A Minnesota corporation can remove an officer by a board vote, and the removal does not depend on the officer agreeing to go. Under Minn. Stat. § 302A.341, subd. 2, “An officer may be removed at any time, with or without cause, by a resolution approved by the affirmative vote of a majority of the directors present.” That removal “is subject to the provisions of a shareholder control agreement and is without prejudice to any contractual rights of the officer.” The hard part is making the vote valid, cutting off the person’s authority in the outside world, and paying what the company still owes. Minnesota answers those questions mainly through its corporation statute (chapter 302A) and its LLC statute (chapter 322C). Minnesota’s employment statutes, the court rules on injunctions, and Minnesota Supreme Court decisions on apparent authority, at-will employment, and injunctions fill in the rest. This page is part of my work on company control and governance disputes.

How does a Minnesota corporation remove an officer?

A Minnesota corporation removes an officer by a board resolution approved by a majority of the directors present, with or without cause, under Minn. Stat. § 302A.341, subd. 2. A chief executive officer can also remove some officers without a board vote.

The same subdivision sets out three removal paths:

  1. The board. A majority of the directors present at a valid meeting can remove any officer.
  2. The chief executive officer, for officers the chief executive officer appointed. “An officer appointed by the chief executive officer may also be removed at any time, with or without cause, by the chief executive officer.”
  3. The chief executive officer, for board-elected officers, in a larger company. “To the extent authorized in the articles, the bylaws, or a resolution approved by the affirmative vote of a majority of the directors present, the chief executive officer of a corporation that is not a closely held corporation may remove an officer elected or appointed by the board, other than the chief financial officer.” A closely held corporation is one “which does not have more than 35 shareholders,” under Minn. Stat. § 302A.011, subd. 6a. Most owner-run companies fall in that group, so their board does the removing. The limits on removing an officer without board approval have their own page.

Every path carries two limits. The removal “is subject to the provisions of a shareholder control agreement and is without prejudice to any contractual rights of the officer.” A written shareholder control agreement that covers “the election of directors or officers” is “valid and specifically enforceable, if the agreement is signed by all persons who, on the date the agreement first becomes effective, are then the shareholders of the corporation,” under Minn. Stat. § 302A.457, subd. 2. Read that agreement and the officer’s employment agreement before the vote.

What makes a board’s removal vote valid?

A removal vote is valid when the meeting is properly called, a quorum is present, and the required majority votes yes, or when the directors sign a proper written action. A removed officer who wants to fight can attack the procedure, so the procedure deserves care.

The default rules in chapter 302A work in this order:

  • Calling the meeting. Under Minn. Stat. § 302A.231, subd. 4, “Unless the articles or bylaws provide for a different time period, a director may call a board meeting by giving at least ten days’ notice or, in the case of organizational meetings pursuant to section 302A.171, subdivision 2, at least three days’ notice, to all directors of the date, time, and place of the meeting. The notice need not state the purpose of the meeting unless the articles or bylaws require it.” Under subdivision 5, no notice is required if the date, time, and place were set in the articles or bylaws or announced at a previous board meeting. Check your bylaws first, because they often change the period. The notice rules for special board meetings cover the common defects.
  • Waiver. Under subdivision 6, attendance waives notice “except where the director objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and does not participate thereafter in the meeting.” An officer who is also a director can preserve a notice objection this way.
  • Quorum. Under Minn. Stat. § 302A.235, “A majority, or a larger or smaller proportion or number provided in the articles or bylaws, of the directors currently holding office is a quorum for the transaction of business.”
  • The vote. Under Minn. Stat. § 302A.237, subd. 1, the board acts by the greater of a majority of directors present or a majority of the minimum number that would be a quorum, “except where this chapter or the articles require the affirmative vote of a larger proportion or number.”
  • Acting in writing. Under Minn. Stat. § 302A.239, subd. 1, a board action “may be taken by written action signed, or consented to by authenticated electronic communication, by all of the directors.” A written action of the board is often the cleanest record, but it needs every director unless the articles allow fewer.
  • Shareholders acting instead of the board. Under Minn. Stat. § 302A.201, subd. 2, the shareholders entitled to vote for directors “may, by unanimous affirmative vote, take any action that this chapter requires or permits the board to take.”
  • Filling the seat. Under § 302A.341, subd. 3, a vacancy in the office of chief executive officer or chief financial officer “shall” be filled. Minn. Stat. § 302A.301 requires every corporation to have natural persons exercising those two functions. Name the replacement in the same resolution.

