180.1803
180.1803
Election. A corporation organized under this chapter and having 50 or fewer shareholders at the time of election may become a statutory close corporation by amending its articles of incorporation to include the statement required under
s. 180.1801. The amendment shall be approved by the holders of at least two-thirds of the votes of each class or series of shares of the corporation, voting as separate voting groups, whether or not otherwise entitled to vote on amendments. If the amendment is approved, a shareholder who did not vote in favor of the amendment is entitled to assert dissenters' rights under
ss. 180.1301 to
180.1331.
180.1803 History
History: 1989 a. 303.
180.1805
180.1805
Share transfer restrictions. No interest in shares of a statutory close corporation may be transferred without the written consent of all shareholders holding voting stock, unless the interest is transferred in any of the following circumstances:
180.1805(2)
(2) To the corporation or to any other holder of the same class or series of shares.
180.1805(3)
(3) To members of the shareholder's immediate family, or to a trust, all of whose beneficiaries are members of the holder's immediate family. In this subsection, "shareholder's immediate family" means the shareholder's spouse, parents, lineal descendants, including any adopted children and stepchildren, and the spouse of any lineal descendants, and brothers and sisters.
180.1805(4)
(4) To a personal representative on the death of a shareholder or to a trustee or receiver as the result of a bankruptcy, insolvency, dissolution or similar proceeding brought by or against a shareholder.
180.1805(5)
(5) By merger or share exchange that becomes effective under
ss. 180.1101 to
180.1107 or a share exchange of existing shares for other shares of a different class or series in the corporation.
180.1805(6)
(6) By a pledge as collateral for a loan that does not grant the pledgee any voting rights possessed by the pledgor.
180.1805(7)
(7) After termination of the corporation's status as a statutory close corporation.
180.1805(8)
(8) As otherwise provided in the corporation's articles of incorporation or in an agreement among shareholders under
s. 180.1823.
180.1805 History
History: 1989 a. 303;
1991 a. 16.
180.1807
180.1807
Transfer after corporation's first refusal. 180.1807(1)(1)
Notice of 3rd party offer. A person desiring to transfer shares in a transaction without the consent described in
s. 180.1805 (intro.) and that is not exempt under
s. 180.1805 (2) to
(8) shall obtain a written and signed offer from a 3rd party to purchase the shares for cash and shall deliver to the statutory close corporation written notice and a copy of the 3rd-party offer. The notice shall comply with
s. 180.0141 and shall state the number and kind of shares, the offering price, the other material terms of the offer and the name and address of the 3rd-party offeror. No transfer may be made to a 3rd party unless all of the following conditions are met:
180.1807(1)(a)
(a) The 3rd party is eligible to become a qualified shareholder under any federal or state tax statute that the corporation has elected to be subject to and the 3rd party agrees in writing not to take any action to terminate the election without the approval of the remaining shareholders.
180.1807(1)(b)
(b) The transfer to the 3rd party will not result in the imposition of a personal holding company tax on the corporation under
26 USC 541 or any similar state or federal penalty tax.
180.1807(2)(a)(a) The notice under
sub. (1) constitutes an offer to sell the shares to the statutory close corporation and other shareholders on the same terms as the 3rd-party offer. Within 20 days after the corporation receives the notice, the corporation shall give notice of a special meeting of shareholders, which shall be held within 60 days after the corporation received notice of the offer, for the purpose of determining whether to purchase all, but not less than all, of the offered shares. The notice shall comply with
s. 180.0141.
180.1807(2)(b)
(b) The offer must be approved by the affirmative vote of the holders of a majority of votes entitled to be cast at the meeting, excluding votes in respect of the shares covered by the offer.
180.1807(2)(c)
(c) With the consent of all of the shareholders entitled to vote for approval of the purchase, the corporation may allocate some or all of the shares to one or more shareholders or to other persons, except as provided in
par. (d).
180.1807(2)(d)1.1. If all shares are not accepted for purchase by the corporation, the remaining shares shall be offered to shareholders of the class or series being offered for sale in proportion to their ownership of shares of that class or series.
180.1807(2)(d)2.
2. If all shares are not accepted for purchase by shareholders under
subd. 1., the remaining shares shall be allocated among shareholders of the class or series being offered for sale who are willing to purchase the shares in proportion to their ownership of shares of that class or series after the acquisitions under
subd. 1.
180.1807(2)(d)3.
3. If all shares are not accepted for purchase by shareholders under
subds. 1. and
2., the remaining shares shall be offered to all other shareholders in proportion to their ownership of shares of the corporation.
180.1807(2)(d)4.
4. If all shares are not accepted for purchase by shareholders under
subd. 3., the remaining shares shall be allocated among shareholders who are willing to purchase the shares in proportion to their ownership of shares of the corporation before the acquisitions under
subd. 3.
180.1807(3)
(3) Acceptance. If the statutory close corporation accepts the shareholder's offer, it must deliver written notice of acceptance to the offering shareholder within 75 days after receipt of the shareholder's offer. The notice shall comply with
s. 180.0141. If sent by mail, the notice is timely if deposited in the mail before midnight of the 75th day following the day that the offer from the shareholder was received by the corporation.
