178.32
178.32
Right to wind up. Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership or the legal representative of the last surviving partner, not bankrupt, has the right to wind up the partnership affairs; provided, however, that any partner, the partner's legal representative, or the partner's assignee, upon cause shown, may obtain winding up by the court.
178.32 History
History: 1993 a. 482.
178.33
178.33
Application of partnership property on dissolution. 178.33(1)(1) When dissolution is caused in any way, except in contravention of the partnership agreement, each partner, as against the other copartners and all persons claiming through them in respect of their interests in the partnership, unless otherwise agreed, may have the partnership property applied to discharge its liabilities, and the surplus applied to pay in cash the net amount owing to the respective partners. But if dissolution is caused by expulsion of a partner, bona fide under the partnership agreement, and if the expelled partner is discharged from all partnership liabilities, either by payment or agreement under
s. 178.31 (2) the expelled partner shall receive in cash only the net amount due the expelled partner from the partnership.
178.33(2)
(2) When dissolution is caused in contravention of the partnership agreement the rights of the partners shall be as follows:
178.33(2)(a)
(a) Each partner who has not caused dissolution wrongfully shall have all the rights specified in
sub. (1), and the right, as against each partner who has caused the dissolution wrongfully, to damages for breach of the agreement.
178.33(2)(b)
(b) The partners who have not caused the dissolution wrongfully, if they all desire to continue the business in the same name, either by themselves or jointly with others, may do so, during the agreed term for the partnership and for that purpose may possess the partnership property, provided they secure the payment by bond approved by the court, or pay to any partner who has caused the dissolution wrongfully, the value of his or her interest in the partnership at the dissolution, less any damages recoverable under
par. (a), and in like manner indemnify him or her against all present or future partnership liabilities.
178.33(2)(c)
(c) A partner who has caused the dissolution wrongfully shall have, if the business is not continued under the provisions of
par. (b), all the rights of a partner under
sub. (1) subject to the provisions of
par. (a), and, if the business is continued under
par. (b), the right as against the other partners and all claiming through them in respect of their interests in the partnership, to have the value of his or her interest in the partnership, less any damages caused to the other partners by the dissolution, ascertained and paid to him or her in cash, or the payment secured by bond approved by the court, and to be released from all existing liabilities of the partnership; but in ascertaining the value of the partner's interest the value of the goodwill of the business shall not be considered.
178.33 History
History: 1993 a. 482;
1997 a. 254.
178.33 Annotation
A partner who had not wrongfully dissolved the partnership had a right under sub. (1) to force a sale of assets, in the absence of a contrary agreement. Dreifuerst v. Dreifuerst,
90 Wis. 2d 566,
280 N.W.2d 335 (Ct. App. 1979).
178.33 Annotation
A business run for 8 years by a surviving partner was winding up under s. 178.33 (1), not continuing under s. 178.37. Trust Estate of Schaefer,
91 Wis. 2d 360,
283 N.W.2d 410 (Ct. App. 1979).
178.33 Annotation
A deceased or withdrawing partner has no claim to post-dissolution profits that are are related to the skill and services of the remaining partners. Fees from work in progress at the time of dissolution constitute partnership assets allocated to each partner according to the partnership formula without any additional compensation to the partner who performed the work. Gull v. Van Epps,
185 Wis. 2d 609,
517 N.W.2d 531 (Ct. App. 1994).
178.34
178.34
Adjustment of rights on dissolution for fraud. If a partnership contract is rescinded on the ground of the fraud or misrepresentation of one of the parties thereto, the party entitled to rescind is, without prejudice to any other right, entitled to all of the following:
178.34(1)
(1) A lien on, or right of retention of, the surplus of the partnership property after satisfying the partnership liabilities to third persons for any sum of money paid by the party entitled to rescind for the purchase of an interest in the partnership and for any capital or advances contributed by the party entitled to rescind.
178.34(2)
(2) To stand, after all liabilities to third persons have been satisfied, in the place of the creditors of the partnership for any payments made by the party entitled to rescind in respect of the partnership liabilities.
