Chapter 180

SHARES AND DISTRIBUTIONS

180.0601 180.0601 Authorized shares.

180.0601(1) (1) The articles of incorporation shall prescribe the classes of shares and the number of shares of each class that the corporation is authorized to issue, except that an investment company may prescribe that each class has an indefinite number of authorized shares. If more than one class of shares is authorized, the articles of incorporation shall prescribe a distinguishing designation for each class. Before the issuance of shares of a class, the corporation shall describe in its articles of incorporation the preferences, limitations and relative rights of that class. All shares of a class shall have preferences, limitations and relative rights identical with those of other shares of the same class unless the class is divided into series.

180.0601(2) (2) The articles of incorporation may create series of shares within a class of shares, except that an investment company may prescribe that each series has an indefinite number of authorized shares. Before the issuance of shares of a series, the corporation shall describe in its articles of incorporation the number of shares of each series that the corporation is authorized to issue or that there is an indefinite number of authorized shares, a distinguishing designation for each series within a class and the preferences, limitations and relative rights of that series. All shares of a series shall have preferences, limitations and relative rights identical with those of other shares of the same series and, except to the extent otherwise provided in the description of the series, with those of other series of the same class.

180.0601(3) (3) The articles of incorporation shall authorize all of the following:

180.0601(3)(a) (a) One or more classes of shares that together have unlimited voting rights.

180.0601(3)(b) (b) One or more classes of shares, which may be the same class or classes as those with voting rights under par. (a), that together are entitled to receive the net assets of the corporation upon dissolution.

180.0601(4) (4) The articles of incorporation may authorize one or more classes of shares that have designations, preferences, limitations and relative rights that may include, but are not limited to, any of the following:

180.0601(4)(a) (a) Special, conditional or limited voting rights, or no right to vote, except to the extent prohibited by this chapter.

180.0601(4)(b) (b) Provisions for the redemption or conversion of the shares under any of the following terms specified by articles of incorporation:

180.0601(4)(b)1. 1. At the option of the corporation, the shareholder or another person, or upon the occurrence of a designated event.

180.0601(4)(b)2. 2. For cash, indebtedness, securities or other property.

180.0601(4)(b)3. 3. In a designated amount or in an amount determined in accordance with a designated formula or by reference to extrinsic data or events.

180.0601(4)(c) (c) Provisions entitling the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative or partially cumulative.

180.0601(4)(d) (d) Preference over any other class of shares with respect to distributions, including dividends and distributions upon the dissolution of the corporation.

180.0601 History History: 1989 a. 303; 1995 a. 271.

180.0602 180.0602 Terms of class or series determined by board of directors.

180.0602(1) (1) To the extent provided in the articles of incorporation, the board of directors may, within the limits under s. 180.0601, do any of the following:

180.0602(1)(a) (a) Determine with respect to any class of shares the preferences, limitations and relative rights, in whole or in part, before the issuance of any shares of that class.

180.0602(1)(b) (b) Create one or more series within a class, and, with respect to any series, determine the number of shares of the series, the distinguishing designation and the preferences, limitations and relative rights, in whole or in part, before the issuance of any shares of that series, except that an investment company may prescribe that each series has an indefinite number of authorized shares.

180.0602(1)(c) (c) In the case of an investment company, change the distinguishing designation of a class or series of shares, whether or not shares of the class are issued and outstanding, if the change does not affect the preferences, limitations and relative rights, in whole or in part, of the class or series.

180.0602(2) (2) Before issuing any shares of a class or series under sub. (1), the corporation shall deliver to the department for filing articles of amendment, which are effective without shareholder action, that include all of the following information:

180.0602(2)(a) (a) The name of the corporation.

180.0602(2)(b) (b) The text of the amendment determining the terms of the class or series of shares.

180.0602(2)(c) (c) The number of shares of the class or series of shares created, except that an investment company may prescribe that each class and each series have an indefinite number of authorized shares.

180.0602(2)(d) (d) A statement that none of the shares of the class or series has been issued, except that this statement is not required if the only amendment to the articles of incorporation is made pursuant to sub. (1) (c).

180.0602(2)(e) (e) The date that the amendment was adopted.

180.0602(2)(f) (f) A statement that the amendment was adopted by the board of directors and that shareholder action was not required.

