Chapter 180

180.1835 180.1835 Limited liability. The failure of a statutory close corporation to observe usual corporate formalities or requirements relating to the exercise of its corporate powers or the management of its business and affairs is not grounds for imposing personal liability on the shareholders for obligations of the corporation.

180.1835 History History: 1989 a. 303.

180.1837 180.1837 Officers; execution of documents.

180.1837(1) (1) A statutory close corporation may operate and conduct business with one or more officers.

180.1837(2) (2) If an individual holds more than one office in a statutory close corporation, the individual may execute, acknowledge or verify in more than one capacity any instrument required to be executed, acknowledged or verified by the holders of 2 or more offices.

180.1837 History History: 1989 a. 303.

subch. XIX of ch. 180 SUBCHAPTER XIX

SERVICE CORPORATIONS

180.1901 180.1901 Definitions. In ss. 180.1901 to 180.1921:

180.1901(1) (1) “Employee” means an individual who is hired by a service corporation and who is usually and ordinarily considered by custom, practice or law to be rendering professional or other personal services for which a license, certificate, registration or other legal authorization is required. “Employee” does not include any of the following:

180.1901(1)(a) (a) An individual who is hired by a service corporation and who provides services as an administrator, technician, clerk or bookkeeper.

180.1901(1)(b) (b) An individual who performs all of his or her employment for a service corporation under the direct supervision and control of a licensed, registered or certified officer or employee of the service corporation.

180.1901(1m) (1m) “Health care professional” means an individual who is licensed, registered or certified by any of the following:

180.1901(1m)(ag) (ag) The massage therapy and bodywork therapy affiliated credentialing board under ch. 460.

180.1901(1m)(am) (am) Chiropractic examining board under ch. 446.

180.1901(1m)(ar) (ar) Board of nursing under ch. 441.

180.1901(1m)(at) (at) Dentistry examining board under ch. 447.

180.1901(1m)(b) (b) Medical examining board under subch. II of ch. 448.

180.1901(1m)(bg) (bg) Physical therapy examining board under subch. III of ch. 448.

180.1901(1m)(bk) (bk) Podiatry affiliated credentialing board under subch. IV of ch. 448.

180.1901(1m)(br) (br) Dietitians affiliated credentialing board under subch. V of ch. 448.

180.1901(1m)(bs) (bs) Athletic trainers affiliated credentialing board under subch. VI of ch. 448.

180.1901(1m)(bu) (bu) Occupational therapists affiliated credentialing board under subch. VII of ch. 448.

180.1901(1m)(c) (c) Optometry examining board under ch. 449.

180.1901(1m)(d) (d) Pharmacy examining board under ch. 450.

180.1901(1m)(e) (e) Psychology examining board under ch. 455.

180.1901(1m)(f) (f) Marriage and family therapy, professional counseling, and social work examining board under subch. I of ch. 457.

180.1901(1m)(g) (g) Hearing and speech examining board under subch. II of ch. 459.

180.1901(1m)(h) (h) Naturopathic medicine examining board under ch. 466, except that “health care professional” does not include a limited-scope naturopathic doctor licensed by the naturopathic medicine examining board under ch. 466.

180.1901(2) (2) “Service corporation” means a corporation organized under ss. 180.1903 to 180.1921.

180.1901 History History: 1989 a. 303; 1993 a. 473; 1995 a. 167; 1997 a. 75, 156, 175; 1999 a. 9, 32, 180; 2001 a. 74, 80; 2003 a. 41; 2009 a. 113, 149, 355; 2021 a. 130; 2023 a. 55.

180.1903 180.1903 Formation of service corporation.

180.1903(1) (1) Except as provided in sub. (1m), one or more natural persons licensed, certified, or registered pursuant to any provisions of the statutes, if all have the same license, certificate, or registration or if all are health care professionals, may organize and own shares in a service corporation. A service corporation may own, operate, and maintain an establishment and otherwise serve the convenience of its shareholders in carrying on the particular profession, calling, or trade for which the licensure, certification, or registration of its organizers is required.

180.1903(1m) (1m) A service corporation for carrying on the profession of certified public accounting may be organized under sub. (1) if more than 50 percent of the shareholders are certified public accountants.

180.1903(2) (2) Professional or other personal services, consultation or advice in any form may be rendered only by directors, officers, agents or employees of the service corporation who are licensed, certified or registered pursuant to statute in the field of endeavor designated in the articles of incorporation of the service corporation.

