RULLCA Keeps on Truckin’ – Minnesota Gets on Board

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RULLCA Keeps on Truckin’ – Minnesota Gets on Board

Last week Governor Dayton signed into law House File 977, Minnesota’s Revised Uniform Limited Liability Company Act (the “New Act”), after it was passed unanimously by both houses of the Legislature. The New Act will completely replace the current statute, the Minnesota Limited Liability Company Act.

The New Act will be effective August 1, 2015, and will apply to all LLCs formed thereafter. LLCs formed before that date are not subject to the new statute until January 1, 2018, unless they elect to be governed by the New Act during the transition period. H.F. 977, 88th Leg. § 89 (Minn. 2014) (to be codified at Minn. Stat. § 322C.1204).

The New Act is based in large part (albeit with some variations) on NCCUSL’s Revised Uniform Limited Liability Company Act (RULLCA), which with Minnesota’s enactment has now been adopted in nine states. RULLCA has been criticized by commentators, and early enactments were slow to come. But its momentum appears to be increasing – in the past two years Florida, California, New Jersey, and now Minnesota have enacted RULLCA.

The New Act is a major rewrite of Minnesota’s LLC statute and changes a number of the default rules governing LLCs. Stephen Quinlivan, David Jenson, Jenifer Frohne, and Robert Rominski have prepared a useful summary of the New Act, including a comparison of its key terms with the current statute and with the Delaware LLC Act, here.

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