Request a Consultation
Offering Phone, Video, and In-Person Consultations 608-784-8310

New LLC Laws in Wisconsin

A limited liability company, LLC, is one of the most common ways to structure a business. The LLC structure is popular because it offers many benefits, such as protecting owners from personal responsibility for business liabilities or debts.

Wisconsin revised business laws in Chapter 183, and starting in 2023, new rules will take effect. The revisions specifically pertain to the Wisconsin Uniform Limited Liability Company Law (WULLCL). The new law repeals the WULLCL and replaces it with the Revised Uniform Limited Liability Company Act (RULLCA).

Urgent Information for LLCs

The revised act covers all Wisconsin LLCs. If an existing Wisconsin LLC wishes to opt out, it must do so by December 31, 2022. If an LLC does not elect to opt out, it will be governed by the new act starting January 1, 2023. Existing LLCs have the option of remaining under the current WULLCL laws, or they may choose to be governed under the new RULLCA.

If an existing LLC does not take any action, it will automatically be governed by the new act starting in 2023. To opt out of the new act, an LLC must file a Statement of Nonapplicability with the Wisconsin Department of Financial Institutions (WDFI) before the end of the year. It is important to note that you must comply with the rules of your LLC and obtain proper authorization before you file a request.

Notable Changes to Wisconsin LLC Laws

The RULLCA provides for many changes to the current LLC laws. Therefore, the entirety of the original act is repealed and replaced with new laws. There is a lot of information to review, so it may be best to discuss the changes with your attorney for a complete understanding of how they impact your company. Here are some of the notable changes in the new RULLCA.

  • Operating Agreements – Under the new law, LLCs can make operating agreements in writing, orally, or implied. Previously, only written agreements were acceptable.
  • Management Designation – Companies no longer need to designate whether they are member-managed or manager-managed in their articles of organization. This change will eliminate the need to file a change if the members change their management structure.
  • Member and Manager Duties – The new laws state that members and managers have fiduciary duties of loyalty and care. Members and managers must act in good faith. LLCs can change their obligational expectations as long as they are still mainly within the general guidelines. This is a complex area, and it is helpful to seek legal guidance.
  • Information Access – The new law allows for a broader range of access to the information of an LLC. Members can request access to more information, and the request is not limited to things that specifically affect the member. Additionally, the LLC cannot put restrictions in place that would be unreasonable.
  • Merger Approval – Under the prior law, 50% of members needed to agree to a merger. Under the new law, all members must be in agreement with a merger. However, if the operating statement provides for less than complete agreement, it may override the statute.
  • Entering into Agreements – Under the old law, any member could act on behalf of the LLC in a member-managed LLC. The new law requires LLCs to designate authority with a Statement of Authority filed with the WDFI.

LLC managers and members need to read and understand the new laws that will govern their companies. If you have not yet reviewed the changes, it may be in your best interest to file a Statement of Nonapplicability until such time as you have been able to evaluate the needs of your LLC. To learn more about how the new LLC laws will affect your company, contact our legal team at Moen Sheehan Meyer, Ltd. at (608) 784-8310 or online.

Published December 8, 2022
Contact MSM Online Bill Pay