183.0607(4)
(4) A limited liability company's indebtedness to a member incurred by reason of a distribution made in accordance with this section is at parity with the limited liability company's indebtedness to its general, unsecured creditors, except to the extent subordinated by written agreement. This subsection does not affect the validity or priority of a security interest in a limited liability company's property that is created to secure the indebtedness to the member.
183.0607(5)
(5) Indebtedness of a limited liability company, including indebtedness issued as a distribution, is not considered a liability for purposes of a determination under
sub. (1) if the terms of the indebtedness provide that payment of principal and interest is to be made only if, and to the extent that, payment of a distribution to members could then be made under this section. If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date on which the payment is made.
183.0607 History
History: 1993 a. 112.
183.0608
183.0608
Liability for wrongful distribution. 183.0608(1)
(1) Except as provided in
sub. (3), a member or manager who votes for or assents to a distribution in violation of
s. 183.0607 or of an operating agreement is personally liable to the limited liability company for the amount of the distribution that exceeds what could have been distributed without violating
s. 183.0607 or the operating agreement.
183.0608(2)
(2) Each member or manager who is liable under
sub. (1) for a wrongful distribution is entitled to contribution from all of the following persons:
183.0608(2)(a)
(a) Every other member or manager who could be held liable under
sub. (1) for the wrongful distribution.
183.0608(2)(b)
(b) Every member for the amount that the member received knowing that the distribution was made in violation of
s. 183.0607 or of an operating agreement.
183.0608(3)
(3) A proceeding under this section is barred unless it is brought within 2 years after the date on which the effect of the distribution was measured under
s. 183.0607.
183.0608 History
History: 1993 a. 112.
OWNERSHIP AND TRANSFER OF
PROPERTY
183.0701
183.0701
Ownership of limited liability company property. 183.0701(1)(1) All property originally transferred to or subsequently acquired by or on account of a limited liability company is property of the limited liability company and not of the members individually.
183.0701(2)
(2) Property acquired with limited liability company funds is presumed to be limited liability company property.
183.0701(3)
(3) Property may be acquired, held and conveyed in the name of a limited liability company. Any interest in real property may be acquired in the name of a limited liability company and title to any interest so acquired shall vest in the limited liability company rather than in the members individually.
183.0701 History
History: 1993 a. 112.
183.0702(1)
(1) Except as provided in
sub. (2), property of a limited liability company held in the name of the limited liability company may be transferred by an instrument of transfer executed by any member in the name of the limited liability company.
183.0702(2)
(2) If management of a limited liability company is vested in one or more managers, all of the following apply:
183.0702(2)(a)
(a) Title to property of the limited liability company that is held in the name of the limited liability company may be transferred by an instrument of transfer executed by any manager in the name of the limited liability company.
183.0702(2)(b)
(b) A member who is not a manager does not have authority, in the member's capacity as a member, to transfer title to property of the limited liability company.
183.0702 History
History: 1993 a. 112;
1995 a. 400.
183.0703
183.0703
Nature of limited liability company interest. A limited liability company interest is personal property.
183.0703 History
History: 1993 a. 112.
183.0704
183.0704
Assignment of limited liability company interest. 183.0704(1)(1) Unless otherwise provided in an operating agreement, all of the following apply:
183.0704(1)(a)
(a) A limited liability company interest is assignable in whole or in part.
183.0704(1)(b)
(b) An assignment of a limited liability company interest entitles the assignee to receive only the distributions and to share in the allocations of profits and losses to which the assignor would be entitled with respect to the assigned interest.
183.0704(1)(c)
(c) An assignment of a limited liability company interest does not dissolve the limited liability company.
183.0704(1)(d)
(d) Unless and until the assignee becomes a member of the limited liability company under
s. 183.0706, an assignment of a limited liability company interest does not entitle the assignee to participate in the management of the business of the limited liability company or to become or exercise any rights of a member nor does an assignment result in the assignee having liability as a member of the limited liability company as a result of the assignment.
183.0704(1)(e)
(e) Unless and until the assignee of a limited liability company interest becomes a member of the limited liability company under
s. 183.0706, the assignor continues to be a member and to have the power to exercise the rights of a member, subject to the members' right to remove the assignor under
s. 183.0802.
183.0704(1)(f)
(f) The assignor of a limited liability company interest is not released from any personal liability arising under this chapter as a member of the limited liability company solely as a result of the assignment.
