LIMITED LIABILITY COMPANY for STATE-LICENSED PROFESSIONALS STATE OF WISCONSIN Electronic Version STATUTORY REFERENCE Wisconsin Statutes, Chapter 183: Limited Liability Companies Wisconsin Statutes, Chapter 180, Subchapter XIX: Service Corporations http://www.legis.state. wi.us/rsb/stats.html INTRODUCTORY NOTES In the State of Wisconsin, there is no separate business entity known as a “PLLC”
(“Professional Limited Liability Company”). In Wisconsin, an LLC (Limited Liability
Company) may pursue "any lawful purpose" (Wisconsin Statutes, Section 183.0106). This
statute goes on to state that, "A limited liability company engaging in a business that is subject to
the provisions of another chapter may organize under this chapter only if not prohibited by, and
subject to all limitations of, the other chapter." Wisconsin Statutes, Chapter 180, Subchapter XIX
- Service Corporations, contains specific restrictions applicable to licensed professionals
organizing a corporation for the practice of their profession. LLC's practicing professional
services are clearly "subject to the limitations of" Chapter 180, Subchapter XIX, and this
package reflects those limitations.This packet provides forms and instructions for the formation of a limited liability company
(LLC) for the practice of a state-licensed profession in the State of Wisconsin. BEFORE filing
your Articles of Organization, it is important for you to contact the governing entity/examining
board for your profession in order to confirm you are in compliance with all requirements
regarding the formation of a business entity to practice your profession, and to obtain any
“certification” necessary to do business as an LLC. If a "certification" certificate or other
document is required, this must be filed with your Articles of Organization. It is your
responsibility to contact your governing/examining agency/board, and ask what special
requirements must be met when starting an LLC.In Wisconsin, there is limited guidance provided for using an LLC for the practice of a
profession. Therefore, this packet is based on the general Wisconsin statutory requirements for
doing business as an LLC (Wisconsin Statutes, Chapter 183 - Limited Liability Companies) and
the specific Wisconsin statutory requirements for doing business as a "professional service
corporation" (Chapter 180, Subchapter XIX - Service Corporations), such as the limitation of
ownership to individuals licensed to practice the profession. Included in the Operating
Agreement are various restrictions and limitations on LLC ownership and management that the
Editor feels are prudent to include based on general Wisconsin law governing professional
business entities. SELECTIONS FROM STATUTES All references herein to “Corporations” pertain to LLC’s. References to “shareholders” pertain
to LLC “members.” Other references pertain to LLC’s as applicable. Statutes are not presented
in their entirety. Consult the STATUTORY REFERENCES (top) for the full statute.180.1903 – Formation of Service Corporation (1) … [O]ne 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. (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.180.1911 – Participants; conflict of interest (1) … [E]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. (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.
180.1915 – Professional relationships and liability Except as provided in this section, §§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: (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. (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.
STEPS TO FORM LLC Step 1:It is recommended that you reserve a LLC name in order to assure that your
Articles of Organization are not rejected because the name you have selected is
not available. You may skip this step and go to step 2, but if the corporate name you have
selected is not available, the Articles of Incorporation will be rejected and
returned to you.
SEE FORM 1 – NAME RESERVATION APPLICATIONDownload Form 1 from the download page (below), and follow the
instructions on the form. You may type directly into the form and print. For
an LLC performing professional services, use the naming conventions for an LLC as indicated on the form.Mail the original and one exact copy of the NAME RESERVATION
APPLICATION along with a $15.00 filing fee (Make check payable to the
Department of Financial Institutions), to:
Mailing Address: Department of Financial InstitutionsDivision of Corporate and Consumer ServicesPO Box 7846Madison WI 53707-7846 Information: 608-261-7577 Fax: 608-267-6813Step 2:SEE FORM 2 –ARTICLES OF ORGANIZATIONOnce you have reserved the limited liability company name, or if you have chosen
to proceed without reserving a name, you are ready to complete the Articles of
Organization.Download Form 2 from the download page in this package (below) and
follow the instructions on the form. You may type directly into the form and
print.Step 3. Mail the original and one exact copy of the ARTICLES OF ORGANIZATION to:Mailing Address: Department of Financial InstitutionsDivision of Corporate and Consumer ServicesPO Box 7846
Madison WI 53707-7846 Information: 608-261-7577 Fax: 608-267-6813 A cover letter to send with the Articles of Organization is included in this packet. SEE FORM 3 – TRANSMITTAL LETTER (below)Step 4: Upon return of the Articles of Organization complete the Operating Agreement. SEE FORM 4 – OPERATING AGREEMENT Step 5: Apply for a Federal Tax Identification Number. This is done with form SS-4.
