SB566: Bill Text

SB566,407,12 (11) In the case of a person that is not an individual, the existence of the person terminates.

SB566,407,13 (16) The limited liability company dissolves and completes winding up.

SB566,407,15 183.0603 Effect of dissociation. (1) If a person is dissociated as a member, all of the following apply:

SB566,407,17 (a) The person's right to participate as a member in the management and conduct of the limited liability company's activities and affairs terminates.

SB566,407,19 (b) The person's duties and obligations under s. 183.0409 as a member end with regard to matters arising and events occurring after the person's dissociation.

SB566,407,22 (c) Subject to s. 183.0504 and subch. X, any transferable interest owned by the person in the person's capacity as a member immediately before dissociation is owned by the person solely as a transferee.

SB566,408,2 (2) A person's dissociation as a member of a limited liability company does not of itself discharge the person from any debt, obligation, or other liability to the limited liability company or the other members which the person incurred while a member.

SB566,408,3 subchapter VII

SB566,408,4 DISSOLUTION AND WINDING UP

SB566,408,7 183.0701 Events causing dissolution. (1) A limited liability company is dissolved, and its activities and affairs must be wound up, upon the occurrence of any of the following:

SB566,408,9 (a) An event or circumstance that the operating agreement states causes dissolution.

SB566,408,10 (b) The affirmative vote or consent of all the members.

SB566,408,12 (c) The passage of 90 consecutive days during which the company has no members unless, before the end of the period, all of the following occur:

SB566,408,15 1. Consent to admit at least one specified person as a member is given by transferees owning the rights to receive a majority of distributions as transferees at the time the consent is to be effective.

SB566,408,16 2. At least one person becomes a member in accordance with the consent.

SB566,408,18 (d) On application by a member, the entry by a court of competent jurisdiction of an order dissolving the company on any of the following grounds:

SB566,408,20 1. That the conduct of all or substantially all the company's activities and affairs is unlawful.

SB566,408,22 2. That it is not reasonably practicable to carry on the company's activities and affairs in conformity with the articles of organization and the operating agreement.

SB566,408,24 3. That the managers or those members in control of the company have done any of the following:

SB566,408,25 a. Acted, or are acting or will act, in a manner that is illegal or fraudulent.

SB566,409,2 b. Acted, or are acting, in a manner that is oppressive and was, is, or will be directly harmful to the applicant.

SB566,409,5 (e) The department has given notice of administrative dissolution under s. 183.0708 (3) (b), unless the limited liability company is subsequently reinstated under s. 183.0709 or pursuant to judicial review under ss. 227.52 to 227.58.

SB566,409,7 (2) In a proceeding brought under sub. (1) (d) 3., the court may order a remedy other than dissolution.

SB566,409,11 183.0702 Winding up. (1) A dissolved limited liability company shall wind up its activities and affairs and, except as otherwise provided in s. 183.0703, the limited liability company continues after dissolution only for the purpose of winding up.

SB566,409,15 (2) (a) In winding up its activities and affairs, a limited liability company shall discharge the company's debts, obligations, and other liabilities, settle and close the company's activities and affairs, and marshal and distribute the assets of the company.

SB566,409,17 (b) In winding up its activities and affairs, a limited liability company may do any of the following:

SB566,409,19 1. Deliver to the department for filing a statement of dissolution stating the name of the company and that the company is dissolved.

SB566,409,21 2. Preserve the company activities, affairs, and property as a going concern for a reasonable time.

SB566,409,23 3. Prosecute and defend actions and proceedings, whether civil, criminal, or administrative.

SB566,409,24 4. Transfer the company's property.

SB566,409,25 5. Settle disputes by mediation or arbitration.

SB566,410,2 6. Deliver to the department for filing a statement of termination stating the name of the company and that the company is terminated.

SB566,410,3 7. Perform other acts necessary or appropriate to the winding up.

SB566,410,8 (3) If a dissolved limited liability company has no members, the legal representative of the last person to have been a member may wind up the activities and affairs of the company. If the person does so, the person has the powers of a sole manager under s. 183.0407 (3) and is deemed to be a manager for the purposes of s. 183.0304 (1).

