A company’s lack of adherence to corporate formalities and corporate governance rules can risk the application ofthe corporate veil-piercing doctrine. In determining whether to apply the doctrine, Minnesota courts look to anumber of factors. Specifically, courts rely upon the two-prong test first articulated by the Minnesota SupremeCourt in Victoria Elevator Co. v. Meriden Grain Co., 283 N.W.2d 509 (Minn. 1979). The first prong of the VictoriaElevator test considers whether or not the shareholder has established a sufficiently separate corporate entityaccording to the following factors, which are not exclusive: 1. Insufficient capitalization for purposes of the corporate undertaking;2. Failure to observe corporate formalities;3. Nonpayment of dividends;4. Insolvency of the debtor corporation;5. Siphoning of funds by a dominant shareholder;6. Nonfunctioning of other officers and directors;7. Absence of corporate records;8. Existence of the corporation as a mere façade for individual dealings. More than one, but not all, of these factors must be present in order to provide a basis for corporate veilpiercing. Under the second prong of the test, the court looks to whether piercing the corporate veil is required byfairness and whether the corporate entity has been operated in an unjust manner with respect to the plaintiff. Id.;White v. Jorgenson, 322 N.W.2d 607, 608 (Minn. 1982)

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CONTRACTISLAW

302A.153 EFFECTIVE DATE OF ARTICLES. Articles of incorporation are effective and corporate existence begins when the articles ofincorporation are filed with the secretary of state accompanied by a payment of $135, whichincludes a $100 incorporation fee in addition to the $35 filing fee required by section 302A.011,subdivision 11. Articles of amendment are effective when filed with the secretary of state or atanother time within 30 days after filing if the articles of amendment so provide. Articles of mergermust be accompanied by a fee of $60, which includes a $25 merger fee in addition to the $35filing fee required by section 302A.011, subdivision 11. https://www.revisor.mn.gov/statutes/?id=302A.153&format=pdf

name of the corporation

other provisions thatmay be included in either theArticles or the Bylaws

After the filing of Articles of Incorporation, the incorporators or the directors named inthe Articles can either hold an organizational meeting or take written action to complete theorganization of the business, including adoption of Bylaws. Minn. Stat. § 302A.171. Thepurpose of Bylaws is to establish rules for the internal government of the corporation. LittleCanada Charity Bingo Hall Ass’n v. Movers Warehouse, Inc., 498 N.W.2d 22, 24 (Minn. Ct.App. 1993).

Shareholder Control Agreements

Employment Agreements

Buy-Sell Agreements,

Voting Agreements

 The power to adopt or amend Bylaws vested in the Board (Section 302A.181)

 Cumulative voting for directors (Section 302A.215, subd. 2)

 All shares are common shares entitled to vote and are of one class (Section302A.401, subd. 2)

 All shares have equal rights and preference as to all matters not otherwiseprovided for by the board (Section 302A.401, subd. 2).

 Certain preemptive rights of shareholders (Section 302A.413).