183.0704(2)
(2) An operating agreement may provide that a member's limited liability company interest may be evidenced by a certificate of limited liability company interest issued by the limited liability company and may also provide for the assignment or transfer of any interest represented by the certificate.
183.0704(3)
(3) Unless otherwise provided in an operating agreement, the pledge of, or the granting of a security interest, lien or other encumbrance in or against any or all of a member's limited liability company interest is not an assignment and shall not cause the member to be an assignor or to cease to have the power to exercise any rights or powers of a member.
183.0704 History
History: 1993 a. 112.
183.0704 Annotation
When Does a Member's Interest in an LLC Become a Security? Briska. Wis. Law. Sept. 1994.
183.0705
183.0705
Rights of judgment creditor. On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the member's limited liability company interest with payment of the unsatisfied amount of the judgment. To the extent so charged, the judgment creditor has only the rights of an assignee of the member's limited liability company interest. This section does not deprive any member of the benefit of any exemption laws applicable to the limited liability company interest.
183.0705 History
History: 1993 a. 112.
183.0706
183.0706
Right of assignee to become a member. 183.0706(1)(1) Unless otherwise provided in an operating agreement, an assignee of a limited liability company interest may become a member only if the other members unanimously consent. The consent of a member may be evidenced in any manner specified in an operating agreement, but in the absence of such specification, consent shall be evidenced by a written instrument that is dated and signed by the member.
183.0706(2)(a)(a) An assignee of a limited liability company interest who becomes a member has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of the assignor under an operating agreement and this chapter. An assignee who becomes a member is liable for any of the assignor's obligations under an operating agreement and this chapter to the limited liability company.
183.0706(2)(b)
(b) Notwithstanding
par. (a), an assignee is not obligated for liabilities of which the assignee had no knowledge at the time the assignee became a member or which could not be ascertained from any written records of the limited liability company kept under
s. 183.0405 (1).
183.0706(3)
(3) Unless otherwise provided in an operating agreement, an assignor of a limited liability company interest is not released from any liability of the assignor to the limited liability company under this chapter without the written consent of all of the members, whether or not the assignee becomes a member.
183.0706 History
History: 1993 a. 112;
1995 a. 400.
183.0707
183.0707
Powers of legal representative. If a member who is an individual dies or is adjudged to be incompetent to manage his or her person or estate by a court of competent jurisdiction, the member's personal representative, administrator, guardian, conservator, trustee or other legal representative shall have all of the rights of an assignee of the member's interest. If a member is a corporation, trust, partnership, limited liability company or other entity and is dissolved or terminated, its legal representative or successor shall have all of the rights of an assignee of the member's interest.
183.0707 History
History: 1993 a. 112;
1995 a. 400.
ADMISSION AND DISSOCIATION OF MEMBERS
183.0801(1)
(1) In connection with the formation of a limited liability company, a person acquiring a limited liability company interest is admitted as a member of the limited liability company upon the later of the following to occur:
183.0801(1)(b)
(b) The time provided in and upon compliance with an operating agreement or, if the limited liability company does not have an operating agreement or an operating agreement does not so provide, on the effective date of the person's admission as reflected in the records of the limited liability company maintained under
s. 183.0405 (1).
183.0801(2)
(2) After the formation of a limited liability company, a person acquiring a limited liability company interest is admitted as a member of the limited liability company:
183.0801(2)(a)
(a) In the case of a person acquiring a limited liability company interest directly from the limited liability company, at the time provided in and upon compliance with an operating agreement or, if the limited liability company does not have an operating agreement or an operating agreement does not so provide, upon the consent of all members and on the effective date of the person's admission as reflected in the records of the limited liability company maintained under
s. 183.0405 (1).
183.0801(2)(b)
(b) In the case of an assignee of a limited liability company interest, as provided in
s. 183.0706 (1) and at the time provided in and upon compliance with an operating agreement or, if the limited liability company does not have an operating agreement or an operating agreement does not so provide, on the effective date of the person's admission as reflected in the records of the limited liability company maintained under
s. 183.0405 (1).
183.0801 History
History: 1993 a. 112;
1995 a. 400.
183.0802
183.0802
Events of dissociation. 183.0802(1)
(1) A person ceases to be a member of a limited liability company upon the occurrence of, and at the time of, any of the following events:
183.0802(1)(a)
(a) The member withdraws by voluntary act from the limited liability company under
sub. (3).
183.0802(1)(b)
(b) The member assigns all of the member's interest in the limited liability company and one or more assignees are admitted as members under
s. 183.0706 (1).
