180.1704 Annotation
As evidenced by the enactment of this section, the state has an interest in having its laws applied to corporations, and their officers and directors, transacting business within the state. Beloit Liquidating Trust v. Grade,
2004 WI 39,
270 Wis. 2d 356,
677 N.W.2d 298,
02-2035.
180.1705
180.1705
Existing preemptive rights preserved. Section 180.0630 does not apply to shares of a preexisting class. Except to the extent limited or denied by this section or by the articles of incorporation, shareholders of shares of a preexisting class have a preemptive right to acquire unissued shares or securities convertible into unissued shares or carrying a right to subscribe to or acquire shares. Unless otherwise provided in the articles of incorporation, all of the following apply to shareholders of shares of a preexisting class:
180.1705(1)
(1) No preemptive rights exist to acquire any of the following:
180.1705(1)(a)
(a) Any shares issued to directors, officers or employees pursuant to approval by the affirmative vote of the holders of a majority of the shares entitled to vote thereon or when authorized by and consistent with a plan approved by such a vote of shareholders.
180.1705(1)(b)
(b) Any shares, convertible securities or rights issued for a consideration other than cash.
180.1705(2)
(2) Holders of shares of any class that is preferred or limited as to dividends or assets are not entitled to any preemptive right.
180.1705(3)
(3) Holders of shares of common stock are not entitled to any preemptive right to shares of any class that is preferred or limited as to dividends or assets or to any obligations, unless convertible into shares of common stock or carrying a right to subscribe to or acquire shares of common stock.
180.1705(4)
(4) Holders of common stock without voting power shall have no preemptive right to shares of common stock with voting power.
180.1705(5)
(5) The preemptive right is only an opportunity to acquire shares or other securities under such terms and conditions as the board of directors may fix for the purpose of providing a fair and reasonable opportunity for the exercise of such right.
180.1705 History
History: 1989 a. 303;
1991 a. 16.
180.1706
180.1706
Certain voting requirements preserved. 180.1706(1)(1) Except to the extent that the corporation's articles of incorporation are amended to provide that the voting requirements of
s. 180.1003 (3),
180.1103 (3),
180.1202 (3),
180.1402 (3) or
180.1404 (2) apply,
subs. (2) and
(3) govern the shareholder vote required on a proposal concerning a subject covered by
s. 180.1003 (3),
180.1103 (3),
180.1202 (3),
180.1402 (3) or
180.1404 (2) if the corporation was organized before January 1, 1973, and has not expressly elected, before January 1, 1991, majority or greater affirmative voting requirements under s.
180.25 (2) (a), 1987 stats., with respect to the subject matter of the proposal.
180.1706(2)(a)
(a) By the affirmative vote of the holders of two-thirds of the shares entitled to vote on the proposal, unless
par. (b) applies.
180.1706(2)(b)
(b) If any class or series of shares is entitled to vote on the proposal as a class, by the affirmative vote of all of the following:
180.1706(2)(b)1.
1. The holders of two-thirds of the shares of each class of shares and of each series entitled to vote as a class.
180.1706(2)(b)2.
2. The holders of two-thirds of the total shares entitled to vote on the proposal.
180.1706(3)
(3) Whenever, with respect to a proposal described in
sub. (1), the articles of incorporation require the vote or concurrence of the holders of a greater proportion of the shares, or of any class or series of shares, than is required by
sub. (2), the provisions of the articles of incorporation shall control.
180.1706(4)
(4) If a corporation has a bylaw in effect on December 31, 1990, that establishes a greater shareholder voting requirement than one required under this chapter, that voting requirement applies until the bylaw is amended or repealed.
180.1706 History
History: 1989 a. 303;
1991 a. 16,
173.
180.1707
180.1707
Certain class voting rights preserved. 180.1707(1)(1)
Sections 180.1004 and
180.1103 (4) (a) do not apply to shares of a preexisting class if a corporation in existence on January 1, 1991 provides in its articles of incorporation that
subs. (2) and
(3), in lieu of
ss. 180.1004 and
180.1103, govern whether shares of a preexisting class are entitled to vote as a class on a proposed amendment to the articles of incorporation or plan of merger.
180.1707(2)(a)(a) The holders of the outstanding shares of a preexisting class subject to this subsection may vote as a class upon a proposed amendment to the articles of incorporation, whether or not entitled to vote thereon by the articles of incorporation, if the amendment would do any of the following with respect to that class:
180.1707(2)(a)1.
1. Increase or decrease the aggregate number of authorized shares of the class, except a decrease of authorized but unissued shares of the class.
180.1707(2)(a)2.
