8. The bill defines shareholder, for purposes of shareholder inspection of corpo
rate records, to include beneficial owners whose shares are held in a voting trust or
by a nominee on the beneficial owner's behalf.
9. The bill deletes the requirement that an LLC have 2 or more members.
10. The bill allows articles of organization of an LLC to include a delayed effec
tive date and time.
11. The bill deletes a requirement that LLCs maintain, at their principal place
of business, executed copies of any powers of attorney used for executing articles of
organization and amendments to them.
12. The bill allows an LLC to be licensed as a real estate broker or salesperson
and specifies how the license application requirements are to be applied to LLCs.
13. The bill changes the situations in which a member's interest in an LLC is
either not a "security" or is presumed to be a "security".
14. The bill eliminates the ability of managers of an LLC to bring a derivative
suit.
15. The bill adds a definition of liabilities to the indemnification provisions and
allows indemnification of the LLC of liabilities of members in certain circumstances.
This bill repeals a number of provisions that relate to actions and proceedings
by and against corporations. These provisions are located outside of the general busi
ness corporations chapter of the statutes and, in certain cases, they conflict with the
provisions contained in that chapter. The provisions that are repealed by this bill
include the following:
1. Certain provisions relating to injunctions against corporations. These provi
sions allow a court to restrain a corporation from assuming or exercising a corporate
right or from transacting business not authorized by its charter. The provisions also
impose certain requirements on a court in granting an injunction to suspend the gen

eral and ordinary business of a corporation. The bill does not repeal the provisions
in the business corporations chapter of the statutes that permit a court to enjoin un
lawful corporate acts in certain cases and to order the dissolution of a corporation.
2. Certain provisions regarding injunctions and suits against corporations with
banking powers. These provisions permit an injunction to be issued by the Wisconsin
supreme court whenever a banking corporation becomes insolvent, neglects or re
fuses to pay its debts or violates any law. These provisions do not specifically address
the powers of the banking commissioner or the role of federal bank regulators. Provi
sions in the banking chapter of the statutes, not repealed by the bill, permit the com
missioner of banking to bring an action in circuit court to enjoin banks to enforce com
pliance with the law and with rules and orders of the commissioner.
3. Certain procedural provisions relating to actions by creditors against corpo
rations and their officers, directors and stockholders. Separate provisions in the
business corporations chapter of the statutes, not repealed by the bill, specifically ad
dress the substantive liability of these parties and special procedures for derivative
actions by shareholders.
4. A general provision providing that, after final judgement against a corpora
tion or against a corporation's directors, trustees, officers or stockholders, the court
must cause the just and fair distribution of the corporation's property. The bill does
not repeal any of the specific provisions in the business corporations chapter of the
statutes that govern the process of winding up and liquidating a domestic corpora
tion's business and affairs.
5. General provisions granting courts "jurisdiction" over certain causes of ac
tion against directors, managers, trustees and other officers of corporations. The
causes of action covered by these provisions include actions to suspend or remove any
director, trustee or other officer from exercising their office; and to direct new elec
tions of a corporate board. The provisions also authorize the governor to fill vacan
cies on corporate boards if all members of the board are removed by a court. The pro
visions appear to conflict in certain ways with specific provisions contained in the
business corporations chapter of the statutes, not repealed by the bill.
6. Certain procedural and substantive provisions dealing with the dissolution
of a corporation and with vacating or annulling an act of incorporation or a corpora
tion's charter. Under these provisions, a judgment that a corporation has forfeited
its corporate rights, privileges and franchises results in the dissolution of the corpo
ration. These provide for a specific order of priority in distributing the assets of the
corporations, the payment of the attorney general's costs in bringing dissolution ac
tions, and the filing of judgements dissolving a corporation. The business corpora
tion chapter contains specific provisions that govern the judicial dissolution of corpo
rations, although these provisions do not provide for a specific order of priority in
distributing the assets of the dissolved corporation.
7. A specific provision allowing courts to compel discovery with respect to a cor
poration and its officers, agents and stockholders.

