Declaration of Dissolution for Nebraska Limited Liability Companies and Nonprofit Corporations

In odd-numbered years, Nebraska limited liability companies and nonprofit corporations are required to file Biennial Reports with the Nebraska Secretary of State. If you have not filed the Biennial Report for your limited liability company or nonprofit corporation and you did not organize or incorporate in 2023, you likely received a Declaration of Dissolution, which states that the Nebraska Secretary of State has dissolved your company and it is now inactive. If you did not file your Biennial Report and you did not receive a Declaration of Dissolution, you will want to be sure to review the Nebraska Secretary of State records to ensure your company’s information is up to date.

If your company has been dissolved, you can reinstate it by filing an Application and Declaration of Reinstatement along with the 2023-2024 Biennial Report with the Nebraska Secretary of State.

If you would like assistance in reinstating your entity so that it is active and in good standing with the Nebraska Secretary of State, the attorneys at Erickson Sederstrom can assist you with this process.

Removing Minority or Legacy Shareholders the Right Way

The best practice for dealing with minority shareholders is a well thought out buy-sell agreement which includes simple to follow and execute buy-out or redemption provisions.  But what if your small business (for example a multigenerational agribusiness or family farm) has legacy shareholders who are not subject to a buy-sell agreement?  Even worse, what if those shareholders are irrational, create conflict and/or are not contributing in a meaningful way to the business?  Most state corporate statutes (including Nebraska) contain a simple solution by allowing a squeeze-out maneuver through the creation of fractional shares (i.e. script) which in turn allows the corporation to simply cancel the minority shareholder’s shares in exchange for tendering cash equal to the fair value of their stock.  This can be a win-win for family and small businesses because it allows the business to move forward without having to deal with issues created by the presence of the minority shareholder and also provides a fair mechanism for valuing the shares of minority shareholders when their position is liquidated.  You should consult with an experienced attorney about the ins and outs of executing this maneuver if you want to remove a minority shareholder.  Often a simple letter from your counsel to the minority shareholder’s counsel is all that is needed to resolve your disputes with the minority shareholder.

SBA Removes Loan Necessity Review for Certain PPP Loans

The United States Small Business Association (“SBA”) will no longer require loan necessity review for Payment Protection Program loans of $2 million or more and any open requests for additional information regarding the loan necessity review can be closed.

 The loan necessity review required completion of the Loan Necessity Questionnaire (SBA Form 3509 for for-profit borrowers and SBA Form 3510 for not-for-profit borrowers) which led to a lawsuit by the Associated General Contractors of America against to the SBA that challenged the legality of the forms.

The changes are effective immediately and the SBA will issue guidance on this issue which will provide more details.