183.0502
183.0502
Liability for contribution. 183.0502(1)
(1) An obligation of a member to provide cash or property or to perform services as a contribution to a limited liability company is not enforceable unless specified in a writing signed by the member.
183.0502(2)
(2) Unless otherwise provided in an operating agreement, a member is obligated to a limited liability company to perform any enforceable promise to provide cash or property or to perform services, even if the member is unable to perform because of death, disability or any other reason. If a member does not provide cash, property or services as promised, the member is obligated at the option of the limited liability company to provide cash equal to that portion of the value, as stated in the records required to be kept under
s. 183.0405 (1), of the stated contribution that has not been fulfilled.
183.0502(3)
(3) Unless otherwise provided in an operating agreement, a member's obligation to provide cash or property or perform services as a contribution to the limited liability company may be compromised only by the written consent of all of the members.
183.0502 History
History: 1993 a. 112.
183.0503
183.0503
Allocation of profits and losses. The profits and losses of a limited liability company shall be allocated among the members in the manner provided in an operating agreement. If the members do not enter into an operating agreement or the operating agreement does not so provide, profits and losses shall be allocated on the basis of value, as stated in the records required to be kept under
s. 183.0405 (1), of the contributions made by each member.
183.0503 History
History: 1993 a. 112.
NONLIQUIDATING DISTRIBUTIONS
183.0601
183.0601
Interim distributions. Except as provided in this subchapter, a member is entitled to receive distributions from a limited liability company, before the member's dissociation from the limited liability company and before its dissolution and winding up, to the extent and at the times or upon the events specified in an operating agreement, or, if not otherwise provided in an operating agreement, to the extent and at the times determined by the members or managers under
s. 183.0404 (1).
183.0601 History
History: 1993 a. 112;
1995 a. 400.
183.0602
183.0602
Allocation of distributions. Distributions of cash or other assets of a limited liability company shall be allocated among the members as provided in an operating agreement. If the members do not enter into an operating agreement or the operating agreement does not so provide, distributions shall be allocated in the same manner that profits are allocated under
s. 183.0503.
183.0602 History
History: 1993 a. 112;
1995 a. 400.
183.0603
183.0603
Distribution upon partial redemption. Except as provided in this subchapter, upon the distribution in partial redemption by a limited liability company of a member's interest, the redeeming member is entitled to receive with respect to the redeemed interest any distribution to which the member is entitled under an operating agreement and, if not otherwise provided in an operating agreement, within a reasonable time after the redemption, the redeeming member is entitled to receive the fair value of the redeemed interest as of the date of redemption based on the member's right to share in distributions from the limited liability company.
183.0603 History
History: 1993 a. 112.
183.0604
183.0604
Distribution upon dissociation. Except as otherwise provided in this subchapter, upon an event of dissociation under
s. 183.0802 that does not cause dissolution of the limited liability company, a dissociating member is entitled to receive any distribution to which the member is entitled under an operating agreement and, if not otherwise provided in an operating agreement, within a reasonable time after dissociation, the dissociating member is entitled to receive a distribution in complete redemption of the fair value of the member's interest in the limited liability company as of the date of dissociation based on the member's right to share in distributions from the limited liability company.
183.0604 History
History: 1993 a. 112.
183.0605
183.0605
Distribution in kind. Unless otherwise provided in an operating agreement, all of the following apply:
183.0605(1)
(1) A member may not demand and receive any distribution from a limited liability company in any form other than cash, regardless of the form of the member's contribution to the limited liability company.
183.0605(2)
(2) A member may not be compelled to accept a distribution of any asset in kind from a limited liability company to the extent that the percentage of the asset distributed to the member exceeds the percentage in which the member shares in distributions from the limited liability company.
183.0605 History
History: 1993 a. 112.
183.0606
183.0606
Right to distribution. At the time that a member becomes entitled to receive a distribution from a limited liability company, the member has the status of and is entitled to all remedies available to a creditor of the limited liability company with respect to the distribution.
183.0606 History
History: 1993 a. 112.
183.0607
183.0607
Limitations on distribution. 183.0607(1)
(1) A limited liability company may not declare or make a distribution to any of its members if, after giving effect to the distribution, any of the following would occur:
183.0607(1)(a)
(a) The limited liability company would be unable to pay its debts as they become due in the usual course of business.
183.0607(1)(b)
(b) The fair value of the limited liability company's total assets would be less than the sum of its total liabilities plus, unless an operating agreement provides otherwise, the amount that would be needed, if the limited liability company were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of members, if any, whose preferential rights are superior to those of the members receiving the distribution.
