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Please see http://docs.legis.wisconsin.gov for the production version.
Under the bill, the operating agreement may not alter or eliminate, or restrict
the remedies for breach of, the duty of loyalty or the duty of care, except as described
below; eliminate, or restrict remedies for the breach of, the contractual obligation of
good faith and fair dealing, but a written operating agreement may prescribe
standards, if not manifestly unreasonable, by which performance of the obligation
is measured; or relieve a person from liability for conduct that violates the duty of
care described in items 1) to 4) in the immediately preceding paragraph. However,
the operating agreement may specify the method by which an act or transaction that
would otherwise violate the duty of loyalty may be authorized or ratified after the
disclosure of all material facts. In a member-managed LLC, a written operating
agreement may also eliminate or limit a member's fiduciary duty if it also relieves
the member of a responsibility and imposes it on another member. A written
operating agreement may also alter or eliminate, or restrict remedies with respect
to, certain aspects of the duty of loyalty; identify specific types or categories of
activities that do not violate the duty of loyalty or the contractual obligation of good
faith and fair dealing; alter the duty of care, if it does not authorize the conduct
described in items 1) to 4) in this paragraph; or alter or eliminate any other fiduciary
duty.
Operating requirements
This bill makes changes to the information that must be contained in an LLC's
annual report. Under current law, if a domestic LLC or registered foreign LLC is
manager-managed, its annual report must contain the name and business address
of each manager. The annual report of a registered foreign LLC must also contain
the name and business address of each LLC member. A domestic LLC is one
organized under this state's law and a registered foreign LLC is one organized under
the law of another state or jurisdiction and authorized to do business in this state.
Under this bill, the annual report of a domestic LLC or registered foreign LLC
must include the name of at least one member if it is member-managed or the name
of at least one manager if it is manager-managed.
This bill makes some changes with respect to the records that an LLC must
keep at its office. As under current law, the bill provides members with certain rights
to, on request, inspect and copy records maintained by the LLC, and requires the

LLC to provide records and information, although the details of these requirements
in the bill differ from current law. Under the bill, managers have these rights in a
manager-managed LLC. In addition, the bill requires an LLC, without request, to
furnish each member in a member-managed LLC, or each manager in a
manager-managed LLC, with any information concerning the LLC's activities,
affairs, financial condition, and other circumstances that the LLC knows and is
material to the proper exercise of the member's or manager's rights and duties,
unless the member or manager already knows the information. In a
manager-managed LLC, the LLC must, without request, provide members with all
known, material information before the member is required to vote on or give or
withhold consent to a matter. In addition to the LLC's duty, each member in a
member-managed LLC, or each manager in a manager-managed LLC, has a duty
to furnish information known by the member or manager. The bill also contains
provisions relating to the rights to information after a person dissociates as a
member. The bill allows an LLC to impose reasonable restrictions and conditions on
access to and use of information furnished by the LLC.
Current law includes provisions relating to when notice to, or knowledge of, a
member or manager is imputed to an LLC.
This bill eliminates these provisions and creates new provisions as to when a
person is considered to have notice or knowledge of a fact. The bill also specifies when
a person is considered to have given another person notice of a fact.
The bill also allows DFI to provide written notice to an LLC solely by e-mail to
its registered agent.
Dissociation of members
As under current law, this bill specifies circumstances under which a member
of an LLC dissociates from the LLC, including voluntary dissociation. Under the bill,
a person may dissociate as a member at any time, rightfully or wrongfully, by
withdrawing as a member by express will. A person's dissociation as a member is
wrongful if, among other things, the dissociation is in violation of a written operating
agreement. The bill provides more specific information, in comparison with current
law, about the effects of a member's dissociation from an LLC. Among these effects,
a person dissociated as a member has no right to participate in the management and
conduct of the LLC's business and the person's right to distributions takes on the
status of the right of a transferee. Upon dissociation, certain obligations of the
person terminate as to future events but continue to apply to past events.
Under current law, if a member withdraws from an LLC and the withdrawal
occurs as a result of the member's wrongful conduct, the LLC may recover from the
withdrawing member damages as a result of the wrongful conduct.
