Business Lawyers Minneapolis: Legal Fee Issues

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When you are about to hire a business lawyer in Minneapolis, you need to discuss the following top three legal fee issues:

1. Payment Structure

There are three main models of payment that lawyers use: hourly fee, contingency fee, and flat fee. The hourly fee is the most common form of business lawyer compensation in Minneapolis because it is fairly simple and, yet, flexible – the business attorney is paid only based on the time he spends on the case. If you are paying your business lawyer by the hour, the agreement should set out the hourly rates of the business attorney and anyone else in this attorney’s office who might work on the case.

A contingency fee, where a Minneapolis business attorney takes a percentage of the amount the client wins at the end of the case, is very rarely used by business attorneys in Minneapolis. In the unlikely case that this latter type of fee arrangement is used, the most important issue to understand is whether the business lawyer deducts the costs and expenses from the amount won before or after you pay the lawyer’s percentage. Obviously, you will pay more in attorney fees if your business lawyer deducts the litigation costs based on the latter scenario (i.e. after you pay the lawyer’s fee).

Finally, in a flat fee arrangement, you pay an agreed-upon amount of money per job/case. For example, you pay $5,000 to your business attorney to organize your corporation with all of the corresponding corporate documents. While a flat fee arrangement is possible in a small project, it is generally disliked by business lawyers in Minneapolis because it often lacks the necessary flexibility to account for the client’s individual legal situation. Usually, some sort of an additional payment arrangement is built into such fee agreements to make sure that the balance between the client’s legal needs and the business attorney’s fees is maintained.

Remember,out-of-pocket expenses (e.g. long-distance calls, mailing costs, photocopying fees, lodging, etc.) and litigation costs (such as court filing fees) are usually billed to you in addition to your business lawyer’s fees.

2. Retainer

Most business lawyers in Minneapolis require their client to pay a retainer. Retainer can mean two different fee arrangements. First, retainer may be the amount of money a client pays to guarantee the lawyer’s commitment to the case. Under this arrangement, the retainer is not a form of an advance payment for future work, but a non-refundable deposit to secure the lawyer’s availability. Second, a retainer is simply the amount of money a business attorney asks his client to pay in advance. In this scenario, the lawyer usually deposits the retainer in a client trust account and withdraws money from it for the work completed according to the fee agreement. The fee agreement should specify the amount of the retainer and when the lawyer can withdraw money form the client trust account (usually, on a monthly basis).

3. Timing of Billing

Usually, business attorneys in Minneapolis bill their clients on a monthly basis. Sometimes, however, when the project is not large, the fee agreement will specify that you will be billed upon completion of the case. In a flat-fee scenario, it is likely that the client will be obligated to pay either a half or even the whole amount immediately as a retainer. It is wise for a client to insist in paying some part of the fee upon completion of the case to retain a degree of control over the case completion.

Conclusion

Generally, before you sign the fee agreement, business lawyers in Minneapolis will discuss with you many more topics than what is covered in this article. The three issues explained here, however, are crucial to your understanding of how the business relationship with your Minneapolis business attorney will work. Before you sign the fee agreement with your business lawyer in Minneapolis, you should ask at least these three questions and make sure that the answers are complete and to your satisfaction.

Business Lawyer Minneapolis |Registering Assumed Name in Minnesota

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If you are required to register an assumed name for your business (to learn about who is required to register an assumed name, click here), it is important to follow through with all of the registration requirements. There are three basic step to registering an assumed name in Minnesota.

1. Fill-out Certificate of Assumed Name

Fill-out the Certificate of Assumed Name. The form is readily available online at the Secretary of State’s website. Filling-out the Certificate is usually not complicated; you need to provide the following information:

a) Exact (assumed) business name. The Secretary of State will not accept a name that duplicates either a registered name of a business entity (corporation, limited liability company or partnership) or a trademark already on file. Only one name per form is allowed;

b) Complete address of the principal place of business. A Minnesota address is preferable, but an out-of-state address may also be acceptable. P.O. Box is not acceptable;

c) Names and addresses of all persons conducting business under the Assumed Name. If such a person is a business entity, then provide a full legal name of the entity and the registered office address; and

d) Signature, date, printed name and title of one of the persons who are conducting business under the Assumed Name. An Authorized Agent may also sign the form as long as the Agent identifies himself as such (including the fact that he is authorized to sign the form). A contact information with respect to the form should also be included.

