183.0304(2)
(2) Notwithstanding
sub. (1), nothing in this chapter shall preclude a court from ignoring the limited liability company entity under principles of common law of this state that are similar to those applicable to business corporations and shareholders in this state and under circumstances that are not inconsistent with the purposes of this chapter.
183.0304 History
History: 1993 a. 112;
1995 a. 400.
183.0304 Annotation
Personal Liability for Corporate Debt. Kelley. Wis. Law. Oct. 1994.
183.0305
183.0305
Parties to actions. A member of a limited liability company is not a proper party to a proceeding by or against a limited liability company, solely by reason of being a member of the limited liability company, except if any of the following situations exists:
183.0305(1)
(1) The object of the proceeding is to enforce a member's right against or liability to the limited liability company.
183.0305 History
History: 1993 a. 112.
RIGHTS AND DUTIES OF MEMBERS AND MANAGERS
183.0401(1)(1) Unless the articles of organization vest management of a limited liability company in one or more managers, management of the limited liability company shall be vested in the members, subject to any provision in an operating agreement or this chapter restricting or enlarging the management rights and duties of any member or group of members.
183.0401(2)
(2) If the articles of organization vest management of a limited liability company in one or more managers, management of the business or affairs of the limited liability company shall be vested in the manager or managers, subject to any provisions in an operating agreement or this chapter restricting or enlarging the management rights and duties of any manager or group of managers. Unless otherwise provided in an operating agreement, the manager or managers:
183.0401(2)(a)
(a) Shall be designated, appointed, elected, removed or replaced by a vote of the members that meets the requirements under
s. 183.0404 (1) (a).
183.0401(2)(b)
(b) Need not be members of the limited liability company or individuals.
183.0401(2)(c)
(c) Shall hold office until a successor is elected and qualified, or until prior death, resignation or removal.
183.0401 History
History: 1993 a. 112;
1995 a. 400.
183.0402
183.0402
Duties of managers and members. Unless otherwise provided in an operating agreement:
183.0402(1)
(1) No member or manager shall act or fail to act in a manner that constitutes any of the following:
183.0402(1)(a)
(a) A wilful failure to deal fairly with the limited liability company or its members in connection with a matter in which the member or manager has a material conflict of interest.
183.0402(1)(b)
(b) A violation of criminal law, unless the member or manager had reasonable cause to believe that the person's conduct was lawful or no reasonable cause to believe that the conduct was unlawful.
183.0402(1)(c)
(c) A transaction from which the member or manager derived an improper personal profit.
183.0402(2)
(2) Every member and manager shall account to the limited liability company and hold as trustee for it any improper personal profit derived by that member or manager without the consent of a majority of the disinterested members or managers, or other persons participating in the management of the limited liability company, from any of the following:
183.0402(2)(a)
(a) A transaction connected with the organization, conduct or winding up of the limited liability company.
183.0402(2)(b)
(b) A use by a member or manager of the property of a limited liability company, including confidential or proprietary information or other matters entrusted to the person as a result of the person's status as member or manager.
183.0402(3)
(3) An operating agreement may impose duties on its members and managers that are in addition to those provided under
sub. (1).
183.0402 History
History: 1993 a. 112;
1995 a. 400.
183.0403
183.0403
Limitation of liability and indemnification of members and managers. 183.0403(1)(b)
(b) "Liabilities" include the obligation to pay a judgment, settlement, penalty, assessment, forfeiture or fine, including an excise tax assessed with respect to an employe benefit plan.
183.0403(2)
(2) A limited liability company shall indemnify or allow reasonable expenses to and pay liabilities of each member and, if management of the limited liability company is vested in one or more managers, of each manager, incurred with respect to a proceeding if that member or manager was a party to the proceeding in the capacity of a member or manager.
183.0403(3)
(3) An operating agreement may alter or provide additional rights to indemnification of liabilities or allowance of expenses to members and managers.
183.0403(4)
(4) Notwithstanding
subs. (2) and
(3), a limited liability company may not indemnify a member or manager for liabilities or permit a member or manager to retain any allowance for expenses provided under those subsections unless it is determined by or on behalf of the limited liability company that the liabilities or expenses did not result from the member's or manager's breach or failure to perform a duty to the limited liability company as provided in
s. 183.0402.
183.0403(5)
(5) Unless otherwise provided in an operating agreement, all of the following apply:
183.0403(5)(a)
(a) A member or manager who is a party to a proceeding because the person is a member or manager shall be conclusively presumed not to have breached or failed to perform a duty to the limited liability company to the extent that the member or manager has been successful on the merits or otherwise in the defense of the proceeding.
183.0403(5)(b)
(b) In situations not described in
par. (a), the determination of whether a member or manager, who is a party to a proceeding because the person is a member or manager, has breached or failed to perform a duty to the limited liability company, or whether the liability or expenses resulted from the breach or failure, shall be made by the vote of the members that meets the requirements under
s. 183.0404 (1) (a), except that the vote of any member who is a party to the same or a related proceeding shall be excluded unless all members are parties.
183.0403 History
History: 1993 a. 112;
1995 a. 400.
