Chapter 180

180.0602 History History: 1989 a. 303; 1995 a. 27, 271; 2005 a. 476.

180.0603 180.0603 Issued and outstanding shares.

180.0603(1) (1) A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. If an investment company has authorized an indefinite number of shares, there is no limit on the number of shares that the investment company may issue. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted or canceled.

180.0603(2) (2) The reacquisition, redemption or conversion of outstanding shares is subject to the limitations of sub. (3) and to s. 180.0640.

180.0603(3) (3) At all times that shares of the corporation are outstanding, there must be outstanding one or more shares that together have unlimited voting rights and one or more shares, which may be the same share or shares as those with unlimited voting rights, that together are entitled to receive the net assets of the corporation upon dissolution.

180.0603 History History: 1989 a. 303; 1995 a. 271.

180.0604 180.0604 Fractional shares.

180.0604(1) (1) A corporation may do any of the following:

180.0604(1)(a) (a) Issue fractions of a share or pay in money the value of fractions of a share.

180.0604(1)(b) (b) Arrange for disposition of fractional shares by the shareholders.

180.0604(1)(c) (c) Issue scrip in registered or bearer form entitling the holder to receive a full share on the surrender of enough scrip to equal a full share.

180.0604(2) (2) A certificate representing scrip shall be conspicuously labeled “scrip” and shall contain the terms of exchange of scrip for a full share and the information required by s. 180.0625 (1), except that it may state that it is issued to bearer.

180.0604(3) (3) The holder of a fractional share may exercise the rights of a shareholder, including the right to vote, to receive dividends and to participate in the assets of the corporation upon liquidation. The holder of scrip is not entitled to the rights described in this subsection unless the scrip provides for them.

180.0604(4) (4) The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including but not limited to any of the following:

180.0604(4)(a) (a) That the scrip will become void if not exchanged for full shares before a specified date.

180.0604(4)(b) (b) That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.

180.0604 History History: 1989 a. 303.

180.0620 180.0620 Subscription for shares.

180.0620(1) (1) 

180.0620(1)(a) (a) A subscription for shares entered into before incorporation is irrevocable for 6 months unless the subscription agreement provides a longer or shorter period or all of the subscribers agree to revocation.

180.0620(1)(b) (b) Unless the subscription agreement provides otherwise, the filing of the articles of incorporation by the department constitutes acceptance by the corporation of all existing subscriptions to its shares.

180.0620(2) (2) The board of directors may determine the payment terms of subscriptions for shares that are entered into before incorporation, unless the subscription agreement specifies the payment terms. A call for payment by the board of directors shall be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.

180.0620(3) (3) Shares issued under subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.

180.0620(4) (4) If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and sell the shares if the debt remains unpaid more than 20 days after the corporation sends written demand for payment to the subscriber.

180.0620(5) (5) A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to s. 180.0621.

180.0620 History History: 1989 a. 303; 1995 a. 27.

180.0621 180.0621 Issuance of shares.

180.0621(1) (1) The powers granted in subs. (2) to (5) to the board of directors may be reserved to the shareholders by the articles of incorporation.

180.0621(2) (2) The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed or other securities of the corporation.

180.0621(3) (3) Before the corporation issues shares, the board of directors shall determine that the consideration received or to be received for the shares to be issued is adequate. The board of directors’ determination is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid and nonassessable.

180.0621(4) (4) When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued for that consideration are fully paid and nonassessable.

180.0621(5) (5) The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the benefits are received or the note is paid. If the services are not performed, the benefits are not received or the note is not paid, the corporation may cancel, in whole or in part, the shares escrowed or restricted and the distributions credited.

180.0621 History History: 1989 a. 303.

180.0622 180.0622 Liability of shareholders, transferees and others.

180.0622(1) (1) A purchaser from a corporation of the corporation’s shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued or the consideration specified in the subscription agreement entered into before incorporation.

180.0622(2) (2) Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation, except for a shareholder in a corporation defined under s. 71.365 (7), and only to the extent provided for under s. 73.0306, and except that a shareholder may become personally liable by his or her acts or conduct other than as a shareholder.

180.0622(3) (3) A person who becomes a transferee of shares in good faith and without knowledge that the consideration determined for the shares or specified in the subscription agreement entered into before incorporation has not been paid is not personally liable for any unpaid portion of the consideration.

180.0622(4) (4) 

180.0622(4)(a) (a) In this subsection, “fiduciary” means a personal representative, conservator, guardian, trustee, assignee for the benefit of creditors, or receiver.

180.0622(4)(b) (b) A fiduciary is not personally liable as a holder of or subscriber to shares of a corporation, but the estate and funds in the fiduciary’s hands are so liable. A pledgee or other holder of shares as collateral security is not personally liable as a shareholder.

180.0622 History History: 1989 a. 303; 2001 a. 102; 2005 a. 474; 2017 a. 58.

180.0622 Annotation Personal Liability for Corporate Debt. Kelley. Wis. Law. Oct. 1994.

180.0623 180.0623 Share dividends.

180.0623(1) (1) In this section, “share dividend” means shares issued proportionally and without consideration to the corporation’s shareholders or to the shareholders of one or more classes or series.

180.0623(2) (2) Except as provided in sub. (3) and unless the articles of incorporation provide otherwise, a corporation may issue share dividends.

180.0623(3) (3) 

180.0623(3)(a) (a) A corporation may not issue shares of one class or series as a share dividend in respect of shares of another class or series unless any of the following is satisfied:

180.0623(3)(a)1. 1. The articles of incorporation authorize the issuance.

180.0623(3)(a)2. 2. A majority of the votes entitled to be cast by the class or series to be issued approve the issuance.

