Effective January 1, 2018, all limited liability companies formed prior to August 1, 2015, under the Minnesota Limited Liability Company Act, Chapter 322B (“Old Act”) will become subject to the new Minnesota Revised Uniform Limited Liability Company Act, Chapter 322C (“New Act”). The New Act significantly changes the management structure of an LLC, the rights of LLC members, and other aspects of operation of an LLC. The New Act also uses different terminology than the Old Act and provides new and greater flexibility in the organization and management of a LLC.
The Minnesota Secretary of State has forwarded a Notice and Memorandum regarding the changes to managers of LLCs originally organized under the Old Act. There are significant changes brought about by the New Act as more fully described in the Notice and Memorandum, which is available at:
If your LLC has a single owner and no additional members are contemplated, no significant changes to your existing LLC documents may be necessary. For LLCs with more than one member or a more complex governance structure, the adoption of a new Operating Agreement normally is advisable that conforms to the New Act.
We recommend that you contact your Lapp Libra attorney as well as your accountant/tax preparer to discuss how the New Act may specifically impact your LLC, and what changes should be made to your existing organizational documents and any questions you may have. The necessary revisions can be made promptly and economically. It is advisable to review the legal issues relating to your LLC annually, and to prepare minutes to support the “personal liability shield” provided by an LLC.
David Libra and Alyssa Troje