For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB923, s. 1 1Section 1. 20.575 (1) (gb) of the statutes is amended to read:
AB923,5,132 20.575 (1) (gb) Expedited service and telephone application for reservation of
3name.
The amounts in the schedule for processing of a document, request for in
4formation or certification in an expeditious manner under s. 14.38 (9), 179.16 (5),
5180.0122 (4), 181.68 (1) (k), 183.0114 (1) (u) or 185.83 (1) (h) and for taking telephone
6applications to reserve a name under s. 179.03 (2), 180.0402, 181.07 (2), 183.0104 or
7185.045. All expedited service fees collected under ss. 14.38 (9), 179.16 (5), 180.0122
8(4), 181.68 (1) (k), 183.0114 (1) (u) and 185.83 (1) (h) and all fees for telephone applica
9tion to reserve a name collected under s. 179.03 (2), 180.0122 (1) (e) or (f), 181.68 (1)
10(g), 183.0114 (1) (e) or (f) or 185.045 shall be credited to this appropriation. Notwith
11standing s. 20.001 (3) (a), any unencumbered balance at the close of a fiscal year ex
12ceeding 10% of the previous fiscal year's expenditures under this appropriation shall
13lapse to the general fund.
AB923, s. 2 14Section 2. 20.865 (1) (a) of the statutes is amended to read:
AB923,6,215 20.865 (1) (a) Judgments and legal expenses. A sum sufficient to pay for legal
16expenses under ss. s. 59.31 and 776.43, for costs under ss. 227.485 and 814.245 and
17for the costs of judgments, orders and settlements of actions, appeals and complaints
18under subch. II of ch. 111 or subch. II or III of ch. 230, and those judgments, awards,
19orders and settlements under ss. 21.13, 165.25 (6), 775.04 and 895.46 that are not
20otherwise reimbursable as liability costs under par. (fm). Release of moneys under

1this paragraph pursuant to any settlement agreement, whether or not incorporated
2into an order, is subject to approval of the attorney general.
AB923, s. 3 3Section 3. 20.865 (1) (g) of the statutes is amended to read:
AB923,6,124 20.865 (1) (g) Judgments and legal expenses; program revenues. From the ap
5propriate program revenue and program revenue-service accounts, a sum sufficient
6to pay for legal expenses under ss. s. 59.31 and 776.43, for costs under ss. 227.485
7and 814.245 and for the cost of judgments, orders and settlements of actions, appeals
8and complaints under subch. II of ch. 111 or subch. II or III of ch. 230, and those judg
9ments, awards, orders and settlements under ss. 21.13, 165.25 (6), 775.04 and 895.46
10that are not otherwise reimbursable as liability costs under par. (fm). Release of mo
11neys under this paragraph pursuant to any settlement agreement, whether or not
12incorporated into an order, is subject to approval of the attorney general.
AB923, s. 4 13Section 4. 20.865 (1) (q) of the statutes is amended to read:
AB923,6,2214 20.865 (1) (q) Judgments and legal expenses; segregated revenues. From the
15appropriate segregated funds, a sum sufficient to pay for legal expenses under ss. s.
1659.31 and 776.43, for costs under ss. 227.485 and 814.245 and for the cost of judg
17ments, orders and settlements of actions, appeals and complaints under subch. II of
18ch. 111 or subch. II or III of ch. 230, and those judgments, awards, orders and settle
19ments under ss. 21.13, 165.25 (6), 775.04 and 895.46 that are not otherwise reim
20bursable as liability costs under par. (fm). Release of moneys under this paragraph
21pursuant to any settlement agreement, whether or not incorporated into an order,
22is subject to approval of the attorney general.
AB923, s. 5 23Section 5. 71.07 (7) (b) of the statutes is amended to read:
AB923,7,1224 71.07 (7) (b) If a resident individual, estate or trust pays a net income tax to
25another state, that resident individual, estate or trust may credit the net tax paid to

