Your Minnesota Small Business Attorney
Small Business Tips
Part Three – Administrative Dissolution and Involuntary Dissolution
We’ve written about voluntarily dissolving the business, but there is another type of dissolution – administrative dissolution. In Minnesota, a corporation may be subject to administrative dissolution if it fails to meet its annual corporate renewal filing requirements with the Secretary of State. Under Minnesota law by December 31st each year a corporation (or limited liability company) must file a corporate renewal form either at the Secretary of State’s office or online. It is simple, painless and free. If the corporation fails to file its annual renewal in any calendar year, the Secretary of State files a certificate of administrative dissolution for that...
Read MorePart Two – When it is time to shut your doors
Dissolution isn’t easy, it can be a very difficult time as you wind up something you poured your lifeblood into. Of course, once the decision is made you want it behind you as fast as possible. As we mentioned in the previous post once notice of dissolution is filed, the board must pay all debts and either give notice to creditors that the company is being dissolved, or move forward with dissolution without notice. Whether to give notice to your creditors or not depends on several factors, do you want to slip away quietly in the night, do you want the risk of creditors finding you well after your company has shut down, perhaps you don’t want to alarm your...
Read MoreDoing 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...
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