Chapter 180

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).

180.0628 180.0628 Expense of issuing shares. A corporation may pay the expense of selling or underwriting its shares, and of organizing or reorganizing the corporation, from the consideration received for shares.

180.0628 History History: 1989 a. 303.

180.0630 180.0630 Preemptive rights.

180.0630(1) (1) In this section, “other securities” has the meaning given in s. 180.0627 (1) (a).

180.0630(2) (2) Except as provided in sub. (7), the shareholders or holders of other securities of a corporation do not have a preemptive right to acquire the corporation’s unissued shares or other securities except to the extent provided in the articles of incorporation. If the articles of incorporation state that “the corporation elects to have preemptive rights”, or words of similar meaning, subs. (3) to (6) govern the preemptive rights, except to the extent that the articles of incorporation expressly provide otherwise.

180.0630(3) (3) Except as provided in sub. (5), the shareholders or holders of other securities of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation’s unissued shares or other securities upon the decision of the board of directors to issue the shares or other securities, subject to the following conditions:

180.0630(3)(a) (a) Holders of shares or other securities with general voting rights have preemptive rights with respect to shares and other securities of any class with general voting rights.

180.0630(3)(b) (b) Holders of shares or other securities without preferential rights to distributions or assets have preemptive rights with respect to shares and other securities of any class without preferential rights to distributions or assets, except that holders of shares or other securities without general voting rights have no preemptive rights with respect to shares or other securities of any class with general voting rights.

180.0630(4) (4) A shareholder or holder of other security may waive his or her preemptive right. A written waiver is irrevocable even if it is not supported by consideration.

180.0630(5) (5) There is no preemptive right with respect to any of the following:

180.0630(5)(a) (a) Shares or other securities issued as compensation to directors, officers or employees of the corporation or its affiliates.

180.0630(5)(b) (b) Shares or other securities issued to satisfy conversion or option rights created to provide compensation to directors, officers or employees of the corporation or its affiliates.

180.0630(5)(c) (c) Shares or other securities authorized in articles of incorporation that are issued within 6 months from the effective date of incorporation.

180.0630(5)(d) (d) Shares or other securities sold for other than money or an obligation to pay money.

180.0630(5)(e) (e) Treasury shares.

180.0630(6) (6) If shares or other securities subject to preemptive rights are not acquired by shareholders or holders of other securities, the corporation may issue the shares or other securities to any person for one year after being offered to shareholders or holders of other securities, at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the preemptive rights of shareholders or holders of other securities.

180.0630(7) (7) The preemptive rights of shares of a preexisting class, as defined in s. 180.1701, are governed by s. 180.1705.

180.0630 History History: 1989 a. 303; 1991 a. 16.

180.0631 180.0631 Corporation’s acquisition of its own shares.

180.0631(1) (1) Treasury shares shall be considered issued shares but not outstanding shares.

180.0631(2) (2) A corporation may acquire its own shares and all shares so acquired after December 31, 1990, constitute treasury shares unless any of the following conditions exists:

180.0631(2)(a) (a) The articles of incorporation prohibit treasury shares or prohibit the reissuance of acquired shares.

180.0631(2)(b) (b) The board of directors, by resolution, cancels the acquired shares, in which event the shares are restored to the status of authorized but unissued shares.

180.0631(3) (3) 

180.0631(3)(a) (a) If the articles of incorporation prohibit treasury shares but do not prohibit the reissuance of acquired shares, all of its own shares acquired by the corporation shall be restored to the status of authorized but unissued shares.

180.0631(3)(b) (b) If the articles of incorporation prohibit the reissuance of acquired shares, the number of authorized shares is reduced by the number of shares acquired by the corporation, effective upon amendment of the articles of incorporation, except in the case of an investment company that has authorized an indefinite number of shares. The board of directors may adopt articles of amendment under this paragraph without shareholder action and deliver them to the department for filing. The articles shall include all of the following information:

180.0631(3)(b)1. 1. The name of the corporation.

180.0631(3)(b)2. 2. The reduction in the number of authorized shares, itemized by class and series.

180.0631(3)(b)3. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares.

180.0631(3)(b)4. 4. A statement that the amendment was adopted by the board of directors and that shareholder action was not required.