1that other state on that income against the net income tax otherwise payable to the
2state on income of the same year. The credit may not be allowed unless the income
3taxed by the other state is also considered income for Wisconsin tax purposes. The
4credit may not be allowed unless claimed within the time provided in s. 71.75 (2), but
5s. 71.75 (4) does not apply to those credits. For purposes of this paragraph, amounts
6declared and paid pursuant to the income tax law of another state shall be deemed
7a net income tax paid to that other state only in the year in which the income tax re
8turn for that state was required to be filed. Income and franchise taxes paid to anoth
9er state by a tax-option corporation or limited liability company may be claimed as
10a credit under this paragraph by that corporation's shareholders or that limited li
11ability company's members
who are residents of this state and who otherwise qualify
12under this paragraph.
AB923, s. 6 13Section 6. 77.25 (15w) of the statutes is created to read:
AB923,7,1814 77.25 (15w) Between a partnership and a limited liability company if all of the
15members of the limited liability company are partners of the partnership and all of
16the partners of the partnership are members of the limited liability company and if
17the transfer is for no consideration other than the assumption of debt or an interest
18in the limited liability company or the partnership.
AB923, s. 7 19Section 7. 93.06 (4) of the statutes is amended to read:
AB923,7,2320 93.06 (4) Law enforcement. At the request of the attorney general or of any
21district attorney, assist in the enforcement of any of the following statutes relating
22to trade: ss. 133.03 to 133.07, 133.10, 133.12 to 133.15, 133.17, 134.01, 185.94,
23776.32, 776.36, 784.04 and 939.31.
AB923, s. 8 24Section 8. 133.12 of the statutes is amended to read:
AB923,8,12
1133.12 Domestic and foreign corporations and limited liability compa
2nies; cancellation of charters or certificates of authority for restraining
3trade; affidavit.
Any corporation or limited liability company organized under the
4laws of this state or foreign corporation or foreign limited liability company autho
5rized to transact business in this state pursuant to a certificate of authority from the
6secretary of state which violates any provision of this chapter, may, upon proof there
7of, in any circuit court have its charter or authority to transact business in this state
8suspended, canceled or annulled. Every corporation or limited liability company
9shall, in its annual report filed with the secretary of state, show whether it has en
10tered into any contract, combination in the form of trust or otherwise, or conspiracy
11in restraint of trade or commerce.
The department of justice shall enforce this sec
12tion.
AB923, s. 9 13Section 9. 180.0640 (6) of the statutes is amended to read:
AB923,8,1914 180.0640 (6) A corporation's indebtedness to a shareholder incurred because
15of a distribution made in accordance with this section is at parity with the corpora
16tion's indebtedness to its general, unsecured creditors except to the extent subordi
17nated by agreement. This subsection does not affect the validity or priority of a secu
18rity interest in corporation property created to secure indebtedness incurred because
19of a distribution.
AB923, s. 10 20Section 10. 180.0706 (1) of the statutes is amended to read:
AB923,9,221 180.0706 (1) A shareholder may waive any notice required by this chapter, the
22articles of incorporation or the bylaws before or after the date and time stated in the
23notice
at any time. The waiver shall be in writing and signed by the shareholder en
24titled to the notice, contain the same information that would have been required in
25the notice under any applicable provisions of this chapter, except that the time and

1place of meeting need not be stated, and be delivered to the corporation for inclusion
2in the corporate records.
AB923, s. 11 3Section 11. 180.1602 (1) of the statutes is renumbered 180.1602 (1m).
AB923, s. 12 4Section 12. 180.1602 (1) of the statutes is created to read:
AB923,9,65 180.1602 (1) In this section, "shareholder" includes a beneficial owner whose
6shares are held in a voting trust or by a nominee on the beneficial owner's behalf.
AB923, s. 13 7Section 13. 180.1604 (1) of the statutes is amended to read:
AB923,9,138 180.1604 (1) If a corporation does not within a reasonable time allow a share
9holder to inspect and copy any record described in s. 180.1602 (1) or (2), the share
10holder who complies with s. 180.1602 (1) (1m) or (2), as applicable, may apply to the
11circuit court for the county where the corporation's principal office or, if none in this
12state, its registered office is located for an order to permit inspection and copying of
13the records demanded.
AB923, s. 14 14Section 14. 180.1915 of the statutes is renumbered 180.1915 (intro.) and
15amended to read:
AB923,9,25 16180.1915 (title) Contract and tort Professional relationships preserved
17and liability. (intro.) Sections Except as provided in this section, ss. 180.1901 to
18180.1921 do not alter any contract, tort or other legal relationship between a person
19receiving professional services and one or more persons who are licensed, certified
20or registered to render those professional services and who are shareholders, direc
21tors, officers or employes
in the same service corporation. Any legal liability which
22may arise out of the professional service shall be joint and several among those share
23holders of the same service corporation.
A shareholder, director, officer or employe
24of a service corporation is not personally liable for the debts or other contractual ob
25ligations of the service corporation nor for the omissions, negligence, wrongful acts,