Mail to your regional IRS office. SEE FORM 5 – IRS-SS-4 (download below) Step 6:Open a bank account and conduct business.Disclaimer: If you are not an attorney, you are advised to seek the advice of an attorney for all
serious legal matters. The information and forms contained herein are not legal
advice and are not to be construed as such. Although the information contained
herein is believed to be correct, no warranty of fitness or any other warranty shall
apply. All use is subject to the U.S. Legal Forms, Inc. Disclaimer and License
located at h
ttp://www.uslegalforms .com/disclaimer.htm
FORMS DOWNLOAD
To access the download page please do the following:IMPORTANT NOTE : WRITE DOWN THE USERNAME AND PASSWORD SHOWN
BELOW BECAUSE YOU WILL NEED TO ENTER IT EXACTLY (case sensitive) TO
DOWNLOAD THE FORMS.The download page you will access by using the link below contains links to download the forms
for this package, as well as a brief description of each form. Once you reach the download page,
the easiest procedure to download the forms is to right-click on the form links and select “save
target as” to save each form to your hard drive.To access the download page you are required to use the following login (PLEASE WRITE
THIS DOWN):USERNAME: xfz975PASSWORD: grt523
The download link can be accessed by any of the following methods:
- Copy the link below and paste into your browser URL location.- Type the link below exactly (case sensitive) as shown into your browser.- Click on the highlighted link below. Download Link:http://www.uslegalforms.com/data/corp/WI-00LLC/WI-00PLLC.htmhttp://www.uslegalforms.com/ data/corp/WI-00LLC/WI-00PLLC.htm
FORM 4 SAMPLE OPERATING AGREEMENT
This agreement is a sample operating agreement and should be modified to meet your needs.
It provides for the LLC to be operated by one or more managers OR by the members. You
will have to decide how you want your LLC to operate. Fill in the name of your profession in #s 7, 8 and 28. Read carefully and make appropriate changes to suit your
individual needs and purposes.
OPERATING AGREEMENT OF ______________________________________ A WISCONSIN LIMITED LIABILITY COMPANY THIS OPERATING AGREEMENT ("Agreement") is entered into the ___ day of ________,
20___, by and between the following persons:1._______________________________________________________________ 2._______________________________________________________________ 3._______________________________________________________________4._______________________________________________________________ hereinafter, ("Members" or “Parties”). FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is
hereby acknowledged, the Parties covenant, contract and agree as follows: ARTICLE I FORMATION OF LIMITED LIABILITY COMPANY 1.Formation of LLC. The Parties have formed a Wisconsin limited liability
company named ___________________________________________________ ("LLC").
The operation of the LLC shall be governed by the terms of this Agreement and the
applicable laws of the State of Wisconsin relating to the formation, operation and taxation of
a LLC and referred to herein as the Wisconsin Limited Liability Act (Wisconsin Statutes,
Chapter 183) hereinafter referred to as the "Act". To the extent permitted by the Act, the
terms and provisions of this Agreement shall control if there is a conflict between such Act
and this Agreement. The Parties intend that the LLC shall be taxed as a partnership. Any
provisions of this Agreement, if any, that may cause the LLC not to be taxed as a partnership
shall be inoperative. 2. Articles or Organization. The Members acting through one of its Members,
_____________________________________, filed Articles of Organization, ("Articles")
for record in the office of the with the Department of Financial Institutions on
_________________________, thereby creating the LLC.
3.Business . The business of the LLC shall be the professional practice of
______________________.
4.Registered Office and Registered Agent. The registered office and place of
business of the LLC shall be ___________________________________________________
______________________________________ and the registered agent at such office shall
be __________________________________________________________________. The Members may change the registered office and/or registered agent from time to time. 5. Duration. The LLC will commence business as of the date the Members
contribute their capital investment in the LLC and will continue in perpetuity.
