HF4235 (Legislative Session 94 (2025-2026))
Corporation and limited liability company powers related to election activity prohibited.
Related bill: SF4513
AI Generated Summary
- Purpose
This bill would stop corporations and limited liability companies (LLCs) from using their powers to influence elections. It defines what counts as "election activity" and adds limits so that corporate entities cannot fund or influence campaigns, candidates, ballot questions, or political parties. It also sets out remedies if a company acts beyond its powers.
Main provisions
Definition added: Election activity
- For corporations and LLCs, election activity means paying, contributing, or expending anything of value (money or in-kind) to:
- promote or defeat the nomination or election of a candidate, or
- promote or defeat the success of any political party, political organization, or to promote or defeat ballot questions.
Power limit for corporations (and similarly for LLCs)
- A corporation (and LLC) has powers needed to do its business, but nothing in Minnesota law should be read as giving it the power to participate in or influence any election activity.
Ultra vires and enforcement
- If a corporation acts without power in ways that relate to election activity, courts may:
- enjoin (stop) the action,
- possibly set aside contracts or transactions tied to the unauthorised activity, and
- consider damages or compensation if appropriate.
- The attorney general can use these rules to dissolve or stop the corporation from unauthorized business related to elections.
Ratification and validation
- A defective corporate act or share can still be considered valid if it is ratified or validated through appropriate legal processes.
Similar changes for LLCs and their statutes
- The same election-activity definitions, power limitations, and enforcement mechanisms apply to LLCs (in the sections that cover LLCs).
How this would change existing law
Explicitly narrows the permissible activities of corporations and LLCs by barring them from engaging in election-related activity as defined in the bill.
Adds uniform language across corporate and LLC statutes to prohibit election activity and to spell out consequences for unauthorized actions.
Strengthens enforcement options (injunctions, potential contract relief, dissolution actions by the attorney general) for election-related power violations.
Updates remedies related to defective acts, allowing court ratification or validation to determine the final outcome.
Practical implications and examples
Examples of what would be prohibited
- A company using corporate funds or in-kind resources to back a candidate, oppose a ballot measure, or support/oppose a political party or organization.
- An LLC paying for political advertising or engaging in coordinated efforts to influence an election.
Examples of what remains allowed (subject to normal business purposes)
- Normal business decisions not connected to influencing elections, as long as they do not cross into defined election activity.
Enforcement consequences
- If a company engages in election activity, authorities could seek to stop the action, undo related deals, or dissolve the company in extreme cases.
- Courts could permit compensation in some situations if they void or halt specific transactions.
Summary of the scope
The bill applies to both corporations and LLCs, creating a parallel set of restrictions and remedies across corporate and LLC law.
It defines election activity broadly to include money and in-kind contributions aimed at influencing elections or ballot questions.
Potential concerns and considerations
Administrative burden for businesses to ensure compliance across multiple statutes.
Definitions of election activity may require interpretation in complex corporate structures and political activities.
Clearer guidance may be needed for what counts as in-kind contributions and how to track expenditure.
Relevant Terms election activity; corporation; limited liability company (LLC); in-kind; monetary; contribute; contributing; expending; aid; promote; defeat; nomination; election; ballot question; political party; political organization; ultra vires; enjoin; contract; injunction; ratification; validation; attorney general; dissolve; powers; authority; governance.
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 12, 2026 | House | Action | Introduction and first reading, referred to | Commerce Finance and Policy |
Citations
[
{
"analysis": {
"added": [
"Subd.10a.Election activity is defined to include paying, contributing, or expending anything of value either monetarily or in kind to aid promote or defeat the nomination or election of a candidate and to aid or promote the interests, success, or defeat of any political party or political organization; and to aid or promote or defeat the passage of a ballot question."
],
"removed": [],
"summary": "Adds a new subdivision defining 'Election activity' for corporations under Minnesota Statutes, section 302A.011.",
"modified": []
},
"citation": "302A.011",
"subdivision": "Subd.10a"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Amends Subd.24 (Other powers limitation) to prohibit corporate power to participate in election activity, except as otherwise provided.",
"modified": [
"Adds language stating that nothing in this chapter, any other statute, regulation, or corporate charter shall be interpreted as granting a corporate power to participate in election activity."
]
},
"citation": "302A.161",
"subdivision": "Subd.24"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Amends 302A.165 (Effect of lack of power; ultra vires) to clarify that acts may be enforceable or enjoined under certain circumstances and may involve remedies related to contracts and governance.",
"modified": [
"Clarifies remedies and authority when a corporation lacks power to perform acts, including potential court actions and allowances for loss or damage in setting aside contract performances."
]
},
"citation": "302A.165",
"subdivision": ""
},
{
"analysis": {
"added": [
"Defective corporate acts or putative shares may be ratified under this section or validated by a court in proceedings under §302A.167."
],
"removed": [],
"summary": "Adds/clarifies the effect of ratification or validation for defective corporate acts or putative shares.",
"modified": []
},
"citation": "302A.166",
"subdivision": "Subd.1"
},
{
"analysis": {
"added": [
"Subd.7b.Election activity is defined to include paying, contributing, or expending anything of value either monetarily or in kind to promote or defeat the nomination or election of a candidate or to promote or defeat the passage of a ballot question."
],
"removed": [],
"summary": "Adds a new subdivision defining 'Election activity' for corporations under Minnesota Statutes, section 317A.011.",
"modified": []
},
"citation": "317A.011",
"subdivision": "Subd.7b"
},
{
"analysis": {
"added": [
"Text prohibiting participation in election activity embedded in 'Other powers limitation' (Subd.28)."
],
"removed": [],
"summary": "Adds/updates 'Other powers limitation' to prohibit corporate power to participate in election activity.",
"modified": []
},
"citation": "317A.161",
"subdivision": "Subd.28"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Amends general rule regarding the validity of acts for corporations, tying into power under the chapter and articles/bylaws.",
"modified": [
"Restates and clarifies the effect that lack of power may have on corporate acts within this chapter."
]
},
"citation": "317A.165",
"subdivision": "Subd.1"
},
{
"analysis": {
"added": [
"Subd.8a.Election activity is defined to include paying, contributing, or expending anything of value to promote or defeat a candidate's nomination or election and to promote or defeat ballot questions."
],
"removed": [],
"summary": "Adds a new subdivision defining 'Election activity' for corporations organized as LLCs under 322C.0102.",
"modified": []
},
"citation": "322C.0102",
"subdivision": "Subd.8a"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Amends LLC powers generally and limits to prevent election activity influence, aligning with other chapters.",
"modified": [
"Clarifies that LLCs have powers generally, but prohibits grant of authority to participate in election activity (consistent with other sections)."
]
},
"citation": "322C.0105",
"subdivision": "Subd.1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References authority of the Attorney General to dissolve a corporation or enjoin unauthorized business under Minnesota law, in the context of prohibiting election activity.",
"modified": []
},
"citation": "302A.757",
"subdivision": ""
}
]