180.1807(4)
(4) Transfer of shares to other than 3rd party. If a contract to sell is created under
sub. (3), the shareholder shall deliver duly endorsed certificates for all of the shares sold, or instruct the corporation in writing to transfer the shares if uncertificated, within 20 days after receipt of the notice of acceptance. Breach of any of the terms of the contract entitles the nonbreaching party to specific performance or any other remedy at law or equity for breach of a contract.
180.1807(5)
(5) Transfer of shares to 3rd party. If the offer to sell is not accepted under
subs. (2) and
(3), the shareholder may transfer to the 3rd-party offeror all, but not less than all, of the offered shares within 120 days after delivery of the notice under
sub. (1), in accordance with the terms of the offer as described in the notice under
sub. (1).
180.1807 History
History: 1989 a. 303.
180.1809
180.1809
Notice of statutory close corporation status. 180.1809(1)(a)(a) The following notice shall be noted conspicuously on each share certificate issued by a statutory close corporation: "The rights of shareholders in a statutory close corporation may differ materially from the rights of shareholders in other corporations. Copies of the articles of incorporation, the bylaws, if any, and shareholders' agreements or other documents, which may restrict transfers and affect voting and other rights, may be obtained without charge by a shareholder on written request to the corporation."
180.1809(1)(b)
(b) Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall deliver to the shareholders a written notice containing the information required by
par. (a). The notice shall comply with
s. 180.0141.
180.1809(2)
(2) A person claiming an interest in shares of a statutory close corporation that has given the written notice required by
sub. (1) is bound by the documents referred to in the notice. A person claiming an interest in shares of a corporation that has not given the written notice required by
sub. (1) is bound by any documents of which he or she, or any person through whom he or she claims, has knowledge or notice.
180.1809 History
History: 1989 a. 303.
180.1811
180.1811
Transfer of shares in breach of transfer restrictions. 180.1811(1)(1) An attempted transfer of shares in a statutory close corporation in violation of a transfer restriction that is binding on the transferee is ineffective.
180.1811(2)
(2) An attempted transfer of shares in a statutory close corporation in violation of a transfer restriction that is not binding on the transferee, either because the corporation fails to give written notice under
s. 180.1809 or because a court orders that the restriction prohibiting the transfer is unenforceable, gives the corporation the option to purchase the shares from the transferee for the same price paid and terms agreed to by the transferee. To exercise the option, the corporation shall give the transferee written notice that complies with
s. 180.0141 and shall make payment within 75 days after the shares are presented for registration in the transferee's name.
180.1811 History
History: 1989 a. 303.
180.1813
180.1813
Merger, share exchange and sale of assets. 180.1813(1)(a)(a) Notwithstanding
ss. 180.1103 (3) to
(5) and
180.1104, a plan of merger or share exchange that will terminate the status of the corporation as a statutory close corporation must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the statutory close corporation, voting as separate voting groups, whether or not the holders are otherwise entitled to vote on the plan.
180.1813(1)(b)
(b) Notwithstanding
ss. 180.1103 (3) to
(5) and
180.1104, a plan of merger under which the surviving corporation will become a statutory close corporation must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the surviving corporation, voting as separate voting groups, whether or not the holders are otherwise entitled to vote on the plan.
180.1813(1)(c)
(c) Notwithstanding
s. 180.1103 (3) and
(4), if under a plan of share exchange the corporation whose shares will be acquired in the share exchange will become a statutory close corporation, the share exchange must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the corporation whose shares will be acquired, voting as separate voting groups, whether or not the holders are otherwise entitled to vote on the plan.
180.1813(1)(d)
(d) If a plan of merger or share exchange is approved, a shareholder who did not vote in favor of the plan is entitled to assert dissenters' rights under
ss. 180.1301 to
180.1331.
180.1813(2)(a)(a) Notwithstanding
s. 180.1202 (3), a sale, lease, exchange or other disposition of all, or substantially all, of the property and assets, with or without the goodwill, of a statutory close corporation, if not made in the usual and regular course of its business, must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the corporation, voting as separate voting groups, whether or not the holders are otherwise entitled to vote on the transaction.
180.1813(2)(b)
(b) A shareholder who did not vote in favor of a disposition under this subsection is entitled to assert dissenters' rights under
ss. 180.1301 to
180.1331.
180.1813 History
History: 1989 a. 303.
180.1815
180.1815
Termination of statutory close corporation status. 180.1815(1)(1) A statutory close corporation ceases to be subject to
ss. 180.1801 to
180.1837 upon the effectiveness of articles of amendment deleting from its articles of incorporation the statement that it is a statutory close corporation. If the corporation has elected under
s. 180.1821 not to have a board of directors, the amendment shall also delete the statement in the articles of incorporation to that effect and shall specify the number, names and addresses of its directors.
180.1815(2)
(2) An amendment under
sub. (1) must be approved by the holders of two-thirds of the votes of each class or series of shares of the statutory close corporation, voting as separate voting groups, whether or not the holders are otherwise entitled to vote on amendments.