183.0607(2)
(2) A limited liability company may base a determination that a distribution is not prohibited by
sub. (1) on any of the following:
183.0607(2)(a)
(a) Financial statements and other financial data prepared on the basis of accounting practices and principles that are reasonable under the circumstances.
183.0607(2)(b)
(b) A fair valuation or other method that is reasonable under the circumstances.
183.0607(3)
(3) Except as provided in
sub. (5), the effect of a distribution for purposes of
sub. (1) is measured as of the following date:
183.0607(3)(a)
(a) The date on which the distribution is authorized if the payment occurs within 120 days after the date of authorization.
183.0607(3)(b)
(b) The date on which payment is made if the payment occurs more than 120 days after the date of authorization.
183.0607(4)
(4) A limited liability company's indebtedness to a member incurred by reason of a distribution made in accordance with this section is at parity with the limited liability company's indebtedness to its general, unsecured creditors, except to the extent subordinated by written agreement. This subsection does not affect the validity or priority of a security interest in a limited liability company's property that is created to secure the indebtedness to the member.
183.0607(5)
(5) Indebtedness of a limited liability company, including indebtedness issued as a distribution, is not considered a liability for purposes of a determination under
sub. (1) if the terms of the indebtedness provide that payment of principal and interest is to be made only if, and to the extent that, payment of a distribution to members could then be made under this section. If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date on which the payment is made.
183.0607 History
History: 1993 a. 112.
183.0608
183.0608
Liability for wrongful distribution. 183.0608(1)
(1) Except as provided in
sub. (3), a member or manager who votes for or assents to a distribution in violation of
s. 183.0607 or of an operating agreement is personally liable to the limited liability company for the amount of the distribution that exceeds what could have been distributed without violating
s. 183.0607 or the operating agreement.
183.0608(2)
(2) Each member or manager who is liable under
sub. (1) for a wrongful distribution is entitled to contribution from all of the following persons:
183.0608(2)(a)
(a) Every other member or manager who could be held liable under
sub. (1) for the wrongful distribution.
183.0608(2)(b)
(b) Every member for the amount that the member received knowing that the distribution was made in violation of
s. 183.0607 or of an operating agreement.
183.0608(3)
(3) A proceeding under this section is barred unless it is brought within 2 years after the date on which the effect of the distribution was measured under
s. 183.0607.
183.0608 History
History: 1993 a. 112.
OWNERSHIP AND TRANSFER OF
PROPERTY
183.0701
183.0701
Ownership of limited liability company property. 183.0701(1)(1) All property originally transferred to or subsequently acquired by or on account of a limited liability company is property of the limited liability company and not of the members individually.
183.0701(2)
(2) Property acquired with limited liability company funds is presumed to be limited liability company property.
183.0701(3)
(3) Property may be acquired, held and conveyed in the name of a limited liability company. Any interest in real property may be acquired in the name of a limited liability company and title to any interest so acquired shall vest in the limited liability company rather than in the members individually.
183.0701 History
History: 1993 a. 112.
183.0702(1)
(1) Except as provided in
sub. (2), property of a limited liability company held in the name of the limited liability company may be transferred by an instrument of transfer executed by any member in the name of the limited liability company.
183.0702(2)
(2) If management of a limited liability company is vested in one or more managers, all of the following apply:
183.0702(2)(a)
(a) Title to property of the limited liability company that is held in the name of the limited liability company may be transferred by an instrument of transfer executed by any manager in the name of the limited liability company.
183.0702(2)(b)
(b) A member who is not a manager does not have authority, in the member's capacity as a member, to transfer title to property of the limited liability company.
183.0702 History
History: 1993 a. 112;
1995 a. 400.
183.0703
183.0703
Nature of limited liability company interest. A limited liability company interest is personal property.
183.0703 History
History: 1993 a. 112.
183.0704
183.0704
Assignment of limited liability company interest. 183.0704(1)(1) Unless otherwise provided in an operating agreement, all of the following apply:
183.0704(1)(a)
(a) A limited liability company interest is assignable in whole or in part.
183.0704(1)(b)
(b) An assignment of a limited liability company interest entitles the assignee to receive only the distributions and to share in the allocations of profits and losses to which the assignor would be entitled with respect to the assigned interest.
183.0704(1)(c)
(c) An assignment of a limited liability company interest does not dissolve the limited liability company.