Why does the removal take effect even if the officer refuses to leave?

A removal takes effect because it is the board’s act, and § 302A.341, subd. 2, conditions it on nothing the officer does. The only exit that depends on the officer is a resignation by written notice, which under subdivision 1 “is effective without acceptance when the notice is given to the corporation, unless a later effective date is specified in the notice.”

An officer who keeps acting after removal is not protected by the old title. Under Minn. Stat. § 302A.361, subd. 1, an officer must act “in good faith, in a manner the officer reasonably believes to be in the best interests of the corporation,” and “A person exercising the principal functions of an office . . . is deemed an officer for purposes of this section.” A holdover who keeps running the business is held to the same standard of conduct while doing it.

The resolution should say so plainly. State that the officer is removed effective immediately, that every authority granted by the board to that person is revoked, and who now holds the office. Then give the removed officer written notice and a written request to return company property, keys, passwords, and records. The board itself still owes duties while it does this, which the page on the board’s fiduciary duties in a removal covers.

How do you stop a removed officer from acting for the company?

A company stops a removed officer from acting by revoking the officer’s access and telling the people who dealt with the officer that the authority has ended. The board’s vote ends actual authority, but outsiders who have not heard may still claim the officer had apparent authority.

The Minnesota Supreme Court set out the test in Hockemeyer v. Pooler, 130 N.W.2d 367 (Minn. 1964): “The principal must have held the agent out as having authority, or must have knowingly permitted the agent to act on its behalf; furthermore, the party dealing with the agent must have actual knowledge that the agent was held out by the principal as having such authority or had been permitted by the principal to act on its behalf; and the proof of the agent’s apparent authority must be found in the conduct of the principal, not the agent.” In Foley v. Allard, 427 N.W.2d 647 (Minn. 1988), the court restated that “Apparent authority is that authority which a principal holds an agent out as possessing, or knowingly permits an agent to assume.” Because the test looks at the company’s own conduct, a company that keeps the removed officer on its letterhead, email, and bank cards keeps holding that person out.

These steps cut off the authority the default rules give each office:

  1. Banks. Under Minn. Stat. § 302A.305, subd. 3, the chief financial officer deposits company money “in the banks and depositories designated by the board.” Deliver the removal resolution to each bank and change the signers.
  2. Signing authority. Under subdivision 2, the chief executive officer’s default duties include signing “in the name of the corporation any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the corporation,” except where the articles, the bylaws, or the board delegate that authority to someone else or the law requires another person to sign. Tell key customers, vendors, and lenders in writing who signs now.
  3. Systems and accounts. Change passwords, email access, payroll and merchant accounts, and domain registrar credentials the officer controlled.
  4. The public record. The annual renewal a corporation files under Minn. Stat. § 302A.821, subd. 2, follows Minn. Stat. § 5.34, which calls for “the name and business address of the officer or other person exercising the principal functions of the president of a nonprofit corporation, manager of a limited liability company, or chief executive officer of a corporation or cooperative.” The next annual renewal should name the new chief executive officer.
  5. LLC statements of authority. If the company is an LLC that filed a statement of authority, “a grant of authority not pertaining to transfers of real property and contained in an effective statement of authority is conclusive in favor of a person that gives value in reliance on the grant” unless, among other exceptions, “the statement has been canceled or restrictively amended under subdivision 2,” under Minn. Stat. § 322C.0302, subd. 5. Amend or cancel it. A grant of authority to transfer real property stays conclusive under subdivision 6 unless “the statement has been canceled or restrictively amended under subdivision 2 and a certified copy of the cancellation or restrictive amendment has been recorded in the real property records.”

Whether a particular signature still binds the company is its own question, covered in when an officer can bind a company without consent.

What changes when the officer is also a director or shareholder?

When the officer is also a director or shareholder, each role has its own removal rule, and a board vote on the office touches none of the others. In a closely held company, the person’s ownership also gives that person a possible claim against the people who removed them.