1misconduct and malpractice of any person who is not under his or her actual supervi
2sion and control in the specific activity in which the omissions, negligence, wrongful
3acts, misconduct and malpractice occurred
. A service corporation may charge for the
4services of its shareholders, directors, officers, employes or agents, may collect such
5charges and may compensate those who render such personal services. Nothing in
6this section shall affect any of the following:
AB923, s. 15 7Section 15. 180.1915 (1) and (2) of the statutes are created to read:
AB923,10,118 180.1915 (1) The liability of a service corporation for the omissions, negligence,
9wrongful acts, misconduct and malpractice of a shareholder, director, officer or em
10ploye while the person, on behalf of the service corporation, provides professional ser
11vices.
AB923,10,17 12(2) The personal liability of a shareholder, director, officer or employe of a ser
13vice corporation for his or her own omissions, negligence, wrongful acts, misconduct
14and malpractice and for the omissions, negligence, wrongful acts, misconduct and
15malpractice of any person acting under his or her actual supervision and control in
16the specific activity in which the omissions, negligence, wrongful acts, misconduct
17and malpractice occurred.
AB923, s. 16 18Section 16. 183.0105 (3) (intro.) of the statutes is amended to read:
AB923,10,2019 183.0105 (3) (intro.) Except as provided in sub. (4), a A statement of change de
20livered under sub. (2) (a) shall include all of the following information:
AB923, s. 17 21Section 17. 183.0107 (1) (intro.) and (a) of the statutes are consolidated, re
22numbered 183.0107 (1) and amended to read:
AB923,11,223 183.0107 (1) Except as provided in this chapter, any document required or per
24mitted by this chapter to be delivered for filing to the secretary of state shall be exe
25cuted by any of the following: (a) Any a manager, if management of the limited liabil

1ity company is vested in a manager or managers, or by a any member, if management
2of the limited liability company is reserved to the members.
AB923, s. 18 3Section 18. 183.0107 (1) (b) of the statutes is repealed.
AB923, s. 19 4Section 19. 183.0201 of the statutes is amended to read:
AB923,11,9 5183.0201 Organization. One or more persons may organize a limited liability
6company by signing and delivering articles of organization to the secretary of state
7for filing. The organizer or organizers need not be members of the limited liability
8company at the time of organization or thereafter. A limited liability company shall
9have 2 or more members.
AB923, s. 20 10Section 20. 183.0202 (6) of the statutes is created to read:
AB923,11,1211 183.0202 (6) If applicable, the delayed effective date and time of the articles
12of organization permitted under s. 183.0111 (2).
AB923, s. 21 13Section 21. 183.0301 (1) (b) of the statutes is amended to read:
AB923,11,2014 183.0301 (1) (b) The act of any member, including the execution in the name
15of the limited liability company of any instrument, for apparently carrying on in the
16ordinary course of business the business of the limited liability company, binds the
17limited liability company unless the member has, in fact, no authority to act for the
18limited liability company in the particular matter, and the person with whom the
19member is dealing has knowledge that the member has no authority to act in the
20matter.
AB923, s. 22 21Section 22. 183.0301 (2) (b) of the statutes is amended to read:
AB923,12,422 183.0301 (2) (b) Each manager is an agent of the limited liability company, but
23not of the members or any of them, for the purpose of its business. The act of any
24manager, including the execution in the name of the limited liability company of any
25instrument, for apparently carrying on in the ordinary course of business the busi