6. Fiscal Year. The LLC's fiscal and tax year shall end December 31. ARTICLE IIMEMBERS 7.Initial Members . All members shall be licensed to practice _______________
in the State of Wisconsin. The initial members of the LLC, their initial capital contributions,
and their percentage interest in the LLC are:
InitialPercentage InterestCapitalMembersin LLCContribution________________________ _________________ ___________________ ________________________ _________________ ___________________ ________________________ _________________ ___________________ ________________________ _________________ ___________________ 8.Additional Members. All new members shall be licensed to practice
_______________ in the State of Wisconsin. New members may be admitted only upon the
consent of a majority of the Members and upon compliance with the provisions of this
agreement.
ARTICLE IIIMANAGEMENT 9Management . The Members have elected to manage the LLC as follows:[ ] The management of the LLC shall be vested in the Members without an
appointed manager. The members shall elect officers who shall manage the
company. The President and Secretary may act for and on behalf of the LLC
and shall have the power and authority to bind the LLC in all transactions and
business dealings of any kind except as otherwise provided in this
Agreement. [ ] The Members hereby delegate the management of the LLC to
Manager(s), subject to the limitations set out in this agreement.
a)The Members shall elect and may remove the Manager(s) by majority
vote.b) A Manager shall serve until a successor is elected by the Members. c)The Manager(s) shall have the authority to take all necessary and proper
actions in order to conduct the business of the LLC. d) Except for decisions concerning distributions, any Manager can take any
appropriate action on behalf of the LLC, including, but not limited to
signing checks, executing leases, and signing loan documents. e) In determining the timing and total amount of distributions to the
Members, the action of the Manager shall be based on a majority vote of
the Managers, with or without a meeting. f) The compensation to the Manager(s) shall be in the discretion of the
majority of the Members of the LLC.g) There shall be _________ initial Managers. h)The initial Managers is/are:
_________________________________________________________. _________________________________________________________. _________________________________________________________. 10.Officers and Relating Provisions . In the event the Members elect to manage
the LLC, rather than appointing a manager, the Members shall appoint officers for the LLC
and the following provisions shall apply:
(a)Officers. The officers of the LLC shall consist of a president, a treasurer
and a secretary, or other officers or agents as may be elected and appointed by the Members.
Members may hold more than one office. The officers shall act in the name of the LLC and
shall supervise its operation under the direction and management of the Members, as further
described below.
(b) Election and Term of Office. The officers of the LLC shall be elected
annually by the Members by a majority vote. Vacancies may be filled or new offices created
and filled at any meeting of the Members. Each officer shall hold office until his/her death,
until he/she shall resign, or until he/she is removed from office. Election or appointment of
an officer or agent shall not of itself create a contract right.(c) Removal. Any officer or agent may be removed by a majority of the
Members whenever they decide that the best interests of the Company would be served
thereby. Such removal shall be without prejudice to the contract rights, if any, of the person
so removed.
(d) Vacancies . A vacancy is any office because of death, resignation,
removal, disqualification or otherwise may be filled by the Members for the unexpired
portion of the term.
(e)President. The President shall be the chief executive officer of the LLC
and shall preside at all meetings of the Members. The President shall have such other powers
and perform such duties as are specified in this Agreement and as may from time to time be
assigned by the Members of the LLC.
(f)The Treasurer. The Treasurer shall be the chief financial officer of the
LLC. The Treasurer shall not be required to give a bond for the faithful discharge of his/her
duties. The Treasurer shall: (i) have charge and custody of and be responsible for all funds
and securities of the LLC; (ii) in the absence of the President, preside at meetings of the
Members; (iii) receive and give receipts for moneys due and payable to the LLC from any
source whatsoever, and deposit all such moneys in the name of the LLC in such banks, trust
companies or other depositaries as shall be selected by the Members of the LLC; and (iv) in
general perform all the duties incident to the office of treasurer and such other duties as from
time to time may be assigned by the President or by the Members of the LLC.
(g)Secretary. The secretary shall: (i) keep the minutes of the Members
meetings in one or more books provided for that purpose; (ii) see that all notices are duly
given in accordance with the provisions of this Agreement or as required by law; (iii) be
custodian of LLC records; (iv) keep a register of the post office address of each Member; (v)
certify the Member’s resolutions; and other documents to the LLC as true and correct; (vi) in the absence of the President and Treasurer, preside at meetings of the Members and (vii) in
general perform all duties incident to the office of secretary and such other duties as from
time as may be assigned by the President or the Members.10.Member Only Powers . Notwithstanding any other provision of this
Agreement, only a majority of the Members may: (a) sell or encumber (but not lease) any
real estate owned by the LLC, or (b) incur debt, expend funds, or otherwise obligate the LLC
if the debt, expenditure, or other obligation exceeds $_____________________.