180.1903(3) (3) Liability may not accrue to a service corporation or its shareholders solely as a result of a decision to organize under sub. (1) or solely as a result of a decision to include or exclude a category of health care professionals as eligible to become shareholders of the service corporation.

180.1903(4) (4) Each health care professional, other than a physician or nurse anesthetist, who is a shareholder of a service corporation and who has the authority to provide health care services that are not under the direction and supervision of a physician or nurse anesthetist shall carry malpractice insurance that provides coverage of not less than the amounts established under s. 655.23 (4).

180.1903 History History: 1989 a. 303; 1993 a. 473; 2001 a. 16.

180.1905 180.1905 Business corporation law applicable.

180.1905(1) (1) Other provisions of this chapter shall be applicable to service corporations, including their organization, and service corporations shall enjoy the powers and privileges and be subject to the duties, restrictions and liabilities of other stock corporations, except as provided in ss. 180.1901 to 180.1921. A service corporation may not engage in any business other than that for which it was specifically organized and for which its charter was granted.

180.1905(2) (2) Sections 180.1901 to 180.1921 control in the event of conflicts with any other provision of this chapter.

180.1905 History History: 1989 a. 303.

180.1907 180.1907 Corporate name. The service corporation may bear the last name of one or more persons formerly or currently associated with it. A service corporation may adopt a name which does not include the surname of any present or former shareholder. The corporate name shall end with the word “chartered” or “limited”, or the words “service corporation”, or the abbreviation “ltd.” or “S.C.”. A service corporation in existence on January 1, 1991, need not change its name to comply with this section.

180.1907 History History: 1989 a. 303; 1991 a. 16, 173.

180.1909 180.1909 Filing articles of incorporation. Before commencing operations, a service corporation shall deliver its articles of incorporation to the department for filing.

180.1909 History History: 1989 a. 303; 1995 a. 27.

180.1911 180.1911 Participants; conflict of interest.

180.1911(1) (1) Except as provided in ss. 180.1903 (1m) and 180.1913, each shareholder, director and officer of a service corporation must at all times be licensed, certified or registered by a state agency in the same field of endeavor or be a health care professional. An individual who is not so licensed, certified or registered may not have any part in the ownership or control of the service corporation, except that the nonparticipant spouse of a married individual has the rights of ownership provided under ch. 766. A proxy to vote any shares of the service corporation may not be given to a person who is not so licensed, certified or registered.

180.1911(2) (2) If any shareholder, director, officer or employee of a service corporation becomes legally disqualified to render professional or other personal services, consultation or advice within this state for which he or she was licensed, certified or registered, or accepts employment or is elected to a public office which by law places restrictions or limitations upon his or her rendering of the services for which he or she was licensed, certified or registered, he or she shall immediately sever all employment with, and financial interest in, the service corporation. A service corporation’s failure to require prompt compliance with this subsection is a ground for the suspension or forfeiture of its franchise.

180.1911 History History: 1989 a. 303; 1993 a. 473; 2005 a. 215.

180.1913 180.1913 Alternative incorporation by one or 2 persons.

180.1913(1) (1) A service corporation which has only one shareholder need have only one director, who shall be the shareholder. The shareholder shall also serve as the president and treasurer of the service corporation. The other officers of a service corporation described in this subsection need not be licensed, certified or registered in the same field of endeavor as the president.

180.1913(2) (2) A service corporation which has only 2 shareholders need have only 2 directors, who shall be the shareholders. The 2 shareholders shall fill all of the general offices of the service corporation between them.

180.1913 History History: 1989 a. 303.

180.1915 180.1915 Professional relationships and liability. Except as provided in this section, ss. 180.1901 to 180.1921 do not alter any contract, tort or other legal relationship between a person receiving professional services and one or more persons who are licensed, certified or registered to render those professional services and who are shareholders, directors, officers or employees in the same service corporation. A shareholder, director, officer or employee of a service corporation is not personally liable for the debts or other contractual obligations of the service corporation nor for the omissions, negligence, wrongful acts, misconduct and malpractice of any person who is not under his or her actual supervision and control in the specific activity in which the omissions, negligence, wrongful acts, misconduct and malpractice occurred. A service corporation may charge for the services of its shareholders, directors, officers, employees or agents, may collect such charges and may compensate those who render such personal services. Nothing in this section shall affect any of the following:

180.1915(1) (1) The liability of a service corporation for the omissions, negligence, wrongful acts, misconduct and malpractice of a shareholder, director, officer or employee while the person, on behalf of the service corporation, provides professional services.

