183.0204(1)(a)(a) A limited liability company is formed when the articles of organization become effective under
s. 183.0111.
183.0204(1)(b)
(b) The department's filing of the articles of organization is conclusive proof that the limited liability company is organized and formed under this chapter.
183.0204(1)(c)
(c) The status of a limited liability company as a limited liability company or as a foreign limited liability company registered to transact business in this state and the liability of any member of any such limited liability company is not adversely affected by errors or subsequent changes in any information stated in any filing made under this chapter.
183.0204(2)
(2) The department's filing of the articles of organization of a foreign limited liability company under
s. 183.1004 shall be considered the certificate of authority for that foreign limited liability company to transact business in this state and is notice of all other facts set forth in the registration statement.
183.0204(3)(a)(a) If a limited liability company or a foreign limited liability company that is registered to transact business in this state dissolves, but its business continues without winding up and without liquidating the company, the status of the limited liability company or foreign limited liability company before dissolution shall continue to be applicable to the company as it continues its business, and the company shall not be required to make any new filings under this chapter. Any filings made by such a limited liability company or foreign limited liability company before dissolution shall be considered to have been filed by the company while it continues its business.
183.0204(3)(b)
(b) If a limited liability company or a foreign limited liability company that is registered to transact business in this state dissolves, any filings made by the company before dissolution remain in effect as to the company and its members during the period of winding up and to the members during the period after the company's liquidation or termination with respect to the liabilities of the company.
183.0204 History
History: 1993 a. 112;
1995 a. 27;
2001 a. 44.
RELATIONS OF MEMBERS AND MANAGERS
TO PERSONS DEALING WITH THE
LIMITED LIABILITY COMPANY
183.0301
183.0301
Agency power of members and managers. 183.0301(1)(1) Except as provided in
sub. (2), all of the following apply:
183.0301(1)(a)
(a) Each member is an agent of the limited liability company, but not of the other members or any of them, for the purpose of its business.
183.0301(1)(b)
(b) The act of any member, including the execution in the name of the limited liability company of any instrument, for apparently carrying on in the ordinary course of business the business of the limited liability company binds the limited liability company unless the member has, in fact, no authority to act for the limited liability company in the particular matter, and the person with whom the member is dealing has knowledge that the member has no authority to act in the matter.
183.0301(2)
(2) If management of the limited liability company is vested in one or more managers, all of the following apply:
183.0301(2)(a)
(a) No member, solely by being a member, is an agent of the limited liability company or of the other members or any of them.
183.0301(2)(b)
(b) Each manager is an agent of the limited liability company, but not of the members or any of them, for the purpose of its business. The act of any manager, including the execution in the name of the limited liability company of any instrument, for apparently carrying on in the ordinary course of business the business of the limited liability company binds the limited liability company unless the manager has, in fact, no authority to act for the limited liability company in the particular matter, and the person with whom the manager is dealing has knowledge that the manager has no authority to act in the matter.
183.0301(3)
(3) No act of a member or, if management of the limited liability company is vested in one or more managers, of a manager that is not apparently for the carrying on in the ordinary course of business the business of the limited liability company shall bind the limited liability company unless in fact authorized at the time of the transaction or at any other time.
183.0301 History
History: 1993 a. 112;
1995 a. 400.
183.0302
183.0302
Admissions of members and managers. 183.0302(1)(1) Except as provided in
sub. (2), an admission or representation made by any member concerning the business of a limited liability company within the scope of the member's actual authority as provided under
s. 183.0301 may be used as evidence against the limited liability company in any legal proceeding.
183.0302(2)
(2) If management of the limited liability company is vested in one or more managers, all of the following apply:
183.0302(2)(a)
(a) An admission or representation made by a manager concerning the business of a limited liability company within the scope of the manager's authority as provided under
s. 183.0301 may be used as evidence against the limited liability company in any legal proceeding.
183.0302(2)(b)
(b) The admission or representation of any member, acting solely in the member's capacity as a member, is not evidence against the limited liability company in any legal proceeding.
183.0302 History
History: 1993 a. 112.
183.0303
183.0303
Limited liability company charged with knowledge of or notice to member or manager. 183.0303(1)(1) Except as provided in
sub. (2), notice to any member of any matter relating to the business of a limited liability company, and the knowledge of a member acting in the particular matter, acquired while a member or known by the person at the time of becoming a member, and the knowledge of any other member who reasonably could and should have communicated it to the acting member, operate as notice to or knowledge of the limited liability company.
183.0303(2)
(2) If management of the limited liability company is vested in one or more managers, all of the following apply:
183.0303(2)(a)
(a) Notice to any manager of any matter relating to the business of the limited liability company, and the knowledge of the manager acting in the particular matter, acquired while a manager or known by the person at the time of becoming a manager, and the knowledge of any other manager who reasonably could and should have communicated it to the acting manager, operate as notice to or knowledge of the limited liability company.
183.0303(2)(b)
(b) Notice to or knowledge of any member while the member is acting solely in the capacity of a member is not notice to or knowledge of the limited liability company.
183.0303 History
History: 1993 a. 112.
183.0304
183.0304
Liability of members to 3rd parties. 183.0304(1)
(1) The debts, obligations and liabilities of a limited liability company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the limited liability company. Except as provided in
ss. 183.0502 and
183.0608, a member or manager of a limited liability company is not personally liable for any debt, obligation or liability of the limited liability company, except that a member or manager may become personally liable by his or her acts or conduct other than as a member or manager.
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 willful 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.
183.0402 Annotation
Limited liability company members have typical fiduciary duties pertaining to fair dealing, taking of improper personal profit, and self-dealing. There was a conflict of interest and illegal unfair dealing in a transaction in which 2 of 3 LLC members transferred the sole asset of the LLC to a new LLC in which they were the only members without determining the fair market value and without notice to the remaining LLC member. The transaction pitted the personal interests of the 2 members against their fiduciary duties to the original LLC. Gottsacker v. Monnier, 2004 WI App 25,
269 Wis. 2d 667,
676 N.W.2d 533,
03-0457.
183.0402 Annotation
Section 183.0402 provides the standard for who is precluded from voting under s. 183.0404 (3) and does not prevent a member who has a material conflict of interest from dealing with matters of the LLC. A member with a conflict of interest must vote his or her ownership interest fairly, considering the interests of the LLC and the relationship with the other members. Gottsacker v. Monnier, 2004 WI App 25,
269 Wis. 2d 667,
676 N.W.2d 533,
03-0457.
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, forfeiture, or fine, including an excise tax assessed with respect to an employee benefit plan, plus costs, fees, and surcharges imposed under
ch. 814, and reasonable expenses.
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.
183.0404(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.
