LLC Formation Checklist - Register Minnesota LLC

Minnesota Limited Liability Company Questionnaire:

If you are interested in discussing the organization of a Minnesota LLC with a business attorney of Trepanier MacGillis Battina P.A., please review the following questionnaire in preparation for your initial consultation. Please do not send this information to the firm unless requested to do so by one of our attorneys. The information on this form includes some factors that will allow Trepanier MacGillis Battina P.A. to evaluate whether you would be best served by a corporation or a limited liability company.

1. Name and Contact Information: Desired Name of Entity: ____________________________________________________List your desired name (e.g., Smith Companies, Inc. or Smith Consulting, LLC). We will determine if the name is available through the Minnesota Secretary of State. We will not perform a trademark or trade name search. If you select a name that is confusingly similar to a third party’s trademark or trade name, you could incur liability or be forced to change your name. We recommend that you extensively research the existence of any similar names in your anticipated geographic territories and within your expected industry to minimize this risk.

Primary business address: __________________________________________

Phone: _________________________________________________________

Fax: ___________________________________________________________

Website: ________________________________________________________

Principal contact person: ___________________________________________

E-mail for principal contact: _________________________________________

Assumed Name(s): __________________________________________

List any name(s) of the business that the entity will do business under, if different than the formal name of the entity listed in paragraph 1. For example, Smith Companies, Inc. doing business as “Smith’s Convenience Store.” If you intend to do business under a name other than the formal corporate name, this “assumed name” must be registered with the Minnesota Secretary of State. The legal fees and registration fees for filing an “assumed name” are not included in the flat fee.

3. Nature of Business: Provide a narrative description of the nature of your business, including primary products, goods, and services, customer base, etc.

_____________________________________________________________________

4. State of Incorporation or Organization: We normally recommend incorporating in Minnesota due to annual registered agent fees in Delaware. There are, however, differences between Minnesota and Delaware corporate laws and potential advantages to incorporating in Delaware. If you are not sure about where to incorporate, discuss this with the attorney.__ Minnesota__ Delaware__ Other__ Don’t know 5. Incorporator or Organizer: Unless you instruct us otherwise, and in order to expedite the filing of your Articles, the attorney preparing your corporate documents will serve as the “incorporator” or “organizer” and then resign upon distribution of shares or membership units to the actual owners you designate. If you want to designate a different incorporator or organizer, list the person’s name below. This may delay your registration slightly.__ The attorney preparing your documents (recommended)__ Other:_______________________________________ 6. Owners, Officers, and Board Members: List each owner and their percentage(s) of ownership* below. In addition, complete the attached Exhibit A for each person who will be an owner, officer, or board member of the new entity.

Owner Name	Voting %	Financial %	SSN	Tax Year

*Note: If you elect the LLC entity structure, the percentage of Voting Interests and Financial Interests can be different. For an S Corporation, they must be the same. 7. Authorized Number of Shares (Corporation Only):__ 1,000,000 (recommended)__ Other: _______________________________________ 8. Par Value (Corporation Only): Par value of stock is a bookkeeping term that equates to price upon issuance of the stock. If a share of stock has a par value of one dollar, then one dollar per share must be given to the corporation in order to purchase the stock upon issuance. For example, buying 1,000 shares of stock with a $1.00 par value, will cost you $1,000.00. Stock can sell above or below its par value, but not on newly issued shares. It is a minimum price of a share below which the share cannot be issued, as designated in the articles of incorporation.__ $.01 par value (recommended)__ Other: _______________________________________ 9. Voting and Financial Rights: Unless otherwise provided in the articles or in the terms of the shares, a shareholder/member has one vote for each share held. (a) Preemptive Rights: If the entity offers for sale additional shares of the company, a preemptive right is the right of an existing shareholder to purchase an amount of shares so that their percentage interest will remain the same after the issuance. Preemptive rights help protect the rights of minority shareholders from dilution of their ownership stake if the majority elects to issue new shares/membership units in the company. Do you wish to adopt preemptive rights?__ Yes__ No__ Don’t know (b) Cumulative Rights: Cumulative rights give shareholders/members the right to pool their votes to concentrate them on an election of one or more directors rather than apply their votes to the election of all directors. For example, if the company has 12 openings to the Board of Directors, in statutory voting, a shareholder with 10 shares casts 10 votes for each opening (10 x 12 = 120 votes). Under the cumulative voting method however, the shareholder may opt to cast all 120 votes for one nominee (or any other distribution he/she might choose). Cumulative rights help protect the rights of minority shareholders to select board members. Do you wish to adopt cumulative rights?__ Yes__ No

