unless a later 
effective date is specified in the notice.  
    Subd. 2.  [REMOVAL.] A manager may be removed at any time, 
with or without cause, by a resolution approved by the 
affirmative vote of a majority of the governors present, subject 
to the provisions of a member control agreement.  The removal is 
without prejudice to any contractual rights of the manager.  
    Subd. 3.  [VACANCY.] A vacancy in an office because of 
death, resignation, removal, disqualification, or other cause 
may, or in the case of a vacancy in the office of chief manager 
or treasurer must, be filled for the unexpired portion of the 
term in the manner provided in the articles or operating 
agreement, or determined by the board of governors, or pursuant 
to section 322B.68.  
    Sec. 91.  [322B.689] [DELEGATION.] 
    Unless prohibited by the articles or operating agreement or 
by a resolution approved by the affirmative vote of a majority 
of the governors present, a manager elected or appointed by the 
board of governors may, without the approval of the board, 
delegate some or all of the duties and powers of an office to 
other persons.  A manager who delegates the duties or powers of 
an office remains subject to the standard of conduct for a 
manager with respect to the discharge of all duties and powers 
so delegated. 
    Sec. 92.  [322B.69] [STANDARD OF CONDUCT.] 
    A manager shall discharge the duties of an office in good 
faith, in a manner the manager reasonably believes to be in the 
best interests of the limited liability company, and with the 
care an ordinarily prudent person in a like position would 
exercise under similar circumstances.  A person exercising the 
principal functions of an office or to whom some or all of the 
duties and powers of an office are delegated pursuant to section 
322B.689 is considered a manager for purposes of this section 
and sections 322B.38 and 322B.699.  

                          LOANS AND OBLIGATIONS 
    Sec. 93.  [322B.693] [LOANS, GUARANTEES AND SURETYSHIP.] 
    Subdivision 1.  [PREREQUISITES.] A limited liability 
company may lend money to, guarantee an obligation of, become a 
surety for, or otherwise financially assist a person, if the 
transaction, or a class of transactions to which the transaction 
belongs, is approved by the affirmative vote of a majority of 
the governors present and:  
    (1) is in the usual and regular course of business of the 
limited liability company; 
    (2) is with, or for the benefit of, a related limited 
liability company, an organization in which the limited 
liability company has a financial interest, an organization with 
which the limited liability company has a business relationship, 
or an organization to which the limited liability company has 
the power to make donations; 
    (3) is with, or for the benefit of, a manager or other 
employee of the limited liability company or a subsidiary, 
including a manager or employee who is a governor of the limited 
liability company or a subsidiary, and may reasonably be 
expected, in the judgment of the board of governors, to benefit 
the limited liability company; or 
    (4) has been approved by the owners of two-thirds of the 
voting power of persons other than the interested person or 
persons, or the unanimous affirmative vote of all members, 
whether or not ordinarily entitled to vote.  
    Subd. 2.  [INTEREST AND SECURITY.] A loan, guaranty, surety 
contract, or other financial assistance under subdivision 1 may 
be with or without interest and may be unsecured or may be 
secured in any manner, including, without limitation, a grant of 
a security interest in a member's financial rights in the 
limited liability company.  
    Subd. 3.  [BANKING AUTHORITY NOT GRANTED.] This section 
does not grant any authority to act as a bank or to carry on the 
business of banking.  
    Sec. 94.  [322B.696] [ADVANCES.] 
    A limited liability company may, without a vote of the 
governors or its members, advance money to its governors, 
managers, or employees to cover expenses that can reasonably be 
anticipated to be incurred by them in the performance of their 
duties and for which they would be entitled to reimbursement in 
the absence of an advance. 
    Sec. 95.  [322B.699] [INDEMNIFICATION.] 
    Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
section, the terms defined in this subdivision have the meanings 
given them.  
    (b) "Limited liability company" includes a domestic or 
foreign limited liability company that was the predecessor of 
the limited liability company referred to in this section in a 
merger or other transaction in which the predecessor's existence 
ceased upon consummation of the transaction.  
    (c) "Official capacity" means (1) with respect to a 
governor, the position of governor in a limited liability 
company, (2) with respect to a person other than a governor, the 
elective or appointive office or position held by a manager, 
member of a committee of the board of governors, or the 
employment relationship undertaken by an employee of the limited 
liability company, and (3) with respect to a governor, manager, 
or employee of the limited liability company who, while a 
governor, manager, or employee of the limited liability company, 
is or was serving at the request of the limited liability 
company or whose duties in that position involve or involved 
service as a governor, director, manager, officer, partner, 
trustee, employee, or agent of another organization or employee 
benefit plan, the position of that person as a governor, 
director, manager, officer, partner, trustee, employee, or 
agent, as the case may be, of the other organization or employee 
benefit plan. 
    (d) "Proceeding" means a threatened, pending, or completed 
civil, criminal, administrative, arbitration, or investigative 
proceeding, including a proceeding by or in the right of the 
limited liability company.  
    (e) "Special legal counsel" means counsel who has not 
represented the limited liability company or a related limited 
liability company, or a governor, manager, member of a committee 
of the board of governors, or employee, whose indemnification is 
in issue.  
    Subd. 2.  [INDEMNIFICATION.] (a) Subject to the provisions 
of subdivision 4, a limited liability company shall indemnify a 
person made or threatened to be made a party to a proceeding by 
reason of the former or present official capacity of the person 
against judgments, penalties, fines, including, without 
limitation, excise taxes assessed against the person with 
respect to an employee benefit plan, settlements, and reasonable 
expenses, including attorney's fees and disbursements, incurred 
by the person in connection with the proceeding, if, with 
respect to the acts or omissions of the person complained of in 
the proceeding, the person:  
    (1) has not been indemnified by another organization or 
employee benefit plan for the same judgments, penalties, fines, 
including, without limitation, excise taxes assessed against the 
person with respect to an employee benefit plan, settlements, 
and reasonable expenses, including attorney's fees and 
disbursements, incurred by the person in connection with the 
proceeding with respect to the same acts or omissions; 
    (2) acted in good faith; 
    (3) received no improper personal benefit and section 
322B.666, if applicable, has been satisfied; 
    (4) in the case of a criminal proceeding, had no reasonable 
cause to believe the conduct was unlawful; and 
    (5) in the case of acts or omissions occurring in the 
official capacity described in subdivision 1, paragraph (c), 
clause (1) or (2), reasonably believed that the conduct was in 
the best interests of the limited liability company, or in the 
case of acts or omissions occurring in the official capacity 
described in subdivision 1, paragraph (c), clause (3), 
reasonably believed that the conduct was not opposed to the best 
interests of the limited liability company.  If the person's 
acts or omissions complained of in the proceeding relate to 
conduct as a director, officer, trustee, employee, or agent of 
an employee benefit plan, the conduct is not considered to be 
opposed to the best interests of the limited liability company 
if the person reasonably believed that the conduct was in the 
best interests of the participants or beneficiaries of the 
employee benefit plan.  
    (b) The termination of a proceeding by judgment, order, 
settlement, conviction, or upon a plea of nolo contendere or its 
equivalent does not, of itself, establish that the person did 
not meet the criteria set forth in this subdivision.  
    Subd. 3.  [ADVANCES.] Subject to the provisions of 
subdivision 4, if a person is made or threatened to be made a 
party to a proceeding, the person is entitled, upon written 
request to the limited liability company, to payment or 
reimbursement by the limited liability company of reasonable 
expenses, including attorney's fees and disbursements, incurred 
by the person in advance of the final disposition of the 
proceeding: 
    (1) upon receipt by the limited liability company of a 
written affirmation by the person of a good faith belief that 
the criteria for indemnification set forth in subdivision 2 have 
been satisfied and a written undertaking by the person to repay 
all amounts so paid or reimbursed by the limited liability 
company, if it is ultimately determined that the criteria for 
indemnification have not been satisfied; and 
    (2) after a determination that the facts then known to 
those making the determination would not preclude 
indemnification under this section.  
    The written undertaking required by clause (1) is an 
unlimited general obligation of the person making it, but need 
not be secured and shall be accepted without reference to 
financial ability to make the repayment.  
    Subd. 4.  [PROHIBITION OR LIMIT ON INDEMNIFICATION OR 
ADVANCES.] The articles of organization or operating agreement 
either may prohibit indemnification or advances of expenses 
otherwise required by this section or may impose conditions on 
indemnification or advances of expenses in addition to the 
conditions contained in subdivisions 2 and 3 including, without 
limitation, monetary limits on indemnification or advances of 
expenses, if the conditions apply equally to all persons or to 
all persons within a given class.  A prohibition or limit on 
indemnification or advances may not apply to or affect the right 
of a person to indemnification or advances of expenses with 
respect to any acts or omissions of the person occurring before 
the effective date of a provision in the articles of 
organization or the date of adoption of a provision in the 
operating agreement establishing the prohibition or limit on 
indemnification or advances.  
    Subd. 5.  [REIMBURSEMENT TO WITNESSES.] This section does 
not require, or limit the ability of, a limited liability 
company to reimburse expenses, including attorney's fees and 
disbursements, incurred by a person in connection with an 
appearance as a witness in a proceeding at a time when the 
person has not been made or threatened to be made a party to a 
proceeding.  
    Subd. 6.  [DETERMINATION OF ELIGIBILITY.] (a) All 
determinations whether indemnification of a person is required 
because the criteria set forth in subdivision 2 have been 
satisfied and whether a person is entitled to payment or 
reimbursement of expenses in advance of the final disposition of 
a proceeding as provided in subdivision 3 must be made:  
    (1) by the board of governors by a majority of a quorum.  
Governors who are, at the time, parties to the proceeding are 
not counted for determining either a majority or the presence of 
a quorum; 
    (2) if a quorum under clause (1) cannot be obtained, by a 
majority of a committee of the board of governors, consisting 
solely of two or more governors not at the time parties to the 
proceeding, duly designated to act in the matter by a majority 
of the full board of governors including governors who are 
parties; 
    (3) if a determination is not made under clause (1) or (2), 
by special legal counsel, selected either by a majority of the 
board of governors or a committee by vote pursuant to clause (1) 
or (2) or, if the requisite quorum of the full board of 
governors cannot be obtained and the committee cannot be 
established, by a majority of the full board of governors 
including governors who are parties; 
    (4) if a determination is not made under clauses (1) to 
(3), by the members, excluding the votes of membership interests 
held by parties to the proceeding; or 
    (5) if an adverse determination is made under clauses (1) 
to (4) or under paragraph (b), or if no determination is made 
under clauses (1) to (4) or under paragraph (b) within 60 days 
after the termination of a proceeding or after a request for an 
advance of expenses, as the case may be, by a court in this 
state, which may be the same court in which the proceeding 
involving the person's liability took place, upon application of 
the person and any notice the court requires.  
