Wisconsin Legislature: Adm 82.25

(2) If the business, financial adviser, or investment firm is a sole proprietorship, a disabled veteran owns 100 percent of the company assets.

(3)

(a) If the business, financial adviser, or investment firm is a partnership, each partner shall act as a principal in his or her own behalf and as agent of his or her co-partners, and general rules of law applicable to agents shall apply with equal force in determining rights and liabilities of partners. One or more disabled veterans shall own at least 51 percent of the partnership interests.

(b) If the business, financial adviser, or investment firm is a limited partnership, one or more disabled veteran general partners shall own at least 51 percent of the general partnership interest and exert at least 51 percent of the control of the partnership. The disabled veteran general and limited partners shall receive at least 51 percent of the partnership’s profits and benefits, including tax credits, deductions and postponements.

Note: See section Adm 82.12 for definitions of general partner, limited partner, limited partnership, and partnership.

(4) If the business, financial adviser, or investment firm is a limited liability company, one or more disabled veterans own at least 51 percent of membership interests in the LLC organization, and exert at least 51 percent of the management and control among the members. The disabled veteran owners also participate in all risks and profits of the organization at a rate commensurate with their membership interests.

(5) If the business, financial adviser, or investment firm has a corporate form of organization, one or more disabled veterans own at least 51 percent of all voting stock of the corporation. Any voting agreements among the shareholders do not dilute the beneficial ownership, the rights, or the influence of the disabled veteran owners of the stock or classes of stock of the corporation. The disabled veteran owners possess the right to all customary incidents of ownership, such as the ability to transfer stock, title possession, and enter binding agreements.

Note: Nonprofit corporations do not meet the for-profit condition in section Adm 82.12 (17) (intro.) and therefore are not eligible for certification.

(6) If the business, financial adviser, or investment firm is a joint venture, one or more disabled veteran-owned entities hold at least 51 percent of the beneficial ownership interest in the joint venture, and exert at least 51 percent of the control and management of the joint venture. The disabled veteran-owned entity partners of the joint venture are certified or are eligible for certification as a DVB.

(7) If the business, financial adviser, or investment firm is a subsidiary or affiliate, one or more disabled veterans own at least 51 percent of the parent company.

History: EmR1041: emerg. cr., eff. 11-14-10; CR 11-004: cr. Register September 2011 No. 669, eff. 10-1-11; correction in (1) made under s. 13.92 (4) (b) 7., Stats., Register December 2011 No. 672.

Adm 82.22 Documentation of being a disabled veteran. An applicant shall submit the verification specified in s. 16.283 (1) (b), Stats.

Note: Section 16.283 (1) (b) of the Statutes, as reprinted under section Adm 82.12 (16), defines “disabled veteran” and addresses verification of that status by the department of veterans affairs.

History: EmR1041: emerg. cr., eff. 11-14-10; CR 11-004: cr. Register September 2011 No. 669, eff. 10-1-11; correction made under s. 13.92 (4) (b) 7., Stats., Register September 2011 No. 669.

Adm 82.24 Determination of ownership.

(1) An applicant shall meet all of the following eligibility standards:

(a)

1. The ownership by one or more disabled veterans is real, substantial and continuing, going beyond the pro-forma ownership of the business as reflected in its ownership documents.

2. Each disabled veteran owner shares in all risk and profits commensurate with his or her ownership interest as demonstrated by a detailed examination of the substance of his or her business arrangements with others.

3. Each disabled veteran owner receives the customary incidents of ownership, such as salary, rights to dividends, ownership of assets and ownership of intangible assets such as copyrights and patents.

(b) The contributions of capital and expertise by the disabled veteran owner or owners to acquire their interest in the business is real and substantial, and in proportion to the interest acquired.

(2) Contributions of personal or professional services alone are not real and substantial for the purposes of this section, except these contributions shall receive consideration when given in conjunction with other tangible forms of investment. Other insufficient contributions include promises to contribute capital or expertise in the future, a note payable to the business or to its owners who are not disabled veterans, or the mere participation as an employee.

(3) Disabled veterans shall hold at least 51 percent of the securities that constitute ownership of a business.