__ Don’t know

(c) Separate Classes of Stock (Corporation Only): Some corporations have separate classes of stock such as “ordinary” stock vs. “preferred” stock or “voting” stock vs. “non-voting” stock. Unless you note otherwise, there will be only one class of stock and “one vote for each share.” Please note that if you elect S Corporation status for tax purposes (see below), you generally cannot have separate classes of stock (except that under some circumstances you can have “voting” and “non-voting” shares). Further, with an S Corporation, distributions of profit must be made based on percentages held.__ One Class of Stock__ Separate Classes of Stock

__ Don’t know

(d) Split “Financial” and “Governance” Rights (LLC Only): The LLC structure allows for splitting the “financial” rights (the rightto share in profits) and “governance” rights (the right to vote) much like having different classes of stock in a corporation. The LLC also allows for flexibility in distributing profits without regard to the percentage of ownership held by the individual(s). This feature of the LLC is one major advantage over an S Corporation. Unless you note otherwise, however, there will be only one class of membership interests and one vote for each membership unit.__ One class of LLC membership interests__ Separate classes of LLC membership interests

__ Don’t know

10. Buy-Sell Agreement: A buy-sell agreement is not necessary when there will be only one owner. If there will be multiple owners, the buy-sell agreement often provides that under certain conditions, such as the owner’s disability, death, resignation of employment, termination of employment, or otherwise, the owner and the owner’s heirs are legally obligated to sell their interest to the company (or the remaining owners) and the company (or the remaining owners) are legally obligated to buy at a price fixed in the agreement. The buy-sell agreement can also be structured to provide for an option to purchase rather than a mandatory obligation. The value of each owner’s share of the business and the exact terms of the buying and selling process are established in the agreement. Sometimes the transaction may be funded through life insurance and disability insurance policies, typically carried on the lives of each individual owner. The buy-sell agreement also typically addresses whether the owners can sell their ownership interests to third parties, and whether the company has a “right of first refusal” to purchase the shares at the stated price. If you will have more than one owner, we highly recommend that you establish a buy-sell agreement to minimize the risk of disputes and litigation when and if one of the owners ends their involvement in the business. Unless otherwise agreed, preparation of a buy-sell agreement is not covered in the flat fee price quoted for establishing your corporation or LLC.__ Yes__ No

__ Don’t know

11. Federal and State ID Numbers: You will most likely be required to obtain both federal and state tax ID numbers to operate yourbusiness; for example, if you will be collecting sales tax or withholding income and payroll taxes for employees. If so, answer the following questions:

(a) Tax ID Number needed for: __ Sales Tax

__ Employer’s Withholding

(b) Nature of business: __________________________________________________(c) 1^st date of business operation: __________________________________________(d) Product or services sold and to whom they are sold:__________________________

_________________________________________________________________

(e) Peak number of employees expected in next twelve months: __________________(f) Date first taxable wages will be paid (estimate): ____________________________(g) Is business seasonal? If yes, which months: _______________________________

_________________________________________________________________

(h) NAICS Code Number: ______________________An NAICS Code Number is a classification given by the census bureau to describe the business of your company. If this code is unknown, go to http://www.census.gov/epcd/www/naics.html and use the search function to determine your code. If you have more than one code due to the type of business you will conduct, indicate up to four codes that would accurately describe your business. (i) List other federal/state ID numbers held or previously held (include the dates of application and the previous location, if different than current location, of business): Federal: __________________________________________________________State:____________________________________________________________ (j) Fiscal year end:__ December 31^st(recommended)

__ Other: ______________________________

__   Don’t know
         (k)     Third party designee:  Typically the attorney from Trepanier MacGillis Battina P.A. who is preparing your documents will be listed as the third party designee for receiving the Employer Identification Number and answering any questions concerning the application.