Under this bill, a member that wrongfully dissociates from an LLC is liable for
damages caused by the dissociation and the liability is to both the LLC and to any
other member if the other member shows that its injury is not solely the result of
injury suffered by the LLC.
Under current law, a member who dissociates from an LLC has a right to a
distribution in complete redemption of the fair value of the member's interest at the
time of dissociation, unless the operating agreement provides otherwise.

Under this bill, unless the operating agreement provides otherwise, a
distribution to a person who dissociates as a member of an LLC is discretionary with
the LLC, and the person has no right to a distribution. The bill also specifies that
an LLC's obligations to a person dissociated as a member are governed by the
operating agreement, but an amendment to the operating agreement after the
person has dissociated as a member cannot impose a new obligation on the person.
This bill expands on provisions of current law under which a creditor of an
LLC's member may seek from a court a charging order against the member's interest
in the LLC to satisfy the unpaid amount of the creditor's judgment. Under the bill,
a charging order is available against the interest (right to receive distributions) of
either a member or a person to whom the member's interest has been transferred
(transferee). A charging order constitutes a lien on the member's or transferee's
interest and requires the LLC to pay over to the creditor any distribution that
otherwise would be paid to the member or transferee. Under certain circumstances,
the court may foreclose the lien and order the sale of the member's or transferee's
interest in the LLC. The purchaser of the interest at the foreclosure sale obtains only
the interest and does not thereby become a member or gain any right to participate
in the business of the LLC. The bill includes specific provisions applicable when a
court orders foreclosure of a charging order lien against a single-member LLC.
Dissolution and winding up
This bill modifies some of the grounds under which an LLC is dissolved and its
activities and affairs must be wound up, and replaces the term “articles of
dissolution" in current law with the term “statement of dissolution." As new grounds
for dissolution under the bill, dissolution occurs upon the passage of 90 consecutive
days during which the LLC has no members. The bill eliminates as a ground for
judicial dissolution of an LLC that the LLC is not acting in conformity with its
operating agreement. The bill also eliminates a “grandfather" provision relating to
dissolution of an LLC organized before October 1, 2002.
Under current law, DFI may administratively dissolve an LLC that does not file
its annual report within one year after it is due. Under this bill, DFI may
administratively dissolve an LLC if the LLC does not pay any required fee or penalty
within one year after it is due; does not file its annual report within one year after
it is due; is without a registered agent in this state for at least one year; does not
notify DFI within one year of changes to its registered agent or registered office; or
commits certain crimes involving human trafficking.
Mergers, conversions, and other business combinations
This bill makes significant changes with respect to mergers, conversions, and
other business combinations involving domestic or foreign LLCs. Under current law,
one or more domestic or foreign LLCs may merge with or into one or more other
domestic or foreign business entities (business corporations, nonprofit or nonstock
corporations, LLCs, or limited partnerships) if the merger satisfies certain
requirements. Current law also allows a domestic LLC to convert to another form
of domestic or foreign business entity if the conversion satisfies certain
requirements.

This bill significantly changes the requirements applicable to a merger or
conversion involving an LLC and also allows an LLC to undertake transactions in
the form of an interest exchange or domestication. In an interest exchange, a
domestic LLC acquires interests of another domestic or foreign business entity, or
has its own interests acquired by another domestic or foreign business entity. In a
domestication, an entity governed by the law of a foreign country (a non-U.S. entity)
may domesticate as a domestic LLC under Wisconsin law while continuing to be
subject to the foreign country's law and a domestic LLC may domesticate as a
non-U.S. entity subject to a foreign country's law while continuing to be a domestic
LLC. Under the bill, a merger, conversion, interest exchange, or domestication is not
limited to transactions involving business entities that are business corporations,
nonprofit or nonstock corporations, LLCs, or limited partnerships; the bill allows
these transactions to include other entities such as limited liability partnerships,
cooperative associations, and unincorporated associations. Certain requirements
apply to organizational transactions under the bill, including approval of a plan of
merger, conversion, interest exchange, or domestication and filing with DFI articles
of merger, conversion, interest exchange, or domestication, although the terms of the
operating agreement generally govern mergers, conversions, interest exchanges,
and domestications. When the merger, conversion, interest exchange, or
domestication becomes effective, certain results occur automatically, as a matter of
law, with respect to such matters as assets, obligations, continued existence, and
organizational documents of the parties involved in the transaction. With respect
to a merger, the bill also eliminates a provision of current law that gives a dissenting
member of the LLC who does not vote in favor of the merger the right, upon
dissociation from the LLC, to receive fair value for the member's LLC interest, unless
the operating agreement provides otherwise.