180.1915(2) (2) The personal liability of a shareholder, director, officer or employee of a service corporation for his or her own omissions, negligence, wrongful acts, misconduct and malpractice and for the omissions, negligence, wrongful acts, misconduct and malpractice of any person acting under his or her actual supervision and control in the specific activity in which the omissions, negligence, wrongful acts, misconduct and malpractice occurred.

180.1915 History History: 1989 a. 303; 1993 a. 473; 1995 a. 400.

180.1915 Annotation A service corporation and its shareholders are not jointly and severally liable for the intentional tort of a shareholder that was not committed in the ordinary course of the corporation’s business with the authority of the tortfeasor’s fellow shareholders or within the tortfeasor’s authority in the course of his or her employment. Anderson v. McBurney, 160 Wis. 2d 866, 467 N.W.2d 158 (Ct. App. 1991).

180.1917 180.1917 Corporate agents. The relationship of an individual to a service corporation with which the individual is associated, whether as shareholder, director, officer or employee, does not modify or diminish the jurisdiction over him or her of any state agency that licensed, certified or registered him or her for a particular field of endeavor.

180.1917 History History: 1989 a. 303.

180.1919 180.1919 Continuity; dissolution; stock transfer or redemption.

180.1919(1) (1) 

180.1919(1)(a) (a) A service corporation has perpetual existence until dissolved in accordance with other provisions of this chapter.

180.1919(1)(b) (b)

180.1919(1)(b)1. 1. Except as provided in subd. 2., if all shareholders of a service corporation cease at any one time and for any reason to be licensed, certified or registered in the particular field of endeavor for which the service corporation was organized, the service corporation is converted into and shall operate solely as a business corporation under applicable provisions of this chapter, exclusive of ss. 180.1901 to 180.1921.

180.1919(1)(b)2. 2. If not more than 50 percent of the shareholders in a service corporation described in s. 180.1903 (1m) at any one time are not certified public accountants, the service corporation is converted into and shall operate solely as a business corporation under applicable provisions of this chapter, exclusive of ss. 180.1901 to 180.1921.

180.1919(2) (2) 

180.1919(2)(a) (a) Within 90 days after a shareholder’s date of death or disqualification under s. 180.1911 (2) to own shares in the service corporation, all of the shares of the shareholder shall be transferred to, and acquired by, the service corporation or persons qualified to own the shares. If no other provision to accomplish the transfer and acquisition is in effect and carried out within the 90-day period, the service corporation shall purchase and redeem all of the deceased or disqualified shareholder’s shares of the service corporation at the book value of the shares, determined as of the end of the month immediately before death or disqualification.

180.1919(2)(b) (b) For purposes of par. (a), the book value is determined from the books and records of the service corporation in accordance with the regular methods of accounting used by the service corporation to determine its net taxable income for federal income tax purposes. A subsequent adjustment of the service corporation’s net taxable income, whether by the service corporation, by federal income tax audit made and agreed to, or by a court decision which has become final, does not alter the redemption price.

180.1919(2)(c) (c) This section does not prevent the parties involved from making any other arrangement, or providing in the service corporation’s articles of incorporation or bylaws or by contract, to transfer the shares of a deceased or disqualified shareholder to the service corporation or to persons qualified to own the shares, whether made before or after the death or disqualification of the shareholder, if all of the shares involved are transferred within the 90-day period under par. (a).

180.1919 History History: 1989 a. 303; 2005 a. 215.

180.1921 180.1921 Annual report.

180.1921(1) (1) A service corporation shall deliver to the department for filing a report in each year following the year in which the service corporation’s articles of incorporation were filed by the department, during the calendar year quarter in which the anniversary of the filing occurs.

180.1921(2) (2) The report shall show the address of this service corporation’s principal office and the name and post-office address of each shareholder, director, and officer of the service corporation and shall certify that, with the exceptions permitted in ss. 180.1903 (1m) and 180.1913, each shareholder, director, and officer is licensed, certified, registered, or otherwise legally authorized to render the same professional or other personal service in this state or is a health care professional. The service corporation shall prepare the report on forms prescribed and furnished by the department, and the report shall contain no fiscal or other information except that expressly called for by this section. The department shall forward report forms by 1st class mail to every service corporation in good standing, at least 60 days before the date on which the service corporation is required by this section to file an annual report.

180.1921(3) (3) A report under this section is in lieu of an annual report required by s. 180.1622.

180.1921(4) (4) An annual report is effective on the date that it is filed by the department.

180.1921 History History: 1989 a. 303; 1991 a. 269; 1993 a. 214, 473, 491; 1995 a. 27; 2001 a. 16, 107.