Legal Question in Business Law in Minnesota

Written Action

A closely held Minnesota corp voted to close the doors of the corp on Jan 1st. There are 3 shareholders who also comprise the board of directors. 2 directors voted to close and 1 abstained.

5 days later, the president wrote a letter that said �We the board members do give the president authorization to keep the doors open�. The letter contained typed names of each person directed to sign which included the 2 directors that had voted to close, and the Treasurer. The letter was signed by these 3, dated Nov 7th. There is also a 2nd version of this letter, identical, except dated Nov 13th, and does not have the Treasurers signature, just the 2 directors.

The bylaws of the corp are identical with Minn. state statue; that a written action without a meeting may be taken if signed by all directors.

Was the letter still valid even though it did not adhere to the bylaws and state statue? If not valid, does it mean the corp was operating illegally after the 1st of the year because they never closed the doors as the board legally voted? Did the president, treasurer, or the 2 directors fail their fiduciary duty by keeping this written action from the 3rd shareholder?


Asked on 4/16/09, 9:22 pm

2 Answers from Attorneys

David Anderson Anderson Business Law LLC

Re: Written Action

You need to have a Business Attorney review the Articles and Bylaws to determine if the actions were ultra vires or sanctioned.

This is important to the continuation of the corporation.

Read more
Answered on 4/16/09, 11:08 pm
Daniel Reiff Reiff Law Office

Re: Written Action

You need to look at all of the corporate documents, particularly the articles of incorporation and bylaws. There are a number of other issues to examine, including what notices were circulated, if any? What actions were actually taken? Was there a meeting of the board? A lawyer probably should be involved immediately.

MY STANDARD DISCLAIMER: This is not intended to be legal advice or to create an attorney-client relationship. No attorney-client relationship is intended until you and I sign a retainer agreement.

Read more
Answered on 4/17/09, 11:52 am


Related Questions & Answers

More Business Law questions and answers in Minnesota