183.0704(1)(d)
(d) Unless and until the assignee becomes a member of the limited liability company under
s. 183.0706, an assignment of a limited liability company interest does not entitle the assignee to participate in the management of the business of the limited liability company or to become or exercise any rights of a member nor does an assignment result in the assignee having liability as a member of the limited liability company as a result of the assignment.
183.0704(1)(e)
(e) Unless and until the assignee of a limited liability company interest becomes a member of the limited liability company under
s. 183.0706, the assignor continues to be a member and to have the power to exercise the rights of a member, subject to the members' right to remove the assignor under
s. 183.0802.
183.0704(1)(f)
(f) The assignor of a limited liability company interest is not released from any personal liability arising under this chapter as a member of the limited liability company solely as a result of the assignment.
183.0704(2)
(2) An operating agreement may provide that a member's limited liability company interest may be evidenced by a certificate of limited liability company interest issued by the limited liability company and may also provide for the assignment or transfer of any interest represented by the certificate.
183.0704(3)
(3) Unless otherwise provided in an operating agreement, the pledge of, or the granting of a security interest, lien or other encumbrance in or against any or all of a member's limited liability company interest is not an assignment and shall not cause the member to be an assignor or to cease to have the power to exercise any rights or powers of a member.
183.0704 History
History: 1993 a. 112.
183.0704 Annotation
When Does a Member's Interest in an LLC Become a Security? Briska. Wis. Law. Sept. 1994.
183.0705
183.0705
Rights of judgment creditor. On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the member's limited liability company interest with payment of the unsatisfied amount of the judgment. To the extent so charged, the judgment creditor has only the rights of an assignee of the member's limited liability company interest. This section does not deprive any member of the benefit of any exemption laws applicable to the limited liability company interest.
183.0705 History
History: 1993 a. 112.
183.0706
183.0706
Right of assignee to become a member. 183.0706(1)(1) Unless otherwise provided in an operating agreement, an assignee of a limited liability company interest may become a member only if the other members unanimously consent. The consent of a member may be evidenced in any manner specified in an operating agreement, but in the absence of such specification, consent shall be evidenced by a written instrument that is dated and signed by the member.
183.0706(2)(a)(a) An assignee of a limited liability company interest who becomes a member has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of the assignor under an operating agreement and this chapter. An assignee who becomes a member is liable for any of the assignor's obligations under an operating agreement and this chapter to the limited liability company.
183.0706(2)(b)
(b) Notwithstanding
par. (a), an assignee is not obligated for liabilities of which the assignee had no knowledge at the time the assignee became a member or which could not be ascertained from any written records of the limited liability company kept under
s. 183.0405 (1).
183.0706(3)
(3) Unless otherwise provided in an operating agreement, an assignor of a limited liability company interest is not released from any liability of the assignor to the limited liability company under this chapter without the written consent of all of the members, whether or not the assignee becomes a member.
183.0706 History
History: 1993 a. 112;
1995 a. 400.
183.0707
183.0707
Powers of legal representative. If a member who is an individual dies or is adjudged to be incompetent to manage his or her person or estate by a court of competent jurisdiction, the member's personal representative, administrator, guardian, conservator, trustee or other legal representative shall have all of the rights of an assignee of the member's interest. If a member is a corporation, trust, partnership, limited liability company or other entity and is dissolved or terminated, its legal representative or successor shall have all of the rights of an assignee of the member's interest.
183.0707 History
History: 1993 a. 112;
1995 a. 400.
ADMISSION AND DISSOCIATION OF MEMBERS
183.0801(1)
(1) In connection with the formation of a limited liability company, a person acquiring a limited liability company interest is admitted as a member of the limited liability company upon the later of the following to occur:
183.0801(1)(b)
(b) The time provided in and upon compliance with an operating agreement or, if the limited liability company does not have an operating agreement or an operating agreement does not so provide, on the effective date of the person's admission as reflected in the records of the limited liability company maintained under
s. 183.0405 (1).
183.0801(2)
(2) After the formation of a limited liability company, a person acquiring a limited liability company interest is admitted as a member of the limited liability company:
183.0801(2)(a)
(a) In the case of a person acquiring a limited liability company interest directly from the limited liability company, at the time provided in and upon compliance with an operating agreement or, if the limited liability company does not have an operating agreement or an operating agreement does not so provide, upon the consent of all members and on the effective date of the person's admission as reflected in the records of the limited liability company maintained under
s. 183.0405 (1).
