A newly formed Limited Liability Company must perform certain start-up tasks, such as obtaining federal and state tax identification numbers, obtaining an unemployment insurance employer account number, setting up and maintaining the books and records of the business, and taking other actions to organize itself. All actions taken and decisions made by the Limited Liability Company through its members, governors and/or managers must conform with the provisions of the articles of organization, the operating agreement, and applicable law. While not necessary, it is advisable and helpful to record all actions and decisions in a minute book or record book maintained for the company. Specific guidance on post-organization issues may be obtained from the company’s legal and tax advisors. Annual Registration Both Minnesota and non-Minnesota Limited Liability Companies must register with the Secretary of State once every year. The Secretary of State will send a Limited Liability Company Annual Renewal form to the Limited Liability Company at its registered office. The form is also available from the Secretary of State at Minnesota Limit Liability Company Forms. Also available by mail from that office. The registration is due before the end of the calendar year. Failure to file will result in administrative termination. Reinstatement may occur within one year of the date of the administrative termination by filing the registration form and paying a reinstatement fee. Operating Agreements The operating agreement is the most important contract among the members of a Limited Liability Company. Many aspects of the members’ relationship and the Limited Liability Company’s business can be controlled by the operating agreement, which is similar in function to a partnership agreement. Generally, operating agreements are specific to the circumstances of each Limited Liability Company. While operating agreements need not be in writing, and may be oral or implied by conduct, it is almost always advisable to reduce an operating agreement to writing, as it greatly increases the likelihood that the members are acting with a common understanding and minimizes the risk of disputes arising later on. Generally an operating agreement will spell out how the Limited Liability Company’s rules differ from the default rules that would otherwise apply under Minn. Stat. Chapter 322C. Rules that members may wish to change may include: • Acts outside the ordinary course of the Limited Liability Company’s business require the consent of all members. (Minn. Stat. § 322C.0407, subds. 2, 3(4)(iii), 4(16)); • All members have an equal vote and an equal say in management matters, rather than voting rights in proportion to the value of their contributions. (e.g., Minn. Stat. § 322C.0407, subds. 2(2), 4(17)); • Each member has a right to participate equally in current distributions and, upon dissolution, in residual distributions after contributions have been returned. (Minn. Stat. §§ 322C.0404; 322C.0707); • The consent of all members is required to admit a new member (Minn. Stat. § 322C.0401, subd. 4(3));
54
Made with FlippingBook - Online Brochure Maker