ITEM 10: FINANCING Item Financed Source of Financing Source of Financing Amount Financed Term (Yrs) Interest Rate Monthly Payment Prepay Penalty Security Required Liability Upon Default Loss of Legal Right on Default Initial Fee Belmont (note 1) $10,000 10 18% $180 None Personal Guarantee Loss of franchise-unpaid loan Waive notice. Confess judgment Land / Constr…
The Amended Franchise Rule specifies how franchise disclosure documents are to be prepared, what additional information may and may not be included, and what records franchisors must maintain. Disclosure documents must: use “plain English”; be contained within a single document; and address each disclosure item without including additional information. It is recommended that an experienced…
Secretary Of State Fee Schedule For Business Entity Filings The following fees are effective as of the date this Guide was printed. Questions may be directed to the Secretary of State’s office at the address and telephone number provided in the Resource Directory section of this Guide. See note at the end of fee schedule…
Filing Documents With The Secretary Of State Drafting The Document Standard forms are available without charge from the Secretary of State’s website at www.sos.state.mn.us/index.aspx?page=331 or by fax from the Fax Forms library at (651) 296-2803 or by mail from the Secretary of State. While these forms are designed to meet minimum requirements of the law,…
The “Required Payment” Element The last of the three definitional elements of a franchise covered by the amended Rule is that purchasers of the business arrangement must be required to pay to the franchisor (or to an affiliate), as a condition of obtaining a franchise or starting operations, a sum of at least $500 at-5…
A franchise is an agreement or contract between two or more persons by which the franchisor, for a fee, gives the franchisee the right to engage in the business of offering or distributing goods or services using the franchisor’s trade name, trademark, service mark, logotype, advertising, or other commercial symbol. Both the franchisor and the…
Cooperatives A cooperative is a form of business organization in which the business is owned and controlled by those who use its services. A cooperative may be organized as a legal entity or it may be an unincorporated association. Cooperative associations are organized as legal entities under and overned by Minnesota Statutes Chapter 308A. Non-Minnesota…
Professional Entities The Minnesota Professional Firms Act, Minnesota Statutes, Chapter 319B, was enacted in 1997 and authorizes practitioners of certain licensed professions to elect to be professional firms under any one of three different forms of organization: corporations (either for-profit or nonprofit); limited liability companies; and limited liability partnerships. In the absence of the Minnesota…
The “Significant Control or Assistance” Element The amended Rule covers business arrangements where the franchisor “will exert or has the authority to exert a significant degree of control over the franchisee’s method of operation, or provide significant assistance in the franchisee’s method of operation.” When Is Control or Assistance Significant? The more franchisees reasonably rely…
Special Types Of Business Organizations S Corporations Professional Entities Nonprofit Corporations Cooperatives Franchises S Corporations Both “S” and “C” corporations are created by filing articles of incorporation with the Secretary of State, after which the shareholders must decide whether to treat the corporation as an S corporation or as a C corporation for tax purposes….
Foreign LLCs Doing Business In Minnesota A limited liability company that is organized under the laws of a state other than Minnesota that transacts business in Minnesota must obtain a certificate of authority before doing business in Minnesota. The requirements for obtaining the certificate of authority are specified by Minnesota Statutes § 322B.90 to 322B.955,…
Entrepreneurs and small business owners often ask me when they should use an attorney. Business owners are often successful because they are frugal, so it follows that they would be especially cautious when hiring a lawyer. For a small business, it is important to keep overhead low; this includes legal fees. However, preventing problems is…
Post-Organization Issues General Considerations After the limited liability company is formed, it must perform certain start-up tasks, such as obtaining federal and state tax identification numbers, obtaining an unemployment compensation identification number, setting up and maintaining the books and records of the business, calling and conducting the initial meeting of the board of governors or…
Amending Articles of Organization A limited liability company may amend its articles of organization to include or modify any provision that is required or permitted to appear in the articles or to omit any provision not required to be included. Amendments are required when any changes are made in the articles of organization. The amendment…
The “Trademark” Element A franchise entails the right to operate a business that is “identified or associated with the franchisor’s trademark, or to offer, sell, or distribute goods, services, or commodities that are identified or associated with the franchisor’s trademark.” The term “trademark” is intended to be read broadly to cover not only trademarks, but…
Articles Of Organization A limited liability company is formed by filing articles of organization with the Secretary of State and paying the filing fee. Minimum requirements for the articles of organization are provided on an articles of organization form that is available from the Secretary of State’s website at www.sos.state.mn.us/index.aspx?page=331 or by fax from the…
Starting a MN Business Understanding the formation of each entity type is an important step in deciding which business entity type is right for you. Over the course of several articles, we’ll look at the formation and logistics of various types of business entities. The information provided is intended to help you in the process…
Forming A Minnesota Limited Liability Company This series of posts will discuss the necessary steps to forming a LLC in Minnesota. Some of the processes and considerations involved in forming a limited liability corporation in Minnesota include: Filing Articles of Organization naming the business entity Registering an office Registering an agent Listing the organizers Other…
Subsidiaries When a corporation extends into a new product line or a new geographic area, it frequently establishes a “subsidiary” corporation. A subsidiary corporation is a separate legal entity which happens to be controlled by another corporation (its “parent”) that owns enough shares of the subsidiary’s stock to dictate policy. Some subsidiaries are wholly-owned, some…
Do you need to have a disclosure at the end of your emails? Most people don’t. However, certain professions (like lawyers) may help protect themselves by having an email disclosure. Email disclosures don’t have to be long and filled with a lot of legalese. However, sometimes lawyers may prefer that to make them sound more…
Landlords who have problems with renters can generally categorize their problems as one of the following: Renters who are not paying Renters who are damaging the property Renters who are otherwise violating the rental agreement Although the facts and circumstances are different with every landlord and renter, the problems in these categories are generally resolved…
Amending the Articles of Incorporation A corporation may amend its articles of incorporation to include or modify any provision that is required or permitted to appear in the articles or to omit any provision not required to be included in the articles. Amendments are required when any changes are made in the articles of incorporation….
Other Provisions There is no publication (i.e., no “legal advertisement”) requirement for corporations incorporated under Minnesota Statutes Chapter 302A. There is also no statutory minimum capital requirement for these corporations. There are a number of provisions of Minnesota Statutes Chapter 302A that may be altered or adopted in the articles of incorporation, but that need…
Articles of Incorporation A corporation is formed by one or more incorporators filing articles of incorporation with the Secretary of State and paying the filing fee. Articles of incorporation are the equivalent to articles of organization in an LLC. Minimum requirements are satisfied by an article of incorporation form that is available from the Secretary of…
When a business starts hiring employees, business owners often become concerned about their employees’ online activity. Concerns may include some of these: illegal online conduct (such as copyright infringement by illegally downloading music and movies, which can result in legal consequences), online pornography or sexually inappropriate materials, defamatory (libel and slander) comments posted on websites…
Apportionment is a key feature of state corporate taxes Apportionment formulas are important features of state corporate income taxes. They determine how much of a business’s income is taxable and affect the incidence and competitiveness of the tax. Minnesota apportions corporate income using the Minnesota proportions of the corporation’s sales, payroll, and property factors to…
Forming A Minnesota Business Corporation A corporation is a separate legal entity that is owned by one or more shareholders. The shareholders elect a board of directors which is responsible for the management and control of the corporation. As a separate legal entity, the corporation is responsible for the debts and obligations of the business….
Limited Partnerships A limited partnership is a type of partnership in which the limited partners share in the partnership’s liability only up to the amount of their investment in the limited partnership. Under Minnesota’s Uniform Limited Partnership Act, the limited partnership must have at least one general partner and one limited partner. The general partner…
Forming A Partnership There are two types of partnerships: general partnerships and limited partnerships. We’ll look at forming a general partnership in this post, and a limited partnership in the next. Both general and limited partnerships can elect certain legal rules that give partners in these partnerships greater protection against personal liability. A general partnership…
E-Insurance For Companies With An Online Presence With the growth of the Internet and e-commerce, the law regarding business insurance is evolving as coverage is being extended to new areas. Both the insurance industry and the courts are starting to sort out how existing insurance products apply to e-commerce. Businesses that operate on the Internet…