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The Minnesota LLC operating agreement is a document that governs how a business operates, including each member’s duties and rights. The agreement is signed and agreed to by all principal members, which allows it to be enforced in the case of disputes between members or litigation against the company.

From MN 322C.0102, subdivision 17:

“Operating agreement” means the agreement, whether or not referred to as an operating agreement and whether oral, in a record, implied, or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in section 322C.0110, subdivision 1. The term includes the agreement as amended or restated.

Minnesota Operating Agreement Law

Per MN 322C.0110:

Subdivision 1.Operating agreement. Except as otherwise provided in subdivisions 2 and 3, the operating agreement governs:
(1) relations among the members as members and between the members and the limited liability company;
(2) the rights and duties under this chapter of a person in the capacity of manager or governor;
(3) the activities of the company and the conduct of those activities; and
(4) the means and conditions for amending the operating agreement.
Subd. 2.Default rules supplementing operating agreement. To the extent the operating agreement does not otherwise provide for a matter described in subdivision 1, this chapter governs the matter.
Subd. 3.Restrictions. An operating agreement may not:
(1) vary a limited liability company’s capacity under section 322C.0105 to sue and be sued in its own name;
(2) vary the law applicable under section 322C.0106;
(3) vary the power of the court under section 322C.0204;
(4) subject to subdivisions 4 to 7, eliminate the duty of loyalty, the duty of care, or any other fiduciary duty;
(5) subject to subdivisions 4 to 7, eliminate the contractual obligation of good faith and fair dealing under section 322C.0409, subdivision 4;
(6) unreasonably restrict the duties and rights stated in section 322C.0410;
(7) vary the power of a court to decree dissolution in the circumstances specified in section 322C.0701, subdivision 1, clauses (4) and (5);
(8) vary the requirement to wind up a limited liability company’s business as specified in section 322C.0702, subdivisions 1 and 2, clause (1);
(9) unreasonably restrict the right of a member to maintain an action under sections 322C.0901 to 322C.0906;
(10) restrict the right to approve a merger, conversion, or domestication under section 322C.1015 to a member that will have personal liability with respect to a surviving, converted, or domesticated organization; or
(11) except as otherwise provided in section 322C.0112, subdivision 2, restrict the rights under this chapter of a person other than a member, manager, or governor.
Subd. 4.Provisions particularly but not exclusively authorized. If not manifestly unreasonable, and without limiting the terms that may be included in an operating agreement, the operating agreement may:
(1) restrict or eliminate the duty:
(i) as required in section 322C.0409, subdivisions 2, clause (1), 7, and 8, to account to the limited liability company and to hold as trustee for it any property, profit, or benefit derived by the member in the conduct or winding up of the company’s business, from a use by the member of the company’s property, or from the appropriation of a limited liability company opportunity;
(ii) as required in section 322C.0409, subdivisions 2, clause (2), 7, and 8, to refrain from dealing with the company in the conduct or winding up of the company’s business as or on behalf of a party having an interest adverse to the company; and
(iii) as required by section 322C.0409, subdivisions 2, clause (3), 7, and 8, to refrain from competing with the company in the conduct of the company’s business before the dissolution of the company;
(2) identify specific types or categories of activities that do not violate the duty of loyalty;
(3) alter the duty of care, except to authorize intentional misconduct or knowing violation of law;
(4) alter any other fiduciary duty, including eliminating particular aspects of that duty; and
(5) prescribe the standards by which to measure the performance of the contractual obligation of good faith and fair dealing under section 322C.0409, subdivision 4.
Subd. 5.Duty of loyalty, authorization and ratification of otherwise violative conduct. The operating agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts.
Subd. 6.Eliminating fiduciary duty when responsibility eliminated. To the extent the operating agreement of a member-managed limited liability company expressly relieves a member of a responsibility that the member would otherwise have under this chapter and imposes the responsibility on one or more other members, the operating agreement may, to the benefit of the member that the operating agreement relieves of the responsibility, also eliminate or limit any fiduciary duty that would have pertained to the responsibility.
Subd. 7.Indemnification and exculpation. The operating agreement may alter or eliminate the indemnification for a member, manager, or governor provided by section 322C.0408, subdivision 2, and may eliminate or limit a member’s, manager’s, or governor’s liability to the limited liability company and members for money damages, except for:
(1) breach of the duty of loyalty;
(2) a financial benefit received by the member or manager to which the member or manager is not entitled;
(3) a breach of a duty under section 322C.0406;
(4) intentional infliction of harm on the company or a member; or
(5) an intentional violation of criminal law.
Subd. 8.Determining whether term is manifestly unreasonable. The court shall decide any claim under subdivision 4 that a term of an operating agreement is manifestly unreasonable. The court:
(1) shall make its determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time; and
(2) may invalidate the term only if, in light of the purposes and activities of the limited liability company, it is readily apparent that:
(i) the objective of the term is unreasonable; or
(ii) the term is an unreasonable means to achieve the provision’s objective.

