AB650,3,11
1An Act to repeal 180.1107, 180.1709 and 183.1203 (1);
to renumber 178.43,
2178.46 (1), 179.14 (1), 179.16 (1), 183.0107 (1), 183.0108 (1) and 551.02 (1);
to
3renumber and amend 183.1203 (2) and 185.83 (1) (b);
to amend 77.21 (1e),
4178.46 (2) and (4), 178.48 (1) (intro.), 178.51 (1), 179.03 (2), 179.04 (1) (b), 179.11
5(1) (intro.), 179.12 (1) (intro.), 179.13 (intro.), 179.185 (1), 179.24 (1) (b),
6subchapter VIII (title) of chapter 179 [precedes 179.70], 179.82 (intro.), 179.82
7(4), 179.86 (1), 179.88, 180.0103 (16), 180.0122 (1) (intro.), 180.0122 (1) (j),
8180.0122 (1) (x), 180.0122 (1) (y), 180.0125 (1), 180.0402 (1), 180.0501 (2) and
9(3), subchapter XI (title) of chapter 180 [precedes 180.1100], 180.1101 (1),
10180.1101 (2) (a), 180.1101 (2) (c), 180.1101 (3) (a), 180.1102 (1), 180.1102 (2) (a),
11180.1102 (2) (c), 180.1103 (6), 180.1104 (title), 180.1104 (1), 180.1104 (2) (b),
12180.1104 (3), 180.1104 (4), 180.1104 (5), 180.1105 (1) (intro.), 180.1105 (1) (b),
13180.1106 (1) (a), 180.1106 (1) (b), 180.1106 (1) (c), 180.1106 (1) (d), 180.1106 (1)
14(f), 180.1150 (3) (e), 180.1421 (1) and (2), 180.1504 (1) (intro.) and (b), 180.1507
1(2), 180.1507 (3), 180.1530 (1m) and (2), 180.1531 (1) and (2) (a) and (b),
2180.1532 (1), 181.0122 (1) (intro.), 181.0122 (1) (j), 181.0402 (1), 181.0501 (2),
3181.0501 (3), subchapter XI (title) of chapter 181 [precedes 181.1100], 181.1101
4(1), 181.1101 (2) (a), 181.1101 (2) (d), 181.1101 (3) (a), 181.1103 (6), 181.1104
5(title), 181.1104 (1), 181.1104 (2) (b), 181.1104 (3), 181.1104 (4), 181.1105
6(intro.), 181.1105 (2), 181.1106 (1), 181.1106 (2), 181.1106 (4), 181.1107 (2),
7181.1108, 181.1421 (1), 181.1421 (4) (b), 181.1422 (2) (a) (intro.), 181.1423 (2),
8181.1504 (1) (b), 181.1507 (2), 181.1507 (3), 181.1531 (1), 181.1531 (2) (a), (b)
9and (c) 1. (intro.), 181.1531 (3), 181.1532 (1), 183.0104 (1), 183.0105 (1) (b),
10183.0105 (1) (c), 183.0108 (3), 183.0110 (1), 183.0114 (1) (intro.), 183.0114 (1) (j),
11183.0114 (1) (w), 183.0802 (3), 183.0901 (4) (intro.), 183.1001 (1), 183.1006 (1)
12(a), 183.1006 (1) (b), 183.1020 (2), 183.1020 (3), 183.1021 (1) and (2), 183.1021
13(3), 183.1022 (1), subchapter XII (title) of chapter 183 [precedes 183.1200],
14183.1201 (2), 183.1201 (3), 183.1202 (3), 183.1202 (4), 183.1206, 184.10 (4),
15185.48 (4), 185.48 (6), 185.83 (1) (intro.), 551.23 (8) (g), 551.23 (10), 551.23 (11)
16(a) and 611.72 (2);
to repeal and recreate 180.0122 (1) (o), 180.1106 (1) (e),
17181.0103 (7), 181.0103 (23), 181.0122 (1) (o), 181.1106 (3), 181.1106 (5),
18181.1403 (1) (e), 181.1421 (2), 183.0114 (1) (n), 183.0204, 183.1204 (1) and
19183.1205; and
to create 71.80 (21), 71.80 (22), 73.03 (58), 77.25 (6d), 77.25 (6m),
2077.61 (15), 178.43 (2m) and (3m), 178.46 (1g), 178.48 (4), 179.045, 179.14 (1g),
21179.16 (1g), 179.70, 179.76, 179.77, 180.0103 (7g), 180.0103 (7k), 180.0121 (1)
22(a) 4., 180.0122 (1) (yr), 180.0122 (5), 180.1100, 180.1105 (1) (c), 180.1105 (1) (d),
23180.1106 (1) (am), 180.1106 (3), 180.1161, 180.1302 (1) (cm), 180.1421 (2m),
24180.1531 (2m), 181.0103 (10m) and (10p), 181.0121 (1) (a) 4., 181.0122 (1) (yr),
25181.0122 (5), 181.1100, 181.1105 (3) (c), 181.1105 (5), 181.1105 (6), 181.1106
1(1m), 181.1106 (6), 181.1161, 181.1531 (2g), 181.1531 (2r), 183.0107 (1g),
2183.0108 (1g), 183.0109 (1) (a) 5., 183.0114 (1) (mp), 183.0114 (3), 183.0404 (2)
