Chapter 178

178.0303(5)(c) (c) A limitation on the grant is contained in another statement of authority that became effective after the statement containing the grant became effective.

178.0303(6) (6) Subject to sub. (3), an effective statement of authority that grants authority to transfer real property held in the name of the partnership, a certified copy of which statement is recorded in the office of the register of deeds for the county in which the property is located, is conclusive in favor of a person that gives value in reliance on the grant without knowledge to the contrary, except to the extent that when the person gives value any of the following applies:

178.0303(6)(a) (a) The statement has been canceled or restrictively amended under sub. (2), and a certified copy of the cancellation or restrictive amendment has been recorded in the office of the register of deeds for the county in which the property is located.

178.0303(6)(b) (b) A limitation on the grant is contained in another statement of authority that became effective after the statement containing the grant became effective, and a certified copy of the later-effective statement is recorded in the office of the register of deeds for the county in which the property is located.

178.0303(7) (7) Subject to sub. (3), if a certified copy of an effective statement containing a limitation on the authority to transfer real property held in the name of a partnership is recorded in the office of the register of deeds for the county in which the property is located, all persons are deemed to know of the limitation.

178.0303(8) (8) Subject to sub. (9), an effective statement of dissolution is a cancellation of any filed statement of authority for the purposes of sub. (6) and is a limitation on authority for purposes of sub. (7).

178.0303(9) (9) After a statement of dissolution becomes effective, a partnership may deliver to the department for filing and, if appropriate, may record a statement of authority that is designated as a postdissolution statement of authority. The statement operates as provided in subs. (6) and (7).

178.0303(10) (10) Unless canceled earlier, an effective statement of authority is canceled by operation of law 5 years after the date on which the statement, or its most recent amendment or renewal, was filed. The cancellation is effective without recording under sub. (6) or (7).

178.0303(11) (11) An effective statement of denial operates as a restrictive amendment under this section and may be recorded by certified copy for purposes of sub. (6) (a).

178.0303(11m) (11m) Certified copies to be recorded in the office of the register of deeds are to be sent by the person desiring the copies to be recorded and the department is not obligated to send the copies to the office of the register of deeds unless it chooses to undertake this responsibility.

178.0303 History History: 2015 a. 295; 2021 a. 258.

178.0304 178.0304 Statement of denial. A person named in a filed statement of authority granting that person authority may deliver to the department for filing a statement of denial that does all of the following:

178.0304(1) (1) Provides the name of the partnership and the caption of the statement of authority to which the statement of denial pertains.

178.0304(2) (2) Denies the grant of authority.

178.0304 History History: 2015 a. 295.

178.0305 178.0305 Partnership liable for partner’s actionable conduct.

178.0305(1) (1) A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with the actual or apparent authority of the partnership.

178.0305(2) (2) If, in the course of the partnership’s business or while acting with actual or apparent authority of the partnership, a partner receives or causes the partnership to receive money or property of a person not a partner, and the money or property is misapplied by a partner, the partnership is liable for the loss.

178.0305 History History: 2015 a. 295.

178.0306 178.0306 Partner’s liability.

178.0306(1) (1) Except as otherwise provided in subs. (2) to (3m), all partners are liable jointly and severally for all debts, obligations, and other liabilities of the partnership unless otherwise agreed by the claimant or provided by law.

178.0306(2) (2) A person that becomes a partner is not personally liable for a debt, obligation, or other liability of the partnership incurred before the person became a partner.

178.0306(3) (3) 

178.0306(3)(a) (a) Except as provided in sub. (3m), a debt, obligation, or other liability of a partnership incurred while the partnership is a limited liability partnership is solely the debt, obligation, or other liability of the limited liability partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such a debt, obligation, or other liability of the limited liability partnership solely by reason of being or acting as a partner.

178.0306(3)(b) (b) This subsection applies despite anything inconsistent in the partnership agreement that existed immediately before the vote or consent required to become a limited liability partnership under s. 178.0901 (2).

178.0306(3)(c) (c) This subsection applies regardless of the dissolution of the limited liability partnership.

178.0306(3m) (3m) 

178.0306(3m)(a) (a) To the extent a partnership has or is deemed to have elected under par. (b) to have this par. (a) apply, sub. (3) does not affect the liability of a partner in a limited liability partnership for any of the following that occurs while the partnership is subject to this subsection:

178.0306(3m)(a)1. 1. The partner’s own omissions, negligence, wrongful acts, misconduct, or malpractice.

178.0306(3m)(a)2. 2. The omissions, negligence, wrongful acts, misconduct, or malpractice of any person acting under the partner’s actual supervision and control in the specific activity in which the omissions, negligence, wrongful acts, misconduct, or malpractice occurred.

