Chapter 180

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.

180.0625 180.0625 Form and content of certificates.

180.0625(1) (1) At a minimum, a share certificate shall state on its face all of the following:

180.0625(1)(a) (a) The name of the issuing corporation and that it is organized under the laws of this state.

180.0625(1)(b) (b) The name of the person to whom issued.

180.0625(1)(c) (c) The number and class of shares and the designation of the series, if any, that the certificate represents.

180.0625(2) (2) If the issuing corporation is authorized to issue different classes of shares or different series within a class, the front or back of each certificate shall contain any of the following:

180.0625(2)(a) (a) A summary of the designations, relative rights, preferences and limitations applicable to each class, and the variations in rights, preferences and limitations determined for each series and the authority of the board of directors to determine variations for future series.

180.0625(2)(b) (b) A conspicuous statement that the corporation will furnish the shareholder the information described in par. (a) on request, in writing and without charge.

180.0625(3) (3) 

180.0625(3)(a) (a) Each share certificate shall be signed either manually or in facsimile, by the officer or officers designated in the bylaws or by the board of directors.

180.0625(3)(b) (b) The validity of a share certificate is not affected if a person who signed the certificate no longer holds office when the certificate is issued.

180.0625 History History: 1989 a. 303.

180.0626 180.0626 Shares without certificates.

180.0626(1) (1) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issuance of any shares of any of its classes or series without certificates. The authorization does not affect shares already represented by certificates until the certificates are surrendered to the corporation.

180.0626(2) (2) Within a reasonable time after the issuance or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on share certificates by s. 180.0625 (1) and (2) and, if applicable, s. 180.0627.

180.0626(3) (3) Unless this chapter or ch. 408 expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.

180.0626 History History: 1989 a. 303.

180.0627 180.0627 Restriction on transfer of shares and other securities.

180.0627(1) (1) In this section:

180.0627(1)(a) (a) “Other securities” include securities that are convertible into or carry a right to subscribe for or acquire shares.

180.0627(1)(b) (b) “Transfer restriction” means a restriction on the transfer or registration of transfer of shares and other securities of a corporation.

180.0627(2) (2) 

180.0627(2)(a) (a) Except as provided in par. (b), the articles of incorporation, bylaws, an agreement among shareholders and holders of other securities, or an agreement between shareholders and holders of other securities and the corporation may impose a transfer restriction on shares and other securities of the corporation for any reasonable purpose, including but not limited to any of the following purposes:

180.0627(2)(a)1. 1. Maintaining the corporation’s status when it is dependent on the number or identity of its shareholders.

180.0627(2)(a)2. 2. Preserving exemptions under federal or state securities law.

180.0627(2)(b) (b) A transfer restriction may not affect shares and other securities issued before the restriction is adopted unless the holders of the shares and other securities are parties to the transfer restriction agreement or vote in favor of the transfer restriction.

180.0627(3) (3) A transfer restriction is valid and enforceable against the holder or a transferee of the holder if the transfer restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by s. 180.0626 (2). Unless so noted, a transfer restriction is not enforceable against a person who does not know of the transfer restriction.

180.0627(4) (4) The transfer restrictions permitted under this section include, but are not limited to, transfer restrictions that do any of the following:

180.0627(4)(a) (a) Obligate the shareholder or holder of other securities first to offer the corporation or other persons, whether separately, consecutively or simultaneously, an opportunity to acquire the restricted shares or other securities.

180.0627(4)(b) (b) Obligate the corporation or other persons, whether separately, consecutively or simultaneously, to acquire the restricted shares or other securities.

180.0627(4)(c) (c) Require the corporation, the holders of any class of its shares or other securities or another person to approve the transfer of the restricted shares or other securities, if the requirement is not manifestly unreasonable.

180.0627(4)(d) (d) Prohibit the transfer of the restricted shares or other securities to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.

180.0627 History History: 1989 a. 303.

180.0627 Annotation If a right-of-refusal renders the sale of stock impossible to anyone except to the corporation at whatever price the corporation wishes to pay, it is illegal. However, requiring a right-of-refusal at book value, if that book value is honestly calculated, does not guarantee a sale to the corporation at whatever price the corporation wishes to pay. Additionally, the failure to require fair market value does not amount to a breach of fiduciary duty. Dewey v. Bechthold, 384 F. Supp. 3d 971 (2019).

180.0628 180.0628 Expense of issuing shares. A corporation may pay the expense of selling or underwriting its shares, and of organizing or reorganizing the corporation, from the consideration received for shares.

180.0628 History History: 1989 a. 303.

180.0630 180.0630 Preemptive rights.

180.0630(1) (1) In this section, “other securities” has the meaning given in s. 180.0627 (1) (a).

180.0630(2) (2) Except as provided in sub. (7), the shareholders or holders of other securities of a corporation do not have a preemptive right to acquire the corporation’s unissued shares or other securities except to the extent provided in the articles of incorporation. If the articles of incorporation state that “the corporation elects to have preemptive rights”, or words of similar meaning, subs. (3) to (6) govern the preemptive rights, except to the extent that the articles of incorporation expressly provide otherwise.