ARTICLE IV CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS 11.Interest of Members. Each Member shall own a percentage interest
(sometimes referred to as a share) in the LLC. The Member’s percentage interest shall be
based on the amount of cash or other property that the Member has contributed to the LLC
and that percentage interest shall control the Member’s share of the profits, losses, and
distributions of the LLC.
12. Contributions. The initial contributions and initial percentage interest of the
Members are as set out in this Agreement.
13. Additional Contributions. Only a majority of the Members of the LLC may
call on the Members to make additional cash contributions as may be necessary to carry on
the LLC's business. The amount of any additional cash contribution shall be based on the
Member's then existing percentage interest. To the extent a Member is unable to meet a cash
call, the other Members can contribute the unmet call on a pro rata basis based on the
Members' percentage interests at that time, and the percentage interest of each Member will
be adjusted accordingly. 14.Record of Contributions/Percentage Interests. This Agreement, any
amendment(s) to this Agreement, and all Resolutions of the Members of the LLC shall
constitute the record of the Members of the LLC and of their respective interest therein.
15.Profits and Losses. The profits and losses and all other tax attributes of the
LLC shall be allocated among the Members on the basis of the Members' percentage interests in the LLC.
16.Distributions. Distributions of cash or other assets of the LLC (other than in
dissolution of the LLC) shall be made in the total amounts and at the times as determined by
a majority of the Members. Any such distributions shall be allocated among the Members
on the basis of the Members' percentage interests in the LLC.
17.Change in Interests . If during any year there is a change in a Member's percentage interest, the Member's share of profits and losses and distributions in that year
shall be determined under a method which takes into account the varying interests during the
year. ARTICLE V VOTING; CONSENT TO ACTION 18.Voting by Members. Members shall be entitled to vote on all matters which
provide for a vote of the Members in accordance with each Member’s percentage interest.
19. Majority Required. Except as otherwise required, a majority of the
Members, based upon their percentage ownership, is required for any action.
20.Meetings - Written Consent. Action of the Members may be accomplished
with or without a meeting. If a meeting is held, evidence of the action shall be by Minutes or
Resolution reflecting the action of the Meeting, signed by a majority of the Members.
Action without a meeting may be evidenced by a written consent signed by a majority of the
Members.
21.Meetings. Meetings of the Members may be called by any Member owning
10% or more of the LLC, or, if Managers were selected, by any Manager of the LLC.
22.Majority Defined. As used throughout this agreement the term “Majority” of
the Members shall mean a majority of the ownership interest of the LLC as determined by
the records of the LLC on the date of the action.
ARTICLE VI DUTIES AND LIMITATION OF LIABILITY MEMBERS, OFFICERS ANDPERSONS SERVING ON ADVISORY COMMITTEES; INDEMNIFICATION 23.Duties of Members: Limitation of Liability. The Members, Managers and
officers shall perform their duties in good faith, in a manner they reasonably believe to be in
the best interests of the LLC, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances. No Member or officer shall have any
liability to the LLC or any other Member by reason of being or having been a Member or
officer. No Member or officer shall not be liable to the LLC or to any other Member or
officer for any loss or damage sustained by the LLC or any other Member or officer unless
the loss or damage shall have been the result of fraud, deceit, gross negligence, willful
misconduct, or a wrongful taking by that Member or officer.