Forming an LLC in Minnesota

  1. Conduct a name search
  2. Choose a registered agent
  3. File formation articles
  4. Draft an operating agreement

To file formation articles, all Minnesota LLCs need a legally registered business name. This name must include “LLC” or “Limited Liability Company”, or a variation of the designation, may not include other business designations like “Corp” and must be distinguishable or unique from other business names in the state..

The name may include restricted words that relate to the professional business type being included (university, attorney, bank), as long as a licensed practitioner is part of the LLC and completes required verification.

The name cannot include government agencies such as Treasury, CIA, FBI, etc.

To conduct the name search, use the Minnesota Secretary of State Business Entity Search website.

Step 2: Choose Your Registered Agent

Registered agents are required for every LLC formation in Minnesota. These representatives will act as the point of contact for legal documents and correspondence like service of process.

Registered agents may be an individual or business that is authorized to operate in Minnesota.

An individual agent should:

  • Be available during business hours (9am – 5pm local time)
  • Be a resident of the state
  • Have a physical (not a P.O. Box) address in Minnesota

When using a registered agent service, the agent must simply be authorized to do business in Minnesota.

Step 3: File Your Formation Articles

A Minnesota Domestic LLC formation (in-state) must complete and submit Articles of Organization online, by mail, or in-person to the Secretary of State.

Online Filing (Domestic):

  • $155 filing fee
  • Turnaround time: 3-5 business days
  • Create an account and submit online

Mailed Filing (Domestic):

  • $135 filing fee
  • Turnaround time: 7-10 business days upon receipt
  • Fill out the form (for-profit or non-profit) online or after printing and mail to:

Minnesota Secretary of State – Business Services
Retirement Systems of Minnesota Building
60 Empire Drive, Suite 100
St Paul, MN 55103

In-Person Filing (Domestic):

  • $155 filing fee
  • Turnaround time: 5-7 business days
  • Fill out the form (for-profit or non-profit) online or after printing and deliver to:

Minnesota Secretary of State – Business Services
Retirement Systems of Minnesota Building
60 Empire Drive, Suite 100
St Paul, MN 55103

Foreign LLCs expanding to Minnesota must complete a Certificate of Authority which is also available to be completed online and filed by mail or in-person.

Online Filing (Foreign):

  • $205 filing fee
  • Turnaround time: 3-5 business days
  • Create an account and submit online

Mailed Filing (Foreign):

  • $185 filing fee
  • Turnaround time: 7-10 business days upon receipt
  • Fill out the form online or after printing and mail to:

Minnesota Secretary of State – Business Services
Retirement Systems of Minnesota Building
60 Empire Drive, Suite 100
St Paul, MN 55103

In-Person Filing (Foreign):

  • $205 filing fee
  • Turnaround time: 5-7 business days
  • Fill out the form online or after printing and deliver to:

Minnesota Secretary of State – Business Services
Retirement Systems of Minnesota Building
60 Empire Drive, Suite 100
St Paul, MN 55103

Step 4: Draft a Minnesota Operating Agreement

An operating agreement is not a requirement for Minnesota LLCs, but it is highly recommended. The document helps to ensure that all directors are on the same page and following agreed-upon procedure when operating the business. The agreement can also allocate rights and responsibilities, settle disputes between members, and protect the individual finances of each principal member in the case of litigation.

A Minnesota operating agreement is a legally enforceable document, but it does not need to be filed with the state. Instead, each member should sign a master copy to be held with the original formation articles and hold their own copy just in case.