1ness of the limited liability company, binds the limited liability company unless the
2manager has, in fact, no authority to act for the limited liability company in the par
3ticular matter, and the person with whom the manager is dealing has knowledge that
4the manager has no authority to act in the matter.
AB923, s. 23 5Section 23. 183.0304 (2) of the statutes is amended to read:
AB923,12,106 183.0304 (2) Notwithstanding sub. (1), nothing in this chapter shall preclude
7a court from ignoring the limited liability company entity under principles of com
8mon
law of this state that are similar to those applicable to business corporations and
9shareholders in this state and under circumstances that are not inconsistent with
10the purposes of this chapter.
AB923, s. 24 11Section 24. 183.0401 (2) (c) of the statutes is amended to read:
AB923,12,1412 183.0401 (2) (c) Unless earlier removed or earlier resigned, shall Shall hold of
13fice until a successor is elected and qualified, or until prior death, resignation or re
14moval
.
AB923, s. 25 15Section 25. 183.0402 (3) of the statutes is amended to read:
AB923,12,1816 183.0402 (3) An operating agreement may impose duties on its members and
17managers that are in addition to, but not in abrogation of, those provided under sub.
18(1).
AB923, s. 26 19Section 26. 183.0403 (1) of the statutes is renumbered 183.0403 (1) (intro.) and
20amended to read:
AB923,12,2121 183.0403 (1) (intro.) In this section, "expenses":
AB923,12,22 22(a) "Expenses" has the meaning given in s. 180.0850 (3).
AB923, s. 27 23Section 27. 183.0403 (1) (b) of the statutes is created to read:
AB923,13,3
1183.0403 (1) (b) "Liabilities" include the obligation to pay a judgment, settle
2ment, penalty, assessment, forfeiture or fine, including an excise tax assessed with
3respect to an employe benefit plan.
AB923, s. 28 4Section 28. 183.0403 (2) of the statutes is amended to read:
AB923,13,95 183.0403 (2) A limited liability company shall indemnify or allow reasonable
6expenses to and pay liabilities of each member and, if management of the limited li
7ability company is vested in one or more managers, of each manager for all reason
8able expenses
, incurred with respect to a proceeding if that member or manager was
9a party to the proceeding in the capacity of a member or manager.
AB923, s. 29 10Section 29. 183.0403 (3) of the statutes is amended to read:
AB923,13,1211 183.0403 (3) An operating agreement may alter or provide additional rights to
12indemnification of liabilities or allowance of expenses to members and managers.
AB923, s. 30 13Section 30. 183.0403 (4) of the statutes is amended to read:
AB923,13,2014 183.0403 (4) Notwithstanding subs. (2) and (3), a limited liability company
15may not indemnify a member or manager for liabilities or permit a member or man
16ager to retain any allowance for expenses provided under those subsections unless
17it is determined by or on behalf of the limited liability company that the member or
18manager did not
the liabilities or expenses did not result from the member's or man
19ager's
breach or fail failure to perform a duty to the limited liability company as pro
20vided in s. 183.0402.
AB923, s. 31 21Section 31. 183.0403 (5) (b) of the statutes is amended to read:
AB923,14,322 183.0403 (5) (b) In situations not described in par. (a), the determination of
23whether a member or manager, who is a party to a proceeding because the person is
24a member or manager, has breached or failed to perform a duty to the limited liability
25company, or whether the liability or expenses resulted from the breach or failure,

1shall be made by the vote of the members that meets the requirements under s.
2183.0404 (1) (a), except that the vote of any member who is a party to the same or a
3related proceeding shall be excluded unless all members are parties.
AB923, s. 32 4Section 32. 183.0405 (1) (b) of the statutes is amended to read:
AB923,14,75 183.0405 (1) (b) A copy of the articles of organization and all amendments to
6the articles, together with executed copies of any powers of attorney under which any
7articles have been executed
.
AB923, s. 33 8Section 33. 183.0405 (1) (e) (intro.) of the statutes is amended to read:
AB923,14,109 183.0405 (1) (e) (intro.) Unless already set forth in an operating agreement, a
10writing
written records containing all of the following information:
AB923, s. 34 11Section 34. 183.0405 (1) (e) 4. of the statutes is amended to read:
AB923,14,1312 183.0405 (1) (e) 4. Other writings prepared under a requirement, if any, in as
13required by
an operating agreement.
AB923, s. 35 14Section 35. 183.0601 of the statutes is amended to read:
AB923,14,21 15183.0601 Interim distributions. Except as provided in this subchapter, a
16member is entitled to receive distributions from a limited liability company, before
17the member's dissociation from the limited liability company and before its dissolu
18tion and winding up, to the extent and at the times or upon the events specified in
19an operating agreement, or, if not otherwise provided in an operating agreement, to
20the extent and at the times determined by the members or managers under s.
21183.0404 (1).
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