180.0602(3) (3) 

180.0602(3)(a) (a) After the articles of amendment are filed under sub. (2) and before the corporation issues any shares of the class or series that is the subject of the articles of amendment, the board of directors may alter or revoke the distinguishing designation of the class or series and the preferences, limitations, or relative rights described in the articles of amendment, by adopting another resolution appropriate for that purpose and filing with the department revised articles of amendment that comply with sub. (2). Except as provided in par. (b), a distinguishing designation, preference, limitation, or relative right may not be altered or revoked after the issuance of any shares of the class or series that are subject to the distinguishing designation, preference, limitation, or relative right, except by amendment of the articles of incorporation under s. 180.1003.

180.0602(3)(b) (b)

180.0602(3)(b)1. 1. Except as otherwise provided in this subdivision, after the articles of amendment are filed under sub. (2), the board of directors may decrease the number of shares of the class or series that is the subject of the articles of amendment by adopting another resolution appropriate for that purpose. The shares specified in the resolution shall resume the status applicable to them immediately before their inclusion in the class or series. The board of directors may not decrease the number of shares under this subdivision below the number of such shares that are outstanding.

180.0602(3)(b)2. 2. After the articles of amendment are filed under sub. (2), if no shares of the class or series that is the subject of the articles of amendment are outstanding, the board of directors may eliminate from the articles of incorporation all matters set forth in the articles of amendment with respect to that class or series by adopting another resolution for that purpose. The board of directors shall prepare a certificate setting forth the content of any resolution under this subdivision, stating that none of the authorized shares of the class or series are outstanding, and stating that no such shares will be issued under the articles of amendment and shall deliver the signed certificate to the department for filing. A resolution under this subdivision takes effect upon receipt of the certificate by the department and has the effect of eliminating from the articles of incorporation all matters set forth in the articles of amendment with respect to the applicable class or series.

180.0602(3)(b)3. 3. Except as otherwise provided in this subdivision, after the articles of amendment are filed under sub. (2), the board of directors may increase the number of shares of the class or series that is the subject of the articles of amendment by adopting another resolution appropriate for that purpose. The board of directors may not increase the number of shares under this subdivision to be greater than the total number of authorized shares of the class or series as specified in the articles of incorporation.

180.0602 History History: 1989 a. 303; 1995 a. 27, 271; 2005 a. 476.

180.0603 180.0603 Issued and outstanding shares.

180.0603(1) (1) A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. If an investment company has authorized an indefinite number of shares, there is no limit on the number of shares that the investment company may issue. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted or canceled.

180.0603(2) (2) The reacquisition, redemption or conversion of outstanding shares is subject to the limitations of sub. (3) and to s. 180.0640.

180.0603(3) (3) At all times that shares of the corporation are outstanding, there must be outstanding one or more shares that together have unlimited voting rights and one or more shares, which may be the same share or shares as those with unlimited voting rights, that together are entitled to receive the net assets of the corporation upon dissolution.

180.0603 History History: 1989 a. 303; 1995 a. 271.

180.0604 180.0604 Fractional shares.

180.0604(1) (1) A corporation may do any of the following:

180.0604(1)(a) (a) Issue fractions of a share or pay in money the value of fractions of a share.

180.0604(1)(b) (b) Arrange for disposition of fractional shares by the shareholders.

180.0604(1)(c) (c) Issue scrip in registered or bearer form entitling the holder to receive a full share on the surrender of enough scrip to equal a full share.

180.0604(2) (2) A certificate representing scrip shall be conspicuously labeled “scrip” and shall contain the terms of exchange of scrip for a full share and the information required by s. 180.0625 (1), except that it may state that it is issued to bearer.

180.0604(3) (3) The holder of a fractional share may exercise the rights of a shareholder, including the right to vote, to receive dividends and to participate in the assets of the corporation upon liquidation. The holder of scrip is not entitled to the rights described in this subsection unless the scrip provides for them.

180.0604(4) (4) The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including but not limited to any of the following:

180.0604(4)(a) (a) That the scrip will become void if not exchanged for full shares before a specified date.

180.0604(4)(b) (b) That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.

180.0604 History History: 1989 a. 303.

180.0620 180.0620 Subscription for shares.

180.0620(1) (1) 

180.0620(1)(a) (a) A subscription for shares entered into before incorporation is irrevocable for 6 months unless the subscription agreement provides a longer or shorter period or all of the subscribers agree to revocation.

180.0620(1)(b) (b) Unless the subscription agreement provides otherwise, the filing of the articles of incorporation by the department constitutes acceptance by the corporation of all existing subscriptions to its shares.

180.0620(2) (2) The board of directors may determine the payment terms of subscriptions for shares that are entered into before incorporation, unless the subscription agreement specifies the payment terms. A call for payment by the board of directors shall be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.

180.0620(3) (3) Shares issued under subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.