    (b) With respect to a person who is not, and was not at the 
time of the acts or omissions complained of in the proceedings, 
a governor, manager, or person possessing, directly or 
indirectly, the power to direct or cause the direction of the 
management or policies of the limited liability company, the 
determination whether indemnification of this person is required 
because the criteria set forth in subdivision 2 have been 
satisfied and whether this person is entitled to payment or 
reimbursement of expenses in advance of the final disposition of 
a proceeding as provided in subdivision 3 may be made by an 
annually appointed committee of the board of governors, having 
at least one member who is a governor.  The committee shall 
report at least annually to the board of governors concerning 
its actions. 
    Subd. 7.  [INSURANCE.] A limited liability company may 
purchase and maintain insurance on behalf of a person in that 
person's official capacity against any liability asserted 
against and incurred by the person in or arising from that 
capacity, whether or not the limited liability company would 
have been required to indemnify the person against the liability 
under the provisions of this section. 
    Subd. 8.  [DISCLOSURE.] A limited liability company that 
indemnifies or advances expenses to a person in accordance with 
this section in connection with a proceeding by or on behalf of 
the limited liability company shall report to the members in 
writing the amount of the indemnification or advance and to whom 
and on whose behalf it was paid not later than the next meeting 
of members.  
    Subd. 9.  [INDEMNIFICATION OF OTHER PERSONS.] Nothing in 
this section must be construed to limit the power of the limited 
liability company to indemnify other persons by contract or 
otherwise.  

                       MERGER, EXCHANGE, TRANSFER 
    Sec. 96.  [322B.70] [MERGER, EXCHANGE, TRANSFER.] 
    Subdivision 1.  [MERGER.] With or without a business 
purpose, a limited liability company may merge:  
    (1) with another limited liability company or a domestic 
corporation pursuant to a plan of merger approved in the manner 
provided in sections 322B.71 to 322B.75; and 
    (2) with any foreign corporation or foreign limited 
liability company pursuant to a plan of merger approved in the 
manner provided in section 322B.76.  
    Subd. 2.  [EXCHANGE.] (a) A limited liability company may 
acquire all of the ownership interests of one or more classes or 
series of another limited liability company or domestic 
corporation pursuant to a plan of exchange approved in the 
manner provided in sections 322B.71 to 322B.75. 
    (b) A domestic corporation may acquire all of the ownership 
interests of one or more classes or series of a limited 
liability company pursuant to a plan of exchange approved in the 
manner provided in sections 322B.71 to 322B.75. 
    (c) A foreign corporation or foreign limited liability 
company may acquire all of the ownership interests of one or 
more classes or series of a limited liability company pursuant 
to a plan of exchange approved in the manner provided in section 
322B.76. 
    Subd. 3.  [TRANSFER.] A limited liability company may sell, 
lease, transfer, or otherwise dispose of all or substantially 
all of its property and assets in the manner provided in section 
322B.77.  
    Subd. 4.  [PERMITTED TRANSACTIONS.] A limited liability 
company may participate in a merger or exchange only as 
permitted by this section.  
    Sec. 97.  [322B.71] [PLAN OF MERGER OR EXCHANGE.] 
    Subdivision 1.  [CONTENTS OF PLAN.] A plan of merger or 
exchange must contain: 
    (1) the name of the limited liability company and each 
other constituent organization proposing to merge or participate 
in an exchange, and:  
    (i) in the case of a merger, the name of the surviving 
organization, which may be the limited liability company or the 
other constituent organization; or 
    (ii) in the case of an exchange, the name of the acquiring 
organization; 
    (2) the terms and conditions of the proposed merger or 
exchange; 
    (3)(i) in the case of a merger, the manner and basis of 
converting the ownership interests of the constituent 
organizations into securities of the surviving organization or 
of any other organization, or, in whole or in part, into money 
or other property; or 
    (ii) in the case of an exchange, the manner and basis of 
exchanging the ownership interests to be acquired for securities 
of the acquiring organization or any other organization or, in 
whole or part, for money or other property; 
    (4) in the case of a merger, a statement of any amendments 
to the articles of organization or articles of incorporation, as 
the case may be, of the surviving organization proposed as part 
of the merger; and 
    (5) any other provisions with respect to the proposed 
merger or exchange that are considered necessary or desirable.  
    Subd. 2.  [OTHER AGREEMENTS.] The procedure authorized by 
this section does not limit the power of a limited liability 
company to acquire all or part of the ownership interests of one 
or more classes or series of any other organization through a 
negotiated agreement with the owners or otherwise.  
    Sec. 98.  [322B.72] [PLAN APPROVAL.] 
    Subdivision 1.  [GOVERNING BOARD APPROVAL AND NOTICE TO 
OWNERS.] A resolution containing the plan of merger or exchange 
must be approved by the affirmative vote of a majority of the 
board members present at a meeting of the governing board of 
each constituent organization and must then be submitted at a 
regular or a special meeting to the owners of: 
    (1) each constituent organization, in the case of a plan of 
merger; and 
    (2) the organization whose ownership interests will be 
acquired by the acquiring organization in the exchange, in the 
case of a plan of exchange. 
If owners owning any class or series of stock of an organization 
are entitled to vote on the plan of merger or exchange pursuant 
to this section, written notice must be given to every owner of 
that organization, whether or not entitled to vote at the 
meeting, not less than 14 days nor more than 60 days before the 
meeting, in the manner provided in section 302A.435 for notice 
of meetings of shareholders in the case of a domestic 
corporation and in the manner provided in section 322B.34 for 
notice of meetings of members in the case of a limited liability 
company.  The written notice must state that a purpose of the 
meeting is to consider the proposed plan of merger or exchange.  
A copy or short description of the plan of merger or exchange 
must be included in or enclosed with the notice.  
    Subd. 2.  [APPROVAL BY OWNERS.] (a) At the meeting a vote 
of the owners must be taken on the proposed plan.  The plan of 
merger or exchange is adopted when approved by the affirmative 
vote of the owners of a majority of the voting power of all 
ownership interests entitled to vote.  Except as provided in 
paragraph (b), a class or series of ownership interests of the 
organization is entitled to vote as a class or series if any 
provision of the plan would, if contained in a proposed 
amendment to the articles of organization or articles of 
incorporation, as the case may be, entitle the class or series 
of ownership interests to vote as a class or series and, in the 
case of an exchange, if the class or series is included in the 
exchange.  
    (b) A class or series of ownership interests of the 
organization is not entitled to vote as a class or series solely 
because the plan of merger or exchange effects a cancellation of 
the ownership interests of the class or series if the plan of 
merger or exchange effects a cancellation of all ownership 
interests of the organization of all classes and series that are 
existing immediately before the merger or exchange and owners of 
ownership interests of that class or series are entitled to 
obtain payment for the fair value of their shares under section 
322B.383 or 302A.471, as the case may be, in the event of the 
merger or exchange. 
    Subd. 3.  [WHEN APPROVAL BY SHAREHOLDERS OF A SURVIVING 
CORPORATION IS NOT REQUIRED.] Notwithstanding subdivisions 1 and 
2, submission of a plan of merger to a vote at a meeting of 
shareholders of a surviving corporation is not required if:  
    (1) the articles of the corporation will not be amended in 
the transaction; 
    (2) each holder of shares of the corporation that were 
outstanding immediately before the effective date of the 
transaction will hold the same number of shares with identical 
rights immediately after that date; 
    (3) the number of shares of the corporation entitled to 
vote immediately after the merger, plus the number of shares of 
the corporation entitled to vote issuable on conversion of 
securities other than shares or on the exercise of rights to 
purchase securities issued by virtue of the terms of the 
transaction, will not exceed by more than 20 percent, the number 
of shares of the corporation entitled to vote immediately before 
the transaction; and 
    (4) the number of participating shares of the corporation 
immediately after the merger, plus the number of participating 
shares of the corporation issuable on conversion, or on the 
exercise of rights to purchase, securities issued in the 
transaction, will not exceed by more than 20 percent, the number 
of participating shares of the corporation immediately before 
the transaction.  "Participating shares" are outstanding shares 
of the corporation that entitle their holders to participate 
without limitation in distributions by the corporation.  
    Sec. 99.  [322B.73] [ARTICLES OF MERGER OR EXCHANGE AND 
CERTIFICATE.] 
    Subdivision 1.  [CONTENTS OF ARTICLES OF MERGER OR 
EXCHANGE.] Upon receiving the approval required by section 
322B.72, articles of merger or exchange must be prepared that 
contain the plan of merger or exchange, and a statement that the 
plan has been approved by each constituent organization pursuant 
to chapter 322B. 
    Subd. 2.  [ARTICLES SIGNED AND FILED.] The articles of 
merger or exchange must be signed on behalf of each constituent 
organization and filed with the secretary of state. 
    Subd. 3.  [CERTIFICATE OF MERGER OR EXCHANGE.] The 
secretary of state shall issue a certificate of merger to the 
surviving organization, or its legal representative, and a 
certificate of exchange to the acquiring organization, or its 
legal representative. 
    Sec. 100.  [322B.74] [ABANDONMENT.] 
    Subdivision 1.  [BY OWNERS OR PLAN.] After a plan of merger 
or exchange has been approved by the owners entitled to vote on 
the approval of the plan as provided in section 322B.72, and 
before the effective date of the plan, it may be abandoned: 
    (1) if the owners of ownership interests of each of the 
constituent organizations entitled to vote on the approval of 
the plan as provided in section 322B.72 have approved the 
abandonment at a meeting by the affirmative vote of the owners 
of a majority of the voting power of the ownership interests 
entitled to vote and, if the owners of a constituent 
organization are not entitled to vote on the approval of the 
plan under section 322B.72, the governing board of that 
constituent organization has approved the abandonment by the 
affirmative vote of a majority of the board members present; 
    (2) if the plan itself provides for abandonment and all 
conditions for abandonment set forth in the plan are met; or 
    (3) pursuant to subdivision 2.  
    Subd. 2.  [BY THE GOVERNING BOARD.] A plan of merger or 
exchange may be abandoned, before the effective date of the 
plan, by a resolution of the governing board of any constituent 
organization abandoning the plan of merger or exchange approved 
by the affirmative vote of a majority of the board members 
present, subject to the contract rights of any other person 
under the plan.  
