management decisions. Decision-making authority also may be delegated by the shareholders and/or directors to hired managers, who may or may not be shareholders. This delegation further removes decision-making authority from the shareholders. Like a partnership, the corporation can draw on the skills and expertise of more than one individual in running the business. This can broaden the base of information for decision making and reduce workload demands on individual managers. The articles of incorporation, bylaws or state business corporation act establish procedures and criteria for decision making, such as meeting and quorum requirements, voting margins, and the like, which may make decision making in the corporation more cumbersome than in a sole proprietorship or partnership. Limited Liability Company. Minn. Stat. Chapter 322C, which governs Limited Liability Companies takes more of a partnership approach to Limited Liability Companies than did the older law, which was based on Minnesota’s Business Corporation Act. Minn. Stat. Chapter 322C permits management by the members, management by one or more managers, and management by a board (Minn. Stat. § 322C.0407). The default structure is member management. Unless the operating agreement provides otherwise, each member has equal rights in the management and conduct of the Limited Liability Company’s activities – i.e., per capita, not in proportion to their capital contributions. Differences as to matters in the ordinary course of the Limited Liability Company’s activities may be decided by a majority of the members, while acts outside the ordinary course may be undertaken only with the consent of all members. Additional agents (who can be referred to as officers) may be appointed by the members, managers, or board. As with a corporation, the rules governing the management of a Limited Liability Company are often specified in a written operating agreement. If not otherwise specified in an operating agreement, the default rules of the Limited Liability Company statute will control. In addition, the Revised Uniform Limited Liability Act as adopted in Minnesota (Minn. Stat. Chapter 322C), provides for a system of formal filings similar to those under the Minnesota Revised Uniform Partnership Act. These allow Limited Liability Companies to put of record the authority or limitations on authority of persons holding any position that exists in or with respect to the company to execute an instrument transferring real property held in the name of the company or enter into other transactions on behalf of, or otherwise act for or bind, the Limited Liability Company. Such statements affect only the power of a person to bind a Limited Liability Company to persons that are not members. Any such statement also may be amended or cancelled. Filing a statement of dissolution automatically cancels all previously filed statements. The types of statements and their effects may be found in the statute (Minn. Stat. § 322C.0302.) In the case of real property transactions, if an effective statement containing a limitation on the authority to transfer real property held in the name of a Limited Liability Company is certified by the Secretary of State and is recorded in the real property records, all persons are deemed to know of the limitation. An effective statement of authority that grants authority to transfer real property held in the name of the Limited Liability Company, is conclusive in favor of a person that gives value in reliance on the grant without knowledge to the contrary, whether or not a certified copy of the statement was recorded in the real property records, unless, when the person gave value, (a) the statement had been canceled or restrictively amended under and a certified copy of the cancellation or restrictive amendment had been recorded in the real property records, or (b) a limitation on the grant was contained in another statement of authority that became effective after the statement containing the grant became effective and a certified copy of the later- effective statement was recorded in the real property records.
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