  • Director. Shareholders, not the board, remove most directors. Under Minn. Stat. § 302A.223, subd. 3, “Except as provided in subdivision 4, any one or all of the directors may be removed at any time, with or without cause, by the affirmative vote of the holders of a majority of the voting power of all shares entitled to vote at an election of directors.” The board acts only under subdivision 2, where “A director may be removed at any time, with or without cause, if: (a) the director was named by the board to fill a vacancy; (b) the shareholders have not elected directors in the interval between the time of the appointment to fill a vacancy and the time of the removal; and (c) a majority of the remaining directors present affirmatively vote to remove the director.” A director elected solely by the holders of one class or series of shares “may be removed only by the affirmative vote of the holders of a majority of the voting power of all shares of that class or series entitled to vote at an election of that director.” Subdivision 4 protects a director in a corporation with cumulative voting when enough votes are cast against removal, “unless the entire board is removed simultaneously.” Cumulative voting is the default under Minn. Stat. § 302A.215, subd. 2, “Unless the articles provide that there shall be no cumulative voting,” and a shareholder uses it by giving written notice of intent to cumulate before the election. Subdivision 1 of § 302A.223 lets the articles, the bylaws, or a shareholder control agreement change these rules. The details of removing a sitting director have their own page.
  • Shareholder. Removing the officer does not move the shares.
  • Shareholder-employee of a closely held corporation. Under Minn. Stat. § 302A.751, subd. 1, a court may grant relief when those in control “have acted in a manner unfairly prejudicial toward one or more shareholders in their capacities as shareholders or directors of a corporation that is not a publicly held corporation, or as officers or employees of a closely held corporation.” Under subdivision 3a, written agreements, “including employment agreements and buy-sell agreements,” are “presumed to reflect the parties’ reasonable expectations concerning matters dealt with in the agreements.” A removal that follows the owners’ own written agreement stands on much firmer ground. The elements of shareholder oppression claims explain this exposure.

What does the company still owe a removed officer?

A removed officer keeps every contract right the officer had, because removal under § 302A.341, subd. 2, “is without prejudice to any contractual rights of the officer.” The vote ends the office, and a written employment agreement still decides severance, notice, and for-cause terms.

Without a written agreement, the officer’s job is usually at will. In Pine River State Bank v. Mettille, 333 N.W.2d 622 (Minn. 1983), the Minnesota Supreme Court explained that in a hiring for an indefinite term, “the employer can summarily dismiss the employee for any reason or no reason.” The same case held that “personnel handbook provisions, if they meet the requirements for formation of a unilateral contract, may become enforceable as part of the original employment contract,” so read the handbook’s discipline and termination language too. The reason still matters for an officer who is an employee: under Minn. Stat. § 181.932, subd. 1, “An employer shall not discharge” an employee because “the employee, or a person acting on behalf of an employee, in good faith, reports a violation, suspected violation, or planned violation of any federal or state law or common law or rule adopted pursuant to law to an employer or to any governmental body or law enforcement official,” and under Minn. Stat. § 363A.08, subd. 2, “Except when based on a bona fide occupational qualification,” an employer may not discharge an employee “because of race, color, creed, religion, national origin, sex, gender identity, marital status, status with regard to public assistance, familial status, membership or activity in a local commission, disability, sexual orientation, or age.”

Final pay depends on how the officer leaves:

  • Discharge. Under Minn. Stat. § 181.13, when an employer employing labor within Minnesota discharges an employee, “the wages or commissions actually earned and unpaid at the time of the discharge are immediately due and payable upon demand of the employee.” The demand “must be in writing but need not state the precise amount of unpaid wages or commissions,” and “If the employee’s earned wages and commissions are not paid within 24 hours after demand, whether the employment was by the day, hour, week, month, or piece or by commissions, the employer is in default.”
  • Resignation. Under Minn. Stat. § 181.14, subd. 1, wages earned and unpaid “shall be paid in full not later than the first regularly scheduled payday following the employee’s final day of employment, unless an employee is subject to a collective bargaining agreement with a different provision.”
  • An officer who handled money. Under § 181.14, subd. 4, where the employee “was, during employment, entrusted with the collection, disbursement, or handling of money or property, the employer shall have ten calendar days after the termination of the employment to audit and adjust the accounts of the employee before the employee’s wages or commissions shall be paid as provided in this section.” A chief financial officer often fits that description.
  • The reason for the termination. Under Minn. Stat. § 181.933, subd. 1, after a terminated employee’s timely written request, “Within ten working days following receipt of such request, an employer shall inform the terminated employee in writing of the truthful reason for the termination.” Write the reason knowing it may be read later.