180.0630(3) (3) Except as provided in sub. (5), the shareholders or holders of other securities of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation’s unissued shares or other securities upon the decision of the board of directors to issue the shares or other securities, subject to the following conditions:

180.0630(3)(a) (a) Holders of shares or other securities with general voting rights have preemptive rights with respect to shares and other securities of any class with general voting rights.

180.0630(3)(b) (b) Holders of shares or other securities without preferential rights to distributions or assets have preemptive rights with respect to shares and other securities of any class without preferential rights to distributions or assets, except that holders of shares or other securities without general voting rights have no preemptive rights with respect to shares or other securities of any class with general voting rights.

180.0630(4) (4) A shareholder or holder of other security may waive his or her preemptive right. A written waiver is irrevocable even if it is not supported by consideration.

180.0630(5) (5) There is no preemptive right with respect to any of the following:

180.0630(5)(a) (a) Shares or other securities issued as compensation to directors, officers or employees of the corporation or its affiliates.

180.0630(5)(b) (b) Shares or other securities issued to satisfy conversion or option rights created to provide compensation to directors, officers or employees of the corporation or its affiliates.

180.0630(5)(c) (c) Shares or other securities authorized in articles of incorporation that are issued within 6 months from the effective date of incorporation.

180.0630(5)(d) (d) Shares or other securities sold for other than money or an obligation to pay money.

180.0630(5)(e) (e) Treasury shares.

180.0630(6) (6) If shares or other securities subject to preemptive rights are not acquired by shareholders or holders of other securities, the corporation may issue the shares or other securities to any person for one year after being offered to shareholders or holders of other securities, at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the preemptive rights of shareholders or holders of other securities.

180.0630(7) (7) The preemptive rights of shares of a preexisting class, as defined in s. 180.1701, are governed by s. 180.1705.

180.0630 History History: 1989 a. 303; 1991 a. 16.

180.0631 180.0631 Corporation’s acquisition of its own shares.

180.0631(1) (1) Treasury shares shall be considered issued shares but not outstanding shares.

180.0631(2) (2) A corporation may acquire its own shares and all shares so acquired after December 31, 1990, constitute treasury shares unless any of the following conditions exists:

180.0631(2)(a) (a) The articles of incorporation prohibit treasury shares or prohibit the reissuance of acquired shares.

180.0631(2)(b) (b) The board of directors, by resolution, cancels the acquired shares, in which event the shares are restored to the status of authorized but unissued shares.

180.0631(3) (3) 

180.0631(3)(a) (a) If the articles of incorporation prohibit treasury shares but do not prohibit the reissuance of acquired shares, all of its own shares acquired by the corporation shall be restored to the status of authorized but unissued shares.

180.0631(3)(b) (b) If the articles of incorporation prohibit the reissuance of acquired shares, the number of authorized shares is reduced by the number of shares acquired by the corporation, effective upon amendment of the articles of incorporation, except in the case of an investment company that has authorized an indefinite number of shares. The board of directors may adopt articles of amendment under this paragraph without shareholder action and deliver them to the department for filing. The articles shall include all of the following information:

180.0631(3)(b)1. 1. The name of the corporation.

180.0631(3)(b)2. 2. The reduction in the number of authorized shares, itemized by class and series.

180.0631(3)(b)3. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares.

180.0631(3)(b)4. 4. A statement that the amendment was adopted by the board of directors and that shareholder action was not required.

180.0631(4) (4) Sections 180.0621 to 180.0628, as they apply to the issuance of shares, apply to the issuance of treasury shares.

180.0631(5) (5) Treasury shares existing on December 31, 1990, remain treasury shares until disposed of, canceled or restored to the status of authorized but unissued shares by action of the board of directors or shareholders.

180.0631 History History: 1989 a. 303; 1991 a. 16; 1995 a. 27, 271.

180.0640 180.0640 Distributions to shareholders.

180.0640(1) (1) The board of directors may authorize and the corporation may make distributions to its shareholders, subject to sub. (3) and any restriction by the articles of incorporation.

180.0640(2) (2) The record date for determining shareholders entitled to a distribution, other than a distribution involving a purchase, redemption or other acquisition of the corporation’s shares, is the date on which the board of directors authorizes the distribution, unless the board of directors fixes a different record date.

180.0640(3) (3) No distribution may be made if, after giving it effect, any of the following would occur:

180.0640(3)(a) (a) The corporation would not be able to pay its debts as they become due in the usual course of business.

180.0640(3)(b) (b) The corporation’s total assets would be less than the sum of its total liabilities plus, unless the articles of incorporation permit otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

180.0640(4) (4) The board of directors may base a determination that sub. (3) does not prohibit a distribution on financial statements and other financial data prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

180.0640(5) (5) Except as provided in sub. (7), the effect of a distribution for purposes of sub. (3) is measured as of the following dates:

180.0640(5)(a) (a) In the case of distribution by purchase, redemption or other acquisition of the corporation’s shares, as of the earlier of the following:

180.0640(5)(a)1. 1. The date on which money or other property is transferred or debt is incurred by the corporation.

180.0640(5)(a)2. 2. The date on which the shareholder ceases to be a shareholder with respect to the acquired shares.