3(fm), 183.0504, 183.1021 (2g), 183.1021 (2r), 183.1200, 183.1202 (6), 183.1207,
4185.83 (1) (b) 2., 185.83 (1) (bm), 185.83 (1m), 551.02 (1g) and 551.31 (1) (d) of
5the statutes;
relating to: merger and conversion of business entities,
6exemptions from securities registration requirements and licensing
7requirements for securities broker-dealers and securities agents, registered
8agents for business entities, filing of documents relating to certain business
9entities, administrative dissolution of business entities, amended certificates
10of authority for certain foreign business entities, granting rule-making
11authority, and making an appropriation.
Analysis by the Legislative Reference Bureau
Conversion of business entities
Current law does not permit the conversion of one form of business entity into
another form of business entity. This bill authorizes limited partnerships, limited
liability companies, business corporations, and nonstock corporations to convert into
any other forms of business entity. Under the bill, the business entity that is to be
converted into another business entity must submit to the department of financial
institutions (DFI) the plan of conversion, a statement that the conversion was
approved in accordance with the applicable law of the jurisdiction that governs the
organization of the business entity, and the registered agent and registered office,
record agent, and record office, or other similar agent and office of the business entity
before and after conversion.
The bill requires that the plan of conversion set forth the name, form of business
entity, and the identity of the jurisdiction governing the business entity that is to be
converted; the name, form of business entity, and the identity of the jurisdiction that
will govern the business entity after conversion; the terms and conditions of the
conversion; the manner and basis of converting the shares or other ownership
interests of the business entity that is to be converted into the shares or other
ownership interests of the new form of business entity; the effective date and time
of the conversion; a copy of the articles of incorporation, articles of organization,
certificate of limited partnership, or other similar governing document of the
business entity after conversion; and, any other provision relating to the conversion,
as determined by the business entity.
Under the bill, when a conversion becomes effective, except with respect to
taxation laws of each jurisdiction that are applicable upon the conversion of the
business entity, the business entity that is converted is no longer subject to the
applicable law of the jurisdiction that governed the organization of the prior form of
business entity and is subject to the applicable law of the jurisdiction that governs
the new form of business entity; the business entity continues to have all liabilities
of the business entity that was converted; the articles of incorporation, articles of
organization, certificate of limited partnership, or other similar governing
document, whichever is applicable, of the business entity are as provided in the plan
of conversion; and, all other provisions of the plan of conversion apply.
Finally, under the bill, any civil, criminal, administrative, or investigatory
proceeding that is pending by or against a business entity that is converted may be
continued by or against the business entity after the effective date of conversion.