178.34(3)
(3) Indemnification by the person guilty of the fraud or making the representation against all debts and liabilities of the partnership.
178.34 History
History: 1993 a. 482.
178.35
178.35
Settlement and distribution on dissolution. In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary:
178.35(1)
(1) The assets of the partnership are all of the following:
178.35(2)
(2) The liabilities of the partnership shall rank in order of payment, as follows:
178.35(2)(a)
(a) Those owing to creditors other than partners.
178.35(2)(b)
(b) Those owing to partners other than for capital and profits.
178.35(2)(c)
(c) Those owing to partners in respect of capital.
178.35(2)(d)
(d) Those owing to partners in respect of profits.
178.35(3)
(3) The assets shall be applied in the order of their declaration in
sub. (1) to the satisfaction of the liabilities.
178.35(4)
(4) Except as provided in
s. 178.12 (2), the partners shall contribute, as provided by
s. 178.15 (1), the amount necessary to satisfy liabilities, and if any, but not all, of the partners are insolvent, or, not being subject to process, refuse to contribute, the other partners shall contribute their share of the liabilities, and, in the relative proportions in which they share the profits, the additional amount necessary to pay the liabilities.
178.35(5)
(5) An assignee for the benefit of creditors or any person appointed by the court shall have the right to enforce the contributions specified in
sub. (4).
178.35(6)
(6) Any partner or the partner's legal representative shall have the right to enforce the contributions specified in
sub. (4) to the extent of the amount which the partner has paid in excess of the partner's share of the liability.
178.35(7)
(7) The individual property of a deceased partner shall be liable for the contributions specified in
sub. (4).
178.35(8)
(8) When partnership property and the individual properties of the partners are in possession of a court for distribution, partnership creditors shall have priority on partnership property and separate creditors on individual property, saving the rights of lien or secured creditors as heretofore.
178.35(9)
(9) If a partner has become bankrupt or the partner's estate is insolvent, the claims against the partner's separate property shall rank in the following order:
178.35(9)(c)
(c) Those owing to partners by way of contribution.
178.35 History
History: 1993 a. 482;
1995 a. 97.
178.36
178.36
Rights and liabilities on continuing business after dissolution without liquidation. 178.36(1)
(1) If any new partner is admitted into an existing partnership, or if any partner retires and assigns, or the representative of the deceased partner assigns, that partner's rights in partnership property to 2 or more of the partners, or to one or more of the partners and one or more 3rd persons and if the business is continued without liquidation of the partnership affairs, the creditors of the first or dissolved partnership are also creditors of the partnership so continuing the business.
178.36(2)
(2) When all but one partner retire and assign (or the representative of a deceased partner assigns) their rights in partnership property to the remaining partner, who continues the business without liquidation of partnership affairs, either alone or with others, creditors of the dissolved partnership are also creditors of the person or partnership so continuing the business.
178.36(3)
(3) If any partner retires or dies and the business of the dissolved partnership is continued as set forth in
subs. (1) and
(2), with the consent of the retired partners or the representative of the deceased partner, but without any assignment of the retired or deceased partner's right in partnership property, rights of creditors of the dissolved partnership and of the creditors of the person or partnership continuing the business shall be as if such assignment had been made.
178.36(4)
(4) When all the partners or their representatives assign their rights in partnership property to one or more third persons who promise to pay the debts and who continue the business of the dissolved partnership, creditors of the dissolved partnership are also creditors of the person or partnership continuing the business.
178.36(5)
(5) When any partner wrongfully causes a dissolution and the remaining partners continue the business under the provisions of
s. 178.33 (2) (b), either alone or with others, and without liquidation of the partnership affairs, creditors of the dissolved partnership are also creditors of the person or partnership continuing the business.
178.36(6)
(6) When a partner is expelled and the remaining partners continue the business either alone or with others, without liquidation of the partnership affairs, creditors of the dissolved partnership are also creditors of the person or partnership continuing the business.
178.36(7)
(7) The liability of a 3rd person becoming a partner in the partnership continuing the business, under this section to the creditors of the dissolved partnership shall be satisfied out of partnership property only.