    Subd. 3.  [FILING OF ARTICLES.] If articles of merger or 
exchange have been filed with the secretary of state, but have 
not yet become effective, the constituent organizations, in the 
case of abandonment under subdivision 1, clause (1), the 
constituent organizations or any one of them, in the case of 
abandonment under subdivision 1, clause (2), or the abandoning 
organization in the case of abandonment under subdivision 2, 
shall file with the secretary of state articles of abandonment 
that contain:  
    (1) the names of the constituent organizations; 
    (2) the provision of this section under which the plan is 
abandoned; and 
    (3) if the plan is abandoned under subdivision 2, the text 
of the resolution approved by the affirmative vote of a majority 
of the board members present abandoning the plan.  
    Sec. 101.  [322B.75] [EFFECTIVE DATE OF MERGER OR EXCHANGE 
AND EFFECT.] 
    Subdivision 1.  [EFFECTIVE DATE.] A merger or exchange is 
effective when the articles of merger or exchange are filed with 
the secretary of state or on a later date specified in the 
articles of merger or exchange.  
    Subd. 2.  [EFFECT ON CONSTITUENT ORGANIZATIONS.] When a 
merger becomes effective: 
    (1) the constituent organizations become a single entity, 
the surviving limited liability company or corporation, as the 
case may be; 
    (2) the separate existence of all constituent organizations 
except the surviving organization ceases; 
    (3) as to any limited liability company that was a 
constituent organization and is not the surviving organization, 
the articles of merger serve as the articles of termination, 
and, unless previously filed, the notice of dissolution; 
    (4)(i) if the surviving organization is a limited liability 
company, the surviving limited liability company has all the 
rights, privileges, immunities, and powers, and is subject to 
all the duties and liabilities of a limited liability company 
organized under this chapter; and 
    (ii) if the surviving organization is a domestic 
corporation, the surviving domestic corporation has all the 
rights, privileges, immunities, and powers, and is subject to 
all the duties and liabilities of a domestic corporation 
organized under chapter 302A; 
    (5) the surviving organization, whether a limited liability 
company or a domestic or foreign corporation, possesses all the 
rights, privileges, immunities, and franchises, of a public as 
well as of a private nature, of each of the constituent 
organizations.  All property, real, personal, and mixed, and all 
debts due on any account, including subscriptions to shares and 
contribution agreements, as the case may be, and all other 
choses in action, and every other interest of or belonging to or 
due to each of the constituent organizations vests in the 
surviving organization without any further act or deed.  
Confirmatory deeds, assignments, or similar instruments to 
accomplish that vesting may be signed and delivered at any time 
in the name of a constituent organization by its current 
officers or managers, as the case may be, or, if the 
organization no longer exists, by its last officers or managers, 
as the case may be.  The title to any real estate or any 
interest in real estate vested in any of the constituent 
organizations does not revert nor in any way become impaired by 
reason of the merger; 
    (6) the surviving organization is responsible and liable 
for all the liabilities and obligations of each of the 
constituent organizations.  A claim of or against or a pending 
proceeding by or against a constituent organization may be 
prosecuted as if the merger had not taken place, or the 
surviving organization may be substituted in the place of the 
constituent organization.  Neither the rights of creditors nor 
any liens upon the property of a constituent organization are 
impaired by the merger; and 
    (7) the articles of organization or articles of 
incorporation, as the case may be, of the surviving organization 
are considered to be amended to the extent that changes in its 
articles, if any, are contained in the plan of merger.  
    Subd. 3.  [EFFECT ON OWNERS.] When a merger or exchange 
becomes effective, the ownership interests to be converted or 
exchanged under the terms of the plan cease to exist in the case 
of a merger, or are considered to be exchanged in the case of an 
exchange.  The owners of those ownership interests are entitled 
only to the securities, money, or other property into which 
those ownership interests have been converted or for which those 
ownership interests have been exchanged in accordance with the 
plan, subject to any dissenters' rights under section 302A.471 
or 322B.383, as the case may be.  
    Sec. 102.  [322B.76] [MERGER OR EXCHANGE WITH FOREIGN 
CORPORATION.] 
    Subdivision 1.  [WHEN PERMITTED.] A limited liability 
company may merge with or participate in an exchange with a 
foreign corporation or a foreign limited liability company by 
following the procedures set forth in this section, if:  
    (1) with respect to a merger, the merger is permitted by 
the laws of the state under which the foreign corporation or 
foreign limited liability company is incorporated or organized; 
and 
    (2) with respect to an exchange, the organization whose 
ownership interests will be acquired is either a limited 
liability company or a domestic corporation, whether or not the 
exchange is permitted by the laws of the state under which the 
foreign corporation or foreign limited liability company is 
incorporated or organized. 
    Subd. 2.  [LAWS APPLICABLE BEFORE TRANSACTION.] Each 
limited liability company shall comply with the provisions of 
sections 322B.70 to 322B.76 with respect to the merger or 
exchange of ownership interests of organizations and each 
foreign corporation or foreign limited liability company shall 
comply with the applicable provisions of the laws under which it 
was incorporated or organized or by which it is governed.  
    Subd. 3.  [SURVIVING DOMESTIC LIMITED LIABILITY 
COMPANY.] If the surviving organization in a merger will be a 
domestic limited liability company, it shall comply with all the 
provisions of this chapter. 
    Subd. 4.  [SURVIVING FOREIGN CORPORATION OR FOREIGN LIMITED 
LIABILITY COMPANY.] If the surviving organization in a merger 
will be a foreign corporation or foreign limited liability 
company and will transact business in this state, it shall 
comply, as the case may be, with the provisions of chapter 303 
with respect to foreign corporations or with the provisions of 
this chapter with respect to foreign limited liability companies.
In every case the surviving foreign corporation or foreign 
limited liability company shall file with the secretary of state:
    (1) an agreement that it may be served with process in this 
state in a proceeding for the enforcement of an obligation of a 
constituent organization and in a proceeding for the enforcement 
of the rights of a dissenting owner of an ownership interest of 
a constituent organization against the surviving foreign 
corporation or foreign limited liability company; 
    (2) an irrevocable appointment of the secretary of state as 
its agent to accept service of process in any proceeding, and an 
address to which process may be forwarded; and 
    (3) an agreement that it will promptly pay to the 
dissenting owners of an ownership interests of each constituent 
domestic limited liability company and constituent domestic 
corporation the amount, if any, to which they are entitled under 
section 302A.473 or 322B.386, as the case may be.  
    Sec. 103.  [322B.77] [TRANSFER OF ASSETS AND WHEN 
PERMITTED.] 
    Subdivision 1.  [MEMBER APPROVAL AND WHEN NOT REQUIRED.] A 
limited liability company, by affirmative vote of a majority of 
the governors present, may sell, lease, transfer, or otherwise 
dispose of all or substantially all of its property and assets 
in the usual and regular course of its business and grant a 
security interest in all or substantially all of its property 
and assets whether or not in the usual and regular course of its 
business, upon those terms and conditions and for those 
considerations, which may be money, securities, or other 
instruments for the payment of money or other property, as the 
board of governors considers expedient, in which case no member 
approval is required.  
    Subd. 2.  [MEMBER APPROVAL AND WHEN REQUIRED.] A limited 
liability company, by affirmative vote of a majority of the 
governors present, may sell, lease, transfer, or otherwise 
dispose of all or substantially all of its property and assets, 
including its good will, not in the usual and regular course of 
its business, upon those terms and conditions and for those 
considerations, which may be money, securities, or other 
instruments for the payment of money or other property, as the 
board of governors considers expedient, when approved at a 
regular or special meeting of the members by the affirmative 
vote of the owners of a majority of the voting power of the 
interests entitled to vote.  Written notice of the meeting must 
be given to all members whether or not they are entitled to vote 
at the meeting.  The written notice must state that a purpose of 
the meeting is to consider the sale, lease, transfer, or other 
disposition of all or substantially all of the property and 
assets of the limited liability company.  
    Subd. 3.  [SIGNING OF DOCUMENTS.] Confirmatory deeds, 
assignments, or similar instruments to evidence a sale, lease, 
transfer, or other disposition may be signed and delivered at 
any time in the name of the transferor by its current managers 
or, if the limited liability company no longer exists, by its 
last managers. 
    Subd. 4.  [TRANSFEREE LIABILITY.] The transferee is liable 
for the debts, obligations, and liabilities of the transferor 
only to the extent provided in the contract or agreement between 
the transferee and the transferor or to the extent provided by 
this chapter or other statutes of this state.  

                               DISSOLUTION 
    Sec. 104.  [322B.80] [DISSOLUTION.] 
    Subdivision 1.  [DISSOLUTION EVENTS.] A limited liability 
company dissolves upon the occurrence of any of the following 
events:  
    (1) when the period fixed in the articles of organization 
for the duration of the limited liability company expires; 
    (2) by order of a court pursuant to sections 322B.833 and 
322B.843; 
    (3) by action of the organizers pursuant to section 
322B.803; 
    (4) by action of the members pursuant to section 322B.806; 
or 
    (5) upon the occurrence of an event that terminates the 
continued membership of a member in the limited liability 
company, including: 
    (i) death of any member; 
    (ii) retirement of any member; 
    (iii) resignation of any member; 
    (iv) redemption of a member's complete membership interest; 
    (v) assignment of a member's governance rights under 
section 322B.313 which leaves the assignor with no governance 
rights; 
    (vi) a buy-out of a member's membership interest under 
section 322B.833 that leaves that member with no governance 
rights; 
    (vii) expulsion of any member; 
    (viii) bankruptcy of any member; 
    (ix) dissolution of any member; 
    (x) a merger in which the limited liability company is not 
the surviving organization; 
    (xi) an exchange in which the limited liability company is 
not the acquiring organization; or 
    (xii) the occurrence of any other event that terminates the 
continued membership of a member in the limited liability 
company, 
but the limited liability company is not dissolved and is not 
required to be wound up by reason of any event that terminates 
the continued membership of a member if (A) either there are at 
least two remaining members or a new member is admitted as 
provided in section 322B.11, and (B) the existence and business 
of the limited liability company is continued by the consent of 
all the remaining members under a right to do so stated in the 
articles of organization and the consent is obtained no later 
than 90 days after the termination of the continued membership.  