Merger of business entities
Current law authorizes business corporations to merge into other business
corporations, nonstock corporations to merge into other nonstock corporations or
into a business corporation, and limited liability companies to merge into other
limited liability companies. This bill authorizes limited partnerships, limited
liability companies, business corporations, and nonstock corporations to merge into
any other form of business entity, not just into the same form of business entity.
Under the bill, the surviving business entity of the merger must submit to DFI the
plan of merger, a statement that the plan of merger was approved by each business
entity that is a party to the merger in the manner required by the laws applicable
to each business entity, the effective date and time of the merger, and any other
provision relating to the merger, as determined by the surviving business entity.
Under the bill, the plan of merger must set forth the name, form of business
entity, and identity of the jurisdiction governing each business entity that is a party
to the merger; the name, form of business entity, and identity of the jurisdiction of
the surviving business entity with or into which each other business entity proposes
to merge; and, the manner and basis of converting the interests in each business
entity that is a party to the merger into shares, interests, obligations, or other
securities of the surviving business entity or any other business entity or into cash
or other property in whole or in part. In addition, the plan of merger may set forth
amendments to the governing document of the surviving business entity and any
other provision relating to the merger.
Under the bill, a merger has the following effects:
1. Every other business entity that is a party to the merger merges into the
surviving business entity, and the separate existence of every business entity, except
the surviving business entity, ceases.
2. If the merger is with or into a business entity under the laws applicable to
which one or more of the owners of the business entity is liable for the debts and
obligations of the business entity, the owner or owners are so liable only for the debts
and obligations accrued during the period or periods in which such laws are
applicable.
3. The title to all property owned by each business entity that is a party to the
merger is vested in the surviving business entity without reversion or impairment.
Provided that, in the case of real estate located in Wisconsin, the real estate is
properly conveyed to the surviving business entity.
4. The surviving business entity has all liabilities of each business entity that
is party to the merger.
5. A civil, criminal, administrative, or investigatory proceeding pending by or
against any business entity that is a party to the merger may be continued as if the
merger did not occur, or the surviving business entity may be substituted in the
proceeding for the business entity whose existence ceased.
6. The articles of incorporation, articles of organization, certificate of limited
partnership, or other similar governing document, whichever is applicable, of the
surviving business entity are amended to the extent provided in the plan of merger.
7. The shares or other interests of each business entity that is party to the
merger that are to be converted into shares, interests, obligations, or other securities
of the surviving business entity or any other business entity or into cash or other
property are converted, and the former holders of the shares or interests are entitled
only to the rights provided in the articles of merger or to their rights under the laws
applicable to each business entity that is a party to the merger.
8. If the surviving business entity is a foreign business entity, DFI is the agent
of the surviving foreign business entity for service of process in a proceeding to
enforce any obligation of any business entity that is a party to the merger or the
rights of the dissenting members or other owners of each business entity that is a
party to the merger.
9. When a merger takes effect, any surviving foreign business entity of the
merger must promptly pay to the dissenting shareholders of each domestic
corporation or dissenting owners of each other domestic business entity that is a
party to the merger the amount, if any, to which they are entitled under laws
applicable to the domestic corporation or other domestic business entity.
Merger fees
Under current law, the fee for filing documents of merger varies depending
upon the type of entity executing the merger. The fee for filing articles of merger by
a corporation is $50 per corporation. For a nonstock corporation, the fee is $30 per
corporation. For a limited liability company, the fee is $50 per company. For a
cooperative, the fee is $10.
This bill sets these filing fees uniformly at $150, except that the fee applicable
to a cooperative under the bill is $30.
Electronic filing
Wisconsin law currently specifies that documents required to be filed by
corporations with DFI may be filed in electronic format. This bill specifies that
documents required to be filed by limited partnerships, limited liability
partnerships, nonstock corporations, and limited liability companies may be filed in
electronic format, as well.
Filing fees
Current law specifies numerous fees that limited liability partnerships, limited
partnerships, corporations, nonstock corporations, limited liability companies,
unincorporated nonprofit associations, and cooperatives must pay in order file
certain documents with DFI. In certain limited circumstances, current law specifies
a higher fee for documents filed in paper format. This bill permits DFI, by rule, to
establish a higher fee that applies if any of these documents are filed in paper format.