183.0404(1)(1) Unless otherwise provided in an operating agreement or this chapter, and subject to
sub. (2), an affirmative vote, approval or consent as follows shall be required to decide any matter connected with the business of a limited liability company:
183.0404(1)(a)
(a) If management of a limited liability company is reserved to the members, an affirmative vote, approval or consent by members whose interests in the limited liability company represent contributions to the limited liability company of more than 50% of the value, as stated in the records required to be kept under
s. 183.0405 (1), of the total contributions made to the limited liability company.
183.0404(1)(b)
(b) If the management of a limited liability company is vested in one or more managers, the affirmative vote, consent or approval of more than 50% of the managers.
183.0404(2)
(2) Unless otherwise provided in an operating agreement or this chapter, the affirmative vote, approval or consent of all members shall be required to do any of the following:
183.0404(2)(b)
(b) Issue an interest in a limited liability company to any person.
183.0404(2)(d)
(d) Allow a limited liability company to accept any additional contribution from a member.
183.0404(2)(e)
(e) Allow a partial redemption of an interest in a limited liability company under
s. 183.0603.
183.0404(2)(g)
(g) Authorize a manager, member or other person to do any act on behalf of the limited liability company that contravenes an operating agreement, including any provision of the operating agreement that expressly limits the purpose or business of the limited liability company or the conduct of the business of the limited liability company.
183.0404(3)
(3) Unless otherwise provided in an operating agreement, if any member is precluded from voting with respect to a given matter, then the value of the contribution represented by the interest in the limited liability company with respect to which the member would otherwise have been entitled to vote shall be excluded from the total contributions made to the limited liability company for purposes of determining the 50% threshold under
sub. (1) (a) for that matter.
183.0404(4)
(4) Unless otherwise provided in an operating agreement or this chapter, if all or part of an interest in the limited liability company is assigned under
s. 183.0704, all of the following apply:
183.0404(4)(a)
(a) The assigning member shall be considered the owner of the assigned interest for purposes of determining the 50% threshold under
sub. (1) (a) until the assignee of the interest in the limited liability company becomes a member under
s. 183.0706.
183.0404(4)(b)
(b) If the assigning member ceases to be a member of the limited liability company, and until the assignee of the interest in the limited liability company becomes a member under
s. 183.0706, the contribution represented by the assigned interest shall be excluded from the total contributions made to the limited liability company for purposes of determining the 50% threshold under
sub. (1) (a).
183.0404 History
History: 1993 a. 112.
183.0405
183.0405
Records and information. 183.0405(1)
(1) A limited liability company shall keep at its principal place of business all of the following:
183.0405(1)(a)
(a) A list, kept in alphabetical order, of each past and present member and, if applicable, manager. The list shall include the full name and last-known mailing address of each member or manager, the date on which the person became a member or manager and the date, if applicable, on which the person ceased to be a member or manager.
183.0405(1)(b)
(b) A copy of the articles of organization and all amendments to the articles.
183.0405(1)(c)
(c) Copies of the limited liability company's federal, state and local income or franchise tax returns and financial statements, if any, for the 4 most recent years or, if such returns and statements are not prepared for any reason, copies of the information and statements provided to, or which should have been provided to, the members to enable them to prepare their federal, state and local income tax returns for the 4 most recent years.
183.0405(1)(d)
(d) Copies of all operating agreements, all amendments to operating agreements and any operating agreements no longer in effect.
183.0405(1)(e)
(e) Unless already set forth in an operating agreement, written records containing all of the following information:
183.0405(1)(e)2.
2. Records of the times at which or the events upon which any additional contributions are agreed to be made by each member.
183.0405(1)(e)3.
3. Any events upon which the limited liability company is to be dissolved and its business wound up.
183.0405(2)
(2) Upon reasonable request, a member may, at the member's own expense, inspect and copy during ordinary business hours any limited liability company record required to be kept under
sub. (1) and, unless otherwise provided in an operating agreement, any other limited liability company record, wherever the record is located.
183.0405(3)
(3) Members or, if the management of the limited liability company is vested in one or more managers, managers shall provide, to the extent that the circumstances render it just and reasonable, true and full information of all things affecting the members to any member or to the legal representative of any member upon reasonable request of the member or the legal representative.
183.0405(4)
(4) Failure of a limited liability company to keep or maintain any of the records or information required under this section shall not be grounds for imposing liability on any person for the debts and obligations of the limited liability company.
183.0405 History
History: 1993 a. 112;
1995 a. 400.
FINANCE
183.0501(1)(1) A member's contributions to a limited liability company may consist of cash, property or services rendered, or promissory notes or other written obligations to provide cash or property or to perform services.
183.0501(2)
(2) The value of a member's contribution shall be determined in the manner provided in an operating agreement. If the members do not enter into an operating agreement or if an operating agreement does not so provide, the value of a contribution shall be approved by the members under
s. 183.0404 (2) (f). That value shall be properly reflected in the records and information kept by the limited liability company under
s. 183.0405 (1) and the value shall be binding and conclusive on the limited liability company and its members.
183.0501 History
History: 1993 a. 112.
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.
