SB810,395,6 183.0408 Reimbursement; indemnification; advancement; and insurance. (1) A limited liability company shall reimburse a member of a member-managed company or the manager of a manager-managed company for any payment made by the member or manager in the course of the member's or manager's activities on behalf of the company, if the member or manager complied with ss. 183.0405, 183.0407, and 183.0409 in making the payment.

SB810,395,11 (2) A limited liability company 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 member or manager, if the claim, demand, debt, obligation, or other liability does not arise from the person's breach of s. 183.0405, 183.0407, or 183.0409.

SB810,395,17 (3) In the ordinary course of its activities and affairs, a limited liability company 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 member or manager, if the person promises to repay the company if the person ultimately is determined not to be entitled to be indemnified under sub. (2).

SB810,395,22 (4) A limited liability company may purchase and maintain insurance on behalf of a member or manager against liability asserted against or incurred by the member or manager in that capacity or arising from that status even if, under s. 183.0105 (3) (g), the operating agreement could not eliminate or limit the person's liability to the company for the conduct giving rise to the liability.

SB810,396,2 183.0409 Standards of conduct for members and managers. (1) A member of a member-managed limited liability company owes to the company and, subject to s. 183.0801, the other members the fiduciary duties of loyalty and care stated in subs. (2) and (3).

SB810,396,4 (2) The duty of loyalty of a member in a member-managed limited liability company includes all of the following duties:

SB810,396,6 (a) The duty to account to the company and hold as trustee for it any property, profit, or benefit derived by the member in or from any of the following:

SB810,396,7 1. The conduct or winding up of the company's activities and affairs.

SB810,396,8 2. A use by the member of the company's property.

SB810,396,9 3. The appropriation of a limited liability company opportunity.

SB810,396,12 (b) The duty to refrain from dealing with the company in the conduct or winding up of the company's activities and affairs as or on behalf of a person having an interest adverse to the company.

SB810,396,14 (c) The duty to refrain from competing with the company in the conduct of the company's activities and affairs before the dissolution of the company.

SB810,396,18 (3) The duty of care of a member of a member-managed limited liability company in the conduct or winding up of the company's activities and affairs is to refrain from engaging in conduct for which relief or exoneration from liability is not permitted under s. 183.0105 (3) (g).

SB810,396,21 (4) A member shall discharge the duties and obligations under this chapter and under the operating agreement and exercise any rights consistently with the contractual obligation of good faith and fair dealing.

SB810,396,24 (5) A member does not violate a duty or obligation under this chapter or under the operating agreement solely because the member's conduct furthers the member's own interest.

SB810,397,5 (6) All the members of a member-managed limited liability company or a manager-managed limited liability company may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty and this authorization or ratification precludes a claim for breach of the duty of loyalty for the act or transaction by such members.

SB810,397,8 (7) It is a defense to a claim under sub. (2) (b) and any comparable claim in equity or at common law that the transaction was fair to the limited liability company.

SB810,397,12 (8) If, as permitted by sub. (6) or (9) (e) or the operating agreement, a member enters into a transaction with the limited liability company which otherwise would be prohibited by sub. (2) (b), the member's rights and obligations arising from the transaction are the same as those of a person that is not a member.

SB810,397,13 (9) In a manager-managed limited liability company, the following rules apply:

SB810,397,15 (a) Subsections (1), (2), (3), and (7) apply to the manager or managers and not the members.

SB810,397,16 (b) The duty stated under sub. (2) (c) continues until winding up is completed.

SB810,397,17 (c) Subsection (4) applies to managers and members.

SB810,397,18 (d) Subsection (5) applies only to members.

SB810,397,19 (e) The power to ratify under sub. (6) applies only to the members.

SB810,397,21 (f) Subject to sub. (4), a member does not have any duty to the company or to any other member solely by reason of being a member.

SB810,397,24 183.0410 Rights to information of member, manager, and person dissociated as member. (1) In a member-managed limited liability company, the following rules apply:

SB810,398,5 (a) On reasonable notice, a member may inspect and copy during regular business hours, at a reasonable location specified by the company, any record maintained by the company regarding the company's activities, affairs, financial condition, and other circumstances, to the extent the information is material to the member's rights and duties under the operating agreement or this chapter.

SB810,398,6 (b) The company shall furnish to each member all of the following:

SB810,398,12 1. Without demand, any information concerning the company's activities, affairs, financial condition, and other circumstances which the company knows and is material to the proper exercise of the member's rights and duties under the operating agreement or this chapter, except to the extent the company can establish that it reasonably believes the member already knows or has notice of the information.