HF747

HF747 (Legislative Session 94 (2025-2026))

Minnesota Business Corporation Act provisions modifications

Related bill: SF1431

AI Generated Summary

Purpose of the Bill

The purpose of this bill is to amend and update the Minnesota Business Corporation Act. It introduces modifications to current statutes that govern the operations, rights, and responsibilities within business corporations in Minnesota. This includes changes affecting corporate governance, shareholder rights, and procedures during emergencies.

Main Provisions

Beneficial Ownership: The bill provides a detailed definition of "beneficial owner" for shares or securities, specifying conditions under which ownership is recognized.
Defective Corporate Acts: New subdivisions address how defects in corporate acts, such as overissues or unauthorized director elections, can be ratified or validated to prevent potential legal voidance.
Conduct During Emergencies: The bill defines an "emergency" and outlines procedures for conducting corporate business during such times, allowing for flexibility in meeting notices and remote participation.
Ratification Process: A specific process is set for ratifying defective corporate acts, which includes board and potentially shareholder approval, and describes how to file the appropriate certifications.
Shareholder Rights: Updates are made regarding the rights of shareholders to dissent from significant corporate changes, and clarification is given on what constitutes a proper purpose for inspection of corporate records.

Significant Changes to Existing Law

Emergency Powers: The bill introduces provisions allowing for emergency bylaws and actions that corporations may take during emergencies.
Validation of Corporate Acts: Provides a pathway for ratification of certain corporate acts previously considered defective, which can be retroactively validated to prevent legal and operational issues.
Shareholder Engagement: Alters how dissenters’ rights are triggered and exercised during mergers or other significant corporate actions, providing more clear guidelines on what changes trigger the right to payment.
Standard of Conduct and Liability: Expands liability exemptions for corporate officers acting in good faith and allows corporations to limit personal liability of officers through specific provisions in the articles of incorporation.

Relevant Terms

Beneficial ownership
Defective corporate act
Emergency bylaws
Ratification
Shareholder rights
Corporate governance
Dissenters’ rights

Bill text versions

Introduction PDF file

Actions

Date	Chamber	Where	Type	Name	Committee Name
February 12, 2025	House	Floor	Action	Introduction and first reading, referred to	Commerce Finance and Policy
March 19, 2025	Senate	Floor	Action	Received from House
February 16, 2025	House	Floor	Action	Author added
March 19, 2025	Senate	Floor	Action	Introduction and first reading
March 19, 2025	Senate	Floor	Action	Referred to	Judiciary and Public Safety
February 23, 2025	House	Floor	Action	Committee report, to adopt and re-refer to	Judiciary Finance and Civil Law
March 26, 2025	Senate	Floor	Action	Comm report: To pass
February 26, 2025	House	Floor	Action	Committee report, to adopt
March 26, 2025	Senate	Floor	Action	Second reading
February 26, 2025	House	Floor	Action	Second reading
March 16, 2025	House	Floor	Action	House rule 1.21, placed on Calendar for the Day
March 16, 2025	House	Floor	Action	Third reading
March 16, 2025	House	Floor	Action	Bill was passed

Citations

[
  {
    "analysis": {
      "added": [
        "Adds multiple new subdivisions to clarify existing definitions and concepts like 'Defective corporate act'."
      ],
      "removed": [],
      "summary": "Modifications are made to define various terms such as 'Beneficial owner', 'Defective corporate act', and 'Emergency' within section 302A.011.",
      "modified": []
    },
    "citation": "302A.011"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Reference is made to a corporation's power under section 302A.101.",
      "modified": []
    },
    "citation": "302A.101"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Reference is made to the general powers section.",
      "modified": []
    },
    "citation": "302A.161"
  },
  {
    "analysis": {
      "added": [
        "Adds a subsection on 'Emergency bylaws' allowing for emergency management procedures."
      ],
      "removed": [],
      "summary": "A modification clarifies that board powers include managing during emergencies.",
      "modified": [
        "Clarifies how board responsibilities shift during emergency situations."
      ]
    },
    "citation": "302A.181"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Describes corporate board responsibilities and empowers boards with emergency authority.",
      "modified": [
        "Subject board activity to new provisions under emergencies or shareholder agreements."
      ]
    },
    "citation": "302A.201"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The board can approve various corporate actions as needed under existing statutes.",
      "modified": [
        "Clarifies board approval processes for agreements and other corporate documents."
      ]
    },
    "citation": "302A.237"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Describes officers' conduct standards, potentially limiting liability.",
      "modified": [
        "Allows for officer liability limitations under certain corporate conditions."
      ]
    },
    "citation": "302A.361"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Mentioned in the context of share issuance and related board governance.",
      "modified": []
    },
    "citation": "302A.401"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Referenced regarding issuance of shares and dividends under board authorization.",
      "modified": []
    },
    "citation": "302A.405"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Involves shareholder notification processes.",
      "modified": []
    },
    "citation": "302A.435"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References voting power issues in shareholder actions.",
      "modified": []
    },
    "citation": "302A.437"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Setting process for shareholder actions taken without a meeting.",
      "modified": []
    },
    "citation": "302A.441"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Involves voting rights provisions.",
      "modified": []
    },
    "citation": "302A.445"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The document specifies governance provisions that can only be altered in articles or shareholder agreements.",
      "modified": []
    },
    "citation": "302A.457"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Details on shareholder rights to inspect corporate records.",
      "modified": [
        "Updates right to inspect records emphasizing proper purpose in organizations that are not publicly held."
      ]
    },
    "citation": "302A.461"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Discusses dissenters' rights and conditions regarding shareholder actions.",
      "modified": [
        "Describes situations where shareholders may dissent and obtain payment."
      ]
    },
    "citation": "302A.471"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Concerns plan of merger references and shareholder rights.",
      "modified": []
    },
    "citation": "302A.626"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Relates to asset disposition and shareholder approval.",
      "modified": []
    },
    "citation": "302A.661"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Mentioned in relation to ratification and shareholder approval processes.",
      "modified": []
    },
    "citation": "302A.673"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Discusses standards during disposition in dissolution situations.",
      "modified": []
    },
    "citation": "302A.725"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Discusses how a defective corporate act can be ratified or validated.",
      "modified": []
    },
    "citation": "302A.722"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Discusses corporate dissolution processes.",
      "modified": []
    },
    "citation": "302A.753"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References a different chapter regarding plans of merger and conversion of various business entities.",
      "modified": []
    },
    "citation": "322C"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Mentions securities regulations possibly affecting officer liability.",
      "modified": []
    },
    "citation": "80A.76"
  }
]