__   Trepanier MacGillis Battina P.A. (recommended)__   Other: ______________________________                            __   Don’t know12.    Sales Tax Applicants ONLY:  Answer the following questions if you will be selling goods or services for which you are required to collect sales tax: (a)     Date of first taxable sale (estimate): ___________________________________ (b)     Will you be filing monthly (tax more than $250/month) or quarterly (tax less than $250/month):_________________________________________________ (c)     Will you be making taxable sales from more than one location?__   Yes        __   No (d)     Will you be making taxable sales in the following cities?__   Yes        __   No                   Minneapolis__   Yes        __   No                   Rochester__   Yes        __   No                   St. Cloud If Yes, do you need registration forms for that city’s tax?__   Yes        __   No (e)     Non-taxable Sales: _________%        Taxable Sales_________%        Sales for purpose of resale_________%        Sales to sales tax-exempt organizations_________%        Sales of materials for use in agricultural or industrial production_________%        Sales shipped out of state by your business_________%        Sales of motor vehicles_________%        Sales of food products_________%        Sales of clothing and wearing apparel_________%        Sales of gasoline_________%        Miscellaneous   100      %      Total Sales 13.    Entity Type:  If you have an initial preference, please indicate your preferred entity type (C Corporation, S Corporation, LLC, or otherwise).  The attorney will discuss this issue with you before a final decision is made.  All clients are strongly advised to discuss their “entity choice” with an accountant given the important tax implications.. While the firm will give you general advice regarding the differences between each entity, the firm is not offering tax advice.

__ C Corporation

__ S Corporation

__ Limited Liability Company (LLC)

__ Other: ______________________________

__ Don’t know

14. S Corporation (Corporation Only): If you choose to form a corporation, you can elect to be treated as an “S Corporation” (small business corporation). An S Corporation has the attributes of “flow through taxation,” meaning that the corporation itself is not taxed on its net income. Rather, the shareholders will be taxed on the corporation’s net income (at the shareholders’ personal income tax rates) based on their percentage interest in the company. The primary advantage of S Corporation status is to avoid “double taxation.” However, an S Corporation may have no more than 100 shareholders. Further, only individuals, estates, exempt organizations under Internal Revenue Code Sections 401(a) or 501(c)(3), or certain trusts are permitted to be shareholders. If you anticipate having more than 100 shareholders at any time, or want the flexibility of allowing non-individuals (such as other corporations and LLC’s) to own stock in the corporation, you should discuss this issue further with your accountant and attorney before electing S Corporation status. Do you wish to elect “S Corporation” status?__ Yes__ No

__ Don’t know

If Yes, fill in subsections (a) through (e).(a) Election is to be effective for tax year beginning: ________________________(b) Date when or will the corporation acquire(d) its first asset:__________________(c) Date the corporation began or will begin/doing business?________________________________________________________________(d) Individual tax years of shareholders: (See Question 6)(e) Does any trust or will any trust hold Subchapter S stock? __ Yes__ No

__ Don’t know

If Yes, please explain: _____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 15. Accountant for Entity: It is often helpful for the attorney to discuss entity formation issues with your accountant. You should hire an accountant if you have not done so already. Please identify your accountant and provide the contact information below. Name: _______________________________________Company: _______________________________________Address: _______________________________________ _______________________________________Phone: _______________________________________Cell Phone: _______________________________________Fax: _______________________________________