    Subd. 2.  [PROCEDURES FOLLOWING DISSOLUTION.] A limited 
liability company dissolved by one of the dissolution events 
specified in subdivision 1 must be wound up and terminated under 
the following dissolution provisions:  
    (1) when a limited liability company is dissolved under 
subdivision 1, clause (1), by reason of the expiration of its 
limited period of duration, the limited liability company must 
be wound up and terminated under sections 322B.81 to 322B.82, 
322B.826, 322B.83, and 322B.876; 
    (2) When a limited liability company is dissolved under 
subdivision 1, clause (2), by reason of a court order, the 
limited liability company must be wound up and terminated under 
sections 322B.83 to 322B.856; 
    (3) when a limited liability company is dissolved under 
subdivision 1, clause (3), by its organizers, the limited 
liability company must be wound up and terminated under sections 
322B.803 and 322B.81 to 322B.83; 
    (4) when a limited liability company is dissolved under 
subdivision 1, clause (4), by its members, the limited liability 
company must be wound up and terminated under sections 322B.806 
to 322B.83 and 322B.873; and 
    (5) when a limited liability company is dissolved under 
subdivision 1, clause (5), by reason of a termination of the 
continued membership of a member, the limited liability company 
must be wound up and terminated under sections 322B.81 to 
322B.82, 322B.826, 322B.83, and 322B.873.  
    Sec. 105.  [322B.803] [NONJUDICIAL DISSOLUTION AND 
TERMINATION BY ORGANIZERS.] 
    Subdivision 1.  [MANNER.] A limited liability company that 
has not accepted contributions may be dissolved and terminated 
by the organizers in the manner set forth in this section.  
    Subd. 2.  [ARTICLES OF DISSOLUTION AND TERMINATION.] (a) A 
majority of the organizers shall sign articles of dissolution 
and termination containing:  
    (1) the name of the limited liability company; 
    (2) the date of organization; 
    (3) a statement that contributions have not been accepted; 
    (4) a statement that no debts remain unpaid.  
    (b) The articles of dissolution and termination shall be 
filed with the secretary of state. 
    Subd. 3.  [EFFECTIVE DATE.] When the articles of 
dissolution and termination have been filed with the secretary 
of state, the limited liability company is terminated. 
    Subd. 4.  [CERTIFICATE OF TERMINATION.] The secretary of 
state shall issue to the terminated limited liability company or 
its legal representative a certificate of termination that 
contains:  
    (1) the name of the limited liability company; 
    (2) the date and time the articles of dissolution and 
termination were filed with the secretary of state; and 
    (3) a statement that the limited liability company is 
terminated.  
    Sec. 106.  [322B.806] [NONJUDICIAL DISSOLUTION BY MEMBERS.] 
    Subdivision 1.  [MANNER.] A limited liability company may 
be dissolved by the members when authorized in the manner set 
forth in this section.  
    Subd. 2.  [NOTICE AND APPROVAL.] (a) Written notice shall 
be given to each member, whether or not entitled to vote at a 
meeting of members, within the time and in the manner provided 
in section 322B.34 for notice of meetings of members and, 
whether the meeting is a regular or a special meeting, must 
state that a purpose of the meeting is to consider dissolving 
the limited liability company and that dissolution must be 
followed by the winding up and termination of the limited 
liability company.  
    (b) The proposed dissolution must be submitted for approval 
at a meeting of members.  If the proposed dissolution is 
approved at a meeting by the affirmative vote of the owners of a 
majority of the voting power of all membership interests 
entitled to vote, the limited liability company is dissolved.  
    Sec. 107.  [322B.81] [FILING NOTICE OF DISSOLUTION AND 
EFFECT.] 
    Subdivision 1.  [CONTENTS.] If dissolution of the limited 
liability company is approved pursuant to section 322B.806, 
subdivision 2, or it occurs under section 322B.80, subdivision 
1, clause (1) or (5), the limited liability company shall file 
with the secretary of state a notice of dissolution.  The notice 
must contain: 
    (1) the name of the limited liability company; 
    (2)(i) if the dissolution is approved pursuant to section 
322B.806, subdivision 2, the date and place of the meeting at 
which the resolution was approved; and a statement that the 
requisite vote of the members was received, or that members 
validly took action without a meeting; 
    (ii) if the dissolution occurs under section 322B.80, 
subdivision 1, clause (1), by the expiration of the limited 
liability company's duration, a statement of the expiration 
date; and 
    (iii) if the dissolution occurs under section 322B.80, 
subdivision 1, clause (5), by the termination of a membership 
interest of a member, a statement that the continued membership 
of a member has terminated and the date of that termination.  
    Subd. 2.  [WINDING UP.] When the notice of dissolution has 
been filed with the secretary of state, and subject to section 
322B.823, the limited liability company shall cease to carry on 
its business, except to the extent necessary for the winding up 
of the business of the limited liability company.  The members 
shall retain the right to revoke the dissolution in accordance 
with section 322B.823 and the right to remove governors or fill 
vacancies on the board of governors.  The limited liability 
company existence continues to the extent necessary to wind up 
the affairs of the limited liability company until the 
dissolution is revoked or articles of termination are filed with 
the secretary of state.  
    Subd. 3.  [CERTAIN MERGERS PERMITTED DURING WINDING UP.] As 
part of winding up, the limited liability company may 
participate in a merger with another limited liability company 
or with a domestic or foreign corporation under sections 322B.70 
to 322B.76, but the dissolved limited liability company shall 
not be the surviving organization.  
    Subd. 4.  [REMEDIES CONTINUED.] The filing with the 
secretary of state of a notice of dissolution does not affect 
any remedy in favor of the limited liability company or any 
remedy against it or its governors, managers, or members in 
those capacities, except as provided in section 322B.816, 
322B.82, or 322B.863. 
    Sec. 108.  [322B.813] [PROCEDURE IN WINDING UP.] 
    Subdivision 1.  [PROCEDURES TO BE FOLLOWED WHERE WINDING UP 
ACCOMPLISHED BY MERGER.] If the business of the limited 
liability company is wound up and terminated by merging the 
dissolved limited liability company into a successor 
organization: 
    (1) the procedures stated in sections 322B.70 to 322B.76 
must be followed; 
    (2) sections 322B.816 to 322B.823 and sections 322B.863 to 
322B.866 do not apply; and 
    (3) once the merger is effective, a creditor or claimant of 
the terminated limited liability company, and all those claiming 
through or under the creditor or claimant, are barred from suing 
the terminated limited liability company on that claim or 
otherwise realizing upon or enforcing it against the terminated 
limited liability company, but the creditor, claimant, and those 
claiming under the creditor and claimant, may, if not otherwise 
barred by law, assert their claims against the surviving 
organization of the merger.  
    Subd. 2.  [PROCEDURES TO BE FOLLOWED OTHERWISE.] If the 
business of the limited liability company is to be wound up and 
terminated other than by merging the dissolved limited liability 
company into a successor organization, the procedures stated in 
subdivisions 3 to 5 must be followed.  
    Subd. 3.  [COLLECTION AND PAYMENT.] When a notice of 
dissolution has been filed with the secretary of state, the 
board of governors, or the managers acting under the direction 
of the board of governors, shall proceed as soon as possible: 
    (1) to give notice to creditors and claimants under section 
322B.816 or to proceed under section 322B.82; 
    (2) subject to any business continuation agreement, to 
collect or make provision for the collection of all known debts 
due or owing to the limited liability company, including 
unperformed contribution agreements; and 
    (3) except as provided in sections 322B.816, 322B.82, and 
322B.863, to pay or make provision for the payment of all known 
debts, obligations, and liabilities of the limited liability 
company according to their priorities under section 322B.873. 
    Subd. 4.  [TRANSFER OF ASSETS.] Notwithstanding section 
322B.77, when a notice of dissolution has been filed with the 
secretary of state, the governors may sell, lease, transfer, or 
otherwise dispose of all or substantially all of the property 
and assets of a dissolved limited liability company without a 
vote of the members.  
    Subd. 5.  [DISTRIBUTION TO MEMBERS.] All tangible or 
intangible property, including money, remaining after the 
discharge of the debts, obligations, and liabilities of the 
limited liability company must be distributed to the members in 
accordance with sections 322B.52 and 322B.873. 
    Sec. 109.  [322B.816] [WINDING UP PROCEDURE FOR LIMITED 
LIABILITY COMPANIES THAT GIVE NOTICE TO CREDITORS AND 
CLAIMANTS.] 
    Subdivision 1.  [WHEN PERMITTED AND HOW GIVEN.] When a 
notice of dissolution has been filed with the secretary of 
state, and the business of the limited liability company is not 
to be wound up and terminated by merging the dissolved limited 
liability company into a successor organization under section 
322B.81, subdivision 3, then the limited liability company may 
give notice of the filing to each creditor of and claimant 
against the limited liability company known or unknown, present 
or future, and contingent or noncontingent.  If notice to 
creditors and claimants is given, it must be given by publishing 
the notice once each week for four successive weeks in a legal 
newspaper in the county or counties where the registered office 
and the principal executive office of the limited liability 
company are located and by giving written notice to known 
creditors and claimants pursuant to section 322B.03, subdivision 
32.  
    Subd. 2.  [REQUIRED CONTENTS.] The notice to creditors and 
claimants must contain: 
    (1) a statement that the limited liability company has 
dissolved and is in the process of winding up its affairs; 
    (2) a statement that the limited liability company has 
filed with the secretary of state a notice of dissolution; 
    (3) the date of filing the notice of dissolution; 
    (4) the address of the office to which written claims 
against the limited liability company must be presented; and 
    (5) the date by which all the claims must be received, 
which must be the later of 90 days after published notice or, 
with respect to a particular known creditor or claimant, 90 days 
after the date on which written notice was given to that 
creditor or claimant.  Published notice is considered given on 
the date of first publication for the purpose of determining 
this date.  
    Subd. 3.  [OPTIONAL CONTENTS WHERE BUSINESS BEING 
CONTINUED.] If the business of the limited liability company is 
being continued under a business continuation agreement, the 
notice to creditors may also contain all, but not less than all, 
of the following:  
    (1) a statement that the business of the dissolved limited 
liability company is being continued by a successor 
organization; 
    (2) the name and address of the successor organization; 
    (3) an undertaking by the successor organization to assume 
all the liabilities of the dissolved limited liability company; 
and 
    (4) a statement that creditors of the dissolved limited 
liability company do not need to file claims against the limited 
liability company in order to preserve their rights to enforce 
those claims against the successor organization.  
    Neither the existence of a business continuation agreement 
nor the giving of the information described in this subdivision 
affects a creditor's or claimant's right to proceed against the 
dissolved limited liability company.  
