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!

Minnesota LLC Formation I: Essential Documents

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It is conventional wisdom that forming a Limited Liability Company (“LLC”) in Minnesota is not hard. Furthermore, a lot of people believe that, in order to form an LLC, the only (and the easiest) thing to do is to file the Articles of Organizations – a one-page fill-in form prepared by the Secretary of State – and that is it. I have seen dozens of examples where entrepreneurs would file the Article of Organization believing they are completely protected and they do not to pursue anything further, saving money on a legal advice.

In fact, however, the issue is much more complex. Even assuming that the LLC is the correct entity form for the business in question (a discussion which requires substantial legal analysis and is a topic for another article), organizing an LLC is process which has its owns legal complexities and requires proper documentation in order to achieve the results that most organizers are striving for – limited liability and protection of one’s business interests. A business owner who is negligent in organizing an LLC is likely to pay a hefty penalty in the future, including a possibility of losing his business altogether.

This article begins a series of articles that I am writing on the topic of LLC formation in Minnesota. It is important to point out this series merely provides a general educational background on this topic and you should consult a Minnesota business lawyer regarding your specific legal situation.

In this essay, I would like to outline the minimum essential documentation one needs for the purposes of organizing an LLC. This is a suggestive list of documents that most Twin Cities business lawyers adopt. Notice, this article does not discuss the process of LLC formation (which is the topic of another article, later in this series).

1. Articles of Organization

The LLC is formed by filing the Articles of Organization with the Minnesota Secretary of State. The Articles become effective on filing and payment of the $160 (current as of the year 2010) filing fee. The Office of the Secretary of State would then issue a Certificate of Organization to the LLC.

It is important to understand that the one-page, fill-in form provided by the Secretary of State Office is not the only possible form. In fact, this form merely incorporates the minimum required provisions in order to form the LLC. The Articles may incorporate a lot more information, stating the rules on various issues such as cumulative voting, preemptive rights, a governor’s liability, et cetera. It is important to consult your business attorney in deciding what the Articles of Organization should include.

2. Bylaws (or Operating Agreement)

In most cases, it is important for the LLC to adopt Bylaws (also known as “Operating Agreement”). Bylaws may contain provisions relating to the management of the LLC, as long as these provisions are not inconsistent with Minnesota law and/or the Articles of Organization.

3. Member Control Agreement
As long as specific requirements are satisfied, Minnesota law allows the organizers of the LLC to adopt a Member Control Agreement. The most crucial aspects of this Agreement are that it permits the organizers to adopt a different governance structure for the LLC and over-rule many default provisions of the Minnesota Limited Liability Company Act, including on such crucial issues as: terms and conditions for transfer of membership interests, voting quorum, valuation of membership interests, and so on.

The recent trend among Minneapolis business lawyers and St. Paul business lawyers is to combine the Bylaws and the Member Control Agreement into one “Member Control and Operating Agreement”.

Conclusion

LLC formation can be a complex process, which deserves a lot more consideration than merely filling out a simple form with minimum formation requirements. Your specific situation may require filing an expended Articles of Organization. Then, in order for the new LLC to operate, you need to describe how it will be managed in the Bylaws. Moreover, the Minnesota Limited Liability Company Act contains many default provisions which may interfere with proper functioning of your business. Therefore, a Member Control Agreement may be necessary for greater flexibility in and proper management of your business.

It is crucially important to consult a Minnesota business lawyer while forming the LLC. Only a business attorney will be able to properly analyze your situation, help you file correct Articles of Organization, and draft the necessary Bylaws and/or Member Control Agreement.

Sherayzen Law Office can help you navigate these complex issues of entity choice and LLC formation as well as draft all of the necessary paperwork, including customized Bylaws and Member Control Agreements.

Call Sherayzen Law Office NOW to discuss your business formation issues with an experienced business lawyer!

Office of Administrative Hearings: Sources of Procedure and Procedural Rights

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If you appealed your business license denial and your case is pending effectively in the Office of Administrative Hearings, it is essential to understand the procedural rules of this administrative court as well as your procedural rights. This means that you and/or your attorney must have a good understanding of the sources of the administrative rules and procedural rights.

There are five main sources of the administrative procedure, including procedural rights, for the cases pending in the Office of Administrative Hearings. First, the Due Process Clause of the U.S. and Minnesota constitutions. Due process rights must be afforded to parties irrespective of whether they are explicitly mentioned in a relevant statute. The two most important rights include: a right to notice and a right to a hearing. A deep understanding of the due process clause may be required to mount an effective defense against the state’s claims or to support your arguments for approval of your business license application.

Second, Minnesota Administrative Procedure Act can be found in Chapter 14 of the Minnesota Annotated Statutes. It constitutes is an important source of the procedural rules for Minnesota state agencies, and, among other things, sets up the procedures for an agency’s rulemaking and applicant petitioning.

The most direct source of the OAH procedures are the rules of the Office of Administrative Hearings(OAH). The Rules can be found in Chapter 1400 of the Minnesota Administrative Rules. Knowledge of the rules is crucial for effective pre-hearing practice as well as the conduct of the actual hearing.

Fourth, a specific statute or an agency’s procedural rules may provide for the specific procedural rules and even substantive requirements.

Finally, where an agency or the OAH has not promulgated a rule to govern unanticipated circumstances, the administrative law judge is likely to rely on the Minnesota Rules of Civil Procedure. In fact, the OAH rules specifically mention the Rules of Civil Procedure as a guide for an administrative law judge in situations where the administrative rules are silent.

I have already detailed elsewhere (click here) the great importance of timely hiring an attorney to represent you in case of a business denial appeal. Here, I will just reiterate that hiring a business lawyer knowledgeable in the OAH rules and procedures is likely to save you nerves, time, money, and even determine the outcome of your case.

Sherayzen Law Office can help you every step of the way in your business license denial appeal case. We will make the utmost use of the pre-hearing process and will provide a vigorous and creative defense of your interests during the hearing.

Call NOW to schedule the consultation!