Other changes
Under the bill, a member of an LLC may bring a derivative action against the
LLC to enforce a right of the LLC if certain conditions are satisfied. The LLC may
appoint a special litigation committee to investigate the claims in the derivative
action and to determine whether pursuing the action is in the best interests of the
LLC. The special litigation committee must be composed of disinterested and
independent individuals, who may be members. If the LLC appoints a special
litigation committee, the court must, on motion of the committee, stay discovery for
the time reasonably necessary to permit the committee to make its investigation,
unless there is good cause shown for the court to deny the stay. After appropriate
investigation, the special litigation committee may determine that it is in the best
interests of the LLC for the proceeding to continue under the control of the plaintiff;
for the proceeding to continue under the control of the committee; for the proceeding
to be settled on terms approved by the committee; or for the proceeding to be
dismissed. After making its determination, the special litigation committee must
submit its determination to the court and, if the court determines that certain
requirements are satisfied, the court must follow and enforce the committee's
recommendation. If the court finds the applicable requirements are not satisfied, the

court must dissolve the stay of discovery and allow the plaintiff to continue the
action.
This bill also changes many terms used under current law in connection with
LLCs. For example, in addition to changing “articles of dissolution" to “statement
of dissolution," the bill changes “articles of correction" to “statement of correction" or
“statement of change," depending on the circumstances.
The bill includes numerous other substantive and stylistic changes from
current law. The bill also includes some modifications from, or additions to, the
model language of RULLCA.
Phase-in
The changes in this bill apply to an LLC formed on or after January 1, 2021, and
apply, on January 1, 2021, to an LLC formed before that date unless 1) the LLC elects
to be governed earlier by the new provisions of the bill, or 2) the LLC elects to be
governed by the existing law applicable before enactment of the bill. When the
provisions of the bill become applicable to an LLC, provisions of prior law relating
to obligations incurred by the LLC prior to the bill's enactment continue to apply and
any provision of an operating agreement that was valid before enactment of the bill
remains valid.
CORPORATIONS
This bill also makes changes to the law governing business corporations and
nonstock corporations that generally correspond to the changes applicable to limited
partnerships, LLCs, and partnerships, including changes similar to those described
above and related to 1) mergers, conversions, and other business-structure
transactions; 2) the process and fees for corporate filings with DFI; 3) procedures and
requirements applicable to corporations including those related to registered agents
and permissible names; 4) the method by which DFI may provide written notice to
a corporation; and 5) consent to corporate action without a meeting.
Because this bill creates a new crime or revises a penalty for an existing crime,
the Joint Review Committee on Criminal Penalties may be requested to prepare a
report.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB810,1 1Section 1 . 11.0101 (9) of the statutes is amended to read:
SB810,25,32 11.0101 (9) “Corporation" includes a foreign limited liability company, as
3defined in s. 183.0102 (8) (5) and a limited liability company, as defined in s. 183.0102
4(10) (8), if the foreign limited liability company or the limited liability company elect

1to be treated as a corporation by the federal internal revenue service, pursuant to 26
2CFR 301.7701
-3, or if the foreign limited liability company or the limited liability
3company has publicly traded shares.
SB810,2 4Section 2 . 13.69 (1) of the statutes is amended to read:
SB810,25,105 13.69 (1) Except as provided in sub. (2m), any principal violating ss. 13.61 to
613.68 or a rule of the commission promulgated under those sections may be required
7to forfeit not more than $5,000. In the case of a partnership, other than a foreign or
8domestic limited liability partnership or a limited liability limited partnership, each
9of the partners, other than a limited partner of a limited partnership, is jointly and
10severally liable for any forfeiture imposed under this subsection.