SB566,410,13 (4) If the legal representative under sub. (3) declines or fails to wind up the limited liability company's activities and affairs, a person may be appointed to do so by the consent of transferees owning a majority of the rights to receive distributions as transferees at the time the consent is to be effective. All of the following apply to a person appointed under this subsection:

SB566,410,15 (a) The person has the powers of a sole manager under s. 183.0407 (3) and is deemed to be a manager for the purposes of s. 183.0304 (1).

SB566,410,17 (b) The person shall deliver promptly to the department for filing an amendment to the company's articles of organization stating all of the following:

SB566,410,18 1. That the company has no members.

SB566,410,20 2. That the person has been appointed pursuant to this subsection to wind up the company.

SB566,410,21 3. The street and mailing addresses of the person.

SB566,410,24 (5) The circuit court may order judicial supervision of the winding up of a dissolved limited liability company, including the appointment of a person to wind up the company's activities and affairs, as follows:

SB566,410,25 (a) On the application of a member, if the applicant establishes good cause.

SB566,411,1 (b) On the application of a transferee, if all of the following apply:

SB566,411,2 1. The company does not have any members.

SB566,411,4 2. The legal representative of the last person to have been a member declines or fails to wind up the company's activities.

SB566,411,6 3. Within a reasonable time following the dissolution, a person has not been appointed pursuant to sub. (4).

SB566,411,7 (c) In connection with a proceeding under s. 183.0701 (1) (d) or (e).

SB566,411,11 183.0703 Rescinding dissolution. (1) A limited liability company may rescind its dissolution, unless a statement of termination applicable to the company is effective, the circuit court has entered an order under s. 183.0701 (1) (d) dissolving the company, or the department has dissolved the company under s. 183.0708.

SB566,411,12 (2) Rescinding dissolution under this section requires all of the following:

SB566,411,13 (a) The affirmative vote or consent of each member.

SB566,411,16 (b) If the limited liability company has delivered to the department for filing a statement of dissolution, delivery for filing of one of the following additional statements:

SB566,411,19 1. If the statement of dissolution has not become effective, delivery to the department for filing of a statement of withdrawal under s. 183.0208 applicable to the statement of dissolution.

SB566,411,22 2. If the statement of dissolution has become effective, delivery to the department for filing of a statement of rescission stating the name of the company and that dissolution has been rescinded under this section.

SB566,411,24 (3) If a limited liability company rescinds its dissolution, all of the following apply:

SB566,412,2 (a) The company resumes carrying on its activities and affairs as if dissolution had never occurred.

SB566,412,5 (b) Subject to par. (c), any liability incurred by the company after the dissolution and before the rescission is effective is determined as if dissolution had never occurred.

SB566,412,8 (c) The rights of a 3rd party arising out of conduct in reliance on the dissolution before the 3rd party knew or had notice of the rescission may not be adversely affected.

SB566,412,12 183.0704 Known claims against dissolved limited liability company. (1) Except as otherwise provided in sub. (4), a dissolved limited liability company may give notice of a known claim under sub. (2), which has the effect provided in sub. (3).

SB566,412,14 (2) A dissolved limited liability company may in a record notify its known claimants of the dissolution. The notice must do all of the following:

SB566,412,15 (a) Specify the information required to be included in a claim.

SB566,412,17 (b) State that a claim must be in writing and provide a mailing address to which the claim is to be sent.

SB566,412,19 (c) State the deadline for receipt of a claim, which may not be less than 120 days after the date the notice is effective under s. 183.0103 (5).

SB566,412,20 (d) State that the claim will be barred if not received by the deadline.

SB566,412,22 (3) A claim against a dissolved limited liability company is barred if the requirements of sub. (2) are met and any of the following applies:

SB566,412,23 (a) The claim is not received by the specified deadline.

SB566,412,25 (b) If the claim is timely received but rejected by the company, all of the following apply:

SB566,413,4 1. The company causes the claimant to receive a notice in a record stating that the claim is rejected and will be barred unless the claimant commences an action against the company to enforce the claim within 90 days after the notice is effective under s. 183.0103 (5).

