Minnesota Business Corporations Act updated

A new law updates the Minnesota Business Corporations Act regarding a corporation’s directors, owners, and officers.

The updates were requested by the Minnesota State Bar Association to ensure Minnesota remains aligned with other states on business law.

The law provides model bylaws for a board of directors to manage the corporation during an emergency. A board of directors can also follow the procedures laid out in the model bylaws during an emergency in the absence of the board having bylaws.

It also will:

• create a new section regulating how a board and shareholders can approve a defective corporate act;

• allow articles of incorporation to limit board powers and an officer’s personal liability;

• allow a board of directors to ratify an agreement when a certificate must be filed with the secretary of state;

• allow a court to require a corporation to allow an inspection if it violates the right to inspect section of the law and award the expenses to the plaintiff;

• allow a shareholder to obtain payment for their shares if the corporation diminishes or abolishes the board’s right to manage the corporation; and

• allow a plan of merger or exchange to include penalties for a party’s failure to perform its obligations and an appointment is irrevocable and unamendable.

It also updates definitions for beneficial ownership, defective corporate act, emergency, failure of authorization, overissue, putative shares, time of defective corporate act, validation effective time and valid shares.

Sponsored by House Republican Floor Leader Harry Niska (R-Ramsey) and Sen. Michael Kreun (R-Blaine), the law takes effect Aug. 1, 2025.

HF747*/SF1431/CH11

HF0747* / SF1431 / CH11