Registered agents
Current law requires every limited partnership, corporation, nonstock
corporation, and limited liability company to appoint a registered agent, who
receives certain communications on behalf of the business organization and who
accepts service of process (for example, service of a summons and complaint).
Current law permits these business organizations to appoint a business entity,
rather than an individual, as registered agent; however, the types of business
entities authorized to serve as registered agent are not uniform across all of the laws
governing these business organizations. Current law does not authorize any of these
business organizations to appoint a limited partnership or limited liability
partnership as registered agent. Under this bill, these business organizations may
appoint a limited partnership, limited liability partnership, corporation, nonstock
corporation, or limited liability company as registered agent.
Current law specifies a procedure which the registered agent of a corporation,
nonstock corporation, or limited liability company may follow to resign. This bill
creates a similar procedure applicable to the registered agent of a limited
partnership or limited liability partnership. This bill also deletes all fees required
for filing a document to reflect only a change in registered agent.
Dissolution of nonstock corporations
Currently, in order to dissolve, a nonstock corporation must file articles of
dissolution with DFI. If approval by members of the nonstock corporation is required
for the dissolution, the articles of dissolution must itemize the number of votes cast
on the question by each class of members entitled to vote. This bill repeals this
requirement and, instead, requires that the articles of dissolution include a
statement that dissolution was approved by a sufficient vote of the members of each
class entitled to vote.
Amended certificates of authority for foreign entities
Under current law, a foreign corporation or foreign nonstock corporation must
obtain a certificate of authority from DFI in order to transact business in this state.
Similarly, a foreign limited liability company must obtain a certificate of registration
from DFI. Current law specifies certain conditions under which a foreign
corporation, foreign nonstock corporation, or foreign limited liability company must
obtain an amended certificate (for example, if the entity changes the jurisdiction
under which it is organized). This bill further requires a foreign corporation, foreign
nonstock corporation, or foreign limited liability company to obtain an amended
certificate if the entity changes the date of its incorporation or organization.
Notice of administrative dissolution or revocation
Current law requires DFI to "serve" a domestic or foreign corporation with
notice of grounds for administratively dissolving the corporation. A similar
requirement applies with regard to foreign limited liability companies. This bill,
instead, requires DFI to "give" a notice to the affected entity. The notice must be
addressed to the entity's registered office. The bill also creates a procedure that DFI
must follow to give notice, if the original notice is returned as undeliverable.
Exemptions from securities registration requirements and licensing
requirements for securities broker-dealers and securities agents
Under current law, a person may not offer or sell any security in this state
unless a registration statement relating to the security is filed with the division of
securities in DFI (division) or unless the security is exempt from state registration
requirements under federal law. However, current law exempts certain types of
securities and transactions from this registration requirement. For example, an
offer or sale of a security currently is exempt from registration if the offer or sale is
made to an individual who qualifies as an accredited investor under the rules of the
division, as long as the issuer of the security reasonably believes that the accredited
investor has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of the investment. In addition, with
certain exceptions, an offer or sale of a security by the issuer of that security is
exempt from registration if the issuer has its principal office in this state and if,
among other things, not more than 15 persons will hold all of the securities after the
sale. Also, under current law, any transaction that is entered into pursuant to an
offer made to not more than ten persons in this state during any period of 12
consecutive months is exempt from registration, if certain other requirements are
satisfied.
This bill expands these exemptions from registration. Under this bill, an offer
or sale of a security to an accredited investor is exempt from registration if the
individual or person receiving the offer or making the purchase qualifies as an
accredited investor under certain federal rules. These federal rules define
"accredited investor" to include, among other things, certain financial entities, such
as banking institutions, and individuals who have a net worth of greater than
$1,000,000 or who have had an income of greater than $200,000 in the two most
recent years. The bill also repeals the requirement that the issuer reasonably believe
the accredited investor has a specified level of knowledge and experience in financial
and business matters. In addition, under this bill, an offer or sale of a security by
the issuer of that security generally is exempt from registration if the issuer has its
principal office in this state and if, among other things, not more than 25 persons will
hold all of the issuer's securities after the sale. Also, under this bill, any transaction
that is entered into pursuant to an offer made to not more than 25 persons in this
state during any period of 12 consecutive months generally is exempt from
registration, if the other requirements under current law are satisfied.
