MN Chap 322C impacts to LLCs

[pltaxpro]

Does anyone have a simple, clear brief in layman's terms that explains the upcoming changes going into effect in Jan 2018 relating to MN Chapter 322C? This statute affects how LLCs that
were formed pre-2015 will be operated/managed going forward. My LLC clients will most likely not understand the new wording as published by the MN Secretary of State or the MN Legislature, and I have not had time to re-write the information myself into a more user-friendly version. Any thoughts would be greatly appreciated.

[TaxGuyBill]

The only tax-related thing that I could see is the unless the Partnership Agreement says otherwise, all distributions need to be equal (profits and losses can still be allocated however you want).


Under new 322C, unless the operating agreement provides otherwise, distributions prior to termination of an LLC are to be made on a “per capita” basis, or in equal shares among members. Upon termination of an LLC, the distribution of any surplus remaining after the LLC’s liabilities have been satisfied is made in specified order: first to members in an amount equal to the value of their unreturned contributions, and then equally among members. 322C does not address the allocation of profits and losses among members, viewing this primarily as a tax matter and instead leaving to the members the decision as to whether, when, and how to allocate profits and losses, to be expressed through their operating agreement.

http://www.sos.state.mn.us/business-liens/business-help/upcoming-llc-law-change/