178.36(8)
(8) If the business of a partnership after dissolution is continued under any conditions set forth in this section, the creditors of the dissolved partnership, as against the separate creditors of the retiring or deceased partner or the representative of the deceased partner, have a prior right to any claim of the retired partner or the representative of the deceased partner against the person or partnership continuing the business, on account of the retired or deceased partner's interest in the dissolved partnership or on account of any consideration promised for such interest or for the retired or deceased partner's right in partnership property.
178.36(9)
(9) Nothing in this section shall be held to modify any right of creditors to set aside any assignment on the ground of fraud.
178.36(10)
(10) The use by the person or partnership continuing the business of the partnership name, or the name of a deceased partner as part thereof, shall not of itself make the individual property of the deceased partner liable for any debts contracted by such person or partnership.
178.36 History
History: 1993 a. 482.
178.36 Annotation
A business run for 8 years by a surviving partner was winding up under s. 178.33 (1), not continuing under s. 178.37. Trust Estate of Schaefer,
91 Wis. 2d 360,
283 N.W.2d 410 (Ct. App. 1979).
178.37
178.37
Rights of retiring or deceased partner. If any partner retires or dies, and the business is continued under any of the conditions set forth in
s. 178.33 (2) (b) or
178.36 (1),
(2),
(3),
(5) and
(6), without any settlement of accounts as between the retired or deceased partner or the deceased partner's estate and the person or partnership continuing the business, unless otherwise agreed, the retired partner or the deceased partner's legal representative as against such persons or partnership may have the value of the retired or deceased partner's interest at the date of dissolution ascertained, and shall receive as an ordinary creditor an amount equal to the value of the retired or deceased partner's interest in the dissolved partnership with interest, or, at the option of the retired partner or the deceased partner's legal representative, in lieu of interest, the profits attributable to the use of the retired or deceased partner's right in the property of the dissolved partnership; provided that the creditors of the dissolved partnership as against the separate creditors, or the representative of the retired or deceased partner, shall have priority on any claim arising under this section, as provided by
s. 178.36 (8).
178.37 History
History: 1993 a. 482.
178.37 Annotation
A personal representative who is also a partner may not deprive a deceased partner's estate of its rights to interest or profits under this section. Hence, a personal representative possessed no authority to waive the estate's rights under the statute, and the personal representative must choose one of the options provided. McDonald v. McDonald,
68 Wis. 2d 292,
228 N.W.2d 727 (1975).
178.37 Annotation
When a legal representative has failed or refused to act, an heir may maintain an action to recover assets for the benefit of an estate. Schaefer v. Schaefer,
89 Wis. 2d 323,
278 N.W.2d 332 (Ct. App. 1979).
178.37 Annotation
A business run for 8 years by a surviving partner was winding up under s. 178.33 (1), not continuing under s. 178.37. Trust Estate of Schaefer,
91 Wis. 2d 360,
283 N.W.2d 410 (Ct. App. 1979).
178.37 Annotation
A retiring partner was entitled to a share of partnership profits from the day of dissolution, less substantial labor and management services made by a continuing partner. Lange v. Bartlett,
121 Wis. 2d 599,
360 N.W.2d 702 (Ct. App. 1984).
178.37 Annotation
A deceased or withdrawing partner has no claim to post-dissolution profits that are related to the skill and services of the remaining partners. Fees from work in progress at the time of dissolution constitute partnership assets allocated to each partner according to the partnership formula without any additional compensation to the partner who performs the work. Gull v. Van Epps,
185 Wis. 2d 609,
517 N.W.2d 531 (Ct. App. 1994).
178.38
178.38
Right to accounting accrues on dissolution. The right to an account of his or her interest shall accrue to any partner, or his or her legal representative, as against the winding up partners or the surviving partners or the person or partnership continuing the business, at the date of dissolution, in the absence of any agreement to the contrary.
178.38 History
History: 1993 a. 482.