SB810,3 11Section 3. 44.03 (3) of the statutes is amended to read:
SB810,25,2512 44.03 (3) Every affiliated society shall make a report of its work annually to the
13historical society that contains the information specified in s. 181.1622 (1) (a) to (e)
14sub. (3m), which, in its entirety or in part, may be included in the publications of the
15historical society, and upon application of any affiliated society the historical society
16may accept, in behalf of the state, custody of or title to the property, records and
17collections of the affiliated society or may assist in the disposal thereof. If any
18affiliated society becomes, in the opinion of the board of curators of the historical
19society, inactive or defunct, title to such property, records and collections not
20otherwise provided for in the grants of donors or in the articles of incorporation of the
21inactive and defunct society, shall vest in the historical society which shall take
22appropriate action in the public interest for the protection or disposal of such
23property, records and collections. Preference in disposition shall be given to
24historical or related organizations in the area or to whatever county or local
25governmental unit that has aided such affiliate financially.
SB810,4
1Section 4. 44.03 (3m) of the statutes is created to read:
SB810,26,32 44.03 (3m) The report under sub. (3) shall include all of the following
3information:
SB810,26,54 (a) The name of the domestic nonstock corporation or foreign nonprofit or
5nonstock corporation and the state or country under whose law it is incorporated.
SB810,26,76 (b) The mailing address of its registered office and the name and e-mail
7address of its registered agent at that office in this state.
SB810,26,88 (c) The mailing address of its current principal office.
SB810,26,99 (d) The name and business address of each director and principal officer.
SB810,26,1010 (e) A brief description of the nature of its business.
SB810,26,1111 (f) Whether the nonprofit or nonstock corporation has members.
SB810,5 12Section 5 . 71.80 (21) of the statutes is amended to read:
SB810,26,1813 71.80 (21) Business entity conversion. Notwithstanding any provision of ss.
14178.1141 to 178.1145, 179.76 179.1141 to 179.1145, 180.1161, 181.1161, and
15183.1207 183.1041 to 183.1045, the conversion of a business entity to another form
16of business entity under s. 178.1141, 179.76 179.1141, 180.1161, 181.1161, or
17183.1207 183.1041 shall be treated for state tax purposes in the same manner as the
18conversion is treated for federal tax purposes.
SB810,6 19Section 6 . 71.80 (21m) of the statutes is amended to read:
SB810,26,2520 71.80 (21m) Business entity interest exchange. Notwithstanding any
21provision of ss. 178.1131 to 178.1135, 179.1131 to 179.1135, 180.1102, 180.11021,
22180.11032, 180.1105, 180.1106, 181.1131 to 181.1135, and 183.1031 to 183.1035
, an
23interest exchange under s. 178.1131, 179.1131, 180.1102, 181.1131, or 183.1031 shall
24be treated for state tax purposes in the same manner as the interest exchange is
25treated for federal tax purposes.
SB810,7
1Section 7. 71.80 (22) of the statutes is amended to read:
SB810,27,82 71.80 (22) Business entity merger. Notwithstanding any provision of ss.
3178.1121 to 178.1125, 179.77 179.1121 to 179.1125, 180.1101, 180.1104 180.11012,
4180.11031 to 180.1106
, 181.1101, 181.1104 to 181.11055, and 183.1201 183.1021 to
5183.1025
, the merger of a business entity with one or more business entities under
6s. 178.1121, 179.77 179.1121, 180.1101, 180.1104, 181.1101, 181.1104, or 183.1201
7183.1021 shall be treated for state tax purposes in the same manner as the merger
8is treated for federal tax purposes.
SB810,8 9Section 8 . 71.80 (22m) of the statutes is amended to read:
SB810,27,1410 71.80 (22m) Business entity domestication. Notwithstanding any provision
11of ss. 178.1151 to 178.1155, 179.1151 to 179.1155, 180.1171 to 180.1175, 181.1171 to
12181.1175, and 183.1051 to 183.1055
, a domestication under s. 178.1151, 179.1151,
13180.1171, 181.1171, or 183.1051
shall be treated for state tax purposes in the same
14manner as the domestication is treated for federal tax purposes.