180.0631(4) (4) Sections 180.0621 to 180.0628, as they apply to the issuance of shares, apply to the issuance of treasury shares.

180.0631(5) (5) Treasury shares existing on December 31, 1990, remain treasury shares until disposed of, canceled or restored to the status of authorized but unissued shares by action of the board of directors or shareholders.

180.0631 History History: 1989 a. 303; 1991 a. 16; 1995 a. 27, 271.

180.0640 180.0640 Distributions to shareholders.

180.0640(1) (1) The board of directors may authorize and the corporation may make distributions to its shareholders, subject to sub. (3) and any restriction by the articles of incorporation.

180.0640(2) (2) The record date for determining shareholders entitled to a distribution, other than a distribution involving a purchase, redemption or other acquisition of the corporation’s shares, is the date on which the board of directors authorizes the distribution, unless the board of directors fixes a different record date.

180.0640(3) (3) No distribution may be made if, after giving it effect, any of the following would occur:

180.0640(3)(a) (a) The corporation would not be able to pay its debts as they become due in the usual course of business.

180.0640(3)(b) (b) The corporation’s total assets would be less than the sum of its total liabilities plus, unless the articles of incorporation permit otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

180.0640(4) (4) The board of directors may base a determination that sub. (3) does not prohibit a distribution on financial statements and other financial data prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

180.0640(5) (5) Except as provided in sub. (7), the effect of a distribution for purposes of sub. (3) is measured as of the following dates:

180.0640(5)(a) (a) In the case of distribution by purchase, redemption or other acquisition of the corporation’s shares, as of the earlier of the following:

180.0640(5)(a)1. 1. The date on which money or other property is transferred or debt is incurred by the corporation.

180.0640(5)(a)2. 2. The date on which the shareholder ceases to be a shareholder with respect to the acquired shares.

180.0640(5)(b) (b) In the case of any other distribution of indebtedness, as of the date on which the indebtedness is distributed.

180.0640(5)(c) (c) In all other cases, as of the following:

180.0640(5)(c)1. 1. The date on which the distribution is authorized if the payment occurs within 120 days after the date of authorization.

180.0640(5)(c)2. 2. The date on which the payment is made if payment occurs more than 120 days after the date of authorization.

180.0640(6) (6) A corporation’s indebtedness to a shareholder incurred because of a distribution made in accordance with this section is at parity with the corporation’s indebtedness to its general, unsecured creditors except to the extent subordinated by agreement. This subsection does not affect the validity or priority of a security interest in corporation property created to secure indebtedness incurred because of a distribution.

180.0640(7) (7) Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under sub. (3) if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to shareholders could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date on which the payment is actually made.

180.0640 History History: 1989 a. 303; 1995 a. 400.

subch. VII of ch. 180 SUBCHAPTER VII

SHAREHOLDERS

180.0701 180.0701 Annual meeting.

180.0701(1) (1) Except as provided in sub. (4), a corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws.

180.0701(2) (2) 

180.0701(2)(a) (a) Subject to par. (b), a corporation may hold the annual shareholders’ meeting in or outside this state at the place stated in or fixed in accordance with the bylaws. Subject to par. (b), if no place is stated in or fixed in accordance with the bylaws, the corporation shall hold the annual meeting at its principal office.

180.0701(2)(b) (b) A corporation’s bylaws may authorize the board of directors, in its sole discretion, to determine that the annual shareholders’ meeting shall not be held at any place, but may instead be held solely by means of remote communication as authorized under s. 180.0709.

180.0701(3) (3) Failure to hold an annual meeting in one or more years does not affect the validity of any corporate action.

180.0701(4) (4) If so provided in the articles of incorporation or bylaws of an investment company, the investment company is not required to hold an annual meeting of shareholders in any year in which none of the following matters is required to be acted on by the shareholders under 15 USC 80a-1 to 80a-64:

180.0701(4)(a) (a) Election of directors.

180.0701(4)(b) (b) Approval of the investment advisory agreement.

180.0701(4)(c) (c) Ratification of the selection of independent certified public accountants licensed or certified under ch. 442.

180.0701(4)(d) (d) Approval of a distribution agreement.