178.0306(3m)(b) (b)

178.0306(3m)(b)1. 1. Except as provided in subd. 3., a limited liability partnership that became a limited liability partnership before January 1, 2018, is deemed to have elected to have par. (a) apply.

178.0306(3m)(b)2. 2. Except as provided in subd. 3, a limited liability partnership that became a limited liability partnership on or after January 1, 2018, is deemed to not have elected to have par. (a) apply.

178.0306(3m)(b)3. 3. A limited liability partnership may change its election under this paragraph by filing an amended statement of qualification to that effect. This amendment may be made at any time, but shall be effective prospectively only.

178.0306(4) (4) The failure of a limited liability partnership to observe formalities relating to the exercise of its powers or management of its business is not a ground for imposing liability on a partner for a debt, obligation, or other liability of the partnership.

178.0306(5) (5) The cancellation or administrative revocation of a limited liability partnership’s statement of qualification does not affect the limitation in this section on the liability of a partner for a debt, obligation, or other liability of the partnership incurred while the statement was in effect.

178.0306 History History: 2015 a. 295.

178.0307 178.0307 Actions by and against partnership and partners.

178.0307(1) (1) A partnership may sue and be sued in the name of the partnership.

178.0307(2) (2) To the extent not inconsistent with s. 178.0306, a partner may be joined in an action against the partnership or named in a separate action.

178.0307(3) (3) A judgment against a partnership is not by itself a judgment against a partner. A judgment against a partnership may not be satisfied from a partner’s assets unless there is also a judgment against the partner.

178.0307(4) (4) A judgment creditor of a partner may not levy execution against the assets of the partner to satisfy a judgment based on a claim against the partnership unless the partner is personally liable for the claim under s. 178.0306 and any of the following is true:

178.0307(4)(a) (a) A judgment based on the same claim has been obtained against the partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part.

178.0307(4)(b) (b) The partnership is a debtor in bankruptcy.

178.0307(4)(c) (c) The partner has agreed that the creditor need not exhaust partnership assets.

178.0307(4)(d) (d) A court grants permission to the judgment creditor to levy execution against the assets of a partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court’s equitable powers.

178.0307(4)(e) (e) Liability is imposed on the partner by law or contract independent of the existence of the partnership.

178.0307(5) (5) This section applies to any debt, liability, or other obligation of a partnership which results from a representation by a partner or purported partner under s. 178.0308.

178.0307 History History: 2015 a. 295.

178.0308 178.0308 Liability of purported partner.

178.0308(1) (1) If a person, by words or conduct, purports to be a partner, or consents to being represented by another as a partner, in a partnership or with one or more persons not partners, the purported partner is liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership. If the representation, either by the purported partner or by a person with the purported partner’s consent, is made in a public manner, the purported partner is liable to a person who relies upon the purported partnership even if the purported partner is not aware of being held out as a partner to the claimant. If partnership liability results, the purported partner is liable with respect to that liability as if the purported partner were a partner. If no partnership liability results, the purported partner is liable with respect to that liability jointly and severally with any other person consenting to the representation.

178.0308(2) (2) If a person is thus represented to be a partner in an existing partnership, or with one or more persons not partners, the purported partner is an agent of persons consenting to the representation to bind them to the same extent and in the same manner as if the purported partner were a partner with respect to persons who enter into transactions in reliance upon the representation. If all the partners of the existing partnership consent to the representation, a partnership act or obligation results. If fewer than all the partners of the existing partnership consent to the representation, the person acting and the partners consenting to the representation are jointly and severally liable.

178.0308(3) (3) A person is not liable as a partner merely because the person is named by another as a partner in a statement of partnership authority.

178.0308(4) (4) A person does not continue to be liable as a partner merely because of a failure to file a statement of dissociation or to amend a statement of partnership authority to indicate the person’s dissociation as a partner.

178.0308(5) (5) Except as otherwise provided in subs. (1) and (2) and subch. VII, persons who are not partners as to each other are not liable as partners to other persons.

178.0308 History History: 2015 a. 295.

subch. IV of ch. 178 SUBCHAPTER IV

RELATIONS OF PARTNERS TO EACH
OTHER AND TO PARTNERSHIP

178.0401 178.0401 Partner’s rights and duties.

178.0401(1) (1) Each partner is entitled to an equal share of the partnership distributions and, except in the case of a limited liability partnership, is chargeable with a share of the partnership losses in proportion to the partner’s share of the distributions.

178.0401(2) (2) A partnership shall reimburse a partner for any payment made by the partner in the course of the partner’s activities on behalf of the partnership, if the partner complied with this section and s. 178.0409 in making the payment.