    Subd. 4.  [CLAIMS AGAINST LIMITED LIABILITY COMPANIES THAT 
GIVE NOTICE.] (a) A limited liability company that gives notice 
to creditors and claimants has 30 days from the receipt of each 
claim filed according to the procedures set forth by the limited 
liability company on or before the date set forth in the notice 
to accept or reject the claim by giving written notice to the 
person submitting it.  A claim not expressly rejected in this 
manner is considered accepted.  
    (b) A creditor or claimant to whom notice is given and 
whose claim is rejected by the limited liability company has 60 
days from the date of rejection, 180 days from the date the 
limited liability company filed with the secretary of state the 
notice of dissolution, or 90 days after the date on which notice 
was given to the creditor or claimant, whichever is longer, to 
pursue any other remedies with respect to the claim.  
    (c) A creditor or claimant to whom notice is given who 
fails to file a claim according to the procedures set forth by 
the limited liability company on or before the date set forth in 
the notice is barred from suing the dissolved limited liability 
company on that claim or otherwise realizing upon or enforcing 
it against the dissolved limited liability company, except as 
provided in section 322B.863.  If the dissolved limited 
liability company gave the additional information referred to in 
subdivision 3, nothing in this section bars the creditor or 
claimant from seeking to enforce its rights against the 
successor organization.  
    (d) A creditor or claimant whose claim is rejected by the 
limited liability company under paragraph (b) is barred from 
suing on that claim or otherwise realizing upon or enforcing it 
whether against the dissolved limited liability company or any 
successor organization, if the creditor or claimant does not 
initiate legal, administrative, or arbitration proceedings with 
respect to the claim within the time provided in paragraph (b).  
    Subd. 5.  [ARTICLES OF TERMINATION AND WHEN FILED.] 
Articles of termination for a limited liability company that has 
given notice to creditors and claimants under this section must 
be filed with the secretary of state after:  
    (1) the 90-day period in subdivision 2, clause (5), has 
expired and the payment of claims of all creditors and claimants 
filing a claim within that period has been made or provided for; 
or 
    (2) the longest of the periods described in subdivision 4, 
paragraph (b), has expired and there are no pending legal, 
administrative, or arbitration proceedings by or against the 
limited liability company commenced within the time provided in 
subdivision 4, paragraph (b).  
    Subd. 6.  [CONTENTS OF ARTICLES OF TERMINATION.] The 
articles of termination must state: 
    (1) the last date on which the notice was given and that 
the payment of all creditors and claimants filing a claim within 
the 90-day period in subdivision 2, clause (5), has been made or 
provided for, or the date on which the longest of the periods 
described in subdivision 4, paragraph (b), expired; 
    (2) that the remaining property, assets, and claims of the 
limited liability company have been distributed in accordance 
with section 322B.873, or that adequate provision has been made 
for that distribution; and 
    (3) that there are no pending legal, administrative, or 
arbitration proceedings by or against the limited liability 
company commenced within the time provided in subdivision 4, 
paragraph (b), or that adequate provision has been made for the 
satisfaction of any judgment, order, or decree that may be 
entered against it in a pending proceeding.  
    Sec. 110.  [322B.82] [WINDING UP PROCEDURE FOR LIMITED 
LIABILITY COMPANIES THAT DO NOT GIVE NOTICE TO CREDITORS AND 
CLAIMANTS.] 
    Subdivision 1.  [ARTICLES OF TERMINATION AND WHEN FILED.] 
Articles of termination for a limited liability company whose 
business is not to be wound up and terminated by merging the 
dissolved limited liability company into a successor 
organization under section 322B.81, subdivision 3, and that has 
not given notice to creditors and claimants in the manner 
provided in section 322B.816 must be filed with the secretary of 
state after:  
    (1) the payment of claims of all known creditors and 
claimants has been made or provided for; or 
    (2) at least two years have elapsed from the date of filing 
the notice of dissolution.  
    Subd. 2.  [CONTENTS.] The articles of termination must 
state:  
    (1) if articles of termination are being filed pursuant to 
subdivision 1, clause (1), that all known debts, obligations, 
and liabilities of the limited liability company have been paid 
and discharged or that adequate provision has been made for 
payment or discharge; 
    (2) that the remaining property, assets, and claims of the 
limited liability company have been distributed in accordance 
with section 322B.873, or that adequate provision has been made 
for that distribution; and 
    (3) that there are no pending legal, administrative, or 
arbitration proceedings by or against the limited liability 
company, or that adequate provision has been made for the 
satisfaction of any judgment, order, or decree that may be 
entered against it in a pending proceeding.  
    Subd. 3.  [CLAIMS AGAINST LIMITED LIABILITY COMPANIES THAT 
DO NOT GIVE NOTICE AND ARE NOT WOUND UP AND TERMINATED THROUGH 
MERGER.] (a) If the limited liability company has paid or 
provided for all known creditors or claimants at the time 
articles of termination are filed, a creditor or claimant who 
does not file a claim or pursue a remedy in a legal, 
administrative, or arbitration proceeding within two years after 
the date of filing the notice of dissolution is barred from 
suing on that claim or otherwise realizing upon or enforcing it. 
    (b) If the limited liability company has not paid or 
provided for all known creditors and claimants at the time 
articles of termination are filed, a person who does not file a 
claim or pursue a remedy in a legal, administrative, or 
arbitration proceeding within two years after the date of filing 
the notice of dissolution is barred from suing on that claim or 
otherwise realizing upon or enforcing it, except as provided in 
section 322B.863.  
    Sec. 111.  [322B.823] [REVOCATION OF DISSOLUTION.] 
    Subdivision 1.  [GENERALLY.] Except as provided in 
subdivisions 4 and 5, winding up proceedings commenced pursuant 
to section 322B.806 may be revoked before the filing of articles 
of termination.  
    Subd. 2.  [NOTICE TO MEMBERS AND APPROVAL.] Written notice 
must be given to every member entitled to vote at a members' 
meeting within the time and in the manner provided in section 
322B.34 for notice of meetings of members and must state that a 
purpose of the meeting is to consider the advisability of 
revoking the dissolution.  The proposed revocation must be 
submitted to the members at the meeting.  If the proposed 
revocation is approved at a meeting by the affirmative vote of 
the owners of a majority of the voting power of all membership 
interests entitled to vote, the dissolution is revoked.  
    Subd. 3.  [EFFECTIVE DATE AND EFFECT.] Revocation of 
dissolution is effective when a notice of revocation is filed 
with the secretary of state.  After the notice is filed the 
limited liability company may cease to wind up and resume 
business.  
    Subd. 4.  [RESTRICTIONS ON REVOCATION.] If a dissolved 
limited liability company is being wound up and terminated by 
being merged into a successor organization under section 
322B.81, subdivision 3, and the plan of merger has been approved 
under section 322B.72, then the dissolution may be revoked under 
this section only after the plan of merger has been properly 
abandoned under section 322B.74.  
    Subd. 5.  [REVOCATION PROHIBITED.] When dissolution occurs 
under section 322B.80, subdivision 1, clause (1), (2), or (5), 
revocation is prohibited.  
    Sec. 112.  [322B.826] [EFFECTIVE DATE OF TERMINATION AND 
CERTIFICATE OF TERMINATION.] 
    Subdivision 1.  [EFFECTIVE DATE.] When the articles of 
termination have been filed with the secretary of state, the 
limited liability company is terminated. 
    Subd. 2.  [CERTIFICATE.] The secretary of state shall issue 
to the dissolved limited liability company or its legal 
representative a certificate of termination that contains:  
    (1) the name of the limited liability company; 
    (2) the date the articles of termination were filed with 
the secretary of state; and 
    (3) a statement that the limited liability company is 
terminated.  
    Sec. 113.  [322B.83] [SUPERVISED WINDING UP AND TERMINATION 
FOLLOWING A NONJUDICIAL DISSOLUTION.] 
    After an event of dissolution has occurred and before a 
certificate of termination has been issued, the limited 
liability company or, for good cause shown, a member or creditor 
may apply to a court within the county in which the registered 
office of the limited liability company is situated to have the 
dissolution conducted or continued under the supervision of the 
court as provided in sections 322B.833 to 322B.863.  
    Sec. 114.  [322B.833] [JUDICIAL INTERVENTION AND EQUITABLE 
REMEDIES, DISSOLUTION, AND TERMINATION.] 
    Subdivision 1.  [WHEN PERMITTED.] A court may grant any 
equitable relief it considers just and reasonable in the 
circumstances or may dissolve, wind up, and terminate a limited 
liability company:  
    (1) in a supervised winding up and termination pursuant to 
section 322B.83; 
    (2) in an action by a member when it is established that:  
    (i) the governors or the persons having the authority 
otherwise vested in the board of governors are deadlocked in the 
management of the affairs of the limited liability company and 
the members are unable to break the deadlock; 
    (ii) the governors or those in control of the limited 
liability company have acted fraudulently, illegally, or in a 
manner unfairly prejudicial toward one or more members in their 
capacities as members, governors, or managers, or as employees 
of a closely held limited liability company; 
    (iii) the members of the limited liability company are so 
divided in voting power that, for a period that includes the 
time when two consecutive regular meetings were held, they have 
failed to elect successors to governors whose terms have expired 
or would have expired upon the election and qualification of 
their successors; 
    (iv) the limited liability company assets are being 
misapplied or wasted; or 
    (v) an event of dissolution has occurred under section 
322B.80, subdivision 1, clause (1), (4) or (5) but the limited 
liability company is not acting to wind up its affairs; 
    (3) in an action by a creditor when:  
    (i) the claim of the creditor has been reduced to judgment 
and an execution on the judgment has been returned unsatisfied; 
or 
    (ii) the limited liability company has admitted in writing 
that the claim of the creditor is due and owing and it is 
established that the limited liability company is unable to pay 
its debts in the ordinary course of business; or 
    (4) in an action by the attorney general to dissolve the 
limited liability company in accordance with section 322B.843 
when it is established that a decree of termination is 
appropriate.  
    Subd. 2.  [BUY-OUT ON MOTION.] In an action under 
subdivision 1, clause (2), involving a closely held limited 
liability company at the time the action is commenced and in 
which one or more of the circumstances described in that clause 
is established, the court may, upon motion of a limited 
liability company or a member, order the sale by a plaintiff or 
a defendant of all membership interests of the limited liability 
company held by the plaintiff or defendant to either the limited 
liability company or the moving members, whichever is specified 
in the motion, if the court determines in its discretion that an 
order would be fair and equitable to all parties under all of 
the circumstances of the case.  