24.Members Have No Exclusive Duty to LLC. The Members shall not be
required to participate in the LLC as their sole and exclusive business. Members may have
other business interests and may participate in other investments or activities in addition to
those relating to the LLC. Neither the LLC nor any other Member shall have any right, by
virtue of this Agreement, to share or participate in another member’s business interests,
investments or activities or the income or proceeds derived therefrom. No Member shall
incur liability to the LLC or to any other Member by reason of participating in any such
other business, investment or activity. 25. Protection of Members and Officers. (a) As used herein, the term “Protected Party” refers to the Members and
officers of the Company.(b)To the extent that, at law or in equity, a Protected Party has duties
(including fiduciary duties) and liabilities relating thereto to the LLC or
to any other Protected Party, a Protected Party acting under this
Agreement shall not be liable to the LLC or to any other Protected Party
for good faith reliance on: (i) the provisions of this Agreement;(ii)the records of the LLC; and/or(iii)such information, opinions, reports or statements presented to the LLC by any person as to matters the Protected Party reasonably believes
are within such other person’s professional or expert competence and
who has been selected with reasonable care by or on behalf of the
LLC, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits or losses of the LLC
or any other fact pertinent to the existence and amount of assets from
which distributions to Members might properly be paid. c) The provisions of this Agreement, to the extent that they restrict the
duties and liabilities of a Protected Party to the LLC or to any other
Protected Party otherwise existing at law or in equity, are agreed by the
parties hereto to replace such other duties and liabilities of such
Protected Party.
d)Whenever this Agreement permits or requires a Protected Party to make
a decision in its “discretion” or under a grant of similar authority or
latitude, the Protected Party shall be entitled to consider only such
interests and factors as it desires, including its own interests, and shall
have no duty or obligation to give any consideration to any interest of or
factors affecting the LLC or any other Person.e) Whenever this Agreement permits or requires a Protected Party to make
a decision using a “good faith” or under another express standard, the
Protected Party shall act under such express standard and shall not be
subject to any other or different standard imposed by this Agreement or
other applicable law. 26.Indemnification and Insurance. (a)Right to Indemnification. (i) Any person who is or was a member or officer of the LLC and who is or
may be a party to any civil action because of his/her participation in or
with the LLC, and who acted in good faith and in a manner which he/she
reasonably believed to be in, or not opposed to, the best interests of the
LLC, shall be indemnified and held harmless by the LLC.(ii) Any person who is or was a member or officer of the LLC and who is or
may be a party to any criminal action because of his/her participation in or
with the LLC, and who acted in good faith and had reasonable cause to
believe that the act or omission was lawful, shall be indemnified and held
harmless by the LLC.(b)Advancement of Expenses. Expenses (including attorney’s fees) incurred by an
indemnified person in defending any proceeding shall be paid in advance of the
proceeding’s final disposition. Should the indemnified member or officer
ultimately be determined to not be entitled to indemnification, that member or
officer agrees to immediately repay to LLC all funds expended by the LLC on
behalf of the member or officer.
(c)Non-Exclusivity of Rights. The right to indemnification and the advancement of
expenses conferred in this section shall not be exclusive of any right which any
person may have or hereafter acquire under any statute, provision of this
Agreement, contract, agreement, vote of Members or otherwise. The Members
and officers are expressly authorized to adopt and enter into indemnification
agreements for Members, officers and advisory committee members.
(d)Insurance. The Members may cause the LLC to purchase and maintain insurance
for the LLC, for its Members and officers, and/or on behalf of any third party or
parties whom the members might determine should be entitled to such insurance
coverage.
(e) Effect of Amendment . No amendment, repeal or modification of this Article shall
adversely affect any rights hereunder with respect to any action or omission
occurring prior to the date when such amendment, repeal or modification became
effective.
27. Duties of Persons Serving on Advisory Committees; Limitation of Liability;
Indemnification. The Members shall have the right to form advisory committees. Persons
serving on an advisory committee, whether or not a Member or officer, shall perform their
duties in good faith, in a manner they reasonably believe to be in the best interests of the
LLC, and with such care as an ordinarily prudent person in a like position would use under
similar circumstances. A person serving on an advisory committee shall not have any
liability to the LLC or to any Member or officer for any loss or damage sustained by the
LLC or any Member or officer unless the loss or damage was the result of fraud, deceit,
gross negligence, willful misconduct, or a wrongful taking by such person.