E-Mail: _______________________________________

16.    Bank or Financial Institution for the Entity:  It is sometimes helpful for the attorney to discuss business start-up issues with your banker.  In addition, the banker will typically require a copy of your articles of incorporation, certificate of incorporation, and bylaws before allowing you to open a bank account.  Please identify your banker and provide the contact information below. Name:      _______________________________________Company:  _______________________________________Address:    _______________________________________     _______________________________________Phone:       _______________________________________Cell Phone:  _______________________________________Fax:          _______________________________________E-Mail:       _______________________________________NOTICE TO PERSON COMPLETING THIS FORM:Unless you are identified as the “Client” in a signed written Legal Services Agreement between Trepanier MacGillis Battina P.A. (the “Firm”) and you:
1.       The Firm is not representing you or acting as your attorney.  2.       The Firm may be representing another interested person or the entity itself.  3.       Your interests and the interests of the person or entity being represented by the Firm may not be the same and very likely are in conflict.4.       You are advised that any information you provide to the Firm may be used for the benefit of the person or entity being represented by the Firm.5.       You are advised to obtain your own independent legal advice from another attorney.By signing below, you represent that the information you have provided is true and correct; you have read the above Notice; and you are voluntarily providing this information to the Firm. ___________________________________Print Name ___________________________________                Signature ___________________________________Date

EXHIBIT AShareholders, Members, Officers, Directors, and Governors:   Complete this Exhibit A for each person who will be a shareholder, member, owner, officer, or member of the board of directors/ board of governors of the new entity. Disclaimer:  Unless this person is identified as a “Client” in a signed written Legal Services Agreement with Trepanier MacGillis Battina P.A. (the “Firm”), the Firm is not representing this person individually or acting as his/her attorney.  Name:                 ___________________________________________________Home Address:       ___________________________________________________                         ___________________________________________________Home Phone:         ___________________________________________________Cell Phone:            ___________________________________________________SSN:                    ___________________________________________________E-Mail:                 ___________________________________________________Married?               __   Yes                  __   NoName of Spouse:     __________________________________________________Current Employer:  __________________________________________________Will this person be an owner of the new company?__   Yes                  __   No                             If yes, percentage of ownership: __________ percent (%)Consideration Given for Shares or Ownership Interest:  The owner must give something to the entity in exchange for the ownership interest.  The legal term for this is “consideration.”  Consideration can be anything of value given in exchange for ownership such as cash, loans, personally guaranteeing leases and bank loans, property, equipment, computers, other assets, customer lists, intellectual property, and “sweat equity” to get the business up and running. List all contributions expected from this owner below:           Cash:          $_______________.00           Loan:          $_______________.00           Other:  __________________________________________________________________________________________           Will this person be on the Board of Directors (Corporation) or Board of Governors (LLC)?          __   Yes                  __   NoWill this person be an officer (high level executive) for the entity?          __   Yes                  __   NoIf Yes, list officer title(s) to be held by this person. The same person can hold more than one office; for a single owner business, the owner typically holds all offices. __   President/Chief Executive Officer (required)
The president, also known as the Chief Executive Officer usually has a general active management of the business of the company, presides at all meetings of the owners,  preside at all meetings of the Board of Directors/Governors if the Chairman of the Board is absent, sees that all orders and resolutions of the Board are carried into effect, signs and delivers in the name of the corporation any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the corporation, maintains records of and, whenever necessary, certifies all proceedings of the Board of Directors/Governors and the shareholders/members.__   Vice PresidentThe Vice President usually has the powers and duties as described in the entity’s bylaws or prescribed by the Board of Directors/Governors.  The Vice President also performs the duties of the President if the President is disabled or absent for a period of time          __   Treasurer/Chief Financial Officer (required)The Treasurer, also known as the Chief Financial Officer of the company, usually keeps accurate financial records for the corporation and has the duties of depositing all money, drafts and checks in the name of and to the credit of the corporation in the banks and depositories designated by the Board of Directors/Governors.__   SecretaryThe Secretary usually records the minutes of all meetings of the shareholders and Board of Directors/Governors and gives proper notice of meetings of shareholders, members, directors and governors.  Does this person have any existing Employment Agreements, Non-Compete Agreements, and Confidentiality Agreements?  (If so, attach a copy.)  The new entity should be careful to ensure that any person who will be an owner, officer, director, or employee does not violate any obligations owed to third parties (such as former employers) in connection with the business’ formation.           __   Yes                  __   NoEmployment Agreement Issues:  Unless the entity has only one owner, we recommend that the new business enter into a written employment agreement with all key employees to govern such issues as compensation, duties, benefits, confidential information, non-solicitation of customers and/or non-competition, assignment of intellectual property rights, procedures for termination, grounds for termination, etc.  The employment agreement also typically triggers obligations under the buy-sell agreement (if there is one) upon resignation or termination.  Unless otherwise agreed, the cost of preparing employment agreements is not included in the flat fee for incorporating your business.     Do you want an Employment Agreement for this person?  __   Yes       __   NoIf Yes, list the following:Title:_____________________________________________Duties: ____________________________________________Reports to: _________________________________________Wage or Salary: _____________________________________Bonus:____________________________________________Commissions: ______________________________________Other Compensation: ________________________________Primary Employee Benefits: ___________________________Paid Sick Leave: ___________________________________Paid Vacation: _____________________________________Stock Options:_____________________________________Advance Notice of Termination:__   Terminable without advance notice__   10 days notice__   30 days notice__   60 days notice__   OtherHow can Corporation or LLC terminate employment: __   “At Will”__   “For Cause” onlyHow can Employee quit employment:__   “At Will”__   “For Cause” onlyWill Employee Receive Severance Upon:__   Termination by Company “Without Cause”__   Termination by Company “For Cause” __   Resignation by Employee “Without Cause”__   Resignation by Employee “For Cause”           If Yes, how much severance?__   One months’ salary__   Three months’ salaryOther: ______________________________                            Do you want a Confidentiality Agreement for this person?  __  Yes   __   No           A confidentiality agreement typically is used to protect the company’s confidential information, trade secrets, formulas, client lists, etc.                   Do you want a Non-Compete Agreement for this person?  __   Yes  __   No           A non-compete agreement is typically used in order to protect an employee from competing against the company during, and after, his or her employment.  This restriction can encompass numerous restrictions including but not limited to promises not to “solicit” the company’s customers.           Does an attorney currently represent this individual?    __   Yes      __   No                    If yes, identify the attorney and law firm: Name:        _____________________________________Firm:          _____________________________________Address:      _____________________________________                _____________________________________Phone:        _____________________________________Cell Phone:   _____________________________________Fax:           _____________________________________E-Mail:        _____________________________________