180.0623(3)(a)3. 3. There are no outstanding shares of the class or series to be issued, as determined under par. (b).

180.0623(3)(b) (b) If a security is outstanding that is convertible into or carries a right to subscribe for or acquire shares of the class or series to be issued, the holder of the security is considered a holder of the class or series to be issued for purposes of making the determination under par. (a) 3.

180.0623(4) (4) If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, it is the date on which the board of directors authorizes the share dividend.

180.0623 History History: 1989 a. 303.

180.0624 180.0624 Share rights, options and warrants. Unless the articles of incorporation provide otherwise before the issuance of the rights, options or warrants, a corporation may issue rights, options or warrants for the purchase of shares of the corporation. The rights, options or warrants may contain provisions that adjust the rights, options or warrants in the event of an acquisition of shares or a reorganization, merger, interest exchange, sale of assets or other occurrence. Subject to the articles of incorporation, the board of directors shall determine the terms on which the rights, options or warrants are issued, their form and content, and the consideration for which the shares are to be issued. Notwithstanding s. 180.0601 (1) and any other provision of this chapter, and unless otherwise provided in the articles of incorporation before issuance of the rights, options or warrants, a corporation may before, on or after April 30, 1972, issue rights, options or warrants that include conditions that prevent the holder of a specified percentage of the outstanding shares of the corporation, including subsequent transferees of the holder, from exercising those rights, options or warrants.

180.0624 History History: 1989 a. 303; 2021 a. 258.

180.0625 180.0625 Form and content of certificates.

180.0625(1) (1) At a minimum, a share certificate shall state on its face all of the following:

180.0625(1)(a) (a) The name of the issuing corporation and that it is organized under the laws of this state.

180.0625(1)(b) (b) The name of the person to whom issued.

180.0625(1)(c) (c) The number and class of shares and the designation of the series, if any, that the certificate represents.

180.0625(2) (2) If the issuing corporation is authorized to issue different classes of shares or different series within a class, the front or back of each certificate shall contain any of the following:

180.0625(2)(a) (a) A summary of the designations, relative rights, preferences and limitations applicable to each class, and the variations in rights, preferences and limitations determined for each series and the authority of the board of directors to determine variations for future series.

180.0625(2)(b) (b) A conspicuous statement that the corporation will furnish the shareholder the information described in par. (a) on request, in writing and without charge.

180.0625(3) (3) 

180.0625(3)(a) (a) Each share certificate shall be signed either manually or in facsimile, by the officer or officers designated in the bylaws or by the board of directors.

180.0625(3)(b) (b) The validity of a share certificate is not affected if a person who signed the certificate no longer holds office when the certificate is issued.

180.0625 History History: 1989 a. 303.

180.0626 180.0626 Shares without certificates.

180.0626(1) (1) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issuance of any shares of any of its classes or series without certificates. The authorization does not affect shares already represented by certificates until the certificates are surrendered to the corporation.

180.0626(2) (2) Within a reasonable time after the issuance or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on share certificates by s. 180.0625 (1) and (2) and, if applicable, s. 180.0627.

180.0626(3) (3) Unless this chapter or ch. 408 expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.

180.0626 History History: 1989 a. 303.

180.0627 180.0627 Restriction on transfer of shares and other securities.

180.0627(1) (1) In this section:

180.0627(1)(a) (a) “Other securities” include securities that are convertible into or carry a right to subscribe for or acquire shares.

180.0627(1)(b) (b) “Transfer restriction” means a restriction on the transfer or registration of transfer of shares and other securities of a corporation.

180.0627(2) (2) 

180.0627(2)(a) (a) Except as provided in par. (b), the articles of incorporation, bylaws, an agreement among shareholders and holders of other securities, or an agreement between shareholders and holders of other securities and the corporation may impose a transfer restriction on shares and other securities of the corporation for any reasonable purpose, including but not limited to any of the following purposes:

180.0627(2)(a)1. 1. Maintaining the corporation’s status when it is dependent on the number or identity of its shareholders.

180.0627(2)(a)2. 2. Preserving exemptions under federal or state securities law.

180.0627(2)(b) (b) A transfer restriction may not affect shares and other securities issued before the restriction is adopted unless the holders of the shares and other securities are parties to the transfer restriction agreement or vote in favor of the transfer restriction.

180.0627(3) (3) A transfer restriction is valid and enforceable against the holder or a transferee of the holder if the transfer restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by s. 180.0626 (2). Unless so noted, a transfer restriction is not enforceable against a person who does not know of the transfer restriction.

180.0627(4) (4) The transfer restrictions permitted under this section include, but are not limited to, transfer restrictions that do any of the following:

180.0627(4)(a) (a) Obligate the shareholder or holder of other securities first to offer the corporation or other persons, whether separately, consecutively or simultaneously, an opportunity to acquire the restricted shares or other securities.

180.0627(4)(b) (b) Obligate the corporation or other persons, whether separately, consecutively or simultaneously, to acquire the restricted shares or other securities.

180.0627(4)(c) (c) Require the corporation, the holders of any class of its shares or other securities or another person to approve the transfer of the restricted shares or other securities, if the requirement is not manifestly unreasonable.

180.0627(4)(d) (d) Prohibit the transfer of the restricted shares or other securities to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.

180.0627 History History: 1989 a. 303.

180.0627 Annotation If a right-of-refusal renders the sale of stock impossible to anyone except to the corporation at whatever price the corporation wishes to pay, it is illegal. However, requiring a right-of-refusal at book value, if that book value is honestly calculated, does not guarantee a sale to the corporation at whatever price the corporation wishes to pay. Additionally, the failure to require fair market value does not amount to a breach of fiduciary duty. Dewey v. Bechthold, 384 F. Supp. 3d 971 (2019).