On January 1, 2018, Minnesota’s new Revised Uniform Limited Liability Act will take effect. It is the most considerable change to happen to LLCs since they were first allowed.
Overall, Minnesota’s new LLC law will be aligned with many other states that have enacted versions of the Revised Uniform Limited Liability Company Act. Those states are California, District of Columbia, Florida, Idaho, Iowa, Nebraska, New Jersey, Utah, and Wyoming.
Some of the bigger changes are the change to a partnership-based model, allowing series LLCs and adopting best practices. Another notable change is the new limitation on information that members of an LLC have a right to access.
Under Minnesota’s original LLC statute, members have an “absolute right” to any information in the 16 categories of records the LLC is required to prepare and keep. Those categories are:
- A current list of the full name and last known business, residence, or mailing address of each member, governor, and chief manager;
- A current list of the full name and last known business, residence, or mailing address of each assignee of financial rights other than a secured party, and a description of the rights assigned;
- A copy of the articles of organization and all amendments to the articles;
- Copies of any currently effective written bylaws;
- Copies of the limited liability company’s federal, state, and local income tax returns and reports, if any, for the three most recent years;
- Financial statements required by section 322B.376;
- Records of all proceedings of members for the last three years;
- Records of all proceedings of the board of governors for the last three years;
- Reports made to members generally within the last three years;
- Member control agreements described in section 322B.37;
- A statement of all contributions accepted under section 322B.40, subdivision 3;
- A statement of all contribution agreements made under section 322B.42;
- A statement of all contribution allowance agreements made under section 322B.43, including for each contribution allowance agreement;
- An explanation of any restatement of value made under section 322B.41;
- Any written consents obtained from members under this chapter;
- A copy of agreements, contracts, or other arrangements or portions of them incorporated by reference under section 322B.40, subdivision 6.
Minn. Stat. § 322B.373, subd. 1.
Under the new Revised Uniform Limited Liability Act, for manager-managed and board-managed LLCs, no specific information must be maintained and there is no “absolute right” for the inspection of document. A member is allowed to see documents and get information when it is “just and reasonable” if (i) the member seeks the information purpose material to the member’s interest, (ii) the member makes a demand in a record received by the company, and (iii) the information is sought is directly connected to the member’s purpose. Minn. Stat. § 322C..0410, subd. 2(2). The member can also be charged for the reasonable cost of copies. The LLC can deny the request, but must give a reason for the denial. Id. 2(3)(ii).