    The purchase price of any membership interest so sold must 
be the fair value of the membership interest as of the date of 
the commencement of the action or as of another date found 
equitable by the court.  If the articles of organization, a 
member control agreement or business continuation agreement 
states a price for the redemption or buy-out of membership 
interests, the court shall order the sale for the price and on 
the terms set forth in them, unless the court determines that 
the price or terms are unreasonable under all the circumstances 
of the case.  
    Within five days after the entry of the order, the limited 
liability company shall provide each selling member with the 
information it is required to provide under section 322B.386, 
subdivision 5, paragraph (a).  
    If the parties are unable to agree on fair value within 40 
days of entry of the order, the court shall determine the fair 
value of the membership interests under the provisions of 
section 322B.386, subdivision 7, may allow interest or costs as 
provided in section 322B.386, subdivisions 1 and 8, and may 
allocate payment among the member whose membership interest is 
being sold and any assignees of the financial rights of that 
member.  
    The purchase price must be paid in one or more installments 
as agreed on by the parties, or, if no agreement can be reached 
within 40 days of entry of the order, as ordered by the court.  
Upon entry of an order for the sale of a membership interest 
under this subdivision and provided that the limited liability 
company or the moving members post a bond in adequate amount 
with sufficient sureties or otherwise satisfy the court that any 
full purchase price of the membership interest, plus the 
additional costs, expenses, and fees awarded by the court, will 
be paid when due and payable, the selling member shall no longer 
have any rights or status as a member, manager, or governor, 
except the right to receive the fair value of the membership 
interest plus other amounts as might be awarded. 
    Subd. 3.  [CONDITION OF LIMITED LIABILITY COMPANY.] In 
determining whether to order relief under this section and in 
determining what particular relief to order, the court shall 
take into consideration the financial condition of the limited 
liability company but shall not refuse to order any particular 
form of relief solely on the ground that the limited liability 
company has accumulated or current operating profits.  
    Subd. 4.  [CONSIDERATIONS IN GRANTING RELIEF INVOLVING 
CLOSELY HELD LIMITED LIABILITY COMPANIES.] In determining 
whether to order relief under this section and in determining 
what particular relief to order, the court shall take into 
consideration the duty that all members in a closely held 
limited liability company owe one another to act in an honest, 
fair, and reasonable manner in the operation of the limited 
liability company and the reasonable expectations of the members 
as they exist at the inception and develop during the course of 
the members' relationship with the limited liability company and 
with each other.  
    Subd. 5.  [CONSIDERATIONS AS TO DISSOLUTION.] In 
determining what relief to order, the court shall take into 
account that any relief that results in the termination of a 
member's membership interest will cause dissolution of the 
limited liability company.  If the court orders relief that 
results in dissolution of the limited liability company, the 
court shall make appropriate orders providing for the winding up 
and termination of the dissolved limited liability company. 
    Subd. 6.  [LIQUIDATION REMEDY.] In deciding whether to 
order winding up through liquidation, the court shall consider 
whether lesser relief suggested by one or more parties, or 
provided in a business continuation agreement, such as any form 
of equitable relief, or a buy-out or partial liquidation coupled 
with the continuation of the business of the dissolved limited 
liability company through a successor organization, would be 
adequate to permanently relieve the circumstances established 
under subdivision 1, clause (2) or (3).  Lesser relief may be 
ordered in any case where it would be appropriate under all the 
facts and circumstances of the case.  
    Subd. 7.  [EXPENSES.] If the court finds that a party to a 
proceeding brought under this section has acted arbitrarily, 
vexatiously, or otherwise not in good faith, it may in its 
discretion award reasonable expenses, including attorneys' fees 
and disbursements, to any of the other parties.  
    Subd. 8.  [VENUE AND PARTIES.] Proceedings under this 
section must be brought in a court within the county in which 
the registered office of the limited liability company is 
located.  It is not necessary to make members parties to the 
action or proceeding unless relief is sought against them 
personally.  
    Sec. 115.  [322B.836] [JUDICIAL INTERVENTION PROCEDURES.] 
    Subdivision 1.  [ACTION BEFORE HEARING.] In proceedings 
under section 322B.833, the court may issue injunctions, appoint 
receivers with all powers and duties the court directs, take 
other actions required to preserve the limited liability company 
assets wherever situated, and carry on the business of the 
limited liability company until a full hearing can be held. 
    Subd. 2.  [ACTION AFTER HEARING.] After a full hearing has 
been held, upon whatever notice the court directs to be given to 
all parties to the proceedings and to any other parties in 
interest designated by the court, the court may appoint a 
receiver to collect the limited liability company assets, 
including all amounts owing to the limited liability company by 
persons who have made contribution agreements and by persons who 
have made contributions by means of enforceable promises of 
future performance.  A receiver has authority, subject to the 
order of the court, to continue the business of the limited 
liability company and to sell, lease, transfer, or otherwise 
dispose of all or any of the property and assets of the limited 
liability company either at public or private sale.  
    Subd. 3.  [DISCHARGE OF OBLIGATIONS UPON LIQUIDATION.] If 
the court determines that the limited liability company is to be 
dissolved with winding up to be accomplished by liquidation, 
then the assets of the limited liability company or the proceeds 
resulting from a sale, lease, transfer, or other disposition 
must be applied in the following order of priority to the 
payment and discharge or:  
    (1) the costs and expenses of the proceedings, including 
attorneys' fees and disbursements; 
    (2) debts, taxes, and assessments due the United States, 
the state of Minnesota and their subdivisions, and other states 
and their subdivisions, in that order; 
    (3) claims duly proved and allowed to employees under the 
provisions of chapter 176; provided, that claims under this 
clause shall not be allowed if the limited liability company 
carried workers' compensation insurance, as provided by law, at 
the time the injury was sustained; 
    (4) claims, including the value of all compensation paid in 
any medium other than money, duly proved and allowed to 
employees for services performed within three months preceding 
the appointment of the receiver, if any; and 
    (5) other claims duly proved and allowed.  
    Subd. 4.  [REMAINDER TO MEMBERS.] After payment of the 
expenses of receivership and claims of creditors duly proved 
under subdivision 3, the remaining assets, if any, must be 
distributed to the members in accordance with section 322B.873, 
subdivision 1.  
    Sec. 116.  [322B.84] [QUALIFICATIONS OF RECEIVERS AND 
POWERS.] 
    Subdivision 1.  [QUALIFICATIONS.] A receiver shall be a 
natural person or a domestic or foreign organization authorized 
to transact business in this state.  A receiver shall give bond 
as directed by the court with the sureties required by the court.
    Subd. 2.  [POWERS.] A receiver may sue and defend in all 
courts as receiver of the limited liability company.  The court 
appointing the receiver has exclusive jurisdiction of the 
limited liability company and its property.  
    Sec. 117.  [322B.843] [ACTION BY ATTORNEY GENERAL.] 
    Subdivision 1.  [WHEN PERMITTED.] A limited liability 
company may be involuntarily dissolved, wound up and terminated 
by a decree of a court in this state in an action filed by the 
attorney general when it is established that:  
    (1) the articles of organization were procured through 
fraud; 
    (2) the limited liability company was organized for a 
purpose not permitted by section 322B.10; 
    (3) the limited liability company failed to comply with the 
requirements of sections 322B.10 to 322B.18 essential to 
organization under this chapter; 
    (4) the limited liability company has flagrantly violated a 
provision of this chapter, or has violated a provision of this 
chapter more than once, or has violated more than one provision 
of this chapter; or 
    (5) the limited liability company has acted, or failed to 
act, in a manner that constitutes surrender or abandonment of 
the limited liability company privileges or enterprise.  
    Subd. 2.  [NOTICE TO LIMITED LIABILITY COMPANY AND 
CORRECTION.] An action must not be commenced under this section 
until 30 days after notice to the limited liability company by 
the attorney general of the reason for the filing of the 
action.  If the reason for filing the action is an act that the 
limited liability company has done, or omitted to do, and the 
act or omission may be corrected by an amendment of the articles 
of organization or the operating agreement or by performance of 
or abstention from the act, the attorney general shall give the 
limited liability company 30 additional days in which to effect 
the correction before filing the action.  
    Sec. 118.  [322B.846] [FILING CLAIMS IN JUDICIAL 
INTERVENTION PROCEEDINGS.] 
    Subdivision 1.  [JUDICIAL INTERVENTION PROCEEDINGS.] In 
proceedings referred to in section 322B.833, the court may 
require all creditors and claimants of the limited liability 
company to file their claims under oath with the court 
administrator or with the receiver in a form prescribed by the 
court. 
    Subd. 2.  [FILING OF CLAIMS.] If the court requires the 
filing of claims, it shall fix a date not less than 120 days 
from the date of the order as the last day for the filing of 
claims, and shall prescribe the notice of the fixed date that 
shall be given to creditors and claimants.  Before the fixed 
date, the court may extend the time for filing claims.  
Creditors and claimants failing to file claims on or before the 
fixed date may be barred, by order of court, from claiming an 
interest in or receiving payment out of the property or assets 
of the limited liability company.  
    Sec. 119.  [322B.85] [DISCONTINUANCE OF PROCEEDINGS FOR 
WINDING UP THROUGH LIQUIDATION.] 
    If the court has determined that the limited liability 
company is to be dissolved, with winding up to be accomplished 
by liquidation, and subsequently the court determines that the 
grounds for dissolution no longer exist or that the grounds for 
ordering winding up through liquidation no longer exist, the 
court shall make whatever orders are just and reasonable under 
the circumstances.  
    Sec. 120.  [322B.853] [DECREE OF TERMINATION.] 
    Subdivision 1.  [WHEN ENTERED.] If the court has ordered a 
dissolution, or the court has intervened under section 322B.833, 
subdivision 1, clause (1), or has ordered or caused a 
dissolution under any other provision of that subdivision, then 
after the affairs of the dissolved limited liability company 
have been appropriately wound up the court shall enter a decree 
terminating the dissolved limited liability company.  
    Subd. 2.  [EFFECTIVE DATE.] When the decree terminating the 
limited liability company has been entered, the limited 
liability company is terminated.  
    Sec. 121.  [322B.856] [FILING DECREE.] 
    After the court enters a decree terminating a limited 
liability company, the court administrator shall cause a 
certified copy of the decree to be filed with the secretary of 
state.  The secretary of state shall not charge a fee for filing 
the decree. 