SB566,413,6 2. The claimant does not commence the required action within 90 days after the notice of rejection is effective under s. 183.0103 (5).

SB566,413,10 (4) This section does not apply to a claim based on an event occurring after the date of dissolution, a liability that on that date is contingent, or a liability for an additional assessment under s. 71.74 or for sales and use taxes determined as owing under s. 77.59.

SB566,413,14 183.0705 Other claims against dissolved limited liability company. (1) A dissolved limited liability company may publish notice of its dissolution and request persons having claims, whether known or unknown, against the company to present them in accordance with the notice.

SB566,413,15 (2) A notice under sub. (1) must satisfy all of the following:

SB566,413,19 (a) It must be published as a class 1 notice, under ch. 985, in a newspaper of general circulation in the county in this state in which the dissolved limited liability company's principal office is located or, if it has none located in this state, in the county in which the office of the company's registered agent is or was last located.

SB566,413,22 (b) It must describe the information required to be contained in a claim, state that the claim must be in writing, and provide a mailing address to which the claim is to be sent.

SB566,413,25 (c) It must state that a claim against the company is barred unless an action to enforce the claim is commenced not later than 2 years after publication of the notice.

SB566,414,4 (3) If a dissolved limited liability company publishes a notice in accordance with sub. (2), unless the claimant commences an action to enforce the claim against the company within 2 years after the publication date of the notice, the claim of each of the following claimants is barred:

SB566,414,5 (a) A claimant that did not receive notice in a record under s. 183.0704.

SB566,414,6 (b) A claimant whose claim was timely sent to the company but not acted on.

SB566,414,8 (c) A claimant whose claim is contingent at, or based on an event occurring after, the date of dissolution.

SB566,414,10 (4) A claim not barred under this section or s. 183.0704 may be enforced against all of the following:

SB566,414,12 (a) A dissolved limited liability company, to the extent of its undistributed assets.

SB566,414,18 (b) Except as otherwise provided in s. 183.0706, if assets of the limited liability company have been distributed after dissolution, a member or transferee to the extent of that person's proportionate share of the claim or of the limited liability company's assets distributed to the member or transferee after dissolution, whichever is less, but a person's total liability for all claims under this paragraph may not exceed the total amount of assets distributed to the person after dissolution.

SB566,415,2 183.0706 Court proceedings. (1) A dissolved limited liability company that has published a notice under s. 183.0705 may file an application with the circuit court in the county where the company's principal office is located or, if the principal office is not located in this state, where the office of its registered agent is or was last located, for a determination of the amount and form of security to be provided for payment of claims that are reasonably expected to arise after the date of dissolution based on facts known to the company which, at the time of application, are contingent or have not been made known to the company or which are based on an event occurring after the date of dissolution.

SB566,415,4 (2) Security is not required for any claim that is or is reasonably anticipated to be barred under s. 183.0705.

SB566,415,7 (3) Not later than 10 days after the filing of an application under sub. (1), the dissolved limited liability company shall give notice of the proceeding to each claimant holding a contingent claim known to the company.

SB566,415,11 (4) In a proceeding under this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, must be paid by the dissolved limited liability company.

SB566,415,17 (5) A dissolved limited liability company that provides security in the amount and form ordered by the court under sub. (1) satisfies the company's obligations with respect to claims that are contingent, have not been made known to the company, or are based on an event occurring after the date of dissolution, and such claims may not be enforced against a member or transferee on account of assets received in liquidation.

SB566,415,20 183.0707 Disposition of assets in winding up. (1) In winding up its activities and affairs, a limited liability company shall apply its assets to discharge its obligations to creditors, including members that are creditors.

SB566,415,23 (2) After a limited liability company complies with sub. (1), any surplus must be distributed in the following order, subject to any charging order in effect under s. 183.0503:

SB566,415,25 (a) To members and dissociated members in satisfaction of liabilities for distributions previously approved under s. 183.0404.