When forming your own business in Rochester, it is vital that those holding the authority to manage the direction of your company is clearly defined. If you run a sole proprietorship, that distinction is easily made. Yet what if you are in business with others? The issue of ownership interests is bound to come up. Many come to us here at Dunlap & Seeger PA questioning how such interest should be determined. If you share the same question, you may be happy to know that the state has provided you with some assistance in this regard.
State law defines “ownership interest” as corporate shares (if your company is a for-profit corporation), membership interest (if your business is a limited liability company) or partnership interest (if your company is a limited liability partnership). According to Section 319.B07 of the Minnesota Professional Firms Act, the following parties (or entities) may hold ownership interest in your company:
- Professionals who are licensed to provide at least one of the services your company offers
- General partnerships authorized to furnish at least one of the pertinent services your company offers
- Other professional firms authorized to operate in at least one category of services your company offers
- A voting trust established in regard to some or all of the ownership interests in your firm
- An employee stock ownership plan
With respect to the two final entities, ownership interest is only possible if allowing for such entities is permitted in your firm’s governing laws, and if trustees or stock holders are also professionals authorized to perform the services your company offers.
In terms of a sole proprietorship, ownership interest can be held by your spouse for one year following your death. More information on managing the ownership of your company can be found here on our site.