ARTICLE VII MEMBERS INTEREST TERMINATED
28.Termination of Membership. A Member’s interest in the LLC shall cease
upon the occurrence of one or more of the following events:
(a) A Member provided notice of withdrawal to the LLC thirty (30) days in
advance of the withdrawal date. Withdrawal by a Member is not a breach of this Agreement(b) A Member assigns all of his/her interest to a third party.(c) A Member dies or is disqualified from the practice of _______________.(d) There is an entry of an order by a court of competent jurisdiction
adjudicating the Member incompetent to manage his/her person or his/her estate. (e)In the case of an estate that is a Member, the distribution by the fiduciary
of the estate's entire interest in the LLC. (f) A Member, without the consent of a majority of the Members: (1) makes
an assignment for the benefit of creditors; (2) files a voluntary petition in bankruptcy; (3) is
adjudicated a bankrupt or insolvent; (4) files a petition or answer seeking for himself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any statute, law or regulation; (5) files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against him in any proceeding of
the nature described in this paragraph; (6) seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator of the Member or of all or any substantial
part of his properties; or (7) if any creditor permitted by law to do so should commence
foreclosure or take any other action to seize or sell any Member's interest in the LLC.(g) If within one hundred twenty (120) days after the commencement of any
action against a Member seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any statute, law, or regulation, the action has
not been dismissed and/or has not been consented to by a majority of the members.(h) If within ninety (90) days after the appointment, without a member’s
consent or acquiescence, of a trustee, receiver, or liquidator of the Member or of all or any
substantial part of the member’s properties, said appointment is not vacated or within ninety
(90) days after the expiration of any stay, the appointment is not vacated and/or has not been
consented to by a majority of the members.
(i) Any of the events provided in applicable code provisions that are not
inconsistent with the dissociation events identified above. 29.Effect of Dissociation. Any dissociated Member shall not be entitled to
receive the fair value of his LLC interest solely by virtue of his dissociation. A dissociated
Member that still owns an interest in the LLC shall be entitled to continue to receive such
profits and losses, to receive such distribution or distributions, and to receive such
allocations of income, gain, loss, deduction, credit or similar items to which he would have
been entitled if still a Member. For all other purposes, a dissociated Member shall no longer
be considered a Member and shall have no rights of a Member.
ARTICLE VIII RESTRICTIONS ON TRANSFERABILITY OF LLC INTEREST; SET PRICE FOR LLC INTEREST 30.LLC Interest. The LLC interest is personal property. A Member has no
interest in property owned by the LLC.
31. Encumbrance . A Member can encumber his LLC interest by a security
interest or other form of collateral only with the consent of a majority of the other Members.
Such consent shall only be given if the proceeds of the encumbrance are contributed to the
LLC to respond to a cash call of the LLC.
32. Sale of Interest. A Member can sell his LLC interest only as follows: (a)If a Member desires to sell his/her interest, in whole or in part, he/she shall give written
notice to the LLC of his desire to sell all or part of his/her interest and must first offer
the interest to the LLC. The LLC shall have the option to buy the offered interest at the
then existing Set Price as provided in this Agreement. The LLC shall have thirty (30)
days from the receipt of the assigning Member's notice to give the assigning Member
written notice of its intention to buy all, some, or none of the offered interest. The
decision to buy shall be made by a majority of the other Members. Closing on the sale
shall occur within sixty (60) days from the date that the LLC gives written notice of its
intention to buy. The purchase price shall be paid in cash at closing unless the total
purchase price is in excess of $_______________ in which event the purchase price
shall be paid in twelve (12) equal quarterly installments beginning with the date of
closing. The installment amounts shall be computed by applying the following interest
factor to the principal amount: interest compounded quarterly at the Quarterly Federal
Short-Term Rate existing at closing under the Applicable Federal Rates used for
purposes of Internal Revenue Code § 1 274(d), or any successor provision. (b) To the extent the LLC does not buy the offered interest of the assigning
Member, the other Members shall have the option to buy the offered interest at the Set Price
on a pro rata basis based on the Members' percentage interests at that time. If Member does
not desire to buy up to his/her proportional part, the other Members can buy the remaining
interest on the same pro rata basis. Members shall have fifteen (15) days from the date the
LLC gives its written notice to the selling Member to give the selling Member notice in
writing of their intention to buy all, some, or none of the offered interest. Closing on the
sales shall occur within sixty (60) days from the date that the Members give written notice of
their intention to buy. The purchase price from each purchasing Member shall be paid in
cash at closing.
(c) To the extent the LLC or the Members do not buy the offered interest, the
selling Member can then assign the interest to a non-member. The selling Member must
close on the assignment within ninety (90) days of the date that he gave notice to the LLC.
If he does not close by that time, he must again give the notice and options to the LLC and
the LLC Members before he sells the interest.(d) A non-member purchaser of a member’s interest cannot exercise any
rights of a Member unless a majority of the non-selling Members consent to him becoming a
Member. The non-member purchaser will be entitled, however, to share in such profits and
losses, to receive such distributions, and to receive such allocation of income, gain, loss,
deduction, credit or similar items to which the selling member would be entitled, to the
extent of the interest assigned, and will be subject to calls for contributions under the terms
of this Agreement. The purchaser, by purchasing the selling member’s interest, agrees to be
subject to all the terms of this Agreement as if he were a Member. 33.Set Price. The Set Price for purposes of this Agreement shall be the price
fixed by consent of a majority of the Members. The Set Price shall be memorialized and
made a part of the LLC records. The initial Set Price for each Member's interest is the
amount of the Member's contribution(s) to the LLC as provided above, as updated in
accordance with the terms hereof. Any future changes in the Set Price by the Members shall
be based upon net equity in the assets of the LLC (fair market value of the assets less
outstanding indebtedness), considering the most recent appraisal obtained by the LLC for its
assets, as may be adjusted by the Members in their discretion. The initial Set Price shall be
adjusted no later than ________________. This basis for determining the Set Price shall
remain in effect until changed by consent of a majority of the Members. The Members will
consider revising the basis for determining the Set Price at least annually.
ARTICLE IX OBLIGATION TO SELL ON A DISSOCIATION EVENT CONCERNING A MEMBER 34. Dissociation. Except as otherwise provided, upon the occurrence of a
dissociation event with respect to a Member, the LLC and the remaining Members shall have
the option to purchase the dissociated Member's interest at the Set Price in the same manner
as provided in ARTICLE VIII and as if the dissociated Member had notified the LLC of his
desire to sell all of his LLC interest. The date the LLC received the notice as provided in
ARTICLE VIII triggering the options shall be deemed to be the date that the LLC receives
actual notice of the dissociation event.
ARTICLE X
DISSOLUTION 35.Termination of LLC . The LLC will be dissolved and its affairs must be
wound up only upon the written consent of a majority of the Members.
36.Final Distributions. Upon the winding up of the LLC, the assets must be
distributed as follows: (a) to the LLC creditors; (b) to Members in satisfaction of liabilities
for distributions; and (c) to Members first for the return of their contributions and secondly
respecting their LLC interest, in the proportions in which the Members share in profits and
losses.
ARTICLE XITAX MATTERS 37.Capital Accounts. Capital accounts shall be maintained consistent with
Internal Revenue Code § 704 and the regulations thereunder.
38.Tax Matters Partner . The Members hereby designate
_____________________________________ as the "tax matters partner" for purposes of
representing the LLC before the Internal Revenue Service if necessary.
39.Partnership Election . The Members elect that the LLC be taxed as a
partnership and not as an association taxable as a corporation.
ARTICLE XII RECORDS AND INFORMATION 40. Records and Inspection. The LLC shall maintain at its place of business the
Articles of Organization, any amendments thereto, this Agreement, and all other LLC
records required to be kept by the Act, and the same shall be subject to inspection and
copying at the reasonable request, and the expense, of any Member.
41.Obtaining Additional Information. Subject to reasonable standards, each
Member may obtain from the LLC from time to time upon reasonable demand for any
purpose reasonably related to the Member's interest as a Member in the LLC: (1)
information regarding the state of the business and financial condition of the LLC;
(2)promptly after becoming available, a copy of the LLC's federal, state, and local income
tax returns for each year; and (3) other information regarding the affairs of the LLC as is just
and reasonable.
ARTICLE XIII MISCELLANEOUS PROVISIONS 42.Amendment. Except as otherwise provided in this Agreement, any
amendment to this Agreement may be proposed by a Member. Unless waived by the
Members, the proposing Member shall submit to the Members any such proposed
amendment together with an opinion of counsel as to the legality of such amendment and the
recommendation of the Member as to its adoption. A proposed amendment shall become
effective at such time as it has been approved in writing by a majority of the Members. This
Agreement may not be amended nor may any rights hereunder be waived except by an
instrument in writing signed by the party sought to be charged with such amendment or
waiver, except as otherwise provided in this Agreement.
43.Applicable Law . To the extent permitted by law, this Agreement shall be
construed in accordance with and governed by the laws of the State of
________________________.
44.Pronouns, Etc. References to a Member or Manager, including by use of a
pronoun, shall be deemed to include masculine, feminine, singular, plural, individuals,
partnerships or corporations where applicable.