Currently, in order to transact business as a securities broker-dealer or
securities agent in this state, a person must obtain a license from the division, unless
the person is exempt from the licensing requirement. Current law exempts persons
who give certain group presentations relating to securities, persons who engage
exclusively in transactions on account of or with certain financial and governmental
entities, and certain persons who are exempt from state licensing requirements
under federal law.
This bill creates an additional exemption from this licensing requirement. This
bill exempts any securities agent who is acting exclusively on behalf of an issuer of
securities (as opposed to acting on behalf of a securities broker-dealer) and who
makes offers and sales of the issuer's securities in transactions that are exempt from
registration under the rules of the division that specifically exempt transactions
involving accredited investors or to persons who qualify as accredited investors
under certain federal rules.
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:
AB650, s. 1
1Section
1. 71.80 (21) of the statutes is created to read:
AB650,8,62
71.80
(21) Business entity conversion. Notwithstanding any provision of ss.
3179.76, 180.1161, 181.1161, and 183.1207, the conversion of a business entity to
4another form of business entity under s. 179.76, 180.1161, 181.1161, or 183.1207
5shall be treated for state tax purposes in the same manner as the conversion is
6treated for federal tax purposes.
AB650, s. 2
7Section
2. 71.80 (22) of the statutes is created to read:
AB650,8,128
71.80
(22) Business entity merger. Notwithstanding any provision of ss.
9179.77, 180.1101, 180.1104, 181.1101, 181.1104, and 183.1201, the merger of a
10business entity with one or more business entities under s. 179.77, 180.1101,
11180.1104, 181.1101, 181.1104, or 183.1201 shall be treated for state tax purposes in
12the same manner as the merger is treated for federal tax purposes.
AB650, s. 3
13Section
3. 73.03 (58) of the statutes is created to read:
AB650,9,214
73.03
(58) (a)
Notwithstanding any provision of ss. 179.76, 180.1161, 181.1161,
15and 183.1207, to treat, for state tax purposes, the conversion of a business entity to
1another form of business entity under s. 179.76, 180.1161, 181.1161, or 183.1207 in
2the same manner as the conversion is treated for federal tax purposes.
AB650,9,73
(b)
Notwithstanding any provision of ss. 179.77, 180.1101, 180.1104, 181.1101,
4181.1104, and 183.1201, to treat, for state tax purposes, the merger of a business
5entity with one or more business entities under s. 179.77, 180.1101, 180.1104,
6181.1101, 181.1104, or 183.1201 in the same manner as the merger is treated for
7federal tax purposes.
AB650, s. 4
8Section
4. 77.21 (1e) of the statutes is amended to read:
AB650,9,139
77.21
(1e) "Mergers of corporations" means the
merger or combination of
2 one 10or more corporations
, nonstock corporations, limited liability companies, or limited
11partnerships, or any combination thereof, under a plan of merger or a plan of
12consolidation
or the combination of 2 or more limited liability companies under a
13plan of merger permitted by the laws that govern the entities.
AB650, s. 5
14Section
5. 77.25 (6d) of the statutes is created to read:
AB650,9,1615
77.25
(6d) Pursuant to partnerships registering as limited liability
16partnerships under s. 178.40.
AB650, s. 6
17Section
6. 77.25 (6m) of the statutes is created to read:
AB650,9,2118
77.25
(6m) Pursuant to the conversion of a business entity to another form of
19business entity under s. 179.76, 180.1161, 181.1161, or 183.1207, if, after the
20conversion, the ownership interests in the new entity are identical with the
21ownership interests in the original entity immediately preceding the conversion.