180.0620(4) (4) If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and sell the shares if the debt remains unpaid more than 20 days after the corporation sends written demand for payment to the subscriber.

180.0620(5) (5) A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to s. 180.0621.

180.0620 History History: 1989 a. 303; 1995 a. 27.

180.0621 180.0621 Issuance of shares.

180.0621(1) (1) The powers granted in subs. (2) to (5) to the board of directors may be reserved to the shareholders by the articles of incorporation.

180.0621(2) (2) The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed or other securities of the corporation.

180.0621(3) (3) Before the corporation issues shares, the board of directors shall determine that the consideration received or to be received for the shares to be issued is adequate. The board of directors’ determination is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid and nonassessable.

180.0621(4) (4) When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued for that consideration are fully paid and nonassessable.

180.0621(5) (5) The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the benefits are received or the note is paid. If the services are not performed, the benefits are not received or the note is not paid, the corporation may cancel, in whole or in part, the shares escrowed or restricted and the distributions credited.

180.0621 History History: 1989 a. 303.

180.0622 180.0622 Liability of shareholders, transferees and others.

180.0622(1) (1) A purchaser from a corporation of the corporation’s shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued or the consideration specified in the subscription agreement entered into before incorporation.

180.0622(2) (2) Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation, except for a shareholder in a corporation defined under s. 71.365 (7), and only to the extent provided for under s. 73.0306, and except that a shareholder may become personally liable by his or her acts or conduct other than as a shareholder.

180.0622(3) (3) A person who becomes a transferee of shares in good faith and without knowledge that the consideration determined for the shares or specified in the subscription agreement entered into before incorporation has not been paid is not personally liable for any unpaid portion of the consideration.

180.0622(4) (4) 

180.0622(4)(a) (a) In this subsection, “fiduciary” means a personal representative, conservator, guardian, trustee, assignee for the benefit of creditors, or receiver.

180.0622(4)(b) (b) A fiduciary is not personally liable as a holder of or subscriber to shares of a corporation, but the estate and funds in the fiduciary’s hands are so liable. A pledgee or other holder of shares as collateral security is not personally liable as a shareholder.

180.0622 History History: 1989 a. 303; 2001 a. 102; 2005 a. 474; 2017 a. 58.

180.0622 Annotation Personal Liability for Corporate Debt. Kelley. Wis. Law. Oct. 1994.

180.0623 180.0623 Share dividends.

180.0623(1) (1) In this section, “share dividend” means shares issued proportionally and without consideration to the corporation’s shareholders or to the shareholders of one or more classes or series.

180.0623(2) (2) Except as provided in sub. (3) and unless the articles of incorporation provide otherwise, a corporation may issue share dividends.

180.0623(3) (3) 

180.0623(3)(a) (a) A corporation may not issue shares of one class or series as a share dividend in respect of shares of another class or series unless any of the following is satisfied:

180.0623(3)(a)1. 1. The articles of incorporation authorize the issuance.

180.0623(3)(a)2. 2. A majority of the votes entitled to be cast by the class or series to be issued approve the issuance.

180.0623(3)(a)3. 3. There are no outstanding shares of the class or series to be issued, as determined under par. (b).

180.0623(3)(b) (b) If a security is outstanding that is convertible into or carries a right to subscribe for or acquire shares of the class or series to be issued, the holder of the security is considered a holder of the class or series to be issued for purposes of making the determination under par. (a) 3.

180.0623(4) (4) If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, it is the date on which the board of directors authorizes the share dividend.

180.0623 History History: 1989 a. 303.

180.0624 180.0624 Share rights, options and warrants. Unless the articles of incorporation provide otherwise before the issuance of the rights, options or warrants, a corporation may issue rights, options or warrants for the purchase of shares of the corporation. The rights, options or warrants may contain provisions that adjust the rights, options or warrants in the event of an acquisition of shares or a reorganization, merger, interest exchange, sale of assets or other occurrence. Subject to the articles of incorporation, the board of directors shall determine the terms on which the rights, options or warrants are issued, their form and content, and the consideration for which the shares are to be issued. Notwithstanding s. 180.0601 (1) and any other provision of this chapter, and unless otherwise provided in the articles of incorporation before issuance of the rights, options or warrants, a corporation may before, on or after April 30, 1972, issue rights, options or warrants that include conditions that prevent the holder of a specified percentage of the outstanding shares of the corporation, including subsequent transferees of the holder, from exercising those rights, options or warrants.

180.0624 History History: 1989 a. 303; 2021 a. 258.