2. File the Certificate of Assumed Name with Filing Fee

The second step is to file the Certificate of Assumed Name with the Office of the Minnesota Secretary of State. A filing fee of $25 (in the year 2010) should be enclosed with the Certificate. The check should be made payable to the “MN Secretary of State”.

3. Publish Legal Notice

Once the Certificate of Assumed Name is filed with the Secretary of State, you must publish the Certificate or Amended Certificate of Assumed Name with a qualified newspaper for two consecutive issues in the county where the principal place of business is located. The newspaper should provide with detailed instructions on how to proceed with the publication. After the publication, the newspaper will return an affidavit of publication which should be retained in your business file.

Failure to publish may render the filing of the Certificate invalid.

Amendment of the Certificate

The Certificate of Amended Assumed Name form must be filed within sixty (60) days with the Secretary of State after any change in the assumed name, business or owner’s address, and ownership has occurred. The Amended Certificate must be published as described above.

Term and Renewal

A Certificate of Assumed Name is valid for ten (10) years from the date of filing with the Secretary of State. A renewal form should be mailed to the business address on file six months prior to expiration. There is filing fee of $25 (current as of the year 2010) to file a renewal.

Conclusion

Registering an Assumed Name in Minnesota usually is not difficult. It is important, however, to actually do it and follow through with all of the requirements, including the legal notice publication. If you have any questions with respect to registering your business name, contact Sherayzen Law Office to speak with an experienced business lawyer in Minneapolis.

Minnesota Certificate of Assumed Name: Who Must File

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Over the years, as a business lawyer in St. Paul, I have had questions from my clients about whether they are supposed to register their assumed name with the Minnesota Secretary of State. In this short essay, I briefly address this issue.

Generally, pursuant to Minn. Stat. §333.01, Subd. 1, any individual, corporation, limited partnership or limited liability company that conducts business in Minnesota under a name other than their full legal name, must register its Assumed Name with the Office of Minnesota Secretary of State along with a required filing fee.

Here are three most common situations where Minnesota law requires you to file the Certificate of Assumed Name:

1. Any person conducting business under a name which is not his or her true full name (first and last name) must file. For example: Robert Stuart has a plumbing business and operates under the name of “Stuart Plumbing”. In this case, he has to file the Certificate of Assumed Name with the Office of Minnesota Secretary of State. If, on the other hand, in the same situation, Mr. Stuart operates under the name of “Robert Stuart Plumbing”, then he may not need to file the Certificate (absent other circumstances).

2. A corporation, limited partnership or limited liability company conducting business under a name other than the legal name, must file. For example, a company called “Versatile Minneapolis Business Advising and Consulting Services, Inc.” would have to file a Certificate of Assumed Name with the Secretary of State if the company decides to operated under the name of “Versatile Minneapolis Advising Services, Inc.”

3. A partnership must file if the name of the partnership does not include the true full name of each partner.

In addition to the Certificate filing requirements, there are publication of legal notice requirements that must be followed.

Sherayzen Law Office can help you determine whether you need to file a Certificate of Assumed Name (or choose to create a business entity under the name in question), draft the Certificate, and help you comply with all procedures necessary to register your Assumed Name.

Minnesota LLC Formation III: Articles of Organization

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In the first two parts of the series, I have mentioned more than once that the Articles of Organization is the key document for LLC formation.

LLC is formed by filing the Articles of Organization with the Office of the Minnesota Secretary of State. The Articles become effective on filing and payment of the $160 (current as of the year 2010) filing fee. Once the Articles are filed and the fee is paid, it is presumed that all conditions precedent have been complied with and the LLC has been organized. The Office of the Secretary of State would then issue a Certificate of Organization to the LLC.

Office of the Minnesota Secretary of State offers a standard fill-in Articles of Organization form which sets out the required elements that must be included in the Articles. What is important to understand is that the Articles may include other elements in addition to what is included in the standard form. I will discuss here the required as well as some of the most important additional provisions that may be included in the Articles by a Minnesota business lawyer.

Required Provisions

Pursuant to Minn. Stat. §322B.115 Subd. 1, the following provisions must be included in the Articles of Organization:

a). Name of the LLC (see specific name requirements in the second part of this series);

b). Address of the Registered Office of the LLC. Note that Minnesota Secretary of State will only accept a Minnesota address. The address should include: street address (or rural route and rural route box number), city, state, and zip code. P.O. Box will not be accepted;

c). Name of the LLC’s Registered Agent (if any);

d). Name and address of each organizer; and

e). A statement of the period of existence for the limited liability company if the LLC is not to have perpetual existence.

Optional Provisions

Minn. Stat. §322B.115 contains a lengthy list of additional provisions that can be modified by and included in the Articles of Organization. Note, that all of these provisions may also be modified by the Member Control Agreement, but only some of the additional powers and rights may be modified in the Bylaws.

The most common provisions included by Minnesota business lawyers in the Articles of Organization are: provision for approval of the transfer of governance rights, denial of cumulative voting, denial of preemptive rights, written action without a meeting, limitations on the liability of governors, and a general statement of purposes and powers. Often, a provision stating that the LLC shall have perpetual existence is included in the Articles. It is not necessary, though, to list in the Articles the powers already granted to an LLC by the Minnesota Limited Liability Company Act

It is also important to point out that the Articles of Organization may contain these additional provisions as long as they are not inconsistent with law.

Conclusion

Sherayzen Law Office can help you determine which additional provisions need to be included in the Articles of Organization, draft the Articles and properly file them with the Minnesota Secretary of State.

Minnesota LLC Formation II: LLC Organization Process

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In the previous article, I already discussed some of the essential documents that are necessary for formation of a Limited Liability Company (“LLC”) in Minnesota. In this article, I would like to explore the basic mechanics of LLC formation.

Who can form an LLC?

One or more natural persons at least 18 years of age may act as organizer(s) and form an LLC. Note that an organizer does not have to become a member, but an LLC must have one or more members.

How LLC is formed?

LLC is formed by filing the Articles of Organization with the Office of the Minnesota Secretary of State. The Articles become effective on filing and payment of the $160 (current as of the year 2010) filing fee. Once the Articles are filed and the fee is paid, it is presumed that all conditions precedent have been complied with and the LLC has been organized. The Office of the Secretary of State would then issue a Certificate of Organization to the LLC.

LLC Name Requirements

The name of an LLC must be in the English language or in any other language expressed in English letters (or characters) and contain the words “limited liability company” or the abbreviation “LLC”. The name itself must be distinguishable from names of other business entities (such as LLCs, partnerships, corporations, et cetera) as determined by the Minnesota Secretary of State. Notice that the name of the LLC cannot contain the words “corporation” or “incorporated”.

Post-Filing Role of Organizers

Where the initial Articles of Organization do not name a board of governors, the organizers may elect the first board of governor or may act as governors until the governors are elected. Often, these issues would be addressed in the Bylaws or Member Control Agreement.

After the Articles of Organization are filed, the most immediate task of the organizers is to complete the organization of the LLC. The following actions are often taken: adoption of Bylaws and/or Member Control Agreement, amendment of the Articles, election of governors, authorization of certain transactions (for example, execution of commercial lease agreements), establishment of the fiscal year, and making of appropriate tax elections.

Contributions to the LLC

Pursuant to the Minnesota Limited Liability Company Act, any form of contribution to the LLC (money, real estate ownership transfer, rendering services, et cetera) is only valid if authorized by the board of governors or otherwise pursuant to a Member Control Agreement. Contributions to the LLC must be reflected in required records. A Minnesota business attorney must be consulted on this important issue.

Amendment of the Articles of Organization

It is important to know that an LLC may amend its Articles of Organization at any time to include or modify any provision that is required or permitted to appear in the Articles or to add any provision not required to be included in the Articles.

The mechanics of the Amendment depend on whether any contribution to the LLC has already been made. If no contribution to the LLC is reflected in its required records, the Articles may be amended by either the organizers or the board of governors. On the other hand, where a contribution has been already registered in the required records, any amendment to the Articles has be to approved by the members of the LLC.

Once an amendment has been adopted, Amended Articles of Organization have to be prepared and filed with the Minnesota Secretary of State. Remember that, in addition to the LLC’s name and the exact text of the amendment, the Amended Articles have to contain a statement that the Amendment has been adopted pursuant to the relevant provision of the Minnesota Limited Liability Company Act.

Conclusion

Despite the deceptive simplicity of the process, forming an LLC may generate its own significant legal problems. Therefore, I strongly advise anyone who wishes to form an LLC to consult a Minnesota business lawyer.

Sherayzen Law Office can help you draft and properly file the Articles of Organization with the Minnesota Secretary of State, guide you through the post-filing organization process (including making contributions to the LLC), and prepare the necessary organization documents, such as Bylaws and Member Control Agreement.

Call NOW to discuss your case with an experienced business lawyer!