Minnesota Money Transmitter License Application: Required Enclosures

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When a business entity applies for a Minnesota money transmitter license, the applicant must be aware that, in addition to answering the questions on the application, the Department of Commerce (“Department”) requires a large number of additional documents that must accompany the original license application. While the precise nature of the required documentation varies depending on whether the applicant is a corporate entity or noncorporate entity and how many locations the applicant intends to operate, the following documents usually must be submitted with the original license application.

1. Sample of the authorized delegate contract(s), if applicable;
2. Sample of the form of payment instrument(s);
3. If the applicant is a corporation, copy of the “Certificate of Incorporation” or, if incorporated in another jurisdiction, copy of the “Certificate of Foreign Incorporation” from the Minnesota Secretary of State. If, however, the applicant is not a corporation, then a copy of the “Article of Organization”;
4. Certificate of good standing from the state in which the applicant is incorporated (if applicable);
5. Copy of criminal history verification for each person listed in Section III or IV of the application;
6. Required financial statements;
7. Surety bond, irrevocable letter of credit, or other similar security device for the required amount (the form is included in the application);
8. Uniform Consent to Service of Process and acknowledgment form;
9. If the applicant has employees in Minnesota, then evidence of current worker’s compensation coverage;
10. Authorization to Release Information form;
11. Affidavit of Official Signing Application form; and
12. Check of money order for the applicable fee amount payable to the “Department of Commerce”.

Sherayzen Law Office can help you correctly collect all of this information, review your money transmitter license application, and file the application with the Minnesota Department of Commerce.

Please, call NOW to discuss your license application with a business attorney!

Minnesota Money Transmitter License Application: Expiration of Initial License Considerations

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Applying for a money transmitter license in Minnesota can be an expensive enterprise, and the applicant should make sure that he will be able to maximize the benefits that can be derived from the license. The definition of the licensed period, therefore, becomes one of the most important considerations.

The Department of Commerce (“Department”) states that the licenses issued under Chapter 53B (the statute which grants the Department authority to issue money transmitter licenses) expire annually on December 31. In order to conduct money transmissions after December 31, the applicant will have to timely submit the application for the license renewal. Hence, it does not matter whether the license is issued on January 1 or October 30 of the same year – the license will still expire on December 31 and, in the latter case, the applicant will need to file the license renewal application almost immediately after the initial license application is granted.

Therefore, if the applicant applies for a money transmitter license in the last quarter of a calendar year, it may be beneficial for him to insist that the license should be issued as of the first of January of the following calendar year. Obviously, in this situation, the applicant may not conduct any transmissions prior to January 1 of the following calendar year. Hence, a cost-benefit analysis must be conducted in order to determine whether it is more profitable for the applicant to obtain the license now or to postpone it until January 1 of the following year.

Sherayzen Law Office can help you file your money transmitter license application with the Minnesota Department of Commerce.

Please, call NOW to discuss your license application with a business attorney!

Franchise Agreements: Typical Structure

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Over the past fifteen to twenty years, the franchise agreements have grown tremendously in complexity and size. They also tend to be more and more favorable toward the franchisor. Therefore, if you are a potential franchisee, you must read the franchise agreement very carefully to make sure that you fully understand what the agreement is saying. While it is imperative to hire a business attorney to advise you before you sign the agreement, this essay will sketch the typical structure of most franchise agreements in order for you to be able to better navigate your franchise contract.

1. Recitals. The recital provisions usually attempt to describe the franchisor’s system, its potential to contribute a great variety of proprietary information, and the reputation of the franchisor in the industry. Be careful: these provisions are generally not repeated as commitments of the franchisor and are typically disclaimed later in the franchise agreement (otherwise, the franchisee may have a breach of contract claim later).

2. Term of the Franchise and Exclusive Territory (if any). This part of the franchise agreement describes the longevity of the franchise agreement, whether any renewals are available, and what territory is granted exclusively to the franchisee against the same-brand competition.

3. Payment Obligations. Most of the agreements set out the payment obligations of the franchisee separately, while others merge this part of the contract with the rest of the franchisee’s duties.

4. Franchisor’s Duties. This part of the franchise agreement describes the franchisor’s duties toward the franchisee. Usually, however, these obligations are riddled with exceptions and references to the franchisor’s discretion. For examples, phrases such as “in its discretion” or “upon written request” are very common. Be careful: this part of the franchise contract may actually be used to impose obligation on the franchisee. Your attorney needs to review this section of the agreement very closely.

5. Franchisee’s Duties. The provisions regarding franchisee’s obligations may be especially numerous. Many modern franchise agreements may contain a very detailed list of duties imposed on the franchisee, and incorporate by reference the entire content of additional manuals and “any subsequent changes and additions thereto.” Additional covenants in separate articles may also be included in the franchise agreements.

6. Transfer, Assignment, and Termination. This part of the franchise contract sets forth how the franchisee may transfer (including through death, incapacitation, and sale) the franchise to another party. A right of first refusal in favor of the franchisor is often included. Also, be on the lookout for additional substantial fees paid by the franchisee to the franchisor in case of a transfer.

7. Miscellaneous: Choice of Law/Forum, Dispute Resolution, Disclaimers, Indemnification and Exculpatory Clauses. This part of the franchise agreement usually contains a mandatory arbitration clause and unfavorable choice of law provisions which may attempt to deprive the franchisee of the existing statutory protections. Here, you will also find various disclaimers and the indemnification requirements. Finally, various “no representation”and “no reliance” clauses (admitted by the franchisee upon execution of the franchise contract) are often included here. Despite the extreme pro-franchisor bias of many of these provisions, state and federal courts have a tendency to enforce them. Therefore, you must study these provisions with your attorney in order to make sure you understand what types of claims against the franchisor you are giving up by signing this agreement.

A typical franchise agreement is about 40-50 pages of dense legal language. Usually, it contains more information in addition to what is described above. Some agreements do not follow the above-described structure at all, but, rather, adopt their own format which may divide, omit or merge the sections described above into more or fewer articles and sub-sections. Therefore, it is highly advisable to retain services of a franchise attorney to review your franchise agreement to make sure you understand all of the provisions of this contract.

Sherayzen Law Office can help you review and analyze your franchise agreement so that you can understand your rights and obligations before you sign the contract.

Call NOW to discuss your franchise agreement with a business lawyer!

Business Litigation: Definition

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While its definition varies, most attorneys would agree that “business litigation” is a complex area of law which includes a variety of contractual and tort claims. Examples of such claims include but not limited to: breach of contract, fraud, tortious interference with contract, breach of fiduciary duty, infringement of intellectual property rights, and unfair competition. Often, when these types of business disputes arise, the parties are unable to resolve them through negotiation or arbitration proceedings. In these cases, business litigation can be used as a way to resolve the disputes.

Business litigation is not limited exclusively to businesses suing other businesses. In certain cases (such copyright and trademark violations), individuals may asset claims against businesses and vice-versa.

Corporate litigation constitutes an important part of business litigation. Corporate disputes often arise as a result of a breach of fiduciary duty. For example, shareholders in a closely-held corporation may recover against a corporate director if he breaches his fiduciary obligations.

Commercial insurance litigation is another frequent source of business litigation. For example, where a commercial insurance company undervalues or denies a fair claim, then the victimized business may sue to recover the amount it believes it is entitled to. Often, these situation deal with contract litigation where an insurance company relies on a particular wording in the contract to avoid fully paying an otherwise legitimate claim.

These are just some of the countless areas in which a business may have a need for a Minnesota business litigation lawyer to resolve a dispute against another business. A good Minneapolis business litigation attorney or a St. Paul business litigation lawyer can be invaluable in protecting your rights and your company’s business interests.

Sherayzen Law Office can help you deal with a business litigation claim, whether defending against another business or enforcing your business rights against other parties.

If you or your company is in need of representation in a business litigation matter, please call NOW to discuss your case with a business litigation lawyer!

Net Worth Requirement for Money Transmitter License in Minnesota

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An applicant for a money transmitter license in Minnesota must comply with Minn. Stat. §53B.05 net worth requirements. Under Minnesota law, each licensee engaging in money transmission in three or fewer locations in the state, either directly or through authorized delegates, must have a net worth of at least $25,000. However, if a licensee engages in money transmission at more than three locations in the state, but fewer than seven locations (either directly or through authorized delegates), he must have a net worth of at least $50,000. If there are more than six locations in the state, the licensee should have a net worth of $100,000 and an additional net worth of $50,000 for each location or authorized delegate located in the state in excess of seven, to a maximum of $500,000. The net worth is calculated in accordance with generally accepted accounting principles (“GAAP”).

The required net worth must be maintained throughout the licensed period. Failure to meet the statutory net worth requirement may lead to license revocation and denial of the license renewal application. Minn. Stat. §53B.19 (2).

The burden of proof is on the initial licensee. This means that when the applicant files its money transmitter license application for the very first time, he must prove by preponderance of evidence that he satisfies the net worth requirements and any other issues raised by the Minnesota Department of Commerce (“Department”). When an application for license renewal is filed, however, the issue of who bears the burden of proof is not yet settled by courts. There is a very good argument that the Department bears the burden of proof once the initial burden of production is satisfied by the applicant. Sherayzen Law Office can help you make this argument once the need arises.

It is very important to hire a Minnesota attorney to review your license application. The regulatory compliance costs are very high and making sure that your application satisfies the statutory requirements prior to its filing may be crucial to containing legal expenses and even ultimate ability to obtain (for the first time) or renew the license.

If, however, you submit your license application without professional review of a Minnesota attorney and the Department raises issues with respect to the application, it is indispensable to retain a Minnesota business lawyer as soon as possible. Timely professional intervention may lead to quick resolution of the issues and led to significant savings in accounting and legal expenses.

Sherayzen Law Office can help you file a new license application as well as a renewal application. If your application has been rejected and you appeal the case with the Office of Administrative Hearings, Sherayzen Law Office will provide you with a vigorous yet cost-effective legal representation. Call our office at (952) 500-8159!