SB810,9 15Section 9 . 73.03 (58) of the statutes is amended to read:
SB810,27,2116 73.03 (58) (a) Notwithstanding any provision of ss. 178.1141 to 178.1145,
17179.76 179.1141 to 179.1145, 180.1161, 181.1161, and 183.1207 183.1041 to
18183.1045
, to treat, for state tax purposes, the conversion of a business entity to
19another form of business entity under s. 178.1141, 179.76 179.1141, 180.1161,
20181.1161, or 183.1207 183.1041 in the same manner as the conversion is treated for
21federal tax purposes.
SB810,28,222 (b) Notwithstanding any provision of ss. 178.1121 to 178.1125, 179.77 179.1121
23to 179.1125
, 180.1101, 180.1104 180.11012, 180.11031 to 180.1106, 181.1101,
24181.1104
to 181.11055, and 183.1201 183.1021 to 183.1025, to treat, for state tax
25purposes, the merger of a business entity with one or more business entities under

1s. 178.1121, 179.77 179.1121, 180.1101, 180.1104, 181.1101, 181.1104, or 183.1201
2183.1021 in the same manner as the merger is treated for federal tax purposes.
SB810,28,73 (c) Notwithstanding any provision of ss. 178.1131 to 178.1135, 179.1131 to
4179.1135, 180.1102, 180.11021, 180.11032, 180.1105, 180.1106, 181.1131 to
5181.1135, and 183.1031 to 183.1035
, to treat, for state tax purposes, an interest
6exchange under s. 178.1131, 179.1131, 180.1102, 181.1131, or 183.1031 in the same
7manner as the interest exchange is treated for federal tax purposes.
SB810,28,128 (d) Notwithstanding any provision of ss. 178.1151 to 178.1155, 179.1151 to
9179.1155, 180.1171 to 180.1175, 181.1171 to 181.1175, and 183.1051 to 183.1055
, to
10treat, for state tax purposes, a domestication under s. 178.1151 , 179.1151, 180.1171,
11181.1171, or 183.1051
in the same manner as the domestication is treated for federal
12tax purposes.
SB810,10 13Section 10 . 77.25 (6m) of the statutes is amended to read:
SB810,28,1814 77.25 (6m) Pursuant to the conversion of a business entity to another form of
15business entity under s. 178.1141, 179.76 179.1141, 180.1161, 181.1161, or 183.1207
16183.1041, if, after the conversion, the ownership interests in the new entity are
17identical with the ownership interests in the original entity immediately preceding
18the conversion.
SB810,11 19Section 11 . 77.25 (6q) of the statutes is amended to read:
SB810,28,2120 77.25 (6q) Pursuant to an interest exchange under s. 178.1131, 179.1131,
21180.1102, 181.1131, or 183.1031
.
SB810,12 22Section 12 . 77.25 (6t) of the statutes is amended to read:
SB810,28,2423 77.25 (6t) Pursuant to a domestication under s. 178.1151, 179.1151, 180.1171,
24181.1171, or 183.1051
.
SB810,13 25Section 13 . 77.61 (15) of the statutes is amended to read:
SB810,29,6
177.61 (15) Notwithstanding any provision of ss. 178.1141 to 178.1145, 179.76
2179.1141 to 179.1145, 180.1161, 181.1161 to 181.1165, and 183.1207 183.1041 to
3183.1045
, a business entity that converts to another business entity under s.
4178.1141, 179.76 179.1141, 180.1161, 181.1161, or 183.1207 183.1041 shall be
5subject to the provisions under this subchapter applicable to liquidations,
6reorganizations, and business entity formations.
SB810,14 7Section 14. 97.605 (4) (a) 1. of the statutes is amended to read:
SB810,29,98 97.605 (4) (a) 1. “Business entity" has the meaning given in s. 179.70 (1)
9180.1100 (1g).
