Your Minnesota Small Business Attorney
Small Business Tips
Doing Business Under An Assumed Name
I get a lot of phone calls from small business owners who may need some work done, or just have a simple question. What I have noticed is that some business owners will file an assumed name (or file a d/b/a) and think they have created a “company” and are thus protected from being personally liable for the acts of the business. In reality, unless they already have an established limited liability company or corporation, they are simply acting as a “sole proprietor” and nothing more. As a sole proprietor, the business owner is personally liable for the debts of the business. In addition, subject to certain exemptions, an owner’s assets...
Read MoreWhy Your Small Business May Need a Board of Directors
If you don’t already subscribe to the Small Business Association’s RSS feed you should, they have relevant information and resources for small businesses (the website is www.sba.gov). Their most recent post discussed why a small business may need a board of directors. You can find the article here. Under Minnesota Law, both the Minnesota Business Corporation Act and the Minnesota Limited Liability Company Act require that the business affairs of a company be managed by a board of directors (board of governors, if an LLC). Granted, the board can be comprised of one member, but a board is required nevertheless. The SBA article cites three reasons why a...
Read MoreAnnual Meetings and the Closely Held Corporation
I am often asked whether a small business needs to hold annual meetings of its members or shareholders. Minnesota statute §302A.431 of the Minnesota Business Corporations Act and §322B.333 of the Minnesota Limited Liability Company Act both provide that that there is no requirement for an annual meeting unless the articles of incorporation (or articles of organization, if you are an LLC) or bylaws impose the requirement. Of course with every rule there are exceptions. Both the Minnesota Business Corporation Act and Limited Liability Company Act provides that if a regular meeting has not be held during the preceding 15 months, a shareholder (or member, as the case may...
Read MoreThe Wall Street Journal is Looking for Innovative Entrepreneurs
There is no question that times have been tough for our locally owned small businesses, and it looks like there is no end in sight. However, if you haven’t already heard, The Wall Street Journal wants to celebrate and promote the small business that found a way to power through these tough times by doing something creative, imaginative or cutting-edge with their business model in order to stay afloat and survive, and possibly even thrive. They are seeking applicants for its “Small Business, Big Innovation” competition for America’s entrepreneurs. This contest is open to any independently owned small business that has less than 500 employees (well, I guess we...
Read MoreWhen a Business Fails
In our current economy, it seems every time I turn around a business is closing, and it is usually the small, independent business that is affected. One such business, a pizza carryout and delivery restaurant in my neighborhood, just closed and I couldn’t help feel saddened by this, and not just because my weekly pizza source has been cut off. Even though this restaurant was not my client I couldn’t help but reflect on what they could have done differently from a legal perspective in order to keep their doors open. First, when leasing a retail or office space negotiate a rent that has a lower rent initially with incremental increases for each subsequent year that...
Read MoreStarting a Business on Your Own
We use the Internet for just about everything nowadays, it is second nature for most of us. As such, I am never surprised when a new client tells me they formed their limited liability company on line, using an online service. On its face, these services look good – you get a fancy book that contains your articles of organization, pretty blank stock certificates, even a corporate seal – plus they are relatively inexpensive. But once you peel back the embossed layers you find that this online service used the Secretary of State’s form articles of organization, the “operating agreement” which is supposed to address how a member can withdraw doesn’t actually...
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