2. Effect an exchange, reclassification or cancellation of all or part of the shares of the class, except a reclassification of unissued shares or treasury shares into shares of a subordinate and inferior class or a cancellation thereof.
180.1707(2)(a)3.
3. Effect or require an exchange or conversion, or create a right of exchange or conversion, of all or any part of the shares of another class into the shares of the class.
180.1707(2)(a)4.
4. Change in a manner prejudicial to the holders of outstanding shares of the class, the designations, preferences, limitations or relative rights of the shares of the class or of any other class.
180.1707(2)(a)5.
5. Change the shares of the class into a different number of shares of the same class or into the same or a different number of shares of another class or classes.
180.1707(2)(a)6.
6. Create a new class or enlarge an existing class of shares having rights or preferences prior or superior to the shares of the class, or increase the rights or preferences of any class having rights or preferences prior or superior to the shares of the class.
180.1707(2)(a)7.
7. In the case of a preferred or special class of shares, divide the shares of the class into series and fix and determine the designation of the series and the variations in the relative rights and preferences between the shares of the series, or authorize the board of directors to fix and determine the designation and the relative rights and preferences of authorized but unissued shares of the series.
180.1707(2)(a)8.
8. Limit or deny any existing preemptive rights of the shares of the class.
180.1707(2)(a)9.
9. Cancel or otherwise affect dividends on the shares of the class which have accrued but have not been declared.
180.1707(2)(b)
(b) Whenever an amendment described in
par. (a) shall affect the holders of shares of one or more but not all of the series of any preferred or special class of shares of a preexisting class that are at the time outstanding, the holders of the outstanding shares of the series affected thereby shall for the purposes of this section be considered a separate class and entitled to vote as a class on such amendment.
180.1707(3)
(3) Shares of a preexisting class subject to this subsection may vote as a class on a plan of merger if the plan of merger contains any provision which, if contained in a proposed amendment to the articles of incorporation, would entitle the shares of a preexisting class to vote as a class.
180.1707 History
History: 1989 a. 303;
1991 a. 16.
180.1708
180.1708
Applicability of various provisions. 180.1708(1)
(1)
Filing duty; appeal. Sections 180.0125 and
180.0126 apply to a document delivered to the department for filing on or after January 1, 1991.
180.1708(2)
(2) Distributions to shareholders. Section 180.0640 applies to a distribution authorized by the board of directors on or after January 1, 1991.
180.1708(3)
(3) Special shareholders' meeting. Section 180.0702 (1) (b) and
(2) applies to a demand for a special meeting of shareholders that is delivered to the corporation on or after January 1, 1991.
180.1708(4)(a)(a) Sections 180.1003,
180.1004 and
180.1007 (3) apply to an amendment to or restatement of the articles of incorporation requiring shareholder approval about which notice of a shareholders' meeting is delivered on or after January 1, 1991.
180.1708(4)(b)1.
1. An amendment or restatement adopted by the board of directors or incorporators on or after January 1, 1991.
180.1708(4)(b)2.
2. An amendment or restatement requiring shareholder approval about which a notice of a shareholders' meeting is delivered on or after January 1, 1991.
180.1708(5)
(5) Mergers. Sections 180.1101 and
180.1103 to
180.1106 apply to a merger, and
ss. 180.1301 to
180.1331 apply to dissenters' rights arising from a merger, for which a plan of merger is approved by the board of directors on or after January 1, 1991.
180.1708(6)
(6) Sale of assets. Section 180.1202 applies to a sale, lease, exchange or other disposition of property requiring shareholder approval, and
ss. 180.1301 to
180.1331 apply to dissenters' rights arising from a sale, lease, exchange or other disposition of property requiring shareholder approval, that is approved by the board of directors on or after January 1, 1991.
180.1708(7)(a)2.
2. By the shareholders, if the corporation delivers notice of the shareholders' meeting under
s. 180.1402 (2) on or after January 1, 1991.
180.1708(8)
(8) Revocation of certificate of authority.
STATUTORY CLOSE CORPORATIONS
180.1801(2)
(2) Except as provided in
sub. (3), if an election is made to be a statutory close corporation,
ss. 180.1801 to
180.1837 control in the event of conflict with other sections of this chapter.
180.1801 History
History: 1989 a. 303.
180.1801 Annotation
The enactment of the statutory close corporation statutes did not preempt existing common law rights, and those statutes do not provide exclusive remedies for close corporations. Jorgensen v. Water Works, Inc.
218 Wis. 2d 761,
582 N.W.2d 98 (Ct. App. 1998),
97-1729.
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
180.1106 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.
180.1807
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).
