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Introduction
A Bullion Coin Dealer in Minnesota is any individual or business engaged in the purchase, sale, or exchange of bullion coins, precious metals, or investment-grade coins, with annual transactions exceeding $25,000. These dealers are regulated under Minnesota Statutes §§ 80G.01–80G.13 and must register with the Minnesota Department of Commerce. As part of compliance, they are required to obtain a Bullion Coin Dealer Surety Bond to ensure honest practices and consumer protection.
Explanation: Minnesota Bullion Coin Dealer Bond
The Minnesota Bullion Coin Dealer Bond is a surety bond required by the Minnesota Department of Commerce for businesses and individuals engaged in the buying, selling, or exchanging of bullion coins, precious metals, or investment-grade coins within the state. This bond serves as a financial guarantee that the dealer will comply with state laws and regulations, particularly those outlined in Minnesota Statutes §§ 80G.01 to 80G.13.
Purpose of the Bond
The bond protects consumers and the state by:
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Ensuring dealers conduct business honestly and transparently
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Providing recourse to consumers who are harmed due to fraud, misrepresentation, or unlawful practices
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Supporting enforcement of Minnesota’s laws governing the precious metals and bullion coin industry
Who is Required to Obtain the Bond?
You must obtain this bond if:
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You are a bullion coin dealer operating in Minnesota
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You conduct transactions over $25,000 in any 12-month period involving bullion coins, precious metal products, or investment-grade coins
Exemptions may apply to certain banks, credit unions, and specific coin transactions (see Minn. Stat. § 80G.02).
Bond Amount
The required bond amount depends on the dealer’s volume of transactions, typically starting at $25,000 and increasing with sales volume. The Commissioner of Commerce sets the exact amount based on financial disclosures.
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Types of Bullion Coin Dealer Bonds in Minnesota Based on Business Structure
Under Minnesota Statutes §§ 80G.01–80G.13, bullion coin dealers—whether individuals, partnerships, or corporations—are subject to the same general bonding requirement. However, the way they apply and are evaluated may differ based on business structure, especially concerning financial responsibility, liability, and required disclosures.
Here’s a breakdown of how the Minnesota Bullion Coin Dealer Bond applies to different business types:
1. Individual Bullion Coin Dealer Bond
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Who Needs It: A sole proprietor operating independently in Minnesota who deals in $25,000 or more annually in bullion coins or precious metals.
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Liability: The individual is personally responsible for all actions and compliance under the bond.
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Bond Requirement: Must obtain a surety bond of at least $25,000, possibly more depending on volume.
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Filing: The bond must name the individual as the principal and be submitted to the Minnesota Department of Commerce.
2. Partnership Bullion Coin Dealer Bond
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Who Needs It: A partnership engaged in qualifying bullion transactions.
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Liability: The bond must cover the entire partnership and all partners. Each partner may be required to provide financial disclosures.
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Bond Requirement: One blanket bond is typically required for the partnership as a whole, starting at $25,000.
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Filing: The bond should list the partnership’s legal name and identify all general partners involved.
3. Corporation (or LLC) Bullion Coin Dealer Bond
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Who Needs It: A legally registered corporation or limited liability company (LLC) that meets the transaction threshold.
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Liability: The bond covers the corporation, but specific officers, directors, or owners may also need to be disclosed or underwritten.
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Bond Requirement: Starts at $25,000, with possible increases depending on sales volume and risk.
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Filing: The bond must list the legal corporate entity as the principal and be filed with the Minnesota Department of Commerce.
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Step-by-Step Process to Get a Bullion Coin Dealer Bond in Minnesota
- Determine Eligibility
Confirm that your bullion coin transactions exceed $25,000 annually, requiring a bond under Minnesota law. - Calculate Bond Amount
The minimum bond is $25,000, but the Minnesota Department of Commerce may require more based on your business volume. - Choose a Surety Bond Provider
Contact a licensed surety company authorized in Minnesota. - Submit an Application
Provide business details, ownership info, and possibly a credit check or financials. - Pay the Bond Premium
Pay an annual premium (typically 1–5% of the bond amount). - Receive the Bond
Review and sign the bond issued in your business or individual name. - File the Bond
Submit the signed bond to the Minnesota Department of Commerce with your bullion coin dealer registration.
Conclusion
The Bullion Coin Dealer Bond is a key compliance requirement for conducting high-value precious metal transactions in Minnesota. It helps guarantee dealers perform lawfully and ethically, providing financial protection for consumers against fraud or misconduct. Securing this bond is essential for maintaining state registration and public trust.
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Frequently Asked Questions (FAQs)
What happens if a claim is filed against the bond?
If a valid claim is made due to the dealer’s misconduct, the surety may pay damages up to the bond amount. The dealer must then reimburse the surety.
Is the bond required for out-of-state dealers?
Yes. Out-of-state dealers conducting qualifying transactions with Minnesota residents must comply with Minnesota’s bullion coin dealer registration and bonding requirements if their annual transaction volume exceeds $25,000.
Can the bond be transferred to another business?
No. The bond is non-transferable. If ownership or business structure changes, a new bond must be obtained and filed under the new legal entity.
What if my transaction volume changes during the year?
If your annual transaction volume increases significantly, the Minnesota Department of Commerce may require you to increase your bond amount to reflect the heightened risk.
What happens if I fail to obtain the bond?
Failure to secure the required bond can lead to:
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Denial or revocation of your dealer registration
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Fines or enforcement actions
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Loss of legal authority to conduct bullion coin transactions in Minnesota
Can the bond be canceled?
Yes. The surety company may cancel the bond by providing 30 days’ written notice to the Minnesota Department of Commerce. You must maintain an active bond to remain compliant.
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