178.0401(3) (3) A partnership shall indemnify and hold harmless a person with respect to any claim or demand against the person and any debt, obligation, or other liability incurred by the person by reason of the person’s former or present capacity as a partner, if the claim, demand, debt, obligation, or other liability does not arise from the person’s breach of this section or s. 178.0406, 178.0407, or 178.0409.

178.0401(4) (4) In the ordinary course of its business, a partnership may advance reasonable expenses, including attorney fees and costs, incurred by a person in connection with a claim or demand against the person by reason of the person’s former or present capacity as a partner, if the person promises to repay the partnership if the person ultimately is determined not to be entitled to be indemnified under sub. (3).

178.0401(5) (5) A partnership may purchase and maintain insurance on behalf of a partner against liability asserted against or incurred by the partner in that capacity or arising from that status even if, under s. 178.0105 (3) (h), the partnership agreement could not eliminate or limit the person’s liability to the partnership for the conduct giving rise to the liability.

178.0401(6) (6) A partnership shall reimburse a partner for an advance to the partnership beyond the amount of capital the partner agreed to contribute.

178.0401(7) (7) A payment or advance made by a partner which gives rise to a partnership obligation under sub. (2) or (6) constitutes a loan to the partnership which accrues interest from the date of the payment or advance.

178.0401(8) (8) Each partner has equal rights in the management and conduct of the partnership’s business.

178.0401(9) (9) A partner may use or possess partnership property only on behalf of the partnership.

178.0401(10) (10) Unless authorized by the partnership agreement or otherwise in accordance with this chapter, a partner is not entitled to remuneration for services performed for the partnership, except for reasonable compensation for services rendered in winding up the business of the partnership.

178.0401(11) (11) A difference arising as to a matter in the ordinary course of business of a partnership may be decided by a majority of the partners. An act outside the ordinary course of business of a partnership, an amendment to the partnership agreement, or a merger, interest exchange, conversion, or domestication by the partnership under subch. IX may be undertaken only with the affirmative vote or consent of all the partners.

178.0401(11m) (11m) Unless otherwise provided in the partnership agreement, any action that is to be voted on or consented to by some or all of the partners may be taken without a meeting of the partners entitled to vote or consent if all of such partners consent to the action. The consent shall be evidenced by one or more written consents describing the action, signed by each of such partners, and delivered to the partnership for inclusion in the partnership records. Unless otherwise provided in the partnership agreement, if a person, whether or not then a partner, so consenting as a partner directs, whether through instruction to an agent or otherwise, that such consent will be effective at a future time, including a time determined upon the happening of an event, then the person shall be deemed to have consented as a partner at this future time so long as the person is then a partner and did not revoke the consent prior to that time. Any such consent shall be revocable prior to its becoming effective.

178.0401 History History: 2015 a. 295; 2021 a. 258.

178.0402 178.0402 Becoming partner.

178.0402(1) (1) Upon formation of a partnership, a person becomes a partner under s. 178.0202 (1).

178.0402(2) (2) After formation of a partnership, a person becomes a partner in any of the following ways:

178.0402(2)(a) (a) As provided in a partnership agreement.

178.0402(2)(b) (b) As a result of a transaction effective under subch. XI.

178.0402(2)(c) (c) With the affirmative vote or consent of all the partners.

178.0402(3) (3) A person may become a partner without doing any of the following:

178.0402(3)(a) (a) Acquiring a transferable interest.

178.0402(3)(b) (b) Making or being obligated to make a contribution to the partnership.

178.0402 History History: 2015 a. 295; 2021 a. 258.

178.0403 178.0403 Form of contribution. A contribution may consist of money or other property transferred to, services performed for, or another benefit provided to the partnership or an agreement to transfer money or property to, perform services for, or provide another benefit to the partnership.

178.0403 History History: 2015 a. 295.

178.0404 178.0404 Liability for contribution.

178.0404(1) (1) A person’s obligation to make a contribution to a partnership is not excused by the person’s death, disability, termination, or other inability to perform personally.

178.0404(2) (2) If a person does not fulfill an obligation to make a contribution other than money, the person is obligated at the option of the partnership to contribute money equal to the value of the part of the contribution which has not been made.

178.0404(3) (3) The obligation of a person to make a contribution may be compromised only by the affirmative vote or consent of all the partners. If a creditor of a limited liability partnership extends credit or otherwise acts in reliance on an obligation described in sub. (1) without knowledge or notice of a compromise under this subsection, the creditor may enforce the obligation.

178.0404 History History: 2015 a. 295.