The Minnesota corporate law firm of Trepanier MacGillis Battina P.A. in Minneapolis, Minnesota represents entrepreneurs, business owners, investors, and individuals who wish to incorporate in Minnesota, find out how to incorporate in Minnesota, organize a Minnesota limited liability company (LLC), register Minnesota LLC, incorporate Minnesota LLC, incorporate Minnesota Subchapter S Corporation, incorporate Minnesota S-Corporation, incorporate Minnesota S-Corp., incorporate Minnesota business, incorporate Minnesota C-Corporation, register Minnesota business, obtain Minnesota business license, startMinnesota sole proprietorship, start a Minnesota business, obtain Minnesota tax ID numbers, and obtain Minnesota assumed name. Our Minnesota LLC attorneys, Minnesota LLC incorporation attorneys, Minnesota LLC lawyers, Minnesota corporate lawyers, Minnesota corporate super lawyers, and Minnesota AVVO lawyers help clients register Minnesota LLCs and Minnesota limited liability companies wherever they might live, includingMinneapolis, St. Paul, Apple Valley, Blaine, Bloomington, Brainerd, Brooklyn Park, Burnsville, Coon Rapids, Duluth, Eagan, Eden Prairie, Edina, Lakeville, Mankato, Maple Grove, Minnetonka, Moorhead, Plymouth, Richfield, Rochester, St. Cloud, Stillwater, Twin Cities, Woodbury and other cities within the State of Minnesota (MN) (Minn.).