AB650, s. 7
22Section
7. 77.61 (15) of the statutes is created to read:
AB650,9,2523
77.61
(15) Notwithstanding any provision of ss. 179.76, 180.1161, 181.1161,
24and 183.1207, a business entity that converts to another business entity under s.
25179.76, 180.1161, 181.1161, or 183.1207 shall be subject to the provisions under this
1subchapter applicable to liquidations, reorganizations, and business entity
2formations.
AB650, s. 8
3Section
8. 178.43 of the statutes is renumbered 178.43 (1).
AB650, s. 9
4Section
9. 178.43 (2m) and (3m) of the statutes are created to read:
AB650,10,85
178.43
(2m) The registered agent of a registered limited liability partnership
6or a foreign limited liability partnership may resign as registered agent by executing
7and filing with the department a written statement that includes all of the following
8information, as applicable:
AB650,10,109
(a) The name of the registered limited liability partnership or foreign
10registered limited liability partnership for which the registered agent is acting.
AB650,10,1111
(b) The name of the registered agent.
AB650,10,1312
(c) If the registered agent is acting for a registered limited liability partnership,
13the street address of the registered limited liability partnership.
AB650,10,1714
(d) If the registered agent is acting for a foreign registered limited liability
15partnership, the foreign registered limited liability partnership's current registered
16office and the mailing address of the foreign registered limited liability partnership's
17current principal office.
AB650,10,1818
(e) A statement that the registered agent resigns.
AB650,10,1919
(f) If the registered office is also discontinued, a statement to that effect.
AB650,10,23
20(3m) After the filing of a statement under sub. (2), the department shall mail
21a copy of the statement to the registered limited liability partnership or foreign
22registered limited liability partnership at the address provided under sub. (2) (c) or
23(d).
AB650, s. 10
24Section
10. 178.46 (1) of the statutes is renumbered 178.46 (1r).
AB650, s. 11
25Section
11. 178.46 (1g) of the statutes is created to read:
AB650,11,1
1178.46
(1g) In this section:
AB650,11,42
(a) "Deliver" means deliver by hand, mail, commercial delivery service,
3electronic transmission, or any other method of delivery used in conventional
4commercial practice.
AB650,11,65
(b) "Electronic" means relating to technology having electrical, digital,
6magnetic, wireless, optical, electromagnetic, or similar capabilities.
AB650,11,97
(c) "Electronic signature" means an electronic sound, symbol, or process,
8attached to or logically associated with a writing and executed or adopted by a person
9with intent to authenticate the writing.
AB650,11,1110
(d) "Sign" means to execute or adopt a manual, facsimile, conformed, or
11electronic signature or any symbol with intent to authenticate a writing.
AB650, s. 12
12Section
12. 178.46 (2) and (4) of the statutes are amended to read:
AB650,11,1513
178.46
(2) The department shall file photocopies or other reproduced copies of
14typewritten or printed documents if the copies satisfy
sub. (1) sub. (1r) and are
15originally executed to satisfy sub. (3).
AB650,11,18
16(4) The department may waive any of the requirements of
subs. (1) to (3) subs.
17(1r) to (3) if it appears from the face of the document that the document's failure to
18satisfy the requirement is immaterial.
AB650, s. 13
19Section
13. 178.48 (1) (intro.) of the statutes is amended to read:
AB650,11,2220
178.48
(1) (intro.)
The Except as provided under sub. (4), the department shall
21collect the following fees when the documents described under this subsection are
22delivered to the department for filing:
AB650, s. 14
23Section
14. 178.48 (4) of the statutes is created to read:
AB650,11,2524
178.48
(4) The department, by rule, may specify a larger fee for filing
25documents described in sub. (1) in paper format.
AB650, s. 15
1Section
15. 178.51 (1) of the statutes is amended to read:
AB650,12,62
178.51
(1) Upon receipt of a document by the department for filing, the
3department shall stamp or otherwise endorse the date
and time of receipt on the
4original document copy and, upon request, any additional document copy received.
5The department shall return any additional document copy to the person delivering
6it, as confirmation of the date
and time of receipt.
AB650, s. 16
7Section
16. 179.03 (2) of the statutes is amended to read: