addition to its general business purpose, which its directors and officers must consider when making strategic decisions for the business. A public benefits corporation publicly reports its progress toward its social purpose each year by filing an annual benefit report with the Minnesota Secretary of State. Minn. Stat. Chapter 304A creates two different types of public benefit corporations, a general business corporation (GBC) and specific benefit corporation (SBC). The corporation must elect one of these two types in Minnesota and use the name of the type of entity in its legal name. A GBC always has a purpose to pursue a general public benefit, and may have an additional purpose to pursue a specific public benefit, while an SBC has a purpose to pursue only a specific public benefit and not any general public benefit. The distinctions between a GBC and an SBC effect the scope of the fiduciary duties of the directors. The Public Benefit Corporation Act does not create a new corporate tax status, nor does election to be a PBC confer tax-exempt status or transform a for-profit enterprise into a nonprofit organization. A PBC is taxed as a regular business corporation – either as a C corporation under the Internal Revenue Code or, if it qualifies and makes an election, as a Subchapter S corporation. A nonprofit corporation cannot become a PBC, but it can create a subsidiary PBC. Under Minnesota law enacted in 2016, an LLC is prohibited from converting directly to a Public Benefit Corporation. FOREIGN CORPORATIONS DOING BUSINESS IN MINNESOTA A corporation that is organized under the laws of a state other than Minnesota that transacts business in Minnesota must register a Certificate of Authority to Transact Business in MN before doing business in Minnesota. The requirements for obtaining the Certificate of Authority are specified by Minn. Stat. Chapter 303, and are set forth on a required form available from the Secretary of State which is also available by mail from that office. A recently-issued (within the past 90 days) certificate of existence from the state of incorporation must accompany the application. The term “transacting business” is not clearly defined in statute, but the standard used in making the determination is the “minimum contacts” standard used in determining jurisdiction. Under this standard the facts are analyzed to determine whether the business or its local agents have conducted a continuous course of business in Minnesota or with Minnesotans sufficient to justify being governed by Minnesota law. This analysis will not be performed by the Secretary of State or any other state executive agency; each business is responsible for performing its own analysis on the topic. Neither the Secretary of State nor any other state agency will make a determination as to whether a particular organization should register as a foreign corporation. As a general rule, doubts should be resolved in favor of registering the organization. Minn. Stat. § 303.03 establishes certain activities as exceptions to the registration requirement. Corporations organized outside Minnesota should consult with their legal counsel to determine whether any of the exceptions apply. A foreign corporation also must file with the Secretary of State a Foreign Corporation Annual Renewal and pay the fee. Annual renewal forms are sent by the Secretary of State to the registered agent and office address of the corporation in Minnesota. Also available by mail from that office. Failure to file the annual registration in a calendar year will result in revocation. Foreign nonprofit corporations are exempt from this requirement.
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