180.1815(3)
(3) If the amendment to terminate the corporation's status as a statutory close corporation is approved, a shareholder who did not vote in favor of the amendment is entitled to assert dissenters' rights under
ss. 180.1301 to
180.1331.
180.1815 History
History: 1989 a. 303.
180.1817
180.1817
Effect of termination of statutory close corporation status. 180.1817(1)(1) The termination of statutory close corporation status does not affect the rights of any shareholder or the corporation under an agreement or the corporation's articles of incorporation, except to the extent that the agreement or the articles of incorporation are invalid under this chapter.
180.1817(2)
(2) The corporation shall adopt bylaws if it has no bylaws on termination of statutory close corporation status.
180.1817 History
History: 1989 a. 303.
180.1819(1)(1) A compromise or forgiveness of a note or other obligation to transfer money or other property to a statutory close corporation in payment for shares is valid only if approved by all of the shareholders of the corporation, unless the articles of incorporation or a final judgment in a proceeding brought to enforce the obligation provides otherwise.
180.1819(2)
(2) In the absence of fraud, the judgment of the persons responsible for the issuance of shares as to the value of the consideration received for shares is conclusive.
180.1819 History
History: 1989 a. 303.
180.1821
180.1821
Election not to have a board of directors. 180.1821(1)(1) A statutory close corporation may operate without a board of directors if the articles of incorporation contain a statement to that effect. All of the following apply while a statement under this subsection is effective:
180.1821(1)(a)
(a) All corporate powers shall be exercised by, or under authority of, and the business and affairs of the corporation shall be managed under the direction of, the shareholders of the corporation, and all powers and duties conferred or imposed upon the board of directors by this chapter shall be exercised or performed by the shareholders.
180.1821(1)(b)
(b) Liability that would otherwise be imposed on the directors may not be imposed on a shareholder by virtue of any act or failure to act unless the shareholder was entitled to vote on the action.
180.1821(1)(c)
(c) A requirement that an instrument filed with a governmental agency contain a statement that a specified action has been taken by the board of directors is satisfied by a statement that the corporation is a statutory close corporation without a board of directors and that the action was duly approved by the shareholders.
180.1821(1)(d)
(d) The shareholders may appoint, by resolution, one or more shareholders to sign documents as "Designated Directors".
180.1821(1)(e)
(e) Except as provided in the articles of incorporation:
180.1821(1)(e)1.
1. An action requiring director approval or both director and shareholder approval is authorized if approved by the shareholders.
180.1821(1)(e)2.
2. An action requiring a vote of a majority or greater percentage of the board of directors is authorized if approved by the majority or greater percentage of the votes of shareholders entitled to vote on the action.
180.1821(2)(a)(a) An amendment to the articles of incorporation to operate without a board of directors must be approved by the holders of all of the shares of the statutory close corporation whether or not otherwise entitled to vote on amendments, or, if no shares have been issued, by all of the subscribers for shares, if any, or if none, by all of the incorporators.
180.1821(2)(b)
(b) An amendment to the articles of incorporation to delete the election must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the corporation, voting as separate voting groups, whether or not the holders are otherwise entitled to vote on amendments.
180.1821 History
History: 1989 a. 303.
180.1823
180.1823
Agreements among shareholders. 180.1823(1)
(1) The shareholders of a statutory close corporation may, by unanimous action, enter into one or more written agreements to regulate the exercise of the corporate powers and the management of the business and affairs of the corporation or the relations among the shareholders of the corporation. Except as otherwise provided in an agreement authorized by this section, the terms of the agreement are binding on all successors in interest.
180.1823(2)
(2) An agreement authorized by this section is valid and enforceable according to its terms even if the agreement does any of the following:
180.1823(2)(b)
(b) Restricts the discretion or powers of the board of directors or authorizes director proxies or weighted voting rights.
180.1823(2)(c)
(c) Has the effect of treating the statutory close corporation as a partnership.
180.1823(2)(d)
(d) Creates a relationship among the shareholders or between the shareholders and the corporation that would otherwise be appropriate only among partners.
180.1823(3)
(3) If the statutory close corporation has a board of directors, an agreement authorized by this section that restricts the discretion or powers of the directors relieves the directors of, and imposes upon each person in whom the directors' discretion or powers are vested, the liability for acts or omissions imposed by law upon directors, unless the agreement provides otherwise.
180.1823(4)
(4) An election not to have a board of directors in an agreement authorized by this section is not valid unless the articles of incorporation contain a statement to that effect adopted under
s. 180.1821.
180.1823(5)
(5) A shareholder agreement authorized by this section may not be amended except by the unanimous written consent of the shareholders, unless otherwise provided in the agreement.
180.1823(6)
(6) Any action permitted by this section to be taken by shareholders may be taken by the subscribers for shares of the statutory close corporation if no shares have been issued at the time of the agreement authorized by this section.
180.1823(7)
(7) This section does not prohibit any other agreement among 2 or more shareholders.
180.1823 History
History: 1989 a. 303.