SB810,15 10Section 15. 97.67 (2) (c) (intro.) of the statutes is amended to read:
SB810,29,1611 97.67 (2) (c) (intro.) A sole proprietorship that reorganizes as a business entity,
12as defined in s. 179.70 (1) 180.1100 (1g), or a business entity that reorganizes as a
13sole proprietorship or a different type of business entity may transfer a license issued
14under this section for a campground, camping resort, recreational or educational
15camp, or public swimming pool to the newly formed business entity or sole
16proprietorship if all of the following conditions are satisfied:
SB810,16 17Section 16 . 108.025 (1) (b) of the statutes is amended to read:
SB810,29,2118 108.025 (1) (b) An individual named as who is a member of a limited liability
19company that is treated as a corporation under this chapter in the records of the
20company required to be kept under s. 183.0405
as of the date of an election under this
21section.
SB810,17 22Section 17 . 139.34 (9) of the statutes is amended to read:
SB810,30,1323 139.34 (9) The applicant for a permit, if a nonresident, foreign corporation or
24foreign limited liability company, shall file proof that the applicant has appointed the
25department of financial institutions as agent for the service of process on any matter

1arising under ss. 139.30 to 139.44. A foreign corporation without a place of business
2in this state need not obtain a certificate of authority under ss. 180.1501 to 180.1505.
3If a foreign corporation has a certificate of authority under ss. 180.1501 to 180.1505,
4the foreign corporation satisfies this subsection by filing the address of its registered
5office in this state and the name and e-mail address of its registered agent at that
6office and by promptly filing any changes to this information. A foreign limited
7liability company without a place of business in this state need not obtain a
8certificate of registration under ss. 183.1002 to 183.1007 s. 183.0902. If a foreign
9limited liability company has a certificate of registration under ss. 183.1002 to
10183.1007
s. 183.0902, the foreign limited liability company satisfies this subsection
11by filing the address of its registered office in this state and the name and address,
12and e-mail address,
of its registered agent at that office in this state and by promptly
13filing any changes to this information.
SB810,18 14Section 18. 157.62 (1) (b) and (2) (b) 1., 2. and 7. of the statutes are amended
15to read:
SB810,30,1716 157.62 (1) (b) Paragraph (a) does not apply to any person required to file a
17report under s. 180.1622 or 181.1622 181.0214.
SB810,30,19 18(2) (b) 1. A copy of any report required under sub. (1) (a) or s. 180.1622 or
19181.1622 181.0214.
SB810,30,2120 2. If the cemetery authority is required to file a report under s. 180.1622 or
21181.1622 181.0214, the information specified in sub. (1) (a) 3.
SB810,30,2422 7. The information specified in sub. (1) (a), to the extent applicable, if the
23cemetery is not required to file a report under sub. (1) (a) or s. 180.1622 or 181.1622
24181.0214.
SB810,19 25Section 19 . 178.0102 (11) of the statutes is amended to read:
SB810,31,6
1178.0102 (11) “Partnership" or “domestic partnership" means an association
2of 2 or more persons, except to the extent provided in s. 178.0801 (6) or organized
3under another chapter
, to carry on as co-owners a business for profit whose
4governing law is the law of this state, and which is subject to this chapter, including
5an association that has become and is still subject to this chapter. The term includes
6a limited liability partnership.
SB810,20 7Section 20 . 178.0102 (14) of the statutes is amended to read:
SB810,31,148 178.0102 (14) “Person" means an individual, business corporation, nonprofit
9or nonstock corporation, partnership, limited partnership, limited liability company,
10general cooperative association, limited cooperative association, unincorporated
11nonprofit association, statutory trust, business trust, common-law business trust,
12estate, trust, association, joint venture, public corporation, government or
13governmental subdivision, agency, or instrumentality, or any other legal or
14commercial entity.
SB810,21 15Section 21 . 178.0103 (6) (d) of the statutes is created to read:
SB810,31,1716 178.0103 (6) (d) For notices from the department, upon successful
17transmission by e-mail as provided in this chapter.
SB810,22 18Section 22 . 178.0104 of the statutes is renumbered 178.0104 (1m).
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