(4) Securities or assets of a business that are held in trust are not considered as held by a disabled veteran in determining the ownership of a business, except under the following circumstances:

(a) The beneficial owner of the securities or assets held in trust is a disabled veteran, and the trustee is a disabled veteran.

(b) A disabled veteran is the sole grantor of assets held in a revocable living trust, and a disabled veteran is the beneficiary and trustee.

(5) The department may not consider securities that are held by any guardian for a minor, in determining ownership and control.

(6) An ownership interest arising in a spouse who is not a disabled veteran, solely because of the operation of marital property laws, may not disqualify an applicant from certification if both spouses certify that the disabled veteran or his or her duly authorized representative performs the majority of the control and management of the business.

History: EmR1041: emerg. cr., eff. 11-14-10; CR 11-004: cr. Register September 2011 No. 669, eff. 10-1-11.

Adm 82.25 Documentation of ownership.

(1)

(a) An applicant shall submit documentation showing ownership of at least 51 percent of the business by a disabled veteran. This documentation may include, but is not limited to, the three preceding years of business taxes, a current business financial statement, business licenses, buy-out agreements and financial agreements.

(b) For a sole proprietorship, additional documentation may include, but is not limited to, canceled checks used to purchase ownership.

(c) For a partnership, additional documentation may include, but is not limited to, partnership agreements, purchase agreements, and salary and profit-sharing records.

(d) For a corporation, additional documentation may include, but is not limited to, articles of incorporation, corporate by-laws, a corporate-borrowing resolution, stock certificates, stock-affirmation forms, and salary and profit-sharing records.

(e) For a joint venture, additional documentation may include, but is not limited to, a joint venture agreement that is written and signed by all of the joint venturers. Each joint venture agreement shall specify all of the following:

1. The capital contribution made by each joint venturer, the control each will exercise, and the distribution of profit and loss. The agreement shall allocate the control and the distribution of profit and loss in proportion to the contributions of the joint venturers.

2. The useful business function the joint venture will perform and the part of the work each joint venturer will do.

(2) The department may require documentation showing how and when the disabled veteran’s interest in the business was acquired.

(3)

(a) The department shall apply the following rules in situations in which marital assets form a basis for ownership of a business:

1. When marital assets other than the assets of the business in question are held jointly or as marital property by both spouses, and are used to acquire the ownership interest asserted by the disabled veteran, the department shall conclude that the disabled veteran acquired his or her ownership interest in the business with his or her own individual resources, provided that the other spouse irrevocably renounces and transfers all rights in the ownership interest in the manner sanctioned by the laws of the state in which either spouse or the business is domiciled. The department may not count a greater portion of joint or marital property assets toward ownership than state law would recognize as belonging to the qualifying member of the business.

2. The application for DVB certification shall include a copy of the document that is used for legally transferring and renouncing the rights as required in subd. 1.

(b) In instances where a disabled veteran and a person who is not a disabled veteran are married and the marital ownership is not clearly established, the department may request a marital-property waiver form in which both spouses certify that only the disabled veteran spouse or his or her duly authorized representative controls and manages the business, or an affidavit stating that the spouses have signed a marital-property agreement in which the spouse who is not a disabled veteran relinquishes control and management of the business.

History: EmR1041: emerg. cr., eff. 11-14-10; CR 11-004: cr. Register September 2011 No. 669, eff. 10-1-11.

Adm 82.28 Determination of control.

(1) Factors that the department may consider in determining whether one or more disabled veteran owners control a business include the following:

(a) Authority and restrictions as indicated in the articles of incorporation, by-laws, minutes of corporate meetings, bank signature cards, partnership and joint venture agreements and other business agreements and documents.

(b) Membership of one or more disabled veteran owners on the board of directors.

(d) The managerial experience, knowledge and expertise of the disabled veteran owners in such areas as finance, budgeting, personnel, production, marketing and research.

(e) Whether the disabled veteran owners have the authority to make policy decisions in such areas as finance, budgeting, personnel, production, marketing and research.

(f) Whether the daily business operations are controlled by one or more duly authorized representatives of one or more disabled veterans.