45.Counterparts. This instrument may be executed in any number of
counterparts each of which shall be considered an original.
46.Specific Performance. Each Member agrees with the other Members that the other Members would be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that monetary
damages would not provide an adequate remedy in such event. Accordingly, it is agreed that,
in addition to any other remedy to which the nonbreaching Members may be entitled, at law
or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent
breaches of this Agreement and, specifically, to enforce the terms and provisions of this
Agreement in any action instituted in any court of the United States or any state thereof
having subject matter jurisdiction thereof. 47.Further Action. Each Member, upon the request of the LLC, agrees to
perform all further acts and to execute, acknowledge and deliver any documents which may
be necessary, appropriate, or desirable to carry out the provisions of this Agreement.
48. Method of Notices. All written notices required or permitted by this
Agreement shall be hand delivered or sent by registered or certified mail, postage prepaid,
addressed to the LLC at its place of business or to a Member as set forth on the Member's signature page of this Agreement (except that any Member may from time to time give
notice changing his address for that purpose), and shall be effective when personally
delivered or, if mailed, on the date set forth on the receipt of registered or certified mail.
49.Facsimiles. For purposes of this Agreement, any copy, facsimile,
telecommunication or other reliable reproduction of a writing, transmission or signature may
be substituted or used in lieu of the original writing, transmission or signature for any and all
purposes for which the original writing, transmission or signature could be used, provided
that such copy, facsimile telecommunication or other reproduction shall have been
confirmed received by the sending Party.
50.Computation of Time. In computing any period of time under this
Agreement, the day of the act, event or default from which the designated period of time
begins to run shall not be included. The last day of the period so computed shall be
included, unless it is a Saturday, Sunday or legal holiday, in which event the period shall run
until the end of the next day which is not a Saturday, Sunday or legal holiday.
WHEREFORE, the Parties have executed this Agreement on the dates stated below
their signatures on the attached signature page for each individual Party. NOTICE: EACH MEMBER HEREBY CERTIFIES THAT HE OR SHE HAS RECEIVED
A COPY OF THIS OPERATING AGREEMENT AND FORMATION DOCUMENT OF
________________________________________________________________________, A
WISCONSIN LIMITED LIABILITY COMPANY. EACH MEMBER REALIZES THAT
AN INVESTMENT IN THIS COMPANY IS SPECULATIVE AND INVOLVES
SUBSTANTIAL RISK. EACH MEMBER IS AWARE AND CONSENTS TO THE FACT
THAT THE INTERESTS IN THE COMPANY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR SECURITIES ACT OF THE STATE OF
WISCONSIN. EACH MEMBER AGREES TO BE BOUND BY ALL OF THE TERMS
AND CONDITIONS OF THIS AGREEMENT AND THE FORMATION CERTIFICATE
OR ARTICLES. Members:__________________________________ Name__________________________________ Name__________________________________ Name__________________________________ Name
Print Name of Member: _______________________ Address: ___________________________________ City, State, Zip: _____________________________ Phone: ____________________________________ Print Name of Member: _______________________ Address: ___________________________________ City, State, Zip: _____________________________ Phone: ____________________________________ Print Name of Member: _______________________ Address: ___________________________________ City, State, Zip: _____________________________ Phone: ____________________________________ Print Name of Member: _______________________ Address: ___________________________________ City, State, Zip: _____________________________ Phone: ____________________________________ Print Name of Member: _______________________ Address: ___________________________________ City, State, Zip: _____________________________ Phone: ____________________________________ Print Name of Member: _______________________ Address: ___________________________________ City, State, Zip: _____________________________ Phone: ____________________________________
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Ownership Ledger
Name and Residence Address of LLC MemberDate of Transfer% OwnershipAmount PaidSubsequent TransferShow on separate line
Accessories U. S. Legal Forms, Inc. offers the following accessories:See http://www.uslegalbookstore.com/officeproducts/
The certificate below is optional.
Membership Certificate
No. ____ LIMITED LIABILITY COMPANY- STATE OF WISCONSIN Percentage: ___This Certificate, certifies that _______________________________, is a true
and lawful owner of ____ percent ownership of _______________________, a
Wisconsin Limited Liability Company. Such ownership interest is only transferable
in accordance with the Operating Agreement between the Members. This certificate is issued by the Limited Liability Company by its duly authorized
officers on this the ____ day of _________, 20___. _________________ _________________