    Sec. 122.  [322B.86] [DEPOSIT WITH STATE TREASURER OF 
AMOUNT DUE CERTAIN MEMBERS.] 
    Upon termination of a limited liability company, the 
portion of the assets distributable to a member who is unknown 
or cannot be found, or who is under disability, if there is no 
person legally competent to receive the distributive portion, 
must be reduced to money and deposited with the state 
treasurer.  The amount deposited is appropriated to the state 
treasurer and must be paid over to the member or a legal 
representative, upon proof satisfactory to the state treasurer 
of a right to payment.  
    Sec. 123.  [322B.863] [CLAIMS BARRED AND EXCEPTIONS.] 
    Subdivision 1.  [CLAIMS BARRED.] Except as provided in this 
section, a creditor or claimant whose claims are barred under 
section 322B.816, 322B.82, or 322B.846 includes a person who is 
or becomes a creditor or claimant at any time before, during, or 
following the conclusion of termination proceedings, and all 
those claiming through or under the creditor or claimant. 
    Subd. 2.  [CLAIMS REOPENED.] At any time within one year 
after articles of termination have been filed with the secretary 
of state pursuant to section 322B.816 or 322B.82, subdivision 1, 
clause (2), or a decree of termination has been entered, a 
creditor or claimant who shows good cause for not having 
previously filed the claim may apply to a court in this state to 
allow a claim:  
    (1) against the limited liability company to the extent of 
undisposed assets; or 
    (2) if the undisposed assets are not sufficient to satisfy 
the claim, against a member, whose liability is limited to a 
portion of the claim that is equal to the portion of the 
distributions to members in liquidation or termination received 
by the member, but in no event may a member's liability exceed 
the amount that the member actually received in the termination. 
    Subd. 3.  [OBLIGATIONS INCURRED DURING TERMINATION 
PROCEEDINGS.] All known contractual debts, obligations, and 
liabilities incurred in the course of winding up and terminating 
the limited liability company's affairs must be paid or provided 
for by the limited liability company before the distribution of 
assets to a member.  A person to whom this kind of debt, 
obligation, or liability is owed but not paid may pursue any 
remedy before the expiration of the applicable statute of 
limitations against the managers and governors of the limited 
liability company who are responsible for, but who fail to 
cause, the limited liability company to pay or make provision 
for payment of the debts, obligations, and liabilities or 
against members to the extent permitted under section 322B.56.  
This subdivision does not apply to dissolution and termination 
under the supervision or order of a court.  
    Sec. 124.  [322B.866] [RIGHT TO SUE OR DEFEND AFTER 
TERMINATION.] 
    After a limited liability company has been terminated, any 
of its former managers, governors, or members may assert or 
defend, in the name of the limited liability company, any claim 
by or against the limited liability company.  
    Sec. 125.  [322B.87] [OMITTED ASSETS.] 
    Title to assets remaining after payment of all debts, 
obligations, or liabilities and after distributions to members 
may be transferred by a court in this state. 
    Sec. 126.  [322B.873] [DISPOSITION OF ASSETS UPON 
DISSOLUTION.] 
    Subdivision 1.  [DISPOSITION UPON LIQUIDATION.] Except when 
the business of a dissolved limited liability company is being 
continued under subdivision 2 or when the dissolved limited 
liability company is being wound up and terminated under section 
322B.81, subdivision 3, the assets of the dissolved limited 
liability company must be disposed of to satisfying liabilities 
according to the following priorities:  
    (1) to creditors, including members who are creditors, to 
the extent otherwise permitted by law, in satisfaction of 
liabilities of the limited liability company other than 
liabilities for interim distributions to members under section 
322B.51 or termination distributions under section 322B.50; 
    (2) unless otherwise provided in the articles of 
organization, to members and former members of the limited 
liability company in satisfaction of liabilities for 
distributions under section 322B.50 or 322B.51; and 
    (3) unless otherwise provided in the articles of 
organization, to members first for a return of their 
contributions, as restated from time to time under section 
322B.41, and secondly respecting their membership interests in 
the proportions in which the members share in distributions. 
    A limited liability company may offset any amount due a 
member under this subdivision by any amount owed to the limited 
liability company by the member and by the amount of damages, if 
any, suffered by the limited liability company as a result of 
that member's breach of a member control agreement. 
    Subd. 2.  [DISPOSITION UNDER A BUSINESS CONTINUATION 
AGREEMENT.] If a business continuation agreement exists, then 
after dissolution the board of governors shall resolve to 
implement the business continuation agreement and the assets of 
the dissolved limited liability company shall be disposed of 
according to that agreement, except:  
    (1) members and former members shall have dissenters' 
rights as provided in sections 322B.383 and 322B.386, but:  
    (i) no dissenters' rights shall exist if the business of 
the dissolved limited liability company is being continued 
pursuant to a business continuation agreement made after the 
dissolution, and 
    (ii) any dissenters' rights that do exist are limited by 
subdivision 3; and 
    (2) if the business of the dissolved limited liability 
company is being continued, but not through a merger under 
section 322B.81, subdivision 3, the dissolved limited liability 
company shall comply with either section 322B.816 or 322B.82.  
    Subd. 3.  [LIMITATIONS ON DISSENTERS' RIGHTS.] If a person 
has agreed in a business continuation agreement to waive 
dissenters' rights and nonetheless asserts dissenters' rights 
under subdivision 2:  
    (1) those rights must be honored; but 
    (2) unless the business continuation agreement provides 
otherwise: 
    (i) in determining the fair value of the membership 
interest, the value of the goodwill of the business of the 
dissolved limited liability company must not be considered; and 
    (ii) the payment due the dissenter is subject to an offset 
equal to:  
    (A) any amount owed to the limited liability company by the 
member; 
    (B) the amount of damages, if any, suffered by the limited 
liability company as a result of the dissenter's breach of the 
business continuation agreement; and 
    (C) the amount of damages, if any, suffered by the limited 
liability company as a result of any breach by the dissenter of 
any other member control agreement or part of a member control 
agreement.  

              ACTIONS AGAINST LIMITED LIABILITY COMPANIES 
    Sec. 127.  [322B.876] [SERVICE OF PROCESS ON LIMITED 
LIABILITY COMPANY.] 
    Subdivision 1.  [WHO MAY BE SERVED.] A process, notice, or 
demand required or permitted by law to be served upon a limited 
liability company may be served either upon the registered 
agent, if any, of the limited liability company named in the 
articles of organization, or upon a manager of the limited 
liability company, or upon the secretary of state as provided in 
this section.  
    Subd. 2.  [SERVICE ON SECRETARY OF STATE AND WHEN 
PERMITTED.] If a limited liability company has appointed and 
maintained a registered agent in this state but neither its 
registered agent nor a manager of the limited liability company 
can be found at the registered office, or if a limited liability 
company fails to appoint or maintain a registered agent in this 
state and a manager of the limited liability company cannot be 
found at the registered office, then the secretary of state is 
the agent of the limited liability company upon whom the 
process, notice, or demand may be served.  The return of the 
sheriff, or the affidavit of a person not a party, that no 
registered agent or manager can be found at the registered 
office in a county is conclusive evidence that the limited 
liability company has no registered agent or manager at its 
registered office.  Service on the secretary of state of any 
process, notice, or demand is considered personal service upon 
the limited liability company and is made by filing with the 
secretary of state duplicate copies of the process, notice, or 
demand.  The secretary of state shall immediately forward, by 
certified mail, addressed to the limited liability company at 
its registered office, a copy of the process, notice, or 
demand.  Service on the secretary of state is returnable in not 
less than 30 days notwithstanding a shorter period specified in 
the process, notice, or demand. 
    Subd. 3.  [RECORD OF SERVICE.] A record must be maintained 
in the office of the secretary of state of all processes, 
notices, and demands served upon the secretary of state under 
this section, including the date and time of service and the 
action taken with reference to it.  
    Subd. 4.  [OTHER METHODS OF SERVICE.] Nothing in this 
section limits the right of a person to serve any process, 
notice, or demand required or permitted by law to be served upon 
a limited liability company in any other manner permitted by law.
    Sec. 128.  [322B.88] [WHEN A MEMBER IS NOT A PROPER PARTY.] 
    A member of a limited liability company is not a proper 
party to a proceeding by or against a limited liability company 
except when:  
    (1) the object of the proceeding is to determine or enforce 
a member's right against, or liability to, the limited liability 
company; or 
    (2) the proceeding involves a claim of personal liability 
or responsibility of that member and that claim has some basis 
other than the member's status as a member. 
    Sec. 129.  [322B.883] [STATE INTERESTED IN PROCEEDINGS.] 
    If it appears at any stage of a proceeding in a court in 
this state that the state is, or is likely to be, interested in 
the proceeding or that it is a matter of general public 
interest, the court shall order that a copy of the complaint or 
petition be served upon the attorney general in the same manner 
prescribed for serving a summons in a civil action.  The 
attorney general shall intervene in a proceeding when the 
attorney general determines that the public interest requires 
it, whether or not the attorney general has been served.  

                  FOREIGN LIMITED LIABILITY COMPANIES 
    Sec. 130.  [322B.90] [GOVERNING LAW.] 
    Subdivision 1.  [STATE OF ORGANIZATION.] Subject to the 
constitution of this state, the laws of the jurisdiction under 
which a foreign limited liability company is organized govern 
its organization and internal affairs and the liability of its 
members.  A foreign limited liability company may not be denied 
a certificate of authority to transact business in this state by 
reason of any difference between those laws and the laws of this 
state.  
    Subd. 2.  [LIMITATIONS.] A foreign limited liability 
company holding a valid certificate of authority in this state 
has no greater rights and privileges than a domestic limited 
liability company.  The certificate of authority does not 
authorize the foreign limited liability company to exercise any 
of its powers or purposes that a domestic limited liability 
company is forbidden by law to exercise in this state.  
    Sec. 131.  [322B.905] [NAME.] 
    A foreign limited liability company may apply for a 
certificate of authority under any name that would be available 
to a domestic limited liability company, whether or not the name 
is the name under which it is authorized in its jurisdiction of 
organization.  
    Sec. 132.  [322B.91] [APPLICATION FOR CERTIFICATE OF 
AUTHORITY.] 