183.0802(1)(c)
(c) The member is removed as a member in accordance with an operating agreement.
183.0802(1)(cm)
(cm) Unless otherwise provided in an operating agreement, the member assigns all of the member's interest in the limited liability company if the member is removed by the affirmative vote of the members as determined under
s. 183.0404 (1) (a), except that the vote of the member who assigns all of the member's interest shall be excluded.
183.0802(1)(d)
(d) Unless otherwise provided in an operating agreement or by the written consent of all members at the time of the event, the member does any of the following:
183.0802(1)(d)3.
3. Becomes the subject of an order for relief under the federal bankruptcy laws.
183.0802(1)(d)4.
4. Files a petition or answer seeking for the member any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation.
183.0802(1)(d)5.
5. Files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the member in any proceeding under
subd. 4.
183.0802(1)(d)6.
6. Seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the member or of all or any substantial part of the member's properties.
183.0802(1)(e)
(e) Unless otherwise provided in an operating agreement or by the written consent of all members:
183.0802(1)(e)1.
1. At the expiration of 120 days after the commencement of any involuntary proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, if the proceeding has not been dismissed.
183.0802(1)(e)2.
2. At the expiration of 120 days after the appointment without the member's consent or acquiescence of a trustee, receiver or liquidator of the member or of all or any substantial part of the member's properties, if the appointment is not vacated or stayed, or at the expiration of 120 days after the expiration of any stay, if the appointment is not vacated.
183.0802(1)(f)
(f) Unless otherwise provided in an operating agreement or by the written consent of all members, if the member is an individual:
183.0802(1)(f)2.
2. The entry of an order by a court of competent jurisdiction adjudicating the member incompetent to manage the member's person or estate.
183.0802(1)(g)
(g) Unless otherwise provided in an operating agreement or by the written consent of all members at the time, if the member is a trust or is acting as a member by virtue of being a trustee of a trust, the termination of the trust, but not merely the substitution of a new trustee.
183.0802(1)(h)
(h) Unless otherwise provided in an operating agreement or by the written consent of all members at the time, if the member is a separate domestic or foreign limited liability company, the dissolution and commencement of winding up of the separate domestic or foreign limited liability company.
183.0802(1)(i)
(i) Unless otherwise provided in an operating agreement or by the written consent of all members at the time, if the member is a corporation, the filing of articles of dissolution for the corporation or the revocation of its charter and the lapse of the time provided by the laws of the state of incorporation without a reinstatement of its charter.
183.0802(1)(j)
(j) Unless otherwise provided in an operating agreement or by the written consent of all members at the time, if the member is an estate, the distribution by the fiduciary of the estate's entire interest in the limited liability company.
183.0802(1)(k)
(k) Unless otherwise provided in an operating agreement or by the written consent of all members at the time, if the member is a partnership or other entity not described under
pars. (g) to
(j), the dissolution of the partnership or entity.
183.0802(2)
(2) The members may provide in an operating agreement for other events the occurrence of which result in a person ceasing to be a member of the limited liability company.
183.0802(3)(a)(a) Except as provided in
par. (b), unless an operating agreement provides that a member does not have the power to withdraw by voluntary act from a limited liability company, the member may do so at any time by giving written notice to the other members, or on any other terms as are provided in an operating agreement. If the member has the power to withdraw but the withdrawal is a breach of an operating agreement or the withdrawal occurs as a result of otherwise wrongful conduct of the member, the limited liability company may recover from the withdrawing member damages for breach of the operating agreement or as a result of the wrongful conduct and may offset the damages against the amount otherwise distributable to the member, in addition to pursuing any remedies provided for in an operating agreement or otherwise available under applicable law. Unless otherwise provided in an operating agreement, in the case of a limited liability company for a definite term or particular undertaking, a withdrawal by a member before the expiration of that term or completion of that undertaking is a breach of the operating agreement.
183.0802(3)(b)
(b) If a member acquired an interest in a limited liability company for no or nominal consideration, the member may withdraw from the limited liability company only in accordance with the operating agreement and only at the time or upon the occurrence of an event specified in the operating agreement. If the operating agreement does not specify the time or the event upon the occurrence of which the member may withdraw, a member who acquired an interest in the limited liability company for no or nominal consideration may not withdraw prior to the time for the dissolution and commencement of winding up of the limited liability company without the written consent of all members of the limited liability company.
DISSOLUTION