178.39
178.39
Recording of partnership agreements; amendments; articles of dissolution. Partnership agreements, amendments thereof and agreements in dissolution thereof may be recorded in the office of the register of deeds of the county in which the principal place of business of such partnership is located.
178.39 History
History: 1993 a. 301.
178.40
178.40
Registration of limited liability partnerships. 178.40(1)(1) To become a registered limited liability partnership or a foreign registered limited liability partnership, a partnership shall file with the department the fee specified in
s. 178.48 and a registration statement that includes all of the following:
178.40(1)(b)
(b) If a foreign registered limited liability partnership, the name of the state or country under whose law it is formed.
178.40(1)(c)
(c) The mailing address of its principal office.
178.40(1)(d)
(d) The street address of the registered office and the name and address of the registered agent at that office for service of process.
178.40(1)(e)
(e) A statement that the partnership registers as a registered limited liability partnership or a foreign registered limited liability partnership.
178.40(1)(f)
(f) Any other information that the partnership determines to include.
178.40(2)
(2) A registered limited liability partnership or a foreign registered limited liability partnership may amend its registration statement at any time by filing with the department a statement that includes all of the following:
178.40(2)(b)
(b) If a foreign registered limited liability partnership, the name of the state or country under whose law it is formed.
178.40(2)(c)
(c) The date of the filing of the original registration statement.
178.40(2)(d)
(d) The amendment to the registration statement.
178.40(3)
(3) A registered limited liability partnership or a foreign registered limited liability partnership may terminate its registration by filing with the department the fee specified in
s. 178.48 and a written notice of withdrawal that includes all of the following:
178.40(3)(b)
(b) If a foreign registered limited liability partnership, the name of the state or country under whose law it is formed.
178.40(3)(c)
(c) A statement that the partnership withdraws its registration.
178.40 History
History: 1995 a. 97.
178.40 Annotation
Wisconsin's LLP Law. Fahrenbach & Klinker. Wis. Law. March 1996.
178.41
178.41
Effect of registration. 178.41(1)
(1) A registration of a limited liability partnership is effective when the registration statement takes effect under
s. 178.49.
178.41(1)(a)
(a) The department's filing of a registration statement is conclusive proof that the partnership is registered as a registered limited liability partnership or a foreign registered limited liability partnership under this chapter, except in a proceeding by the state to revoke the registration, and is notice of all other facts set forth in the registration statement.
178.41(1)(b)
(b) The department's filing of a registration statement of a foreign registered limited liability partnership under
s. 178.40 constitutes its certificate of authority to transact business in this state and is notice of all other facts set forth in the registration statement.
178.41(2)(a)(a) A partnership that registers as a registered limited liability partnership is for all purposes the same partnership that existed before the registration and continues to be a partnership under the laws of this state.
178.41(2)(b)
(b) If a registered limited liability partnership or a foreign registered limited liability partnership dissolves for any reason and its business continues without winding up the partnership affairs and without liquidating or terminating the partnership, and so long as the partnership continues to comply with
s. 178.42, the registration of the registered limited liability partnership or the foreign registered limited liability partnership shall continue to be applicable to the partnership continuing the business, and the partnership shall not be required to file a new registration statement. The partnership continuing the business shall be considered to have filed any documents required or permitted under this chapter which were filed by the dissolved registered limited liability partnership or foreign registered limited liability partnership.
178.41(3)
(3) If a registered limited liability partnership or a foreign registered limited liability partnership dissolves for any reason and winds up its affairs, liquidates or terminates, the registration statement remains in effect as to the partnership and partners during the period of winding up and remains in effect as to the partners after liquidation or termination with respect to liabilities of the partnership incurred, assumed or arising before the effective date of liquidation or termination.
178.41(4)
(4) A partnership continues as a registered limited liability partnership or foreign registered limited liability partnership if there is substantial compliance with the requirements of this chapter. The status of a partnership as a registered limited liability partnership or foreign registered limited liability partnership and the liability of a partner of that registered limited liability partnership or foreign registered limited liability partnership shall not be adversely affected by errors or subsequent changes in the information stated in any filing under this chapter.
