Effective August 1, 2015 Minnesota has enacted a version of the Revised Uniform LLC Act. All LLCs formed in Minnesota after August 1 will be covered by the new act. Existing LLCs will have until January 1, 2018 to covert their entities to entities under the new act, and after January 1, 2018 old LLCs will automatically become subject to the new act.
Changes in the law include a shift from a corporation-model to a partnership model (board of directors versus direct member control). A related change is that profits and losses under a partnership model are distributed per capita meaning each partner gets an equal share, in comparison to the old model which was based upon contribution, the pro rata share model.
LLC owners can now significantly modify the default statutory provisions with the use of an Operating Agreement. Businesses are advised to discuss their options for an Operating Agreement because often the default conditions of the new statute are at odds with what business owners actually want for the manner in which their business is to be run.