(g) Whether the disabled veteran owners or their duly authorized representatives are substantially unconnected with the principal place of business, such as by being incarcerated.

(2) An applicant’s assertion of being independent from a business that is owned by other than a disabled veteran may not rest solely on recognition of the disabled veteran owners by governmental taxing authorities. Other test criteria may include the following:

(a) An applicant’s relationship with any business that is not owned by a disabled veteran, which involves any long-term contract or lease agreements.

(b) The existence of working agreements with any business that is not owned by a disabled veteran.

(c) An applicant’s status as a party to any contract or lease agreement on terms at variance with industry standards or prudent business practices.

(d) The existence of restrictive financing agreements with any business that is not owned by a disabled veteran or any financial institution which impose undue limitations on the applicant.

(e) Interlocking stock ownership of the applicant and any business that is not owned by a disabled veteran in the same industry.

(f) Common directors or officers between the applicant and any business that is not owned by a disabled veteran.

(g) An applicant’s use of employees, equipment, expertise, facilities, or other resources from a business that is not owned by a disabled veteran.

(h) The receipt of financial benefits, such as profits and wages, that are not commensurate with the duties performed, by a business that is not owned by a disabled veteran.

(i) An applicant that cannot operate without licenses, permits or insurance held by another business.

(j) An applicant that does not possess all legal requirements necessary to its operation.

History: EmR1041: emerg. cr., eff. 11-14-10; CR 11-004: cr. Register September 2011 No. 669, eff. 10-1-11.

Adm 82.29 Documentation of control.

(1) An applicant shall submit evidence that one or more disabled veteran owners or their duly authorized representatives have control over the business. The evidence may include any of the following:

(a) Signed bids and contracts.

(b) Signed debt instruments.

(d) Bank signature cards and bank resolution authorizations, for savings, checking and other financial accounts.

(e) Written proof that the organizational and governing documents of an applicant, such as limited liability company operating agreements, partnership agreements, or articles of incorporation and by-laws, do not contain any provision which restricts the disabled veteran owner or his or her duly authorized representative from exercising control of the business.

(f)

1. Documentation, such as résumés, showing that the disabled veteran owners or their duly authorized representatives have the managerial experience, knowledge and expertise — in such areas as finance, budgeting, personnel, production, marketing and research — needed for exercising day-to-day control over the business.

2. The department may waive the managerial experience required in subd. 1., when a disabled veteran is starting a disabled veteran-owned business, financial adviser, or investment firm.

(g) Documentation establishing the representation authorization prescribed in s. 45.04 (1) (a), Stats., if another person is acting for the disabled veteran.

Note: Section 45.04 (1) (a) of the Statutes defines “duly authorized representative” and is reprinted under section Adm 82.12 (20).

(2) The managerial experience, knowledge and expertise of the disabled veteran owners or their duly authorized representatives substantially demonstrates their ability to make independent and unilateral business decisions necessary to guide the future and destiny of the business. The applicant may document this ability and control in a number of ways. For a disabled veteran owner or his or her duly authorized representative to demonstrate the extent of this control, the department may consider the following or other aspects of a business:

(a) Authority to sign payroll checks and letters of credit.

(b) Signature responsibility for insurance or bonds.

(d) Ability to obtain bank authorization resolutions.

(3) Agreements for support services are permitted as long as the power of the disabled veteran owner or his or her duly authorized representative to control the company is not restricted or impaired, as determined by the department.

History: EmR1041: emerg. cr., eff. 11-14-10; CR 11-004: cr. Register September 2011 No. 669, eff. 10-1-11.

Adm 82.32 Determination of active management. Factors that the department may consider in determining whether one or more disabled veteran owners or their duly authorized representatives actively manage a business include the following:

(1) Direct operational management.

(a) The operational management of the disabled veteran owner or his or her duly authorized representative is the demonstrated extent to which the disabled veteran owner or his or her duly authorized representative actually operates the day-to-day business.

(b) Departmental assessments of operational management shall rest upon the peculiarities of the industry of which the business is a part. In order to clarify the level of operational management of the disabled veteran owner or his or her duly authorized representative, the department may consider each of the following: