AB854: Bill Text

AB854,420,18 (2) A demand under sub. (1) would be futile.

AB854,420,21 183.0803 Proper plaintiff. A derivative action to enforce a right of a limited liability company may be maintained only by a person that is a member at the time the action is commenced and to which any of the following applies:

AB854,420,23 (1) The person was a member when the conduct giving rise to the action occurred.

AB854,421,3 (2) The person's status as a member devolved on the person by operation of law or pursuant to the terms of the operating agreement from a person that was a member at the time of the conduct.

AB854,421,5 183.0804 Pleading. In a derivative action under s. 183.0802, the complaint must state with particularity one of the following:

AB854,421,7 (1) The date and content of plaintiff's demand and the response to the demand by the managers or other members.

AB854,421,8 (2) Why demand should be excused as futile.

AB854,421,17 183.0805 Special litigation committee. (1) If a limited liability company is named as or made a party in a derivative proceeding, the company may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the company. If the company appoints a special litigation committee, on motion by the committee made in the name of the company, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation. This subsection does not prevent the court from doing any of the following:

AB854,421,18 (a) Enforcing a person's right to information under s. 183.0410.

AB854,421,20 (b) Granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.

AB854,421,22 (2) A special litigation committee must be composed of one or more disinterested and independent individuals, who may be members.

AB854,421,24 (3) (a) In a member-managed limited liability company, a special litigation committee may be appointed as follows:

AB854,422,2 1. By the affirmative vote or consent of a majority of the transferable interests of the members not named as parties in the proceeding.

AB854,422,4 2. If all members are named as parties in the proceeding, by a majority of the transferable interests of the members named as defendants.

AB854,422,6 (b) In a manager-managed limited liability company, a special litigation committee may be appointed as follows:

AB854,422,7 1. By a majority of the managers not named as parties in the proceeding.

AB854,422,9 2. If all managers are named as parties in the proceeding, by a majority of the managers named as defendants.

AB854,422,12 (4) After appropriate investigation, a special litigation committee may determine that any of the following is in the best interests of the limited liability company:

AB854,422,13 (a) That the proceeding continue under the control of the plaintiff.

AB854,422,14 (b) That the proceeding continue under the control of the committee.

AB854,422,15 (c) That the proceeding be settled on terms approved by the committee.

AB854,422,16 (d) That the proceeding be dismissed.

AB854,423,3 (5) After making a determination under sub. (4), a special litigation committee shall file with the court a statement of its determination and its report supporting its determination and shall serve each party with a copy of the determination and report. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered under sub. (1) and allow the action to continue under the control of the plaintiff.

AB854,423,7 183.0806 Proceeds and expenses. (1) (a) Except as otherwise provided in sub. (2), any proceeds or other benefits of a derivative action, whether by judgment, compromise, or settlement, belong to the limited liability company and not to the plaintiff.

AB854,423,9 (b) Except as otherwise provided in sub. (2), if the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the company.

AB854,423,12 (2) If a derivative action is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney fees and costs, from the recovery of the limited liability company.

AB854,423,13 subchapter IX

AB854,423,15 FOREIGN LIMITED LIABILITY COMPANIES

AB854,423,17 183.0901 Governing law. (1) The governing law of a foreign limited liability company governs all of the following:

AB854,423,18 (a) The internal affairs of the company.

AB854,423,20 (b) The liability of a member as member and a manager as manager for a debt, obligation, or other liability of the company.

AB854,423,23 (2) A foreign limited liability company is not precluded from registering to do business in this state because of any difference between its governing law and the law of this state.

AB854,424,2 (3) Registration of a foreign limited liability company to do business in this state does not authorize the foreign company to engage in any activities and affairs or exercise any power that a limited liability company may not engage in or exercise in this state.

AB854,424,5 183.0902 Registration to do business in this state. (1) A foreign limited liability company may not do business in this state until it registers with the department under this subchapter.

AB854,424,8 (2) A foreign limited liability company doing business in this state may not maintain an action or proceeding in this state unless it has registered to do business in this state.

AB854,424,12 (3) The failure of a foreign limited liability company to register to do business in this state does not impair the validity of a contract or act of the foreign limited liability company or its title to property in this state or preclude it from defending an action or proceeding in this state.

AB854,424,15 (4) A limitation on the liability of a member or manager of a foreign limited liability company is not waived solely because the company does business in this state without registering to do business in this state.

AB854,424,17 (5) Section 183.0901 (1) and (2) applies even if a foreign limited liability company fails to register under this subchapter.

AB854,424,21 (6) (a) A foreign limited liability company that does business in this state without registering to do business in this state is liable to this state, for each year or any part of a year during which it did business in this state without registration, in an amount equal to all of the following:

AB854,424,25 1. All fees and other charges that would have been imposed by this chapter on the foreign limited liability company had it properly filed a foreign registration statement as required by this section and thereafter filed all reports required by this chapter.

AB854,425,1 2. Fifty percent of the amount owed under subd. 1. or $5,000, whichever is less.

AB854,425,6 (b) The foreign limited liability company shall pay the amount owed under par. (a) to the department, and the department may not file a foreign registration statement for the foreign limited liability company until the amount owed is paid. The attorney general may enforce a foreign limited liability company's obligation to pay to the department any amount owed under this subsection.

AB854,425,9 183.0903 Foreign registration statement. To register to do business in this state, a foreign limited liability company must deliver a foreign registration statement to the department for filing. The statement must state all of the following:

AB854,425,11 (1) The name of the company and, if the name does not comply with s. 183.0112, a fictitious name adopted pursuant to s. 183.0906 (1).

AB854,425,12 (2) That the company is a foreign limited liability company.

AB854,425,13 (3) The jurisdiction of the company's governing law.

AB854,425,17 (4) The street and mailing addresses of the company's principal office and, if the company's governing law requires the company to maintain an office in the jurisdiction of such governing law, the street and mailing addresses of the required office.

AB854,425,19 (5) The address of the company's registered office in this state and the name and e-mail address of its registered agent at that office.

AB854,425,23 183.0904 Amendment or cancellation of foreign registration statement. A registered foreign limited liability company shall deliver to the department for filing an amendment to, or cancellation of, as appropriate, its foreign registration statement if there is a change in any of the following:

AB854,425,25 (1) The name of the company and, if the name does not comply with s. 183.0112, a fictitious name adopted pursuant to s. 183.0906 (1).

AB854,426,1 (1m) The company's status as a foreign limited liability company.

AB854,426,2 (2) The jurisdiction of the company's governing law.

AB854,426,3 (3) An address required by s. 183.0903 (4).

AB854,426,5 (4) The information required by s. 183.0903 (5), unless this information has previously been changed pursuant to s. 183.0116 or 183.0212.

AB854,426,8 183.0905 Activities not constituting doing business. (1) Activities of a foreign limited liability company which do not constitute doing business in this state under this subchapter include all of the following:

AB854,426,10 (a) Maintaining, defending, mediating, arbitrating, or settling an action or proceeding.

AB854,426,12 (b) Carrying on any activity concerning its internal affairs, including holding meetings of its members or managers.

AB854,426,13 (c) Maintaining accounts in financial institutions.

AB854,426,16 (d) Maintaining offices or agencies for the transfer, exchange, and registration of securities of the company or maintaining trustees or depositaries with respect to those securities.

AB854,426,17 (e) Selling through independent contractors.

AB854,426,19 (f) Soliciting or obtaining orders by any means if the orders require acceptance outside this state before they become contracts.

AB854,426,21 (g) Creating or acquiring indebtedness, mortgages, or security interests in property.

AB854,426,23 (h) Securing or collecting debts or enforcing mortgages or security interests in property securing the debts and holding, protecting, or maintaining property.

AB854,426,25 (i) Conducting an isolated transaction that is not in the course of similar transactions.

AB854,427,1 (j) Owning, without more, property.

AB854,427,2 (k) Doing business in interstate commerce.

AB854,427,4 (2) A person does not do business in this state solely by being a member or manager of a foreign limited liability company that does business in this state.

AB854,427,7 (3) This section does not apply in determining the contacts or activities that may subject a foreign limited liability company to service of process, taxation, or regulation under law of this state other than this chapter.

AB854,427,13 183.0906 Noncomplying name of foreign limited liability company. (1) A foreign limited liability company whose name does not comply with s. 183.0112 may not register to do business in this state until it adopts, for the purpose of doing business in this state, a fictitious name that complies with s. 183.0112. After registering to do business in this state with a fictitious name, a company shall only do business in this state under the fictitious name.

AB854,427,17 (2) If a registered foreign limited liability company changes its name to one that does not comply with s. 183.0112, it may not do business in this state until it complies with sub. (1) by amending its registration to adopt a fictitious name that complies with s. 183.0112.

AB854,427,24 183.0907 Withdrawal deemed on conversion to or merger into domestic filing entity or domestic limited liability partnership. A registered foreign limited liability company that converts to, or merges into, a domestic limited liability partnership or to or into a domestic entity whose formation requires the delivery of a record to the department for filing is deemed to have withdrawn its registration on the effective date of the conversion or merger, unless the registration is transferred to such company pursuant to s. 183.0909.

AB854,428,7 183.0908 Withdrawal on dissolution or conversion to or merger into nonfiling entity other than limited liability partnership. (1) (a) A registered foreign limited liability company that has dissolved and completed winding up or has converted to, or merged into, a domestic or foreign entity whose formation does not require the delivery of a record for filing by the department, other than a limited liability partnership, shall deliver a statement of withdrawal to the department for filing, as provided in s. 183.0911.

AB854,428,10 (c) In the case of a merger or conversion, the statement under par. (a) must also state the name and type of entity to which or into which the limited liability company has converted or merged and the jurisdiction of its governing law.

AB854,428,14 (2) After a withdrawal under this section is effective, service of process in any action or proceeding based on a cause of action arising during the time the foreign limited liability company was registered to do business in this state may be made pursuant to s. 183.0119, as provided in s. 183.0911 (2).

AB854,428,20 183.0909 Transfer of registration. (1) When a registered foreign limited liability company has merged into a foreign entity that is not registered to do business in this state or has converted to a foreign entity required to register with the department to do business in this state, the foreign entity shall deliver to the department for filing an application for transfer of registration. The application must state all of the following:

AB854,428,22 (a) The name of the registered foreign limited liability company before the merger or conversion.

AB854,428,24 (b) That before the merger or conversion the registration pertained to a foreign limited liability company.

AB854,429,3 (c) The name of the applicant foreign entity into which the foreign limited liability company has merged or to which it has been converted and, if the name does not comply with s. 183.0112, a fictitious name adopted pursuant to s. 183.0906 (1).

AB854,429,5 (d) The type of entity of the applicant foreign entity and the jurisdiction of its governing law.

AB854,429,9 (e) The street and mailing addresses of the principal office of the applicant foreign entity and, if the entity's governing law requires the entity to maintain an office in the jurisdiction of that governing law, the street and mailing addresses of that office.

AB854,429,11 (f) The street address of the applicant foreign entity's registered office in this state and the name and e-mail address of its registered agent at that office.

AB854,429,15 (2) When an application for transfer of registration takes effect, the registration of the foreign limited liability company to do business in this state is transferred without interruption to the foreign entity into which the company has merged or to which it has been converted.

AB854,429,18 183.09101 Grounds for termination. (1) The department may terminate the registration of a registered foreign limited liability company in the manner provided in s. 183.09102 if any of the following applies:

AB854,429,20 (a) The foreign limited liability company fails to file its annual report with the department within 4 months after it is due.

AB854,429,22 (b) The foreign limited liability company does not pay, within 4 months after they are due, any fees or penalties due the department under this chapter.

AB854,429,24 (c) The foreign limited liability company is without a registered agent or registered office in this state for at least 6 months.

AB854,430,4 (d) The foreign limited liability company does not inform the department under s. 183.0116 or 183.0117 that its registered agent or registered office has changed, that its registered agent has resigned, or that its registered office has been discontinued, within 6 months of the change, resignation, or discontinuance.

AB854,430,6 (e) The foreign limited liability company's statement of foreign registration contains fraudulent or materially false information.

AB854,430,10 (f) The department receives a duly authenticated certificate from the secretary of state or other official having custody of company records in the jurisdiction of the foreign limited liability company's governing law stating that it has been dissolved or disappeared as the result of a merger or other event.