Minnesota: Corporate Compliance – Simple Steps to Protecting Assets

Minnesota law requires all businesses to maintain proper corporate formalities.

Every business owner knows that one must set up some type of business entity – an LLC, an S-corporation – to protect one’s personal assets from the business’s creditors and lawsuits. And owners know that this is done by filing the appropriate corporate documents with the State. But stopping there, and relying solely on a paper filing with the Minnesota Secretary of State’s Office, is insufficient and may subject your personal assets to creditors and claimants.

Minnesota courts and juries have found business owners personally liable for the debts of their companies even though the companies were properly established under Minnesota law. Companies that do not have in place a sound corporate compliance system run the risk of being deemed the “alter ego” of the owner and courts and juries will “pierce the corporate veil” to allow creditors access to the owner’s personal assets. All companies need to take action to protect the assets of their owners.

In order to fully protect owners’ assets, Minnesota law requires that owners do more than merely establish a valid LLC or S-corp.  Every business entity, be it a single member LLC or a multi-shareholder private corporation needs to commit to what the law calls “corporate formalities.”  Two such formalities are vital:  (1) maintaining books and records; and (2) holding an annual meeting. 

Proper corporate compliance protects your personal assets.

Smith Jadin Johnson works with our business clients to ensure that these corporate formalities are met. We work with clients on ensuring that their companies’ registration with all states in which they conduct business is current, all federal and state tax classifications are current, and all corporate documents, including formation and transaction documents, are maintained. We also, on an annual basis, and periodically throughout the year as needed, counsel our business clients on their annual and special meetings, including working with the client to provide proper notice of the meetings, assisting with preparation of meeting agenda, and drafting corporate minutes and resolutions.

Contact Smith Jadin Johnson, PLLC to ensure your company maintains its liability shield and your personal assets are protected.