A negotiated resignation with a payment usually includes a release of claims. Under Minn. Stat. § 363A.31, subd. 2, a release of Minnesota Human Rights Act claims “may be rescinded within 15 calendar days of its execution,” and the releasing party “shall be informed in writing of the right to rescind.” That rescission right does not apply to “a waiver or release given in settlement of a claim filed with the department or with another administrative agency or judicial body,” which “is valid and final upon execution.” For an employer “who has twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year” under 29 U.S.C. § 630(b), a release of federal age claims must also meet 29 U.S.C. § 626(f), including “a period of at least 21 days within which to consider the agreement” and a revocation period “of at least 7 days following the execution of such agreement.” The removed owner’s side of these questions is in can a business owner be fired.

How do you remove a manager, governor, or officer of a Minnesota LLC?

A Minnesota LLC removes its managers, governors, and board-designated officers under its operating agreement, and chapter 322C supplies default rules where the agreement is silent. Under Minn. Stat. § 322C.0110, subd. 1, the operating agreement governs “the rights and duties under this chapter of a person in the capacity of manager or governor,” and under subdivision 2, “To the extent the operating agreement does not otherwise provide for a matter described in subdivision 1, this chapter governs the matter.”

The defaults in Minn. Stat. § 322C.0407 depend on how the LLC is managed:

  • Manager-managed. Under subdivision 3, “A manager may be removed at any time by the consent of a majority of the members without notice or cause.” Removal does not end membership, because “If a person that is both a manager and a member ceases to be a manager, that cessation does not by itself dissociate the person as a member.” It also does not erase what the person owes: “A person’s ceasing to be a manager does not discharge any debt, obligation, or other liability to the limited liability company or members which the person incurred while a manager.”
  • Board-managed. Under subdivision 4, “A governor may be removed at any time, without cause and without advance notice, by a majority of the voting power of all of the members.” A person the board designates as chief executive officer or chief financial officer serves “as an agent of the limited liability company at the will of the board, without prejudice to any rights the person may have under a contract with the limited liability company.”
  • Member-managed. Under subdivision 2, “Each member has equal rights in the management and conduct of the company’s activities,” and “The operating agreement may be amended only with the consent of all members.” No majority can strip a co-member of management rights under the defaults alone.

The page on LLC manager removal goes deeper on manager authority.

What can a Minnesota court order when the officer will not leave?

A Minnesota court can order a removed officer to stop acting for the company through a temporary restraining order and a temporary injunction, and it can declare who holds the office. The company asks for that relief in a lawsuit, usually alongside claims for breach of duty or contract.

Minnesota Rule of Civil Procedure 65 sets the procedure:

  • Without notice. Under Minn. R. Civ. P. 65.01, a temporary restraining order may be granted without notice “only if (1) it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party or that party’s attorney can be heard in opposition,” and the applicant’s attorney states in writing the efforts made to give notice or why notice should not be required.
  • With notice. Under Rule 65.02, “No temporary injunction shall be granted without notice of motion or an order to show cause to the adverse party.”
  • Security. Under Rule 65.03, no order issues “except upon the giving of security by the applicant, in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained.”

The Minnesota Supreme Court’s decision in Dahlberg Bros., Inc. v. Ford Motor Co., 137 N.W.2d 314 (Minn. 1965) lists five considerations for a temporary injunction: the parties’ relationship before the dispute, the harm to each side, the likelihood of success on the merits, public policy expressed in state and federal statutes, and “The administrative burdens involved in judicial supervision and enforcement of the temporary decree.”

Two more tools fit this dispute. Under Minn. Stat. § 555.01, “Courts of record within their respective jurisdictions shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed,” which lets a court declare who holds the office. For an LLC member, under Minn. Stat. § 322C.0602, “on application by the company, the person is expelled as a member by judicial order” on grounds that include wrongful conduct that “has adversely and materially affected, or will adversely and materially affect, the company’s activities.” On dissociation, under Minn. Stat. § 322C.0603, subd. 1, “the person’s right to participate as a member in the management and conduct of the company’s activities terminates.”

How can governing documents prevent an officer standoff?

Governing documents prevent an officer standoff by deciding, before anyone is angry, who can remove each officer, what the person is paid on the way out, and what happens to the person’s shares. Minnesota lets the owners set most of these terms in writing.

The documents that do the work:

  • A shareholder control agreement. Under § 302A.457, subd. 2, a written agreement on “the election of directors or officers, the employment of shareholders and others by the corporation, or the arbitration of disputes” is specifically enforceable when every shareholder signs it.
  • Bylaws that set terms in office. Under Minn. Stat. § 302A.311, each officer has “the powers, rights, duties, responsibilities, and terms in office provided for in the articles or bylaws or determined by the board.”
  • Limits on delegation. Under Minn. Stat. § 302A.351, an officer may delegate the office’s powers to others “Unless prohibited by the articles or bylaws or by a resolution approved by the affirmative vote of a majority of the directors present.” A bylaw or resolution can close that door before a dispute.
  • Matching employment and buy-sell terms. An employment agreement whose for-cause definition and severance terms fit the removal rules, and a buy-sell agreement that says whether removal triggers a sale, keep the removal vote and the money questions from pulling in different directions.

The best time to answer who can remove whom is when the company is formed or a new owner comes in. At that point the owners still agree and can put the answer in documents they all sign.

Can the CEO fire another officer without a board vote?

Sometimes. Under Minn. Stat. § 302A.341, subd. 2, a chief executive officer may remove any officer the chief executive officer appointed, with or without cause. In a corporation with more than 35 shareholders, the chief executive officer may also remove a board-elected officer other than the chief financial officer, but only if the articles, the bylaws, or a board resolution authorizes it. In a closely held corporation, removing a board-elected officer takes a board vote.

Do we need a reason to remove an officer?

Not under Minnesota’s default rule. Minn. Stat. § 302A.341, subd. 2, lets the board remove an officer at any time, with or without cause. Under the corporation statute, two documents can change the outcome. A shareholder control agreement can limit the removal itself, and an employment agreement keeps its force, because the removal is without prejudice to the officer’s contract rights. A for-cause clause can make a no-cause removal expensive even when the vote is valid. For an officer who is an employee, the reason still matters: Minn. Stat. § 181.932, subd. 1, bars discharging an employee because the employee in good faith reports a violation, suspected violation, or planned violation of law to the employer or to a governmental body or law enforcement official, and Minn. Stat. § 363A.08, subd. 2, bars discharging an employee because of race, sex, age, disability, or another status that subdivision lists, except when based on a bona fide occupational qualification.

Can a removed officer still sign contracts that bind the company?

The officer loses actual authority when the board removes the officer, but a third party may still argue apparent authority. Under the Minnesota Supreme Court’s apparent-authority test, that argument turns on the company’s own conduct in holding the person out and on what the third party knew. Prompt written notice to the banks, customers, and vendors who dealt with the officer gives that argument the least room.

Does removing an officer take away the officer's shares?

No. A removal vote under Minn. Stat. § 302A.341 ends the office and does not itself move the officer’s shares. A court-ordered buyout under Minn. Stat. § 302A.751, subd. 2, can end shareholder status before the price is paid. After the court orders the sale, the corporation or the moving shareholders may post a bond in adequate amount with sufficient sureties, or otherwise satisfy the court that the full purchase price of the shares, plus such additional costs, expenses, and fees as may be awarded, will be paid when due and payable. Once they do, the selling shareholders no longer have any rights or status as shareholders, officers, or directors, except the right to receive the fair value of their shares plus such other amounts as might be awarded.

Can the board remove an officer by email instead of a meeting?

Yes, if the directors sign or consent electronically to a written action. Under Minn. Stat. § 302A.239, subd. 1, a written action works when all directors sign or consent by authenticated electronic communication. If the articles allow it, the number of directors needed at a full meeting can act in writing, and then, under subdivision 3, all directors must be notified immediately of the text and effective date. An email thread without that signed or consented action is not a board vote.

Should we offer severance to get the officer to resign?

That is a business decision, and it can be the fastest way out. Under Minn. Stat. § 302A.341, subd. 1, a written resignation is effective when given, without acceptance, unless the notice names a later date. If the payment buys a release of claims, Minn. Stat. § 363A.31 gives the officer a right to rescind a release of Minnesota Human Rights Act claims within 15 calendar days, unless the release settles a claim already filed with an agency or court. For an employer with twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year, a release of federal age claims must also meet the waiver rules in 29 U.S.C. § 626(f).

What are the key steps to remove an officer who will not leave?

Removing an officer who will not step down in Minnesota usually comes down to three things: a valid vote under chapter 302A or the operating agreement, prompt notice that ends the person’s authority with banks and customers, and full payment of what the officer’s contracts and Minnesota’s wage statutes require. For more on company control and governance disputes, the practice page collects the related questions. If you would like a second set of eyes on the governing documents or the removal resolution before your board votes, email aaron@aaronhall.com with a brief description of the situation.