    Subdivision 1.  [APPLICATION INFORMATION.] Before 
transacting business in this state, a foreign limited liability 
company shall obtain a certificate of authority.  An applicant 
for the certificate shall file with the secretary of state an 
application executed by an authorized person and setting forth:  
    (1) the name of the foreign limited liability company and, 
if different, the name under which it proposes to transact 
business in this state; 
    (2) the jurisdiction of its organization; 
    (3) the name and business address of the proposed 
registered agent in this state, which agent shall be an 
individual resident of this state, a domestic corporation, or a 
foreign corporation having a place of business in, and 
authorized to do business in, this state; and 
    (4) the address of the office required to be maintained in 
the jurisdiction of its organization by the laws of that 
jurisdiction or, if not so required, of the principal place of 
business of the foreign limited liability company. 
    Subd. 2.  [FEES.] The application must be accompanied by 
payment of $185, which includes a $150 initial license fee in 
addition to the $35 filing fee required by section 322B.03, 
subdivision 18.  
    Sec. 133.  [322B.915] [ISSUANCE OF CERTIFICATE OF 
AUTHORITY.] 
    Subdivision 1.  [ISSUANCE OF CERTIFICATE.] If the secretary 
of state finds that an application for a certificate of 
authority conforms to law and all fees have been paid, the 
secretary shall: 
    (1) endorse on the application the word "Filed" and the 
date of the filing of it; 
    (2) file the original of the application; and 
    (3) return the original of the application to the person 
who filed it with a certificate of authority issued by the 
secretary of state.  
    Subd. 2.  [EFFECTIVE DATE OF CERTIFICATE.] A certificate of 
authority issued under this section is effective from the date 
the application is filed with the secretary of state accompanied 
by the payment of the requisite fees.  
    Sec. 134.  [322B.92] [AMENDMENTS TO THE CERTIFICATE OF 
AUTHORITY.] 
    If any statement in the application for a certificate of 
authority by a foreign limited liability company was false when 
made or any arrangements or other facts described have changed, 
making the application inaccurate in any respect, including but 
not limited to a change in the name or address of the registered 
agent required to be maintained by section 322B.925, the foreign 
limited liability company shall promptly file with the secretary 
of state an amendment to the certificate of authority, executed 
by an authorized person correcting the statement. 
    Sec. 135.  [322B.925] [REGISTERED AGENT AND CERTAIN 
REPORTS.] 
    A foreign limited liability company authorized to transact 
business in this state shall: 
    (1) appoint and continuously maintain a registered agent in 
the same manner as provided in section 322B.13; or 
    (2) file a report upon any change in the name or business 
address of its registered agent in the same manner as provided 
in section 322B.135, subdivision 3.  
    Sec. 136.  [322B.93] [CERTIFICATE OF WITHDRAWAL.] 
    A foreign limited liability company authorized to transact 
business in this state may withdraw from this state upon 
procuring from the secretary of state a certificate of 
withdrawal.  In order to procure the certificate, the foreign 
limited liability company shall file with the secretary of state 
an application for withdrawal, which must set forth:  
    (1) the name of the limited liability company and the state 
or country under the laws of which it is organized; 
    (2) that the limited liability company is not transacting 
business in this state; 
    (3) that the limited liability company surrenders its 
authority to transact business in this state; 
    (4) that the limited liability company revokes the 
authority of its registered agent in this state to accept 
service of process and consents to that service of process in 
any action, suit, or proceeding based upon any cause of action 
arising in this state during the time the limited liability 
company was authorized to transact business in this state may be 
made on the limited liability company by service upon the 
secretary of state; and 
    (5) a post office address to which a person may mail a copy 
of any process against the limited liability company.  
    Sec. 137.  [322B.935] [REVOCATION OF CERTIFICATE OF 
AUTHORITY.] 
    Subdivision 1.  [REVOCATION PROCEDURE.] The certificate of 
authority of a foreign limited liability company to transact 
business in this state may be revoked by the secretary of state 
upon the occurrence of any of these events:  
    (1) the foreign limited liability company has failed to 
appoint and maintain a registered agent as required by this 
chapter, file a report upon any change in the name or business 
address of the registered agent, or file in the office of the 
secretary of state any amendment to its application for a 
certificate of authority as specified in section 322B.92; or 
    (2) a misrepresentation has been made of any material 
matter in any application, report, affidavit, or other document 
submitted by the foreign limited liability company pursuant to 
this chapter.  
    Subd. 2.  [REVOCATION NOTICE.] No certificate of authority 
of a foreign limited liability company shall be revoked by the 
secretary of state unless:  
    (1) the secretary has given the foreign limited liability 
company not less than 60 days' notice by mail addressed to its 
registered office in this state or, if the foreign limited 
liability company fails to appoint and maintain a registered 
agent in this state, addressed to the office required to be 
maintained pursuant to section 322B.13; and 
    (2) during the 60-day period, the foreign limited liability 
company has failed to file the report of change regarding the 
registered agent, to file any amendment, or to correct the 
misrepresentation.  
    Subd. 3.  [EFFECTIVE DATE.] Upon the expiration of 60 days 
after the mailing of the notice, the authority of the foreign 
limited liability company to transact business in this state 
ceases.  The secretary of state shall issue a certificate of 
revocation and shall mail the certificate to the principal 
executive office of the foreign limited liability company.  
    Sec. 138.  [322B.94] [TRANSACTION OF BUSINESS WITHOUT 
CERTIFICATE OF AUTHORITY.] 
    Subdivision 1.  [ACCESS TO COURTS.] A foreign limited 
liability company transacting business in this state may not 
maintain any action, suit, or proceeding in any court of this 
state until it possesses a certificate of authority.  
    Subd. 2.  [CONTRACTS AND DEFENSE SUITS.] The failure of a 
foreign limited liability company to obtain a certificate of 
authority does not impair the validity of any contract or act of 
the foreign limited liability company or prevent the foreign 
limited liability company from defending any action, suit, or 
proceeding in any court of this state.  
    Subd. 3.  [DESIGNATED REGISTERED AGENT.] A foreign limited 
liability company, by transacting business in this state without 
a certificate of authority, appoints the secretary of state as 
its agent upon whom any notice, process, or demand may be served.
    Subd. 4.  [FEES.] A foreign limited liability company that 
transacts business in this state without a valid certificate of 
authority is liable to the state for the years or parts of years 
during which it transacted business in this state without the 
certificate in an amount equal to all fees that would have been 
imposed by this chapter upon that limited liability company had 
it duly obtained the certificate, filed all reports required by 
this chapter, and paid all penalties imposed by this chapter.  
The attorney general shall bring proceedings to recover all 
amounts due this state under the provisions of this section.  
    Subd. 5.  [CIVIL PENALTY.] A foreign limited liability 
company that transacts business in this state without a valid 
certificate of authority is subject to a civil penalty, payable 
to the state, not to exceed $5,000.  Each governor or, in the 
absence of governors, each member or agent who authorizes, 
directs, or participates in the transaction of business in this 
state on behalf of a foreign limited liability company that does 
not have a certificate is subject to a civil penalty, payable to 
the state, not to exceed $1,000. 
    Subd. 6.  [INJUNCTION.] The civil penalties set forth in 
subdivision 5 may be recovered in an action brought within the 
district court for Ramsey county by the attorney general.  Upon 
a finding by the court that a foreign limited liability company 
or any of its members, governors, or agents have transacted 
business in this state in violation of this chapter, the court 
shall issue, in addition to the imposition of a civil penalty, 
an injunction restraining the further transaction of the 
business of the foreign limited liability company and the 
further exercise of any limited liability company's rights and 
privileges in this state.  The foreign limited liability company 
must be enjoined from transacting business in this state until 
all civil penalties plus any interest and court costs that the 
court may assess have been paid and until the foreign limited 
liability company has otherwise complied with the provisions of 
this chapter. 
    Subd. 7.  [MEMBER LIMITED LIABILITY.] A member of a foreign 
limited liability company is not liable for the debts and 
obligations of the limited liability company solely by reason of 
the company's having transacted business in this state without a 
valid certificate of authority.  
    Sec. 139.  [322B.945] [TRANSACTIONS NOT CONSTITUTING 
TRANSACTING BUSINESS.] 
    Subdivision 1.  [EXCLUDED ACTS.] The following activities 
of a foreign limited liability company, among others, do not 
constitute transacting business within the meaning of this 
chapter: 
    (1) maintaining, defending, or settling any proceeding; 
    (2) holding meetings of its members or carrying on any 
other activities concerning its internal affairs; 
    (3) maintaining bank accounts; 
    (4) maintaining offices or agencies for the transfer, 
exchange, and registration of the foreign limited liability 
company's own securities or maintaining trustees or depositories 
with respect to those securities; 
    (5) selling through independent contractors; 
    (6) soliciting or obtaining orders, whether by mail or 
through employees or agents or otherwise, if the orders require 
acceptance outside this state before they become contracts; 
    (7) creating or acquiring indebtedness, mortgages, and 
security interests in real or personal property; 
    (8) securing or collecting debts or enforcing mortgages, 
and security interests in property securing the debts; 
    (9) holding, protecting, renting, maintaining and operating 
real or personal property in this state so acquired; 
    (10) selling or transferring title to property in this 
state to any person; or 
    (11) conducting an isolated transaction that is completed 
within 30 days and that is not one in the course of repeated 
transactions of a like manner. 
    Subd. 2.  [EFFECT OF PERSONAL JURISDICTION.] The term 
"transacting business" as used in this section has no effect on 
personal jurisdiction under section 543.19. 
    Subd. 3.  [OWNERSHIP OF INCOME PRODUCING PROPERTY.] For 
purposes of this section, any foreign limited liability company 
that owns income-producing real or tangible personal property in 
this state, other than property exempted under subdivision 1, 
will be considered transacting business in this state.  
    Subd. 4.  [SCOPE OF EXCLUDED TRANSACTIONS DEFINITIONS.] The 
list of activities in subdivision 1 is not exhaustive.  This 
section does not apply in determining the contracts or 
activities that may subject a foreign limited liability company 
to service of process or taxation in this state or to regulation 
under any other law of this state.  
    Sec. 140.  [322B.95] [ACTION BY ATTORNEY GENERAL.] 
    The attorney general may bring an action to restrain a 
foreign limited liability company from transacting business in 
this state in violation of this chapter.  
    Sec. 141.  [322B.955] [SERVICE OF PROCESS.] 
    Service of process on a foreign limited liability company 
must be as provided in section 322B.876. 
    Sec. 142.  [EFFECTIVE DATE.] 
    This article is effective January 1, 1993. 
    Presented to the governor April 17, 1992 
    Signed by the governor April 29, 1992, 7:54 a.m.