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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...
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,...
read moreWhen it is Time to Shut the Doors
Not every business succeeds, that is a simply a reality. It may be that the shareholders no longer wish to continue in business or the business is no longer viable. Your company may also be subject to administrative dissolution if you fail to meet annual corporate renewal filing requirements. This is the first in a series of three articles discussing voluntary dissolution and administrative dissolution. A third type of dissolution is a remedy for minority shareholders and creditors which is beyond the scope of this article. There are two...
read moreOne of Minnesota’s Top 25 Blawgs
When I redesigned my website this past year I did so with the small business owner in mind. I wanted the business owner (new or experienced) to be able to get useful information from my site. My efforts paid off! I am proud to announce that budgelaw.com was named one of Minnesota’s Top 25 Legal Blawgs – for the second year in a row!! See http://practiceblawg.com/top25/2011-selections/.
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...
read moreThe Year in Review
As 2011 draws to a close, I was reflecting back over the year and thinking about all the wonderful clients, business owners, attorneys and friends that I came in contact with this past year, and am thankful and grateful for the relationships that were formed. Based on the type of work that came across my desk this past year I would say the economy is improving! I formed a lot of new businesses, advised on expanding staff and hiring employees, and worked on a record number of purchase agreements (clients purchasing businesses). If that...
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)....
read moreThe Importance of Taking Minutes
Corporate minutes serve an important function in the running of a business. Minutes are a record of the actions and discussions of a board or committee. Well-kept minutes serve as a record of corporate decisions (e.g., should we sell the business, hire a new executive, obtain additional funding, or even something as simple as changing banks or registered agents). Properly prepared minutes reduce the possibility of successfully piercing the corporate veil or breach of fiduciary duty claims. Historically, board meeting minutes were very short...
read moreIRS Announces a Voluntary Worker Classification Settlement Program
As a small business attorney I spend a lot of time counseling clients on the use of independent contractors vs. hiring employees. As we have discussed in previous posts, the issue of misclassifying employees as independent contractors has been under scrutiny by the IRS and Department of Labor. If you feel you have erroneously been treating workers as non-employees or as independent contractors, and fear that there may be severe consequences for doing so, the IRS launched a new program that will enable many employers to resolve past worker...
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...
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