Effective January 1st, Wisconsin Will Have a New LLC Law

Thursday, December 8th, 2022 -- 9:00 AM

Wisconsin has a New LLC law that will completely replace the existing LLC law.

The new law will be effective January 1, 2023. The new law affects both existing LLCs and future LLCs. This new law made changes to the statute governing limited liability companies (LLCs) organized in Wisconsin.

The new law (Chapter 183) replaces the existing statute and is based on the Revised Uniform Limited Liability Company Act already adopted in some form by other states. The greatest effect of the law change will be on multiple member LLCs and Partnership LLCs.

If this is your situation, I encourage you to take some time and consider how the law change will affect your LLC and its members. For single member LLC’s the new law will have limited impact. For multiple member LLC’s the law can have significant impact to the members.

Owners with existing LLCs have the option to: By December 31, file a statement of non-applicability with the Wisconsin Department of Financial Institutions (WDFI) to continue the status quo and have your LLC governed by current LLC law …(Opt out of the law for your LLC.)

Do nothing, and on January 1, 2023, your LLC will be governed by the new statute by operation of law. If you operate as a Single Member LLC, the change in the law will have less practical effect on Single Member LLCs, as there are no issues related to liability among members because there is only one member.

If you do nothing, the New LLC Law will automatically apply to your LLC as of January 1, 2023. Note: You may still want to put in place a written Operating Agreement, even for Single Member LLCs.

If you operate as a Multi-Member LLC, the new LLC law is somewhat more restrictive as to what you can and cannot do via a written Operating Agreement.  Also, the new LLC law contains updates to the duties of care, loyalty, good faith, and fair dealing among and between members, and limits the ability to change these duties via a written Operating Agreement.

Because of these changes, you may want to restate or amend your current written Operating Agreement to address those restrictions. If this cannot be accomplished before the end of 2022, it may make sense to opt out of the New LLC Law by December 31, 2022. Later you can opt in once you have updated your operating agreement or are satisfied that you are set.

The SBDC will be hosting a webinar on multiple dates and times that can help you determine how the changes might impact your LLC and its owners/managers, and to learn more about the changes and the options/actions you should consider taking to get your intended result. The webinar will be facilitated by attorneys familiar with the new LLC statue.

Feel free to contact us with questions and/or comments.